Document:

exv10w18

 

Exhibit 10.18

SPLIT-DOLLAR INSURANCE AGREEMENT

     THIS AGREEMENT is entered into this 21st day of November, 1994, by and between
General Dynamics (the “Company”), and the Mellor Family Irrevocable Trust (the
“Trust”), and James R. Mellor, Jr., Deborah Mellor Rye and Diane Mellor
Liljestrom, as trustees of the Trust (the “Trustees”).

     NOW THEREFORE, the Company and the Trust agree as follows:

     1.     The life insurance policy (the “Policy”) with which the agreement deals is
Policy Number ______issued by The Massachusetts Mutual Life Insurance
Company (“Insurer”) on the lives of James R. and Suzanne S. Mellor (the
“Insureds”). The Trust shall be the sole owner of the Policy.

     2.     The entire premium on the Policy shall be paid by the Company as it becomes
due. The Company shall pay an annual premium of $535,806 for a period of ten
years to the Insurer. No contributory amount shall be paid by the Trust or the
Trustees.

     3.     Dividends shall be applied to purchase paid-up additional insurance
protection.

     4.     To secure the Company’s share of the premiums paid by it in paragraph 2
above, the Trust has executed an assignment of the Policy to the Company in
substantially the form as attached hereto as Exhibit “A” for the Policy.

     5.     In the event the Policy becomes a claim by reason of the Insureds’ deaths,
the Company shall have an interest in the proceeds of the Policy equal to the
total value of its share of the premiums paid under paragraph 2 of this
agreement. The balance, if any, of the proceeds of the Policy shall be paid
directly by the Insurer to the Trustees.

     6.     This agreement shall be terminated, subject to the provisions in paragraphs
7, 8 and 9 below, only after the close of the fifteenth year of the Policy
unless both Insureds have died as provided in paragraph 5, above. The Company
shall notify the Trustees of the termination in writing.

     7.     In the event of termination of this agreement as provided in paragraph 6
above, the Trust shall have the obligation to repay the Company within 60 days
of the date of termination an amount equal to the premiums paid by the Company
under paragraph 2 of this agreement.

 

 

     8.     If the Trust fails to repay said amount to the Company within 60 days of the
date of termination of the agreement pursuant to the provisions of paragraph 7
above, the Trustees shall execute any and all instruments that may be required
to vest ownership of the Policy in the Company. Thereafter, the Trust shall
have no further interest in said Policy.

     9.     Any payments under the Policy to the Company in connection with the rights
granted to the Company in the assignment referred in paragraph 5 shall first be
made from the Policy’s cash value attributable to the paid-up additional life
insurance purchased by the Policy’s dividends. The Trust shall have no interest
in the paid-up additional life insurance protection except to the extent the
death benefit or cash value thereof exceeds the total premiums paid by the
Company. The Company’s rights under this paragraph are in addition to the
Company’s other rights under this agreement.

     10.     The Trust shall have the right to assign any part or all of the Trust’s
retained interest in the Policy and this agreement to any person, entity or
trust by execution of a written assignment delivered to the Company and to the
Insurer. The Trust’s retained interest is defined as the value of the Policy
and death benefit after satisfaction of the Company’s rights under this
agreement.

     11.     The Company and the Trust can mutually agree to amend this agreement and
such amendment shall be in writing and signed by the Company and Trustees. Such
amendment may include, but is not limited to, the exchange of the Policy for a
replacement policy issued by the Insurer or another insurance company.

     12.     This agreement shall bind and inure to the benefit of the Company and its
successors and assigns; Trust and Trustees, and any Policy beneficiary.

     13.     The financial obligations of the Company under this agreement shall be
limited to the payment of premiums described in paragraph 2 above, and the
Company does not have or assume any liability or responsibility with respect to
the obligations of the Insurer under the Policy or otherwise. Without limiting
the generality of the foregoing, it is specifically provided that in the event
of insolvency or other default of payment by either the Insurer or the Trust or
Trustees, the Company shall have no responsibility to make any payment to the
Trust, the Trustees, James R. Mellor, Suzanne S. Mellor or any other person or
entity, and any person or entity claiming entitlement to payments under the
Policy may look only to the assets of the Insurer respectively and any person or entity claiming entitlement to
payments under the Trust may look only to the assets of the Trust.

     14.     The following provisions are part of this agreement and are intended to
meet the requirements of the Employee Retirement Income Security Act of 1974:

	 	(a)	 	The named fiduciary: The Company.

 

 

	 	(b)	 	The funding procedure under this plan is that all premiums on the Policy be
remitted to the Insurer when due.
	 
	 	(c)	 	Direct payment by the Insurer is the basis of payment of benefits under
this plan, with those benefits in turn being based on the payment of premiums
as provided in the plan.
	 
	 	(d)	 	For claims procedure purposes, the “Claims manager” shall be Ralph W.
Kiger, or his successor.

	 
	 	(1)	 	If for any reason a claim for benefits under this Plan is denied by the
Company, the Claims Manager shall deliver to the claimant a written explanation
setting forth the specific reasons for the denial, pertinent references to the
plan section on which the denial is based, such other data as may be pertinent
and information on the procedures to be followed by the claimant in obtaining a
review of his claim, all written in a manner calculated to be understood by the
claimant. For this purpose:

	 
	 	(A)	 	The claimant’s claim shall be deemed filed when presented orally or in
writing to the Claims Manager.
	 
	 	(B)	 	The Claims Manager’s explanation shall be in writing delivered to the
claimant within 90 days of the date the claim is filed.

	 
	 	(2)	 	The claimant shall have 60 days following his receipt of the denial of the
claim to file with the Claims Manager a written request for review of the
denial. For such review, the claimant or his representative may submit
pertinent documents and written issues and comments.
	 
	 	(3)	 	The Claims Manager shall decide the issue on review and furnish the
claimant with a copy within 60 days of the receipt of the claimant’s request
for review of his claim. The decision on review shall be in writing and shall
include specific reasons for the decision, written in a manner calculated to be
understood by the claimant, as well as specific references to the pertinent
Plan provisions on which the decision is based. If a copy of the decision is not so furnished to the claimant within such 60
days, the claim shall be deemed denied on review.

 

 

IN WITNESS WHEREOF the parties have signed and sealed this agreement

	 	 	 	 	 
	 	 	 	 	 
	In the presence of	 	 	 	GENERAL DYNAMICS
	 	 	 	 	 
	/s/ Rhonda Mijdail	 	By	 	/s/ Nicholas D. Chabraja
	
	 	 	 	

	 	 	 	 	(Name and Title of Officer

Nicholas D. Chabraja
	 	 	 	 	Executive Vice President
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	(CORPORATE SEAL)
	 	 	 	 	 
	/s/ Andrea R. Parton	 	 	 	/s/ James R. Mellor, Jr.
	
	 	 	 	

	 	 	 	 	James R. Mellor, Jr., Trustee for the
	 	 	 	 	Mellor Family Irrevocable Trust
	 	 	 	 	 
	/s/ Andrea R. Parton	 	 	 	/s/ Deborah Mellor Rye
	
	 	 	 	

	 	 	 	 	Deborah Mellor Rye, Trustee for
	 	 	 	 	the Mellor Family Irrevocable Trust
	 	 	 	 	 
	/s/ Andrea R. Parton	 	 	 	/s/ Diane Mellor Liljestrom
	
	 	 	 	

	 	 	 	 	Diane Mellor Liljestrom, Trustee
	 	 	 	 	for the Mellor Family Irrevocable Trustexv10w12

 

EXHIBIT 10.12

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

Exclusive License Agreement

     This Exclusive License Agreement (“Agreement”) is made and entered into
this 17th day of April 2002, by and between AltaRex Corp., a corporation
organized and existing under Business Corporations Act (Alberta), Canada,
with executive offices located at 610 Lincoln Street, Waltham, Massachusetts
02451 (“AltaRex”) and Unither Pharmaceuticals, Inc., a wholly-owned
subsidiary of United Therapeutics Corporation, a corporation organized and
existing under the laws of the State of Delaware, located at 1110 Spring
Street, Silver Spring, Maryland 20910, U.S.A. (hereinafter referred to as
“UP”). AltaRex and UP may be referred to in this Agreement each individually
as a “party” and jointly as the “parties.”

RECITALS

     WHEREAS, AltaRex has rights to certain antigen-targeted antibodies that
may be effective in the treatment of certain diseases;

     WHEREAS, UP is involved in the development and commercialization of
products potentially useful in the prevention, mitigation and treatment of
disease; and

     WHEREAS, UP desires to obtain an exclusive license to certain
intellectual property rights owned or controlled by AltaRex in order to
develop and commercialize products for the treatment of diseases in
accordance with the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the foregoing promises and the
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:

ARTICLE 1

DEFINITIONS

     For purposes of this Agreement, the terms defined in this Article 1
shall have the respective meanings set forth below:

     1.1 “Affiliate” means with respect to any party and with respect to United
Therapeutics Corporation any other Person which controls, is controlled by, or
is under common control with, such party. As used in this Section 1.1,
“control” means (a) that an entity or company owns, directly or indirectly,
more than fifty percent (50%) of the voting stock of another entity, or (b)
that an entity, person or group has the actual ability to control and direct
the management of the entity, whether by contract or otherwise.

 

 

     1.2 “Biomira Agreement” means that certain Amended and Restated License
Agreement entered into by AltaRex and Biomira Inc. dated as of September 3,
1999.

     1.3 “Consideration” means any cash or non-cash consideration of any kind
whatsoever, whether tangible or intangible, direct or indirect.

     1.4 “Core Development Team” means those individuals preliminarily
identified on Appendix D attached to this Agreement and any other individuals
who will be agreed upon by the parties after the Effective Date.

     1.5 “Data” means any and all preclinical and clinical research, safety,
use, pharmacokinetics and efficacy data, Information, reports and analyses
and all other information concerning the Licensed Technology which is
available to AltaRex or UP and which is reasonably required for the
development and commercialization of Products, including without limitation,
compilations, analyses, reports, studies, copies of regulatory filings and
proceedings which relate to the Licensed Technology.

     1.6 “Dollars” or “$” means United States dollars.

     1.7 “Effective Date” means the date appearing at the beginning of this
Agreement.

     1.8 “FDA” means the United States Food and Drug Administration or any successor entity.

     1.9 “Field” means the treatment of any and all therapeutic indications and uses.

     1.10 “First Commercial Sale” means, with respect to any Product, the
first sale for use or consumption by the general public of such Product. A
transfer of the Product by UP or its sublicensees (i) for research and
development purposes, or (ii) prior to UP’s receipt of approval of an NDA by
the FDA (or from the governing health authority of any other country) for use
of such Product in humans, shall not be considered a First Commercial Sale.

     1.11 “Improvements” means any and all improvements to the Licensed
Technology listed in Section 1.16(i), namely, OvaRex®, BrevaRex®, ProstaRexTM,
AR54, and GivaRexTM, for use in the Field, whether or not patentable,
including without limitation, intellectual property rights, improvements,
successors, modifications, variations, revisions, versions and derivatives,
as well as all data, know-how, methods, Information, processes, machines,
manufactures or compositions of matter pertaining to the Licensed Technology
to the extent they have application in the Field, which AltaRex may conceive,
discover or develop at any time before or after the Effective Date of this
Agreement and during the term hereof, and which AltaRex has an ownership or
licensable interest but only to the extent that AltaRex has a right to grant
a sublicense in such licensable interest.

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     1.12 “Information” means information, results and data of any type
whatsoever, in any tangible or intangible form, including without limitation
inventions, practices, methods, techniques, specifications, formulations,
formulae, knowledge, know-how, skill, experience, trade secrets, test data
(including pharmacological, biological, chemical, biochemical, toxicological
and clinical test data), analytical and quality control data, stability data,
studies and procedures, and other legal information or descriptions, and all
intellectual property rights therein.

     1.13 “Joint Intellectual Property” means (i) any Information specific to
the development and/or commercialization of those certain antibodies known as
OvaRex®, BrevaRex®, ProstaRexTM, AR54, and GivaRexTM solely invented or developed
by UP or on behalf of UP or jointly developed by or on behalf of the parties
pursuant to this Agreement and all intellectual property rights therein,
including without limitation any Patents, Know-How and Improvements to the
extent claiming such Information, and (ii) any other Information jointly
developed by or on behalf of the parties pursuant to this Agreement and all
intellectual property rights therein, including without limitation any Patents,
Know-How and Improvements claiming such Information. Notwithstanding the
foregoing, (iii) inventions made solely by each party that are not under or do
not incorporate the Licensed Technology, or (iv) any Information obtained by
each party that is not under or does not incorporate the Licensed Technology,
shall not be deemed to constitute Joint Intellectual Property and, accordingly,
each party shall solely own all rights therein and thereto without restriction
or obligation to the other party under this Agreement.

     1.14 “Know-How” means all Information, whether or not patentable, in
which AltaRex has an ownership or licensable interest and (i) which are not
generally known including without limitation ideas, concepts, formulae,
procedures, methods, processes, protocols, techniques, materials and results
of experimentation and testing, including samples, or (ii) which are set
forth on Appendix B to this Agreement; and (iii) which are necessary or
useful for UP to make, use, develop, sell or seek regulatory approval to
market a Product, or otherwise necessary to practice or useful in practicing
the Licensed Technology.

     1.15 “Laws” means all federal, state, provincial and local laws,
ordinances, rules and regulations in any jurisdiction applicable to this
Agreement or the activities contemplated under this Agreement, whether such
laws, ordinances, rules and regulations are now or hereafter in effect.

     1.16 “Licensed Technology” means, collectively, (i) OvaRex®, BrevaRex®,
ProstaRexTM, AR54, and GivaRexTM, their formulations and methods of
administration; (ii) the Prior Development Technology; (iii) Patents,
Know-How, and Joint Intellectual Property, (iv) all Information relating to
those certain antibodies known as OvaRex®, BrevaRex®, ProstaRexTM, AR54, and
GivaRexTM in the course of any work conducted pursuant to this Agreement, and
(v) Improvements. The Licensed Technology does not include any technology,
formulation, method of administration, Patents, Know-How, Information or
Improvements (collectively “NIH Materials”) to the extent any rights to such
NIH Materials are granted to AltaRex under the NIH Agreement (defined in
Section 3.1 below) which NIH Agreement expires as of June 11, 2002. Upon
AltaRex’s receipt prior to June 11, 2002 of

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UP’s written notice that UP would like to sublicense the rights to such NIH
Materials granted to AltaRex under the NIH Agreement, such Materials shall
automatically be included in Licensed Technology.

     1.17 “NDA” means a New Drug Application filed with the FDA or any
equivalent successor application.

     1.18 “Net Sales” means, with respect to any Product, the invoiced sales
price of such Product by UP, its Affiliates and its sublicensees to Third Party
purchasers, less the following deductions: (i) credits, allowances, discounts,
rebates, chargebacks, adjustments, rejections and recalls for which the
customer has been credited the original sales price and returns; (ii) price,
cash, quantity, and trade discounts or rebates customary to the industry and
actually allowed, given or accrued (including, but not limited to, cash,
governmental and managed care rebates, and hospitals or other buying group
chargebacks); (iii) sales, excise, inventory, value-added, and similar taxes
(other than income tax) assessed on the sale of such Product; (iv) exportation,
importation, transportation, and insurance charges; and (v) uncollectible
accounts as it relates to reimbursement in a 6 month post-launch period
provided UP exercises appropriate diligence with respect to obtaining
reimbursement from state and federal agencies. Unless otherwise agreed among
the parties in writing, “Net Sales” with respect to any Product requiring one
or more active ingredients, manufacturing or delivery technologies to be
in-licensed in addition to the Licensed Technology, means the invoiced sales
price of such Product billed to Third Party purchasers, less all the
allowances, adjustments, reductions, discounts, taxes, duties and other charges
referred to in the foregoing sentence, multiplied by a fraction, the numerator
of which shall be the manufacturing cost or acquisition cost, as applicable, of
the Licensed Technology included in such Product and the denominator of which
shall be the manufacturing cost or acquisition cost, as applicable, of all
active ingredients, manufacturing and/or delivery technologies in such Product,
including the Licensed Technology. In no event, however, shall the foregoing
fraction be less than one-half (1/2). A sale of a Product shall be deemed to
occur upon the earlier of (i) receipt of Consideration for such Product from a
Third Party purchaser; or (ii) forty-five (45) days after shipment of Product
to a Third Party.

     1.19 “Patents” means, within the Territory, (i) all domestic and
international issued patents and patent applications set forth in Appendix A
attached hereto which are owned by or licensed to AltaRex which claim (a) a
Product, (b) the process of manufacture or use of a Product, or (c) a
congener, if any, described within the patents or patent applications set
forth in Appendix A to this Agreement, together with any and all patents that
issue or in the future issue therefrom, including utility and design patents
and certificates of invention, (d) any patent that claims an invention in the
Licensed Technology, and (ii) any and all reissues, extensions,
substitutions, confirmations, registrations, revalidations, renewals,
supplementary protection certificates, additions, continuations,
continuations-in-part, divisions, or foreign equivalents to any such patents
and patent applications to the extent that they claim the subject matter set
forth in (i) a, b, or c above. To the extent that any existing patent or
patent application, patent disclosure or Improvement owned or licensed by
AltaRex is necessary to practice any Patent as defined above, then such
necessary patents, patent applications,

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disclosures, and Improvements will be included as Patents, to the extent that
AltaRex is capable to do so.

     1.20 “Person” means an individual, corporation, partnership, trust,
business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental
authority, or any other form of entity not specifically listed herein.

     1.21 “Prior Development Technology” means (i) all Information relating to
those certain antibodies known as OvaRex®, BrevaRex®, ProstaRexTM, AR54, and
GivaRexTM acquired and/or conceived of and/or reduced to practice by AltaRex in
the course of any research and/or any development work (including without
limitation any clinical trials) conducted prior to this Agreement, and/or (ii)
all right(s), title(s) and interest(s) in Information relating to those certain
antibodies known as OvaRex®, BrevaRex®, ProstaRexTM, AR54, and GivaRexTM that
AltaRex has licensed, received by assignment and/or acquired in, from and/or
pursuant to the Biomira Agreement or any other agreements, including without
limitation, any Patents thereunder.

     1.22 “Product” means any product, use, application, administration,
method of administration or treatment that utilizes and/or incorporates any
of the Licensed Technology in the Field.

     1.23 “Registration” means, in relation to any Product, such approvals by
government authorities as may be legally required before such Product may be
commercialized.

     1.24 “Royalty Term” means, with respect to each Product in each country,
the period of time equal to the longer of (i) ten (10) years from the date of
the First Commercial Sale of such Product in such country, or (ii) if the
manufacture, use, import, offering for sale, or sale of such Product in such
country is covered by a Valid Patent Claim, the term for which such Valid
Patent Claim remains in effect and would, if in an issued patent, be
infringed but for the license granted by this Agreement.

     1.25 “Territory” means the universe with the exception of (i) the member
nations of the European Union as of the Effective Date, and (ii) those
certain countries and rights identified in Appendix C to this Agreement.

     1.26 “Third Party” means any Person other than AltaRex, UP, and their
respective Affiliates.

     1.27 “University of Maryland Agreement” means that certain License
Agreement entered into by AltaRex and the University of Maryland, Baltimore,
dated as of August 27, 2001, a copy of which has been provided to UP under
separate cover.

     1.28 “Valid Patent Claim” means a claim of an issued Patent that has not
expired or been canceled, been declared invalid by an unreversed and
unappealable decision of a court or

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other appropriate body of competent jurisdiction, been admitted to be invalid
or unenforceable through reissue, disclaimer or otherwise, and/or been
abandoned.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

     2.1 By Both Parties.

           2.1.1 Each party represents and warrants to the other that it has the full
right, power and authority to enter into this Agreement, perform this Agreement
and to grant all of the rights, property and authorizations granted in this
Agreement; that this Agreement has been duly executed and delivered by each
party and is a legal, valid and binding obligation enforceable against each
party in accordance with its terms; that, to the best of its knowledge, there
are no agreements, commitments or obstacles, technical or legal, including
intellectual property rights of others, which could prevent it from carrying
out all of its obligations hereunder; and that the execution, delivery and
performance of this Agreement does not and will not violate any law, statute,
local ordinance, state or federal regulation, court order, or administrative
order ruling, its corporate charter or bylaws, nor any agreement by which it is
bound.

           2.1.2 Each party represents and warrants that it will use its best efforts
to obtain and maintain in full force and effect all necessary licenses, permits
and other authorizations required by Law to carry out its duties and
obligations under this Agreement. Each party shall cooperate with the other to
provide such letters, documentation and other Information on a timely basis as
the other party may reasonably require to fulfill its reporting and other
obligations under Laws to applicable regulatory authorities. Except for such
amounts as are expressly required to be paid by a party to the other under this
Agreement, each party shall be solely responsible for any costs incurred by it
to comply with its obligations under Laws. Each party shall conduct its
activities hereunder in an ethical and professional manner.

           2.1.3 Each party hereby covenants that each of its employees and other
Persons performing any work during the Initial Assessment Period (as defined
below), under the UP Development Program (as defined below) or under the
AltaRex Development Program (as defined below) shall have entered into a
written invention assignment agreement requiring that each such Person assign
to such party all right, title and interest in and to any Information conceived
of and/or reduced to practice by such Person or its employees, consultants or
agents in connection with any activities during the Initial Assessment Period,
under the UP Development Program or under the AltaRex Development Program.

           2.1.4 Each party hereby covenants that it shall not knowingly
misappropriate or otherwise misuse, nor shall it knowingly permit any of its
employees, consultants or agents to misappropriate or otherwise misuse, any
Information of any Third Party in its conduct during the Initial Assessment
Period, of the UP Development Program or of the AltaRex Development Program
hereunder.

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     2.2 By AltaRex. AltaRex represents and warrants to UP that:

           2.2.1 AltaRex is, as of the Effective Date, the sole owner or exclusive
licensee of the Licensed Technology in the Territory with the power and right
to license or sublicense the Licensed Technology in accordance with this
Agreement and, to the best of AltaRex’s knowledge as of the Effective Date,
the use of the Licensed Technology under the terms and conditions
contemplated by this Agreement will not infringe upon any Third Party’s
know-how, patent or other intellectual property rights or constitute misuse
of confidential information by UP;

           2.2.2 To the best of AltaRex’s knowledge, no claim, whether or not
embodied in an action past or present, of any infringement, of any conflict
with, or of any violation of any patent, trade secret or other intellectual
property right or similar right of any Third Party, other than by Biomira,
Inc. has been made or is pending or AltaRex has knowledge of a potential
claim with respect to such Patents or the Prior Development Technology;

           2.2.3 Before entering into this Agreement, AltaRex delivered to UP
certain documents and Information concerning AltaRex and those certain
antibodies known as OvaRex®, BrevaRex®, ProstaRexTM, AR54, and GivaRexTM
(collectively, the “AltaRex Information Documents”). The AltaRex Information
Documents are accurate, complete (to permit UP a right to practice the
license granted under Section 3.1) and correct in all material respects.

           2.2.4 To the best of AltaRex’s knowledge, (i) there is no action, suit,
proceeding or investigation pending or threatened against AltaRex that
challenges the validity of this Agreement or the right of AltaRex to enter
into this Agreement, or to consummate the transactions contemplated hereby,
or which might result, either individually or in the aggregate, in any
material adverse change in the development of those certain antibodies known
as OvaRex®, BrevaRex®, ProstaRexTM, AR54, and GivaRexTM; or commercial sales of
a Product hereunder. The foregoing includes, without limitation, actions
pending or threatened involving the prior employment of any of AltaRex’s
employees, their use in connection with AltaRex’s business or any Information
or techniques allegedly proprietary to any of their former employers, or
their obligations under any agreements with prior employers; (ii) any
pending or threatened claims or litigation brought by a Third Party under any
Third Party patent, trade secret or other Third Party proprietary right in
respect of AltaRex’s exploitation of the Licensed Technology; (iii) any basis
upon which practice of the inventions described in the Patents or Know-How
would infringe on the rights of Third Parties; (iv) any licenses or other
restrictions on the ability to develop, make, have made, use, import, market,
promote, sell, have sold or otherwise practice the Licensed Technology; or
(v) any scientific Information, published or unpublished, relating to studies
or experiments with the Licensed Technology, whether conducted by AltaRex or
by other parties, that would suggest development and commercialization of the
Licensed Technology is not feasible;

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           2.2.5 To the best of AltaRex’s knowledge, AltaRex is not a party or
subject to the provisions of any order, writ, injunction, judgment or decree
of any court or government agency or instrumentality that would have a
material adverse effect on the license granted pursuant to Section 3.1;

           2.2.6 To the best of AltaRex’s knowledge, AltaRex is not in violation of
any applicable Laws or restriction of any domestic or foreign government or any
instrumentality or agency thereof in respect of the conduct of its business or
the ownership of its properties which violation would have a material adverse
effect on the development and commercialization of those certain antibodies
known as OvaRex®, BrevaRex®, ProstaRexTM, AR54, and GivaRexTM, or the commercial
sales of a Product hereunder;

           2.2.7 A complete list of (i) all patents and patents applications
included in the Patents as of the Effective Date and (ii) all Patents owned
by Third Parties and validly and exclusively licensed to AltaRex, with the
unrestricted right to exclusively sublicense to UP, is provided at Appendix A
attached to this Agreement. AltaRex owns or controls under valid licenses and
has the right to license or sublicense, all right, title and interest in and
to all such Third Party Patents listed on Appendix A. A complete list of all
Information and data included in the Know-How as of the Effective Date is
provided at Appendix B attached to this Agreement;

           2.2.8 AltaRex has made or will make available to UP all material
technical Information in its possession or control that is pertinent to
development or commercialization of the Licensed Technology as permitted in
Section 3.1;

           2.2.9 The Core Development Team identified on Appendix D constitutes
those individuals who have been developing the Licensed Technology for
AltaRex prior to the Effective Date and the individuals who AltaRex considers
necessary for the continued development of the Licensed Technology in
accordance with this Agreement; and

           2.2.10 AltaRex will act in accordance with Section 4.5.2 below.

           2.2.11 AltaRex is in compliance in all material respects with all its
obligations under the Biomira Agreement.

           2.2.12 Prior to the Effective Date, AltaRex has filed assignments with
the Canadian Patent Office assigning the following patent applications to
AltaRex: #[**] and #[**]. As soon as practical after a serial number has
been designated by the Canadian Patent Office, AltaRex shall file an
assignment with the Canadian Patent Office assigning the following patent
application to AltaRex: that Canadian national application identified as
[**].

     2.3 By UP. UP represents and warrants to AltaRex that:

           2.3.1 UP will use commercially reasonable efforts to develop and
commercialize and market Products for one or more indications within the
Field;

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           2.3.2 UP will use its commercially reasonable best efforts to conduct
its Initial Assessment Period obligations and meet its development
obligations and milestones in accordance with Sections 4.1 and 4.2 below;

           2.3.3 UP will conduct all studies and clinical trials in accordance with
all applicable Laws, Good Clinical Practices and medical ethical rules;

           2.3.4 UP will adhere to all applicable Laws and Good Manufacturing
Practices in the manufacturing, storing, selling, and exporting of Product;

           2.3.5 UP will not use any individual to perform any services as
contemplated by this Agreement who has been disbarred pursuant to the United
States Food, Drug and Cosmetic Act; and

           2.3.6 UP will adhere to all applicable Laws regarding any of UP’s
obligations under this Agreement.

ARTICLE 3

GRANT

     3.1 Grant. Subject to the terms of this Agreement and with the
exception of Joint Intellectual Property defined in Section 1.13(ii), AltaRex
hereby grants to UP a sole and exclusive, non-transferable (other than to an
Affiliate with prior written notice to AltaRex), royalty bearing license in
the Territory, with the right to grant sublicenses, under the Licensed
Technology to develop, make, have made, use, import, market, promote, sell
and have sold Products within the Field in the Territory. With respect to
AR54 only, UP agrees and acknowledges that the Licensed Technology and
AltaRex’s grant hereunder, excludes any and all rights granted to AltaRex
under the Public Health Service Patent License Agreement entered into between
the National Institutes of Health and AltaRex effective as of September 11,
1999 (the “NIH Agreement”) and which NIH Agreement expires as of June 11,
2002.

     3.2 Sublicenses. With the exception of Joint Intellectual Property
defined in Section 1.13(ii), UP shall have the right to grant sublicenses, in
the Territory, under the license in Section 3.1 above to any Third Party or
Affiliate. UP shall deliver a copy of each sublicense under this Agreement
to AltaRex promptly after execution of the same. Each sublicensee shall be
subject to the same and identical terms and conditions of this Agreement. UP
shall be liable for all actions of UP’s sublicensees.

     3.3 Grant to AltaRex under Section 1.13 (i). UP hereby grants to
AltaRex a sole and exclusive, royalty-free license, with the right to grant
sublicenses, under its interest in Joint Intellectual Property as defined in
Section 1.13 (i) to develop, make, have made, use, import, market, promote,
sell and have sold Products within the Field outside of the Territory only.

9

 

     3.4 Grant to AltaRex under Section 1.13 (ii). UP hereby grants to
AltaRex a sole and exclusive, royalty-free license, with the right to grant
sublicenses, under its interest in Joint Intellectual Property as defined in
Section 1.13 (ii) to the extent that such Joint Intellectual Property is not
specific to the development and/or commercialization of those certain
antibodies known as OvaRex, BrevaRex, ProstaRex, AR54 and GivaRex.

     3.5 Sublicense Rights. Notwithstanding anything in this Agreement to the
contrary, both parties agree that they will not sublicense any Joint
Intellectual Property as defined in Section 1.13 (ii) to a Third Party or to
an Affiliate without the prior written consent of the other party.

     3.6 Covenant Not to Sue. AltaRex agrees that it will not assert nor
cause to be asserted against UP, its Affiliates or its sublicensees any
existing invention, Information, patent or know-how not included in the
Licensed Technology that is or might be infringed by reason of UP, its
Affiliates or its sublicensees’ exercise of rights granted to UP under this
Article 3.

     3.7 Biomira Agreement. The exclusive license granted to UP under this
Agreement to the extent that such license covers Technology (as defined in
the Biomira Agreement) (and the other provisions of this Agreement to the
extent applicable) are subject and subordinate to the following sections of
the Biomira Agreement (and any other provisions of the Biomira Agreement,
such as the defined terms in Section 1.1 of the Biomira Agreement, which may
be reasonably necessary to permit an understanding of such sections):
Section 2.1, Section 2.3, Section 2.4, Section 2.7, Section 3.5, Section 4.3,
Section 4.5, Section 4.6, Article V, Section 6.1.1 and Section 6.1.2. Copies
of these sections of the Biomira Agreement are attached to this Agreement as
Appendix E.

     3.8 University of Maryland Agreement. The exclusive license granted to
UP under this Agreement to the extent that such license covers Patent Rights
(as defined in the University of Maryland Agreement) (and the other
provisions of this Agreement to the extent applicable) are subject and
subordinate to the following sections of the University of Maryland Agreement
(and any other provisions of the University of Maryland Agreement, such as
the defined terms in Section 1.02 and Article 2 and Exhibit A of the
University of Maryland Agreement, which may be reasonably necessary to permit
an understanding of such sections): Section 3.01, Section 3.02, Section
3.04, Section 3.05, Article 4, Article 6, Section 7.01, Section 7.02, Section
7.03, Section 8.01(h), Section 8.01(i), Section 9.01, Section 9.02, Article
10, Section 11.01, Section 11.02, Section 11.03, Section 11.04, Section
11.06, Section 11.07, Section 11.08, and Section 19.04.

ARTICLE 4

DEVELOPMENT AND COMMERCIALIZATION PROGRAM

     4.1 Initial Assessment Period.

10

 

           4.1.1 The parties acknowledge that it will be beneficial to UP to work
closely with AltaRex for a period of time following the Effective Date in order
to (i) perform a top-to-bottom assessment of all aspects of the development of
the Licensed Technology conducted by or on behalf of AltaRex prior to the
Effective Date so that UP may be fully informed of all development progress,
status, issues, concerns, assumptions, strategies, trade-offs, limitations,
decisions and similar elements and factors bearing on the state of the Licensed
Technology as of the Effective Date, and (ii) to reengineer, redesign, develop,
propose and optimize turnkey solutions and strategies going forward with
respect to all aspects of the successful development of the Licensed Technology
including, without limitation, manufacturing, clinical trial design including a
pivotal trial design for OvaRex®, intellectual property strategies, and market
and competitive assessments, the foregoing period referred to as the “Initial
Assessment Period”.

           4.1.2 UP shall provide written notice to AltaRex when it has substantially
completed the Initial Assessment Period to its satisfaction and is prepared to
proceed with the UP Development Program in accordance with Section 4.2 below or
determines not to proceed with the UP Development Program (the date of such
notice being the last day of the Initial Assessment Period if not earlier
delivered in writing to AltaRex); provided, however, that the Initial
Assessment Period shall be no longer than 240 days following the Effective
Date. UP’s conclusions, recommendations and strategies going forward that
result from the Initial Assessment Period shall be presented to the Advisory
Committee for evaluation and discussion.

           4.1.3 From the Effective Date, UP, at its sole expense, shall fund all
reasonable and direct ongoing development costs incurred by either AltaRex or
UP in accordance with this Agreement and with respect to developing the
Licensed Technology in the Territory during the Initial Assessment Period only;
provided, however, that AltaRex shall not incur any such development expenses
(the “AltaRex Expenses”) following the Effective Date that are not (i) in
accordance with a budget approved by UP (the “AltaRex Expense Budget”), which
approval shall not be unreasonably withheld or delayed, or (ii) with the prior
written approval of UP, which approval shall not be unreasonably withheld or
delayed.

                 4.1.3.1 AltaRex shall provide UP with a detailed monthly invoice within
15 days of the end of each month with a detailed listing of all AltaRex
Expenses by category of the AltaRex Expense Budget. The total for each
category shall be compared to the amount allowed in the AltaRex Expense
Budget for that month. If a category total exceeds the budgeted amount
(i.e., a negative variance), the excess will not be reimbursed until a
positive variance accumulates in a future month. Each invoice shall also be
signed by an officer of AltaRex and shall certify that (i) all information
contained in each invoice is complete and accurate and that AltaRex has no
information that would require adjustment to any prior invoices; and (ii)
the invoices do not contain any charges for which UP is not responsible in
accordance with this Agreement including, without limitation, any costs that
are not with respect to developing Licensed Technology in the Territory.
AltaRex shall provide copies of all vendor invoices being passed through on
the monthly invoice. AltaRex shall be solely responsible for all AltaRex
Expenses that are in excess of an approved AltaRex Expense Budget.

11

 

                 4.1.3.2 AltaRex shall not enter into agreements with Third Parties with
respect to AltaRex Expenses without first submitting to UP a detailed
proposal, budget and contract for each contract proposed to be performed by
such Third Parties. UP will have the right to review and either approve or
reject these proposals in its sole discretion and in a timely manner. Upon
approval, AltaRex shall notify UP as to any material revisions to the
proposed contract for services with such approved Third Party and shall send
detailed invoices for all work performed by approved Third Parties to UP for
review prior to payment. All AltaRex expenditures in excess of $25,000 shall
be pre-approved in writing by an officer of UP.

           4.1.3.3 AltaRex and UP will use its commercially reasonable best efforts
to efficiently transition payment for all ongoing expenses to UP for direct
payment. Within five days of the Effective Date, AltaRex shall provide a list
of vendors from whom services have been procured and to whom amounts are
expected to come due during the Initial Assessment Period. The list shall
indicate the termination provisions of each vendor relationship and the
expected amounts to be paid under each arrangement.

           4.1.4 The parties expect that UP will hire some of the Core Development
Team within 30 days of the Effective Date (the “Transition Period”). UP agrees
that it shall reimburse AltaRex for all actual and ordinary costs of employment
of the Core Development Team during the “Transition Period”, including wages,
severance and benefits as provided in this Article 4 and Appendix D. During
the Transition Period, AltaRex shall (i) make no changes to compensation paid
to the Core Development Team without the prior approval of UP, (ii) operate the
Licensed Technology in the same manner as it has been operated in the week
prior to the Effective Date without the prior approval of UP, (iii) not enter
into any agreements that may encumber the Licensed Technology within the
Territory without the prior approval of UP, and (iv) present to UP on May 17,
2002 a detailed invoice identifying all expenses incurred by AltaRex with
respect to the Licensed Technology in the Territory during the Transition
Period, including, without limitation, development costs as contemplated by
Section 4.1.3, employment costs contemplated by Section 4.1.4, expenses
contemplated by Section 4.1.6 and severance costs contemplated by Section
4.1.7. AltaRex may invoice UP from time to time after May 17, 2002 in
connection with other expenses incurred during the Initial Assessment Period
for which UP is responsible in accordance with the provisions of this Article
4. UP shall examine each invoice and pay any undisputed amounts within five
business days.

           4.1.5 In the event that UP does not provide written notice to AltaRex of
its decision to proceed with the UP Development Program in accordance with
Section 4.2 below within [**] days or provides written notice of its
determination not to proceed with the UP Development Program, then in such
event AltaRex in its discretion may terminate the exclusive license granted to
UP under this Agreement immediately on upon fifteen (15) day advance written
notice to UP unless within such 15-day period UP issues such written notice.
Upon fifteen (15) day written notice to AltaRex at any time during the Initial
Assessment Period or within thirty days following completion of the Initial
Assessment Period, UP may terminate the

12

 

exclusive license granted to it under this Agreement. Upon the foregoing
termination events, the terms of Section 11.4.2 shall apply.

           4.1.6 During the Transition Period, the Initial Assessment Period and the
UP Development Program for so long as AltaRex and UP agree that UP may maintain
employees co-located with AltaRex employees, UP will pay for its proportionate
share of overhead expenses related to the common facilities as used by the
co-located employees. The parties shall agree on reasonable and customary
terms for calculating the proportionate share of overhead expenses and for UP’s
payments to AltaRex.

           4.1.7 UP agrees to assume the severance obligations of, and pay or
reimburse AltaRex for those severance expenses identified in Appendix D
relating to UP’s termination of the employment of any member of the Core
Development Team without Cause in accordance with such employees’ respective
letter agreements; provided, however, that AltaRex shall be responsible for
severance obligations, if any, solely for any employees who choose to leave
AltaRex during the Transition Period and not as a result of being terminated by
UP without Cause. For the purposes of this Section 4.1.7, Cause shall mean a
failure to perform an employee’s responsibilities after two prior written
warnings.

           4.1.8 Prior to the Effective Date, AltaRex has ordered certain
manufacture, formulation and other production services with respect to the
preparation of bulk drug product, clinical trial material and other forms and
formulations of OvaRex® ( the “OvaRex® CTM”) as identified in Appendix F. UP
agrees that it shall be responsible for the payment of the batches of such
OvaRex® CTM identified in Appendix F as lots #2 and lots #3, estimated at
approximately US$[**] each in cost, as such invoices are generated in the
ordinary course of business.

     4.2 Development Program. Subject to AltaRex performing AltaRex’s
obligations to provide all relevant materials and Information under this
Agreement, UP shall use its commercially reasonable best efforts following
completion of the Initial Assessment Period to diligently develop and conduct
such research, development and preclinical and clinical trials to obtain the
necessary regulatory approvals to market and commercialize such Products as UP
determines are commercially feasible, and diligently obtain necessary approvals
to commence marketing and market one or more Products in the United States and
such other countries of the Territory as UP determines are commercially
feasible (hereinafter the “UP Development Program”). The UP Development
Program shall be directed by UP pursuant to the results from the Initial
Assessment Period as evaluated by the Advisory Committee created under Section
4.9 below and as reasonably approved by UP.

           4.2.1 UP Development Program Milestones. UP shall use its best efforts to
conduct the UP Development Program and, if in UP’s opinion, the results of the
UP Development Program so justify, to seek Registration for such Product in the
United States and pursue manufacturing, commercialization and marketing of
Products in the United States, and thereafter in such additional countries
within the Territory as UP determines are commercially feasible. The UP
Development Program shall include such product development work as UP

13

 

may, in its sole discretion, consider necessary for such Registration. UP
shall complete enrollment in a pivotal OvaRex® study by [**]; and (ii) make an
OvaRex® BLA submission by [**]; provided, however, that the foregoing milestone
dates shall be extended by that number of days as is equivalent to the duration
of the Initial Assessment Period.

           4.2.2 Failure to Meet Milestone Schedule. Subject to Section 4.2.3 below,
in the event of UP’s failure to perform in accordance with the development
milestones in Section 4.2.1 above, AltaRex in its discretion may terminate the
exclusive license granted to UP under this Agreement upon 120-day advance
written notice to UP, unless within such 120-day period, UP achieves such
milestone obligation. Upon such termination, the terms of Section 11.4.2 shall
apply.

           4.2.3 Suspension of Milestone Schedule. UP’s obligation to meet the
development milestones provided in Section 4.2.1 above is expressly conditioned
on the continuing absence of any material safety or regulatory event or
condition (such as, but not limited to, a regulatory action affecting a Product
or the existence of an issue relating to the safety or efficacy of a Product)
that UP after performing due diligence and exercising reasonable business
judgment, determines that development or marketing of the Product should be
suspended or stopped altogether. In such an event, (i) UP’s obligations to
develop or market a Product shall be suspended so long as any such condition or
event exists, and (ii) the development milestone schedule provided in Section
4.2.1 shall be extended by the period of any such suspension.

     4.3 Reports. UP will provide AltaRex with quarterly written progress
reports, summarizing in detail UP’s activities relating to the Initial
Assessment Period or the UP Development Program, and will provide such other
Information reasonably requested by AltaRex.

     4.4 Disclosure of Inventions and Development Results. Each party shall
provide to the other party a complete written disclosure for each and every
invention or other discovery, whether or not patentable, first conceived or
reduced to practice in the performance of the Initial Assessment Period, the UP
Development Program or the AltaRex Development Program (as it relates to the
Licensed Technology) including without limitation, Improvements (whether or not
AltaRex has a right to grant a sublicense with respect to such Improvement) and
Joint Intellectual Property, promptly after each such invention is made. Each
party shall regularly inform the other party of the results of the Initial
Assessment Period, the UP Development Program or the AltaRex Development
Program (as it relates to the Licensed Technology), and shall provide copies of
the results and raw data from the Initial Assessment Period, the UP Development
Program or the AltaRex Development Program (as it relates to the Licensed
Technology), as requested. As used herein, “raw data” means all Information
generated by employees and other Persons working on the Initial Assessment
Period, the UP Development Program or the AltaRex Development Program (as it
relates to the Licensed Technology), whether in written, graphic or electronic
form, and including without limitation all materials such as films, printouts,
and photographs that record such Information, concerning work

14

 

conducted pursuant to the Initial Assessment Period, the UP Development
Program or the AltaRex Development Program (as it relates to the Licensed
Technology).

     4.5 Regulatory Efforts and Coordination.

           4.5.1 Within the Territory. UP shall solely manage all applications,
requests for authorization, submissions of Information and data and for all
interactions with the FDA or applicable governing health authority for the
purpose of attempting to obtain registration of the Products within the
Territory in accordance with the Initial Assessment Period or the UP
Development Program. UP shall have the final authority to make all clinical
and regulatory decisions with respect to the registration of Products within
the Territory in its sole reasonable discretion. UP shall provide AltaRex
with sufficient time to review and approve all material submissions of
Information and data prior to submission to the FDA or applicable governing
health authority, and AltaRex shall participate and collaborate in the
process of Product registration including, without limitation, participation
in meetings with regulatory authorities and interaction with UP staff,
contractors and consultants on a regular basis regarding the development and
commercialization of Products. UP shall solely and exclusively own all
regulatory applications, approvals, clinical data and Product registrations
obtained by UP or its Affiliates with respect to Products within the
Territory, including retaining control and ownership of each Drug Master File
related to the Licensed Technology within the Territory. For the avoidance
of doubt, the foregoing materials shall be deemed to be Data.

           4.5.2 Outside of the Territory. AltaRex intends to research, develop
and conduct certain preclinical and clinical activities in order to obtain
the necessary regulatory approvals to market and commercialize products
incorporating or based directly or indirectly on the Licensed Technology
outside of the Territory as AltaRex shall determine in its discretion
(hereinafter the “AltaRex Development Program”). AltaRex shall provide
prompt written notice to UP of all aspects of the AltaRex Development
Program, and shall promptly update UP in writing with respect to all material
changes in such AltaRex Development Program that may arise from time to time.
UP shall review and approve in writing the AltaRex Development Program, and
all material changes thereto from time to time, in an effort to ensure that
the Initial Assessment Period and the UP Development Program are not
jeopardized or adversely affected by the AltaRex Development Program, such
approval not to be unreasonably withheld or delayed by UT. Qualified
personnel of UP shall be permitted to participate and collaborate in the
Product registration process by AltaRex outside of the Territory, including
without limitation the review of filings prior to submission to regulatory
authorities outside of the Territory, participation in meetings with
regulatory authorities, and interaction with AltaRex personnel on a regular
basis regarding the status of regulatory filings. The parties shall closely
cooperate on any matters involved in and arising from the development and
commercialization process that may materially affect the other party’s
efforts to register Products within each party’s respective territory. Each
party shall closely consult with the other with regard to its participation
in important clinical development meetings. AltaRex shall provide UP with
quarterly written progress reports, summarizing in detail AltaRex’s
activities relating to the AltaRex Development Program, and will provide such
other Information reasonably requested by UP.

15

 

           4.5.3 Clinical Data. Each party hereby grants to the other party full
and complete access to all Data it develops or controls for the other party’s
use in connection with such party’s efforts to obtain Product registrations
within such party’s territory, including without limitation the right to use
and submit all Data to governmental authorities to the extent legally
required and as otherwise necessary in support of Product applications for
registration, and to make full reference to the CMC and Drug Master File.

     4.6 Records. Each party shall maintain complete and accurate records,
in sufficient detail and in good scientific manner appropriate for patent
purposes, which shall properly reflect all work conducted and all results
achieved in the performance of its research and development regarding the
Licensed Technology and the Products (including all data in the form required
under all applicable laws and regulations) appropriate for patent and
regulatory purposes. The other party shall have the right, during normal
business hours and upon reasonable notice to inspect and copy such records.

     4.7 Visits. Appropriate employees, agents and outside consultants of
each party may visit the other party at its offices and laboratories during
normal business hours and upon reasonable prior written notice in the event
that the parties’ offices are not co-located in the same facility, and may
discuss the Initial Assessment Period and its results, the UP Development
Program and its results and the AltaRex Development Program and its results
in detail with the technical personnel and consultants of the other party.
All visits shall be conducted in a manner so as not to disrupt a party’s
business nor cause any disclosure of any other confidential information of
such party.

     4.8 Compliance with Laws. The parties shall comply with all applicable
Laws in performing their obligations hereunder and in any of their dealings
with respect to the Product.

     4.9 Advisory Committee.

           4.9.1 Composition of the Advisory Committee. An Advisory Committee
shall be comprised of two representatives of AltaRex and two representatives
of UP with an appropriate level of skill, experience and familiarity with the
Initial Assessment Period, the UP Development Program or the AltaRex
Development Program. The initial representatives for AltaRex shall be
Richard E. Bagley and Robert Newman. The initial representatives for UP
shall be Martine Rothblatt, Ph.D. and Barry Kanarek, M.D. Each party may
substitute one or more of its representatives, in its sole discretion,
effective upon agreement of the other party of such change, such agreement
not to be unreasonably withheld or delayed.

           4.9.2 Meetings. The Advisory Committee shall meet not less than twice
each year during the term of this Agreement on such dates and at such time
and places as agreed to by the parties, alternating between AltaRex’s
principal offices and UP’s principal offices, or such other locations as the
parties shall agree, unless both parties mutually determine that a meeting
should not take place. At such meetings, the Advisory Committee shall
discuss the parties’ research and prospective development and
commercialization efforts under this Agreement, the Initial Assessment
Period, the development budget, development priorities,

16

 

UP’s requirements from AltaRex, any actual regulatory filings regarding
Products together with any anticipated regulatory filings with respect to
possible products, pricing of Product, patent filings, and, in general, shall
coordinate the development and commercialization of Products. Each party
shall bear its own expenses in connection with travel and attendance at such
meetings.

     4.10 AltaRex Obligations.

           4.10.1 Information. AltaRex, at its sole expense, shall be responsible
for the timely delivery to UP of all Information available to AltaRex
regarding the Licensed Technology and reasonably required by UP to fulfill
its obligations under this Agreement, including but not limited to,
Information, compilations, analyses, reports, studies, data, copies of
regulatory filings and proceedings which AltaRex has developed or acquired
which may be related to the licensed rights and which concerns or relates to
preclinical and clinical research, safety, use, efficacy, and copies of
findings or reports which are required by the FDA or similar regulatory
agencies.

           4.10.2 Cooperation. AltaRex shall, upon the request by UP, provide UP
with reasonable assistance and consultation regarding the Licensed
Technology, including reasonable access to sample materials and data and the
execution of necessary and appropriate instruments and documents.

           4.10.3. Clinical Trial Material. AltaRex shall provide UP free of
charge with all bulk drug substance, clinical trial material and other forms
and formulations of OvaRex® and other compounds and products within the
Licensed Technology in AltaRex’s possession or control as of the Effective
Date as UP shall reasonably request in connection with the performance of its
obligations during the Initial Assessment Period and the UP Development
Program and otherwise in accordance with this Agreement.

     4.11 Registration of License. UP may, at its expense, register the
exclusive license granted under this Agreement in any country, or community
or association of countries within the Territory, where the use, sale or
manufacture of a Product in such country would be covered by a Valid Patent
Claim. Upon request of UP, AltaRex agrees, after AltaRex reviews for
accuracy, promptly to execute any “short form” licenses in a form submitted
to it by UP from time to time in order to effect the foregoing registration
in such country.

     4.12 Supply of Products. UP will be contracting for the manufacture and
supply of clinical trial material and commercial Products. If requested by
AltaRex, the parties shall commence good faith negotiations to enter into an
agreement in which AltaRex’s reasonable requirements for clinical trial
material and commercial Products for use outside the Territory may be added to
UP’s purchasing requirements; provided, however, that such additional AltaRex
requirements do not result in increased costs, manufacturing delays, or
otherwise jeopardize in any manner the cost, quality and timely delivery of
clinical trial material or Products in accordance with the UP Development
Program. Such agreement shall include

17

 

payment price, delivery schedule, ordering procedures and other standard terms
and conditions contained in similar agreements.

ARTICLE 5

PAYMENTS AND ROYALTIES

     5.1 Milestone Payments. In partial consideration for the grant of the
license under the Licensed Technology to UP under Section 3.1, UP shall pay
AltaRex the milestone payments in the amount specified below for each
indication for which UP seeks regulatory approval of a Product, such payment
to be made within thirty days following the completion of the corresponding
event designated below:

	 	 	 	 	 
	 	 	Milestone Payment
	Milestone Event	 	(Millions of Dollars)
	
	 	

	Commencement of pivotal Phase 3
enrollment
	 	$	[**]	 
	Completion of BLA filing
	 	$	[**]	 
	BLA approval by FDA
	 	$	[**]	 

The parties acknowledge that the first milestone payment to AltaRex in
connection with the development of OvaRex® for the treatment of ovarian
cancer shall be upon completion of a BLA filing.

     5.2 Royalties.

           5.2.1 In partial consideration for the grant of the license under the
Licensed Technology to UP under Section 3.1, following First Commercial Sale
UP shall pay AltaRex a stepped royalty based on the aggregate annual Net
Sales of each Product sold in the Territory by UP, its Affiliates and
sublicensees during the Royalty Term:

	 	 	 	 	 	 	 	 	 
	Annual Net Sales 0 - $[**]
	 	 	[**]	%	 	 	 	 
	Annual Net Sales $[**] — $[**]
	 	 	[**]	%	 	 	 	 
	Annual Net Sales over $[**]
	 	 	[**]	%	;	 	 	 

provided, however, that (i) with respect to Net Sales of OvaRex® only, the
above royalty rates shall apply with UP responsible for payment of an
additional [**]% royalty directly to Biomira, Inc. in accordance with the
Biomira Agreement, and (ii) with respect to Net Sales of ProstaRexTM only, the
above royalty rates shall apply with UP responsible for payment of an
additional [**]% royalty directly to the Noujaim Institute in accordance with
the Noujaim Institute for Pharmaceutical Oncology Research, Faculty for
Pharmacy and Pharmaceutical Sciences, University of Alberta Research
Agreement.

18

 

     5.3 Accrual of Royalties. No royalties shall be payable on a Product
distributed to Third Parties solely as a sample for testing or evaluation
purposes. No multiple royalty shall be payable on the sale of any one
Product. No multiple royalty shall be payable on a Product because the
manufacture, use or sale of such Product is covered by more than one Patent
or is subject to both Know-How and a Valid Patent Claim. UP shall have the
right to distribute (without receipt of Consideration and without payment of
a royalty to AltaRex) in any calendar year for compassionate purposes to
indigent patients, an aggregate of up to [**] percent ([**]%) of the total
number of Products sold in units (with the receipt of Consideration) in such
calendar year by UP, its Affiliates and sublicensees.

     5.4 Third Party Royalties. With the exception of possible royalties to
Biomira, Inc. and the Noujaim Institute in accordance with Section 5.2 above,
if UP, its Affiliates or its sublicensees determine, at UP, its Affiliates’
or its sublicensee’s discretion and after consulting with AltaRex, that they
are required to pay royalties to any Third Party because the manufacture, use
or sale of Products infringes any patent or other intellectual property
rights of such Third Party in any country in the Territory, UP, its
Affiliates or its sublicensees may deduct from royalties thereafter due with
respect to Net Sales of such Product in such country up to ([**] percent,
[**]%) of the royalties or such other fees paid to such Third Party; provided,
however, that in no event shall the royalties due on such Net Sales of
Products on account of any reduction pursuant to this Section 5.4 be thereby
reduced by more than [**] percent ([**]%) of the royalties which otherwise
would have been due hereunder on such Net Sales of such Products (reflecting
[**]% of the Reduced Royalty where the Reduced Royalty applies in accordance
with Section 5.8).

     5.5 Compulsory Licenses. Should a compulsory license be granted to a
Third Party under the applicable laws of any country in the Territory under
the Licensed Technology hereunder, the royalty rate payable hereunder for the
sale of Products in such country shall be reduced by an amount equivalent to
the lower royalty rate granted to such Third Party for such country.

     5.6 Commercial Hardship. If in any country UP can demonstrate that for
any reason beyond it, its Affiliates’ or its sublicensees’ control the
royalty payable hereunder by UP causes or may cause UP, its Affiliate or its
sublicensee a significant reduction in its or their sales of Product in that
country, or otherwise causes or may cause hardship in the promotion or sale
of Product in a country, the parties shall meet and in good faith endeavor to
agree on a reduction in the royalty rate payable in that country that will
place UP, its Affiliates or its sublicensees in a position to competitively
market such Product in such country.

     5.7 Reduction in Royalty Due to Invalid Claim. In the event that all
applicable patent claims included in the Patents under which UP is selling or
actively developing a Product shall be held invalid by a court of competent
jurisdiction in a given country, whether or not there is a conflicting
decision by another court of competent jurisdiction in such country, the
royalty to be paid by UP under this Section 5 shall be reduced to [**]
percent

19

 

([**]%) of the royalties which otherwise would have been due hereunder on
such Net Sales of such Products in such country (reflecting [**]% of the
Reduced Royalty where the Reduced Royalty applies in accordance with Section
5.8) until such judgment shall be finally reversed by an unappealed or
unappealable decree of a court of competent jurisdiction of higher dignity in
such country; provided, however, that if and to the extent such judgment is
finally reversed by an unappealed or unappealable decree of a court of
competent jurisdiction, the former royalty payments shall be resumed and the
royalty payments not therefore made shall become due and payable.

     5.8 Reduction in Royalty Due to Failure of Material Patent Claim to
Issue. In the event that at least one Material Claim fails to issue in a
country of the Territory prior to regulatory approval of the first Product in
such country, then the royalty to be paid by UP under this Section 5 shall be
reduced to [**] percent ([**]%) of the royalties which otherwise would have
been due hereunder on Net Sales of such Product in such country (the “Reduced
Royalty”), provided however that if a Material Claim issues for a Product in
such country after approval, the reduced royalty rate provided in this
Section 5.8 shall no longer apply following the date such Material Claim
issues with respect to sales in such country for so long as such Material
Claim remains a Valid Patent Claim. For the purposes of this Section 5.8, a
“Material Claim” is a claim which has a scope at least as broad as the
following claim: a method of eliciting a host immune response comprising
administering to a host in need thereof a binding agent which binds to an
epitope of a multi-epitopic antigen and forms a binding agent/antigen pair in
said host, such that a host immune response is elicited against at least a
second epitope on the antigen.

     5.9 Sublicensing. In the event that UP grants a sublicense under Section
3.2 to a sublicensee to make, use or sell the Product, such sublicenses shall
require the sublicensee to account for and report its Net Sales of the Product
on the same basis as if such sales were Net Sales of the Product by UP, and UP
shall pay royalties on such sales as if the Net Sales of the sublicensees were
Net Sales of UP.

ARTICLE 6

ROYALTY REPORTS, ACCOUNTING AND PAYMENT

     6.1 Reports, Exchange Rates. UP shall notify AltaRex in writing
promptly upon the First Commercial Sale of a Product by UP, its Affiliates or
its sublicensees. During the term of this Agreement following the First
Commercial Sale of a Product, UP shall furnish to AltaRex a quarterly written
report showing in reasonably specific detail, on a country by country basis:
(i) the gross sales of each Product sold by UP, its Affiliates and its
sublicensees during the reporting period and the calculation of Net Sales
from such gross sales; (ii) the royalties payable in Dollars, if any, which
shall have accrued hereunder based upon Net Sales of each Product; (iii) the
withholding taxes, if any, required by law to be deducted in respect of such
sales; (iv) the date of the First Commercial Sales of each Product in each
country during the reporting period; and (v) the exchange rates used in
determining the amount of Dollars. With respect to sales of Products
invoiced in Dollars, the gross sales, Net Sales, and

20

 

royalties payable shall be expressed in Dollars. With respect to sales of
Products invoiced in a currency other than Dollars, the gross sales, Net
Sales and royalties payable shall be expressed in the domestic currency of
the party making the sale together with the Dollar equivalent of the royalty
payable. The Dollar equivalent shall be calculated using the average
exchange rate (local currency per US$1) published in The Wall Street Journal,
Western Edition, under the heading “Currency Trading,” on the last business
day of each month during the applicable calendar quarter. Reports shall be
due on the sixtieth (60th) day following the close of each quarter. UP, its
Affiliates and its sublicensees shall keep complete and accurate records in
sufficient detail to properly reflect all gross sales and Net Sales and to
enable the royalties payable hereunder to be determined.

     6.2 Audits.

           6.2.1 Upon the written request of AltaRex, and not more than once in
each calendar year, UP shall permit an independent certified public
accounting firm of nationally recognized standing, selected by AltaRex and
reasonably acceptable to UP, at AltaRex’s expense, to have access during
normal business hours to such of the records of UP as may be reasonably
necessary to verify the accuracy of the royalty reports hereunder for any
year ending not more than twenty-four (24) months prior to the date of such
request. The accounting firm shall disclose to AltaRex only whether the
records are correct or not and the specific details concerning any
discrepancies. No other information shall be shared.

           6.2.2 If such accounting firm concludes that additional royalties were
owed during such period, UP shall pay the additional royalties within thirty
(30) days of the date AltaRex delivers to UP such accounting firm’s written
report so concluding. The fees charged by such accounting firm shall be paid
by AltaRex; provided however, that if the audit discloses that the royalties
payable by UP for the audited period are more than one hundred five percent
(105%) of the royalties actually paid for such period, then UP shall pay the
reasonable and direct fees and expenses charged by such accounting firm.

           6.2.3 UP shall include in each sublicense granted by it pursuant to
this Agreement a provision requiring the sublicensee to make reports to UP,
to keep and maintain records of sales made pursuant to such sublicense, and
to grant access to such records by AltaRex’s independent accountant to the
same extent required of UP under this Agreement. Upon the expiration of
twenty-four (24) months following the end of any year, the calculation of
royalties payable with respect to such year shall be binding and conclusive
upon AltaRex and UP, its Affiliates and sublicensees.

     6.3 Confidential Financial Information. AltaRex shall treat all
financial information subject to review under this Article 6 or under any
sublicense agreement as confidential and shall cause its accounting firm to
retain all such financial information in confidence.

21

 

     6.4 Payment Terms. Royalties shown to have accrued by each royalty
report provided for under this Article 6 shall be due and payable on the date
such royalty report is due. Payment of royalties in whole or in part may be
made in advance of such due date.

     6.5 Payment Method. Except as provided in Section 6.6, all royalty
payments by UP under this Agreement shall be paid in Dollars, and all such
payments shall be originated from a United States bank located in the United
States and made by bank wire transfer or bank check in immediately available
funds to such account as AltaRex shall designate before such payment is due.

     6.6 Exchange Control. If at any time legal restrictions prevent the
prompt remittance of part or all royalties with respect to any country where
the Product is sold, payment shall be made through such lawful means or
methods as UP reasonably shall determine after consultation with AltaRex.

ARTICLE 7

RIGHT OF FIRST REFUSAL TO UP

     7.1 Right of First Refusal to UP. AltaRex hereby grants to UP an
exclusive right of first refusal to enter into an agreement concerning the
license, development and/or commercialization of new chemical entities,
compounds, products, or other therapies owned or controlled by AltaRex which
have application, directly or indirectly, in the treatment of cancer that are
not included within the Licensed Technology (a “New Compound”).

           7.1.1 AltaRex shall, via written notice, inform UP of any New Compound
and provide UP with terms and conditions for an agreement (which may be a
detailed term sheet) and UP shall have thirty (30) days from the date of its
receipt of written notice from AltaRex to exercise its right of first refusal
granted hereby by notifying AltaRex in writing of such exercise and to
commence negotiations to enter into an agreement with AltaRex. In the event
the parties cannot execute an agreement within thirty (30) days of UP
exercising such right of first refusal, AltaRex may commence discussions with
Third Parties to enter into an arrangement with such Third Parties; provided,
however, AltaRex shall not grant terms any more favorable to the terms
offered by AltaRex to UP. Should UP fail to provide a written notice to
AltaRex indicating whether or not it intends to exercise its right of first
refusal within such thirty (30) day period or declines to exercise UP’s right
of first refusal, UP shall be deemed to have declined to exercise UP’s right
of first refusal granted pursuant to Section 7.1.

ARTICLE 8

CONFIDENTIALITY

     8.1 Confidential Information. As used herein, “Confidential
Information” means all Information relating to the Initial Assessment Period,
the UP Development Program or the AltaRex Development Program for each
Product or product, respectively, all Information that

22

 

the parties have disclosed to each other since October 22, 2001 and/or
during the term of this Agreement and all Information deemed “Confidential
Information” under this Agreement, provided that Confidential Information
(other than Information relating to the Initial Assessment Period, the UP
Development Program or the AltaRex Development Program) has been marked
“Confidential” or “Proprietary” or, if orally presented, is indicated before
disclosure to be confidential or proprietary. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing by the parties,
each party shall keep confidential and shall not publish or otherwise
disclose any Confidential Information of the other party and shall not use
such Confidential Information of the other party for any purpose not
authorized by this Agreement.

     8.2 Exceptions. Notwithstanding Section 8.1 above, “Confidential
Information” shall not include any Information that a party can demonstrate
by competent written evidence:

           8.2.1 was already known to such party, other than under an obligation of
confidentiality, at the time of disclosure by the other party or, prior to
its creation or discovery hereunder;

           8.2.2 was generally available to the public or otherwise part of the
public domain at the time of its disclosure to such party;

           8.2.3 became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission
of such party;

           8.2.4 was disclosed to such party, other than under an obligation of
confidentiality to a Third Party, by a Third Party who had no obligation to a
party not to disclose such information to others; or

           8.2.5 is independently developed by such party without using any
Confidential Information of the other party.

     8.3 Permitted Disclosure. Notwithstanding the limitations in this
Section 8, each party may disclose Confidential Information to the extent
such disclosure is reasonably necessary in the following instances, but
solely for the limited purpose of such necessity:

           8.3.1 prosecuting or defending litigation;

           8.3.2 complying with applicable governmental laws or regulations,
including without limitation, NASDAQ, TSE, SEC or Ontario Securities
Commission disclosure requirements, or valid court orders;

           8.3.3 disclosure to employees, consultants or agents, solely in
furtherance of this Agreement, provided that such individuals have agreed in
writing to be bound by similar terms of confidentiality and non-use at least
equivalent in scope to those set forth in this Section 8; or

23

 

     8.3.4 general information of a non-material nature regarding the general
status of the Initial Assessment Period, the UP Development Program or the
AltaRex Development Program.

Notwithstanding the foregoing, in the event that a party is required to make
a disclosure of the Confidential Information of the other party pursuant to
subsections 8.3.1 and 8.3.2 above, it will give prompt advance notice to the
other party of such disclosure and shall use its best efforts to assist the
other party in securing confidential treatment of such information.

     8.4 Publicity. The parties shall agree upon the text of a press release
that will be distributed by AltaRex or UP in connection with this Agreement,
the Initial Assessment Period, the UP Development Program, the AltaRex
Development Program, the Licensed Technology, or that describes the nature
and scope of the collaboration including its aggregate value, such approval
not to be unreasonably delayed or withheld; provided however, if the parties
have previously approved a press release, the approved disclosure may be
included or referenced in a subsequent release of a similar nature without
prior approval of both parties, and provided further that either may make any
such disclosure as would be permitted under Section 8.3 if the disclosure
contemplated by this Section 8.4 were Confidential Information, but only on
the condition that the party seeking disclosure under Section 8.3 shall first
make a good faith effort to provide such disclosure to the other party with
sufficient time to review and comment on such disclosure before any
disclosure under Section 8.3 is made.

     8.5 Publication. From time to time it may be to the mutual interest of
the parties to publish articles relating to data generated or analyzed as a
part of this Agreement. Neither party shall submit for written or oral
publication or presentation any manuscript, abstract, writing, printed
material or the like which includes data or any other information generated
and provided solely by the other party without first obtaining the prior
written consent of the other party, which consent shall not be unreasonably
withheld or delayed, provided however, that valid commercial reasons may
exist for withholding such consent. Nothing contained herein shall be
construed as precluding either party from making, in its discretion, any
disclosures of information of any type which relate to the safety, efficacy,
toxicology, or pharmacokinetic characteristics of the Products to the extent
that either party may be required by law to make disclosures of such
information.

     8.6 Terms of the Agreement. The terms of this Agreement are deemed to
be Confidential Information, subject to Section 8.3 above; provided however,
each party shall be free to disclose the terms of the Agreement to potential
investors, financial institutions, licensors, licensees and consultants
provided such disclosures are subject to no less restrictive terms of
confidentiality than as are set forth in this Agreement.

     8.7 Survival. The provisions of this Section 8 shall survive for five
(5) years after the termination or expiration of this Agreement.

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ARTICLE 9

INTELLECTUAL PROPERTY RIGHTS

     9.1 Ownership of Joint Intellectual Property. All Joint Intellectual
Property shall be initially owned by AltaRex and UP shall sign whatever
assignment papers are necessary to effectuate this ownership. After the
filing of any patent application covering Joint Intellectual Property, the
Advisory Committee shall determine whether there is a material intellectual
property advantage to keeping the application assigned to AltaRex. If the
determination made is that there is no such advantage, AltaRex shall assign
an undivided one-half interest in such patent application to UP and the
patent application shall be jointly owned by the parties. Each party
promptly shall disclose to the other party the making, conception or
reduction to practice of Joint Intellectual Property by its employees or
others acting on its behalf.

     9.2 Filing, Prosecution and Maintenance of Joint Intellectual Property.

           9.2.1 UP shall, using commercially reasonable practices, control the
preparation, filing, prosecution, grant and maintenance of patent rights
regarding Joint Intellectual Property in the Territory, with the exception of
the Joint Intellectual Property licensed to AltaRex in Section 3.4 herein,
and shall select all patent counsel or other professionals to advise,
represent or act for it in all matters relating to the prosecution and
maintenance of such patent rights regarding Joint Intellectual Property in
the Territory. UP shall bear all costs incurred in connection therewith. UP
shall inform AltaRex at regular intervals, or on request, about the status of
Joint Intellectual Property for which it is responsible and shall promptly
provide AltaRex with copies of any substantive official communications from
United States and foreign patent offices relating to said prosecution, as
well as drafts and copies as filed of relevant substantive communications to
the various patent offices including drafts of the patent application to be
filed. UP shall reasonably consider any recommendations provided by AltaRex
regarding the filing and/or prosecution of such patents covering Joint
Intellectual Property, but the final decision as to the filing and/or
prosecution matters shall rest with UP.

           9.2.2 In the event that UP elects not to file a patent application or
decides to abandon any pending application or granted patent under the Joint
Intellectual Property in any country, it shall provide adequate notice to
AltaRex and give AltaRex the opportunity to file or maintain such application
or patent at its own expense; provided, however, that except for the right to
file and maintain such patent rights, the ownership rights of AltaRex and UP
to such patent rights shall not be affected by reason of this Section 9.2.2.

           9.2.3 AltaRex shall, using commercially reasonable practices, control
the preparation, filing, prosecution, grant and maintenance of patent rights
regarding Joint Intellectual Property outside the Territory, as well as the
Joint Intellectual Property licensed to AltaRex in Section 3.4 herein and
shall select all patent counsel or other professionals to advise, represent
or act for it in all matters relating to the prosecution and maintenance of
such patent rights regarding Joint Intellectual Property in the Territory.
AltaRex shall bear all costs incurred in connection therewith. AltaRex shall
inform UP at regular intervals, or on request,

25

 

about the status of Joint Intellectual Property for which it is responsible
and shall promptly provide UP with copies of any substantive official
communications from United States and foreign patent offices relating to said
prosecution, as well as drafts and copies as filed of relevant substantive
communications to the various patent offices including drafts of the patent
application to be filed. AltaRex shall reasonably consider any
recommendations provided by UP regarding the filing and/or prosecution of
such patents covering Joint Intellectual Property, but the final decision as
to the filing and/or prosecution matters shall rest with AltaRex.

           9.2.4. In the event that AltaRex elects not to file a patent
application or decides to abandon any pending application or granted patent
under the Joint Intellectual Property in any country, it shall provide
adequate notice to UP and give UP the opportunity to file or maintain such
application or patent at its own expense; provided, however, that except for
the right to file and maintain such patent rights, the ownership rights of
AltaRex and UP to such patent rights shall not be affected by reason of this
Section 9.2.4.

     9.3 Cooperation. Each party shall make available to the other party or
its authorized attorneys, agents, consultants or representatives, if
available, such information necessary or appropriate to enable the
appropriate party (at the appropriate party’s cost and expense) to prepare,
file, prosecute and maintain patent applications and resulting patents with
respect to Joint Intellectual Property as set forth in Section 9.2 above, for
a period of time reasonably sufficient for such party to obtain the
assistance it needs from such personnel. Where appropriate, each party shall
sign or cause to have signed all documents relating to said patent
applications or patents at no charge to the other.

     9.4 Filing Prosecution and Maintenance of Patents.

           9.4.1 AltaRex will be responsible for prosecuting and maintaining the
Patents in the Territory except as provided below in 9.4.6. AltaRex shall
promptly forward to UP’s patent counsel any substantive actions prepared for
or received from the U.S. Patent and Trademark Office or any foreign patent
office which may materially affect patent rights within the Territory, e.g.,
claim scope or patent term. UP’s patent counsel shall provide any comments
to AltaRex in sufficient time for AltaRex to reflect such comments in any
response. Any comments made by UP shall be made in good faith and shall be
directed to maximizing the claims covered by such Patents.

           9.4.2 If AltaRex agrees with the comments of UP’s patent counsel, it
shall reflect such comments in its response. If AltaRex disagrees with such
comments, it shall notify UP, and either party may then submit such dispute
(a “Patent Comment Dispute”) for resolution by an intellectual property
lawyer (the “Neutral Lawyer”) with at least five years of experience and a
background in biotechnology or pharmaceutical patent matters. The Neutral
Lawyer shall be selected by mutual agreement of the parties; provided,
however, that if the parties cannot agree on a Neutral Lawyer within five
days of a party’s request for a Neutral Lawyer under this provision, the
Neutral Lawyer shall be selected by the American Arbitration Association in
Washington, D.C. Each party shall submit its position as to the Patent

26

 

Comment Dispute to the Neutral Lawyer, who shall resolve the dispute by
agreeing to one of the submitted positions of the parties without any changes
to such position. The parties agree that the position agreed to by the
Neutral Lawyer shall be reflected in the action or response being prepared
and that the costs of the Neutral Lawyer shall be paid by the party whose
position is not agreed to by the Neutral Lawyer. The decision of the Neutral
Lawyer shall be final and binding on the parties. The Parties shall
cooperate in all respects to resolve any Patent Comment Dispute in sufficient
time to avoid any loss of rights, including without limitation jointly
instructing the Neutral Lawyer to make a decision in sufficient time to avoid
any loss of rights.

           9.4.3 UP will be responsible for and pay fifty percent (50%) of
AltaRex’s costs incurred in prosecuting and maintaining such Patents net of
amounts paid to AltaRex for such costs by other licensees, if any, for costs
incurred after the Effective Date of any patent application which contains at
least one claim covering a Licensed Product. AltaRex shall direct its
counsel to invoice UP directly for UP’s share of such costs as such costs are
incurred with respect to prosecuting and maintaining such Patents.

           9.4.4 Joint Patent Committee. AltaRex and UP will, within sixty (60)
days after the execution of this Agreement, establish a committee (the “Joint
Patent Committee”) consisting of three representatives of each party. The
Joint Patent Committee shall confer twice each calendar year or as necessary
to support timely decision making during the term of this Agreement to
discuss patent prosecution issues, budgets and strategies relating to the
Patents.

           9.4.5 The provisions set forth in this Section 9.4 shall not apply to
Joint Intellectual Property which provisions governing maintenance and
prosecution are set forth above in Section 9.3.

           9.4.6 Notwithstanding the foregoing provisions, if no claim covering all
Licensed Products is indicated allowable following the next response in U.S.
Serial No. [**] (in which a response is currently due on May 28, 2002), then
UP shall be permitted to file a U.S. divisional application for the purpose
of seeking an expedited allowance of a group of claims covering Licensed
Products, provided that AltaRex is given a draft set of claims for such
divisional application and an opportunity to comment thereon before such
divisional application is filed. With respect to said divisional
application, the counsel of UP’s choice shall be permitted to take the lead
in filing and prosecuting the application, including filing papers and
conducting interviews with the examiner, provided that each action is
discussed in advance with and consented to by AltaRex. If there is a dispute
concerning any proposed action in the divisional, it shall be resolved as set
forth above in 9.4.2.

     9.5 Infringement of Patents and Joint Intellectual Property. If either
party becomes aware that a Third Party is infringing any rights in the
Licensed Technology, such party shall give written notice to the other party
describing in detail the nature of such infringement. UP, in the case of
Joint Intellectual Property and AltaRex, in the case of Patents and
Improvements in the Territory (the “Enforcing Party”), shall have the first
right to enforce such patent rights

27

 

against infringers, and to consult with the other party both prior to and
during such enforcement.

           9.5.1 The Enforcing Party shall have 120 days from the date of receipt
of notice under this Section 9.5 to abate the infringement, or to file suit
against at least one of the infringers, at its sole expense, following
consultation with the other party; provided however, that within thirty (30)
days after receipt of notice from the party whose patent rights allegedly are
being infringed of its intent to file such suit, the other party shall have
the right to fund up to one-half (1/2) of the costs of such a suit.

           9.5.2 If the Enforcing Party does not within 120 days of receipt of such
a notice, abate the infringement or file suit to enforce the patent rights
against at least one infringing party in a country, the other party shall
have the right to take whatever action it deems appropriate in its own name
or, if required by law, in the name of the party whose patent rights
allegedly are being infringed, to enforce the patent rights.

           9.5.3 The party controlling the action may not settle the action or
otherwise consent to an adverse judgment in such action that diminishes the
rights or interests of the non-controlling party without the express written
consent of the non-controlling party. All monies recovered upon the final
judgment or settlement of any such suit shall be shared, after reimbursement
of the costs of participating in such action, by AltaRex and UP pro rata
according to the respective percentages of costs borne by each party in such
suit pursuant to this Section 9.5. Notwithstanding the foregoing, AltaRex
and UP shall fully cooperate with each other in the planning and execution of
any action to enforce the patent rights and provide all reasonable assistance
to the other party.

     9.6 Infringement Actions by Third Parties. In the event that a Third
Party files an action against a party, its Affiliates, distributors or
sublicensees alleging that such party’s or its Affiliates’, distributors’ or
sublicensees’ activities under this Agreement infringe such Third Party’s
patent or other intellectual property rights, such party shall give written
notice to the other party, and the parties will consult and cooperate on the
best course of action. If the alleged infringing process, method or
composition is claimed under the Licensed Technology in the Territory, UP
shall have the right, in its sole discretion, to control the defense of such
suit at its own expense, in which event AltaRex shall have the right to be
represented by advisory counsel of its own selection, at its own expense, and
shall cooperate fully in the defense of such suit and furnish to UP all
evidence and assistance in its control. If UP does not elect within thirty
(30) days after such notice to so control the defense of such suit, AltaRex
may undertake such control at its own expense, and UP shall then have the
right to be represented by advisory counsel of its own selection, at its own
expense, and UP shall cooperate fully in the defense of such suit and furnish
to AltaRex all evidence and assistance in UP’s control. The party
controlling the suit may not settle the suit or otherwise consent to an
adverse judgment in such suit that diminishes the rights or interests of the
non-controlling party without the express written consent of the
non-controlling party. Any judgments, settlements or damages payable with
respect to legal proceedings covered by this Section 9.6

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shall be paid by the party which controls the litigation, subject to the
other party’s indemnification obligations under Article 10 below.

ARTICLE 10

INDEMNIFICATION AND INSURANCE

     10.1 Indemnity.

           10.1.1 By AltaRex. Subject to UP’s compliance with Section 10.2,
AltaRex hereby agrees to indemnify, defend and hold harmless UP and its
directors, officers, employees and agents, and hereby forever releases and
discharges UP, from and against any and all liabilities, damages, judgments,
awards or costs of defense (including without limitation reasonable
attorneys’ fees, expenses to defend and amounts paid in settlement of any
action) (collectively, “Losses”) resulting from all Third Party claims,
demands, actions and other proceedings resulting directly or indirectly from
AltaRex’s breach of any of its covenants or representations and warranties
hereunder, or AltaRex’s negligence or wrongdoing, but only to the extent that
such Losses do not result from UP’s breach of any of its covenants or
representations and warranties hereunder or UP’s negligence or wrongdoing.

           10.1.2 By UP. Subject to AltaRex’s compliance with Section 10.2, UP
hereby agrees to indemnify, defend and hold harmless AltaRex and its
directors, officers, employees and agents, and hereby forever releases and
discharges AltaRex, from and against any and all liabilities, damages,
judgments, awards or costs of defense (including without limitation
reasonable attorneys’ fees, expenses to defend and amounts paid in settlement
of any action) (collectively, “Losses”) resulting from all Third Party
claims, demands, actions and other proceedings, including but not limited to
bodily harm, injury or death, resulting directly or indirectly from UP’s
breach of any of its covenants or representations and warranties hereunder,
or UP’s negligence or wrongdoing, but only to the extent that such Losses do
not result from AltaRex’s breach of any of its covenants or representations
and warranties hereunder or AltaRex’s negligence or wrongdoing.

     10.2 Procedure. In all cases where one party seeks indemnification by the
other under this Section 10, the party seeking indemnification shall promptly
notify the indemnifying party of receipt of any claim or lawsuit covered by
such indemnification obligation and shall cooperate fully with the indemnifying
party in connection with the investigation and defense of such claim or
lawsuit. The indemnifying party shall have the right to control the defense,
with counsel of its choice, provided that the non-indemnifying party shall have
the right to be represented by advisory counsel at its own expense. The
indemnifying party shall not settle or dispose of the matter in any manner,
which could negatively and materially affect the rights or liability of the
non-indemnifying party without the non-indemnifying party’s prior written
consent, which shall not be unreasonably withheld or delayed.

     10.3 Insurance. Each party, at its own expense, shall maintain
comprehensive general liability insurance and clinical trial insurance coverage
in amounts reasonable and customary in

29

 

the industry, but not less than $2,000,000 per occurrence and $3,000,000
in the aggregate. UP shall purchase product liability insurance with a
reputable insurance company in amounts reasonable and customary in the
industry, prior to the first commercial sale or distribution of Product and
AltaRex shall be named in such policy as an additional insured party. Each
party shall provide documentation that such coverage exists upon request of the
other party. Each party shall maintain such insurance for so long as it
continues to research, develop, manufacture, commercialize, and market
Products, and thereafter for so long as it customarily maintains insurance for
itself covering similar activities with its other similar products.

ARTICLE 11

TERM AND TERMINATION

     11.1. Expiration of Term. The term of this Agreement shall commence upon
the Effective Date and shall expire, unless earlier terminated as set forth in
this Article 11, upon the date of the last to expire payment obligation under
this Agreement. Prior to expiration, the parties shall agree upon the
surviving rights and obligations of the parties and the disposition of any
Joint Intellectual Property.

     11.2. Termination for Cause.

           11.2.1 Except as provided elsewhere in this Agreement, either party may
terminate this Agreement in its discretion and in writing to the other party
following a Material Breach of this Agreement by the other party if such
party has not cured such breach within one hundred twenty (120) days after
the non-breaching party has provided written notice describing the breach.
The term “Material Breach” includes, without limitation, a party’s gross
negligence, failure to perform or comply with the material provisions of this
Agreement, omission, material misrepresentation or fraud related in any
manner to the Initial Assessment Period, the UP Development Program or the
Products.

           11.2.2 In the event that United Therapeutics does not exercise the warrant
acquired by it pursuant to the Subscription and Debenture Purchase
Agreement dated as of the date hereof between AltaRex and United Therapeutics
(the “Subscription Agreement”) on or prior to August 20, 2002 or does not
purchase the Second Debenture (as defined in the Subscription Agreement) on or
prior to August 25, 2002, AltaRex may terminate this Agreement immediately upon
written notice to UP.

     11.3 Regulatory and Material Adverse Change. UP may terminate this
Agreement, on a Product by Product basis, in its sole option at any time upon
written notice to AltaRex and after consultation with AltaRex in the event
that (i) there is a reasonable basis upon which to conclude that the safety
of human subjects is at risk from such Product; or (ii) there is a reasonable
basis upon which to conclude that the efficacy of such Product may not
reasonably be capable of demonstration; or (iii) there is a reasonable basis
upon which to conclude that such Product may not be timely and affordably
manufactured in accordance with U.S. “Good Manufacturing Practices” and with
an auditable quality system for the manufacturing process; or (iv) if the
parties learn that a Third Party has rights to intellectual property that
would

30

 

prevent commercialization of such Product and negotiations to obtain a
necessary license from such Third Party are unsuccessful; or (v) there is a
reasonable basis upon which to conclude that the estimated costs to develop
and commercialize such Product are prohibitive; or (vi) after conducting
appropriate due diligence, UP reasonably determines that a Product will not
achieve the contemplated regulatory approval under the UP Development
Program, through no fault of UP. Upon such termination by UP, all rights and
licenses to the Licensed Technology granted by AltaRex under this Agreement
with respect to such discontinued Products shall terminate and revert to
AltaRex with no compensation due to UP and UP shall grant AltaRex a
perpetual, royalty-free, irrevocable right to use (for any purpose) all Data
generated by UP under this Agreement regarding such terminated Product.

     11.4 Termination by UP.

           11.4.1 UP shall have the right to immediately terminate this Agreement
in its sole discretion upon written notice to AltaRex, which termination
shall be effective as of one hundred twenty (120) days after the date of such
notice is received or on such later date as UP may specify in such notice.

           11.4.2 Upon such termination by UP pursuant to Section 11.4.1,
termination by UP pursuant to Section 4.1.5, or by AltaRex pursuant to
Sections 4.1.5, 4.2.2 or 11.2, all rights and licenses to the Licensed
Technology granted by AltaRex under this Agreement shall terminate and revert
to AltaRex, UP shall grant AltaRex a perpetual, royalty-free, irrevocable
right to use (for any purpose) all Data generated by UP under this Agreement;
and UP shall, free of charge and with no limitation, perpetually and
irrevocably assign all rights, title and interest that UP has in the Joint
Intellectual Property to AltaRex.

           11.4.3 Following notice of termination, by UP or AltaRex hereunder, UP
shall work closely with AltaRex to efficiently transition to or at the
direction of AltaRex such Initial Assessment Period or UP Development Program
activities as AltaRex may reasonably request.

     11.5 Bankruptcy.

           11.5.1 In the event of the institution by or against either party of
insolvency, receivership, bankruptcy proceedings, or any other proceedings
for the settlement of a party’s debts which are not dismissed within sixty
(60) days, or upon a party’s making an assignment for the benefit of
creditors, or upon a party’s dissolution or ceasing to do business, the other
party may terminate this Agreement upon written notice.

           11.5.2 All rights and licenses granted under or pursuant to this
Agreement are, and shall otherwise be deemed to be, for purposes of Section
365(n) of the U.S. Bankruptcy Code, licenses of rights to “intellectual
property” as defined under Section 101 of the U.S. Bankruptcy Code. The
parties agree that each, as a licensee of certain rights under this
Agreement, shall retain and may fully exercise all of their rights and
elections under the U.S. Bankruptcy Code; provided however, nothing herein
shall be deemed to constitute a

31

 

present exercise of such rights and elections. The parties further
agree that, in the event of the commencement of a bankruptcy proceeding by or
against a party under the U.S. Bankruptcy Code, the other party 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, and same, if not already in its possession, shall be promptly
delivered to such party (a) upon any such commencement of a bankruptcy
proceeding upon their written request therefore, unless the bankrupt party
elects to continue to perform all of its obligations under this Agreement, or
(b) if not delivered under (a) above, upon rejection of this Agreement by or
on behalf of the bankrupt party upon written request therefore by the
non-bankrupt party.

     11.6 Effect of Expiration or Termination.

           11.6.1 Upon expiration of termination of this Agreement for any reason,
each party shall promptly return all of the other party’s materials, documents
and Information related to the Initial Assessment Period, the UP Development
Program or the AltaRex Development Program and otherwise created hereunder, and
all Confidential Information of the other party; provided however, each party
may retain one copy of each document of the other party’s Confidential
Information to enable such party to determine its surviving obligations of
confidentiality and non-use with respect to the other party’s Confidential
Information.

           11.6.2 Except in the case of a termination of this Agreement (i) by
AltaRex owing to a material breach of this Agreement by UP, or (ii) in
connection with a Product’s infringement on the intellectual property rights
of a Third Party, upon any termination of this Agreement, UP shall have the
right and option to sell any remaining UP inventories of Product pursuant to
the terms and conditions of this Agreement.

     11.7 Survival. The following provisions shall survive termination or
expiration of this Agreement: Articles 1, 2, 8 (for five years), 10, 11 and
12, and Sections 4.2.1 (with respect to the registration name for regulatory
filings) and 9.1. Termination or expiration of this Agreement shall not
relieve either party of any liability that accrued hereunder prior to the
effective date of such termination, nor preclude either party from pursuing
all rights and remedies it may have hereunder or at law or in equity with
respect to any breach of this Agreement, nor prejudice either party’s right
to obtain performance of any obligation.

ARTICLE 12

MISCELLANEOUS

     12.1 Entire Agreement; Amendment. This Agreement sets forth the complete,
final and exclusive agreement between the parties with respect to the subject
matter hereof, and all of the covenants, promises, agreements, warranties,
representations, conditions and understandings between the parties hereto with
respect to such subject matter, and supersedes and terminates all prior
agreements and understandings between the parties with respect to such subject
matter, including without limitation that certain Confidential Disclosure
Agreement, dated as of October 22, 2001. There are no covenants, promises,
agreements, warranties,

32

 

representations, conditions or understandings, either oral or written,
between the parties with respect to such subject matter other than as are set
forth herein and therein. No subsequent extension, termination, alteration,
amendment, modification, change, addition to or waiver of this Agreement shall
be binding upon the parties unless reduced to writing and signed by an
authorized officer of each party.

     12.2 Dispute Resolution. The parties agree to consult and negotiate in
good faith to try to resolve any dispute, controversy or claim that arises out
of or relates to this Agreement. In the event of any controversy or claim
arising out of, relating to or in connection with the Initial Assessment
Period, the UP Development Program or any other provision of this Agreement, or
the rights or obligations of the parties hereunder, the parties shall try to
settle their differences amicably between themselves by referring the disputed
matter to the Chief Executive Officer of AltaRex and the Chief Executive
Officer of United Therapeutics Corporation for discussion and resolution.
Either party may initiate such informal dispute resolution by sending written
notice of the dispute to the other party, and within ten (10) days of such
notice the Chief Executive Officer of AltaRex and the Chief Executive Officer
of United Therapeutics Corporation shall meet for attempted resolution by good
faith negotiations. If such executives are unable to resolve such dispute
within thirty (30) days of initiating such negotiations, each party may
thereafter pursue any and all rights and remedies it may have at law or equity.
The foregoing dispute resolutions provisions shall not apply to any disputes,
controversies or claims arising under Article 8 (Confidentiality) and Article
10 (Indemnification and Insurance).

     12.3 Force Majeure. Both parties shall be excused from the performance of
their obligations under this Agreement to the extent that such performance is
prevented by force majeure and the non-performing party promptly provides
notice of the prevention to the other party. Such excuse shall be continued so
long as the condition constituting force majeure continues and the
non-performing party takes reasonable efforts to remove the condition. For
purposes of this Agreement, “force majeure” shall include conditions beyond the
control of the parties, including without limitation, an act of God, war, civil
commotion, labor strike or lock-out, epidemic, failure or default of public
utilities or common carriers, destruction of production facilities or materials
by fire, earthquake, storm or like catastrophe.

     12.4 Notices. Any consent, notice or report required or permitted to be
given under this Agreement shall be in writing, shall specifically refer to
this Agreement and shall be deemed to have been sufficiently given for all
purposes if mailed by first class certified or registered mail, postage
prepaid, express delivery service or personally delivered, or if sent by
facsimile and confirmed through one of the foregoing methods. Unless otherwise
specified in writing, the mailing addresses of the parties shall be as
described below.

	 	 	 
	For AltaRex:	 	
AltaRex Corp.

610 Lincoln Street

Waltham, Massachusetts 02451

Fax: (781) 672-0142

Attention: President

33

 

	 	 	 
	 	 	
With a copy to:
	 	 	 
	 	 	
Hale and Dorr LLP

60 State Street

Boston, Massachusetts 02109

Attention: Stuart M. Falber, Esq.

Facsimile No.: (617) 526-5000

	 	 	 
	For UP: 	 	
Unither Pharmaceuticals, Inc.

1110 Spring Street

Silver Spring, Maryland 20910

Attention: Martine Rothblatt, CEO

Fax Number: (301) 608-9291

	 	 	 
	 	 	
With a copy to:
	 	 	 
	 	 	
Unither Pharmaceuticals, Inc.

1735 Connecticut Avenue, N.W.

Washington, D.C. 20009

Attention: Paul A. Mahon, General Counsel

Fax Number: (202) 483-4006

     12.5 Limitation of Liability. In no event will either party be liable to
the other party for any indirect, collateral, consequential, special or
punitive damages or for any lost profits of the other party, however caused and
on any theory of liability, arising out of the performance or failure to
perform any obligations set forth herein, except for those damages caused by a
party’s gross negligence or willful malfeasance.

     12.6 Consents Not Unreasonably Withheld or Delayed. Whenever provision is
made in this Agreement for either party to secure the consent or approval of
the other, that consent or approval shall not unreasonably be withheld or
delayed, and whenever in this Agreement provisions are made for one party to
object to or disapprove a matter, such objection or disapproval shall not
unreasonably be exercised, unless expressly stated that such consent is to be
given in such party’s discretion.

     12.7 Independent Contractors. The status of the parties under this
Agreement shall be that of independent contractors. Neither party shall have
the right to enter into any agreements on behalf of the other party, nor shall
it represent to any person that it has any such right or authority. Nothing in
this Agreement shall be construed as establishing a partnership or joint
venture relationship between the parties.

     12.8 Maintenance of Records. Each party shall keep and maintain all
records required by law or regulation with respect to development of a Product
and shall make copies of such records available to the other party upon
request.

34

 

     12.9 United States Dollars. References in this Agreement to “Dollars” or
“$” shall mean the legal tender of the United States of America.

     12.10 Assignment. Neither party to this Agreement may assign or transfer
this Agreement or any rights or obligations hereunder without the prior written
consent of the other party. Notwithstanding the foregoing, either party may
assign or transfer this Agreement to a successor of a controlling interest of
such party. Any permitted successor or assignee of rights and/or obligations
hereunder shall, in writing to the other party, expressly assume performance of
such rights and/or obligations. This Agreement shall be binding upon and shall
inure to the benefit of each party’s permitted successors-in-interest and
permitted assigns. Any assignment or attempted assignment by either party in
violation of the terms of this Section 12.10 shall be null and void and of no
legal effect.

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

     12.12 Further Actions. Each party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

     12.13 Severability. If any one or more of the provisions of this
Agreement is held to be invalid or unenforceable, the provision shall be
considered severed from this Agreement and shall not serve to invalidate any
remaining provisions hereof. The parties shall make a good faith effort to
replace any invalid or unenforceable provision with a valid and enforceable one
such that the objectives contemplated by the parties when entering this
Agreement may be realized.

     12.14 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event of an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any of the provisions of this Agreement.

     12.15 Headings. The headings for each article and section in this
Agreement have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular article or section.

     12.16 No Waiver. Any delay in enforcing a party’s rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party’s rights to the future enforcement of its
rights under this Agreement, excepting only as to an express written and signed
waiver as to a particular matter for a particular period of time.

35

 

     12.17 Governing Law; Jurisdiction and Venue. This Agreement will be
governed and construed in accordance with the laws of the State of Maryland..
No lawsuit pertaining to any matter arising under or growing out of this
Agreement shall be instituted in any jurisdiction other than in the courts
located in the State of Maryland, and the parties consent to exclusive
jurisdiction before the federal or state courts of the State of Maryland.

     12.19 Legal Fees. If any dispute arises between the parties with respect
to the matters covered by this Agreement which leads to a proceeding to resolve
such dispute, the prevailing party in such proceeding shall be entitled to
receive its reasonable attorneys’ fees, expert witness fees and out-of-pocket
costs incurred in connection with such proceeding, in addition to any other
relief it may be awarded.

     12.20 Injunctive Relief. A breach of any of the promises or agreements
contained in this Agreement may result in irreparable and continuing damage to
a party for which there may be no adequate remedy at law, and each party is
therefore entitled to seek injunctive relief as well as such other and further
relief as may be appropriate. The obligations provided under Section 8 of this
Agreement are acknowledged as necessary and reasonable in order to protect each
party and its business, and the parties expressly agree that monetary damages
would be inadequate to compensate either party for the breach thereof.
Accordingly, each party agrees and acknowledges that any such violation or
threatened violation will cause irreparable injury to the other party and that,
in addition to any other remedies that may be available, in law, in equity or
otherwise, each party shall be entitled to obtain injunctive relief against the
breach or threatened breach by the other party of Section 8, without the
necessity of proving actual damages.

     12.21 Contemporaneous Agreements. This Agreement is being executed
contemporaneously with the Loan Agreement and the Subscription Agreement
between United Therapeutics Corporation and AltaRex Corp. and this Agreement
shall have no force and effect unless all such documents are contemporaneously
executed.

     IN WITNESS WHEREOF, the parties have executed this Agreement by their
authorized officers of the date and year first above written.

	 	 	 
	ALTAREX CORP	 	
UNITHER PHARMACEUTICALS, INC.
	 	 	 
	/s/  Richard E. Bagley	 	
/s/  Paul A. Mahon
	
	 	

	Richard E. Bagley

President and CEO	 	
Paul A. Mahon

Senior Vice President and General Counsel

36

 

United Therapeutics Corporation hereby agrees and acknowledges that it shall
be fully responsible and liable for the acts and omissions of its wholly
owned subsidiary, Unither Pharmaceuticals, Inc. and any respective Affiliate
or subsidiary of United Therapeutics Corporation or Unither Pharmaceuticals,
Inc. under this Agreement.

	 	 
	 	UNITED THERAPEUTICS CORPORATION
	 	/s/  Paul A. Mahon
	 	

	 	Paul A. Mahon

Senior Vice President and General Counsel

37

 

APPENDIX A

PATENTS AND PATENT APPLICATIONS

	 	 	 	 	 	 	 	 	 
	Country	 	File Date	 	Serial Number	 	Patent Number	 	Issue Date
	
	 	
	 	
	 	
	 	

	Therapeutic compositions that produce an immune response
	Altered Immunogenicity
	South Africa	 	11/10/98	 	9810275	 	98/10275	 	8/30/00
	[**]	 	[**]	 	[**]	 	 	 	 
	Australia	 	6/15/99	 	41593/99	 	 	 	 
	Canada	 	11/4/98	 	2,253,058	 	 	 	 
	Canada	 	6/15/99	 	2,333,221	 	 	 	 
	Europe	 	6/15/99	 	99925215.8	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	PCT	 	6/15/99	 	PCT/IB99/01114	 	 	 	 
	USA	 	8/18/99	 	09/376,604	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	 
	Therapeutic Binding Agents against MUC-1 antigen and methods of their use
	BrevaRex
	[**]	 	[**]	 	[**]	 	 	 	 
	Australia	 	8/18/99	 	Pending	 	 	 	 
	[**]	 	[**]	 	[**] PCT/US00/22890	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	Europe	 	8/18/99	 	Pending	 	 	 	 
	PCT	 	8/18/00	 	PCT/US00/22890	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 

38

 

APPENDIX A

PATENTS AND PATENT APPLICATIONS

	 	 	 	 	 	 	 	 	 
	Country	 	File Date	 	Serial Number	 	Patent Number	 	Issue Date
	
	 	
	 	
	 	
	 	

	 	 	 	 	[**]	 	 	 	 
	 	 	 	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	 	 	 	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	 
	Therapeutic method utilizing antigen-antibody complexation and presentation

by dendritic cells
	Dendritic Cells
	PCT (in vivo)	 	5/11/01 	 	PCT/IB01/01331	 	 	 	 
	USA (in vivo) 	 	5/11/01	 	09/853,300	 	 	 	 
	PCT (ex vivo)	 	5/11/01	 	PCT/IB01/01238	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	 
	Method and Composition for Reconforming Multi-epitopic antigens to initiate

an immune response
	Multi-epitopic
	Australia	 	5/15/96	 	56,580/96	 	711,270	 	1/20/00
	Brazil	 	5/15/96	 	PI 9612619-1	 	 	 	 
	Canada	 	5/15/96	 	2,253,602	 	 	 	 
	China	 	5/15/96 	 	96180297.9	 	 	 	 
	Europe 	 	5/15/96 	 	96913660.5	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 

39

 

APPENDIX A

PATENTS AND PATENT APPLICATIONS

	 	 	 	 	 	 	 	 	 
	Country	 	File Date	 	Serial Number	 	Patent Number	 	Issue Date
	
	 	
	 	
	 	
	 	

	Method and Composition for Reconforming Multi-epitopic antigens to initiate
an immune response
	Multi-epitopic
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	Norway	 	5/15/96 	 	985,304	 	 	 	 
	New Zealand 	 	5/15/96 	 	332588 	 	332588 	 	3/8/01
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	PCT 	 	5/15/96 	 	PCT/IB96/00461	 	 	 	 
	USA	 	5/15/96 	 	08/913,290 	 	6,241,985 	 	6/5/01
	USA 	 	5/31/01 	 	09/871,339	 	 	 	 
	 
	Therapeutic composition and method of treatment
	Photoactivation
	Australia 	 	6/16/98 	 	81439/98 	 	732,505 	 	8/9/01
	Canada 	 	6/16/98 	 	2292912	 	 	 	 
	Europe 	 	6/16/98 	 	98931277.2	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	PCT 	 	6/16/98 	 	PCT/US98/12401	 	 	 	 
	USA 	 	6/17/97 	 	08/877,511 	 	6,086,873 	 	7/11/00
	[**]	 	[**]	 	[**]	 	 	 	 

40

 

APPENDIX A

PATENTS AND PATENT APPLICATIONS

	 	 	 	 	 	 	 	 	 
	Country	 	File Date	 	Serial Number	 	Patent Number	 	Issue Date
	
	 	
	 	
	 	
	 	

	Immunotherapeutic Composition and Method for the treatment of Prostate
	ProstaRex
	Australia 	 	6/15/99 	 	41594/99	 	 	 	 
	Canada 	 	6/15/99 	 	2,328,504	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	PCT 	 	6/15/99 	 	PCT/IB99/01115 	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	 	 	 	 	[**]	 	 	 	 
	 	 	 	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	 
	Therapeutic Immune Condition Compositions and Methods
	Anti-Inflammation and Metastasis
	Australia 	 	8/25/00 	 	Pending	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	PCT 	 	8/25/00 	 	PCT/IB00/02077	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 
	 
	Method for Diagnosing Efficacy of Xenotypic Antibody Therapy
	HAMA
	PCT	 	2/8/01	 	PCT/IB01/00423	 	 	 	 
	USA	 	2/8/01	 	09/779,439	 	 	 	 
	 	 	 	 	[**]	 	 	 	 
	 	 	 	 	[**]	 	 	 	 
	[**]	 	[**]	 	[**]	 	 	 	 

41

 

APPENDIX B

KNOW-HOW

     All Know-How from the Biomira Agreement licensed rights including, without
limitation, notebook data, biological and animal data, process information
and tech transfer and any and all unpublished data in connection with the
Biomira Agreement licensed rights, to which AltaRex has a sublicensable
interest.

     All Know-How and unpublished data of AltaRex as it relates to the Patents,
including discoveries and all other proprietary information and analysis
relating to the Prior Development Technology, Improvements and Information to
which AltaRex has an ownership or a sublicensable interest.

42

 

APPENDIX C

EXCLUDED TERRITORIES

     The following are excluded from the Territory of this Agreement:

	 	 	 	 	 
	Dompé(1)	 	Genesis(2)	 	Medison(2)
	
	 	
	 	

	Italy

Switzerland

Austria

Spain (Faes)

Portugal (Faes)

San Marino

Ukraine

Belarus

Hungary

Poland

Czech Republic

Yugoslavia

Lithuania

Estonia

Latvia	 	
Greece

Turkey

Cyprus

Croatia

Bosnia

Herzegovina

Macedonia

Serbia

Slovenia

Albania

Romania

Bulgaria
	 	Israel

Egypt

Jordan

Saudi Arabia

Yemen

Oman

Iraq

Syria

Qatar

Bahrain

Kuwait

UAE

Iran

Palestine

Lebanon

     (1)Dompé
has a Right of First Offer on BrevaRex® and ProstaRexTM for the same
countries as listed above upon the Products entering phase II study.

     (2)Genesis
and Medison have a Right of First Offer on BrevaRex® for the same
countries as listed above upon the Product entering phase II study.

43

 

Appendix D [**]PRELIMINARY CORE DEVELOPMENT TEAM

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	Base Salary	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Severance	 	
	 	 	 	 	 	 	 	 
	Employee Name	 	AltaRex Title	 	(in Months)	 	Annual	 	Per Pay Period	 	Severance
	
	 	
	 	
	 	
	 	
	 	

	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	
	 	 	 	
	 	 	 	
	 
	 
	 	 	 	 	 	 	 	 	 	$	1,618,500	 	 	$	67,437	 	 	$	858,192	 
	 
	 	 	 	 	 	 	 	 	 	 	
	 	 	 	
	 	 	 	
	 
	% cost of Benefits as related to Base
	 	 	 	 	 	 	18.22	%	 	 	 	 	 	 	 	 
	Salary:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Benefit:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Health
	 	 	 	 	 	 	 	 	 	$	109,810	 	 	 	 	 	 	 	 	 
	 	FICA Match
	 	 	 	 	 	 	 	 	 	 	91,395	 	 	 	 	 	 	 	 	 
	 	401(k) Match
	 	 	 	 	 	 	 	 	 	 	46,563	 	 	 	 	 	 	 	 	 
	 	Dental
	 	 	 	 	 	 	 	 	 	 	28,389	 	 	 	 	 	 	 	 	 
	 	Life
	 	 	 	 	 	 	 	 	 	 	8,351	 	 	 	 	 	 	 	 	 
	 	Long-term
	 	 	 	 	 	 	 	 	 	 	9,145	 	 	 	 	 	 	 	 	 
	Disability
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Short-term
	 	 	 	 	 	 	 	 	 	 	1,188	 	 	 	 	 	 	 	 	 
	Disability
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	$	294,841	 	 	 	 	 	 	 	 	 

     Note: This analysis does not include any vacation accruals, a timing difference as people take vacation.

44

 

	 	 	 	 	 
	Contracted Personnel	 	AltaRex Description
	
	 	

	(no benefits, etc.)	 	 
	1.	 	
Dr. Howard Fingert
	 	Consulting Medical Oncologist ($[**]/month until April 30, 2002
	2.	 	Veristat (John Balser)	 	Biometrics and data management ($[**]/hr
	 	 	Biostatistics	 	$[**]/hr Medical Writing)

CLINICAL ADVISORY BOARD AND SCIENTIFIC ADVISORY BOARD

Although not directly part of the Core Development Team, the Company’s Clinical
Advisory Board directs its attention entirely to OvaRex®. AltaRex will
terminate two (2) members (DRS. Holland and Margolese) effective immediately
following the next CAB meeting as ASCO in May, 2002. As of the Effective Date
and in accordance with the above, UP shall be responsible for Clinical Advisory
Board expenses and payments.

1.      Dr. Ozols ($[**]/year)

2.      Dr. Cohen ($[**]/year)

3.      Holland ($[**]/year)

4.      Dr. Margolese ($[**]/year)

5.      Dr. Von Hoff ($[**]/year)

6.      Dr. Whiteside ($[**]/day as needed)

45

 

APPENDIX E

APPLICABLE SECTIONS OF BIOMIRA AGREEMENT

ARTICLE I

DEFINITIONS

     1.1 Definitions

In this Agreement, unless otherwise provided, the following terms shall have
the following meanings:

	(1)	 	“Affiliate” has the meaning ascribed to that term in the Canada Business
Corporations Act (Canada);
	 
	(2)	 	“Agreement” means this amended and restated license agreement, together
with any further amendments to or restatements of this amended and
restated license agreement;
	 
	(3)	 	“AltaRex Information” means all information of a confidential nature of
AltaRex or any of its Affiliates including, without limiting the
generality of the foregoing, all biological material, plant, animal and
human laboratory and clinical data, technical information, Know-How,
inventions, techniques, processes, systems, formulae, results of
experimentation, designs, statistics and records;
	 
	(4)	 	“Anti-Idiotype Applications” means the induction of anti-idiotype and/or
cellular immune response by administration of a formulation containing an
antibody, antibody fragment or antibody derivative for the treatment or
prevention of disease. Without limiting the generality of the foregoing,
Anti-Idiotype Applications specifically includes the administration of the
B43 Antibody for therapeutic or prophylactic purposes;
	 
	(5)	 	“B43 Antibody” means the murine antibody MAb B43.13;
	 
	(6)	 	“B43 Working Cell Bank” means Biomira’s murine working hybridoma cell
bank B43.13 of the murine hybridoma clone B43.13 such cell bank being
produced at the Charles River Laboratories and used in the OVAREXTM program
as of November 24, 1995 (the effective date of the Original Agreement);
	 
	(7)	 	“Biomira Information” means all information of a confidential nature of
Biomira or any of its Affiliates including, without limiting the
generality of the foregoing, all Biomira Technology, biological material,
plant, animal and human, laboratory and clinical data, technical
information, Know-How inventions, techniques, processes, systems,
formulae, results of experimentation, designs, statistics and records;

46

 

	(8)	 	“Biomira Technology” means all Know-How, technical expertise,
information, inventions and discoveries, whether patentable or not, and
all copyrights, patents, trademarks, industrial designs, and other
intellectual property rights or benefits made, authored, conceived,
created, compiled or developed by or for, or acquired by Biomira or any of
its Affiliates;
	 
	(9)	 	“Confidential Information” means any and all Biomira Information or
AltaRex Information, as the case may be, and any and all information of a
confidential nature relating to Biomira, AltaRex, the relationship among
the parties to this Agreement and the terms and subject matter of this
Agreement;
	 
	(10)	 	“Data” means, as of November 24, 1995 (the effective date of the Original
Agreement), the experimental and clinical data and records of Biomira or
Biomira Research, Inc. relating to the B43 Antibody, the B43 Working Cell
Bank and the product OVAREXTM owned by Biomira or Biomira Research, Inc.;
	 
	(11)	 	“Effective Date” means December 1, 1995;
	 
	(12)	 	“First Commercial Sale” means, on a country-by-country basis, the first
commercial sale of a Licensed Product in a country, excluding sales for
clinical trial purposes;
	 
	(13)	 	“IPT” means the use of an antibody to target a photodynamic effector
molecule to a cell whereby the effector molecule kills the cell;
	 
	(14)	 	“IRT” means the use of an antibody to target a radioactive effector
molecule to a cell whereby the effector molecule kills the cell;
	 
	(15)	 	“Know-How” means, with respect to AltaRex or Biomira as the case may be,
all technical information, expertise, Know-How and information including
without limitation all data, results of experiments, formulae,
specifications, procedures, tests, compounds, cell lines, cultures,
constructs, effectors, development strains, micro-organisms, assay
systems, assay protocol and assay supporting material, fermentation and
purification material and techniques;
	 
	(16)	 	“Licensed Product” means any product (including without limitation
OVAREXTM) based, in whole or in part, on the Technology (which defined
term, for purposes of this definition, shall include the B43 Antibody and
any derivative thereof);
	 
	(17)	 	“Multi-Epitopic Patent Rights” means International Application
PCT/IB96/00461 and any national stage application claiming priority
thereof, and any continuations, divisionals, continuations-in-part
thereof, and any foreign equivalents, and any patents issuing therefrom,
including any reissues thereof;
	 
	(18)	 	“Net Sales Revenue” means the aggregate of the gross amounts received
from all sales, uses or other dispositions of Licensed Products by AltaRex
or any Sublicensee after deducting (i) customary trade, cash and quantity
discounts actually allowed and taken, (ii) tariffs, duties, excises, sales
tax or other taxes imposed upon and paid with respect

47

 

	 	 	to the production, sale, delivery or use of any product (excluding
income-based taxes), and (iii) amounts actually paid or credited to
unrelated purchasers in accordance with normal commercial practice by
reason of (A) rejections, defects, recalls or returns, or (B)
chargebacks, refunds, rebates or retroactive price reductions, and then
crediting any refund of taxes deducted (all as determined in accordance
with Canadian generally accepted accounting principles applied on a
consistent basis). In the event a Licensed Product is sold as part of a
Combination Product (as defined below), the Net Sales Revenue from the
Combination Product, for the purposes of determining royalty payments,
shall be determined by multiplying the Net Sales Revenue of the
Combination Product (as defined in the foregoing Net Sales Revenue
definition), during the applicable royalty reporting period, by the
fraction, A/A+B, where A is the average sale price of the Licensed
Product when sold separately in finished form in the country in which the
Combination Product is sold and B is the average sale price of the other
pharmaceutical product(s) included in the Combination Product when sold
separately in finished form in the country in which the Combination
Product is sold, in each case during the applicable royalty reporting
period or, if sales of both the Licensed Product and the other
pharmaceutical product(s) did not occur in such period, then in the most
recent royalty reporting period in which sales of both occurred. In the
event that such average sale price cannot be determined for both the
Licensed Product and all other pharmaceutical products(s) included in the
Combination Product, Net Sales Revenue for the purposes of determining
royalty payments shall be calculated by multiplying the Net Sales Revenue
of the Combination Product by the fraction of C/C+D where C is the fair
market value of the Licensed Product in the country in which the
Combination Product is sold and D is the fair market value of all other
pharmaceutical product(s) included in the Combination Product in the
country in which the Combination Product is sold. In such event, AltaRex
shall in good faith make a determination of the respective fair market
values of the Licensed Product and all other pharmaceutical products
included in the Combination Product, and shall notify Biomira of such
determination and provide Biomira with data to support such
determination. Biomira shall have the right to review such determination
and supporting data, and to notify AltaRex if it disagrees with such
determination. If Biomira does not agree with such determination, the
parties shall attempt to reach agreement in good faith as to such
respective fair market values.
	 
	 	 	As used above, the term “Combination Product” means any product which
comprises the Licensed Product and other distinct pharmaceutical
products;
	 
	 	 	The sale or disposition of a Licensed Product by AltaRex to or among its
Sublicensees shall not be subject to royalties based upon Net Sales
Revenue, unless such Sublicensee is the end user of the Licensed Product,
but rather shall be calculated upon the sale or disposition of a Licensed
Product by any such Sublicensee to an independent third party. If the
Sublicensee is the end user of the Licensed Product and the transaction
with such Sublicensee is not an “arms’ length” transaction, then the
“amount received” shall be the greater of (a) the actual amount received,
or (b) the amount which would have been received had such sale or other
disposition of the Licensed Product been to a person at arms’ length with
the seller.

48

 

	(19)	 	“Patent Rights” means the patent applications referred to in Exhibit A to
this Agreement, together with all continuations, divisionals,
continuations-in-part, and any foreign equivalents, and any patents
issuing therefrom, including any reissues thereof, related to the Licensed
Products and Technology;
	 
	(20)	 	“Proprietary Rights” means the Patent Rights and all copyrights,
trademarks, industrial designs and other intellectual property rights or
benefits (including Know-How) specifically relating to Anti-Idiotype
Applications of the B43 Antibody, the B43 Working Cell Bank and the Data,
in each case owned or controlled by Biomira or Biomira Research, Inc., but
excluding the Multi-Epitopic Patent Rights;
	 
	(21)	 	“Royalty Period” means the period commencing on the Effective Date of the
Original Agreement and ending, on a country-by-country basis, on the
latest to occur of (i) ten (10) years after the first January 1 following
the First Commercial Sale of a Licensed Product in such country, or (ii)
in consideration of the compromise of claims between the parties relating
to the use of Biomira Data in the Multi-Epitopic Patent Rights
application, the date of expiration of the last patent included in the
Multi-Epitopic Patent Rights, if any, in such country;
	 
	(22)	 	“Sublicensee” means any person to whom AltaRex or any such person,
directly or indirectly, transfers any rights or privileges granted under
this Agreement, by sublicense or otherwise, to, among other things, enable
such person to make, use or sell Licensed Products;
	 
	(23)	 	“Technology” means collectively the B43 Antibody, the B43 Working Cell
Bank, the Data and the Proprietary Rights as they relate to Anti-Idiotype
Applications.
	 
	2.1	 	Grant of Rights

     Subject to the terms and conditions of this Agreement, Biomira hereby
grants to AltaRex and AltaRex hereby accepts (a) in consideration of the
up-front payment of $150,000 under Section 4.1 hereof, an exclusive worldwide
right and license under the Patent Rights, and (b) in consideration of the Net
Sales Revenue Royalty under Section 4.2 hereof, an exclusive worldwide right
and license under the Proprietary Rights, exclusive of the Patent Rights, in
either case (being (a) or (b) above) to use the B43 Antibody, the B43 Working
Cell Bank, and the Data to develop, commercialize, manufacture, make, use and
sell Licensed Products solely for Anti-Idiotype Applications, including the
right to grant sublicenses to third parties, subject to the terms and
conditions of this Agreement. AltaRex, on behalf of itself and its Affiliates,
expressly agrees not to disclose or provide rights to any technology of Biomira
other than the Technology (and with respect to the Technology only upon the
terms set forth in this Agreement), or to make, or permit their respective
employees, agents or consultants to make, any statements with respect to
Biomira or any technology of Biomira other than the Technology (and with
respect to the Technology only as specifically authorized in this Agreement),
or other than with respect to information which is already fully in the public
domain through no fault of AltaRex or its Sublicensees. AltaRex shall, and
shall require each Sublicensee to, include in any sublicense agreement a
provision binding upon the Sublicensee

49

 

that is substantially similar to the provisions of this preceding sentence.
Biomira on behalf of itself and its Affiliates, expressly agrees not to permit
their respective employees, agents or consultants to make any statements with
respect to AltaRex or any technology of AltaRex other than as is specifically
authorized under this Agreement or other than with respect to information which
is already fully in the public domain through no fault of Biomira or its
Affiliates or sublicensees. AltaRex shall promptly notify Biomira in writing
of any sublicense or other transfer of all or any of the rights granted by
Biomira under this Agreement and shall ensure that the written commitment of
each Sublicensee (as a term of the agreement with the Sublicensee) is obtained
to abide by all terms and conditions of this Agreement applicable to such
Sublicensee as a sublicensee, assignee or otherwise.

	2.3	 	Termination
	 
	(1)	 	Any party to this Agreement shall have the right to terminate this
Agreement forthwith upon forty-five (45) days’ prior written notice if the
other party defaults in the performance, observance or fulfillment of any
of its obligations under this Agreement. The termination shall become
effective at the end of the forty-five (45) day period unless the
breaching party cures such breach during such forty-five (45) day period.
Notwithstanding the foregoing, in the event that AltaRex has prior to the
occurrence of such breach (i) granted to a financially sound third party a
license to manufacture, market or otherwise use the Technology and
Proprietary Rights and (ii) has designated such third party as the
designated licensee of AltaRex (the “Designated Licensee”) by written
notice to Biomira setting forth, among other things, the name, address and
fax number of the Designated Licensee, Biomira shall also provide written
notice of default to the Designated Licensee at the address and/or fax
number provided to Biomira by AltaRex, and the Designated Licensee shall
have the right to cure such default within such forty-five (45) day
period. At any given time, AltaRex shall only be entitled to designate
one (1) Designated Licensee for purposes of this Agreement.
	 
	(2)	 	Either party to this Agreement shall have the right to terminate this
Agreement forthwith upon written notice to the other party upon the
happening of any of the following events with respect to the other
party:

	 	(i)	 	such party becomes bankrupt or insolvent;
	 
	 	(ii)	 	such party ceases or threatens to cease to carry on business,
or takes or threatens to take any action to liquidate its assets or
institutes any proceedings under bankruptcy, reorganization,
receivership, insolvency or other similar laws affecting the rights
of creditors generally or the making by such party of a composition
or an assignment or trust mortgage for the benefit of creditors;
	 
	 	(iii)	 	the liquidation, termination of existence or dissolution of
such party, or the voluntary appointment of a receiver,
receiver-manager or custodian for such party or any of its property;
or

50

 

	 	(iv)	 	the institution against such party of any proceedings under
any bankruptcy, reorganization, receivership, insolvency or other
similar laws affecting the rights of creditors generally, which
proceedings are not dismissed within thirty (30) days of the date of
filing thereof, or any involuntary appointment of a receiver,
receiver-manager or custodian for such party or any of its property
if such appointment is not terminated or dismissed within thirty
(30) days thereof.

Notwithstanding the foregoing, AltaRex shall have the right during the five (5)
day period immediately following receipt of the default notice referred to in
this Section 2.3(2) to assign all of its rights and obligations under this
Agreement to the Designated Licensee and this Agreement shall remain in full
force and effect provided that the Designated Licensee is financially sound at
the time in question and agrees in writing, during such period, to be bound by
the terms of this Agreement in the place and stead of AltaRex and all defaults
hereunder are cured.

	2.4	 	Protecting the Technology

Biomira is not aware, as of November 24, 1995 (the effective date of the
Original Agreement), that the Technology infringes the rights of any third
party and agrees to use all reasonable efforts to protect the Technology during
the term of this Agreement. Except as required by law or any regulatory
authority, Biomira agrees not to knowingly provide, sell, license, assign or
supply the Technology for Anti-Idiotype Applications to any person or entity
that is not a party to this Agreement. AltaRex shall, and shall cause each
Sublicensee (by ensuring that the written commitment of the Sublicensee is
obtained as a term of the agreement granting the subject rights to the
Sublicensee) to, cooperate with and provide reasonable assistance to Biomira in
connection with protecting the Technology and other rights granted by Biomira
under this Agreement including, without limitation, in relation to infringement
actions against third parties.

	2.7	 	Sublicense Agreements
	 
	(1)	 	Within fifteen (15) days after AltaRex or any Sublicensee grants a
sublicense to a Sublicensee, AltaRex shall provide extracts from such
sublicense agreement to Biomira. Such extracts shall consist of the
following provisions of the sublicense agreement: (i) the identity of the
Sublicensee; (ii) the scope/field of the use of the Sublicensee under the
sublicense agreement; and (iii) the provisions required to be included in
the sublicense agreement pursuant to the following sections of this
Agreement (and any other provisions, such as defined terms, which may be
reasonably necessary to permit an understanding of such provisions):
Section 2.1, Section 2.4, Section 2.7, Section 3.5, Section 4.3 Section
4.5, Section 4.6, Article V, Section 6.1.1, Section 6.1.2 and a
termination provision similar to that set forth in Section 2.3. The
provisions of the sublicense agreement referred to in subsection (iii) are
referred to as the “Designated Sublicense Provisions”.

51

 

	(2)	 	AltaRex agrees to ensure that the Designated Sublicense Provisions are
included in each sublicense agreement with a Sublicensee (whether granted
by AltaRex or a Sublicensee) and that such Designated Sublicense
Provisions will not be amended (except for an amendment which in no way
derogates from AltaRex’s obligations under this Section 2.7) or deleted
prior to the termination of the sublicense in question. AltaRex shall use
commercially reasonable efforts to enforce or cause to be enforced the
Designated Sublicense Provisions against Sublicensees. AltaRex shall in a
timely manner keep Biomira informed as to any breaches by any Sublicensee
of the Designated Sublicense Provisions. In the event that Biomira
believes that a Sublicensee has breached any of the Designated Sublicense
Provisions, it may, in its discretion, provide notice of such claimed
breach to AltaRex and AltaRex shall, within fifteen (15) days after
receipt of such notice, use commercially reasonable efforts to cause the
Sublicensee to comply with the applicable Designated Sublicense Provisions
and AltaRex shall take or cause to be taken such other steps as may be
commercially reasonable under the circumstances, including the exercise of
the termination remedies in the applicable sublicense agreement with
respect to a Sublicensee which has breached any of the Designated
Sublicense Provisions. In the event that AltaRex fails to enforce or
cause to be enforced the Designated Sublicense Provisions against the
relevant Sublicensees, despite having used commercially reasonable
efforts, Biomira shall have the right to seek an injunction and/or bring
an action(s) for damages and/or specific performance against such
Sublicensees and, in order to enable Biomira to carry out the foregoing,
AltaRex shall, as directed by Biomira, either assign or cause to be
assigned to Biomira in a timely manner any and all actions or causes of
action(s) relating to the claimed breach of the Designated Sublicense
Provisions or permit Biomira or cause Biomira to be permitted to pursue
such action(s) in the name of AltaRex or other applicable party. In no
event, however, shall the foregoing be construed to permit or provide
Biomira with the right to itself directly exercise the termination
remedies in the applicable sublicense agreement.
	 
	(3)	 	Biomira and AltaRex agree that the obligations of AltaRex under this
Agreement in relation to sublicensing of any rights granted under this
Agreement (including without limitation the obligations with respect to
the Designated Sublicense Provisions and Biomira’s rights under Section
2.7(2)) shall apply mutatis mutandis to any other transfer by
assignment or otherwise of any rights or privileges granted by Biomira
under this Agreement.
	 
	3.5	 	Compliance with Laws
	 
	 	 	AltaRex, on behalf of itself and its Affiliates, agrees to comply in all
material respects with any and all applicable local, state, provincial,
national, federal and/or international laws and regulations pertaining to the
development, testing, manufacture, promotion, sale and disposition of Licensed
Products and to mark all Licensed Products or their packaging with all
applicable patent numbers and similarly to indicate “patent pending” status and
to make such other markings as are necessary to preserve the Patent Rights.
AltaRex shall obtain the agreement of each Sublicensee to comply with the
provisions of this Section 3.5.
	 
	4.3	 	Reports

52

 

Within sixty (60) days of June 30 and December 31 in each calendar year
following the First Commercial Sale of Licensed Products, AltaRex shall provide
to Biomira a written report, certified by a senior officer of AltaRex, showing
in reasonable detail and in such form as Biomira may reasonably request:

	4.3.1 	 	the Net Sales Revenue (including Net Sales Revenue by Sublicensees)
during the preceding six-month period;
	 
	4.3.2	 	the basis for the calculation of all royalties and other amounts payable
by AltaRex to Biomira pursuant to this Agreement; and
	 
	4.3.3	 	such other reasonable information with respect to the foregoing as
Biomira may request.
	 
	4.5	 	Records

AltaRex shall maintain adequate and complete records (and shall require its
Sublicensees to maintain such records) showing:

	4.5.1	 	the Net Sales Revenue received by AltaRex or any Sublicensees; and
	 
	4.5.2	 	the basis for the calculation of all royalties and other amounts payable
by AltaRex to Biomira pursuant to this Agreement.

AltaRex shall retain such records (and shall require each Sublicensee to retain
such records) for a period of five (5) years from the date of their making.

	4.6	 	Audit Inspection
	 
	(1)	 	AltaRex and its Affiliates shall make available the records referred to
in Section 4.5 for the prior five (5) year period on reasonable notice
during AltaRex’s normal business hours for inspection by a national firm
of chartered accountants or certified public accountants on behalf of
Biomira PROVIDED HOWEVER no one will be allowed to inspect any records of
AltaRex and its Affiliates without having first signed a confidentiality
agreement provided by AltaRex which shall contain only terms which are
consistent with industry standards in similar circumstances and which will
not restrict the accountants in question from pursuing the inspection
rights hereunder and reporting to Biomira. Any such inspection shall be
made at the expense of Biomira unless it is determined that Biomira was
entitled to receive a sum which varied greater than ten (10%) percent from
the amount reported by AltaRex as due and payable to Biomira for the
period covered by the inspection, in which case AltaRex shall pay the
reasonable costs of such inspection and interest, as provided in Section
4.4. AltaRex and its Affiliates shall cooperate fully with the chartered
accountants or certified public accountants conducting the inspection
provided for in this Section 4.6.
	 
	(2)	 	In the event that AltaRex conducts an audit of the records and books of
account of a Sublicensee, the audit report shall be provided to Biomira by
the chartered accountant or certified public accountant at the same time
that such report is provided to AltaRex. In

53

 

	 	 	addition, in the event that Biomira believes that it would be appropriate
to conduct an audit of the records and books of account of a Sublicensee
(other than an Affiliate of AltaRex), Biomira shall notify AltaRex and
AltaRex shall promptly use commercially reasonable efforts to cause such
audit to be conducted, with the audit report to be provided
simultaneously to AltaRex and Biomira. AltaRex shall obtain the written
agreement of each Sublicensee to permit the conduct of such audits and
the provision of the audit report to Biomira. Biomira agrees to treat
each such audit report as Confidential Information of AltaRex.

ARTICLE V

CONFIDENTIALITY

	5.1	 	Confidentiality
	 
	5.1.1	 	Subject to Section 5.2 of this Agreement, all Confidential Information
shall be held in strict confidence by each of the parties to this
Agreement and each party to this Agreement shall employ or cause to be
employed diligent efforts and reasonable care in order to ensure that such
Confidential Information is not made available to any third party
excepting only as required under this Agreement, or to the directors,
officers, employees and consultants of such party to this Agreement whose
duties require disclosure of the same and then (in any such case) only if
the parties to whom such Confidential Information is being disclosed have
given to each of the parties to this Agreement an enforceable undertaking
(in form acceptable to Biomira and AltaRex, acting reasonably) not to
disclose such Confidential Information to any other party, provided that
AltaRex may disclose Confidential Information to a Sublicensee so long as
such Sublicensee has agreed to treat the Confidential Information in the
manner provided in this Article V.
	 
	5.1.2	 	Subject to Section 5.1.3 of this Agreement, Confidential Information
which is obtained by any party to this Agreement from a third party
without obligation of confidence (provided, however, that such third party
has no obligation of confidence to one of the parties hereto) or which
becomes public knowledge otherwise than through the fault of a party to
this Agreement or any of such party’s directors, officers, agents,
consultants, servants or employees, shall be deemed to be in the public
domain and accordingly Section 5.1.1 of this Agreement shall not apply to
such portion of the Confidential Information which has been so obtained or
which has become public knowledge.
	 
	5.1.3	 	Confidential Information which is specific shall not be deemed to be
within the public domain merely because it is embraced by general
knowledge in the public domain. Further, any Confidential Information
dealing with any combination of features of a specific matter shall not be
deemed to be within the public domain, unless the combination of features
and the principle of operation are in the public domain.
	 
	5.1.4	 	Each party to this Agreement shall, upon the termination of this
Agreement, return all corporeal Confidential Information to the owner of
such Confidential Information with a written undertaking that no copies,
duplicates or progeny have been retained.

54

 

	5.1.5	 	Each of the parties of this Agreement acknowledges that the other
parties to this Agreement would suffer irreparable harm as a result of the
breach of any of the non-disclosure and confidentiality obligations set
forth in this Article 5 and that legal remedies are inadequate; therefore,
each of the parties to this Agreement agrees that, in addition to any
damages and other remedies that the other parties to this Agreement may be
entitled to as a result of such a breach, the other parties to this
Agreement shall be entitled to an order from a court of competent
jurisdiction restraining such party from breaching or continuing to breach
any of the provisions of this Article 5.
	 
	5.1.6	 	The covenants of the parties under this Article 5 shall continue in full
force and effective notwithstanding the termination of this Agreement by
effluxion of time or otherwise.
	 
	5.1.7	 	In the event either party is required by law or any governmental or
regulatory authority having jurisdiction to disclose any information that
party has the right to do so subject to such party hereto using its best
efforts to take all reasonably available means to keep details of this
Agreement and its terms and the Confidential Information of the other
party confidential.

5.1.8   Nothing in this Agreement shall prevent AltaRex through its officers,
employees or agents from presenting or publishing such information related to
the Technology as is necessary for the commercialization of Licensed Products,
including, but not limited to, the use of the Technology in patent applications
and patents, communications with regulatory authorities, scientific
publications and presentations and marketing materials; PROVIDED THAT AltaRex
shall ensure that in doing so, no Biomira Confidential Information other than
Biomira Confidential Information relating to the Technology will be disclosed
without Biomira’s prior written consent which may be unreasonably withheld

6.1.1   AltaRex has agreed to acquire the rights granted under this Agreement,
and all of the data and other materials acquired hereunder on an “as is” basis.
AltaRex shall, and shall require each Sublicensee to, include a provision in
each agreement with a Sublicensee acknowledging the prior sentence.
Accordingly, AltaRex shall accept the entire responsibility related to or
arising out of the use by AltaRex or any Sublicensee of the Technology or the
development, manufacture, use or sale of any product based on the Technology.
Except as set forth in Section 2.3, Biomira makes no warranties, whether
expressed or implied, as to any matter whatsoever to AltaRex or any third
parties with respect to the Technology, any Licensed Product or any aspect
thereof, including without limitation, as to the validity of any right granted
by Biomira under this Agreement or that any such right or Licensed Product will
be free from infringement of the rights of third parties. If AltaRex or any
Sublicensee receives written notice that any Licensed Product or right granted
under this Agreement constitutes an infringement of the rights of a third
party, AltaRex shall, if it or any Sublicensee intends to continue to develop,
manufacture, use or sell such Licensed Product, within fifteen (15) days after
receipt of such notice, provide to Biomira a means reasonably satisfactory to
Biomira, whereby Biomira shall be fully protected from damages, actions,
claims, costs and expenses which may arise as a result of the decision of
AltaRex or any Sublicensee to continue to develop, manufacture, use or sell the
Licensed Product or to use such right. If, after complying

55

 

with the preceding sentence, AltaRex or any Sublicensee continues to develop,
manufacture, use or sell the Licensed Product or use such right, AltaRex or
such Sublicensee does so at its own risk and AltaRex will and does hereby
indemnify Biomira for any damages, actions, claims, costs and expenses incurred
by Biomira, except as provided in Section 2.3, which may arise as a result of
AltaRex, its Affiliates or Sublicensees continuing to develop, manufacture, use
or sell the Licensed Product or use such right.

6.1.2   AltaRex, on behalf of itself and its Affiliates, acknowledges that the
Technology is the property of Biomira and that Biomira has made no
representations or warranties to AltaRex in connection with the Technology
under this Agreement and AltaRex hereby agrees that it will not make any claim
or demand against Biomira or any of its officers, directors, employees, agents
or consultants for any loss, cost, damage or expense, whether direct or
indirect or consequential, suffered or sustained by AltaRex or any person
claiming through AltaRex, which is based upon, arises out of or is connected
with the Technology and AltaRex hereby waives as against Biomira, its officers,
directors, employees, agents and consultants all such claims and demands. In
any agreement with a Sublicensee, AltaRex shall secure or cause to be secured a
similar covenant from such Sublicensee.

56

 

APPENDIX F

COSTS ASSOCIATED WITH LOTS #2 AND #3

	 	 	 	 	 	 	 	 	 	 
	Abbott
	 	 	U.S.$[**]	 	 	 	 	 
	 	Related supplies
	 	 	U.S.$[**]	 	 	 	 	 
	Charles River Laboratories
	 	 	U.S.$[**]	 	 	for lot #2
	 
	 	 	U.S.$[**]	 	 	estimated for lot #3
	SP Pharma (fill finish)
	 	 	U.S.$[**]	 	 	for lot #2
	 
	 	 	U.S.$[**]	 	 	estimated for lot #3
	Other miscellaneous vendors
	 	 	U.S.$[**]	 	 	for both lots
	 
	 	 	 	 	 	 	 	 
	Total
	 	 	U.S.$[**]	 	 	for both lots

57

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