EXHIBIT
10.1


 


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


 


LICENSE,
DEVELOPMENT AND


COMMERCIALIZATION  AGREEMENT


 


THIS LICENSE, DEVELOPMENT AND
COMMERCIALIZATION AGREEMENT (the “Agreement”), dated as of April 20,
2009 (the “Execution Date”), is entered into by and between MERCK SHARP & DOHME RESEARCH LTD. with a principal
place of business at Chesney House, 96 Pitts Bay Road, Pembroke HM 08, Bermuda
(“Merck”), and MEDAREX, INC., 707 State Road,
Princeton, NJ 08540, USA (“Medarex”), UNIVERSITY OF
MASSACHUSETTS, MASSACHUSETTS BIOLOGIC LABORATORIES,  (“UMass” and “MBL”
respectively) each of UMass and MBL with an address of 460 Walk Hill Street,
Mattapan, Massachusetts,  02126, USA, ,  WORCESTER CITY CAMPUS CORPORATION,
having its place of business at 55 Lake Avenue North, Worcester, MA 01655, (“WCCC”).  Medarex
and UMass are referred to hereinafter collectively as “Licensors”.  Merck, UMass, MBL, WCCC and Medarex are
sometimes referred to herein individually as a “Party” and collectively
as the “Parties”.


 


BACKGROUND


 


WHEREAS:


 


A.            UMass and Medarex entered into
a collaboration agreement, dated April 17, 2002 (the “Licensor
Collaboration Agreement”) to use Medarex’s immunizable transgenic mice to
prepare fully human monoclonal antibodies against toxins produced by C. difficile;


 


B.            Under the Licensor
Collaboration Agreement, UMass and Medarex have researched and developed the
antibodies against C. difficile
and have entered late-stage clinical trials with such antibodies;


 


C.            Licensors have made a decision
to license the further development and commercialization rights with respect to
such antibodies against C. difficile;


 


D.            The license that is granted by UMass in this
Agreement promotes the development of inventions made by MBL to practical
application for the public good;


 


E.             Merck wishes to develop and
commercialize such antibodies further, and Licensors are prepared to license to
Merck their rights with respect to such antibodies so that Merck can develop
and commercialize such antibodies; and


 


F.             MBL, as UMass’s designee,
holds the IND for the antibodies currently in development, and manufactures
such antibodies.


 


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NOW, THEREFORE, Medarex, UMass, MBL, WCCC and Merck agree as follows:


 


1.             DEFINITIONS


 


1.1           “Affiliate”
of a Party means any other party that, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with such first party.  For
purposes of this definition only, “control” and, with correlative meanings, the
terms “controlled by” and “under common control with” shall mean (a) the
possession, directly or indirectly, of the power to direct the management or
policies of a Party, whether through the ownership of voting securities or by
contract relating to voting rights or corporate governance, or (b) the
ownership, directly or indirectly, of more than fifty percent (50%) of the
voting securities or other ownership interest of a Party.


 


1.2           “Antibody(ies)” means
all monoclonal antibodies or fragments thereof, including but not limited to
the antibodies CDA1 (MDX-066) and CDB1 (MDX-1388) or any modifications thereto,
which selectively (i) bind to, and (ii) activate, inactivate,
inhibit or otherwise alter or modify, one or both of the Antigen(s) or the
biological function of one or both of the Antigen(s).


 


1.3           “Antigen(s)” means C. difficile toxins
A and/or B.


 


1.4           “Applicable Law” means the
applicable national, supra-national, state and local laws, rules, and
regulations, including any rules, regulations, guidelines, or other
requirements of Regulatory Authorities, that may be in effect from time to time
in the Territory.


 


1.5           “BLA” or “Biologics
License Application”  means
a Biologics License Application, as defined in the U.S. Federal Food, Drug, and
Cosmetics Act, as amended, and the regulations promulgated thereunder, and any
corresponding supranational, foreign or domestic marketing authorization
application, registration or certification, necessary or reasonably useful to
market and sell a Product in the Territory, but not including pricing and
reimbursement approvals.


 


1.6           “Calendar Quarter” the respective periods of
three (3) consecutive calendar months ending on March 31, June 30,
September 30 and December 31.


 


1.7           “Calendar
Year” means each successive period of twelve (12) months commencing on January 1
and ending on December 31.


 


1.8           “cGMPs”
or “current Good Manufacturing Practices” means the requirements under 21 CFR Parts 210 and 211, and all
guidelines promulgated in relationship thereto by the United State Food and
Drug Administration (FDA), as such cGMPs may be applied from time to time with
respect to products in a similar stage of clinical development to Licensed
Products.


 


1.9           “Change of Control” means (i) a sale of
all or substantially all of a Party’s


 


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assets or business; (ii) a merger,
reorganization or consolidation involving a Party in which the stockholders of
such Party immediately prior to such transaction cease to own collectively
fifty percent (50%) or more of the voting securities of a successor entity; or (iii) the
acquisition of fifty percent (50%) or more of the voting equities of a Party by
a person or group.


 


1.10         “Closing Conditions”
shall have the meaning provided in Section 8.7.


 


1.11         “Closing Date” means the date when the
Closing Conditions have been met.


 


1.12         “Commercially
Reasonable Efforts” means, with respect to the efforts to be expended
by a Party with respect to any objective, the reasonable, good faith efforts
and resources to accomplish such objective as such Party and its Affiliates
would normally use to accomplish a similar objective under similar
circumstances.  With regard to the
development, registration, marketing or sale of a Product, such efforts would
be substantially equivalent to those efforts and resources commonly used by
such Party for biological products owned by it or to which it has rights, which
product is of similar market potential at a similar stage in its product life,
taking into account for example efficacy, safety, approved labeling, the
establishment of the product in the marketplace, the competitiveness of
alternative products, the likely proprietary position of the product, the
likelihood of Regulatory Approval for the product, and the potential
profitability of the product, including the amounts payable to licensors of
patent or other intellectual property rights, and alternative products.  Commercially Reasonable Efforts shall be
determined on a market-by-market basis for each Product, and it is anticipated
that the level of effort will be different for different markets, and will
change over time, reflecting changes in the status of the Product and the
market(s) involved.


 


1.13         “Competing Product” means any pharmaceutical
product that [ * ] pursuant to [ * ] that either (a) is
[ * ] (b) has [ * ] from the [ * ] or (c) is
[ * ]; and, in each case ((a), (b) and (c)), that contains an
Antibody.


 


1.14         “Confidential Information”
means all information belonging to or in the possession of the Parties and
their Affiliates which they consider confidential including, without
limitation, information concerning the study, discovery, design, development,
manufacture, formulation, extraction, compounding, mixing, processing, testing,
control, preservation, storage, finishing, packing, packaging, use,
administration, distribution, sale, reimbursement and/or marketing of
biopharmaceutical products or compounds and potential products or compounds,
and shall further include, without limitation, all information, data from, and
methodology of pre-clinical and clinical studies, the contents of any
submissions to Regulatory Authorities worldwide, marketing plans or computer
hardware and software systems and designs and plans for same.  Confidential Information may be conveyed in
written, graphical, physical or oral form.


 


1.15         “Control” or “Controlled”
means (i) possession of the ability to grant the licenses or sublicenses
as provided for herein without violating the terms of any agreement or other
arrangement with any Third Party, and (ii) in addition, but only with


 


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respect to MBL, that Licensed
Know-How, Production Process Technology, Regulatory Documentation, and
Information shall be “Controlled” by MBL if such Information is either (i) at
an MBL facility, (ii) in the possession of employees or officers of MBL,
or (iii) accessible to employees or officers of MBL.


 


1.16         “Cross License Agreement”
means that certain Cross License Agreement between and among Medarex, Cell
Genesys, Inc., Abgenix, Inc., Xenotech, L.P. and Japan Tobacco Inc.,
dated March 26, 1997.


 


1.17         “Develop”, “Developed” or “Development”
means the activities involved in [ * ] and [ * ] of an
Antibody or Product.


 


1.18         “Development Plan” has
the meaning set forth in Section 4.2.1.


 


1.19         “EU” means the
countries of the European Union, as constituted from time to time.


 


1.20         “FDA” means the United
States Food and Drug Administration of the Department of Health and Human
Services, or any successor agency with responsibility for regulating the
development, manufacture and sale of human pharmaceutical products.


 


1.21         “Field” means any use
in humans and/or animals for the treatment and/or prevention of infection with C. difficile and/or the effects thereof.


 


1.22         “Filing” of a BLA means acceptance for filing
of such BLA by the relevant Regulatory Authority, including any deemed
acceptance of such a filing.


 


1.23         “First Commercial Sale” means, with
respect to each Product in each country, the first bona fide commercial sale by
Merck, its Affiliates or Sublicensees of such Product to a Third Party
following Regulatory Approval in such country.


 


1.24         “Grant-Back
Improvement” means (a) [ * ] or [ * ] or
any [ * ] that is [ * ] whether or not patented or
patentable, including (i) any [ * ] that is [ * ] to
the [ * ] of such an [ * ] or (ii) any [ * ]
that [ * ] in each case that is [ * ].  “Grant-Back Improvement” shall
[ * ]:  (x) [ * ]
regarding the [ * ]; and (y) [ * ] including
[ * ] related to the [ * ] or the [ * ] of a
[ * ] unless such [ * ] is [ * ] therein.


 


1.25         “HSR
Act” shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1974, as amended, 15 U.S.C. §18A.


 


1.26         “IND” means an
investigational new drug application filed with the FDA for authorization to
commence human clinical trials, and its equivalent in other countries or
regulatory jurisdictions.


 


1.27         “Information” means all
technical, scientific and other know-how, information and data, trade secrets,
knowledge, technology, means, methods, processes, practices, formulas,
instructions, skills, techniques, procedures, experiences, ideas, technical
assistance, designs, drawings, assembly procedures, computer programs,


 


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apparatuses, specifications, data, results and other
material, including high-throughput screening, gene expression, genomics,
proteomics and other drug discovery and development technology, pre-clinical
and clinical trial results (including Regulatory Documentation), manufacturing
procedures, test procedures and purification and isolation techniques, (whether
or not confidential, proprietary, patented or patentable) in written,
electronic or any other form now known or hereafter developed, and all
improvements, whether to the foregoing or otherwise, and other discoveries,
developments (whether or not confidential, proprietary, patented or
patentable).


 


1.28         “Invention” means any process, method,
composition of matter, article of manufacture, discovery or finding that is
conceived and/or reduced to practice in the course of and as a result of the
activities under the Development Plan, and “Invent” means the act of conception and/or reduction to
practice of such Invention.


 


1.29         “Joint Technology” means (a) all
Inventions conceived, discovered, developed and/or reduced to practice jointly
by employees of UMass and/or Medarex and Merck or Third Parties working on
behalf of UMass and/or Medarex and Merck jointly during and in the course of
the performance of the activities under the Development Plan and (b) Patents
with respect thereto (“Joint Patents”), and all know-how which is not
generally known (including materials) developed jointly by employees of UMass
and/or Medarex and Merck or by Third Parties working on behalf of UMass and/or
Medarex and Merck jointly during the performance of and as a result of the
activities under the Development Plan.


 


1.30         “Licensed Know-How” means
[ * ] and, with respect to Section [ * ] that (i) is
not generally known, and (ii) is [ * ] to research, develop,
manufacture, use and/or sell the Products and/or to practice the Licensed
Patents (including any necessary or useful materials, the [ * ] (to
the extent that [ * ] has the right to enable such use by Merck of
the [ * ] any cell lines used to manufacture the Antibodies), all
Regulatory Documentation, and all pre-clinical and clinical data with regard to
the Licensed Products.  For the avoidance
of doubt, any know-how Controlled by UMass (including MBL) and/or Medarex that
is [ * ] researching, developing, manufacturing, using and/or selling
the Products and/or practicing the Licensed Patents [ * ] including
without limitation, the Production Process Technology of each of UMass
(including MBL) and Medarex.


 


1.31         “Licensed Patents”  means
all Patents Controlled by UMass (including MBL) and/or Medarex [ * ]
and, with respect to Section [ * ] (including any rights of
UMass and/or Medarex in Patents claiming Joint Technology) that claim or cover
Antibodies, and/or the use, manufacture, sale and import of Products (including
the use of Antibodies against the Antigens), (including Patents claiming the
[ * ] to the extent that [ * ] has the right to enable such
use by Merck of the [ * ]. 
Licensed Patents include, but are not limited to, the Patents listed in
Schedule 1.  For the avoidance of doubt,
Licensed Patents do not include (i) Medarex Patents and (ii) Production
Process Patents of UMass (including MBL) and Medarex.


 


1.32         “Licensed Product” means any Product that (i) but
for the licenses granted


 


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hereunder would infringe a Valid Claim, or (ii) with
respect to which, the development, manufacture, use, sale or import makes use
of and/or incorporates Licensed Know-How.


 


1.33         “Licensed Technology”
means Licensed Patents, Licensed Know-How, and any rights of Medarex and/or
UMass in Joint Technology.


 


1.34         [ * ] means [ * ]
proprietary monoclonal antibody [ * ] to which UMass has
[ * ] to [ * ] under its [ * ] and amendments
thereto.


 


1.35         “Major Markets” means (i) the
EU, (ii) Japan and (iii) the United States.


 


1.36         “Manufacture/Manufacturing/Manufactured”
means, with respect to Antibodies, all operations of Licensors, including,
without limitation, procurement, receipt and storage of materials, production,
packaging, labeling, warehousing, quality control testing (including in-process,
release and stability testing), release and shipping, including, without
limitation, the Initial Material, First Supplemental Material and the Second
Supplemental Material, if any.


 


1.37         “Material” shall mean
those products Manufactured by Licensors for Merck, including, without
limitation, the Initial Material and the Supplemental Material, if any.


 


1.38         “MBL” means
Massachusetts Biologic Laboratories, as established pursuant to Massachusetts
General Laws Chapter 75, Section 43, including its facilities located at
305 South Street, Boston, MA 02130 and 460 Walk Hill Street, Boston, Mass and
any employees identified as employees of Massachusetts Biologic Laboratories
that are employed at such facilities as of the Execution Date and thereafter
during the Term.


 


1.39         “Medarex Patents” means
any Patents Controlled by Medarex that claim or cover (a) the
Medarex transgenic mice (the “Medarex
Mice”) or (b) biological materials derived directly or
indirectly from the Medarex Mice, and any inventions with respect to the
foregoing, but excluding any Patents that relate solely to the composition of
matter, use, manufacture, import or sale of Antibodies or Products.


 


1.40         “Merck Invention”
means an Invention Controlled by Merck or its Affiliates that is conceived
and/or reduced to practice during and as a result of the activities conducted
under the Development Plan solely by employees of Merck, Merck Affiliates or
Third Parties working on behalf of Merck, but excluding any Invention regarding
(i) manufacturing Production Process Technology regarding the growth of
antibodies in pichia cells; and/or (ii) clinical
and diagnostic assays, including biomarker assays, related to the detection of C. difficile infection or evaluating the efficacy of a
therapeutic or prophylactic treatment against C. difficile
infection, unless such assay is specifically and directly related to Products
or Antibodies contained therein.


 


1.41         “Net
Sales” means, for any period, the gross amount invoiced (not including value
added taxes, sales taxes, or similar taxes) by Merck, its Affiliates and
Sublicensees for the sale of Product(s) to [ * ] less deductions
for expenses that are actually incurred for:


 


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1.41.1      trade and quantity discounts other than early
payment cash discounts;


 


1.41.2      returns, rebates, and chargebacks and other
allowances, such as administrative fees paid to group purchasing organizations
and fees paid to distributors pursuant to Merck’s product distribution program,
and other similar allowances to the extent generally utilized in the
pharmaceutical industry;


 


1.41.3      retroactive price reductions that are actually
allowed or granted; and


 


1.41.4      a fixed amount equal to [ * ] of the
amount invoiced to cover bad debt, early payment cash discounts, transportation
and insurance and custom duties;


 


provided, however, that with respect to the
deductions specified in subsections 1.41.1 through 1.41.4 above, an amount for
a particular item of expense shall be deducted once and only once regardless of
how many categories may apply to it.


 


Any of the deductions listed above that involves a
payment by Merck, its Affiliates or Sublicensees shall be taken as a deduction
in the Calendar Quarter in which the payment is accrued by such entity.  For purposes of determining Net Sales, the
Product(s) shall be deemed to be sold when invoiced and a “sale” shall not
include transfers or dispositions for charitable, promotional, pre-clinical,
clinical, or regulatory purposes.


 


For purposes of calculating Net Sales of
Products:  (i) [ * ] but
sales by Merck, its Affiliates or its Sublicensees to [ * ] shall be
included in the computation of Net Sales, and (ii) [ * ] for the
[ * ] for a Product shall be included in the computation of Net
Sales.


 


1.42         “Non-Licensor Product”
means (a) any [ * ] with respect to which
[ * ] (b) any [ * ] that [ * ] that is [ * ] during the Term, and (c) any [ * ] that [ * ] that [ * ] or for which [ * ] in each case which is (i) for [ * ] in a [ * ] or to [ * ] in the Field; or (ii) for [ * ] or any other method in the Field, but which [ * ] is not a [ * ].


 


1.43         “Patents” means (a) all
patents and patent applications, including provisional applications,
international applications, and national phase applications (which for the
purpose of this Agreement shall be deemed to include certificates of invention
and applications for certificates of invention), (b) any substitutions,
divisions, continuations, continuations-in-part, reissues, renewals,
registrations, confirmations, re-examinations, revalidations, extensions,
supplementary protection certificates, and patent term extensions and
restorations based thereon, and other governmental actions that extend any of
the foregoing, and (c) any U.S. and foreign or international equivalent of
any of the foregoing.


 


1.44         “Phase III Clinical Trial” means a human
clinical trial, the principal purpose of which is to establish safety and
efficacy in patients with the disease being studied as required in 21 C.F.R.
§312, or similar clinical study prescribed by the Regulatory Authorities in a
country other than the United States.  A
Phase III Clinical Trial shall also include any other human clinical trial
intended as a pivotal study, whether or not such study is a traditional Phase
III Clinical Trial.  A Phase III Clinical
Trial shall


 


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be deemed to have commenced when the first dose of
Product has been administered to the first subject/patient.


 


1.45         “Product” means any
pharmaceutical preparation that contains one or more Antibodies and is (i) for
administration to human patients in a clinical trial or to animals; or (ii) for
sale by prescription or any other sales method. 
For the avoidance of doubt, the products described in clauses (i) and
(ii) hereof include, without limitation, Licensed Products and
Non-Licensor Products.


 


1.46         “Production Process
Development” means the development of processes and technology
for the production, purification, evaluation, characterization, stability
assessment, vialing and distribution, and release of an Antibody or Product.


 


1.47         “Production Process
Improvement” means any modification to a Licensed Product or
Antibody contained therein, or Production Process Development related
specifically and directly to such Antibody or Licensed Product, whether or not
patented or patentable, including any enhancement in the efficiency, operation,
manufacture, ingredients, preparation, presentation, formulation, means of
delivery, packaging or dosage of such an Antibody or Licensed Product, or any
discovery or development that improves the stability, safety or efficacy of
such an Antibody or Licensed Product that is (i) conceived by Merck or an
Affiliate or Sublicensee during and as a result of the activities under the
Development Plan, or (ii) is conceived by Licensors during the Term.


 


1.48         “Production
Process Know-How” means any Information of
UMass and/or Medarex with respect to the Production Process Development or the
manufacture of Antibody(ies) or Products, but excluding any Information to the
extent covered or claimed by the Production Process Patents.


 


1.49         “Production
Process Patents” means any Patents of a
Party that claim or cover the Production Process Development or the manufacture
of Antibody Products.


 


1.50         “Production
Process Technology” means any
Production Process Know-How and Production Process Patents.


 


1.51         “Regulatory Approval” means any and
all approvals (including pricing and reimbursement approvals), licenses,
registrations or authorizations of any Regulatory Authority, necessary for the
marketing and sale of a Product in a country.


 


1.52         “Regulatory Authority” means any
applicable government entities regulating or otherwise exercising authority
with respect to the manufacturing, marketing, sale, reimbursement and/or
pricing of the Products in the Territory, including, without limitation, in the
United States, the United States Food and Drug Administration, and in the
European Union, the European Medicines Agency, and any successor governmental
authority having substantially the same function.


 


1.53         “Regulatory
Documentation” means all applications, registrations, licenses,
authorizations and approvals, all correspondence submitted to or received from
Regulatory Authorities (including minutes and official contact reports relating
to any


 


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communications with any Regulatory Authority), all
supporting documents and all clinical studies and tests, relating to any
Licensed Product, and all data contained in any of the foregoing, including all
advertising and promotion documents, adverse event files and complaint files,
but excluding any and all Regulatory Approvals with respect to such Licensed
Product.


 


1.54         “Sublicensee” means a
Third Party (except an Affiliate) to whom Merck has granted a license or
sublicense to make, have made, research, develop, import, use, sell or offer
for sale Products in the Territory.


 


1.55         “Supplemental Material”
means collectively the First Supplemental Material as set forth in Section 3.2.1
and the Second Supplemental Material as set forth in Section 3.2.2.


 


1.56         “Territory” means all
countries of the world.


 


1.57         “Term” has the meaning
set forth in Section 12.1.


 


1.58         “Third Party” means any
entity other than Licensors or Merck and their respective Affiliates.


 


1.59         “Valid Claim” means a claim in an
issued and unexpired Licensed Patent that is in force and which has not been
revoked, disclaimed or held to be invalid or unenforceable by a court of
competent jurisdiction or other governmental agency of competent jurisdiction
by a decision from which no further appeal may be taken, which claim has not
been disclaimed, denied or admitted to be invalid or unenforceable through
reissue, re-examination or disclaimer or otherwise.


 


1.60         “WCCC” is a corporation established under the
laws of the Commonwealth of Massachusetts of which the University of
Massachusetts is the sole member, which [ * ] shall [ * ]
hereof and is entering into this Agreement [ * ].


 


2.             LICENSES


 


2.1           Licenses to Merck.


 


2.1.1        Subject
to the terms and conditions of this Agreement, Licensors hereby grant to Merck
an exclusive, royalty-bearing license, with the right to sublicense
pursuant to Section 2.2, under the Licensed Technology to research,
develop, make, have made, import and use Antibodies and to research, develop,
make, have made, import, use, offer for sale and/or sell Products in the
Territory, in each case for use in the Field.


 


2.1.2        Subject
to the terms and conditions of this Agreement and in particular subject to Section 2.4.2
and Section 2.5, Medarex hereby grants to Merck an exclusive (even as to
Medarex), royalty-bearing license, with the right to sublicense pursuant to Section 2.2,
under the Medarex Patents to research, develop, make, have made, import
and use Antibodies and to research, develop, make, have made, import, use,
offer for sale and/or sell Products in the Territory, in each case for use in
the Field.


 


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2.1.3        Subject
to the terms and conditions of this Agreement, Medarex hereby grants to Merck
an exclusive license, with the right to sublicense pursuant to Section 2.2,
under the Production Process Technology of Medarex, to research, develop, make,
have made, import and use Antibodies and to research, develop, make, have made,
import, use, offer for sale and/or sell Products in the Territory, in each case
for use in the Field.


 


2.1.4        Subject
to the terms and conditions of this Agreement, UMass hereby grants to Merck an
exclusive license, with the right to sublicense pursuant to Section 2.2,
under the Production Process Technology of UMass (including MBL) to research,
develop, make, have made, import and use Antibodies and to research, develop,
make, have made, import, use, offer for sale and/or sell Products in the
Territory, in each case for use in the Field.


 


2.1.5        Covenant Not to Sue.  In the event that the making, having made,
use, offer for sale, sale or import by Merck, or Merck’s Affiliates or
Sublicensees, of Antibody(ies) or Licensed Product(s) would infringe
during the Term a claim of any [ * ] and are [ * ] to Antibodies and Licensed Products, and
that are [ * ] Merck
to develop, make, have made, use, sell, offer for sale or import Antibody(ies)
and Licensed Product(s) in the Territory in the Field, Licensors each
hereby covenant on behalf of themselves and their respective Affiliates and
sublicensees, not to enforce, and not to seek enforcement of such [ * ] against Merck, its Affiliates and
Sublicensees in the Territory.  In any
agreement in which either Licensor grants rights to a Third Party [ * ], Licensors shall cause such Third Party to
agree to the terms of this Section 2.1.5.


 


2.2           Sublicenses.  Subject to the terms and conditions of this
Agreement (and in particular, with respect to the right to sell, lease, and
offer for sale or lease Licensed Products under the Medarex Patents, Section 2.5), Merck shall have the right to
sublicense the rights granted in Section 2.1 above through multiple tiers
of sublicenses.  Each such sublicense
shall be consistent with all the terms and conditions of this Agreement.  Merck shall remain responsible to Licensors
for each such Sublicensee’s, and Sublicensees’ sublicensees’ obligations under
the sublicense.


 


2.3           Exclusivity.  Except as set forth in the terms of this
Agreement, the Parties acknowledge and agree that during the
Term, (i) Merck shall, and shall cause its Affiliates to, (ii) Medarex
shall, and shall cause its Affiliates to, and (iii) MBL shall, and UMass
shall cause MBL to, [ * ].  For
the avoidance of doubt, [ * ] including, without limitation,
[ * ] and [ * ] and with respect to which Merck
[ * ] set forth in Section [ * ].


 


2.4           Retained Rights.


 


2.4.1        UMass.  UMass retains the right to use the Licensed
Technology and the Production Process Technology for the purpose of academic
research and teaching at UMass facilities, without payment of compensation to
Merck.  UMass may license its retained
rights under this Subsection 2.4.1 to post-doctoral fellows and students of
UMass faculty members, in each case at UMass facilities.


 


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2.4.2        Medarex.  Medarex retains the right to
continue to perform its obligations pursuant to agreements that have been
executed with Third Parties prior to the Execution Date (“Third Party
Existing Agreements”) and to grant rights to such Third Parties pursuant to
the terms of such Third Party Existing Agreements as they exist as of the
Execution Date.  This includes the right
under such Third Party Existing Agreements to (a) grant licenses and other
rights under the Medarex Patents to such Third Parties pursuant to existing
options and licenses; (b) immunize the Medarex transgenic mice on behalf
of such Third Parties for the generation of antibodies raised against the
Antigens, (c) transfer Medarex know-how, but not the Licensed Know-How, to
such Third Parties in connection therewith, including by providing instruction
with respect to the use and immunization of the Medarex transgenic mice and
assistance with respect to the Medarex Patents and know-how, (d) develop
production processes for, and manufacture, antibody products, and (e) receive
license fees, milestone payments, royalties and other remuneration in
connection therewith, in each case pursuant to the terms of the Third Party
Existing Agreements as they exist as of the Execution Date; provided, however,
in connection with clause (a), (b), (c), (d) or (e) above, Medarex
shall not otherwise actively participate in the clinical development or
commercialization by such Third Parties of such antibody products raised
against the Antigens.


 


2.5           Cross License Agreement.  The Cross License Agreement
prohibits Medarex from granting commercialization rights to the same antibody
product, whether by license or sublicense, under certain Medarex Patents to
more than one party in a territory. 
Pursuant to the foregoing, Medarex may not grant Merck the right to
directly grant sublicenses under certain Medarex Patents that are covered by
the Cross License Agreement to sell, lease, and offer for sale or lease a
particular Licensed Product.  So long as
the applicable provisions of the Cross License Agreement are in effect, if
Merck grants or desires to grant a sublicense to a particular Sublicensee under
the Medarex Patents to sell, lease, and offer for sale or lease a particular
Licensed Product, then, upon Merck’s request, Medarex shall, and shall cause
its Affiliates to, enter into an agreement with such Sublicensee which grants a
direct license to such Sublicensee under such of the Medarex Patents that are
covered by the Cross License Agreement to sell, lease, and offer for sale or
lease such Licensed Product on the same terms and conditions as the sublicense
granted by or desired to be granted by Merck to such Sublicensee (“Direct Sublicense Agreement”);
provided, each such Direct Sublicense Agreement granted by Medarex shall: (i) be
consistent with all the terms and conditions of this Agreement; (ii) provide
that all performance obligations of such Sublicensee, including without
limitation, with respect to development and commercialization of Licensed
Products and payment of amounts owing under the sublicense granted to such
Sublicensee by Merck, shall be owed to Merck and not to Medarex; (iii) not
conflict with any of the rights granted under this Agreement; (iv) provide
that Merck is a Third Party beneficiary under such Direct Sublicense Agreement,
with the right, at Merck’s expense, to enforce the terms and conditions of such
Direct Sublicense Agreement against such Sublicensee, including the right to
collect all monies due to Merck from such Sublicensee under such Direct
Sublicense Agreement; and (v) be subject to Merck’s approval, which
approval shall not be unreasonably withheld. 
Further, it is understood and agreed by Merck that, in such sublicense
granted by Merck to such Sublicensee, Merck shall make the rights related to
such Medarex Patents granted by Medarex to Merck under Section 2.1.2


 


11

















 


subordinate to such direct license granted by
Medarex to such Sublicensee, such that the rights granted by Medarex to Merck
under Section 2.1.2 shall not be in conflict with the rights granted to
such Sublicensee by Medarex under this Section 2.5.


 


2.6           Transfer of Licensed Know-How.  Subject to the terms of this
Agreement, including in particular Article 7, each of Medarex and MBL
shall during the Term, and shall cause its Affiliates to, without additional
compensation and at such Party’s sole expense, disclose and make available to
Merck, in whatever form Merck may reasonably request, the Licensed Know-How,
and the Production Process Technology specifically used to manufacture the
Antibodies, and any other Information specifically relating directly to the
research, development, manufacture and commercialization of the Antibodies or
Products promptly after the Closing Date and thereafter as applicable and
useful during the Term.


 


2.7                           No Further Rights.               Only the licenses granted pursuant to the express terms of this Agreement
shall be of any legal force or effect. No other license rights shall be granted
or created by implication, estoppel or otherwise.


 


3.     MANUFACTURE
AND SUPPLY.


 


3.1.          Initial Material.


 


3.1.1.       Pursuant to the
terms herein, Licensors agree to deliver to Merck and Merck agrees to accept
such delivery of the following: one lot each of CDA-1 and CDB-1 manufactured at
2500L scale Manufactured in MBL’s Mattapan, MA facility (the “Initial Material”),
as further described in Exhibit 3.  Within thirty (30) days after the Closing Date,
Licensors shall deliver to Merck at the site specified by Merck the Initial
Material.


 


3.1.2.       The Parties acknowledge the need for (i) as between Merck, MBL and
Medarex, a Quality Agreement covering the Initial Material and (ii) as
between Merck and MBL, a Quality Agreement covering the Supplemental Material
and expressly agree that the applicable Parties shall negotiate and execute
such Quality Agreements within sixty (60) days after the Closing Date;
provided, however, that the [ * ].  For avoidance of doubt, [ * ] and may affect [ * ] under Article 4.


 


3.1.3.       Interim Development Support.  In addition to delivery of the Initial
Material as provided in Section 3.1.1 above, the Parties shall carry out
the following tasks as promptly as practicable and in no event later than January 1,
2010:


 


3.1.3.1.        [ * ].  [ * ] shall, [ * ] to confirm that there is [ * ] as a result of [ * ]  Licensors
will supply materials mutually agreed upon to [ * ] shall carry out [ * ].


 


3.1.3.2.        [ * ].  [ * ] may, at its option, [ * ].


 


3.1.3.3.        [ * ].  [ * ] shall conduct [ * ] and [ * ].  [ * ] shall provide [ * ] as requested by [ * ] so that [ * ] prior to the [ * ].  [ * ] will provide [ * ] used to [ * ]


 


12

















 


in such quantities as
reasonably requested by [ * ]
(including [ * ] and [ * ] to participate in the execution of the studies [ * ].


 


3.1.3.4.        [ * ].  [ * ] shall as promptly as practicable provide the [ * ] by [ * ]. [ * ] shall as
promptly as practicable provide [ * ] as are in possession of [ * ] as [ * ] may
reasonably request [ * ]
including without limitation [ * ] and [ * ] as well
as [ * ].


 


3.1.3.5.        [ * ].  [ * ] shall designate the [ * ]. [ * ] shall provide staff for training and necessary materials [ * ].


 


3.1.3.6.        [ * ].  [ * ] shall perform [ * ] on both [ * ] based on [ * ] and current equipment.


 


3.1.3.7.        [ * ].  In
furtherance of [ * ] with
regard to [ * ]  [ * ] coordinate with [ * ] to transfer as promptly as practicable [ * ] as reasonably requested by [ * ] including without limitation, those [ * ].  In
addition, [ * ] shall
promptly provide [ * ] to [ * ] with regard to the [ * ].  For
avoidance of doubt, [ * ]
shall not be required pursuant to this Section 3.1.3.7 to [ * ].


 


3.1.4.       The Initial Material shall
be at no cost to Merck; provided, however, that the Interim Development Work
listed in Sections 3.1.3.1 through 3.1.3.5 shall be charged to Merck
[ * ], if additional work is required; provided, further, that the
Interim Development Work listed in Sections 3.1.3.6 shall be charged to Merck
[ * ] for completion of the two remaining 24 month samples for
current stability protocol and conducting the release assays on final vials
described in Exhibit 3 and 4. Additional time points that may be added by
Merck to the stability protocol to extend testing will be charged
[ * ] at each time point added for each monoclonal antibody and for
each temperature condition chosen to be evaluated.


 


3.1.5.       (a) MBL
represents and warrants that [ * ] as set forth in Exhibit 3.  (b) Medarex represents and warrants that
[ * ] as set forth in Exhibit 3.


 


3.2.          Supplemental Material.


 


3.2.1.       First
Supplemental Material.  In
addition to the Initial Material, MBL shall Manufacture one 2500L lot of the
CDA1 Antibody and one 2500L lot of the CDB1 Antibody at the current scale using
the current process and Manufactured with current MBL protocols and with
current equipment and, with a yield of [ * ] except, in each case,
for decreases to provide the materials for the jointly agreed-upon studies set
forth in Exhibit 2 (“First Supplemental Material”).  Such Manufacture shall be initiated on or
after July 1, 2009 in MBL’s Mattapan MA facility.  MBL shall deliver by January 1, 2010 the
First Supplemental Material and shall represent and warrant that
[ * ] as set forth in Exhibit 3. 
The supply price for the First Supplemental Material provided under this
Section 3.2.1 shall be [ * ]. 
Payment of such [ * ] for each Antibody: the first tranche
will be paid within [ * ] after commencement of production by MBL of
such Antibody; and the second shall be paid within [ * ] after
delivery of such Antibody to Merck (including the requisite certificate of
analysis and supporting documentation set forth in


 


13

















 


the
Quality Agreement) relating to such Antibody, or if Merck requests delay in
delivery of such Antibody, upon delivery to Merck of such certificate of
analysis and supporting documentation for such Antibody The fixed price also
includes [ * ]. MBL shall also
perform analytical testing for release and stability on both bulk and finished
vials based on its existing testing protocols and current equipment at a
schedule and at temperature conditions mutually agreed. The costs of stability
testing will be [ * ] at
each time point selected for each monoclonal antibody and for each temperature
condition evaluated and shall include the individual tests listed on Exhibit 4.
Release testing on bulk and final vial testing will be at [ * ] as described in Exhibit 3.


 


3.2.2.       Option for Second Supplemental Material. Merck
shall have the option to request MBL to Manufacture one additional 2500L lot of
the CDA1 Antibody and one additional 2500L of the CDB1 Antibody (“Second
Supplemental Material”), such Manufacture to be initiated in MBL’s
Mattapan MA facility according to a timetable mutually agreed by the
Parties.  MBL shall provide the same
representation and warranty for such Second Supplemental Material as provided
in Section 3.2.1 with regard to the First Supplemental Material.  Merck shall exercise its option to request
Second Supplemental Material under this Section 3.2.2
[ * ].  Prior to initiation of
such Manufacture, MBL and Merck shall agree on the applicable supply price for
the Second Supplemental Material; provided, however, that MBL and Merck
acknowledge that such supply price [ * ].


 


3.2.3.       Technical
Representatives. MBL agrees to permit one or more qualified
technical representatives of Merck and/or a Merck-designated contract
manufacturing organization to be present and observe the Manufacture of the
Supplemental Material.  MBL shall give Merck
reasonable notice of its manufacturing schedule, as established at MBL’s
discretion, and Merck representatives shall be trained in MBL’s relevant SOP’s,
to include gowning and other visitor-specific requirements.


 


3.2.4.       [ * ].  Should [ * ] in order to
[ * ] the [ * ].  If
[ * ] then [ * ] and [ * ].


 


3.3.          Technology Transfer.  At any time after the
Closing Date that Merck determines it wishes to initiate technology transfer,
Licensors shall promptly conduct such technology transfer.  Such technology transfer shall include Merck
and/or Merck’s designated contract manufacturing organization, as specified by
Merck. The Parties shall work together to determine the scope and mutual
governance of such technology transfer taking into account Product development
needs and timing.  Licensor’s services
for agreed technology transfer and agreed work scope activities shall be
[ * ].


 


3.4.          Development Consultancy Services. At any time
after the Closing Date that Merck determines it wishes to access Licensors’
employees for development consulting services, Licensors shall promptly
and reasonably make staff available.
The Parties shall work together to determine the scope of such consulting
taking into account Product development needs and timing.  Licensors’ services for development
consulting activities shall be [ * ].


 


14

















 


3.5.          Shipments of Material. The Material
will be delivered to Merck F.O.B. Destination, Freight Not Allowed (UCC
2-319).  All Material shipped to Merck shall be shipped in accordance with
specific pre-specified conditions appropriate for Materials, including without
limitation cold storage. All Materials shall be accompanied by a Certificate of
Analysis for all manufacturing lots, packing slips and Material Safety Data
Sheets (MSDS) and any other information reasonably requested by Merck.  The form of such documents shall be as
specified by Merck from time to time.


 


3.6.          Warranty Disputes.  In the event that Merck believes at any time
that the Material does not conform to any warranty under this Article 3,
then Merck shall notify Licensors of such belief.  Any such disagreement shall be settled
through [ * ].  In the event that said negotiations are not
successful and the matter can be resolved through independent laboratory
testing of the Material, then the dispute shall be referred to an independent
testing laboratory selected by the applicable Parties within seven (7) days
of a demand by any involved Party.  The
determination of the independent testing laboratory shall be final and binding
on the involved Parties.  In the event
that any of the Supplemental Material does not conform to the warranties as
determined by the independent testing laboratory, then Merck shall have the
right to return any nonconforming Material to MBL for credit.  Notwithstanding the foregoing, (i) [ * ]; (ii) a failure of Materials to meet the
warranties set forth in this Article 3 shall [ * ]; (iii) a failure of Materials to meet the
warranties set forth in this Article 3 shall [ * ]; and (iv) the remedies set forth in this Section 3.6
shall not preclude any indemnification claim that Merck may have pursuant to Section 11.1
or Section 11.2.


 


3.7.          EXCEPT AS
EXPRESSLY PROVIDED HEREIN, LICENSORS MAKE NO OTHER REPRESENTATIONS AND EXTEND
NO WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH
RESPECT TO THE MATERIALS, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.


 


3.8.          Diligence.  The Parties expressly agree that any
obligation set forth in this Article 3 shall be performed using
Commercially Reasonable Efforts.


 


4.     DILIGENCE


 


4.1.        Efforts.  Commencing as of the Closing
Date, Merck shall use Commercially Reasonable Efforts to develop, obtain
Regulatory Approval, manufacture, market and sell Licensed Products throughout
the Territory.  Merck shall use
Commercially Reasonable Efforts to (i) achieve Regulatory Approvals for
the sale of Licensed Products in the Territory by submitting registration
packages requesting approval for commercial sale of the Licensed Product as
soon as reasonably practicable and (ii) actively pursue commercial sales
of Product in the Territory upon obtaining necessary Regulatory Approvals.  In particular, Merck shall exercise
Commercially Reasonable Efforts to develop and obtain Regulatory Approvals in
the Major Markets.  All costs of
development, manufacture, marketing and sale of Product shall be borne by Merck,
its Affiliates or Sublicensees.


 


15

















 


4.2.              Development Plan.


 


4.2.1.       Within [ * ]
after the later of (i) the Closing Date or (ii) the end-of-Phase II
meeting with the FDA (or in any case such other time as the Parties shall
mutually agree), Merck shall [ * ] (i) the proposed approach that Merck intends to take [ * ] and the [ * ] (ii) the [ * ] for such [ * ] with respect to the Products in the Major
Markets (the “Development Plan”).  At the same time as Merck provides such
Development Plan to the Licensors, Merck shall also provide reasonable advanced
written notice of [ * ]
and for a [ * ] during
which [ * ].  Such [ * ] unless otherwise mutually agreed by the Parties.


 


4.2.2.       Thereafter, within [ * ], Merck shall provide Licensors with a
[ * ], including any [ * ] in the [ * ]. Merck and Licensors shall [ * ] after Merck provides such [ * ] or at such other time as mutually agreed by the
Parties, to review [ * ]
during which [ * ].


 


4.2.3.       If Licensors believe that Merck is not using its
Commercially Reasonable Efforts in developing or seeking Regulatory Approval
for a Licensed Product in a Major Market, Licensors may notify [ * ], taking into account any actual development and
regulatory performance of Merck as of such date.  Merck shall, within [ * ] of such notification:


 


(a)           notify Licensors of its agreement that [ * ], which [ * ] Licensors may [ * ] and if Licensors [ * ], the Parties shall proceed as set forth in Section 4.2.4
below; or


 


(b)           provide Licensors with a [ * ] as to [ * ].


 


4.2.4.       If Licensors [ * ] or if Merck
notifies Licensors that [ * ] and Licensors [ * ], then such
dispute shall be referred to Parties’ respective executives as set forth in
this Section 4.2.4.  The dispute
shall first be referred to such executives as may be appointed by Licensors,
and Merck’s [ * ].  If the dispute is not resolved [ * ] after the dispute is initially referred to each Party’s executives as set
forth above, or such longer period as such executives may agree, the dispute
may be referred to [ * ] on the one hand, and Licensors, on the
other hand) [ * ] shall use their good faith efforts to resolve such
dispute.  If such dispute is not resolved
by the senior officers of the Parties [ * ] after such dispute is
referred to them, or such longer period as such officers may mutually agree,
then Licensors may refer the matter
for dispute resolution in accordance with Section 13.7.


 


4.2.5.       If the arbitrator panel appointed pursuant to Section 13.7
determines that Merck has not met its obligations to exercise Commercially
Reasonable Efforts to develop and seek Regulatory Approval of the Licensed
Product, Merck shall take whatever steps are necessary to increase its
development and regulatory activities to meet such obligation, and if Merck
does not meet such obligation within the time determined by the arbitration
panel, the provisions of Section 12.2 shall apply.


 


4.3.          [ * ].  Commencing
with the first updated Development Plan provided


 


16

















 


pursuant to Section 4.2.2, and thereafter
annually at the same time as Merck provides its updated Development Plan
pursuant to Section 4.2.2, Merck shall provide to Licensors [ * ].  Such
obligation [ * ]
shall [ * ].  Such [ * ] shall be provided for the [ * ].


 


4.4.          Conditions for Exercise of Commercially Reasonable Efforts.  Merck’s
obligations under this Article 4 are expressly conditional upon:


 


(a)           the absence of a Force Majeure; and


 


(b)           the fulfilment of Licensors’ obligations under this
Agreement, including with respect to Licensors’ warranties contained herein, and
with respect to supply of Antibodies by MBL pursuant to this Agreement,


 


and
Merck’s obligation to develop, market and sell any Licensed Product(s) will
be suspended for as long as any Force Majeure or non-fulfilment exists;
provided, however, that such [ * ].


 


Any and all Information disclosed by any Party
pursuant to this Article 4 shall be deemed trade secrets and, if so
disclosed, shall be treated by the Parties as Confidential Information in
accordance with Section 7.1.


 


5.     CONSIDERATION


 


5.1.          Up-front Payment.  In partial consideration of the rights
granted to it by Licensors under this Agreement, Merck shall pay to Licensors
collectively a non-refundable, noncreditable upfront fee of sixty (60) million
United States dollars (US$60,000,000) within thirty (30) days after the Closing
Date.  The upfront fee will be
unconditional and as such shall not be subject to any offset, credit, reduction
or repayment for any reason whatsoever.


 


5.2.          Development Milestone Payments.
Within thirty (30) days following the first occurrence of the relevant
milestone events specified below with respect to the first Licensed Product to
reach such milestone, Merck shall pay to Licensors collectively the following
amounts:


 


[ * ]


 


[ * ].  Each milestone payment is payable only
once.  The milestone payments will be
unconditional and as such shall not be subject to any offset, credit, reduction
or repayment for any reason whatsoever.


 


5.3.          Sales Milestone Payments.


 


5.3.1.       Merck will pay a one-time sales milestone payment of [ * ] within thirty (30) days following the
first time that total Net Sales of Products in the Territory in a Calendar Year
are equal to or greater than [ * ].


 


5.3.2.       Merck will pay a one-time sales milestone payment of [ * ] within


 


17

















 


thirty (30) days following the
first time that total Net Sales of Products in the Territory in a Calendar Year
are equal to or greater than [ * ].


 


5.3.3.       Merck will pay
a one-time sales milestone payment of [ * ] within thirty (30) days
following the first time that total Net Sales of Products in the Territory in a
Calendar Year are equal to or greater than [ * ].


 


The [ * ] will be [ * ] of [ * ] within [ * ] after
the [ * ] when such [ * ].  The [ * ] shall be [ * ] and as such [ * ] any reason whatsoever.


 


5.4.          Royalties on Net Sales.  Merck will pay Licensors royalties on a
country-by-country and Product-by-Product basis according to the following
schedule:


 


5.4.1.       Licensed Products.


 


5.4.1.1.            If the
manufacture, sale, use or import of the Licensed Product at the time of First
Commercial Sale in a country (or after issuance of such a Patent if it issues
after First Commercial Sale) would infringe a Valid Claim of the Licensed
Patents, the royalty rate shall be:


 


5.4.1.1.1. [ * ] on the
annual Net Sales of Licensed Product for the longer of the last to expire of
the Licensed Patents or [ * ] from the First Commercial Sale of such
Licensed Product; and


 


5.4.1.1.2. [ * ] on the
annual Net Sales of such Licensed Product for [ * ] following the
period set forth in Section 5.4.1.1.1.


 


5.4.1.2.            If the Licensed Product is
not covered under Section 5.4.1.1, but the manufacture, sale, use or
import of such Licensed Product utilizes Licensed Know-How, the royalty rate
shall be [ * ] on the annual Net Sales of such Licensed Product for
[ * ] from the First Commercial Sale of such a Licensed Product in an
applicable country.


 


5.4.1.3.            [ * ].  The Parties acknowledge that the key Patents
relating to the Licensed Products have been published.  Accordingly, in the event that: (1) a
[ * ] after the First Commercial Sale in a country; and (2) Merck
has, prior to [ * ] paid Licensors royalties at the [ * ];
then the remaining provisions of this Section 5.4.1.3 shall apply.


 


(a)           Any Party that becomes aware of the [ * ]
shall so notify the other Parties of the [ * ].


 


(b)           For royalty payments due
after [ * ], Merck shall pay the [ * ].


 


(c)           Merck shall, within ninety
(90) days of such notice, [ * ], as such term is defined herein.  The [ * ] on the [ * ]:  (1) the [ * ], and (2) the
[ * ] prior to the [ * ]; and shall [ * ].


 


18
















 


5.4.2.       Non-Licensor Products.


 


5.4.2.1.            Merck shall pay
the [ * ] that [ * ], provided that the period during which
such royalty shall be payable [ * ];


 


5.4.2.2.            If,
[ * ] Merck has not [ * ], then [ * ] of such
Non-Licensor Product in such country, but not to exceed [ * ].


 


For
the avoidance of doubt, the following [ * ]: (i) if a
Non-Licensor Product [ * ], the royalty rate applicable to the
Licensed Product under Sections 5.4.1.1 or 5.4.1.2 [ * ]; (ii) if
the Non-Licensor Product [ * ], the royalty rate on the Non-Licensor
Product [ * ] and [ * ].


 


5.5.          Blended Royalty Rates.  With respect to the royalty rates for
Products, the Parties acknowledge and agree that the Licensed Patents and
Licensed Know-How licensed pursuant to this Agreement justify royalty rates of
differing amounts with respect to sales of such Products, which rates could be
applied separately to Products involving the exercise of such Licensed Patent
rights and/or the incorporation or use of such Licensed Know-How, and that if
such royalties were calculated separately, royalties relating to Licensed
Patents and royalties relating to Licensed Know-How would last for different
terms.  The Parties have determined, in
light of such considerations and for reasons of convenience, that blended royalty
rates for the Licensed Patents and the Licensed Know-How licensed hereunder
will apply during a single royalty term (which blended royalty rates would be
advantageous to both Parties). 
Consequently, the Parties have agreed to adopt the royalty rates set
forth in Section 5.4 hereof.


 


5.6.          Royalty Offset.  Subject to the terms of this Section 5.6,
if Merck [ * ], any [ * ] payable by Merck or its
Affiliates to [ * ] would be [ * ].  Notwithstanding the foregoing, in no event
shall [ * ] of the royalty obligation otherwise payable pursuant to Section 5.4,
after the deduction and/or [ * ]. 
In the event that Licensors [ * ] then upon written notice by
Licensors to Merck, the Parties shall pursue a resolution of such disagreement
[ * ].


 


6.              PAYMENTS


 


6.1.          Royalty Reports and Payments.  Merck shall deliver to Licensors
within [ * ] in which Products for which Merck owes a royalty
hereunder are sold, a statement providing the information shown on the form of
royalty report attached hereto as Exhibit 6.  Merck
shall make royalty payments to Licensors within [ * ] in which Net Sales have occurred.


 


6.2.          Payments; Interest.  Any payments due under this Agreement shall
be due on such date as specified in this Agreement and, in the event such date
is not a business day, then the next succeeding business day.  Any payments or portions
thereof due hereunder which are not paid on the date such payments are due
under this Agreement shall bear interest at a rate equal to the lesser of the
prime rate as published in The Wall Street Journal,
Eastern Edition, on the first day of each Calendar Quarter in which such
payments are overdue, plus [ * ] and the maximum rate permitted by
law, calculated on


 


19

















 


the number of days such payment is delinquent,
compounded monthly. Pursuant to the instructions of the Licensors, amounts
payable pursuant to Article 5 shall be divided equally between Medarex and
UMass and disbursed separately by Merck.


 


6.3.          Taxes.  UMass and Medarex shall be liable for all
income and other taxes (including interest) (“Taxes”) imposed upon any payments
made by Merck to Licensors under this Article 5 (“Agreement Payments”).  If applicable laws, rules or regulations
require the withholding of Taxes, Merck shall make such withholding payments
and shall subtract the amount thereof from the Agreement Payments.  Merck shall submit to Licensors appropriate
proof of payment of the withheld Taxes as well as the official receipts within
a reasonable period of time.  Merck shall
provide Licensors reasonable assistance in order to allow Licensors to obtain
the benefit of any present or future treaty against double taxation which may
apply to the Agreement Payments.   In the event that Merck wishes to assign this
Agreement as a whole, or the payment obligations under this Agreement, to an
Affiliate of Merck, and as of the date of such assignment such assignment would
require the Merck Affiliate to withhold taxes from payments made under this
Agreement to UMass, Merck will notify UMass, and such assignment shall be
subject to UMass’s consent.


 


6.4.          Tax-Exempt
Status.  Merck and Medarex acknowledge
that UMass, as a public institution of the Commonwealth of Massachusetts, is an
exempt organization under the United States Internal Revenue Code of 1986, as
amended.  Merck and Medarex also
acknowledge that certain facilities in which the licensed inventions were
developed may have been financed through offerings of tax-exempt bonds.  If the Internal Revenue Service determines,
or if counsel to UMass reasonably determines, that any term of this Agreement
affects the tax-exempt status of UMass or the bonds used to finance UMass
facilities, the relevant term and terms of the Agreement that are affected
thereby shall be deemed to be invalid and shall be modified in accordance with Section 13.11.


 


6.5.          Payment Currency.  All
payments to be made by Merck to Licensors under this Agreement shall be made in
United States dollars and may be paid by check made to the order of Licensors
or bank wire transfer in immediately available funds to such bank account in
the United States as may be designated in writing by Licensors from time to
time.  In the case of sales outside the
United States, the rate of exchange to be used in computing the monthly amount
of currency equivalent in United States dollars due Licensors shall be made at
the monthly rate of exchange utilized by Merck in its worldwide accounting
system, prevailing on the third to the last business day of the month preceding
the month in which such sales are recorded by Merck, which Merck rate of
exchange shall be derived from an internationally recognized source for
currency exchanges such as Bloomberg.com or a similar source.


 


6.6.          Records Retention. Merck shall maintain (and shall ensure that its Affiliates and Sublicensees
shall maintain) complete and accurate books, records and accounts that fairly
reflect their respective Net Sales with respect to Products in sufficient
detail to confirm the accuracy of any payments required hereunder and in
accordance with GAAP, which books, records and accounts shall be retained by
Merck until the later of (a) three (3) years after the end of the
period to which such books, records and


 


20

















 


accounts pertain, and (b) the expiration of the
applicable tax statute of limitations (or any extensions thereof), or for such
longer period as may be required by Applicable Law.


 


6.7.          Audit.  Licensors shall have the right to have an
independent certified public accounting firm of nationally recognized standing,
reasonably acceptable to Merck, to have access during normal business hours,
and upon reasonable prior written notice, to such of the records of Merck (and
its Affiliates and Sublicensees) as may be reasonably necessary to verify the
accuracy of royalty reports for Products  for any Calendar Year ending not more than
[ * ] prior to the date of such request; provided, however, that
Licensors shall not have the right to conduct more than one such audit in
[ * ].  The accounting firm
shall disclose to each Party whether the royalty reports are correct or
incorrect and the specific details concerning any discrepancies.  No other information shall be provided to
Licensors.  Licensors shall
[ * ].  If, based on the results
of such audit, additional payments are owed by Merck under this Agreement,
Merck shall make such additional payments, with interest from the date
originally due as provided in Article 5, within [ * ] on which
such accounting firm’s written report is delivered to Merck.  Licensors shall treat all information subject
to review under this Section 6.7 in accordance with the confidentiality
provisions of Article 7 and shall cause its accounting firm to enter into
a reasonably acceptable confidentiality agreement with Merck obligating such
firm to maintain all such financial information in confidence pursuant to such
confidentiality agreement.  In the event
that Merck disagrees with the accounting firm’s results hereunder, then upon
written notice by Merck to Licensors, the Parties shall [ * ].


 


7.     CONFIDENTIALITY


 


7.1.          Confidential Information.
Except as expressly provided herein, the Parties agree that, for the term of
this Agreement and for ten (10) years thereafter, the receiving Party
shall keep completely confidential and shall not publish or otherwise disclose
and shall not use for any purpose except for the purposes contemplated by this
Agreement any Confidential Information furnished to it by the disclosing Party
hereto pursuant to this Agreement, except to the extent that it can be
established by the receiving Party by competent proof that such Confidential
Information:


 


7.1.1.       is or becomes public or available to the general public otherwise than
through the act or default of the receiving Party;


 


7.1.2.       is obtained by the receiving Party from a Third Party who is lawfully in
possession of such Confidential Information and is not subject to an obligation
of confidentiality or non-use owed to the disclosing Party or others;


 


7.1.3.       is previously known to the receiving Party prior to disclosure to the
receiving Party by the disclosing Party under this Agreement, as shown by
written evidence, and is not obtained or derived directly or indirectly from
the disclosing Party;


 


7.1.4.       is disclosed by the receiving Party pursuant to the requirement of law,
provided that the receiving Party has complied with the provisions set forth in


 


21

















 


Section 7.3; or


 


7.1.5.       is independently developed by the receiving Party without the use of or
reliance on any Confidential Information provided by the disclosing Party
hereunder, as shown by contemporaneous written evidence.


 


7.2.            Licensed Know-How.  Subject to the terms of this Article 7,
Licensors shall maintain the confidentiality of Licensed Know-How in the Field,
as if such Licensed Know-How were disclosed to Licensors by Merck.


 


7.3.            Public Domain. For the purposes of this
Agreement, specific information disclosed as part of the Confidential
Information shall not be deemed to be in the public domain or in the prior
possession of the receiving Party merely because it is embraced by more general
information in the public domain or by more general information in the prior
possession of the receiving Party.


 


7.4.            Legal Disclosure. If the receiving
Party becomes legally required to disclose any Confidential Information
provided by the disclosing Party, the receiving Party will give the disclosing
Party prompt notice of such fact so that the disclosing Party may obtain a
protective order or other appropriate remedy concerning such disclosure and/or
waive compliance with the non-disclosure provision of this Agreement. The
receiving Party will reasonably cooperate with the disclosing Party in
connection with the disclosing Party’s efforts to obtain any such order or
other remedy. If any such order or other remedy does not fully preclude
disclosure or the disclosing Party waives such compliance, the receiving Party
will make such disclosure only to the extent that such disclosure is legally
required and will use its reasonable efforts to have confidential treatment
accorded to the disclosed Confidential Information.


 


7.5.            Permitted Use and Disclosures. Each
Party hereto may use or disclose Confidential Information disclosed to it by
the other Party to the extent such use or disclosure is reasonably necessary in
complying with applicable governmental regulations or otherwise submitting
information to tax or other governmental authorities, conducting preclinical or
clinical development, or otherwise exercising its rights hereunder; provided,
however, that, if a Party is required to make any such disclosure of another
Party’s Confidential Information, other than pursuant to a confidentiality
agreement, it will give reasonable advance notice to the latter Party of such
disclosure and, save to the extent inappropriate in the case of patent
applications, will use its reasonable efforts to secure confidential treatment
of such Confidential Information prior to its disclosure (whether through protective
orders or otherwise).


 


7.6.            Public Disclosure. Except as otherwise
required by law, neither Party shall issue a press release or make any other
public disclosure concerning this Agreement or the subject matter hereof
without the prior written approval of such press release or public disclosure
by the other Party. Each Party shall submit any such press release or public
disclosure to the other Party for its prior review and approval, which approval
shall not be unreasonably withheld, conditioned or delayed.  If the receiving Party does not respond
within fifteen (15) days from submission, the press release or public


 


22

















 


disclosure shall be deemed
approved. The contents of any such announcement or similar publicity that has
been reviewed and approved by the reviewing Party can be re-released by either
Party without a requirement for re-approval. 
Notwithstanding the foregoing, either Party may issue such press releases
as it determines, based on advice of counsel, are reasonably necessary to
comply with law or for appropriate market disclosure.  If a public disclosure is required by law,
including without limitation in a filing with the US Securities and Exchange
Commission, the disclosing Party shall provide copies of the disclosure
reasonably in advance of such filing or other disclosure for the non-disclosing
Party’s prior review and comment and shall give due consideration to any
reasonable comments by the non-filing Party relating to such filing, including
without limitation the provisions of this Agreement for which confidential
treatment should be sought.


 


7.7.            Confidential Terms. Except as expressly
provided herein, each Party agrees not to disclose any terms of this Agreement
to any Third Party without the consent of the other Party; except that
disclosures may be made as required by securities or other Applicable Law, or
to existing or potential acquirers or merger candidates; existing or
potential pharmaceutical collaborators; actual or potential sublicensees;
investment bankers; existing or potential investors, venture capital firms or
other financial institutions or investors for purposes of obtaining financing;
or Affiliates, each of whom prior to disclosure must be bound by obligations of
confidentiality and non-use at least equivalent in scope to those set forth in
this Article 7.


 


7.8.            Survival. This Article 7 will
survive expiry or termination of this Agreement for any reason for the period
of time set forth in Section 7.1.


 


8.     REPRESENTATIONS AND WARRANTIES; CONDITIONS TO CLOSING


 


8.1.          Licensors.  Medarex and UMass hereby represent and
warrant that as of the Execution Date:


 


8.1.1.       Medarex
and UMass each have the right to grant the rights and licenses granted herein;
and


 


8.1.2.       to the knowledge of the
officers of Medarex and UMass, the Licensed Patents exist and have not been
held by a court of competent jurisdiction to be invalid or unenforceable, in
whole or in part;


 


8.1.3.       it has not previously
assigned, transferred, conveyed or otherwise encumbered its right, title and
interest in Licensed Patents or Licensed Know-How;


 


8.1.4.       to the knowledge of the
officers of Medarex and UMass, Medarex and UMass are the sole and exclusive
owners of the Licensed Patents and Licensed Know-How, all of which are free and
clear of any liens, charges and encumbrances, and no other person, corporate or
other private entity, or governmental entity or subdivision thereof, has or
shall have any claim of ownership whatsoever with respect to the Licensed
Patents and/or Licensed Know-How;


 


8.1.5.       to the
knowledge of the officers of Medarex and UMass, there are


 


23

















 


no existing claims, judgments or settlements against
or owed by Medarex and/or UMass and no pending or threatened (in writing)
claims or litigation relating to the Licensed Patents and Licensed Know-How;
and


 


8.1.6.       to the
knowledge of the officers of Medarex and UMass, Medarex and UMass have
disclosed to Merck all material technical data in Medarex’s and UMass’ possession
and control specific to the Licensed Patents and the Antibodies called CDA1
(MDX-066) and CDB1 (MDX-1388).


 


For purposes of this Section 8.1:  (a) “knowledge of” a person shall mean [ * ] (b) the officers of Medarex include the
Chief Executive Officer, Chief Financial Officer, General Counsel, Chief
Science Officer, Managing Attorney Intellectual Property, and Senior
Vice-President of Business Development, and (c) the officers of UMass
include the Chief Executive Officer of MBL, and Executive Director of the Office of Technology
Management of UMass Medical School.


 


8.2.          Medarex. Medarex hereby represents
and warrants that as of the Execution Date:


 


8.2.1.       Medarex is a corporation duly organized validly existing and in good
standing under the laws of the State of New Jersey, U.S.A.; and


 


8.2.2.       the execution, delivery and performance of this Agreement have been duly
authorized by all necessary corporate action on the part of Medarex and is legally
binding upon it, enforceable in accordance with its terms, and does not
conflict with any agreement, instrument or understanding, oral or written, to
which it is a party or by which it may be bound, nor violate any material law
or regulation of any court, governmental body or administrative or other agency
having jurisdiction over it.


 


8.3.          UMass and MBL.  UMass and MBL, jointly and severally, hereby
represent and warrant that:


 


8.3.1.       UMass is a state university duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, and MBL is an
entity within the University of Massachusetts Medical School;


 


8.3.2.       the execution, delivery and performance of this Agreement have been duly
authorized by all necessary corporate action on the part of UMass and all
necessary authorities on the part of MBL, and is legally binding upon
UMass and MBL, enforceable in accordance with its terms, and does not conflict
with any agreement, instrument or understanding, oral or written, to which
either UMass or MBL is a party or by which it may be bound, nor violate any
material law or regulation of any court, governmental body or administrative or
other agency having jurisdiction over it; and


 


8.3.3.       [ * ]
with [ * ] and amendments thereto, to [ * ] the
[ * ] and to [ * ] under [ * ].


 


8.4.          Merck. Merck represents and
warrants that: (i) it is a corporation duly


 


24

















 


organized validly existing and
in good standing under the laws of New Jersey, and (ii) the execution,
delivery and performance of this Agreement have been duly authorized by all
necessary corporate action on the part of Merck and is legally binding upon
it, enforceable in accordance with its terms, and does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any material law or regulation of any
court, governmental body or administrative or other agency having jurisdiction
over it.


 


8.5.        Disclaimer. EXCEPT AS EXPRESSLY STATED
IN THIS AGREEMENT NOTHING IN THIS AGREEMENT IS OR SHALL BE CONSTRUED AS:


 


8.5.1.       A WARRANTY OR
REPRESENTATION BY LICENSORS OR WCCC AS TO THE VALIDITY OR SCOPE OF ANY LICENSED
TECHNOLOGY; OR


 


8.5.2.       A WARRANTY OR REPRESENTATION BY LICENSORS OR WCCC THAT ANYTHING MADE, USED, SOLD, OR OTHERWISE
DISPOSED OF UNDER ANY LICENSE GRANTED IN THIS AGREEMENT IS OR WILL BE FREE FROM
INFRINGEMENT OF PATENTS OR OTHER INTELLECTUAL PROPERTY OF THIRD PARTIES; OR


 


8.5.3.       AN OBLIGATION
TO BRING OR PROSECUTE ACTIONS OR SUITS AGAINST THIRD PARTIES FOR INFRINGEMENT
(EXCEPT TO THE EXTENT AND IN THE CIRCUMSTANCES STATED IN ARTICLE 9);


 


8.5.4.       GRANTING BY
IMPLICATION, ESTOPPEL, OR OTHERWISE, ANY LICENSES OR RIGHTS UNDER PATENTS OR
KNOW-HOW OF LICENSORS OTHER THAN THE LICENSED TECHNOLOGY.


 


8.5.5.       A REPRESENTATION OR WARRANTY BY LICENSOR OR WCCC OF THE ACCURACY, SAFETY,
OR USEFULNESS FOR ANY PURPOSE OF ANY LICENSED KNOW-HOW AT ANY TIME MADE
AVAILABLE BY LICENSOR.


 


8.6.          Limitation on Liability.  (a)  [ * ] LICENSOR SHALL HAVE NO LIABILITY WHATSOEVER TO
MERCK, ITS AFFILIATES OR SUBLICENSEES FOR OR ON ACCOUNT OF ANY INJURY, LOSS, OR
DAMAGE, OF ANY KIND OR NATURE, SUSTAINED BY, OR ANY DAMAGE ASSESSED OR ASSERTED
AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED ON MERCK, ITS AFFILIATES
OR SUBLICENSEES, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM (A) THE
PRODUCTION, USE, OR SALE OF ANY PRODUCT, OR THE PRACTICE OF THE LICENSED
PATENTS OR THE JOINT TECHNOLOGY; OR (B) THE USE OF ANY LICENSED KNOW-HOW.


 


(b)  [ * ] NO PARTY SHALL HAVE ANY LIABILITY TO ANY OTHER
PARTY FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES OR LOSSES
OF ANY KIND, NATURE OR DESCRIPTION


 


25

















 


WHATSOEVER FOR OR ON ACCOUNT OF ANY INJURY, LOSS, OR
DAMAGE OF SUCH PARTY DUE TO THE ACTS OR OMISSIONS OF THE OTHER PARTY.


 


8.7.           HSR Filing;
Closing Date of Agreement.


 


8.7.1.       Unless
otherwise exempted from filing (it being the understanding of UMass that it is
exempted from filing), each of Merck, UMass and Medarex shall, within ten (10) days
after the Execution Date, file with the United States Federal Trade Commission
and the Antitrust Division of the United States Department of Justice, any
filing required of it under the HSR Act with respect to the transactions
contemplated hereby.  The Parties will
cooperate with one another to the extent necessary in the preparation of any
such filing.  Each Party will be
responsible for its own costs, expenses, and filing fees associated with any
filing under the HSR Act.  In respect of
any such filing, each of Merck, UMass and Medarex will use its good faith,
diligent efforts to resolve and address any concerns on the part of any court
or governmental authority regarding the legality of the proposed transaction,
including cooperating in good faith with any government investigation and the
prompt production of documents and information demanded by a second request for
documents and of witnesses if requested, and to cause the Closing Date of this
Agreement to occur as soon as practicable, as provided in Section 8.7.2.


 


8.7.2.       The “Closing
Date” shall not occur until (a) the waiting period under the HSR Act
shall have expired or earlier been terminated; (b) no injunction (whether
temporary, preliminary or permanent) prohibiting consummation of the transactions
contemplated by this Agreement or any material portion hereof shall be in
effect; (c) no requirements or conditions shall have been imposed in
connection therewith which are not reasonably satisfactory to the Parties; and (d) each
Party shall certify that the representations set forth in Sections 8.1 through
8.4 (Representations and Warranties) remain true and correct as of the Closing
Date (collectively, the “Closing
Conditions”).  In the event
that the Closing Conditions are not satisfied on the date that is
[ * ] after the Execution Date, this Agreement shall terminate.  Further, in the event that condition (a) of
this Section 8.7.2 has not been satisfied within [ * ] after the
Execution Date, then the Parties shall confer in good faith with respect to the
best course of action with respect to the activities anticipated under this
Agreement; provided, however, that in any event, either Party (Merck, on the
one hand, and Licensors, on the other hand) may terminate this Agreement upon
the fifteenth (15th) day after the
[ * ] anniversary of the Execution Date if condition (a) has not
then been satisfied.


 


8.8.          Portions of
Agreement effective as of Execution Date.  Notwithstanding Section 8.7, the
following provisions of the Agreement shall be in full force and effect as of
the Execution Date:  Articles 1
(Definitions), 7 (Confidentiality), 8 (Representations and Warranties;
Conditions to Closing), Section 12.6.2 (Termination: Return of Licensors
Know-How), Section 13.1 (Governing Law), and Section 13.5 (Notices).


 


8.9.          Activities
between Execution Date and Closing Date.  Effective upon the Closing Date, Licensed
Patents and Licensed Know-How resulting from the independent activities of
Licensors between the Execution Date and Closing Date shall be deemed to


 


26

















 


be subject to the licenses granted by Licensors to
Merck hereunder.


 


9.                                      INTELLECTUAL PROPERTY


 


9.1.          Ownership of Licensed Technology.  Subject to the license
grants and other rights set forth in this Agreement, as between the Parties,
Licensors shall own and retain all right, title and interest in and to the
Licensed Technology.


 


9.2.          Ownership of Medarex Patents.  Subject to the license
grants to Merck under Article 2, as between the Parties, Medarex shall own
and retain all right, title and interest in and to any and all Medarex Patents.


 


9.3.          Ownership of Production Process Technology.  Each Party shall own and
retain all right, title and interest in and to such Party’s Production Process
Technology, including any and all Information with respect to such Production
Process Technology (including any Production Process Improvements) that are
conceived, discovered, developed or otherwise made, by or on behalf of such
Party, its Affiliates or, to the extent permitted, its sublicensees, whether or
not patented or patentable, and any and all Patent and other intellectual
property rights with respect thereto. 
Each Party shall have the sole right, but not the obligation, to file,
prosecute, maintain, defend and enforce, at its sole cost and expense, all
Patents within such Party’s Production Process Technology.


 


9.4.          Ownership of Joint Technology.  Subject to the license
grants and other rights set forth in this Agreement, Merck, Medarex and/or
UMass (including MBL) shall each own an equal and undivided interest in and to
any Joint Technology.


 


9.5.          Patent Prosecution – Licensed Patents and Joint Patents.  Licensors agree to file,
prosecute and maintain in the Territory, upon appropriate consultation with Merck,
the Licensed Patents licensed to Merck under this Agreement; provided, however,
that with respect to Joint Inventions, Merck shall have the first right to
file, prosecute, maintain and defend patent applications in the name of Merck
and Licensors jointly.  With respect to
Licensor Inventions, Licensors may elect not to file and if so, Licensors shall
notify Merck and Merck shall have the right, at Merck’s sole cost and expense,
to file, prosecute and maintain such patent applications in the name of Licensors,
which patent applications shall thereupon be Licensed Patents hereunder.


 


9.6.          Cooperation.  Licensors and Merck shall cooperate fully in
the preparation, filing, prosecution and maintenance of the Licensed Patents
and Joint Patents, executing all papers and instruments so as to enable the
relevant Party to apply for, to prosecute and to maintain Patent applications
and Patents in any country.  Each Party
shall provide to the other prompt notice as to all matters which come to its
attention and which may affect the preparation, filing, prosecution,
maintenance and defense of any such Patent applications or Patents. The filing
Party shall give the non-filing Party an opportunity to review the text of the
application before filing, shall consult with the non-filing Party with respect
thereto, and shall supply the non-filing Party with a copy of the application
as filed, together with notice of its filing date and serial number.  Licensors shall keep Merck advised of the status of
the actual and prospective patent filings and


 


27

















 


upon Merck’s request, shall provide advance copies of any papers related to
the filing, prosecution and maintenance of such patent filings.  Licensors shall promptly give notice to Merck
of the allowance, grant, lapse, revocation, surrender, invalidation or
abandonment of any Licensed Patents licensed to Merck for which Licensors are
responsible for the filing, prosecution and maintenance.  Licensors shall consult Merck with regard to
the filing of divisional applications following the allowance of any patent
application within the Licensed Patents and before the payment of the issue or
grant fee related to such allowed application. 
The Parties agree to cooperate and to take reasonable actions to
maximize the protections available under the safe harbor provisions of 35
U.S.C. 103(c) for US Patents.


 


9.7.          Option of Merck to Prosecute and Maintain Patents.  Licensors shall give notice to
Merck of any desire to cease prosecution and/or maintenance of Licensed Patents
on a country by country basis in the Territory and, in such case, shall permit
Merck, in its sole discretion, to continue prosecution and/or maintenance of
such Licensed Patents in the name of Licensors. 
Any such Patents shall continue to be Licensed Patents hereunder. Licensor shall
execute such documents and perform such acts in a timely manner at Licensors’
expense as may be reasonably necessary to allow the effective prosecution
and/or maintenance of such Licensed Patents by Merck.  The cost and expenses incurred by Merck in
prosecuting and maintaining such Licensed Patents after notice is provided by
Licensors pursuant to this Section 9.7 shall be borne by Licensors.


 


9.8.          Costs.  Except as provided in Section 9.7, Merck
shall reimburse Licensor for all of the costs and expenses required to file,
prosecute and maintain the Licensed Patents, and to pay for all costs and
expenses required to file, prosecute and maintain the Joint Patents.  Merck may not elect to cease payment of the
costs of filing, prosecuting and maintaining such Patents for any country in
the Major Markets.  Merck may elect to
cease payment of the costs of filing, prosecuting and maintaining such Patents
for a particular country other than the Major Markets by providing sixty (60)
days written notice to Licensors. 
Licensors agree that during such sixty (60) day period, Licensors shall
not make any payment or incur any cost or expense that had not, prior to Merck’s
notice of election to discontinue payment, been intended to be made or incurred
during such sixty (60) day period.  Upon
expiration of such sixty (60) day period, any Licensed Patents for which Merck
has ceased to pay costs and expenses pursuant to this Section 9.8 shall
not be considered Licensed Patents.


 


9.9.          Interference,
Opposition, Reexamination, Reissue and other Post-Grant Proceedings.


 


9.9.1.       Licensed Patents.


 


9.9.1.1.    Licensors
shall, within ten (10) days of learning of such event, inform Merck of any
request for, or filing or declaration of, any interference, opposition, reissue
or reexamination relating to Licensed Patents. 
Merck and Licensors shall thereafter consult and cooperate fully to
determine a course of action with respect to


 


28

















 


any
such proceeding.  Merck shall have the
right to review and approve any submission to be made in connection with such
proceeding.


 


9.9.1.2.    Licensors shall
not initiate any reexamination, interference or reissue proceeding relating to
Licensed Patents without the prior written consent of Merck, which consent
shall not be unreasonably withheld.


 


9.9.1.3.    In connection
with any interference, opposition, reissue, or reexamination proceeding
relating to Licensed Patents, Merck and Licensors will cooperate fully and will
provide each other with any information or assistance that either may
reasonably request. Licensors shall keep Merck informed of developments in any
such action or proceeding, including, to the extent permissible by law,
consultation and approval of any settlement, the status of any settlement
negotiations and the terms of any offer related thereto.


 


9.9.2.       Joint Patents.


 


9.9.2.1.    Merck shall,
within ten (10) days of learning of such event, inform Licensors of any
request for, or filing or declaration of, any interference, opposition, reissue
or reexamination relating to Joint Patents. 
Merck and Licensors shall thereafter consult and cooperate fully to
determine a course of action with respect to any such proceeding.  Licensors shall have the right to review and
approve any submission to be made in connection with such proceeding.


 


9.9.2.2.    Merck shall not
initiate any reexamination, interference or reissue proceeding relating to
Joint Patents without the prior written consent of Licensors, which consent
shall not be unreasonably withheld.


 


9.9.2.3.    In connection
with any interference, opposition, reissue, or reexamination proceeding
relating to Licensed Patents, Merck and Licensors will cooperate fully and will
provide each other with any information or assistance that either may
reasonably request. Merck shall keep Licensors informed of developments in any
such action or proceeding, including, to the extent permissible by law,
consultation and approval of any settlement, the status of any settlement
negotiations and the terms of any offer related thereto.


 


9.9.3.       Merck shall bear the expense
of any interference, opposition, reexamination, or reissue proceeding relating
to Licensed Patents and Joint Patents.


 


9.9.4.       Regardless of which Party
has the right to initiate and prosecute such action, both Parties shall, as
soon as practicable after receiving notice of such action, convene and consult
with each other regarding the appropriate course of conduct for such action.  The non-initiating Party shall have the right
to be kept fully informed and participate in decisions regarding the
appropriate course of conduct for such action, and the right to join and
participate in such action.


 


9.10.        Infringement.        Licensors
shall give Merck notice if Licensors become aware of (i) any infringement
of Licensed Patents, or (ii) any misappropriation or misuse 


 


29

















 


of Licensed Know-How.  With respect to the Licensed Know-How,
Licensed Patents and the Joint Patents, Merck, its Affiliates and/or
Sublicensees shall have the right (but not the obligation) to enforce in its
own name and at its own expense any infringement, including counterclaims or
defenses relating to invalidity, non-infringement, or unenforceability, of such
Patents or misappropriation of such Licensed Know-How. Before Merck, its
Affiliates or its Sublicensees commence an action with respect to any
infringement of such Licensed Patents or Joint Patents, Merck shall consult
with Licensors and reasonably consider any input by Licensors.


 


9.11.        Joining Licensors.  If Merck, its Affiliates and/or its
Sublicensees elect to commence an action as described above and Licensors are
legally indispensable parties to such action, Licensors shall either join in such
action or, at its election, shall assign to Merck all of Licensors’ right,
title, and interest in each Patent or Patent application which (i) is a
part of the Licensed Patents and Joint Patents and (ii) is the subject of
such action.  In the event that any
Patent or Patent application is assigned to Merck by Licensors, pursuant to
this Section 9.11, such assignment shall require Merck to continue to meet
its relevant obligations, including its payment obligations, under this
Agreement as if the assigned Patent or Patent application were still licensed,
rather than assigned, to Merck.


 


9.12.        Cost Reimbursement.  Merck shall reimburse Licensors for any costs
that Licensors incur as part of an action brought against Licensors, Merck, its
Affiliates and/or Sublicensees or by Merck, its Affiliates and/or Sublicensees,
provided that Merck has requested Licensors’ participation in the action and/or
Licensors are indispensable parties to such action.


 


9.13.        Licensor Action.  In the event that Merck, its Affiliates
and/or its Sublicensees elect not to exercise their right to prosecute any
infringement of the Licensed Patents and Joint Patents pursuant to the above
paragraphs, Licensors may do so at their own expense, controlling such action
and retaining all recoveries therefrom. 
To the extent reasonably necessary, Merck shall cooperate with Licensors
in any action.


 


9.14.        Distribution of Recoveries.  Any revenues obtained as a result of a
proceeding brought pursuant to Section 9.10 shall be distributed as
follows:


 


9.14.1.     the Party which initiated
and prosecuted the action shall recoup all of its costs and expenses incurred
in connection with the action;


 


9.14.2.     the other Parties shall
then, to the extent possible and to the extent not already reimbursed by the other
Party, recover their costs and expenses incurred in connection with the action;
and


 


9.14.3.     [ * ]; and


 


9.14.4.     [ * ].


 


9.15.        Medarex Patents.  Medarex shall have the sole
right, at its expense and in its sole discretion, (i) to prepare, file,
prosecute and maintain the Medarex Patents and to conduct any interferences,
reexaminations, reissues, oppositions, or request for patent


 


30
















 


term extensions relating
thereto, (ii) to prosecute and defend any claim, suit or proceeding
alleging patent infringement against Medarex, Licensors or Merck relating to
the Medarex Patents, and (iii) to enforce the Medarex Patents against any
Third Party if Medarex determines that such Medarex Patents are being infringed
by a Third Party’s activities and that such infringement will affect the
exercise by Merck of its rights and obligations under this Agreement.


 


9.16.        Ownership of Information and Inventions Made Under the Agreement. Ownership of Information developed by one or any of the Parties,
ownership of Inventions conceived by one or any of the Parties under the
Agreement, and ownership of Patents claiming such Inventions, shall be
determined as set forth herein. 
Inventorship will be determined in accordance with United States patent
law.  Information developed solely by
UMass and/or Medarex, and Inventions conceived solely by UMass and/or Medarex,
shall be owned solely by the respective Party or Parties.  Information developed solely by Merck, and
Inventions conceived solely by Merck will be owned solely by Merck.  Information developed jointly by UMass and/or
Medarex and Merck, and Inventions conceived jointly by UMass and/or Medarex and
Merck, shall be owned jointly by the applicable Parties.  Filing, prosecution and maintenance of any
Patents claiming Inventions shall be carried out in accord with the provisions
of this Article 9.


 


9.17.        Patent Term
Restoration. The Parties shall cooperate with each other,
including without limitation to provide necessary information and assistance as
the other Party may reasonably request, in obtaining patent term extension,
restoration and supplemental protection certificates and their equivalents in
any country in the Territory where applicable to Licensed Patents.  In the event that elections with respect to
obtaining such patent term extension, restoration or supplemental protection
certificates or their equivalents are to be made, Merck shall have the right to
make such election and Licensors agree to abide by such election.


 


10.           PUBLICATION


 


10.1         Publication. Each Party shall consult with
each of the other Parties according to the procedures of this Section 10.1
before publishing, presenting or disclosing any publication, presentation or
other public disclosure relating to the Agreement (each, a “Publication”).  Each
Party shall provide the other Parties for review any written Publication at
least fifteen (15) days prior to submission for publication or presentation or
other public disclosure with regard to an abstract, and sixty (60) days prior
to submission for publication or presentation or other public disclosure of any
manuscript other than an abstact.  Within
such sixty (60) day period, each Party shall advise the other Parties of, and
such Party shall take, appropriate action to protect Information and/or
Inventions (including Licensed Technology), including delay of the Publication
to permit patent filings or modification of the publication to delete Information
and/or Inventions (including Licensed Technology).  Until this publication process is completed,
the Information and/or Inventions shall be kept confidential in accordance with
Article 7 above by the Parties. 
Notwithstanding the foregoing, Merck shall have the right at its sole
discretion to include Information and/or Inventions in Regulatory
Documentation, marked as confidential, at any time during the Term, and the 


 


31

















 


Parties understand and agree that MBL shall present the
results of its Phase II clinical trial on June 3, 2009 at the Digestive
Disease Week meeting and shall also publish such results in an appropriate
journal or other publication.  MBL shall
provide copies of the June 3rd presentation and its published article to
Merck.


 


11            INDEMNIFICATION


 


11.1         Medarex.  Medarex shall indemnify, defend and hold
harmless Merck, its Affiliates, and its and their directors, officers,
employees and agents (each, a “Merck Indemnitee”)
from and against any and all liabilities, damages, losses, costs or expenses
(including attorneys’ fees) (each, a “Liability”)
resulting from a claim, suit or proceeding made or brought by a Third Party
against a Merck Indemnitee arising from or occurring as a result of any breach
of the representations and warranties of Medarex set forth in Article 3,
and Sections 8.1 and 8.2, except to the extent caused by the negligence or
willful misconduct of a Merck Indemnitee.


 


11.2         [ * ].  [ * ]
shall indemnify, defend and hold harmless [ * ] from and against any and all [ * ] against a [ * ] except to the extent caused by the negligence or
willful misconduct of a Merck Indemnitee.


 


11.3         Merck.


 


11.3.1      UMass/MBL.  Merck shall indemnify, defend
and hold harmless UMass/MBL and their trustees, officers, employees and agents
(each, a “UMass/MBL Indemnitee”) from and against
any and all Liabilities resulting from a claim, suit or proceeding made or
brought by a Third Party against a UMass/MBL Indemnitee, arising from or
occurring as a result of (i) any breach of the representations and
warranties set forth in Section 8.4, (ii) the practice by Merck of
any right granted herein, or (iii) any manufacture, use or sale of any
Product by Merck and/or its Affiliates and/or its Sublicensees (including,
without limitation, product liability claims), except to the extent that such a
claim would be subject to indemnification by Medarex pursuant to Section 11.1
or by WCCC pursuant to Section 11.2.


 


11.3.2      Medarex.  Merck shall indemnify, defend
and hold harmless Medarex and its directors, officers, employees and agents
(each, a “Medarex Indemnitee”) from and against
any and all Liabilities resulting from a claim, suit or proceeding made or
brought by a Third Party against a Medarex Indemnitee, arising from or
occurring as a result of (i) any breach of the representations and
warranties set forth in this Agreement, (ii) the practice by Merck of any
right granted herein, or (iii) any manufacture, use or sale of any Product
by Merck and/or its Affiliates and/or its Sublicensees (including, without
limitation, product liability claims), except to the extent such a claim would
be subject to indemnification by Medarex pursuant to Section 11.1 or by
WCCC pursuant to Section 11.2.


 


11.4      Procedure. In the event that any Indemnitee intends to claim indemnification under
this Article 11 it shall promptly notify the other Party (the “Indemnitor”) in writing of such alleged Liability.  The Indemnitor shall have the sole 


 


32

















 


right
to control the defense and settlement thereof. 
The Indemnitee shall cooperate with the Indemnitor and its legal
representatives in the investigation of any action, claim or Liability covered
by this Article 11 and do nothing which would adversely affect such
defense or settlement.  The Indemnitee
shall not, except at its own cost, voluntarily make any payment or incur any
expense with respect to any claim or suit without the prior written consent of
the Indemnitor, which the Indemnitor shall not be required to give.  For purposes of this Article 11, “Indemnitee” shall mean, as applicable, a Merck Indemnitee, a
UMass/MBL Indemnitee, or a Medarex Indemnitee.


 


11.5      Merck Insurance.  Merck shall maintain at its
sole cost and expense, an adequate liability insurance or self-insurance
program (including product liability insurance) to protect against potential
liabilities and risk arising out of activities to be performed under this
Agreement upon such terms (including coverages, deductible limits and self-insured
retentions) as are customary in the U.S. pharmaceutical industry for the
activities to be conducted by Merck under this Agreement.  Subject to the preceding sentence, such
liability insurance or self-insurance program shall insure against all types of
liability, including personal injury, physical injury or property damage
arising out of the manufacture, sale, use, distribution or marketing of a
Product.  Merck shall furnish to
Licensors evidence of such insurance or self insurance, upon written
request.  Such insurance information
shall be kept in confidence in the same manner as any other Confidential
Information disclosed by Merck to Licensors hereunder.


 


11.6      Cooperation.  Each Party shall cooperate with
the other Parties to provide appropriate and reasonable documentation to permit
such other Parties to obtain insurance coverage for Liabilities covered under
this Article 11.


 


11.7      Survival.     This Article 11 will survive expiry or termination of this Agreement
for any reason.


 


12.                                 TERM AND TERMINATION


 


12.1.        Term. The term of this Agreement (“Term”) shall commence on the Closing Date and unless earlier
terminated as provided in this Article 12, this Agreement shall continue
in full force and effect on a country-by-country and Product-by-Product basis
until there are no remaining royalty payment obligations in a country, at which
time the Agreement shall expire in its entirety in such country, at which point
Merck shall have a fully paid-up, perpetual license in such country.


 


12.2.        Termination for Cause.
Failure of Merck or Licensors to materially comply with any of the respective
material obligations contained in this Agreement shall entitle the other Party
to give the Party in default notice requiring it to cure such material default.  If such material default is not cured within [ * ] after receipt of such notice, the notifying
Party shall be entitled (without prejudice to any of its other rights conferred
on it by the Agreement) to terminate this Agreement by giving a notice to take
effect immediately.  Notwithstanding the
foregoing, in the event of a non-monetary default, if the default is not
reasonably capable of being cured within the [ * ] cure period by the 


 


33

















 


defaulting Party and such defaulting
Party is making a good faith effort to cure such default, the notifying Party
may not terminate this Agreement, provided however, that the notifying Party
may terminate this Agreement if such default is not cured within [ * ] of such original notice of default. The right of
either Party to terminate this Agreement as herein above provided shall not be
affected in any way by its waiver of, or failure to take action with respect
to, any previous default.  Notwithstanding
the foregoing, in the event of a good faith dispute with respect to the
existence of a material breach, the [ * ] cure period shall be tolled until such time as
the dispute is resolved pursuant to Section 13.7.


 


12.3.        Termination for Insolvency. Either Party
may terminate this Agreement if, at any time, the other Party shall file in any
court or agency pursuant to any statute or regulation of any state, country or
jurisdiction, a petition in bankruptcy or insolvency or for reorganization or
for an arrangement or for the appointment of a receiver or trustee of that
Party or of its assets, or if such other Party proposes a written agreement of
composition or extension of its debts, or if such 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 such other Party shall propose or be a party to any
dissolution or liquidation, or if such other Party shall make an assignment for
the benefit of its creditors.


 


12.4.        Rights in
Bankruptcy.  All rights
and licenses granted under or pursuant to this Agreement by Licensors are, and
shall otherwise be deemed to be, for purposes of Section 365(n) of
the United States Bankruptcy Code, licenses of rights to “intellectual property”
as defined under Section 101 of the United States Bankruptcy Code.  The Parties agree that the Merck, as licensee
of such rights under this Agreement, shall retain and may fully exercise all of
its rights and elections under the United States Bankruptcy Code.  The Parties further agree that, in the event
of the commencement of a bankruptcy proceeding by or against a Party under the
United States Bankruptcy Code, the Party hereto that is not a Party to such
proceeding shall be entitled to a complete duplicate of (or complete access to,
as appropriate) any such intellectual property and all embodiments of such
intellectual property, which, if not already in the non-subject Party’s
possession, shall be promptly delivered to it (a) upon any such
commencement of a bankruptcy proceeding upon the non-subject Party’s written
request therefor, unless the Party subject to such proceeding continues to
perform all of its obligations under this Agreement or (b) if not
delivered under clause (a) above, following the rejection of this
Agreement by or on behalf of the Party subject to such proceeding upon written
request therefor by the non-subject Party.


 


12.5.        Termination by Merck.  Subject to the terms of Section 12.6,
Merck may terminate this Agreement at any time upon providing one-hundred
eighty (180) days prior written notice to Licensors.


 


12.6.        Effect of Termination and Expiration.


 


12.6.1.         Accrued Rights and Obligations.
Termination of this Agreement for any reason shall not release any Party hereto
from any liability which, at the time of such termination, has already accrued
to the other Party or which is attributable to a 


 


34

















 


period prior to such
termination nor preclude either Party from pursuing any rights and remedies it
may have hereunder or at law or in equity with respect to any breach of this
Agreement. It is understood and agreed that monetary damages may not be a
sufficient remedy for any material breach of this Agreement and that the non-breaching
Party may be entitled to injunctive relief as a remedy for any such material
breach.


 


12.6.2.         Return of Licensor Know-How. Upon
any termination of this Agreement, all licenses granted hereunder will
immediately terminate and Merck shall promptly return to Licensors all Licensed
Technology in tangible form; provided Merck’s counsel may retain one (1) copy
of such tangible Licensor Technology for archival purposes and for ensuring
compliance with Article 7.


 


12.6.3.         Reversion Rights upon Termination with Respect to Licensed Products.  In the event of (i) termination
of this Agreement by Licensors under Sections 12.2 or 12.3 with respect to
Licensed Products, or (ii) termination by Merck under Section 12.5,
in each case (clauses (i) and (ii)) the following provisions shall apply
with respect to the applicable Licensed Product to enable Licensors to further
manufacture, develop, market and/or sell such Licensed Products:


 


12.6.3.1.        Merck
shall transfer to Licensors [ * ], and subject to Section 12.6.3.3, [ * ];


 


12.6.3.2.  Merck
shall work diligently and in good faith to coordinate with Licensors for the
expeditious and orderly transfer of responsibility for clinical development
activities and regulatory interactions related to the clinical development and
seeking of Regulatory Approval for Licensed Product throughout the Territory,
with the costs for such work assumed by Licensors as of the date of notice;


 


12.6.3.3.  Merck
shall grant to Licensors a worldwide, sublicensable, non-exclusive,
royalty-free, fully paid up license, with the right to sublicense through
multiple tiers of sublicenses, [ * ], (ii) any [ * ], and (iii) any [ * ], in each case ((i), (ii) and (iii)) to the
extent [ * ].  Notwithstanding
the foregoing, Merck shall not be obligated to provide any materials, including
any Antibody or Licensed Product, to Licensors if Merck, in the reasonable
exercise of its discretion, has determined that such materials are unsafe for
use in humans; provided, however, that this sentence does not apply to the
master cell banks with respect to the Antibodies and Licensed Products, which
in any case shall be transferred to Licensors hereunder; and provided, further,
that in the event that Licensors disagree with Merck’s election not to provide
the materials pursuant to this Section 12.6.3.3, then upon written notice
by Licensors to Merck, the Parties shall pursue a resolution of such
disagreement [ * ].


 


12.6.4.         Licensor Rights with respect to [ * ].  Notwithstanding the terms of
this Section 12.6 or any other terms in this Agreement, in the event that [ * ] and upon the effective date of such termination [ * ], then the Agreement and all applicable
provisions therein [ * ].  By way of example and not limitation, the
obligation of Merck [ * ].


 


35

















 


12.7.              Survival. Articles 1, 6 (as it relates
to any payments due after the Term or rights that specifically survive
termination), 7, 9, 11 (and any representations contained in Article 3 and
8 related to Article 11), 12 and 13 (other than Section 13.4) of this
Agreement shall survive expiration or termination of this Agreement for any
reason.


 


13.                                 MISCELLANEOUS


 


13.1.                Governing Law. This Agreement and any
dispute arising from the performance or breach hereof shall be governed by and
construed and enforced in accordance with the laws of the State of New York, USA, without regard to its conflict of laws principles.


 


13.2.                Patents and Trademarks.  Notwithstanding Section 13.1, any
disputes regarding the validity, scope or enforceability of Patents or
trademarks shall be governed by the patent and trademark law of the United
States.


 


13.3.                Independent Contractors. The
relationship of the Parties hereto is that of independent contractors.  Merck and Licensors are not deemed to be
agents, partners or joint ventures of the others for any purpose as a result of
this Agreement or the transactions contemplated thereby.


 


13.4.                Assignment; Change of Control.


 


13.4.1.             Without the
prior written consent of the Licensors, in the case of Merck, or Merck, in the
case of Licensors, no Party shall sell, transfer, assign, delegate, pledge or
otherwise dispose of, whether voluntarily, involuntarily, by operation of law
or otherwise, this Agreement or any of its rights or duties hereunder; provided,
however, that any Party hereto may assign or transfer this Agreement or any of
its rights or obligations hereunder without the consent of the other Party(ies)
(a) to any Affiliate of such Party; or (b) to any Third Party with
which it may merge or consolidate, or to which it may transfer all or
substantially all of its assets to which this Agreement relates if in any such
event (i) the assigning Party (provided that it is not the surviving
entity) remains jointly and severally liable with the relevant Licensor
Affiliate or Third Party assignee under this Agreement, (ii) if Merck
assigns the Agreement to a Merck Affiliate, that Merck guarantees the payment
obligations of the Merck Affiliate, and (ii) the relevant Licensor
Affiliate assignee, Merck Affiliate assignee, Third Party assignee or surviving
entity assumes in writing all of the assigning Party’s obligations under this
Agreement.  In the event that
[ * ] such Licensor shall [ * ].  In the event that [ * ], Licensor
shall [ * ]; provided, however that Licensor shall
[ * ].  For purposes of
clarification with respect to subsection (b) herein, a Third Party that
merges or consolidates with a Party, or to which a Party transfers all or
substantially all of its assets to which this Agreement relates, shall not be
deemed to grant the other Party to this Agreement any license or rights
(including pursuant to Section 2.1.5) to such Third Party’s technology in
existence as of the effective date of such merger, consolidation or transfer,
unless such grant is made pursuant to a separate agreement, provided such Third
Party shall maintain all licenses granted hereunder by such first Party with
respect to its Patents, Information and/or Inventions licensed hereunder.  Any purported assignment or transfer in
violation of this 


 


36

















 


Section shall be void ab initio and
of no force or effect.


 


13.4.2.             In the event that Merck or any of its Affiliates merges or
consolidates with, is otherwise acquired by, or acquires, a Third Party
(including through a Change of Control transaction), during the Term, and if
such Third Party (or any of its Affiliates) (x) is as of the effective
date of such transaction, engaged, directly or indirectly, in the Development,
marketing and/or sale of a Competing Product in any country in the Territory,
and (y) with respect to any Affiliate of Merck that engages in such a
transaction, to the extent that such Affiliate remains an Affiliate of Merck
(or its successor, if applicable) immediately after the effective date of such
transaction, then Merck, whether as acquirer or acquiree, (or its successor as
the case may be) shall, within [ * ] after consummation of such
merger, consolidation, or acquisition (or other Change of Control transaction)
shall notify Licensors in writing whether Merck intends to (i) [ * ]
or (ii) [ * ].  If Merck,
whether as acquirer or acquiree, (or its successor as the case may be) notifies
Licensors in writing within such [ * ] period that [ * ]
then it shall have [ * ].  If Merck,
whether as acquirer or acquiree, (or its successor as the case may be) makes
[ * ] then Licensors may [ * ].  In the event that Merck, whether as acquirer
or acquiree, (or its successor as the case may be) notifies Licensors in
writing within such [ * ] period that [ * ] and rather
[ * ] then all the terms of this Agreement with respect to
[ * ].


 


13.4.3.             In the event that Medarex or any of its Affiliates merges or
consolidates with, is otherwise acquired by, or acquires, a Third Party
(including through a Change of Control transaction), during the Term, and if
such Third Party (or any of its Affiliates) (x) is as of the effective
date of such transaction, engaged, directly or indirectly, in the Development,
marketing and/or sale of a small molecule pharmaceutical product or a
biological product (including a vaccine or antibody product) in the Field in
any country in the Territory, and (y) with respect to any Affiliate of
Medarex that engages in such a transaction, to the extent that such Affiliate
remains an Affiliate of Medarex (or its successor, if applicable) immediately
after the effective date of such transaction, then Merck, shall be entitled, by
providing written notice within [ * ] after consummation of such
merger, consolidation, or acquisition (or other Change of Control transaction)
to (i) [ * ] and (ii) [ * ].  If Merck provides such a notice, UMass shall
thereafter [ * ] and shall [ * ].


 


13.5.                Notices. All notices, requests and
other communications hereunder shall be in writing and shall be personally
delivered or sent by telecopy or other electronic facsimile transmission or by
registered or certified mail, return receipt requested, postage prepaid, in
each case to the respective address specified below, or such other address as
may be specified in writing to the other Party hereto:


 


	
  If to Medarex:

  	
  If to Merck:

  
	
   

  	
   

  
	
  Medarex, Inc.

  	
  Merck Sharp & Dohme Research Ltd.

  
	
  707 State Road

  	
  96 Pitts Bay Road

  
	
  Princeton, New Jersey 08540

  	
  Pembroke HM 08,

  
	
  Attn: Chief Executive Officer

  	
  Bermuda

  
	
   

  	
  Attn: 
  Financial Director

  



 


37

















 


	
  With copies to:

  	
  With copies to:

  
	
   

  	
   

  
	
  General Counsel

  	
  Merck & Co., Inc.

  
	
  Contracts Manager

  	
  P.O. Box 100, WS 2A-30

  
	
   

  	
  One Merck Drive

  
	
  If to University of Massachusetts:

  	
  Whitehouse Station, N.J. 08889

  
	
   

  	
  Attn: Chief Licensing Officer

  
	
  University of Massachusetts

  	
  Facsimile: (908)735-1214

  
	
  Office of Technology Management

  	
   

  
	
  Univ. of Massachusetts Medical School

  	
  and

  
	
  Higgins Building

  	
   

  
	
  222 Maple Avenue

  	
  Merck & Co., Inc.

  
	
  Shrewsbury, MA 01545 USA

  	
  One Merck Drive

  
	
  Attn: Executive Director

  	
  P.O. Box 100, WS3A-65

  
	
   

  	
  Whitehouse Station, NJ 08889-0100

  
	
  If to WCCC:

  	
  Attention: Office of Secretary

  
	
   

  	
  Facsimile No.: (908)735-1246

  
	
  Worcester City Campus Corporation

  	
   

  
	
  55 Lake Avenue North

  	
  If to Massachusetts Biologic Laboratories:

  
	
  Worcester, MA 01655

  	
   

  
	
  Attn: 
  President

  	
  Massachusetts Biologic Laboratories

  
	
   

  	
  460 Walk Hill Street

  
	
   

  	
  Mattapan, MA 02126

  
	
   

  	
  Attn: Chief Executive Officer

  



 


For avoidance of doubt, notice provided by Merck
hereunder to Licensors shall not be effective unless provided to both UMass and
Medarex, and notice provided by Licensors to Merck hereunder shall not be
effective unless provided by both UMass and Medarex.


 


13.6.                Expedited Dispute Resolution.  In
the event of a dispute between Merck, on the one hand, and Licensors, on the
other hand, specifically arising under [ * ] (each, a “Limited Dispute”), then such Limited Dispute shall be
resolved pursuant to the terms of this Section 13.6.  For the avoidance of doubt, with respect to [ * ] the Parties shall resolve such dispute
pursuant to the dispute resolution mechanism set forth in Section 13.7.


 


13.6.1.             If the Parties (Merck, on the one hand, and
Licensors, on the other hand) are unable to resolve a Limited Dispute through
their good faith efforts within twenty (20) days of the first presentation of
the Limited Dispute by a Party to the other Party, then such Limited Dispute
shall be referred to a senior officer of each of the 


 


38

















 


Parties (Merck, on the one
hand, and Licensors, on the other hand) authorized to resolve such Limited
Dispute, which senior officers shall use their good faith efforts to resolve
such Limited Dispute.


 


13.6.2.             If any Limited Dispute is not resolved by the
senior officers of the Parties pursuant to Section 13.6.1 within fifteen
(15) days after such Limited Dispute is referred to them, or such longer period
as such officers may mutually agree, then either Party (Merck, on the one hand,
and Licensors, on the other hand) shall have the right to refer such Limited
Dispute to an Expert for expedited arbitration as set forth in Section 13.6.3.


 


13.6.3.             With respect to Limited Disputes that are not
resolved by the senior officers of the Parties (Merck, on the one hand, and
Licensors, on the other hand), upon written request by Licensors to Merck or by
Merck to Licensors, the Parties shall promptly negotiate in good faith to
appoint a mutually acceptable disinterested, conflict-free individual not
affiliated with either Party, with [ * ]  [ * ] and/or [ * ] necessary to resolve such dispute (an “Expert”).  If the Parties are not able to mutually agree
upon an Expert within [ * ] after the receipt by a Party of the written request
in the immediately preceding sentence, the American Arbitration Association, or
such other similar entity as the Parties may agree, shall be responsible for
selecting an Expert within [ * ] of being approached by a Party.  The fees and costs of the Expert and the
American Arbitration Association (or such other entity) shall be shared equally
(50%/50%) by the Parties (Merck, on the one hand, and Licensors, on the other
hand).  Within [ * ] after the designation of the Expert, the
Parties shall each simultaneously submit to the Expert and one another a
written statement of their respective positions on such Limited Dispute.  Each Party shall have [ * ] from receipt of the other Party’s submission
to submit a written response thereto, which shall include any scientific,
technical, accounting and/or regulatory information, as applicable to the
specific Limited Dispute, in support thereof. 
The Expert shall have the right to meet with the Parties, either alone
or together, as necessary to make a determination.  No later than [ * ] after the final submission by the Parties to
the Expert as set forth above, the Expert shall make a determination by
selecting the resolution proposed by one of the Parties that as a whole is the
most fair and reasonable to the Parties in light of the totality of the
circumstances and shall provide the Parties with a written statement setting
forth the basis of the determination in connection therewith.  The decision of the Expert shall be final and
conclusive, absent manifest error.


 


13.7.                Non-Expedited Dispute Resolution.


 


13.7.1.             The Parties shall negotiate
in good faith and use reasonable efforts to settle any dispute, controversy or
claim arising from or related to this Agreement or the breach thereof.  If the Parties do not fully settle, and a
Party wishes to pursue the matter, each such dispute, controversy or claim that
is not an “Excluded Claim” and that is not otherwise specifically subject to
the dispute resolution process set forth in Section 13.6, shall be finally
resolved by binding arbitration in accordance with the Commercial Arbitration Rules and
Supplementary Procedures for Large Complex Disputes of the American Arbitration
Association (“AAA”), and judgment on the
arbitration award may be entered in any court having jurisdiction thereof.


 


39

















 


13.7.2.             The arbitration shall be
conducted by a panel of three (3) persons experienced in the
biopharmaceutical business and specifically with respect to antibodies: within
thirty (30) days after initiation of arbitration, each Party shall select one (1) person
to act as arbitrator and the two (2) Party-selected arbitrators shall
select a third arbitrator within thirty (30) days of their appointment.  If the arbitrators selected by the Parties
are unable or fail to agree upon the third arbitrator, the third arbitrator
shall be appointed by the AAA.  The place
of arbitration shall be New York, New York, and all proceedings and
communications shall be in English.


 


13.7.3.             Either Party may apply to
the panel of arbitrators for interim injunctive relief until the arbitration
award is rendered or the controversy is otherwise resolved.  Either Party also may, without waiving any
remedy under this Agreement, seek from any court having jurisdiction any
injunctive or provisional relief necessary to protect the rights or property of
that Party pending the arbitration award. 
The arbitrators shall have no authority to award punitive or any other
type of damages not measured by a Party’s compensatory damages.  Each Party shall bear its own costs and
expenses and attorneys’ fees and an equal share of the arbitrators’ fees and
any administrative fees of arbitration.


 


13.7.4.             Except to the extent
necessary to confirm an award or as may be required by law, neither a Party nor
an arbitrator may disclose the existence, content, or results of an arbitration
without the prior written consent of both Parties (Merck, on the one hand, and
Licensor, on the other hand).  In no
event shall an arbitration be initiated after the date when commencement of a
legal or equitable proceeding based on the dispute, controversy or claim would
be barred by the applicable New York statute of limitations.


 


13.7.5.             The Parties agree that, in
the event of a dispute over the nature or quality of performance under this
Agreement, neither Party may terminate this Agreement until final resolution of
the dispute through arbitration or other judicial determination.  The Parties further agree that any payments
made pursuant to this Agreement pending resolution of the dispute shall be
refunded if the panel of arbitrators or court determines that such payments are
not due.


 


13.7.6.             As used in this Section, the
term “Excluded Claim” shall mean a dispute, controversy or claim that
concerns (a) the infringement of a patent, trademark or copyright; or (b) any
antitrust, anti-monopoly or competition law or regulation, whether or not
statutory.


 


13.8.                Force Majeure. A Party shall not be held
liable or responsible to the other Party or be deemed to have defaulted under
or breached this Agreement for failure or delay in fulfilling or performing any
term of this Agreement when such failure or delay is caused by or results from
events beyond the reasonable control of the non-performing Party, including
fires, floods, embargoes, shortages, epidemics, quarantines, war, acts of war
(whether war be declared or not), acts of terrorism, insurrections, riots,
civil commotion, acts of God, or acts, omissions or delays in acting by any
governmental authority.  The
non-performing Party shall provide reasonable notice to the other Party


 


40
















 


after such occurrence by
giving written notice to the other Party stating the nature of the event, its
anticipated duration, and any action being taken to avoid or minimize its
effect.  The suspension of performance shall
be of no greater scope and no longer duration than is necessary and the
non-performing Party shall use Commercially Reasonable Efforts to remedy its
inability to perform; provided, however, that in the event the suspension of
performance continues for one-hundred and eighty (180) days after the date of
the occurrence, the Parties shall meet to discuss in good faith how to proceed
in order to accomplish the goals of this Agreement.


 


13.9.                Advice of Counsel. UMass, Medarex and
Merck have each consulted counsel of their choice regarding this Agreement, and
each acknowledges and agrees that this Agreement shall not be deemed to have
been drafted by one Party or another and will be construed accordingly.


 


13.10.              Further Assurances. At any time or from
time to time on and after the Closing Date, either Party shall at the request
of the other Party hereto (i) deliver to the requesting Party any records,
data or other documents consistent with the provisions of this Agreement, (ii) execute,
and deliver or cause to be delivered, all such consents, documents or further
instruments of transfer or license, and (iii) take or cause to be taken
all such actions, as the requesting Party may reasonably deem necessary in
order for the requesting Party to obtain the full benefits of this Agreement
and the transactions contemplated hereby.


 


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


 


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


 


13.13.              Complete Agreement. This Agreement, with
its Exhibits, constitutes the entire agreement, both written and oral, between
the Parties with respect to the license of Antibodies and Products from
Licensors to Merck, and that all prior agreements respecting the license of
Antibodies and Products from Licensors to Merck, either written or oral,
expressed or implied, are merged and canceled, and are null and void and of no
effect. No amendment or change hereof or addition hereto shall be effective or
binding on either of the Parties hereto unless reduced to writing and duly
executed on behalf of both Parties.


 


13.14.              Use of Name. No Party shall use the name
or trademarks of the other Party, without the prior written consent of such
other Party except in connection with the disclosure of the existence of this
Agreement.


 


41

















 


13.15.              English Language.  This Agreement has been
written and executed in the English language. 
Any translation into any other language shall not be an official version
thereof, and in the event of any conflict in interpretation between the English
version and such translation, the English version shall control.


 


13.16.              Headings. The captions to the several
Sections and Articles hereof are not a part of this Agreement, but are included
merely for convenience of reference only and shall not affect its meaning or
interpretation.


 


13.17.              Third Party Beneficiaries.  No
person, other than Licensors, Merck, their respective Affiliates and their
permitted assignees hereunder, shall be deemed an intended beneficiary
hereunder or have any right to enforce any obligation of this Agreement.


 


13.18.              Certain Rules of
Interpretation.  In
interpreting this Agreement, the following rules of construction shall
apply:


 


13.18.1.           Any reference to “Licensor”
or “Licensors” shall mean both UMass and Medarex, collectively;


 


13.18.2.           Any provision which states
that MBL shall perform an action also means that UMass shall cause MBL to
perform such action;


 


13.18.3.           Any use of the term “including”
shall mean “including but not limited to”;


 


13.18.4.           The use of words in the
singular or plural, or with a particular gender, shall not limit the scope or
exclude the application of any provision of this Agreement to such person or
persons or circumstances as the context otherwise permits;


 


13.18.5.           Unless otherwise specified,
time periods within or following which any payment is to be made or act is to
be done shall be calculated by excluding the day on which the period commences
and including the day on which the period ends and by extending the period to
the next business day following if the last day of the period is not a business
day in the jurisdiction of the Party to make such payment or do such act;


 


13.18.6.           Whenever any payment is to
be made or action to be taken under this Agreement is required to be made or
taken on a day other than a business day, such payment shall be made or action
taken on the next business day following such day in the jurisdiction of the
Party to make such payment or do such act.


 


[The remainder of this page intentionally
left blank.]


 


42

















 


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


 


IN WITNESS WHEREOF Medarex, UMass, MBL, WCCC and Merck have executed this Agreement by
their respective duly authorized representatives.


 


	
  MERCK SHARP & DOHME
  RESEARCH LTD.

  	
   

  	
  MEDAREX, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Lynn B. Perry

  	
   

  	
  By:

  	
  /s/
  Ronald A. Pepin

  
	
  Lynn B. Perry

  	
   

  	
  Ronald A. Pepin, Ph.D.

  
	
  President

  	
   

  	
  Senior Vice President, Business Development

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MASSACHUSETTS BIOLOGIC LABORATORIES

  	
   

  	
  UNIVERSITY OF MASSACHUSETTS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Donna Ambrosino

  	
   

  	
  By:

  	
  /s/ James P. McNamara

  
	
  Donna
  Ambrosino, MD

  	
   

  	
  James
  P. McNamara, PhD

  
	
  Chief Executive Officer

  	
   

  	
  Executive Director

  
	
   

  	
   

  	
  Office of Technology Management

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WORCESTER CITY CAMPUS
  CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Robert Jenal

  	
   

  	
   

  
	
  Robert Jenal

  	
   

  	
   

  
	
  President

  	
   

  	
   

  



 

















 


EXHIBIT 1


 


Licensed
Patents


 


[ * ]


 

















 


EXHIBIT 2


 


Estimates of Cell Culture Expression and Purification
Recovery


 


[ * ]


 

















 


EXHIBIT 3


 


Description
of Initial Material


and
Specifications for Release of Formulated Bulk


 


[ * ]


 

















 


EXHIBIT 4


 


Stability
Testing


 


[ * ]


 

















 


EXHIBIT 5


 


Process-Related Data Transfer


 


[ * ]


 

















 


EXHIBIT 6


 


Form of Royalty Report


 


[ * ]