Document:

Confidential materials omitted
and filed separately with the 

Securities and Exchange Commission. 
Asterisks denote such omission.

Exhibit
10.2

Private &
Confidential

Execution Copy

 

DATED AS
OF JUNE 21, 2006

 

 

CAMBRIDGE
ANTIBODY TECHNOLOGY LIMITED   (1)

and

DYAX
CORP.    (2)

 

 

AMENDED
AND RESTATED LICENCE AGREEMENT

 

 

 

THIS AGREEMENT
is made as of  June 21, 2006

BETWEEN:

(1)                                  CAMBRIDGE ANTIBODY TECHNOLOGY LIMITED (Registered in England
No. 2451177) whose registered office is at The Milstein Building, Granta Park,
Cambridge, Cambridgeshire, CB1 6GH, UK (“CAT”).

(2)                                  DYAX CORP. a corporation organised and existing under the
laws of the State of Delaware having its principal place of business at 300
Technology Square, Cambridge, Massachusetts 02139 USA (“Dyax”).

BACKGROUND:

(a)                                  The
Parties entered into the Original Agreements; an Amendment Agreement and a
Second Amendment Agreement (as defined below) regarding the use of their
respective rights in (b) and (c) below.

(b)                                 CAT
is the owner or exclusive licensee (pursuant to an agreement dated 7 January
1997 between CAT and the Medical Research Council (“MRC”))
of the CAT Antibody Phage Display Patents (as defined below).

(c)                                  Dyax
has the right to grant licenses to certain technology described and claimed in
US Patent No. 5,223,409 entitled “Directed Evolution of Novel Binding Proteins”,
US Patent No. 5,403,484 entitled “Viruses Expressing Chimeric Binding Proteins”,
US Patent No. 5,571,698 entitled “Directed Evolution of Novel Binding Proteins”,
and other Patent Rights (as defined below).

(d)                                 By
this Agreement the Parties wish to consolidate the terms of the Original
Agreements, the Amendment Agreement and the Second Amendment Agreement and to
make further changes to the agreement between them.

In consideration
of the mutual covenants and undertakings set out below, THE PARTIES
AGREE as follows:

1.             Definitions

1.1                                 In
this Agreement, the terms defined in this Clause shall have the meanings
specified below:

“Abbott Agreement”
means the Agreement dated 20 January 1994 between CAT and Knoll AG (now known
as Abbott Laboratories Inc) and relating to D2E7.

“Acceptance Fee”
means the payment to CAT by Dyax or a Dyax Sublicensee, as appropriate, under
Clauses 8.1.1, 8.2.1, and 8.3.1 hereof.

“Additional Diagnostic
Licences” means the Product Licences detailed in Clause 3.7.

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“Additional Licence Allocation” means the [******]
Product Licences in Clause 3.5.

“Affiliate”
means any company, partnership or other entity which directly or indirectly
Controls, is Controlled by or is under common Control with any other entity.

“Agreement” means this agreement and any and all Schedules, appendices
and other addenda to it as may be amended from time to time in accordance with
the provisions of this agreement.

“Amendment Agreement”
means the agreement made between CAT and Dyax, dated 3 January 2003, to amend the
Original Agreements.

“Antibody” means a molecule or a gene encoding such a molecule
comprising or containing one or more immunoglobulin variable domains or parts
of such domains or any existing or future fragments, variants, modifications or
derivatives thereof.

“Antibody Diagnostic
License Agreement” means the
License Agreement between Dyax and CAT dated 31 December 1997 relating to
antibody diagnostic products.

“Antibody Library”
means any Antibody library constructed using processes which are covered by a
claim of an issued and unexpired patent included within the CAT Antibody Phage
Display Patents which has not been held permanently revoked, unenforceable or
invalid by a decision of a court or other governmental agency of competent
jurisdiction unappealed within the time allowed for appeal, and which has not
been admitted to be invalid or unenforceable through reissue or disclaimer or
otherwise.

“Antibody Services”
means the provision of research and/or development services for the
identification, generation, derivation or development of one or more Antibody
Libraries or Antibodies derived therefrom.

“Bi-Specific
Antibody” means an Antibody directed to two Nominated Targets as
described in Clause 4.6.

“Business Day”
means a day (other than a Saturday or Sunday) on which the banks are ordinarily
open for business in the City of London and the Commonwealth of Massachusetts.

“CAT Antibody Phage Display Patents”
means: (a) the patents and patent applications listed in Schedule 1 and any
patents issuing from such patent applications, together with any divisions,
registrations, confirmations, reissues, extensions, renewals, continuations,
continuations-in-part, revalidations, additions, substitutions, renewals or
supplementary protection certificates thereof throughout the world; and (b) any
Patent Rights which claim or cover any invention or discovery which is
developed by CAT or its Affiliates at any time during the term of this
Agreement directly related to Antibody phage display or Antibody Services; provided,
however, that CAT Antibody Phage Display Patents shall always exclude (i) CAT
Diabodies Patent Rights, (ii) any Patent Rights owned or controlled by CAT
which claim or cover Catalytic 

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Antibodies, (iii) any Patent Rights owned or
controlled by CAT which claim ribosome display technology, (iv) any Patent
Rights which claim Single Domain Antibodies, (v) any Patent Rights acquired by
CAT after 3 January 2003 from any Third Party for consideration or as a result
of CAT’s acquisition of or merger with such Third Party, and (vi) any use of
the said Patent Rights in the field of Research Products.

“CAT Diabodies Patent
Rights” means (a) the
Patent Rights entitled “Diabodies — multivalent and multispecific binding
proteins, their manufacture and use”, PCT/GB93/02492 and (b) the Patent Rights
entitled “Retargeting antibodies and diabodies”, PCT/GB94/02019.

“CAT Gatekeeping Procedure”
means the procedure set out in Schedule 2 which CAT shall carry out in
respect of a Nominated Target prior to the grant of any Product Licence.

“CAT Know-How” means any Confidential Information of CAT which constitutes
unpatented know-how, technical and other information related to the subject
matter of the CAT Antibody Phage Display Patents as identified in Schedule 3
and as amended from time to time in accordance with Schedule 3;

“CAT Licensable Antibody”
means any Antibody (including a Bi—Specific Antibody) to a Target (a) where
such Antibody has been identified, generated, developed, produced or derived by
Dyax or a Dyax Sublicensee or its sublicensees and (b) the identification,
generation, development, production or derivation of such Antibody uses any of
the processes claimed or covered by a claim of an issued and unexpired patent
included within the CAT Antibody Phage Display Patents (which has not been held
permanently revoked, unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction unappealed within the time
allowed for appeal, and which has not been admitted to be invalid or unenforceable
through reissue or disclaimer or otherwise) or uses the CAT Know-How and (c)
which is potentially useful for the development of any Diagnostic Antibody
Product and/or any Therapeutic Antibody Product.

“Catalytic Antibodies” means solely those Antibodies which bind to and catalyze
the chemical transformation of a substrate and in which an Antibody binding
region is involved in said catalysis.

“Co-Development Option”
means the option described in Clause 11.1.

“Commencement Date”
means 3 January 2003.

“Commercial Party”
shall mean any party, other than an Affiliate of CAT, which has been authorized
by CAT to make, have made, use, sell or have sold Licensed Products and (i) to
which CAT (or any of its Affiliates), sells, transfers, or otherwise makes available
any Licensed Intermediate or (ii) for which CAT (or any of its Affiliates)
performs services or provides proprietary information, with respect to any
Licensed Intermediate.

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“Competent Authority”
means any national or local agency, authority, department, inspectorate,
minister, ministry official, parliament or public or statutory person (whether
autonomous or not) of any government of any country having jurisdiction over
either any of the activities contemplated by this Agreement or the Parties including
the European Commission, the Court of First Instance and the European Court of
Justice.

“Competing Antibody
Companies” means the entities listed on Schedule 4, together
with (a) any successor to the business or substantially all of the business of any
such companies and (b) any company or other entity which acquires, takes over
or merges with any of those companies provided that the resulting entity
continues after such acquisition, merger or takeover to compete with CAT by
providing Antibody Services.

“Controls” means
the ownership, directly or indirectly, of more than fifty percent (50%) of the
outstanding equity securities of a corporation which are entitled to vote in
the election of directors or a more than fifty percent (50%) interest in the net
assets or profits of an entity which is not a corporation.

“Development and
Licence Agreement” means the agreement referred to in Clause 8.7 of
this Agreement.

“Development Licence”
means a licence as described in Clause 10.1.

“Development Licence Option”
means the option for CAT to enter into a Development Licence with Dyax for any
Dyax Therapeutic Antibody Product as described in Clause 10.1;

“Development Licence Option
Notice” means the notice described in Clause 10.2;

“Diagnostic Antibody
Product” means any preparation in the form of a device, compound,
kit or service with utility in the diagnosis, prognosis, prediction or disease
management of a disorder for any indication which contains, comprises or the
process of development or manufacture of which utilises a CAT Licensable
Antibody.  The term “Diagnostic
Antibody Product” shall not include any Research Product.

“Diagnostic Collaboration
Licences” means the Product Licences detailed in Clause 3.6.

“Disclosing Party”
means a Party which discloses Confidential Information to the other Party.

“Dyax Partner”
means (a) any person or entity with whom Dyax has entered into a written
agreement for the performance of Antibody Services or other services related to
the commercialization of any Product, or (b) any other Third Party to which
Dyax is selling or licensing in good faith in accordance with its normal
business practice Antibody Libraries or Antibodies derived therefrom; provided,
that in no event shall the term “Dyax Partner”
include any Third Party which is a bare licensee under the Dyax Patent Rights.

“Dyax Patent Rights”
means all Valid Claims (defined below) of United States Patent Nos. 5,223,409,
5,403,484 and 5,571,698 (collectively, the “US Patents”), reissues,
reexaminations, renewals and 

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extensions thereof, and all continuations,
continuations-in-part and divisionals of the applications for such patents in
the United States and all counterparts thereto in countries outside the United
States, all of which patents and patent applications as of 31 December 1997 are
listed in Schedule 5.  Dyax Patent
Rights shall not include (i) Valid Claims in US Patent No. 5,233,409 to the
extent they cover single chain antibodies, nor (ii) Valid Claims of any
continuation, continuation-in-part or divisional applications of the US Patents
or any counterparts of the US Patents in countries outside of the United
States, that cover particular protein or peptide sequences, or nucleic acids
thereof, that bind to a specific biological or molecular target.

“Dyax Therapeutic Antibody
Product” means any Therapeutic Antibody Product identified,
generated or derived by Dyax for itself or its Affiliates but not a Therapeutic
Antibody Product identified, generated or derived by Dyax for, or on behalf of,
a Third Party.

“Dyax Sublicensee”
means any (a) Dyax Partner to which Dyax grants a sublicense in accordance with
the terms of this Agreement, and/or (b) any sublicensee of Dyax under a Product
Licence.

“D2E7” means any
Antibody directed against the Target TNF alpha.

“End User” shall
mean a person or entity whose use of a product results in its destruction, loss
of activity and/or loss of value.

“Exploit” means
to make, have made, use, sell or import.

“FDA” means the
United States Food and Drug Administration, the equivalent Competent Authority
in any country of the Territory or any successor bodies thereto.

“Field of Use” means research
and development and human or non-human therapeutics and human or non-human in
vitro diagnostic or research reagent uses only and not any in vivo diagnostics,
purifications or separations, or other industrial purposes.

“First Commercial Sale”
means the first commercial sale of any Product, or Other Product by Dyax or a
Dyax Sublicensee (or its sublicensee) in any country after grant of a Marketing
Authorisation.

“Force Majeure”
means any event outside the reasonable control of either Party affecting its
ability to perform any of its obligations (other than payment) under this
Agreement, including Act of God, fire, flood, lightning, war, revolution, act
of terrorism, riot or civil commotion, but excluding strikes, lock-outs or
other industrial action, whether of the affected Party’s own employees or
others, failure of supplies of power, fuel, transport, equipment, raw materials
or other goods or services.

“GAAP” means
United States generally accepted accounting principles, consistently applied.

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“IDE” means an Investigational Device Exemption application, as
defined in Title 21 of the United States Code of Federal Regulations, filed
with the FDA or an equivalent foreign filing.

“IND” means an Investigational New Drug Application, as defined
in Title 21 of the United States Code of Federal Regulations, that is required
to be filed with the FDA before beginning Phase I Clinical Trials of any
Therapeutic Antibody Product in human subjects, or an equivalent foreign
filing.

“Initial Licence Allocation” means the [******]
Product Licences in Clause 3.2, the up to [******] additional
Product Licences in Clause 3.3, and the up to [******]
additional Product Licences in Clause 3.4.

“Licensed Intermediate” means
any fusion protein (including without limitation any chimeric binding protein),
genetic package (including without limitation any virus, spore or cell) or
other intermediate compound, or any compound derived form any of the foregoing,
that is (i) discovered, made or developed by CAT using a method covered in
whole or in part by Dyax Patent Rights or (ii) is otherwise covered by Dyax
Patent Rights.

“Licensed Product”
means any product intended for sale to an End User as a human or non-human
therapeutic or in vitro
diagnostic or research reagent (and in the case of a diagnostic or research
reagent contains one or more antibodies as a binding moiety) that prior to or
after December 31, 1997 (the effective date of the Original Agreements) is
discovered, made or developed, whether by CAT, its Affiliates or any Commercial
Party, using a Licensed Intermediate or a method covered in whole or in part by
the Dyax Patent Rights.

“Major Market”
means any one of the following: (i) the United States of America, (ii) any
country in Europe which is subject to the Marketing Authorisation procedure of
the European Medicines Evaluation Agency, or (iii) Japan.

“Marketing Authorisation”
means any approval (including all applicable pricing and governmental
reimbursement approvals) required from the FDA or relevant Competent Authority
to market and sell a Product in a particular country.

“Net Sales”
means, with respect to a Product sold by Dyax or a Dyax Sublicensee (or its
sublicensees) or an Other Product sold by Dyax or its sublicensee, the price
invoiced by that party to the relevant purchaser (or in the case of a sale or
other disposal otherwise than at arm’s length, the price which would have been
invoiced in a bona fide arm’s length contract or sale) but deducting the costs
of packing, transport and insurance, customs duties, any credits actually given
for returned or defective Products, Other Products, normal trade discounts
actually given, and sales taxes, VAT or other similar tax charged on and
included in the invoice price to the purchaser.

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“Nominated Target”
has the meaning set forth in Clause 4.1(a).

“Option Product” has the meaning set forth in Clause 11.2.2.

“Original Agreements”
means the Therapeutic Product License Agreement and the Antibody Diagnostic
License Agreement.

“Other Product”
has the meaning set forth in Clause 7.1.

“Other Purposes”
has the meaning set forth in Clause 7.1.

“Party” means CAT or Dyax.

“Patent Rights”
means any patent applications and any patents issuing from such patent
applications, author certificates, inventor certificates, utility certificates,
improvement patents and models, and certificates of addition and all
counterparts of them throughout the Territory, including any divisional
applications and patents, filings, renewals, continuations,
continuations-in-part, patents of addition, extensions, reissues,
substitutions, confirmations, registrations, revalidation and additions of or
to any of them, as well as any supplementary protection certificates and
equivalent protection rights in respect of any of them.

“Pharmacia Agreement”
means the agreement between CAT and Pharmacia P-L Biochemicals Inc. dated 11
September 1991.

“Pharmacia P-L Biochemicals
Inc.” means Pharmacia P-L Biochemicals
Inc (now known as Amersham Biosciences).

“Phase I Clinical Trial”
means a human clinical trial in any country that is intended to initially
evaluate the safety of an investigational Product in volunteer subjects or
patients that would satisfy the requirements of 21 CFR 312.21(a), or its
foreign equivalent and may evaluate the Product’s therapeutic or antigenic
effects.

“Phase II Clinical Trial”
means studies in humans of the safety, dose ranging and efficacy of a Product
that would satisfy the requirements of 21 CFR 312.21(b).

“Phase III Clinical Trial”
means a pivotal human clinical trial in any country the results of which could
be used to establish safety and efficacy of a Product as a basis for a
marketing application that would satisfy the requirements of 21 CFR 312.21(c).

“Product” means
a Diagnostic Antibody Product or a Therapeutic Antibody Product.

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“Product Licence”
means each license granted to Dyax pursuant to Clause 5.1.

“Quarter” means
each period of three (3) months ending on March 31, June 30, September 30, or
December 31 and “Quarterly” shall be construed
accordingly.

“Research Products” means any product in relation to which Pharmacia P-L has an
exclusive licence from CAT pursuant to the Pharmacia Agreement.

“Restatement Date” means the date of this Agreement first written above.

“Second Amendment
Agreement” means the agreement to amend the Amendment Agreement made
between CAT and Dyax dated 18 September 2003.

“Single Domain Antibodies”
means an Antibody containing only a single domain (heavy or light).

“Specified Diagnostic
Agreements” means (i) [******] and
(iii) the [******], as such agreements may be
amended from time to time.

“Target” means
DNA as identified by a full length protein sequence that it encodes.

“Target Option Notice”
means the notice described in Clause 4.1.

“Territory”
means all countries of the world.

“Therapeutic Antibody
Product” means any preparation for the treatment or prevention of
disease, infection or other condition in humans for any indication which
contains, comprises, or the process of development or manufacture of which
utilises, a CAT Licensable Antibody.  The
term “Therapeutic Antibody Product” shall not
include any Research Product.

“Therapeutic Product
License Agreement” means the
License Agreement between Dyax and CAT dated 31 December 1997 relating to
therapeutic products.

“Third Party”
means any entity or person other than Dyax, CAT or their respective Affiliates.

“Valid Claim” means a claim of an issued and unexpired patent included
within the CAT Antibody Phage Display Patents which have been licensed to CAT
by the MRC or the Dyax Patent Rights (as the case may be) which has not been
held permanently revoked, unenforceable or invalid by a decision of a court or
other governmental agency of competent jurisdiction unappealed within the time
allowed for appeal, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise.

“Year” means
initially the period from the Commencement Date to the end of that calendar
year, and subsequently a calendar year.

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1.2                                 The
headings to clauses are inserted for convenience only and shall not affect the
interpretation or construction of this Agreement.

1.3                                 Words
imparting the singular shall include the plural and vice versa. References to
persons include an individual, company, corporation, firm or partnership.

1.4                                 The
words and phrases “other”, “including” and “in particular” shall not limit the
generality of any preceding words or be construed as being limited to the same
class as any preceding words where a wider construction is possible.

1.5                                 References
to any statute or statutory provisions of the United Kingdom shall include (i)
any subordinate legislation made under it, (ii) any provision which it has
superseded or re-enacted (whether with or without modification), and (iii) any
provision which subsequently supersedes it or re-enacts it (whether with or
without modification. References to any statute or regulation of the United
States of America means that statute or regulation as it may be amended,
supplemented or otherwise modified from time to time, and any successor statute
or regulation.

2.             Amended and Restated Licence
Agreement and CAT Licence from Dyax

2.1                                 This
Agreement consolidates and replaces the Original Agreements, the Amendment
Agreement and the Second Amendment Agreement.

2.2                                 Subject
to the terms and conditions set out in this Agreement, Dyax grants CAT and its
Affiliates a world-wide, non-exclusive, royalty free licence (sub-licensable in
accordance with the provisions of Clause 2.4) under the Dyax Patent Rights (i)
to research develop, make, have made, use, import, sell and have sold Licensed
Products in the Field of Use, and (ii) to research, develop, make, and use
Licensed Intermediates in the Field of Use (a) for sale or transfer to any
Commercial Party, or (b) for transfer to any third party who is not permitted
by CAT or its Affiliates to commercialize such Licensed Intermediates of any
Licensed Product.

2.3                                 CAT
acknowledges that the value of the Dyax Patent Rights is measured in part by
the value of products resulting from any Licensed Intermediate.  CAT agrees, therefore, that it will not sell,
transfer, or otherwise make available a Licensed Intermediate to any Commercial
Party and will not provide services or proprietary information with respect to
any Licensed Intermediate solely within the Field of Use to any Commercial
Party, unless such Commercial Party executes an agreement with CAT in which
such Commercial Party agrees to use any Licensed Intermediate solely in the
Field of Use.

2.4                                 CAT
shall have no right to grant sublicences under the licence to Dyax Patent
Rights granted to CAT in this Section 2.1, except CAT may grant a sublicence
under the Dyax Patent Rights to any Third Party to which CAT is licensing,
selling or otherwise transferring Antibodies or Antibody Libraries solely for
use 

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by
such Third Party with the Antibodies (including Antibodies which are supplied
to CAT by the Third Party and in relation to which CAT provides services to
optimize that Antibody before handing the Antibody back to the Third Party in
its optimized form) or Antibody Libraries licensed, sold or otherwise
transferred from CAT and solely for the purpose of developing therapeutic
Antibody products or diagnostic Antibody products; provided that
as a condition to any such sublicense, CAT shall require any such sublicensee
to be bound by the terms of this Clause 2 and Clause 15.  For the avoidance of doubt, in no event shall
CAT have the right to sublicense the Dyax Patent Rights to any Third Party
which is a bare licensee under the CAT Antibody Phage Display Patents.  Any Third Party which is granted a sublicense
under the Dyax Patent Rights by CAT shall have no right to grant further
sublicenses.

2.5                                 CAT
or its sub-licensees shall indemnify Dyax and its Affiliates and their
directors, officers, employees and agents and their respective successors,
heirs and assigns (the “Dyax Indemnitees”) against any liability, damage, loss
or expense (including attorneys fees and expenses of litigation) incurred by or
imposed upon the Dyax Indemnitees or any one of them in connection with any
claims, suits, actions, demands or judgments by or in favour of any Third Party
concerning any manufacture, use or sale of any Licensed Product or Licensed
Intermediate by Dyax or the CAT or its sublicensee.

2.6                                 In
partial consideration for the grant of rights set out above CAT agrees not to
enforce against Dyax or its Affiliates the CAT Antibody Phage Display Patents
during the term of this Agreement that Dyax or its Affiliates may infringe in
practicing the inventions claimed in the Dyax Patent Rights.

3.             Dyax Option for Product Licences
from CAT

3.1                                 Numbers
of Options.  In accordance with this
Clause 3, CAT grants to Dyax the following options to obtain Product Licences
which may be exercised by Dyax for itself and for Dyax Sublicensees:

(a)                                  an
Initial Licence Allocation of up to [******]
Product Licences for Therapeutic Antibody Products and/or Diagnostic Antibody
Products shall be available from the Commencement Date as set out in Clauses
3.2, 3.3 and 3.4;

(b)                                 an
Additional Licence Allocation of up to [******]
Product Licences for Therapeutic Antibody Products and Diagnostic Antibody
Products shall be available from the Commencement Date as set out in Clause
3.5. 

(c)                                  [******] Diagnostic Collaboration Licences for Diagnostic
Antibody Products shall be available from the Commencement Date as set out in
Clause 3.6; and

(d)                                 [******] Additional Diagnostic Licences for Diagnostic
Antibody Products shall be available from the Commencement Date as set out in
Clause 3.7.

 

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3.2                                 Subject
to Clauses 3.3 and 3.4, CAT hereby grants to Dyax the option for Dyax to obtain
the following [******] Product Licences for both
Therapeutic Antibody Products and Diagnostic Antibody Products, which may be
exercised by Dyax only on a cumulative basis in accordance with the following
schedule:

(a)                                  [******] Product Licences on or before 31 December 2003;

(b)                                 [******] additional Product Licences on or before 31
December 2004;

(c)                                  [******] additional Product Licences on or before 31
December 2005;

(d)                                 [******] additional Product Licences on or before 31
December 2006.

If the option for any particular Product Licence set
out in clauses (a) through (d) above has not been exercised by Dyax by the
relevant date, then such unexercised options will be carried over into the next
allocation period, and so on; provided that if any option for a Product Licence
in this Clause 3.2 has not been exercised by Dyax on or before 31 December
2017, then the option for such Product Licence will lapse irrevocably.

3.3                                 If
any option for a Product Licence under Clause 3.2 is exercised and a Product
Licence is granted to Dyax, then for each Product under any such Product
Licence which enters a Phase III Clinical Trial, CAT hereby grants to Dyax an
additional option for one Product Licence, up to a maximum of [******] additional Product Licences under this Clause 3.3;
provided that if any option for a Product Licence granted in this Clause 3.3
has not been exercised by Dyax on or before 31 December 2017, then the option
for such Product Licence will lapse irrevocably.

3.4                                 If
any option for a Product Licence under Clause 3.2 is exercised and a Product
Licence is granted to Dyax, then for each Product under any such Product
Licence which fails in development or for which Dyax decides to terminate its
program of development, CAT hereby grants to Dyax an additional option for one
Product Licence, up to a maximum of [******]
additional Product Licences under this Clause 3.4; provided that if any option
for a Product Licence granted in this Clause 3.4 has not been exercised by Dyax
on or before 31 December 2017, then the option for such Product Licence will
lapse irrevocably.

3.5                                 In
addition to the options for Product Licences granted by CAT to Dyax in Clauses
3.2 to  3.4, CAT hereby grants to Dyax
the option for a total of an additional [******]
Product Licences for both Diagnostic Antibody Products and Therapeutic Antibody
Products to be granted to Dyax; provided that if any option for a Product
Licence in this Clause 3.5 has not been exercised and granted to Dyax on or
before 31 December 2017, then the option for such Product Licence will lapse
irrevocably.

3.6                                 In
addition to the options for Product Licences granted by CAT to Dyax in Clauses
3.2 through 3.5, CAT hereby grants to Dyax the option for a total of an
additional [******] Product Licences for
Diagnostic 

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Antibody
Products developed by Dyax under the Specified Diagnostic Agreements (the “Diagnostic Collaboration Licences”); provided that if any
option for a Diagnostic Collaboration Licence in this Clause 3.6 has not been
exercised by Dyax on or before 31 December 2017, then the option for such
Product Licence will lapse irrevocably.

3.7                                 In
addition to the options for Product Licences granted by CAT to Dyax in Clauses
3.2 through 3.6, CAT hereby grants to Dyax the option for a total of an
additional [******] Product Licences for
Diagnostic Antibody Products (the “Additional Diagnostic
Licences”); provided that if any option for an Additional Diagnostic
Licences has not been exercised by Dyax on or before 31 December 2017, then the
option for such Product Licences will lapse irrevocably.

3.8                                 CAT
agrees that, commencing with effect from 3 January 2003, it will not enter into
any  agreement or arrangement with any
Third Party whereby a field of use under the CAT Antibody Phage Display Patents
is exclusively licensed to, reserved for, or otherwise committed to such Third
Party.  If CAT does enter into such an
agreement or arrangement it will ensure that such agreement or arrangement does
not restrict the activities or rights of Dyax (or any potential Dyax
Sublicensee or its sublicensee) contemplated by this Agreement.  For the purposes of this Clause, a “field of
use” means one or more particular clinical diseases or medical conditions and
not one or more uniquely identified Targets.

3.9                                 Except
as set forth in Clause 17, the options granted in this Agreement shall not be
assigned or otherwise transferred to any Third Party.

3.10                           Prior
[******], and provided that Dyax
obtains a Product Licence for such Product [******], CAT
grants to Dyax, its Affiliates, and Dyax Sublicensees (and their sublicensees)
a non-exclusive, royalty free licence in the Territory during the term of this
Agreement to use the CAT Antibody Phage Display Patents and the CAT Know-How
for the purposes of carrying out research and development activities in
relation to identifying CAT Licensable Antibodies or potential Products.

4.             Target Option Notice and
Gatekeeping Procedure

4.1                                 If
Dyax wishes to develop and commercialise Diagnostic Antibody Products and/or
Therapeutic Antibody Products to a particular Target and provided that Product
Licences are available to Dyax under Clause 3, Dyax may, at any time, in a
written notice to CAT (each a “Target Option Notice”)
request that CAT grant Dyax a Product Licence in relation to such identified
Target.  In such Target Option Notice,
Dyax will:

(a)                                  identify
the relevant Target against which such CAT Licensable Antibodies are directed (“Nominated Target”); and

(b)                                 state
whether Dyax or the Dyax Sublicensee wishes to develop such CAT Licensable
Antibodies as Diagnostic Antibody Products and/or Therapeutic Antibody
Products.

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4.2                                 If
CAT notifies Dyax that the Nominated Target has passed the CAT Gatekeeping
Procedure in accordance with Clause 4.4.1 below, then, unless otherwise
notified by Dyax, CAT will reserve such Nominated Target for Dyax and Dyax
Sublicensee for a period of [******] from
the date of such CAT notice (“Reservation
Period”).  Dyax may, at any
time prior to the expiry of the Reservation Period, request in writing that CAT
extend the Reservation Period by a period of [******].  Such request for an extension shall be
accompanied by payment of a fee of [******] (the “Extension Fee”).  Upon receipt by CAT of the Extension Fee the
Reservation Period for the Nominated Target in question will be so
extended.  The Reservation Fee will be
creditable against any subsequent Acceptance Fee which may become due from Dyax
to CAT under the terms of this Agreement in respect of the same Nominated
Target.  For the purposes of this Clause
4.2 “reserved for” means that a Product Licence will continue to be available
to Dyax and Dyax Sublicensees during that [******] period
(or [******] if the Reservation Period is
extended).  Dyax may not (a) have more
than [******] Nominated Targets reserved at
any one time and (b) exercise the right to reserve Nominated Targets pursuant
to this Clause in relation to more Targets than there are Product Licences
remaining available at the relevant time pursuant to Clause 3.  Should, at any time during which a Nominated
Target is reserved for Dyax in accordance with this Clause 4.2, a Third Party
request from CAT an exclusive license in respect of the relevant Nominated Target,
CAT will promptly notify Dyax in writing. 
Dyax will then have a period of [******] from
the date of CAT’s notice to decide whether or not it wishes to take a Product
Licence for that Nominated Target.  If
Dyax notifies CAT within that period that it does not wish to take such a
Product Licence or fails to notify CAT at all then such Nominated Target shall
no longer be reserved for Dyax and CAT may grant an exclusive license in
respect of such Nominated Target to the Third Party.

4.3                                 Upon
receipt of a Target Option Notice from Dyax under Clause 4.1, CAT shall have [******] to make a determination whether the Nominated
Target passes CAT’s Gatekeeping Procedure. 
CAT shall:

(a)                                  [******]

(b)                                 [******]

4.4                                 Before
the expiry of the [******]
referred to in Clause 4.3, CAT shall either;

4.4.1                        notify Dyax in writing that the
Nominated Target has passed the CAT Gatekeeping Procedure, in which case,
subject to the payment of applicable Acceptance Fee set out in Clause 8, grant
to Dyax a Product Licence to Exploit Products against such Nominated Target in
the Territory; or

4.4.2                        notify Dyax in writing that the
Nominated Target has not passed the CAT Gatekeeping Procedure, in which case
Dyax shall have no right to obtain a Product Licence to Exploit Products
against such Nominated Target in the Territory.

4.5                                 CAT
agrees that:

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(a)                                  CAT
will treat Dyax in the same way as CAT treats its other customers,
collaborators and licensees when applying the procedure described in this
Clause 4;

(b)                                 if
a Nominated Target does not pass the CAT Gatekeeping Procedure because, at the
time of submission, CAT is already engaged in bona fide discussions with a
Third Party concerning the Nominated Target, CAT will, as soon as reasonably
possible, notify Dyax if those discussions subsequently terminate (with no
reasonable likelihood of re-commencing). 
Dyax will then be entitled to re-submit the Nominated Target to the CAT
Gatekeeping Procedure; and

(c)                                  CAT
will only disclose information received by it from Dyax in relation to a
Nominated Target to those CAT employees who need to know such information for
the purposes of this Clause 4.  Any such
information will be deemed to be Confidential Information of Dyax

4.6                                 In
the case where a CAT Licensable Antibody is directed to two Targets (a “Bi-Specific Antibody”), the Target Option Notice
shall identify each relevant Target against which such Bi-Specific Antibody is
directed, and each such Target shall be considered a Nominated Target.  If CAT notifies Dyax that each Nominated
Target to which such Bi-Specific Antibody is directed has passed the CAT
Gatekeeping Procedure, Dyax shall have the right to obtain a Product Licence
with respect to each such Nominated Target; provided however, that such Product
Licence shall be limited so as to allow Dyax to Exploit only Products to such
Nominated Targets that comprise or contain the Bi-Specific Antibody, which
shall be clearly identified in the Product Licence.  For the avoidance of doubt, the parties
acknowledge that:

(a)                                  Dyax
may obtain a Product Licence for Therapeutic Antibody Products and Diagnostic
Antibody Products containing or comprising such Bi-Specific Antibodies against
two Nominated Targets by exercising only one (1) option from among the Initial
Licence Allocation under Clauses 3.2 to 3.4 and the Additional Licence
Allocation under Clause 3.5;

(b)                                 should
Dyax request that CAT reserve such Nominated Targets for the Reservation Period
both such Nominated Targets will count towards the maximum of twenty five (25)
Nominated Targets which may be reserved by Dyax at one time pursuant to Clause
4.2; and

(c)                                  should
Dyax request that the Reservation Period for any such Nominated Targets be
extended for six (6) months then Dyax will pay an Extension Fee for each such
Nominated Target (making a total of $100,000.00).

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5.             Grant of Product Licence by CAT

5.1                                 To
Dyax.  In the event CAT notifies Dyax
under Clause 4.4.1 above that a Nominated Target has passed the CAT Gatekeeping
Procedure, then upon receipt by CAT of the applicable Acceptance Fee, CAT
agrees to grant and hereby grants to Dyax and its Affiliates a non-exclusive,
royalty-bearing license, with the right to sublicense, under the CAT Antibody
Phage Display Patents and CAT Know-How to Exploit Products against such
Nominated Target in the Territory.  Any
Product Licence granted to Dyax shall be consistent with the terms of this
Clause 5 and Clauses 6, 8, 9, 13.1, 13.2, 13.3.6, 14.4, 16 and 18 of this
Agreement and shall be negotiated by the Parties in good faith; provided,
however, that, except as set forth in Section 5.9,  the Parties agree that the terms and
conditions and the form of any Product Licence executed after the Effective
Date of this Agreement shall be substantially similar to the form attached
hereto as Schedule 7.

5.2                                 The
Parties agree that Dyax may obtain a Product Licence for Therapeutic Antibody
Products and Diagnostic Antibody Products against the same Nominated Target by
exercising only one (1) option from among the Initial Licence Allocation under
Clauses 3.2 to 3.4 and the Additional Licence Allocation under Clause 3.5.

5.3                                 Nothing
herein shall prevent CAT from meeting any obligations it has to Third Parties
under any agreements in respect of any Nominated Target for which Dyax submits
a Target Option Notice under Clause 4.1 where such Nominated Target is
determined by CAT under Clause 4 not to pass the CAT Gatekeeping Procedure,
provided that such obligation does not involve any use or disclosure of any
Confidential Information belonging to Dyax.

5.4                                 Dyax
must request, and be granted, a Product Licence;

5.4.1                        in relation to a Therapeutic
Antibody Product prior to [******]; or

5.4.2                        in relation to a Diagnostic
Antibody Product prior to[******].

For the avoidance of doubt, the parties acknowledge
and agree that a Dyax Partner or Dyax Sublicensee may obtain rights under the CAT
Antibody Phage Display Patents and CAT Know-How to Exploit Products against a
Target in the Territory without obtaining rights under a Product License if
such Dyax Partner or Dyax Sublicensee obtains such rights under a written
agreement directly with CAT.

5.5                                 Any
Product Licence which may be granted by CAT to Dyax shall not be effective
until the receipt by CAT of the relevant Acceptance Fee, which shall not be
refundable or creditable against any other sums which may be payable by Dyax or
a Dyax Sublicensee  to CAT pursuant to
this Agreement.

5.6                                 Dyax
will, if requested by CAT, inform CAT of the identity of all Dyax Sublicensees
(and their sublicensees) in relation to each Product Licence.

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5.7                                 Dyax
(and where relevant each Dyax Sublicensee) will ensure that any sublicensee (to
which it sublicences its rights in accordance with the terms of this Agreement)
executes a written agreement (a) which requires the sublicensee to abide by the
terms of one or more specified Product Licences or (b) which is consistent with
the terms of Clauses 3.10 or 7, and Clauses 4, 5.5, 5.9, 13.1 and 18 of this
Agreement and for the purposes of sublicences relating to Other Products only
Clauses 8.4, 8.6, 8.8, 8.9, 8.10 and 9.2 through to 9.7.

5.8                                 Dyax
(and where relevant each Dyax Sublicensee) will be liable for any breach of the
clauses listed in Clause 5.7 above by a sublicensee; provided, however, that
Dyax’s liability for such breach by a sublicensee shall be limited to in
relation to a Diagnostic Antibody Product prior to [******];
and provided, further, that any written agreement with a sublicensee shall
contain a provision pursuant to which CAT shall be a third party beneficiary of
such sublicence agreement and shall have the right to enforce (including claim
damages as a result of any breach) such sublicence agreement. If at any time
CAT does have to enforce its rights under a sublicence agreement Dyax will, if
requested by CAT, supply to CAT  a copy
of the relevant sublicence as soon as possible. 
For the avoidance of doubt, sublicensing by Dyax to a Dyax Sublicensee
is permitted as is sublicensing by a Dyax Sublicensee to a sublicensee.  No further sublicensing of the rights and
obligations under this Agreement is permitted.

6.             Terms of the Product LicencesEach
Product Licence granted to Dyax by CAT shall include the following terms:

6.1                                 The
Product Licence shall grant rights under the CAT Antibody Phage Display Patents
and CAT Know-How and, for the avoidance of doubt, no rights shall be granted by
CAT in any Product Licence to any CAT Diabodies Patent Rights, and any Patent
Rights owned or controlled by CAT which claim Catalytic Antibodies, ribosome
display technology, any Patent Rights which claim Single Domain Antibodies and
no rights shall be granted by CAT in any Product Licence under the Antibody
Phage Display Patents to Exploit Research Products.

6.2                                 The
Product Licence shall come into effect upon the date that the Acceptance Fee is
paid and the Product Licence shall be subject to the applicable terms of Clause
8;

6.3                                 Unless
terminated under Clause 6.10, Clause 6.11 or Clause 6.12, the Product Licence
shall continue, on a country-by-country and Product-by-Product basis until the
last Valid Claim of the CAT Antibody Phage Display Patents expires, or ten (10)
years after First Commercial Sale of such Product in the country of sale,
whichever occurs later;

6.4                                 Dyax
and each Dyax Sublicensee (or its sublicensee) shall indemnify CAT and its
Affiliates and their directors, officers, employees and agents and their
respective successors, heirs and assigns (the “CAT Indemnitees”) against any
liability, damage, loss or expense (including attorneys fees and expenses of 

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litigation)
incurred by or imposed upon the CAT Indemnitees or any one of them in
connection with any claims, suits, actions, demands or judgments by or in
favour of any Third Party concerning any manufacture, use or sale of any
Product by Dyax or such Dyax Sublicensee (or its sublicensee);

6.5                                 CAT
shall not be liable to Dyax and Dyax Sublicensee (or its sublicensee) in
respect of any liability, loss, damage or expense (including attorneys fees and
expenses of litigation) incurred or suffered by Dyax and Dyax Sublicensees (or
its sublicensee) in connection with the manufacture, use or sale of any
Products by Dyax and Dyax Sublicensees (or its sublicensee);

6.6                                 No
warranty or representation from CAT that the CAT Antibody Phage Display Patents
are, or will be, valid or that the exercise of the rights granted under the
Product Licence will not result in the infringement of patents of Third
Parties;

6.7                                 Dyax
shall notify CAT promptly of any proceedings or applications for revocation of
any of the CAT Antibody Phage Display Patents emanating from a Third Party that
comes to its notice or if a Third Party takes or threatens to take any
proceedings for infringement of any patents of that Third Party by reason of
Dyax’s use or operation of the CAT Antibody Phage Display Patents or
manufacture, use or sale of the Products. 
Dyax shall notify CAT promptly of any infringement of the CAT Antibody
Phage Display Patents by a Third Party which may come to its attention during
the term of the Product Licence, except Dyax shall have no obligation to so
notify CAT with respect to any infringement by an academic or not-for-profit
entity which occurs by reason of such entity carrying out research activities
provided such activities are, as far as Dyax is aware, not being carried out
with a view to commercialising a product or otherwise for profit;

6.8                                 CAT
shall have the sole right and responsibility, at its sole discretion and cost
and with reasonable assistance from Dyax, to file, prosecute and maintain the
CAT Antibody Phage Display Patents and for the conduct of any lawsuits, claims
or proceedings challenging the validity or enforceability thereof including,
without limitation, any interference or opposition proceeding relating thereto
in all countries.  For the avoidance of
doubt, Dyax and Dyax Sublicensees will have the right to conduct any proceedings
relating to its Product including any proceedings relating to product
liability;

6.9                                 Dyax
and any Dyax Sublicensee may assign the benefit and/or burden of any Product
Licence to any Affiliate or Third Party, provided that such Affiliate or Third
Party undertakes to CAT to be bound by the terms of the Product Licence;

6.10                           CAT
shall have the right to terminate any Product Licence in the event that:

6.10.1                  Dyax or a Dyax Sublicensee (or its
sublicensee) has not filed an IND for a Therapeutic Antibody Product, or a
510(k) or IDE for a Diagnostic Antibody Product within [******]
after the grant of that Product Licence; provided however, that 

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Dyax
shall have the right to extend such period in annual increments by up to [******], upon the following terms:

	
  

  	
  First Annual
  Extension

  	
   

  	
  $[******].

  
	
   

  	
  Second Annual
  Extension

  	
   

  	
  $[******].

  

 

In
order for Dyax to be granted an extension under this Clause 6.10.1, the
foregoing amounts must be received by CAT prior to the date of expiration.  All amounts received by CAT under this Clause
6.10.1 will be credited against any milestones and royalties that would
otherwise be due to CAT under the terms of the Product License; or

6.10.2                  Dyax or a Dyax Sublicensee (or its
sublicensee) directly or indirectly opposes or assists any Third Party to
oppose the grant of letters patent or any patent application within the CAT
Antibody Phage Display Patents, or disputes or directly or indirectly assists
any Third Party to dispute the validity of any patent within the CAT Antibody
Phage Display Patents or any of the claims thereof.

6.11                           In
the event that either Party commits a material breach of any of its obligations
with respect to a Product Licence, and such Party fails to remedy that breach
within ninety (90) days after receiving written notice thereof from the other
Party, that other Party may immediately terminate the Product Licence upon
written notice to the breaching Party.

6.12                           Either
Party may terminate a Product Licence in its entirety by giving notice in
writing to the other Party if any one or more of the following events happens:

(a)                                  the
other Party has any distress or execution levied on the major portion of its
assets (as determined by its balance sheet in accordance with GAAP) which is not
paid out within thirty (30) days of its being levied;

(b)                                 the
other Party calls a meeting for the purpose of passing a resolution to wind it
up, or such a resolution is passed, or the other Party presents, or has
presented, a petition for a winding up order, or presents, or has presented, a
petition to appoint an administrator, or has an administrative receiver, or
receiver, liquidator or other insolvency practitioner appointed over all or any
substantial part of its business, undertaking, property or assets;

(c)                                  the
other Party stops or suspends making payments (whether of principal or
interest) with respect to substantially all of its debts or announces an
intention to do so or the other Party suspends or ceases to carry on its
business;

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(d)                                 a
secured lender to the other Party holding a security interest over the major
portion of the tangible assets (as determined by its balance sheet in
accordance with GAAP) of such other Party takes any steps to obtain possession
of the property on which it has security or otherwise to enforce its security;
or

(e)                                  the
other Party suffers or undergoes any procedure analogous to any of those
specified in Clause 6.12(a) - (d) above or any other procedure available in the
country in which the other Party is constituted, established or domiciled
against or to an insolvent debtor or available to the creditors of such a
debtor.

7.             Grant of Other Licences

7.1                                 Other
Products. CAT hereby grants with effect from 3 January 2003 to Dyax a
non-exclusive licence in the Territory, with the right to sublicence, under the
CAT Antibody Phage Display Patents and the CAT Know-How for any purpose not
already covered by the provisions of this Agreement (“Other
Purposes”) including to Exploit any product, other than a
Therapeutic Antibody Product, Diagnostic Antibody Product or Research Product,
whose development, manufacture, use or sale would, absent the license
hereunder, infringe Valid Claims of the CAT Antibody Phage Display Patents or
utilize the CAT Know-How (“Other Product”).  The license granted under this Clause 7.1
shall be subject to the terms and conditions applicable under Clauses 5.6, 5.7,
5.8, 6.1, 6.3 through 6.11, 7.3, 7.4, 7.5, 8.5 through 8.7, 9.2 through 9.7,
14.4(c)-(g) and 18.

7.2                                 The
licence granted in Clause 7.1  does not
include any grant by CAT of rights to CAT Diabodies Patent Rights, or Patent
Rights owned or controlled by CAT which claim Catalytic Antibodies, or ribosome
display technology or Patent Rights which claim Single Domain Antibodies.  Dyax’s rights under the licence granted in
Clause 7.1  is expressly subject to any
rights which CAT has granted to any Third Party prior to 3 January 2003 or may
grant to any Third Party after 3 January 2003 provided that any rights granted
by CAT to any Third Party after 3 January 2003 shall not restrict the freedom
of Dyax or Dyax Sublicensees (or their sublicensees) to operate under any
agreement entered into by them prior to the date CAT grants such Third Party
rights.

7.3                                 In
the event that either Party commits a material breach of any of its obligations
with respect to the licence granted in Clause 7.1, and such Party fails to
remedy that breach within ninety (90) days after receiving written notice
thereof from the other Party, that other Party may immediately terminate the
licence upon written notice to the breaching Party.

7.4                                 Either
Party may terminate a licence set out in Clause 7.1 above in its entirety by
giving notice in writing to the other Party if any one or more of the following
events happens:

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(a)                                  the
other Party has any distress or execution levied on the major portion of its
assets (as determined by its balance sheet in accordance with GAAP) which is
not paid out within thirty (30) days of its being levied;

(b)                                 the
other Party calls a meeting for the purpose of passing a resolution to wind it
up, or such a resolution is passed, or the other Party presents, or has
presented, a petition for a winding up order, or presents, or has presented, a
petition to appoint an administrator, or has an administrative receiver, or
receiver, liquidator or other insolvency practitioner appointed over all or any
substantial part of its business, undertaking, property or assets;

(c)                                  the
other Party stops or suspends making payments (whether of principal or
interest) with respect to substantially all of its debts or announces an
intention to do so or the other Party suspends or ceases to carry on its
business;

(d)                                 a
secured lender to the other Party holding a security interest over the major
portion of the tangible assets (as determined by its balance sheet in
accordance with GAAP) of such other Party takes any steps to obtain possession
of the property on which it has security or otherwise to enforce its security;

(e)                                  the
other Party suffers or undergoes any procedure analogous to any of those
specified in Clause 7.4(a) — (d) above or any other procedure available in the
country in which the other Party is constituted, established or domiciled
against or to an insolvent debtor or available to the creditors of such a
debtor;

8.             Consideration Payable by Dyax

8.1                                 Initial
Licence Allocation for Therapeutic Antibody Products.

8.1.1                        With respect to each Product
Licence from the Initial Licence Allocation for Therapeutic Antibody Products
for a Nominated Target, Dyax shall pay to CAT the following payments upon
achievement of the specified milestones by Dyax or a Dyax Sublicensee (or its
sublicensee) for the first Therapeutic Antibody Product directed against such
Nominated Target to achieve the relevant milestone:

	
  Acceptance Fee
  (if not already paid for that Nominated Target pursuant to Clause 8.3.1)

  	
   

  	
  US $[******]

  
	
  Initiation of
  first Phase I Clinical Trial

  	
   

  	
  US $[******]

  
	
  Initiation of
  first Phase III Clinical Trial

  	
   

  	
  US $[******]

  
	
  First filing for
  Marketing Authorisation in one Major Market country

  	
   

  	
  US $[******]

  
	
  Marketing
  Authorisation granted in the United States

  	
   

  	
  US $[******]

  

 

 

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8.1.2                        With respect to Product
Licences for a Therapeutic Antibody Product from the Initial Licence
Allocation, Dyax shall pay CAT royalties in an amount equal to [******] of Net Sales of the Therapeutic Antibody Product
sold by or on behalf of Dyax or the Dyax Sublicensee.

8.2                                 Additional
Licence Allocation for Therapeutic Antibody Products.

8.2.1                        With respect to each Product
Licence from the Additional Licence Allocation set forth in Clause 3.5 for
Therapeutic Antibody Products for a Nominated Target, Dyax shall pay to CAT the
following payments upon achievement of the specified milestones by Dyax or a
Dyax Sublicensee (or its sublicensee) for the first Therapeutic Antibody
Product directed against such Nominated Target to achieve the relevant
milestone:

	
  Acceptance Fee (if not already paid for that
  Nominated Target pursuant to Clause 8.3.1)

  	
   

  	
  US $[******]

  
	
  Initiation of first Phase I Clinical Trial

  	
   

  	
  US $[******]

  
	
  Initiation of first Phase III Clinical Trial

  	
   

  	
  US $[******]

  
	
  First filing for Marketing Authorisation in one
  Major Market country

  	
   

  	
  US $[******]

  
	
  First Marketing Authorisation granted in one Major
  Market country

  	
   

  	
  US $[******]

  

 

8.2.2                        With respect to each Product
Licence from the Additional Licence Allocation set forth in Clause 3.5 for
Therapeutic Antibody Products, Dyax will pay CAT royalties in an amount equal
to [******] of Net Sales of the
Therapeutic Antibody Product sold by or on behalf of Dyax or the Dyax
Sublicensee.

8.3                                 Product
Licences for Diagnostic Products.

8.3.1                        With respect to each Product
Licence for Diagnostic Antibody Products, Dyax shall pay to CAT the following
payments upon achievement by Dyax or a Dyax Sublicensee (or its sublicensee) of
the milestones set out below.  For the
avoidance of doubt the milestone payments shall be payable in respect of the
first Diagnostic Antibody Product directed against each Nominated Target to
achieve the relevant milestone:

	
  Acceptance Fee (if not already paid for that Nominated Target
  pursuant to Clause 8.1.1 or 8.2.1)

  	
   

  	
  US $[******]

  	
   

  
	
  First filing for Marketing Authorisation in one Major Market country

  	
   

  	
  US $[******]

  	
   

  
	
  Marketing Authorisation granted in each Major Market Country

  	
   

  	
  US $[******]

  	
   

  

 

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Notwithstanding the foregoing, the parties acknowledge
and agree that no milestone payments will be payable by Dyax Sublicensee to CAT
in respect of Diagnostic Antibody Products developed under the Specified
Diagnostic Agreements.

8.3.2                        With respect to each Product
Licence for a Diagnostic Antibody Product, Dyax shall pay CAT royalties on a
country-by-country basis in an amount equal to [******]
of Net Sales of Diagnostic Antibody Products sold by or on behalf of Dyax or
any Dyax Sublicensee.

8.4                                 Other
Products.  With respect to each Other
Product developed by Dyax or one of its sublicensees under Clause 7, Dyax or
its sublicensee, as the case may be, shall pay CAT royalties on a
country-by-country basis in an amount equal to [******]
of Net Sales of each Other Product sold by or on behalf of Dyax or the Dyax
Sublicensee in the Territory.

8.5                                 In
addition to the royalty payments in Clause 8.4, and subject to Clause 8.7.3,
Dyax will pay to CAT [******] of all
other sums received by Dyax in relation to Other Products or any Other Purposes
under sublicense agreements executed after the Commencement Date.  For the avoidance of doubt, the sums payable
by Dyax shall include [******] of any
sums that Dyax receives from a sublicensee from any further sublicensing but
CAT shall not receive [******] of the
sum actually received by such a sublicensee from such further sublicensing.  Dyax shall be entitled to retain all amounts
that it receives from sublicensees in payment for the provision of support
services relating to the supply of Antibody Libraries or Antibodies derived
therefrom as reasonably calculated based on the use of Full Time Equivalents,
machine hours, other comparable cost based measures or any combination of the
foregoing.

8.6                                 For
the further avoidance of doubt, Dyax or its sublicensee will retain all
non-royalty payments made to Dyax by sublicensees of Other Products under
agreements executed prior to 3 January 2003.

8.7                                 The
Parties hereby agree that, notwithstanding any provision of this Agreement
(including without limitation Clauses 8.4, 8.5 and 8.6 of this Agreement), with
respect to any [******] used for [******] that is developed under that certain Development
and License Agreement between Dyax and a Third Party dated [******]
(the “Development and License Agreement”),
Dyax’s sole obligation to CAT is to pay to CAT [******]
of all royalties, milestones and other sums (including any consideration in
kind) received by Dyax in relation to such [******]
product, except that Dyax shall not pay to CAT any percentage of Full Time
Equivalent based funded research payments received by Dyax under the
Development and License Agreement.

8.8                                 Dyax
Antibody Libraries and Funded Discovery Activities.

8.8.1                        In respect of any agreements
concluded between Dyax and any Dyax Partner before 3 January 2003 under which
Antibody Libraries or Antibodies derived therefrom are made available to such
Dyax Partner, the Parties agree that: (a) Dyax will retain all amounts
(including without limitation 

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all
Antibody Library transfer fees) that it receives in payment from such Dyax
Partner prior to the grant of a Product Licence; (b) Dyax will retain all
amounts that it receives in payment from such Dyax Partner after the grant of a
Product Licence hereunder, exclusive of any amounts payable on account of such
Dyax Partner’s obligation to pay any milestone payments or royalties to CAT for
any Therapeutic Antibody Product or Diagnostic Antibody Product under the terms
of such Product Licence.

8.8.2                        In respect of any agreements
concluded between Dyax and any Dyax Partner after 3 January 2003 of this
Agreement under which Antibody Libraries or Antibodies derived therefrom are
made available to such Dyax Partner, the Parties agree that: (a) Dyax shall be
entitled to retain all amounts that it receives from such Dyax Partner in
payment for the provision of support services relating to the supply of the
Antibody Libraries or Antibodies derived therefrom as reasonably calculated
based on the use of Full Time Equivalents, machine hours, other comparable
cost-based measures or any combination of the foregoing; and (b) all other
amounts (including without limitation all Antibody Library transfer fees) that
Dyax receives in payment from such Dyax Partner with respect to development of
a Product during the period before the grant of a Product Licence hereunder
will be divided in the proportion [******] to
Dyax and [******] to CAT.  After the grant of a Product Licence for a
Product CAT shall only be entitled to payments under the Product Licence for
such Product and no further amounts shall be payable under this Clause 8.9.2.

8.8.3                        The provisions of this Clause
8.8 shall not apply to Other Products, which shall be handled solely in
accordance with Clauses 8.4, 8.5 and 8.6 above.

8.9                                 All
royalties due to CAT under Clauses 8.1.2, 8.2.2, 8.3.2, 8.4 or sums due to CAT
in respect of any Other Product or any Other Purpose under Clause 8.5 or any
other sums due to CAT under Clause 8.8.2 shall be payable on a
country-by-country basis until the last Valid Claim of a CAT Antibody Phage
Display Patent expires or ten (10) years from the date of First Commercial Sale
of such Product, Affinity Matured Product or Other Product or Other Purpose,
whichever occurs later.

8.10                           Dyax
agrees that it will not, without the prior written consent of CAT, receive
shares or any other non-cash consideration in return for granting any sublicence
to a Dyax Sublicensee.  Dyax will ensure
that each Dyax Sublicensee will also not receive any shares or any other
non-cash consideration when granting a sublicence pursuant to the terms of its
sublicence agreement.

8.11                           Dyax
shall be free to make Antibody Libraries and Antibodies derived from Antibody
Libraries available to any Dyax Sublicensee and the latter will be free to use
the foregoing without any further licence from CAT under the CAT Antibody Phage
Display Patents; provided that (i) any amounts paid to Dyax from any such Dyax
Sublicensee 

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will
be dealt with in accordance with Clause 8.5 or 8.8, and (ii) such Dyax
Sublicensees will only be able to Exploit any Product derived from such
Antibody Libraries or such Antibodies if a Product Licence has been sublicensed
to them by Dyax.

8.13                           The
Parties agree that any payments already made by Dyax to CAT under the terms of
the Amendment Agreement are not affected by the terms of this Agreement.

9.             Provisions relating to Payment
of Consideration by Dyax

9.1                                 All
milestone payments shall be paid by Dyax within [******]
days of the applicable milestone being achieved and no milestone payments shall
be refundable or creditable against any other sum payable by Dyax hereunder for
any reason.

9.2                                 Dyax
shall make the payments due to CAT under Clause 8 above in United States
dollars (if Dyax in turn receives payment in dollars) or in pounds sterling (if
Dyax in turn receives payment in pound sterling), or Euros (if Dyax in turn
receives payment in Euros).  Where Dyax
receives payment in a currency other than United States dollars, pounds
sterling or Euros, Dyax will convert the relevant sum into pounds sterling (or
Euros if Euros have replaced pounds sterling at the time of payment).  Dyax will use the conversion rate reported in
the Financial Times two (2) Business Days before the day on which Dyax pays
CAT.  Such payment will be made without
deduction of exchange, collection or other charges.  All payments will be made at Quarterly
intervals.  Within [******]
days of the end of each Quarter after the First Commercial Sale of each
Product, or Other Product in any country, Dyax shall prepare a statement which
shall show on a country-by-country basis for the previous Quarter Net Sales of
each Product, or Other Product by Dyax or its Affiliates and all monies due to
CAT based on such Net Sales.  That
statement shall include details of Net Sales broken down to show the country of
the sales and the total Net Sales by Dyax or its Affiliates in such country and
shall be submitted to CAT within such [******] day
period together with remittance of the monies due.  With respect to Net Sales of a Product,
Affinity Matured Product or Other Product by a Dyax Sublicensee (or its
sublicensee) Dyax shall prepare a statement which will include the same
information and remit that statement and any monies due within the same period
except with regard to any Dyax Sublicensee with which Dyax has a licence
agreement relating to the technology of Antibody phage display as of or prior
to the Commencement Date where the remittance will be made at Quarterly
intervals within [******] days of the date
royalties are due to Dyax from such existing Dyax Sublicensees.  With respect to any other sums received by
Dyax in accordance with Clauses 8.5 and 8.7.2 Dyax  shall within [******]
days of the end of the first Quarter in which Dyax receives such sums prepare
and submit to CAT a statement, which shall include details of all such sums
received by Dyax on a country by country basis in the previous Quarter,  together with remittance of any monies due.

9.3                                 All
payments shall be made free and clear of and without deduction or deferment in
respect of any disputes or claims whatsoever and/or as far as is legally
possible in respect of any taxes imposed by or under the authority of any
government or public authority.  [******]

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9.4                                 Dyax
shall keep and shall procure that its Affiliates and Dyax Sublicensees keep
true and accurate records and books of account containing all data necessary
for the calculation of the amounts payable by it to CAT pursuant to this
Agreement.  Those records and books of
account shall be kept for seven (7) years following the end of the Year to
which they relate.  Upon CAT’s written
request, a firm of accountants appointed by agreement between the Parties or,
failing such agreement within ten (10) Business Days of the initiation of
discussions between them on this point CAT shall have the right to cause an
international firm of independent certified public accountants that has not
performed auditing or other services for either Party or their Affiliates (or,
if applicable, any Dyax Sublicensee with rights to the Product in question)
acceptable to Dyax or the Dyax Sublicensee such acceptance not to be
unreasonably withheld to inspect such records and books of account.  In particular such firm:

9.4.1                        shall be given access to and
shall be permitted to examine and copy such books and records of Dyax and its
Affiliates and Dyax Sublicensees upon twenty (20) Business Days notice having
been given by CAT and at all reasonable times on Business Days for the purpose
of certifying that the Net Sales or other relevant sums calculated by Dyax and
its Affiliates and Dyax Sublicensees during any Year were reasonably
calculated, true and accurate or, if this is not their opinion, certify the Net
Sales figure or other relevant sums for such period which in their judgment is
true and correct;

9.4.2                        prior to any such examination
taking place, such firm of accountants shall undertake to Dyax that they shall
keep all information and data contained in such books and records, strictly
confidential and shall not disclose such information or copies of such books
and records to any third person including CAT, but shall only use the same for
the purpose of calculations which they need to perform in order to issue the
certificate to which this Clause envisages;

9.4.3                        any such access examination and
certification shall occur no more than once per Year and will not go back over
records more than two (2) years old;

9.4.4                        Dyax and its Affiliates and
Dyax Sublicensees shall make available personnel to answer queries on all books
and records required for the purpose of that certification; and

9.4.5                        the cost of the accountant
shall be the responsibility of Dyax if the certification shows it to have
underpaid monies to CAT by more than [******] and
the responsibility of CAT otherwise.

9.5                                 All
payments due to CAT under the terms of this Agreement are expressed to be
exclusive of value added tax (VAT) howsoever arising.  [******]

9.6                                 All
payments made to CAT under this Agreement shall be made to the bank account of
CAT as notified by CAT to Dyax from time to time.

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9.7                                 If
Dyax fails to make any payment to CAT hereunder on the due date for payment,
without prejudice to any other right or remedy available to CAT it shall be
entitled to charge  Dyax interest (both
before and after judgment) of the amount unpaid at the annual rate of LIBOR
(London Interbank Offering Rate) plus [******]
calculated on a daily basis until payment in full is made without prejudice to
CAT’s right to receive payment on the due date.

10.          CAT Development License for Dyax
Therapeutic Antibody Products

10.1                           In
the event that Dyax undertakes development of any Dyax Therapeutic Antibody
Product on its own and then subsequently decides to licence the further
development and commercialisation of such Dyax Therapeutic Antibody Product (a “Development Licence”) to a Third Party prior to the filing
of the first IND for such Dyax Therapeutic Antibody Product, then before entering
into such a Development Licence with a Third Party, Dyax shall first offer CAT
in writing the option to enter into a Development Licence with Dyax for the
development and commercialisation of such Dyax Therapeutic Antibody Product by
CAT in the Territory (a “Development Licence Option”).  For the avoidance of doubt, if Dyax decides
to licence the further development and commercialisation of any Dyax
Therapeutic Antibody Product to a Third Party after the filing of the first IND
for such Dyax Therapeutic Antibody Product, it shall have no obligation to
offer CAT a Development Licence with respect thereto.

10.2                           The
written notification by Dyax to CAT of a Development Licence Option (a “Development Licence Option Notice”) shall set out the
financial terms upon which Dyax is willing to grant a Development Licence, and
it shall be accompanied by all reasonable and relevant scientific, regulatory
and technical information relating to the Dyax Therapeutic Antibody Product
that is the subject of the Development Licence Option Notice (the “Supporting Information”) so that CAT can reasonably
determine in its sole discretion whether to enter into a Development Licence.

10.3                           CAT
shall notify Dyax within [******] days
of receipt of the Development Licence Option Notice and all Supporting
Information (or such other longer period as the Parties agree) whether or not
it wishes to enter into a Development Licence. 
If CAT notifies Dyax that it does not wish to enter into a Development
Licence, or CAT does not respond to Dyax within the foregoing period, then Dyax
shall be free to develop and commercialise the Therapeutic Antibody Product
that was the subject of the Development Licence Option Notice with any Third
Party.

10.4                           If
CAT wishes to enter into a Development Licence, the Parties shall forthwith
negotiate the terms of such Development Licence in good faith.  If the Parties acting reasonably and in good
faith are unable to agree the terms of the Development Licence within [******] months of commencing negotiations, Dyax shall be
free to enter into a Development Licence with any Third Party for the Dyax
Therapeutic Antibody that was the subject of the Development Licence Option
Notice; provided that Dyax shall not enter into such a Development Licence on
terms which, taken as a whole, are more favourable to the Third Party then
those 

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set
out in the Development Licence Option Notice without first offering such more
favourable terms to CAT.

10.5                           The
provisions of this Clause 10 shall apply to all Dyax Therapeutic Antibody
Products.

11.          Co-Development Agreement Option

11.1                           Dyax
hereby grants CAT an exclusive option to enter into a Co-Development Agreement
in respect of each Dyax Therapeutic Antibody Product that is the subject of an
IND application filed with the FDA and that has not be licensed to a Third
Party in accordance with Clause 10, to develop and commercialise such a Dyax
Therapeutic Antibody Product in the Territory in collaboration with Dyax (the “Co-Development Option”).

11.2                           The
Co-Development Option may be exercised by CAT as follows:

11.2.1                  when Dyax submits the first IND
application for a particular Dyax Therapeutic Antibody Product, Dyax shall at
the same time provide a copy of the dossier supporting that IND application to
CAT;

11.2.2                  within [******]
days (or such other longer period as the Parties may agree) of receipt of the
dossier in Clause 11.2.1 above, CAT will inform Dyax whether it wishes to enter
into an agreement to co-develop the Dyax Therapeutic Antibody Product that is
the subject of the dossier (the “Option Product”).

11.3                           If
CAT notifies Dyax that it does not wish to exercise the Co-Development Option
in relation to the Option Product, or CAT does not respond within the period in
Clause 11.2.2 above, then Dyax shall have no further obligation to CAT under
the Co-Development Option or the Development Licence Option.

11.4                           If
CAT notifies Dyax that it wishes to exercise the Co-Development Option in
relation to the Option Product, then the Parties will enter into a
Co-Development Agreement on the terms set out at Schedule 8.

12.          No Sums Payable by CAT 

12.1                           CAT
will have no obligation whatsoever to make any payments to Dyax for the rights
granted to CAT under Clause 2 above including by way of royalty, milestone,
payment of maintenance fee.

12.2                           Without
prejudice to Clause 12.1 above, Dyax agrees that CAT will have no obligations
whatsoever to make any payments (whether by way of royalty, milestone or
otherwise) to Dyax for any reason in relation to the sums CAT may have received
or will receive in respect of the D2E7 product developed by CAT under the
Abbott Agreement or any agreement which replaces or amends the Abbott Agreement
in the future.  Dyax, on behalf of itself
and its assigns and successors (each a “Dyax
Entity”), hereby releases and forever discharges CAT, its
Affiliates, assignees, successors and licensees and predecessors and any 

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directors
and officers of the foregoing (each a “CAT
Entity”) from any and all actions, courses of action, claims,
demands, damages and expenses and any other thing in law, equity or otherwise
whether now known or unknown or which have ever existed, now exist or which may
exist in the future which any Dyax Entity may have against any CAT Entity
arising out of or relating to any agreements, events or conduct relating to the
D2E7 product developed by CAT under the Abbott Agreement.

13.          Representations and Warranties

13.1                           Each
Party represents, warrants, undertakes and agrees for the benefit of the other
Party that:

13.1.1                  it has full power to enter into and
perform this Agreement;

13.1.2                  so far as it is aware the execution
and delivery of this Agreement and the performance of and compliance with its
terms and provisions will not:

(a)                                  conflict
with or result in a breach of, or constitute a default under, any agreement or
instrument to which it is a party or by which it is bound or with its
memorandum and articles of association;

(b)                                 conflict
with or result in a breach of any law, regulation or order of any court;

13.2                           CAT
represents, warrants and undertakes for the benefit of Dyax as at 3 January
2003:

13.2.1                  CAT has provided to Dyax a complete
and accurate description of CAT’s Gatekeeping Procedure;

13.2.2                  CAT will keep the agreement between
it and the Medical Research Council dated 7 January 1997 in force;

13.2.3                  the patents and applications listed
in Schedule 1 are all the Patent Rights relating to the technology of
Antibody phage display owned or controlled by CAT (including Patent Rights
sublicensed by CAT from the Medical Research Council), except as specifically excluded
in this Agreement.  If CAT has
inadvertently excluded any Patent Right from Schedule 1, such omission
shall not be considered a breach of this representation and warranty but rather
any missing Patent Right shall be deemed to be so included in Schedule 1;

13.2.4                  CAT was not as at 3 January 2003 in
material discussions with the MRC with regard to taking a licence from the MRC
for any Patent Rights or other intellectual property rights directly relating
to the technology of Antibody phage display except with regard any discussions
CAT was engaged in with [******] in
relation to the so called [******]
patents and others.

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13.3                           Dyax
represents, warrants and undertakes for the benefit of CAT that as at 31
December 1997 it possessed the exclusive right, title and interest in and to
the Dyax Patent Rights and that it had the full legal right and power to enter
into the obligations and grant the rights and licences set forth in this
Agreement;

13.4                           Nothing
in this Agreement shall be construed as:

13.4.1                  a warranty or representation by Dyax
or CAT as to the validity or scope of any patent included within any Patent
Rights licensed pursuant to this Agreement.

13.4.2                  a warranty or representation that the
exploitation of any Patent Rights or the manufacture, use or sale of a Licensed
Intermediate or a Licensed Products or a Product, or Other Product  is or will be free from infringement of
patents of Third Parties;

13.4.3                  an obligation of either Party to
bring or prosecute actions or suits against Third Parties for infringement;

13.4.4                  an obligation of CAT or Dyax to
maintain any patent or to continue to prosecute any patent application included
within the Patent Rights licensed pursuant to this Agreement in any country;

13.4.5                  creating any agency, partnership, joint
venture or similar relationship between CAT and Dyax ; or

13.4.6                  conferring by implication, estoppel
or otherwise any license, immunity or right under any patent of Dyax or CAT
other than those specified in the Dyax Patent Rights or the CAT Antibody Phage
Display Patent Rights.

14.          Duration and Termination  

14.1                           The
options granted by CAT in Clause 3 will continue until (a) 31 December 2017; or
(b) the termination of this Agreement in accordance with Clause 14.3 below.

14.2                           The
term of this Agreement shall commence upon the Restatement Date save for those
provisions which are expressed to have an effect from the Commencement Date (in
which case the relevant term will be deemed to have commenced as of the
Commencement Date and be subject to the remaining terms of this Agreement) and
shall terminate upon (a) the last-to-expire of claims of an issued and
unexpired patent within the CAT Antibody Phage Display Patents or the Dyax
Patent Rights (as the case may be) (which has not been held permanently revoked,
unenforceable or invalid by a decision of a court or other governmental agency
of competent jurisdiction unappealed within the time allowed for appeal, and
which has not been admitted to be invalid or unenforceable through reissue or
disclaimer or otherwise) or (b) the date upon which no payments are due to CAT
under Clause 8 of this Agreement, whichever event occurs last.

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14.3                           Either
Party may terminate this Agreement in its entirety by giving notice in writing
to the other Party if any one or more of the following events happens:

(a)                                  the
other Party commits a material breach of any of its obligations under this
Agreement which is incapable of remedy;

(b)                                 the
other Party fails to remedy, where it is capable of remedy, or persists in any
breach of any of its obligations under this Agreement after having been
required in writing to remedy or desist from such breach within a period of
ninety (90) days;

(c)                                  the
other Party has any distress or execution levied on the major portion of its
assets (as determined by its balance sheet in accordance with GAAP) which is
not paid out within thirty (30) days of its being levied;

(d)                                 the
other Party calls a meeting for the purpose of passing a resolution to wind it
up, or such a resolution is passed, or the other Party presents, or has
presented, a petition for a winding up order, or presents, or has presented, a
petition to appoint an administrator, or has an administrative receiver, or
receiver, liquidator or other insolvency practitioner appointed over all or any
substantial part of its business, undertaking, property or assets;

(e)                                  the
other Party stops or suspends making payments (whether of principal or
interest) with respect to substantially all of its debts or announces an
intention to do so or the other Party suspends or ceases to carry on its
business;

(f)                                    a
secured lender to the other Party holding a security interest over the major
portion of the tangible assets (as determined by its balance sheet in
accordance with GAAP) of such other Party takes any steps to obtain possession
of the property on which it has security or otherwise to enforce its security;

(g)                                 the
other Party suffers or undergoes any procedure analogous to any of those
specified in Clause 14.3(c) - (f) above or any other procedure available in the
country in which the other Party is constituted, established or domiciled
against or to an insolvent debtor or available to the creditors of such a
debtor;

14.4                           Upon
termination of this Agreement for any reason whatsoever:

(a)                                  the
relationship of the Parties hereunder shall cease save as (and to the extent)
expressly provided for in this Clause 14.4;

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(b)                                 any
unexercised options for Product Licences granted to Dyax under this Agreement
shall terminate,

(c)                                  any
Product Licence granted to Dyax before the date of termination shall continue
and the Parties will continue to be bound by the terms of this Agreement in
relation to any such Product Licences;

(d)                                 the
licence granted to Dyax for Other Purposes shall continue with respect to any
Other Products commercialised prior to the date of termination of this
Agreement and the Parties will continue to be bound by the terms of this
Agreement in relation to any such Other Product;

(e)                                  any
sublicences granted by Dyax in accordance with the terms of this Agreement will
continue in force provided that such sublicensees are not in breach of the
relevant sublicence and that each sublicensee agrees to enter into a direct
agreement with CAT upon the terms of this Agreement;

(f)                                    the
Parties acknowledge and agree that Dyax Sublicensees, as well as sublicensees
of the foregoing to the extent permitted under this Agreement, each derive
independent and significant value from the agreements set forth herein and may
rely thereon and to that extent only shall each have the right to enforce the
provisions of Clause 14.4 (e) of this Agreement and be a third party
beneficiary for that purpose only;

(g)                                 Dyax
shall immediately return or procure to be returned to CAT at such place as it
directs and at the expense of Dyax (or if CAT so requires by notice to Dyax in
writing, destroy) all CAT Know-How together with all copies of such CAT
Know-How in its possession or under its control.

(h)                                 the
rights of any Commercial Party shall not be affected by the termination or
expiration of this Agreement provided that the Commercial Party continues to
perform the obligations of CAT pursuant to Clause 2.  CAT’s rights and obligations, with respect to
Licensed Products developed using the Dyax Patent Rights, or developed as a
result of Licensed Intermediates, during the term of this Agreement will
survive termination or expiration of this Agreement.

(i)                                     any
sublicences granted by CAT in accordance with the terms of this Agreement will
continue in force provided that such sublicensees are not in breach of the
relevant sublicence and that each sublicensee agrees to enter into a direct
agreement with Dyax upon the terms of this Agreement;

(j)                                     the
Parties acknowledge and agree that CAT sublicensees each derive independent and
significant value from the agreements set forth herein and may rely thereon and
to that extent only shall each have the right to enforce the provisions of
Clause 14.4 (i) of this Agreement and be a third party beneficiary for that
purpose only;

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14.5                           If Dyax
(or any Affiliate of Dyax to which Dyax may assign this Agreement in accordance
with Clause 17.1 below) undergoes a Change of Control (as defined in Clause
14.6(c) below), then the amendments set out below shall take effect:

14.5.1                  The definition of “Additional Licence
Allocation” contained in this Agreement shall be amended by deleting the words “[******]” in the first line of the definition and the
replacing them with “[******]”.

14.5.2                  The definition of “Initial Licence
Allocation” contained in the this Agreement shall be amended by deleting the
words “[******]” in the first line of the
definition and replacing them with “[******]” and
by deleting the words “[******]” in
the second line of the definition and replacing them with “[******]”.

14.5.3                  The words “[******]”
in the first line of Clause 3.1(b) shall be deleted and replaced by the words “[******]”.

14.5.4                  The words “[******]”
in the second line of Clause 3.2 shall be deleted and replaced with the words “[******]” and the words “[******]”
in Clause 3.2(d) shall be deleted and replaced by the words “[******]”.

14.5.5                  The words “[******]”
in the in the fourth line of Clause 3.4 shall be deleted and replaced by the
words “[******]”.

14.5.6                  The words “subject to Clause 3.6”
will be inserted after the words “grants to Dyax” in the second line of Clause
3.5 and the words “[******]” in
the second line of Clause 3.5 shall be deleted and replaced with the words “[******]”.

14.5.7                  The following
new clause 3.6 shall be inserted as follows:

“The options in Clause
3.5 shall be allocated as follows:

3.6.1                           [******] Product Licences shall be available from the
Commencement Date;

3.6.2                           if any option for a Product
Licence under Clause 3.6.1 is exercised and a Product Licence is granted to
Dyax, then for each Product under any such Product Licence which enters a Phase
III Clinical Trial by Dyax or a Dyax Sublicensee (or its sublicensee), CAT
hereby grants to Dyax an additional option for one Product Licence, up to a
maximum of [******] additional Product Licences
under this Clause 3.6.2; provided that if any option for a Product Licence
granted in this Clause 3.6.2 has not been exercised and granted to 

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Dyax
on or before 31 December 2017, then the option for such Product Licence will
lapse irrevocably; and

3.6.3                           if any option for a Product
Licence under Clause 3.6.1 is exercised and a 
Product Licence is granted to Dyax, then for each Product under any such
Product Licence which fails in development or for which Dyax or a Dyax
Sublicensee (or its sublicensee) decides to terminate its program of
development, CAT hereby grants to Dyax an additional option for one Product
Licence, up to a maximum of [******]
additional Product Licences under this Clause 3.6.3; provided that if any
option for a Product Licence granted in this Clause 3.6.3 has not been
exercised and granted to Dyax on or before 31 December 2017, then the option
for such a Product Licence will lapse irrevocably.”

14.5.8                  Clause 4.2 of this Agreement shall be
amended so that the words “[******]” in
the last sentence of that clause are deleted and replaced with the words “[******]” and Clause 3.1 is amended by adding the words “and
3.6” at the end of that clause.  In
Clause 3.7 the words “though 3.5” will be replaced with “through 3.6”.

14.6                                                                           (a)           For the avoidance of doubt, the
Parties acknowledge that in the event Dyax undergoes a Change of Control, Dyax
shall have the number of options to obtain Product Licences as set forth in the
Amendment Agreement (which equals [******]
options) (the “Original Options”)
and Dyax shall no longer have rights to exercise the [******]
options added by the Second Amendment Agreement.

(b)                                 Furthermore,
in the event of any merger or other transaction of Dyax with any Competing
Antibody Company where, immediately following the transaction, the outstanding
voting equity securities of the surviving entity then held by its equity
security holders who were equity security holders of Dyax immediately before
the transaction represent less than [******] of the
outstanding voting equity securities of the surviving entity after the
transaction, then any unexercised Original Options shall terminate.

(c)                                  For
the purpose of Clauses 14.5 and 14.6, “Change
of Control” means any merger or other transaction of Dyax with any
Third Party where, immediately following the transaction, the outstanding
voting equity securities of the surviving entity then held by its equity
security holders who were equity security holders of Dyax immediately before
the transaction represent less than [******] of the
outstanding voting equity securities of the surviving entity.

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15.          Confidentiality and Publicity

15.1                           With
respect to any confidential information received from the other Party (“Confidential
Information”), each Party undertakes and agrees to:

15.1.1                  only use the Confidential Information
for the purposes envisaged under this Agreement and not to use the same for any
other purpose whatsoever;

15.1.2                  ensure that only those of its
officers and employees who are directly concerned with the carrying of this Agreement
have access to the Confidential Information on a strictly “need to know” basis
and are informed of the secret and confidential nature of it;

15.1.3                  keep the Confidential Information
secret, confidential, safe and secure and shall not directly or indirectly
disclose or permit to be disclosed the same to any Third Party, including any
consultants or other advisors, without the prior written consent of the
disclosing party except to the extent disclosure is necessary in connection
with its use as envisaged under this Agreement;

15.1.4                  ensure that the Confidential
Information will not be covered by any lien or other encumbrance in any way;
and

15.1.5                  not copy, reproduce or otherwise
replicate for any purpose or in any manner whatsoever any documents containing
the Confidential Information except to the extent necessary in connection with
its use as envisaged under this Agreement.

15.2                           The
obligations referred to in Clause 15.1 above shall not extend to any
Confidential Information which:

15.2.1                  is or becomes generally available to
the public otherwise than be reason of breach by a recipient Party of the
provision of Clause 15.1;

15.2.2                  is known to the recipient Party and
is at its free disposal (having been generated independently by the recipient
Party or a Third Party in circumstances where it has not been derived directly
or indirectly from the disclosing Party’s Confidential Information prior to its
receipt from the disclosing Party), provided that evidence of such knowledge is
furnished by the recipient Party to the disclosing Party within twenty eight
(28) days of recipient of that Confidential Information;

15.2.3                  is subsequently disclosed to the
recipient Party without obligations of confidence by a Third Party owing no
such obligations to the disclosing Party in respect of that Confidential
Information;

15.2.4                  is required by law to be disclosed
(including as part of any regulatory submission or approval process) and then
only when prompt written notice of this requirement has been given to the
disclosing Party so that it may, if so advised, seek appropriate relief to
prevent such disclosure, 

 34
 Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omission.
 

 

 

provided
always that in such circumstances such disclosure shall be only to the extent
so required and shall be subject to prior consultation with the disclosing
Party with a view to agreeing on the timing and content of such disclosure.

15.3                           No
public announcement or other disclosures to Third Parties concerning the terms
of this Agreement shall be made, whether directly or indirectly, by any Party
to this Agreement (except confidential disclosures to professional advisors)
without first obtaining the approval of the other Party and agreement upon the
nature and text of such announcement or disclosure with the exception that:

15.3.1                  a Party may disclose those terms
which it is required by regulation or law to disclose, provided that it takes
advantage of all provisions to keep confidential as many terms of this
Agreement as possible; and

15.3.2                  the Party desiring to make any such
public announcement or other disclosure shall inform the other Party of the
proposed announcement or disclosure in reasonably sufficient time prior to
public release, and shall provide the other Party with a written copy thereof,
in order to allow such Party to comment upon such announcement or disclosure in
reasonably sufficient time prior to public release, and shall provide the other
Party with a written copy thereof, in order to allow such Party to comment upon
such announcement or disclosure.  Each
Party agrees that it shall cooperate fully with the other with respect to all
disclosures regarding this Agreement to the US Securities Exchange Commission,
the UK Stock Exchange and any other comparable body including requests for
confidential information or proprietary information of either party included in
any such disclosure.  The Parties agree
that each shall be entitled from time to time to include the name of other
within a list of licensees under the respective Patent Rights in a public
announcement.

16.          Governing Law and Jurisdiction

16.1                           This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.

16.2                           Any
dispute, controversy or claim arising under, out of or relating to this
agreement and any subsequent amendments of this contract, including, without
limitation, its formation, validity, binding effect, interpretation,
performance, breach or termination, as well as non-contractual claims, shall be
referred to and finally determined by arbitration in accordance with the World
Intellectual Property Organization Arbitration Rules. The arbitral tribunal
shall consist of three arbitrators. The place of arbitration shall be Boston,
Massachusetts if the arbitration is initiated by CAT, and it shall be London,
England if the arbitration is initiated by Dyax.  The language to be used in the arbitral
proceedings shall be English.  The 

 35
 Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omission.
 

 

 

dispute,
controversy or claim shall be decided in accordance with the law of the
Commonwealth of Massachusetts, U.S.A.

17.          Assignment  

17.1                           Subject
to clause 6.9, this Agreement may not be assigned by either Party without the
prior written consent of the other Party, except that either Party may assign
the Agreement to any of its Affiliates or, subject to Clauses 14.5 and 14.6,
either Party may assign this Agreement to a successor in connection with the
merger, consolidation or sale of all or substantially all of its assets or the
portion of its business pertaining to the subject matter of this Agreement with
prompt notice to the other Party of such assignment.  This Agreement shall inure for the benefit of
and be binding on the Parties and their respective lawful successors and
assignees.

18.          Miscellaneous

18.1                           Notices
- All notices, requests, demands and other communications required or permitted
to be given pursuant to this Agreement shall be in writing and shall be deemed
to have been duly given upon the date of receipt if delivered by hand,
recognized international overnight courier, confirmed facsimile transmission,
or registered or certified mail, return receipt requested, postage prepaid to
the following addresses or facsimile numbers:

	
  If to Dyax:

  	
   

  	
  If to CAT:

  
	
   

  	
   

  	
   

  
	
  Dyax Corp.

  	
   

  	
  Cambridge Antibody Technology Group Plc

  
	
  300 Technology
  Square

  	
   

  	
  Milstein Building,

  
	
  Cambridge, MA
  02139

  	
   

  	
  Granta Park, Cambs, CB1 6GH

  
	
  USA

  	
   

  	
  UK

  
	
  Attention:
  Corporate Counsel

  	
   

  	
  Attention: Company Secretary

  
	
  Facsimile: (617)
  225 2501

  	
   

  	
  Facsimile: 01223 471472

  

 

18.2                           Compliance
with Law - Nothing in this Agreement shall be construed so as to require
the commission of any act contrary to law, and wherever there is any conflict
between any provision of this Agreement and any statute, law, ordinance or
treaty, the latter shall prevail, but in such event the affected provisions of
the Agreement shall be conformed and limited only to the extent necessary to
bring it within the applicable legal requirements.

18.3                           Amendment
and Waiver - This Agreement may be amended, supplemented, or otherwise
modified only by means of a written instrument signed by both parties.  Any waiver of any rights or failure to act in
a specific instance shall relate only to such instance and shall not be
construed as an agreement to waive any rights or fail to act in any other
instance, whether or not similar.

 36
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18.4                           Severability
- In the event that any provision of this Agreement shall, for any reason, be
held to be invalid or unenforceable in any respect, such invalidity or
unenforceability shall not affect any other provision hereof, and the parties
shall negotiate in good faith to modify the Agreement to preserve (to the
extent possible) their original intent.

18.5                           Entire
Agreement - This Agreement, [******],
constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements or understandings
between the parties relating to the subject matter hereof.

 37
 Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omission.
 

 

 

IN
WITNESS OF THE ABOVE the Parties have signed this Agreement
on the date written at the head of this Agreement.

	
  SIGNED by

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
  /s/ Diane Mellet

  
	
  for and on
  behalf of

  	
  )

  	
  Director & Authorised Signatory

  
	
  CAMBRIDGE
  ANTIBODY

  	
  )

  	
   

  
	
  TECHNOLOGY
  LIMITED

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
  /s/ Ivana Magovcevic-Liebisch

  
	
  for and on
  behalf of

  	
  )

  	
  General Counsel & Executive Vice President,

  
	
  DYAX
  CORP.

  	
  )

  	
  Corporate Communications

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  

 

 38
 Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omission.

 

 

Schedule
1

Antibody
Phage Display Patents

1.                                       “Single Domain
Ligands, Receptors Comprising said Ligands, Methods for their Production and
Use of Said Ligands and Receptors” PCT/GB89/01344, filed November 13,
1989.

2.             “Co-expression of Heteromeric Receptors” PCT/US90/02890,
filed May 16, 1990.

3.                                       “Method for
Isolating Receptors Having a Preselected Specificity” PCT/US90/02835, filed May
16, 1990.

4.                                       “A new method
for tapping the immunological repertoire” PCT/US90/02836, filed May 16,
1990.

5.                                       “Methods for producing
members of specific binding pairs” PCT/GB91/01134, filed July 10, 1991.

6.                                       “Methods for
producing members of specific binding pairs” PCT/GB92/00883, filed May 15,
1992.

7.             “Treatment of Cell Populations” PCT/GB92/01483, filed
August 10, 1992.

8.                                       “Production of
chimeric antibodies — a combinational approach” PCT/GB92/01755, filed September
23, 1992.

9.                                       “Production of
anti-self antibodies from antibody segment repertoires and displayed on phage”
PCT/GB92/02240, filed December 2, 1992.

10.                                 “Methods for producing
members of specific binding pairs” PCT/GB93/00605, filed March 24, 1993.

11.                                 “SBP members with a
chemical moiety covalently bound within the binding site; production and
selection thereof” PCT/GB94/01422, filed June 30, 1994.

12.                                 “Recombinant Binding
Proteins and peptides” PCT/GB94/02662, filed December 5, 1994.

13.                                 “Labelling and
selection of Specified Binding Molecules” PCT/GB97/01835, filed July 8, 1997.

 Schedule 1-Page 1
  
 Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omission.

 

 

Schedule 2

CAT
Gatekeeping Procedure

For each
Nominated Target (which must be accompanied by a GenBank® accession number or
similar information which uniquely identifies that Nominated Target) submitted
by Dyax under Clause 4.1, CAT will, on a Nominated -Target-by-Nominated -Target
basis, not grant a Product Licence to Dyax, if:

1.                                       CAT
is, at the date of submission of the Target Option Notice by Dyax,
contractually obligated on an exclusive basis in respect of that Nominated
Target with a Third Party pursuant to an agreement with that Third Party which
was entered into prior to 3 January 2003; or

2.                                       CAT
is, at the date of submission of the Target Option Notice by Dyax, engaged in
internal research and/or development with respect to such a Nominated Target (as
can be measured by reliable or verifiable means).

NOTES

1. For
the avoidance of doubt, CAT will not subject any Nominated Target to the CAT
Gatekeeping Procedure unless and until Dyax supplies CAT with a GenBank®
accession number or similar information which uniquely identifies that
Nominated Target.

2. If
Dyax supplies CAT with an incorrect GenBank® accession number for a Nominated
Target or otherwise incorrectly identifies a Nominated Target which is then
subjected to the CAT Gatekeeping Procedure, the result of the CAT Gatekeeping
Procedure in respect of such Nominated Target shall prevail even if it is
subsequently discovered that such incorrect GenBank® accession number or
identifying information had been provided by Dyax.

3. Within
one (1) month after notice is given to Dyax of a refusal by CAT to grant a
Product Licence in respect of any Nominated Target, Dyax may notify CAT that it
wishes to appoint an Expert to make such enquiries of CAT as may be reasonably
necessary for the Expert to be able to confirm to Dyax that the CAT Gatekeeping
Procedure had been correctly applied by CAT in respect of such Nominated
Target.  CAT shall provide such
information to the Expert as the Expert may reasonably determine is required in
order to make such confirmation.  For the
avoidance of doubt the Expert shall not be entitled (unless CAT consents) to
enter CAT premises in order to carry out its enquiries, shall only provide the
confirmation to Dyax on a “Yes/No” basis and shall not give or be obliged to
give to Dyax any other information obtained from CAT in respect of the CAT
Gatekeeping Procedure or the relevant Nominated Target.  The Expert shall, prior to making any
enquiries of CAT, enter into a confidential disclosure agreement with CAT.  Notwithstanding the foregoing, CAT shall not
be obliged to respond to the enquiries of the Expert if to do so would, or
would reasonably be expected to, cause a breach in terms of any agreement CAT
may have with any other Third Parties; provided, however, that such disclosure subject
to the confidential disclosure agreement shall be treated by CAT in the same
manner as disclosure in its normal business operations. The Expert shall
complete its investigations and provide the confirmation to Dyax (with a copy
to CAT) within thirty (30) days 

 Schedule 2 - Page 1
  
 Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omission.
 

 

 

after
appointment by Dyax, and payment of the Expert’s fee shall be conditioned on
such delivery being timely made.  If such
written confirmation is not made within such thirty (30) days period, then a
replacement Expert shall be appointed within 10 days thereafter, subject to
same terms and conditions stated above. 
If an Expert provides notice that he or she cannot complete the analysis
because CAT has failed without good reason to provide any information requested
as provided above, then CAT shall have no more than 30 days to provide the
information and the Expert shall then have no more than 15 days after the
information is provided to the Expert to evaluate the information and make a
determination.  Failure of the second
Expert to provide such written confirmation to Dyax on a “Yes/No” basis within
thirty (30) days after appointment shall be irrevocably deemed to be
confirmation that CAT correctly applied the CAT Gatekeeping Procedure to the
Nominated Target in question, provided, however that until (i) CAT provides all
information that it is required to provide in accordance with this Schedule 2
and (ii) the expiration of any extension required for the Expert to evaluate
such information, there shall not be deemed to be any such confirmation that
CAT correctly applied the CAT Gatekeeping Procedure to the Nominated Target in
question.

If the
Expert appointed by Dyax hereunder decides that CAT correctly applied, or is
deemed to have correctly applied, the CAT Gatekeeping Procedure, Dyax shall be
responsible for the Expert’s fees and CAT shall thereafter have no obligations
to Dyax in respect of such Nominated Target. 
If the Expert decides that CAT did not correctly apply the CAT
Gatekeeping Procedure Dyax shall be granted a Product Licence in relation to
the Nominated Target in question (provided that CAT is not restricted by
obligations to any Third Party in relation to the Nominated Target in question
in which case the Product Licence will be subject to those restrictions) and
CAT shall be responsible for the Expert’s fees. 
“Expert”  shall mean a  patent agent who is independent of CAT and
all of the other parties with an interest in the outcome of a determination
regarding a Nominated Target, who has suitable knowledge and experience in the
reasonable opinion of Dyax to perform the above activities, subject to CAT’s
consent, which consent shall not be unreasonably withheld or delayed.

 Schedule 2 - Page 2
  
 Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omission.

 

 

Schedule 3

CAT Know-How

[******]

 Schedule 3 - Page 1
 Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omission.

 

 

 

Schedule 4

 

Competing Antibody Companies

 

[******]

 Schedule 4 - Page 1
 Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omission.

 

 

 

Schedule
5

Dyax Patent Rights

	
  Country

  	
   

  	
  Application/

  Patent No.

  	
   

  	
  Filing Date

  	
   

  	
  Patent No.

  	
   

  	
  Issue Date

  	
   

  
	
  US

  	
   

  	
  07/664,989*

  	
   

  	
  3/1/91

  	
   

  	
  5,223,409

  	
   

  	
  6/29/93

  	
   

  
	
  US

  	
   

  	
  9,319

  	
   

  	
  1/26/93

  	
   

  	
  5,403,484

  	
   

  	
  4/4/95

  	
   

  
	
  US

  	
   

  	
  08/057,667

  	
   

  	
  6/18/93

  	
   

  	
  5,571,698

  	
   

  	
  11/5/96

  	
   

  
	
  US

  	
   

  	
  08/415,922

  	
   

  	
  4/3/95

  	
   

  	
  Allowed

  	
   

  	
   

  	
   

  
	
  US

  	
   

  	
   

  	
   

  	
  12/18/97

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PCT

  	
   

  	
  US89/03731

  W09002809 (pub)

  	
   

  	
  9/1/89

  3/22/90

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EPO

  	
   

  	
  89/910702.3

  EP436597 (pub)

  	
   

  	
  9/1/89

  7/17/91

  	
   

  	
  436,597

  	
   

  	
  4/2/97

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EPO div

  	
   

  	
  96/112867.5

  	
   

  	
  8/9/96

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Japan

  	
   

  	
  89510087

  JP4502700 (pub)

  	
   

  	
  9/1/89

  5/21/92

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Canada

  	
   

  	
  610,176

  	
   

  	
  9/1/89

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ireland

  	
   

  	
  IR89/2834

  	
   

  	
  9/4/89

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Israel (& divs)

  	
   

  	
  91501

  	
   

  	
  9/1/89

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PCT

  	
   

  	
  US92/01456

  W09215677 (pub)

  	
   

  	
  2/27/92

  9/17/92

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EPO

  	
   

  	
  92/908057.0

  	
   

  	
  2/27/92

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Canada

  	
   

  	
  2105300

  	
   

  	
  2/27/92

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Japan

  	
   

  	
  92507558

  	
   

  	
  2/27/92

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PCT

  	
   

  	
  US92/01539

  W09215679 (pub)

  	
   

  	
  2/28/92

  9/17/92

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EPO

  	
   

  	
  92/908799.7

  	
   

  	
  2/28/92

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Canada

  	
   

  	
  2105303

  	
   

  	
  2/28/92

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Japan

  	
   

  	
  92508216

  	
   

  	
  2/28/92

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

CIP of US SN487,063 filed
3/2/90 which is a CIP of US SN240,160 filed 9/2/88

 Schedule 5 - Page 1
 Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

 

 

Schedule 6

 

[NOT USED]

 Schedule 6 - Page 1
 Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

 

 

Schedule 7

 

 

Private &
Confidential

 

 

 

 

DATED AS
OF                              ,
200   

 

 

CAMBRIDGE
ANTIBODY TECHNOLOGY LIMITED   (1)

and

DYAX
CORP.   (2)

 

PRODUCT
LICENCE FOR [    ]

 

 Schedule 7 - Page 1
 Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.

 

 

THIS
AGREEMENT is made as of ____________________, 200___

BETWEEN:

(1)                                  CAMBRIDGE ANTIBODY TECHNOLOGY LIMITED (Registered in England
No. 2451177) whose registered office is at The Milstein Building, Granta Park,
Cambridge, Cambridgeshire, CB1 6GH, UK (“CAT”).

(2)                                  DYAX CORP. a corporation organised and existing under the
laws of the State of Delaware having its principal place of business at 300
Technology Square, Cambridge, Massachusetts 
02139 USA (“Dyax”).

BACKGROUND:

(a)                                  By
the terms of the Amended and Restated Agreement (as defined below), CAT granted
Dyax certain options to be granted Product Licences under the Antibody Phage
Display Patents and CAT Know How (all as defined below).

(b)                                 Dyax
has nominated the Target (which was identified prior to the execution of the
Amended and Restated Agreement), and this Target has passed the CAT Gatekeeping
Procedure (each as defined below).

(c)                                  By
this Agreement CAT wishes to grant to Dyax a Product Licence in respect of
Diagnostic Antibody Products and Therapeutic Antibody Products against the
Target.

In consideration
of the mutual covenants and undertakings set out below, THE PARTIES
AGREE as follows:

1.             Definitions

1.1                                 In
this Agreement, the terms defined in this Clause shall have the meanings
specified below:

“Acceptance
Fee” means [******].

“Additional
Licence Allocation” means the options for licences granted pursuant
to Clause 3.5 of the Amended Agreement.

“Affiliate”
means any company, partnership or other entity which directly or indirectly
Controls, is Controlled by or is under common Control with any other entity.

“Agreement” means this product licence and any and all Schedules,
appendices and other addenda to it as may be amended from time to time in
accordance with the provisions of this agreement.

“Amended Agreement” means
the Amended and Restated Agreement executed by Dyax and CAT on June    , 2006.

 Schedule 7 - Page 2
 Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.
 

 

 

“Antibody” means a molecule or a gene encoding such a molecule
comprising or containing one or more immunoglobulin variable domains or parts
of such domains or any existing or future fragments, variants, modifications or
derivatives thereof.

“Antibody
Library” means any Antibody library constructed using processes
which are covered by a claim of an issued and unexpired patent included within
the Antibody Phage Display Patents which has not been held permanently revoked,
unenforceable or invalid by a decision of a court or other governmental agency
of competent jurisdiction unappealed within the time allowed for appeal, and
which has not been admitted to be invalid or unenforceable through reissue or
disclaimer or otherwise.

“Antibody
Phage Display Patents” means: 
(a) the patents and patent applications listed in Schedule 1 and
any patents issuing from such patent applications, together with any divisions,
registrations, confirmations, reissues, extensions, renewals, continuations,
continuations-in-part, revalidations, additions, substitutions, renewals or
supplementary protection certificates thereof throughout the world; and (b) any
Patent Rights which claim or cover any invention or discovery which is
developed by CAT or its Affiliates at any time during the term of this
Agreement directly related to Antibody phage display or Antibody Services; provided, however, that Antibody Phage Display Patents shall
always exclude (i) CAT Diabodies Patent Rights, (ii) any Patent Rights owned or
controlled by CAT which claim or cover Catalytic Antibodies, (iii) any Patent
Rights owned or controlled by CAT which claim ribosome display technology, (iv)
any Patent Rights which claim Single Domain Antibodies, and (v) any Patent
Rights acquired by CAT after the Commencement Date from any Third Party for
consideration or as a result of CAT’s acquisition of or merger with such Third
Party.

“Antibody
Services” means the provision of research and/or development
services for the identification, generation, derivation or development of one
or more Antibody Libraries or Antibodies derived therefrom.

“Business Day”
means a day (other than a Saturday or Sunday) on which the banks are ordinarily
open for business in the City of London and the Commonwealth of Massachusetts.

“CAT
Diabodies Patent Rights” means (a) the
Patent Rights entitled “Diabodies — multivalent and multispecific binding
proteins, their manufacture and use”, PCT/GB93/02492 and (b) the Patent Rights
entitled “Retargeting antibodies and diabodies”, PCT/GB94/02019.

“CAT
Gatekeeping Procedure” means the procedure set out in Schedule 2
of the Amended Agreement which CAT has carried out in respect of the Target
prior to the grant of this Product Licence.

“CAT Know-How” means any Confidential Information of CAT which constitutes
unpatented know-how, technical and other information related to the subject
matter of the Antibody Phage Display Patents as identified in Schedule 2
and as amended from time to time in accordance with Schedule 2.

“CAT
Licensable Antibody” means any Antibody to the Target (a) where such
Antibody has been identified, generated, developed, produced or derived by Dyax
or a Dyax Sublicensee or its sublicensees and (b) the identification,
generation, development, production or derivation of such Antibody uses any of
the processes claimed or covered by a claim of an issued and unexpired patent
included within the 

 Schedule 7 - Page 3
 Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.
 

 

 

Antibody Phage Display
Patents (which has not been held permanently revoked, unenforceable or invalid
by a decision of a court or other governmental agency of competent jurisdiction
unappealed within the time allowed for appeal, and which has not been admitted
to be invalid or unenforceable through reissue or disclaimer or otherwise) or
uses the CAT Know-How and (c) which is potentially useful for the development
of any Diagnostic Antibody Product and/or any Therapeutic Antibody Product.

“Catalytic
Antibodies” means solely
those Antibodies which bind to and catalyze the chemical transformation of a
substrate and in which an Antibody binding region is involved in said
catalysis.

“Commencement
Date” means the date of this Agreement first written above.

“Competent
Authority” means any national or local agency, authority,
department, inspectorate, minister, ministry official, parliament or public or
statutory person (whether autonomous or not) of any government of any country
having jurisdiction over either any of the activities contemplated by this
Agreement or the Parties including the European Commission, the Court of First
Instance and the European Court of Justice.

“Controls”
means the ownership, directly or indirectly, of more than fifty percent (50%)
of the outstanding equity securities of a corporation which are entitled to
vote in the election of directors or a more than fifty percent (50%) interest
in the net assets or profits of an entity which is not a corporation.

“Diagnostic
Antibody Product” means any preparation in the form of a device,
compound, kit or service with utility in the diagnosis, prognosis, prediction
or disease management of a disorder for any indication which contains,
comprises or the process of development or manufacture of which utilises a CAT
Licensable Antibody.  The term “Diagnostic
Antibody Product” shall not include any Research Product,

“Dyax
Therapeutic Antibody Product” means any Therapeutic Antibody Product
identified, generated or derived by Dyax for itself or its Affiliates but not a
Therapeutic Antibody Product identified, generated or derived by Dyax for, or
on behalf of, a Third Party.

“Dyax Sublicensee”
means any sublicensee of Dyax under this Agreement.

“Exploit”
means to make, have made, use, sell or import.

“FDA”
means the United States Food and Drug Administration, the equivalent Competent
Authority in any country of the Territory or any successor bodies thereto.

“First
Commercial Sale” means the first commercial sale of any Product by
Dyax or a Dyax Sublicensee (or its sublicensee) in any country after grant of a
Marketing Authorisation.

“Force
Majeure” means any event outside the reasonable control of either
Party affecting its ability to perform any of its obligations (other than
payment) under this Agreement, including Act of God, fire, flood, lightning,
war, revolution, act of terrorism, riot or civil commotion, but excluding
strikes, lock-outs or other industrial action, whether of the affected Party’s
own employees or others, failure of supplies of power, fuel, transport,
equipment, raw materials or other goods or services.

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“GAAP”
means United States generally accepted accounting principles, consistently
applied.

“IDE” means an Investigational Device Exemption application, as
defined in Title 21 of the United States Code of Federal Regulations, filed
with the FDA or an equivalent foreign filing.

“IND” means an Investigational New Drug Application, as defined
in Title 21 of the United States Code of Federal Regulations, that is required
to be filed with the FDA before beginning Phase I Clinical Trials of any Therapeutic
Antibody Product in human subjects, or an equivalent foreign filing.

“Major Market”
means any one of the following:  (i) the
United States of America, (ii) any country in Europe which is subject to
the Marketing Authorisation procedure of the European Medicines Evaluation
Agency, or (iii) Japan.

“Marketing
Authorisation” means any approval (including all applicable pricing
and governmental reimbursement approvals) required from the FDA or relevant
Competent Authority to market and sell a Product in a particular country.

“Net Sales”
means, with respect to a Product sold by Dyax or a Dyax Sublicensee (or its
sublicensees), the price invoiced by that party to the relevant purchaser (or
in the case of a sale or other disposal otherwise than at arm’s length, the
price which would have been invoiced in a bona fide arm’s length contract or
sale) but deducting the costs of packing, transport and insurance, customs
duties, any credits actually given for returned or defective Products, normal
trade discounts actually given, and sales taxes, VAT or other similar tax
charged on and included in the invoice price to the purchaser.

“Party”
means CAT or Dyax.

“Patent
Rights” means any patent applications and any patents issuing from
such patent applications, author certificates, inventor certificates, utility
certificates, improvement patents and models, and certificates of addition and
all counterparts of them throughout the Territory, including any divisional
applications and patents, filings, renewals, continuations,
continuations-in-part, patents of addition, extensions, reissues,
substitutions, confirmations, registrations, revalidation and additions of or
to any of them, as well as any supplementary protection certificates and
equivalent protection rights in respect of any of them.

“Pharmacia
Agreement” means the agreement between CAT and Pharmacia P-L
Biochemicals Inc.  dated 11 September
1991.

“Pharmacia
P-L Biochemicals Inc.” means
Pharmacia P-L Biochemicals Inc (now known as Amersham Biosciences).

“Phase I
Clinical Trial” means a human clinical trial in any country that is
intended to initially evaluate the safety of an investigational Product in
volunteer subjects or patients that would satisfy the requirements of 21 CFR
312.21(a), or its foreign equivalent and may evaluate the Product’s therapeutic
or antigenic effects.

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“Phase III
Clinical Trial” means a pivotal human clinical trial in any country
the results of which could be used to establish safety and efficacy of a
Product as a basis for a marketing application that would satisfy the
requirements of 21 CFR 312.21(c).

“Primary
Application” means a major application of an Antibody against the
Target as ascertained at the time of assessment using objective and reasonable
scientific and/or commercial criteria, data and/or information.  Primary Application shall not mean any minor
or incidental application.

“Product”
means a Diagnostic Antibody Product or a Therapeutic Antibody Product.

“Product
Licence” means the licence granted to Dyax pursuant to Clause 2 of this
Agreement.

“Quarter”
means each period of three (3) months ending on March 31, June 30, September
30, or December 31 and “Quarterly”
shall be construed accordingly.

“Research
Products” means any
product in relation to which Pharmacia P-L has an exclusive licence from CAT
pursuant to the Pharmacia Agreement.

“Single
Domain Antibodies” means an Antibody containing only a single domain
(heavy or light).

“Status Report” has
the meaning set forth in Clause 4.1.

“Target” means
[        ], as set out in Schedule 3.

“Territory”
means all countries of the world.

“Therapeutic
Antibody Product” means any preparation for the treatment or
prevention of disease, infection or other condition in humans for any
indication which contains, comprises, or the process of development or
manufacture of which utilises, a CAT Licensable Antibody.  The term “Therapeutic
Antibody Product” shall not include any Research Product, “Third Party” means any entity or person other than Dyax, CAT
or their respective Affiliates.

“Valid Claim” means a claim of an issued and unexpired patent included
within the Antibody Phage Display Patents which have been licensed to CAT by
the MRC which has not been held permanently revoked, unenforceable or invalid
by a decision of a court or other governmental agency of competent jurisdiction
unappealed within the time allowed for appeal, and which has not been admitted
to be invalid or unenforceable through reissue or disclaimer or otherwise.

“Year”
means initially the period from the Commencement Date to the end of that
calendar year, and subsequently a calendar year.

1.2                                 The
headings to clauses are inserted for convenience only and shall not affect the
interpretation or construction of this Agreement.

1.3                                 Words
imparting the singular shall include the plural and vice versa.  References to persons include an individual,
company, corporation, firm or partnership.

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1.4                                 The
words and phrases “other”, “including” and “in particular” shall not limit the
generality of any preceding words or be construed as being limited to the same
class as any preceding words where a wider construction is possible.

1.5                                 References
to any statute or statutory provisions of the United Kingdom shall include
(i) any subordinate legislation made under it, (ii) any provision which it
has superseded or re-enacted (whether with or without modification), and (iii)
any provision which subsequently supersedes it or re-enacts it (whether with or
without modification.  References to any
statute or regulation of the United States of America means that statute or
regulation as it may be amended, supplemented or otherwise modified from time
to time, and any successor statute or regulation.

2.             Grant of Product Licence

2.1                                 Subject
to Clause 2.4 below, CAT hereby grants to Dyax and its Affiliates a non-exclusive,
royalty-bearing licence (on the terms of this Agreement) with the right to
sublicense (on the terms of Clause 3) under the Antibody Phage Display Patents
and CAT Know-How to Exploit Products against the Target in the Territory.

2.2                                 The
Product Licence granted under this Agreement is pursuant to Dyax’s exercise of
one (1) option from the Additional Licence Allocation under the Amended
Agreement.

2.3                                 For
the avoidance of doubt, no rights are granted by CAT under this Agreement to
any CAT Diabodies Patent Rights, and any Patent Rights owned or controlled by
CAT which claim Catalytic Antibodies, ribosome display technology, any Patent
Rights which claim Single Domain Antibodies and no rights are granted by CAT in
this Agreement under the Antibody Phage Display Patents to Exploit Research
Products.

2.4                                 This
Product Licence shall come into effect upon the date that the Acceptance Fee is
received by CAT.  The Acceptance Fee
shall not be refundable or creditable against any other sums which may be payable
by Dyax or a Dyax Sublicensee to CAT pursuant to this Agreement.

3.             Sub-Licensing

3.1                                 Dyax
will, if requested by CAT, inform CAT of the identity of all Dyax Sublicensees
(and their sublicensees) in relation to this Agreement.

3.2                                 Dyax
(and where relevant each Dyax Sublicensee) will ensure that any sublicensee (to
which it sublicences its rights in accordance with the terms of this Agreement)
executes a written agreement which requires the sublicensee to abide by the
terms of this Agreement.

3.3                                 Dyax
(and where relevant each Dyax Sublicensee) will be liable for any breach of the
sublicences granted in accordance with Clause 3.2; provided,
however, that Dyax’s liability for such breach by a sublicensee shall be
limited to the amount that has been received or is thereafter received by Dyax
directly or indirectly from such sublicensee pursuant to the sublicense
agreement; and provided, further, that any written

 Schedule 7 - Page 7
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agreement
with a sublicensee shall contain a provision pursuant to which CAT shall be a
third party beneficiary of such sublicence agreement and shall have the right
to enforce (including claim damages as a result of any breach) such sublicence
agreement.  If at any time CAT does have
to enforce its rights under a sublicence agreement Dyax will, if requested by
CAT, supply to CAT  a copy of the
relevant sublicence as soon as possible. 
For the avoidance of doubt, sublicensing by Dyax to a Dyax Sublicensee
is permitted as is sublicensing by a Dyax Sublicensee to a sublicensee.  No further sublicensing of the rights and
obligations under this Agreement is permitted.

4.             Status Report

4.1                                 Dyax
will provide to CAT a brief summary of the status of each Product against the
Target that Dyax or Dyax Sublicensees desire to Exploit under this Agreement (“Status Report”). 
During the Term, Dyax will submit such Status Report to CAT for a
particular Product prior to the time Dyax or Dyax Sublicensees begin the first
human clinical trial with respect to such Product. [******].

5.             Gatekeeping 

The Parties acknowledge
that, as of the Commencement Date, the Target has passed CAT’s Gatekeeping
Procedure under the Amended Agreement.

6.             Consideration

6.1                                 Therapeutic
Antibody Products

6.1.1                        With respect to Therapeutic
Antibody Products, Dyax shall pay to CAT the following payments upon
achievement of the specified milestones by Dyax or a Dyax Sublicensee (or its
sublicensee) for the first Therapeutic Antibody Product to achieve the relevant
milestone:

	
  Initiation of
  first Phase I Clinical Trial

  	
   

  	
  US $[******]

  	
   

  
	
  Initiation of
  first Phase III Clinical Trial

  	
   

  	
  US $[******]

  	
   

  
	
  First filing for
  Marketing Authorisation in one Major Market country

  	
   

  	
  US $[******]

  	
   

  
	
  Marketing Authorisation
  granted in the United States

  	
   

  	
  US $[******]

  	
   

  

 

6.1.2                        With respect to Therapeutic
Antibody Products, Dyax shall pay CAT royalties in an amount equal to [******] percent ([******]%) of
Net Sales of the Therapeutic Antibody Product sold by or on behalf of Dyax or
the Dyax Sublicensee.

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6.2                                 Diagnostic
Products

6.2.1                        With respect to Diagnostic
Antibody Products, Dyax shall pay to CAT the following payments upon
achievement by Dyax or a Dyax Sublicensee (or its sublicensee) of the
milestones set out below.  For the
avoidance of doubt the milestone payments shall be payable in respect of the
first Diagnostic Antibody Product to achieve the relevant milestone:

	
  First filing for Marketing Authorisation in one
  Major Market country

  	
   

  	
  US $[******]

  
	
   

  	
   

  	
   

  
	
  Marketing Authorisation granted in each Major Market
  Country

  	
   

  	
  US $[******]

  

 

6.2.2                        With respect to Diagnostic
Antibody Products, Dyax shall pay CAT royalties on a country-by-country basis
in an amount equal to [******] of Net
Sales of Diagnostic Antibody Products sold by or on behalf of Dyax or any Dyax
Sublicensee.

6.3                                 All
royalties due to CAT pursuant to Clauses 6.1.2 and 6.2.2 shall be payable on a
country-by-country basis until the last Valid Claim expires or ten (10) years
from the date of First Commercial Sale of such Product, whichever occurs later.

7.             Provisions Relating to Payment
of Consideration

7.1                                 All
milestone payments shall be paid by Dyax within [******] days
of the applicable milestone being achieved and no milestone payments shall be refundable
or creditable against any other sum payable by Dyax hereunder for any reason.

7.2                                 Dyax
shall make the payments due to CAT under Clause 6 above in United States
dollars (if Dyax in turn receives payment in dollars) or in pounds sterling (if
Dyax in turn receives payment in pound sterling), or Euros (if Dyax in turn
receives payment in Euros).  Where Dyax
receives payment in a currency other than United States dollars, pounds
sterling or Euros, Dyax will convert the relevant sum into pounds sterling (or
Euros if Euros have replaced pounds sterling at the time of payment).  Dyax will use the conversion rate reported in
the Financial Times two (2) Business Days before the day on which Dyax pays
CAT.  Such payment will be made without
deduction of exchange, collection or other charges.  All payments will be made at Quarterly
intervals.  Within [******] days
of the end of each Quarter after the First Commercial Sale of each Product in
any country, Dyax shall prepare a statement which shall show on a country-by-country
basis for the previous Quarter Net Sales of each Product by Dyax or its
Affiliates and all monies due to CAT based on such Net Sales.  That statement shall include details of Net
Sales broken down to show the country of the sales and the total Net Sales by
Dyax or its Affiliates in such country and shall be submitted to CAT within
such [******] day period together with
remittance of the monies due.  With
respect to Net Sales of a Product by a Dyax Sublicensee (or its sublicensee)
Dyax shall prepare a statement which will include the same information and
remit that statement and any monies due within the same period except with
regard to any Dyax Sublicensee with which Dyax has a licence agreement relating
to the technology of Antibody phage display as of the Commencement Date where
the remittance will be made at 

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Quarterly
intervals within [******] days of the date
royalties are due to Dyax from such existing Dyax Sublicensees.

7.3                                 All
payments shall be made free and clear of and without deduction or deferment in
respect of any disputes or claims whatsoever and/or as far as is legally
possible in respect of any taxes imposed by or under the authority of any
government or public authority.  [******].

7.4                                 Dyax
shall keep and shall procure that its Affiliates and Dyax Sublicensees keep
true and accurate records and books of account containing all data necessary
for the calculation of the amounts payable by it to CAT pursuant to this
Agreement.  Those records and books of
account shall be kept for seven (7) years following the end of the Year to
which they relate.  Upon CAT’s written
request, a firm of accountants appointed by agreement between the Parties or,
failing such agreement within ten (10) Business Days of the initiation of
discussions between them on this point CAT shall have the right to cause an
international firm of independent certified public accountants that has not
performed auditing or other services for either Party or their Affiliates (or,
if applicable, any Dyax Sublicensee with rights to the Product in question)
acceptable to Dyax or the Dyax Sublicensee such acceptance not to be
unreasonably withheld to inspect such records and books of account.  In particular such firm:

7.4.1                        shall be given access to and
shall be permitted to examine and copy such books and records of Dyax and its
Affiliates and Dyax Sublicensees upon twenty (20) Business Days notice having
been given by CAT and at all reasonable times on Business Days for the purpose
of certifying that the Net Sales or other relevant sums calculated by Dyax and
its Affiliates and Dyax Sublicensees during any Year were reasonably
calculated, true and accurate or, if this is not their opinion, certify the Net
Sales figure or other relevant sums for such period which in their judgment is
true and correct;

7.4.2                        prior to any such examination
taking place, such firm of accountants shall undertake to Dyax and its
Affiliates and Dyax’ Sublicensees that they shall keep all information and data
contained in such books and records, strictly confidential and shall not
disclose such information or copies of such books and records to any third
person including CAT, but shall only use the same for the purpose of
calculations which they need to perform in order to issue the certificate to
which this Clause envisages;

7.4.3                        any such access examination and
certification shall occur no more than once per Year and will not go back over
records more than two (2) years old;

7.4.4                        Dyax and its Affiliates and
Dyax Sublicensees shall make available personnel to answer queries on all books
and records required for the purpose of that certification; and

7.4.5                        the cost of the accountant
shall be the responsibility of Dyax if the certification shows it to have
underpaid monies to CAT by more than [******] and the
responsibility of CAT otherwise.

7.5                                 All
payments due to CAT under the terms of this Agreement are expressed to be
exclusive of value added tax (VAT) howsoever arising.  [******].

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7.6                                 All
payments made to CAT under this Agreement shall be made to the bank account of
CAT as notified by CAT to Dyax from time to time.

7.7                                 If
Dyax fails to make any payment to CAT hereunder on the due date for payment,
without prejudice to any other right or remedy available to CAT it shall be
entitled to charge  Dyax interest (both
before and after judgment) of the amount unpaid at the annual rate of LIBOR
(London Interbank Offering Rate) plus [******]
calculated on a daily basis until payment in full is made without prejudice to
CAT’s right to receive payment on the due date.

8.             Confidentiality

8.1                                 With
respect to any confidential information received from the other Party (“Confidential Information”), each
Party undertakes and agrees to:

(a)                                  only
use the Confidential Information for the purposes envisaged under this Agreement
and not to use the same for any other purpose whatsoever;

(b)                                 ensure
that only those of its officers and employees who are directly concerned with
the carrying of this Agreement have access to the Confidential Information on a
strictly “need to know” basis and are informed of the secret and confidential
nature of it;

(c)                                  keep
the Confidential Information secret, confidential, safe and secure and shall
not directly or indirectly disclose or permit to be disclosed the same to any
Third Party, including any consultants or other advisors, without the prior
written consent of the disclosing Party except to the extent disclosure is
necessary in connection with its use as envisaged under this Agreement;

(d)                                 ensure
that the Confidential Information will not be covered by any lien or other
encumbrance in any way, and

(e)                                  not
copy, reproduce or otherwise replicate for any purpose or in any manner
whatsoever any documents containing the Confidential Information except to the
extent necessary in connection with its use as envisaged under this Agreement.

For the avoidance of doubt, the Parties agree that the identity of the
Target, any information related to the Target provided to CAT by Dyax, and the
Status Report is the Confidential Information of Dyax.

8.2                                 The
obligations referred to in Clause 8.1 above shall not extend to any
Confidential Information which:

(a)                                  is
or becomes generally available to the public otherwise than be reason of breach
by a recipient Party of the provision of Clause 8.1;

(b)                                 is
known to the recipient Party and is at its free disposal (having been generated
independently by the recipient Party or a Third Party in circumstances where it
has not been derived directly or indirectly from the disclosing Party’s
Confidential Information prior to its receipt from the 

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disclosing
Party), provided that evidence of such knowledge is furnished by the recipient
Party to the disclosing Party within twenty-eight (28) days of recipient of
that Confidential Information;

(c)                                  is
subsequently disclosed to the recipient Party without obligations of confidence
by a Third Party owing no such obligations to the disclosing Party in respect
of that Confidential Information;

(d)                                 is
required by law to be disclosed (including as part of any regulatory submission
or approval process) and then only when prompt written notice of this
requirement has been given to the disclosing Party so that it may, if so
advised, seek appropriate relief to prevent such disclosure, provided always
that in such circumstances such disclosure shall be only to the extent so
required and shall be subject to prior consultation with the disclosing Party
with a view to agreeing on the timing and content of such disclosure.

8.3                                 No
public announcement or other disclosures to Third Parties concerning the terms
of this Agreement shall be made, whether directly or indirectly, by either
Party (except confidential disclosures to professional advisors) without first
obtaining the approval of the other Party and agreement upon the nature and
text of such announcement or disclosure with the exceptions that:

(a)                                  a
Party may disclose those terms which it is required by regulation or law to
disclose, provided that it takes advantage of all provisions to keep
confidential as many terms of this Agreement as possible; and

(b)                                 the
Party desiring to make any such public announcement or other disclosure shall
inform the other Party of the proposed announcement or disclosure in reasonably
sufficient time prior to public release, and shall provide the other Party with
a written copy thereof in order to allow such Party to comment upon such
announcement or disclosure.  Each Party
agrees that it shall cooperate fully with the other with respect to all
disclosures regarding this Agreement to the U.S. Securities Exchange Commission,
the UK Stock Exchange and any other comparable body including requests for
confidential information or proprietary information of either Party included in
any such disclosure.

9.             Indemnification

9.1                                 Dyax
hereby indemnifies CAT and its Affiliates and their directors, officers,
employees and agents and their respective successors, heirs and assigns (the “CAT Indemnitees”) against any liability, damage, loss or
expense (including attorneys fees and expenses of litigation) incurred by or
imposed upon the CAT Indemnitees or any one of them in connection with any
claims, suits, actions, demands or judgments by or in favour of any Third Party
concerning any manufacture, use or sale of any Product by Dyax or any Dyax
Sublicensee (or their sublicensee). In addition, each Dyax Sublicensee (or
their sublicensee) shall indemnify the CAT Indemnitees against any liability,
damage, loss or expense (including attorneys fees and expenses of litigation)
incurred by or imposed upon the CAT Indemnitees or any one of them in connection
with any claims, suits, actions, demands or judgments by or in favour of any
Third Party concerning any manufacture, use or sale of any Product by such Dyax
Sublicensee (or their sublicensee).

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9.2                                 CAT
shall not be liable to Dyax and Dyax Sublicensee (or its sublicensee) in
respect of any liability, loss, damage or expense (including attorneys fees and
expenses of litigation) incurred or suffered by Dyax and Dyax Sublicensees (or
its sublicensee) in connection with the manufacture, use or sale of any
Products by Dyax and Dyax Sublicensees (or its sublicensee).

9.3                                 CAT
gives no warranty or representation that the Antibody Phage Display Patents
are, or will be, valid or that the exercise of the rights granted under this
Agreement will not result in the infringement of patents of Third Parties.

10.          Infringement and Patent Prosecution

10.1                           Dyax
shall notify CAT promptly of any proceedings or applications for revocation of
any of the Antibody Phage Display Patents emanating from a Third Party that
comes to its notice or if a Third Party takes or threatens to take any
proceedings for infringement of any patents of that Third Party by reason of
Dyax’s use or operation of the Antibody Phage Display Patents or manufacture,
use or sale of the Products.  Dyax shall
notify CAT promptly of any infringement of the Antibody Phage Display Patents
by a Third Party which may come to its attention during the term of the Product
Licence, except Dyax shall have no obligation to so notify CAT with respect to
any infringement by an academic or not-for-profit entity which occurs by reason
of such entity carrying out research activities provided such activities are,
as far as Dyax is aware, not being carried out with a view to commercialising a
product or otherwise for profit.

10.2                           CAT
shall have the sole right and responsibility, at its sole discretion and cost
and with reasonable assistance from Dyax, to file, prosecute and maintain the
Antibody Phage Display Patents and for the conduct of any lawsuits, claims or
proceedings challenging the validity or enforceability thereof including,
without limitation, any interference or opposition proceeding relating thereto
in all countries.  For the avoidance of
doubt, Dyax and Dyax Sublicensees will have the right to conduct any proceedings
relating to its Product including any proceedings relating to product
liability.

11.          Termination

11.1                           Unless
terminated under this Clause 11, this Agreement shall commence on the
Commencement Date and shall terminate, on a country-by-country and Product-by-Product
basis upon the last to expire of claims of an issued and unexpired patent
within the Antibody Phage Display Patents (which has not been held permanently
revoked, unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction unappealed within the time
allowed for appeal, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise) or (b) the date upon
which no payments are due to CAT under Clause 6 of this Agreement, whichever
occurs later.

11.2                           CAT
shall have the right to terminate this Agreement in the event that:

11.2.1                  Dyax or a Dyax Sublicensee (or its
sublicensee) has not filed an IND for a Therapeutic Antibody Product, or a
510(k) or IDE for a Diagnostic Antibody Product within [******] after
the Commencement Date; provided however, that Dyax shall have the right to
extend such period in annual increments by up to[******],
upon the following terms:

 Schedule 7 - Page 13
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  First Annual Extension

  	
   

  	
  $[******]

  
	
   

  	
   

  	
   

  
	
  Second Annual Extension

  	
   

  	
  $[******]

  

 

In
order for Dyax to be granted an extension under this Clause 11.2.1, the
foregoing amounts must be received by CAT prior to the date of expiration.  All amounts received by CAT under this Clause
11.2.1 will be credited against any milestones and royalties that would
otherwise be due to CAT under the terms of the Product License; or

11.2.2                  Dyax or a Dyax Sublicensee (or its
sublicensee) directly or indirectly opposes or assists any Third Party to
oppose the grant of letters patent or any patent application within the
Antibody Phage Display Patents, or disputes or directly or indirectly assists
any Third Party to dispute the validity of any patent within the Antibody Phage
Display Patents or any of the claims thereof.

11.3                           In
the event that either Party commits a material breach of any of its material
obligations with respect to this Agreement, and such Party fails to remedy that
breach within ninety (90) days after receiving written notice thereof from the
other Party, that other Party may immediately terminate this Agreement upon
written notice to the breaching Party.

11.4                           Either
Party may terminate this Agreement in its entirety by giving notice in writing
to the other Party if any one or more of the following events happens:

(a)                                  the
other Party has any distress or execution levied on the major portion of its
assets (as determined by its balance sheet in accordance with GAAP) which is
not paid out within thirty (30) days of its being levied;

(b)                                 the
other Party calls a meeting for the purpose of passing a resolution to wind it
up, or such a resolution is passed, or the other Party presents, or has
presented, a petition for a winding up order, or presents, or has presented, a
petition to appoint an administrator, or has an administrative receiver, or
receiver, liquidator or other insolvency practitioner appointed over all or any
substantial part of its business, undertaking, property or assets;

(c)                                  the
other Party stops or suspends making payments (whether of principal or
interest) with respect to substantially all of its debts or announces an
intention to do so or the other Party suspends or ceases to carry on its
business;

(d)                                 a
secured lender to the other Party holding a security interest over the major
portion of the tangible assets (as determined by its balance sheet in
accordance with GAAP) of such other Party takes any steps to obtain possession
of the property on which it has security or otherwise to enforce its security;

(e)                                  the
other Party suffers or undergoes any procedure analogous to any of those
specified in Clause 11.4(a)-(d) above or any other procedure available in the
country in which the other Party is constituted, established or domiciled
against or to an insolvent debtor or available to the creditors of such a
debtor.

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12.          Consequences of Termination

12.1                           Upon
termination of this Agreement for any reason whatsoever:

(a)                                  the
relationship of the Parties hereunder shall cease save as (and to the extent)
expressly provided for in this Clause 12;

(b)                                 any
sublicenses granted by Dyax in accordance with the terms of this Agreement will
continue in force provided that such sublicensees are not in breach of the
relevant sublicense and that each sublicensee agrees to enter into a direct
agreement with CAT upon the terms of this Agreement;

(c)                                  Dyax
shall immediately return or procure to be returned to CAT at such place as it
directs and at the expense of Dyax (or if CAT so requires by notice to Dyax in
writing, destroy) all CAT Know-How together with all copies of such CAT
Know-How in its possession or under its control;

(d)                                 The
following provisions shall survive expiration or termination of this Agreement:
Clauses 7 (in relation to any accrued payment obligations of Dyax prior to termination
or expiry), 8, 9, 12, 13 and 15; and

(e)                                  Expiry
or termination of this Agreement shall not affect the rights and obligations of
the Parties accrued prior to such expiry or termination including any accrued
obligation for Dyax to make any payments under Clause 6.

13.          Dispute Resolution

13.1                           Any
dispute arising between the Parties relating to, arising out of or in any way
connected with this Agreement or any term or condition thereof, or the
performance by either Party of its obligations hereunder, whether before or
after termination of this Agreement, shall be referred to the Chief Executive
Officers of each of the Parties.  The
Chief Executive Officers shall meet to resolve such deadlock within thirty (30)
days of the date that the dispute is referred to them, at a time and place
mutually acceptable to them.  Any dispute
that has not been resolved following good faith negotiations of the Chief
Executive Officers for a period of thirty (30) days shall be referred to and
finally settled by binding arbitration in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association.  There shall be three (3) arbitrators, each
Party to designate one arbitrator and the two Party-designated arbitrators to
select the third arbitrator.  The Party
initiating recourse to arbitration shall include in its notice of arbitration
its appointment of an arbitrator.  The
appointing authority, in the event a Party does not or the Parties do not
appoint arbitrator(s), shall be the American Arbitration Association in [******].  The place
of arbitration shall be [******]. The
language to be used in the arbitration shall be English.  Any determination by the arbitration panel
shall be final and conclusively binding. 
Judgement on any arbitration award may be entered in any court having
jurisdiction thereof.  Each Party shall
bear its own costs and expenses incurred in the arbitration; provided that the
arbitration panel may assess the costs and expenses of the prevailing Party,
including reasonable attorneys fees, against the non-prevailing Party.

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14.          Notices

14.1                           All
notices, requests, demands and other communications required or permitted to be
given pursuant to this Agreement shall be in writing and shall be deemed to
have been duly given upon the date of receipt if delivered by hand, recognized
international overnight courier, confirmed facsimile transmission, or
registered or certified mail, return receipt requested, postage prepaid to the
following addresses or facsimile numbers:

	
  If to Dyax:

  	
   

  	
  If to CAT:

  
	
   

  	
   

  	
   

  
	
  Dyax Corp.

  	
   

  	
  Cambridge Antibody Technology Limited

  
	
  300 Technology Square

  	
   

  	
  The Milstein Building

  
	
  Cambridge, MA 02139

  	
   

  	
  Granta Park, Cambridge

  
	
  Attention: Chief Executive Officer

  	
   

  	
  Cambridgeshire CB1 6GH

  
	
  Facsimile: (617) 225-2501

  	
   

  	
  United Kingdom

  
	
  Attention: Company Secretary

  	
   

  	
  Facsimile: 011-44-(0)1223 471472

  

 

Either party may change its designated address and
facsimile number by notice to the other party in the manner provided in this Clause.

15.          Governing Law

15.1                           This
Agreement shall be governed by and construed in accordance with the laws of [******].

15.2                           Save
as provided in this Clause, the United Kingdom Legislation entitled the
Contracts (Rights of Third Parties) Act 1999 will not apply to this
Agreement.  No person, other than a CAT
Indemnitee (as defined in Clause 9.1), who is not a Party to this Agreement
(including any employee, officer, agent, representative or subcontractor of
either Party) will have the right (whether under the Contracts (Rights of Third
Parties) Act 1999 or otherwise) to enforce any term of this Agreement which
expressly or by implication confers a benefit on that person without the
express prior agreement in writing of the Parties which agreement must refer to
this Clause, except that any Dyax Sublicensee shall have the right to enforce
the provisions of Clause 12.1(b) of this Agreement and shall be a third party
beneficiary for that purpose only.

16.          Specific Performance

16.1                           The
parties agree that irreparable damage will occur in the event that the
provisions of Clause 8 are not specifically enforced.  In the event of a breach or threatened breach
of any such provisions, each Party agrees that the other Party shall, in
addition to all other remedies, be entitled to temporary or permanent
injunction, without showing any actual damage or that monetary damages would
not provide an adequate remedy and without the necessity of posting any bond,
and/or a decree for specific performance, in accordance with the provisions
hereof.

17.          Assignment

17.1                           This
Agreement may not be assigned by either party without the prior written consent
of the other party, except that either Party may assign the benefit and/or
burden of this Agreement to any Affiliate of it or any 

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Third
Party, provided that such Affiliate or Third Party undertakes to the other
Party to be bound by the terms of this Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties and their respective lawful
successors and assigns.

18.          Compliance With Law

18.1                           Nothing
in this Agreement shall be construed so as to require the commission of any act
contrary to law, and wherever there is any conflict between any provision of
this Agreement and any statute, law, ordinance, or treaty, the latter shall
prevail, but in, such event the affected provisions of the Agreement shall be
conformed and limited only to the extent necessary to bring it within the
applicable legal requirements.

19.          Amendment and Waiver

19.1                           This
Agreement may be amended, supplemented, or otherwise modified only by means of
a written instrument signed by both parties. 
Any waiver of any rights or failure to act in a specific instance shall
relate only to such instance and shall not be construed as an agreement to
waive any rights or fail to act in any other instance, whether or not similar.

20.          Severabi1ity

20.1                           In
the event that any provision of this Agreement shall, for any reason, be held
to be invalid or unenforceable in any respect, such invalidity or
unenforceability shall not affect any other provision hereof and the parties
shall negotiate in good faith to modify the Agreement to preserve (to the
extent possible) their original intent.

21.          Entire Agreement

21.1                           This
Agreement and the Amendment Agreement constitute the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior
agreements or understandings between the parties relating to the subject matter
hereof.

IN WITNESS OF THE ABOVE the Parties have signed this Agreement on the
date written at the head of this Agreement.

	
  SIGNED by

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
  General Counsel & Authorised Signatory

  
	
  CAMBRIDGE ANTIBODY

  	
  )

  	
   

  
	
  TECHNOLOGY LIMITED

  	
  )

  	
   

  

 

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  SIGNED by

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
  Senior Vice President &

  
	
  DYAX CORP.

  	
  )

  	
  Authorised Signatory

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  

 

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Schedule 8

Co Development Agreement

THIS
CO-DEVELOPMENT AGREEMENT (this “Agreement”), effective as of
            ,
         (the “Effective Date”),
is between DYAX CORP., a
Delaware corporation, having a principal place of business at 300 Technology
Square, Cambridge, Massachusetts 02139 USA (“Dyax”) and CAMBRIDGE ANTIBODY TECHNOLOGY LIMITED, (Registered in
England No. 2451177), whose registered office is at The Milstein Building,
Granta Park, Cambridge, Cambridgeshire, CB1 6GH 
UK (“CAT”).  Each of Dyax and
CAT are referred to hereinafter as a “Party” or collectively as the “Parties”.

RECITALS

A.            The Parties entered into a license
agreement dated 31 December 1997 related to therapeutic products (“Therapeutic Product License Agreement”) pursuant
to which Dyax licensed certain patent rights to CAT for human or non-human
therapeutics.

B             The Parties entered into an
Amendment Agreement dated January 3, 2003 (“Amendment Agreement”)
pursuant to which the Parties amended certain provisions of the Therapeutic
Product License Agreement, and CAT licensed certain patent rights to Dyax and
granted Dyax the option to enter into certain Product Licenses (as defined in
the Amendment Agreement) for therapeutic and diagnostic products.  The Parties entered into a second amendment
agreement dated 18 September 2003.  The
Parties consolidated the Therapeutic Product License Agreement, the Amendment
Agreement and the second amendment agreement into one amended and restated
licence agreement (“Amended and Restated Licence”) dated [                    ].

C.            Pursuant to Article 11 of the
Amended and Restated Licence, CAT has an exclusive option to enter into a
co-development agreement with Dyax with respect to certain Dyax Therapeutic
Antibody Products (as defined in the Amended and Restated Licence).

D.            CAT has exercised its option under
the Amended and Restated Licence with respect to the Dyax Therapeutic Antibody
Product identified on Exhibit A, and the Parties mutually desire to
co-develop and co-commercialize such product pursuant to the terms and
conditions of this Agreement.

NOW, THEREFORE, in
consideration of the mutual covenants set forth in this Agreement, the parties
hereby agree as follows:

ARTICLE
1.  DEFINITIONS

For purposes of
this Agreement, the terms defined in this Article shall have the meanings
specified below:

1.1                                “Affiliate”
shall have the same meaning ascribed to such term in the Amended and Restated
Licence.

1.2                                “CAT
Co-Development Activities” shall have the meaning set forth in Clause
2.2(b) hereof.

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1.3                                “CAT
Co-Development Product Patent Rights” means any Patent Rights owned or
controlled by CAT that cover the making, using, selling or importing of the
Co-Development Product including, without limitation, any Patent Rights
claiming CAT Inventions.

1.4                                “CAT
Co-Development Product Technology” means any proprietary inventions
(including CAT Inventions) compositions of matter, devices, methods, processes,
formulas, protocols, techniques, trade secrets, other proprietary capabilities,
copyrightable material, know-how, data, information and other intellectual
property of any kind (including without limitation any proprietary biological
or other materials, compounds or reagents and computer software) that cover the
making, using, selling or importing of the Co-Development Product, but not
including any CAT Co-Development Patent Rights.

1.5                                “CAT
Territory” means (a) the European Union, and (b) any other country or
region of the world, if any, for which CAT, as determined by the Steering
Committee, will have primary responsibility for Marketing the Co-Development
Product.

1.6                                “Co-Development
Activities” means the Dyax Co-Development
Activities and/or the CAT Co-Development Activities.

1.7                                “Co-Development
Costs” means all variable costs and fixed costs properly incurred by Dyax
in the performance of the Dyax Co-Development Activities, all variable costs
and fixed costs properly incurred by CAT in the performance of the CAT
Co-Development Activities, and any Third Party License Costs.  Co-Development Costs include, by way of
example and without limitation, costs for the Co-Development Product incurred
in (a) conducting clinical trials including costs of clinical laboratory, data
management, toxicology and contract research organization services, (b)
obtaining regulatory approval, (c) manufacturing the Co-Development Product,
(d) prosecuting and maintaining any Patent Rights covering the Co-Development
Product, and (e) conducting marketing, distribution and sales efforts including
performing market research.

For purposes of
this definition, “variable costs” shall be deemed to be the cost of
labor, raw materials, supplies and other resources directly consumed in a Party’s
performance of its Co-Development Activities. 
For purposes of this definition, “fixed costs” shall be deemed to
be the cost of facilities, utilities, insurance, facility and equipment
depreciation and other fixed costs directly related to a Party’s performance of
its Co-Development Activities, allocated based upon the proportion of such
costs directly attributable to support of the Co-Development Activities or by
such other method of cost allocation as may be approved by the Steering
Committee.  All cost determinations made
hereunder shall be made in accordance with GAAP.

1.8                                “Co-Development
Plan” means the plan for the performance of development and
commercialization activities by the Parties in the Field, as may be amended
from time to time by the Steering Committee, which plan, including all
amendments, shall be attached hereto as Exhibit B.

1.9                                “Co-Development Product” means the Option Product (as
defined in Clause 11.2.2 of the Amendment Agreement), for which Dyax has
exercised its option as provided in Clause 11.2 of the Amendment Agreement and
which is identified on Exhibit A hereto.

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1.10                          “Commercially
Reasonable and Diligent Efforts” means those efforts and the deployment of
resources consistent with the exercise of reasonable and prudent scientific and
business judgment, as applied to other pharmaceutical products of similar
potential, characteristics and market size by the Party in question.

1.11                          “Direct
Costs” means the variable costs and fixed costs properly incurred with
respect to the work performed in connection with the development of any
Co-Development Product , including, without limitation (a) costs of studies
conducted and services provided by contract research organisations and
individuals, consultants, toxicology contractors, (b) any costs associated with
securing the right to use any intellectual property rights owned by a Third
Party, (c) costs relating to data management, (d) costs for preparing,
submitting and reviewing or developing data or information for the purpose of
an IND, IDE or other regulatory filing, and (e) any other direct costs
including out of pocket external costs. 
For the purpose of this definition, “variable costs” shall be
deemed to be the cost of labor, raw materials, supplies and other resources
directly consumed in the development of the Co-Development Product, and “fixed
costs” shall be deemed to be the costs of facilities, utilities, insurance,
facility and equipment depreciation and other fixed costs directly related to
the development of the Co-Development Product allocated based upon the
proportion of such costs directly attributable to support the development of
the Co-Development Product.  All cost
determinations shall be made in accordance with GAAP.

1.12                          “Dyax
Co-Development Activities” shall have the meaning set forth in Clause
2.2(a) hereof.

1.13                          “Dyax
Co-Development Product Patent Rights” means any Patent Rights owned or
controlled by Dyax that cover the making, using, selling or importing of the
Co-Development Product including, without limitation, any Patent Rights
claiming Dyax Inventions.

1.14                          “Dyax
Co-Development Product Technology” means any proprietary inventions
(including Dyax Inventions) compositions of matter, devices, methods,
processes, formulas, protocols, techniques, trade secrets, other proprietary
capabilities, copyrightable material, know-how, data, information and other
intellectual property of any kind (including without limitation any proprietary
biological or other materials, compounds or reagents and computer software)
that cover the making, using, selling or importing of the Co-Development
Product, but not including any Dyax Co-Development Patent Rights.

1.15                          “Dyax
Territory” means (a) the United States of America, (b) Canada, and (c) any
other country or region of the world, if any, for which Dyax, as determined by
the Steering Committee, will have primary responsibility for Marketing the
Co-Development Product.

1.16                          “Field”
means the field of human and non-human therapeutic products.

1.17                          “First
Commercial Sale” means the first commercial sale of the Co-Development
Product by CAT, Dyax or their Affiliates (or in the case of Dyax, its
licensees) in any country after grant of a Marketing Authorisation (as defined
in the Amended and Restated Licence).

1.18                          “GAAP”
means United States generally accepted accounting principles, consistently
applied.

1.19                          “IND”
shall have the same meaning ascribed to such term in the Amended and Restated
Licence.

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1.20                          “Invention”
means any invention, discovery, or idea (whether or not patentable) which is
conceived or reduced to practice, solely by or on behalf of either Party or
jointly by or on behalf of the Parties during performance of the Co-Development
Activities.

1.21                          “Marketing”
means, with respect to the Co-Development Product, the activities of each Party
in the marketing, distribution and sales of the Co-Development Product in such
Party’s territory, including, without limitation, performing market research,
post-marketing studies, advertising, producing and distributing promotional
materials, searching for trademarks and filing for trademark protection,
sponsoring seminars and symposia, sales training meetings and seminars,
originating sales, and providing reimbursement and other patient support
services.

1.22                          “Marketing
Party” means Dyax with respect to the Dyax Territory, and CAT with respect
to the CAT Territory.

1.23                          “Net
Profits or Losses” means, with respect to the Co-Development Product, Net
Sales of such Co-Development Product by a Party or its Affiliates (or in the
case of Dyax, its licensees) less the
Co-Development Costs allocable to such Co-Development Product; provided that in
no event shall any amounts deducted from the invoice price for the purpose of
calculating Net Sales also be counted toward the amount of Co-Development
Costs.  To the extent Net sales exceeds
Co-Development Costs for the relevant period, such amount of difference shall
be deemed “Net Profits,” and to the extent that Co-Development Costs
exceed Net Sales for the relevant period, such amount of difference shall be
deemed “Net Losses.”

1.24                          “Net
Sales” means, with respect to the Co-Development Product sold by CAT, Dyax
or their Affiliates (or in the case of Dyax, its licensees), the price invoiced
by that party to the relevant purchaser (or in the case of a sale or other
disposal otherwise than at arm’s length, the price which would have been
invoiced in a bona fide arm’s length contract or sale) but deducting the costs
of packing, transport and insurance, customs duties, any credits actually given
for returned or defective Co-Development Product, normal trade discounts
actually given, and sales taxes, VAT or other similar tax charged on and included
in the invoice price to the purchaser. 
Net Sales shall also include the fair market value of any other
consideration (whether in cash, payment in kind, exchange or other form)
actually received by a Party or its Affiliates (or in the case of Dyax, its
licensees) from Third Parties with respect to transactions involving the
development or commercialization of the Co-Development Product, to the extent
such consideration is fairly and reasonably attributable to such Co-Development
Product.

1.25                          “Patent
Rights” shall have the same meaning
ascribed to such term in the Amended and Restated Licence.

1.26                          “Phase
I Clinical Trial”, “Phase II Clinical Trial” and “Phase III
Clinical Trial” shall have the same meaning as ascribed to such terms in
the Amendment Agreement.

1.27                          “Regulatory
Approval” means any approvals (including pricing and reimbursement
approvals), licenses, registrations or authorizations of any federal, state or
local regulatory agency, department, bureau or other governmental entity,
necessary for the sale of a Co-Development Product in a Regulatory
Jurisdiction.

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1.28                          “Regulatory
Jurisdiction” means any government or governmental unit which has authority
to regulate the sale or use of a Co-Development Product in any territory.

1.29                          “Steering
Committee” means the committee established pursuant to Clause 3.1 hereof.

1.30                          “Third
Party” means any individual or entity other than Dyax or CAT or their
respective Affiliates.

1.31                          “Third
Party License Costs” means (a) all payments (including license fees,
milestones and royalties) due to any licensor of Dyax or CAT (including Medical
Research Council) as consideration for the grant of rights to Dyax or CAT under
any intellectual property rights, including Patent Rights, for the
Co-Development Product, and (b) all costs as set forth in Clause 5.2 hereof.

The above
definitions are intended to encompass the defined terms in both the singular
and plural forms.

ARTICLE
2.  CO-DEVELOPMENT BY THE PARTIES

2.1                                Co-Development
Plan.  The initial Co-Development
Plan shall be approved by the Steering Committee within sixty (60) days after
the Effective Date and shall be attached hereto as Exhibit B.  The Co-Development Plan shall describe the
comprehensive worldwide development plan and budget for the Co-Development Product
in the Field, including, without limitation, the overall plan for clinical
trials, regulatory approvals and commercialization activities, and shall be
consistent with Clause 2.2 below.  As
part of the budget, the Steering Committee shall agree on an annual budget for
development and Marketing of the Co-Development Product in the CAT Territory
and Dyax Territory, and, neither CAT nor Dyax shall expend Co-Development Costs
for development and Marketing in excess of [******] of the
amount budgeted, without the prior written approval of the Steering Committee.

2.2                                Co-Development
Activities.   

(a)                                  Dyax.  Dyax shall be responsible for, and shall use
Commercially Reasonable and Diligent Efforts in carrying out, the following
activities in furtherance of the co-development and co-commercialization of the
Co-Development Product (the “Dyax Co-Development Activities”):

conducting and managing
any Phase I Clinical Trials, Phase II Clinical Trials and Phase III Clinical
Trials of the Co-Development Product worldwide;

manufacturing or having
manufactured by a Third Party the Co-Development Product;

marketing the
Co-Development Product in the Dyax Territory;

prosecuting, maintaining
and enforcing the Dyax Co-Development Product Patent Rights in accordance with
Clauses 5.3 and 5.4 below;

cooperating with and
providing reasonable support to CAT in CAT’s performance of the CAT
Co-Development Activities; and

performing any other
activities or duties as may be assigned to Dyax by the Steering Committee.

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(b)                                 CAT.  CAT shall be responsible for, and shall use
Commercially Reasonable and Diligent Efforts in carrying out, the following
activities in furtherance of the co-development and co-commercialization of the
Co-Development Product (the “CAT Co-Development Activities”):

marketing the
Co-Development Product in the CAT Territory;

cooperating with and
providing reasonable support to Dyax in Dyax’s performance of the Dyax
Co-Development Activities; and

performing any other
activities or duties as may be assigned to CAT by the Steering Committee.

2.3                                Regulatory
Approvals.

(a)                                  Steering
Committee Determination.  The
Steering Committee shall determine which Party shall be responsible for
preparing, submitting and obtaining Regulatory Approvals in each country or
territory.  The Parties shall consult and
cooperate in preparing any common technical documents that may be necessary or
desirable to facilitate compliance with applicable regulatory requirements or
to seek Regulatory Approvals in each Party’s territory.

(b)                                 Regulatory
Communications.  To the extent that
either Party receives a written or material oral communication from any
Regulatory Jurisdiction relating to the Co-Development Product, the Party
receiving such communication shall notify the other Party and provide a copy of
any written communication and records of any verbal communication as soon as
reasonably practicable or at a time interval agreed to by the Parties.

(c)                                  Complaints.  Each Party shall maintain a record of all
non-medical and medical product related complaints it receives with respect to
any Co-Development Product.  Each Party
shall notify the other Party of any complaint received by it in sufficient
detail and within five (5) days after the event, and in any event in sufficient
time to allow the responsible Party to comply with any and all regulatory
requirements imposed upon it in any country. 
The Marketing Party for the Co-Development Product in a particular
country, in cooperation with the other Party to the extent necessary, shall
investigate and respond to all such complaints in such country as soon as
reasonably practicable.  The Party
responsible for responding to such complaint shall promptly provide the other
Party a copy of any such response.

(d)                                 Adverse
Drug Events.  As required under applicable regulatory
requirements, each Party shall submit any necessary adverse event
information and file reports to various governmental agencies on compounds
under clinical investigation, compounds proposed for marketing, or marketed
drugs in accordance with applicable regulatory requirements.  Each Party shall promptly provide the other
Party a copy of any such adverse drug experience reports and, in the case of
serious adverse events, notice thereof shall be provided to the other Party
within twenty-four (24) hours of receiving notification of the event.

(e)                                  Recalls.
The Parties shall use good faith and Commercially Reasonable and Diligent
Efforts to coordinate any decision making with respect to issuing a recall,
market withdrawal or correction of 

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any Co-Development
Product in either Party’s territory. 
Each Party shall notify the other Party promptly (and in any event
within three (3) business days of receipt of written notice) if any
Co-Development Product is alleged or proven to be the subject of a recall, market
withdrawal or correction in any country in the either Party’s territory.  The Parties shall cooperate in the handling
and disposition of such recall, market withdrawal or correction with respect to
a Co-Development Product in either Party’s territory, provided that the
Marketing Party shall have responsibility for managing any recalls in its
territory.

2.4                                Diligence.  As a condition for CAT maintaining its right
to co-develop and co-commercialize the Co-Development Product in the Field and
in the CAT Territory and for Dyax maintaining its right to co-develop and
co-commercialize the Co-Development Product in the Field and in the Dyax
Territory, such Party shall itself or through its Affiliates (or in the case of
Dyax, its licensees) use Commercially Reasonable and Diligent Efforts in
accordance with this Agreement and the Co-Development Plan to develop and
commercialize the Co-Development Product in each country or region within such
Party’s assigned territory.  Each Party
shall provide the other Party on a not less than a calendar quarterly basis
with documentation that reasonably demonstrates that such Party is maintaining
such efforts.

If either Party (the “Notifying Party”)
reasonably believes that the other Party has failed to maintain Commercially
Reasonable and Diligent Efforts with respect to a particular country or region,
it shall so notify the other Party in writing and the other Party shall then
have ninety (90) days to demonstrate to the Notifying Party’s reasonable
satisfaction that it is maintaining such efforts.  If the other Party has failed to maintain
Commercially Reasonable and Diligent Efforts in such country or region in its
assigned territory (“Abandoned Region”), then the license granted to the
other Party under Clause 5.1 hereof with respect to sales of the Co-Development
Product in the Field in such Abandoned Region shall terminate, and the
Notifying Party shall have the option to assume responsibility for Marketing
the Co-Development Product in the Field in that Abandoned Region; provided, however, that in the event the Parties are unable
to agree on whether the other Party has failed to maintain Commercially
Reasonable and Diligent Efforts in a country or region in its assigned
territory, then the dispute shall be resolved in accordance with Clause 10.1
hereof.  If the Notifying Party assumes
responsibility for Marketing the Co-Development Product in the Field in an
Abandoned Region, then:

(a)                                  the
other Party shall cooperate with the Notifying Party with respect to the
Co-Development Product in the Field in such Abandoned Region,

(b)                                 the
other Party shall grant and hereby grants to the Notifying Party an exclusive,
worldwide license, with the right to grant sublicenses, under the Dyax
Co-Development Product Technology and Dyax Co-Development Product Patent Rights
or CAT Co-Development Product Technology and CAT Co-Development Product Patent
Rights, as applicable, to make, have made, use, sell and import the
Co-Development Product in the Field in the Abandoned Region, and

(c)                                  in
lieu of payment under Article 4 hereof, the Notifying Party shall pay to the
other Party a royalty as set forth below solely on Net Sales of the
Co-Development Product in the Field in the Abandoned Region by the Notifying
Party:

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In the event the
Notifying Party assumes the Abandoned Territory prior to the initiation of the
first Phase I Clinical Trial of the Co-Development Product, the royalty shall
be [******] of Net Sales;

In the event the
Notifying Party assumes the Abandoned Territory after the initiation of the
first Phase I Clinical Trial of the Co-Development Product, but prior to the
initiation of the first Phase III Clinical Trial, the royalty shall be [******] of Net Sales; and,

In the event the
Notifying Party assumes the Abandoned Territory after the initiation of the
first Phase III Clinical Trial, the royalty shall be [******] of
Net Sales.

The royalty, at
the applicable rate, shall be payable on a country-by-country basis until the
expiration of the last valid claim of the licensed Dyax Co-Development Product
Patent Rights or CAT Co-Development Product Patent Rights, as applicable, or
ten (10) years from the date of First Commercial Sale of the Co-Development
Product, whichever occurs later.

2.5                                Provision
of Materials.  Each Party shall
provide the other Party with reasonable quantities of materials as necessary
for the performance of the Co-Development Activities in accordance with the
Co-Development Plan.  Each Party agrees
that it will use such materials or derivatives thereof of the other Party only
for the purposes of the Co-Development Activities, and will not transfer such
materials or derivatives thereof to any Third Party without the written consent
of the other Party hereunder.

2.6                                Trademarks.  All Co-Development Products shall be sold in
each territory under trademarks selected by the Marketing Party in such
territory (“Product Trademarks”). 
The Marketing Party shall own, and shall be responsible for the
preparation, prosecution and maintenance of applications relating to, such
Product Trademarks in its territory.

ARTICLE
3.  THE STEERING COMMITTEE

3.1                                Composition.  A joint steering committee comprised of three
(3) named representatives of Dyax and three (3) named representatives of CAT
(the “Steering Committee”) shall be appointed by the Parties promptly
after the Effective Date.  A Party may,
upon written notice to the other Party, change one or more of its
representatives to the Steering Committee at any time.

3.2                                Meetings.  The Steering Committee shall meet as needed
but not less than once each calendar quarter.  Meetings may be held either in person or by
telephone or video conference.  If the
meetings are held in person, the place of such meetings shall alternate between
the offices of Dyax and CAT, unless otherwise agreed to by the Steering
Committee.  The time and form of such
meetings shall be as the members of the Steering Committee shall agree.

3.3                                Minutes.  The Steering Committee shall keep accurate
minutes of its deliberations and shall record all proposed decisions and all
actions recommended or taken.  The
Steering Committee shall designate at each meeting a member to act as secretary
to prepare draft minutes for such meeting. 
The designation of the secretary shall alternate between a Dyax representative
and a CAT representative at each meeting of the Steering Committee.  Draft minutes shall be sent to all members of
the Steering Committee within ten (10) working days after each meeting.  The draft minutes shall be edited by said
secretary based on comments 

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from the members of the
Steering Committee and shall be distributed to the members prior to the next
meeting of the Steering Committee for review and final approval at such next
meeting.  All records of the Steering Committee
shall at all times be available to both Parties.

3.4                                Responsibilities.  The Steering Committee will assist in the
administration of the Co-Development Activities, including without limitation,
the following responsibilities:

(a)                                  overseeing
and monitoring the progress of the Co-Development Activities;

(b)                                 assigning
responsibility for certain development and commercialization activities as
contemplated by this Agreement;

(c)                                  reviewing
data and information generated in the performance of the Co-Development
Activities, including, without limitation, the reports provided by the Parties
under Clauses 2.4 and 4.8(a) of this Agreement;

(d)                                 approving
the initial Co-Development Plan and any amendments thereto;

(e)                                  facilitating
the transfer of information between the Parties in accordance with this
Agreement;

(f)                                    serving
as the first forum for settlement of disputes or disagreements between the
Parties; and

(g)                                 performing
such other functions as appropriate to further the purposes of the
Co-Development Activities as determined by the Parties.

3.5                                Decisions
of the Steering Committee.  Decisions
of the Steering Committee shall be made by unanimous vote of all members of the
Steering Committee.

3.6                                Disagreements.  All disagreements within the Steering
Committee shall be subject to the following:

(a)                                  The
representatives to the Steering Committee will negotiate in good faith for a
period of not more than thirty (30) days to attempt to resolve the dispute;

(b)                                 If
the representatives to the Steering Committee are unable to resolve the dispute
within such thirty (30) day period, then the matter shall resolved pursuant to
the dispute resolution procedures of Clause 10.1 of this Agreement.

ARTICLE
4.  FINANCIAL TERMS

4.1                                Reimbursement
for Dyax’s Prior Costs.  CAT shall
pay to Dyax a sum equal to [******].  Such payment shall be made to Dyax within ten
(10) days of the Effective Date of this Agreement.

4.2                                Co-Development
Costs Prior to First Commercial Sale. 
The Parties shall share equally (on a 50/50 basis) in the Co-Development
Costs incurred by both Parties in accordance with Clause 2.1 hereof after the
date of filing the first IND for the Co-Development Product and prior to the
First Commercial Sale of the Co-Development Product.  In accordance with Clause 4.8(a), within
thirty (30) days after the end of each 

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calendar quarter, each
Party shall furnish the Steering Committee with a report detailing the
Co-Development Costs actually incurred by such Party in performing such Party’s
Co-Development Activities. Within thirty (30) days after the receipt of each
report, the Parties shall make payments to one another so that each Party shall
bear fifty percent (50%) of the total Co-Development Costs for such calendar
quarter; provided however that any milestone payment payable to CAT by Dyax
during such calendar quarter under Clause 8.1.1 of the Amendment Agreement will
be credited against any payment by CAT to Dyax under this Clause 4.2.

4.3                                Sharing
of Net Profits or Losses.  The
Parties share equally (i.e. on a 50/50 basis) in the Parties’ Net Profits or
Losses after the First Commercial Sale of the Co-Development Product.  In accordance with Clause 4.8(a), within
thirty (30) days after the end of each calendar quarter, each Party shall
furnish the Steering Committee with a report detailing the Co-Development Costs
incurred by both Parties in accordance with Clause 2.1 hereof and Net Sales of
both Parties for such calendar quarter. 
Within thirty (30) days after the receipt of each report, the Parties
shall make payments to one another so that each Party shall share equally (on a
50/50 basis) in the total Net Profits or Losses for such calendar quarter.

4.4                                No
Royalties.  For the avoidance of
doubt, neither Party shall have the obligation to pay royalties to the other
Party on sales of the Co-Development Product, or to make any payments under the
Amendment Agreement with respect to the Co-Development Product.

4.5                                Taxes.  A Party may deduct from any amounts it is
required to pay pursuant to this Agreement an amount equal to that withheld for
or due on account of any taxes (other than taxes imposed on or measured by net
income or taxes that are already accounted for in the amount required to be
paid) or similar governmental charge imposed by any jurisdiction (“Taxes”).  At the receiving Party’s request, the paying
Party shall provide the receiving Party a certificate evidencing payment of any
Taxes hereunder and shall reasonably assist the receiving Party, at the
receiving Party’s expense, to obtain the benefit of any applicable tax treaty.

4.6                                Currency;
Exchange Rates.  With respect to
payments under Clauses 4.1 and 4.2 hereof, Dyax shall make all payments due to
CAT in pounds sterling (or Euros if Euros have replaced pounds sterling at the
time of payment) and CAT shall make all payments due to Dyax in United States
Dollars.  With respect to payments under
Clause 4.3 hereof, (a) Dyax shall make all payments due to CAT in pounds
sterling (or Euros if Euros have replaced pounds sterling at the time of
payment), except that if Dyax is obligated to share Net Profits received by
Dyax in United States Dollars or other currency, then payment to CAT shall be
paid in United States Dollars or such other currency, and (b) CAT shall make
all payments due to Dyax in United States Dollars, except that if CAT is
obligated to share Net Profits received by CAT in pounds sterling or other
currency, then payment to Dyax shall be paid in pounds sterling or such other
currency.  With respect to any royalty
payments under Clauses 2.4 or 8.3(a), Dyax shall make all payments due to CAT in
pounds sterling (or Euros if Euros have replaced pounds sterling at the time of
payment) and CAT shall make all payments due to Dyax in United States Dollars
and all amounts payable will be converted using as a rate of exchange the
average rate for conversion as listed in The Wall Street Journal
for the applicable calendar quarter.

4.7                                Late
Payments.  Any payments due from a
Party under this Agreement that are not paid within forty-five (45) days of the
date such payments are due shall bear interest, to the extent permitted by law,
at two (2) 

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percentage points above
the base prime rate of interest most recently reported by The Wall
Street Journal calculated based on the number of days that payment
is delinquent.

4.8                                Reports;
Records; Audits.

(a)                                  Reports.  Within thirty (30) days of the end of each
calendar quarter, each  Party shall
furnish to the Steering Committee a report detailing the reporting Party’s
Co-Development Activities, Co-Development Costs and Net Sales for such calendar
quarter.

(b)                                 Record
Retention.  Each
Party shall maintain (and shall ensure that its Affiliates and, in the case of
Dyax, its licensees, shall maintain) complete and accurate books, records and
accounts that fairly reflect their respective Co-Development Costs and Net
Sales, in each case in sufficient detail to confirm the accuracy of any
payments required hereunder and in accordance with GAAP.  Each Party shall retain such books, records
and accounts for three (3) years after the end of the period to which such
books, records and accounts pertain (the Retention Period”).

(c)                                  Audits.  During the Retention Period for any
particular records of a Party, the other Party shall have the right, at its
expense, to cause an independent certified public accountant (selected by the
auditing Party and reasonably acceptable to the audited Party) to inspect such
records during normal business hours for the sole purpose of verifying any
reports and payments delivered under this Agreement.  Such accountant shall not disclose to the
auditing Party any information other than information relating to the accuracy
of reports and payments delivered under this Agreement and shall provide the
audited Party with a copy of any report given to the auditing Party.  The Parties shall reconcile any underpayment
or overpayment within thirty (30) days after the accountant delivers the
results of the audit.  The auditing Party
shall bear the cost of the audit; provided, that in the event that any audit
performed under this Clause reveals an underpayment by the audited Party in
excess of [******] for any calendar quarter, the
audited Party shall bear the full cost of such audit.  The auditing Party shall treat all
information subject to review under this Clause 4.8(c) in accordance with the
confidentiality provisions of Article 9 of this Agreement and shall cause its
accounting firm to enter into a reasonably acceptable confidentiality agreement
with the audited Party obligating such firm to maintain all such financial
information in confidence pursuant to such confidentiality agreement.

ARTICLE
5.  INTELLECTUAL PROPERTY RIGHTS

5.1                                Licenses.

(a)                                  License
from Dyax to CAT.  Subject to the
terms and conditions of this Agreement, Dyax hereby grants to CAT a fully-paid
up, royalty-free, co-exclusive (with Dyax) license, without the right to grant
sublicenses, under the Dyax Co-Development Product Technology and Dyax
Co-Development Product Patent Rights solely to perform CAT’s Co-Development
Activities in accordance with the Co-Development Plan in the Field and in the
CAT Territory.

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(b)                                 License
from CAT to Dyax.  Subject to the
terms and conditions of this Agreement, CAT hereby grants to Dyax a fully-paid
up, royalty-free, co-exclusive (with CAT) license, without the right to grant
sublicenses, under the  CAT Co-Development
Product Technology and CAT Co-Development Product Patent Rights solely to
perform Dyax’s Co-Development Activities in accordance with the Co-Development
Plan in the Field and in the Dyax Territory.

5.2                                Third
Party Licenses.  In the event that
either Party determines that it is necessary or useful to obtain a license from
a Third Party in order for such Party to perform its Co-Development Activities,
such Party shall notify the Steering Committee promptly in writing, and the
Steering Committee shall determine the best course of action with respect
thereto.  If the Steering Committee
determines that such Third Party license is necessary or useful for the
Co-Development Activities, the cost and expenses of obtaining and maintaining
any such Third Party licenses shall be treated as the Co-Development Costs of
the Party required to pay such costs and expenses.

5.3                                Ownership
of the Co-Development Product.  CAT
acknowledges and agrees that the Co-Development Product, the Dyax
Co-Development Product Patent Rights and Dyax Co-Development Product Technology
are proprietary to and owned or controlled by Dyax and that, except as
expressly provided in this Agreement, CAT has no ownership or other rights in
the foregoing.  Dyax shall have the sole
right to file, prosecute and maintain the Dyax Co-Development Product Patent
Rights.

5.4                                Enforcement
of the Dyax Co-Development Product Patent Rights. Each Party shall promptly
report in writing to the other Party any known or suspected infringement of the
Dyax Co-Development Product Patent Rights in the Field and shall provide such
other Party with all available evidence supporting such known or suspected
infringement.  As determined by the
Steering Committee, the Parties shall prosecute any Third Party infringement of
the Dyax Co-Development Product Patent Rights and/or defend the Dyax
Co-Development Product Patent Rights in any declaratory judgment action brought
by a Third Party which alleges invalidity, unenforceability, or
non-infringement of the Dyax Co-Development Product Patent Rights, and the
Parties shall share equally the costs of any such action.  Each Party shall offer reasonable assistance
to the other Party in connection therewith. 
If the Parties recover any damages, by way of settlement or otherwise,
in connection with such prosecution or defense, such recovery shall be shared
equally by Dyax and CAT.  Should the
Steering Committee elect not to prosecute any infringement or defend any
declaratory judgment action in the Field within sixty (60) days of becoming
aware of or being notified of such infringement or action, then Dyax shall have
the right to do so under its own control and at its own expense and in the name
of CAT to the extent legally necessary. 
In the event Dyax elects to proceed with any such prosecution or
defense, CAT shall offer reasonable assistance to Dyax in connection
therewith.  If Dyax recovers any damages,
by way of settlement or otherwise, in connection with such prosecution or
defense, such recovery shall be retained by Dyax.  Should Dyax elect not to prosecute any
infringement or defend any declaratory judgment action in the Field within
ninety (90) days of becoming aware of or being notified of such infringement or
action, then CAT shall have the right to do so under its own control and at its
own expense and in the name of Dyax to the extent legally necessary.  In the event CAT elects to proceed with any
such prosecution or defense, Dyax shall offer reasonable assistance to CAT in
connection therewith.  If CAT recovers
any damages, by way of settlement or otherwise, in connection with such
prosecution or defense, such recovery shall be retained by CAT.

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5.5                                Inventions
and Patent Rights.

(a)                                  Dyax
Inventions.  Dyax shall solely own
any and all Inventions conceived or reduced to practice solely by or on behalf
of Dyax during or as a result of the Co-Development Activities (“Dyax
Inventions”).  Dyax shall own all
right, title and interest in and to any and all Dyax Inventions and
intellectual property rights with respect thereto.  Dyax shall have the sole right to prepare,
file, prosecute, maintain and enforce any and all Patent Rights claiming Dyax
Inventions.

(b)                                 CAT
Inventions.  CAT shall solely own any
and all Inventions conceived or reduced to practice solely by or on behalf of
CAT during or as a result of the Co-Development Activities (“CAT Inventions”)
and all CAT Co-Development Product Patent Rights and CAT Co-Development Product
Technology.  CAT shall own all right,
title and interest in and to any and all CAT Co-Development Product Patent
Rights and CAT Co-Development Product Technology and all CAT Inventions and
intellectual property rights with respect thereto.  CAT shall have the sole right to prepare,
file, prosecute, maintain and enforce any and all CAT Co-Development Product
Patent Rights and all Patent Rights claiming CAT Inventions and CAT
Co-Development Product Technology.

(c)                                  Joint
Inventions.  The Parties shall
jointly own any and all Inventions conceived or reduced to practice jointly by
or on behalf of both Parties during or as a result of the Co-Development
Activities (“Joint Inventions”). 
Each Party will promptly disclose all Joint Inventions to the other
Party.  The Parties shall jointly own all
right, title and interest in and to any and all Joint Inventions and
intellectual property rights with respect thereto.  Each Party shall take all necessary actions,
including executing documents of assignment, to vest title to all Joint
Inventions (including all intellectual property rights therein) with both
Parties.  The preparation, filing,
prosecution, maintenance and enforcement of Patent Rights claiming Joint
Inventions shall be as mutually agreed between the Parties through the Steering
Committee and the costs associated with such filing, prosecution, maintenance
and enforcement shall be shared equally by the Parties.  Each Party shall promptly report in writing
any known or suspected infringement of any Patent Rights claiming Joint
Inventions in the Field and shall provide such other Party with all available
evidence supporting such known or suspected infringement.

ARTICLE
6.  REPRESENTATIONS AND WARRANTIES

6.1                                Authorization.  Each party represents and warrants to the
other that it has the legal right, power and authority to enter into this
Agreement, and has obtained all necessary consents, to extend the rights and
licenses granted to the other in this Agreement, and to fully perform its
obligations hereunder, this Agreement has been duly executed and delivered on
behalf of such Party and constitutes a legal, valid and binding obligation of
such Party and is enforceable against it in accordance with its terms, and that
the performance of such obligations will not conflict with its charter
documents or any agreements, contracts, or other arrangements to which it is a
party.

6.2                                Assignment
by Employees.  Each Party represents
and agrees that all of its employees, all of its Affiliates’ employees and all
others acting on its or its Affiliates’ behalf in performing their respective
obligations 

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under this Agreement
shall be obligated under a binding written agreement or established corporate
policy to assign to such Party, or as such Party shall direct, all Inventions
made or conceived by such employee or other person.

6.3                                Disclaimer
of Warranties.  Nothing in this
Agreement shall be construed as:

(a)                                  a
warranty or representation by Dyax as to the validity or scope of any Dyax
Co-Development Product Patent Right;

(b)                                 a
warranty or representation that the exploitation of the Dyax Co-Development
Product Patent Rights or the manufacture, use or sale of a Co-Development
Product is or will be free from infringement of patents of Third Parties;

(c)                                  an
obligation of either party to bring or prosecute actions or suits against Third
Parties for infringement;

(d)                                 an
obligation of Dyax to Prosecute any Dyax Co-Development Product Patent Right in
any country;

(e)                                  creating
any agency, partnership, joint venture or similar relationship between the
Parties; or

(f)                                    conferring
by implication, estoppel or otherwise any license, immunity or right under any
Patent Right, other than in the Dyax Co-Development Patent Rights and CAT
Co-Development Patent Rights in accordance with this Agreement.

(g)                                 EXCEPT
FOR THE EXPRESS WARRANTIES SET FORTH HEREIN, DYAX AND CAT MAKE NO
REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR
BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND DYAX AND CAT EACH
SPECIFICALLY DISCLAIM ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS
OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENT
RIGHTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES.

ARTICLE
7.  INDEMNIFICATION AND INSURANCE

7.1                                Indemnification.
Each Party agrees to defend, indemnify and hold the other Party, its Affiliates
and their respective directors, officers, employees and agents and their
respective successors, heirs and assigns (each individually, an “Indemnitee”),
harmless from and against any losses, costs, claims, damages, liabilities or
expenses (including reasonable attorneys’ and professional fees and other
expenses of litigation) (collectively, “Liabilities”) arising out of
Third Party claims, suits, actions, demands or judgments, including, without
limitation, personal injury and product liability matters, suits, actions, or
demands (a) relating to any Co-Development Product that is marketed,
distributed or sold by or on behalf of such Party, its Affiliates, or in the
case of Dyax, its licensees or other designees; (b) arising out of or resulting
from a

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breach by such Party of
any of its representations, warranties or covenants made hereunder; or (c)
arising out of such Party’s negligence or intentional misconduct, except in
each case to the extent such Liabilities resulted from a material breach of
this Agreement by, or negligence or intentional misconduct on the part of, the
Indemnitee(s).

7.2                                Indemnification
Procedure.  In the event that an
Indemnitee intends to claim indemnification under Clause 7.1, such Indemnitee
shall promptly notify the indemnifying Party of any Liability in respect of
which the Indemnitee intends to claim such indemnification, and the
indemnifying Party shall assume and have exclusive control over the defense
thereof with counsel selected by the indemnifying Party that is reasonably
satisfactory to the Indemnitee; provided, however,
that such Indemnitee shall have the right to fully participate in any such
action or proceeding and to retain its own counsel, with the reasonable fees
and expenses to be paid by the indemnifying Party, if representation of such
Indemnitee by the counsel retained by the indemnifying Party would be
inappropriate under applicable standards of professional conduct due to actual
or potential differing interests between such Indemnitee and any other party represented
by such counsel in such proceedings. 
Neither the indemnifying Party nor the Indemnitee shall enter into any
settlement agreement with any Third Party without the consent of the other
Party, which consent shall not be unreasonably withheld or delayed.  The failure to deliver notice to the
indemnifying Party within a reasonable time after the commencement of such
action, to the extent prejudicial to the indemnifying Party’s ability to defend
such action, shall relieve the indemnifying Party of its obligations under
Clause 7.1, but the failure to so deliver notice to the indemnifying Party will
not relieve it of any Liability that it may have to any Indemnitee otherwise
than as aforesaid.  The Indemnitee shall,
at the expense of the indemnifying Party, cooperate with the indemnifying Party
and its legal representatives in the investigation and defense of any Liability
covered by this Agreement.

7.3                                Insurance.  Each Party shall have and maintain such types
and amounts of liability insurance as is normal and customary in the industry
generally for parties similarly situated, and shall upon request provide the
other Party with a copy of its policies of insurance in that regard, along with
any amendments and revisions thereto.

ARTICLE
8.  TERM AND TERMINATION

8.1                                Term.  Unless sooner terminated as provided herein,
this Agreement shall commence on the Effective Date and shall remain in effect
until the last to occur of (a) ten (10) years from the Effective Date, or (b)
the last day of any calendar year in which no Net Sales were generated by CAT
or Dyax or their respective Affiliates (or in the case of Dyax, its licensees)
during such calendar year (the “Term”), unless earlier terminated as
provided in this Article.

8.2                                Termination

(a)                                  For
Convenience. Either Party shall have the right to terminate this Agreement
at any time during the Term upon one hundred eighty (180) days prior written
notice to the other Party.

(b)                                 For
Breach.  Upon a material breach of
this Agreement by either Party, the non-breaching Party may provide written
notice to the breaching Party specifying the material breach.  If the breaching 

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Party fails to cure the
material breach within thirty (30) days of such notice, then the non-breaching
Party shall have the right to terminate this Agreement.

(c)                                  For
Bankruptcy or Insolvency.  Either
Party shall have the right to terminate this Agreement at any time during the
Term, if the other Party becomes insolvent or is subject of a petition in
bankruptcy whether voluntary or involuntary or of any other proceeding under
bankruptcy or insolvency, including, without limitation, a reorganization,
liquidation or receivership proceedings, or upon an assignment of a substantial
portion of the assets for the benefit of creditors by the such Party, or in the
event a receiver or custodian is appointed for such Party’s business or a
substantial portion of such Party’s business is subject to attachment or
similar process; provided, however, in the case of
any involuntary bankruptcy proceeding such right to terminate shall only become
effective if the Party consents to the involuntary bankruptcy or such
proceeding is not dismissed within sixty (60) days after the filing thereof.

8.3                                Effect
of Expiration or Termination.

(a)                                  Effect
of Termination for Convenience.  In
the event either Party provides notice of termination of this Agreement
pursuant to Clause 8.2(a) above, the Parties shall continue to be obligated to
make payments to each other under Article 4 during the one hundred eighty (180)
day notice period.  Upon the effective
date of termination, the terminating Party shall grant and hereby grants to the
non-terminating Party an exclusive, worldwide license, with the right to grant
sublicenses, under the Dyax Co-Development Product Technology and Dyax Co-Development
Product Patent Rights or CAT Co-Development Product Technology and CAT
Co-Development Product Patent Rights, as applicable, to make, have made, use,
sell and import the Co-Development Product in the Field.  The non-terminating Party shall pay to the
terminating Party a royalty as set forth below on Net Sales of the
Co-Development Product by the non-terminating Party:

In the event this
Agreement is terminated pursuant to Clause 8.2(a) above prior to the initiation
of the first Phase I Clinical Trial of the Co-Development Product, the royalty
shall [******] of Net Sales;

In the event this
Agreement is terminated pursuant to Clause 8.2(a) above after the initiation of
the first Phase I Clinical Trial of the Co-Development Product, but prior to
the initiation of the first Phase III Clinical Trial, the royalty shall be [******] of Net Sales; and,

In the event this
Agreement is terminated pursuant to Clause 8.2(a) above after the initiation of
the first Phase III Clinical Trial, the royalty shall be [******] of
Net Sales.

The royalty, at
the applicable rate, shall be payable on a country-by-country basis until the
expiration of the last valid claim of the licensed Dyax Co-Development Product
Patent Rights or CAT Co-Development Product Patent Rights, as applicable, or
ten (10) years from the date of First Commercial Sale of the Co-Development
Product, whichever occurs later.

Upon the effective
date of termination, the terminating Party shall no right to make, have made,
use, sell or import the Co-Development Product in the Field.

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(b)                                 Effect
of Termination for Breach, Bankruptcy or Insolvency.  In the event either Party terminates this
Agreement pursuant to Clause 8.2 (b) or Clause 8.2(c) above, the terminating
Party shall grant and hereby grants to the non-terminating Party an exclusive,
royalty-free, worldwide license, with the right to grant sublicenses, under the
Dyax Co-Development Product Technology and Dyax Co-Development Product Patent
Rights or CAT Co-Development Product Technology and CAT Co-Development Product
Patent Rights, as applicable, to make, have made, use, sell and import the
Co-Development Product in the Field.

(c)                                  Survival.  No expiration or termination of this
Agreement shall eliminate any rights or duties of the Parties accrued prior to
such expiration or termination.  Articles
1, 6, 7, 8, 9 and 10 and Clauses 2.2(b), 2.2(c), 2.2(d), 2.2(e), 4.6, 4.7 and
4.8 of this Agreement shall survive expiration or termination of this Agreement
for any reason.

ARTICLE
9.  CONFIDENTIALITY & PUBLICITY

9.1                                Confidentiality.  With respect to any confidential information
received from the other Party (“Confidential Information”), each Party
undertakes and agrees to

(a)                                  only
use the Confidential Information for the purposes envisaged under this
Agreement and not to use the same for any other purpose whatsoever;

(b)                                 ensure
that only those of its officers and employees who are directly concerned with
the carrying of this Agreement have access to the Confidential Information on a
strictly “need to know” basis and are informed of the secret and confidential
nature of it;

(c)                                  keep
the Confidential Information secret, confidential, safe and secure and shall
not directly or indirectly disclose or permit to be disclosed the same to any
Third Party, including any consultants or other advisors, without the prior
written consent of the disclosing Party except to the extent disclosure is
necessary in connection with its use as envisaged under this Agreement;

(d)                                 ensure
that the Confidential Information will not be covered by any lien or other
encumbrance in any way, and

(e)                                  not
copy, reproduce or otherwise replicate for any purpose or in any manner
whatsoever any documents containing the Confidential Information except to the
extent necessary in connection with its use as envisaged under this Agreement.

9.2                                Exceptions
to Confidentiality.  The obligations
referred to in Clause 9.1 above shall not extend to any Confidential
Information which

(a)                                  is
or becomes generally available to the public otherwise than be reason of breach
by a recipient Party of the provision of Clause 9.1;

(b)                                 is
known to the recipient Party and is at its free disposal (having been generated
independently by the recipient Party or a Third Party in circumstances where it
has not been derived directly or 

 Schedule 8 - Page 17
 Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.
 

 

 

indirectly from the
disclosing Party’s Confidential Information prior to its receipt from the
disclosing Party), provided that evidence of such knowledge is furnished by the
recipient Party to the disclosing Party within twenty-eight (28) days of
recipient of that Confidential Information;

(c)                                  is
subsequently disclosed to the recipient Party without obligations of confidence
by a Third Party owing no such obligations to the disclosing Party in respect
of that Confidential Information;

(d)                                 is
required by law to be disclosed (including as part of any regulatory submission
or approval process) and then only when prompt written notice of this
requirement has been given to the disclosing Party so that it may, if so
advised, seek appropriate relief to prevent such disclosure, provided always
that in such circumstances such disclosure shall be only to the extent so
required and shall be subject to prior consultation with the disclosing Party
with a view to agreeing on the timing and content of such disclosure.

9.3                                Publicity.  No public announcement or other disclosures
to Third Parties concerning the terms of this Agreement shall be made, whether
directly or indirectly, by either Party (except confidential disclosures to
professional advisors) without first obtaining the approval of the other Party
and agreement upon the nature and text of such announcement or disclosure with
the exceptions that: (a) a Party may disclose those terms which it is required
by regulation or law to disclose, provided that it takes advantage of all
provisions to keep confidential as many terms of this Agreement as possible;
and (b) the Party desiring to make any such public announcement or other
disclosure shall inform the other Party of the proposed announcement or
disclosure in reasonably sufficient time prior to public release, and shall
provide the other Party with a written copy thereof in order to allow such
Party to comment upon such announcement or disclosure.  Each Party agrees that it shall cooperate
fully with the other with respect to all disclosures regarding this Agreement
to the U.S. Securities Exchange Commission, the UK Stock Exchange and any other
comparable body including requests for confidential information or proprietary
information of either Party included in any such disclosure.

ARTICLE
10.  MISCELLANEOUS

10.1                          Dispute
Resolution.  Any dispute arising
between the Parties relating to, arising out of or in any way connected with
this Agreement or any term or condition thereof, or the performance by either
Party of its obligations hereunder, whether before or after termination of this
Agreement, which has not been resolved by the Steering Committee within thirty
(30) days after notice thereof has been given by one Party to the other Party
and the Steering Committee (the “Initial Negotiation Period”) shall be
referred to the Chief Executive Officers of each of the Parties.  The Chief Executive Officers shall meet to
resolve such deadlock within thirty (30) days of the end of the Initial
Negotiation Period, at a time and place mutually acceptable to them.  Any dispute that has not been resolved
following good faith negotiations of the Chief Executive Officers for a period
of thirty (30) days shall be referred to and finally settled by binding
arbitration in accordance with the then current Commercial Arbitration Rules of
the American Arbitration Association. 
There shall be three (3) arbitrators, each Party to designate one
arbitrator and the two Party-designated arbitrators to select the third
arbitrator.  The Party initiating recourse
to arbitration shall include in its notice of arbitration its appointment of an
arbitrator.  The appointing authority, in
the event a Party does not or the Parties do not appoint arbitrator(s), shall
be the American Arbitration Association in New York, New York. 

 Schedule 8 - Page 18
 Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.
 

 

 

The place of arbitration
shall be New York, New York.  The
language to be used in the arbitration shall be English.  Any determination by the arbitration panel
shall be final and conclusively binding. 
Judgement on any arbitration award may be entered in any court having
jurisdiction thereof.  Each Party shall
bear its own costs and expenses incurred in the arbitration; provided that the
arbitration panel may assess the costs and expenses of the prevailing Party,
including reasonable attorneys fees, against the non-prevailing Party.

10.2                          Notices.  All notices, requests, demands and other
communications required or permitted to be given pursuant to this Agreement
shall be in writing and shall be deemed to have been duly given upon the date
of receipt if delivered by hand, recognized international overnight courier,
confirmed facsimile transmission, or registered or certified mail, return
receipt requested, postage prepaid to the following addresses or facsimile
numbers:

	
  If to Dyax:

  	
   

  	
  If to CAT:

  
	
  Dyax Corp.

  	
   

  	
  Cambridge Antibody Technology Limited

  
	
  300 Technology
  Square

  	
   

  	
  The Milstein Building

  
	
  Cambridge, MA
  02139

  	
   

  	
  Granta Park, Cambridge

  
	
  Attention: Chief
  Executive Officer

  	
   

  	
  Cambridgeshire CB1 6GH

  
	
  Facsimile: (617)
  225-2501

  	
   

  	
  United Kingdom

  
	
   

  	
   

  	
  Attention:
  Company Secretary

  
	
   

  	
   

  	
  Facsimile:
  011-44-(0)1223 471472

  

 

Either party may
change its designated address and facsimile number by notice to the other party
in the manner provided in this Clause.

10.3                          Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.

10.4                          Specific
Performance.  The parties agree that
irreparable damage will occur in the event that the provisions of Article 9 are
not specifically enforced.  In the event
of a breach or threatened breach of any such provisions, each Party agrees that
the other Party shall, in addition to all other remedies, be entitled to
temporary or permanent injunction, without showing any actual damage or that
monetary damages would not provide an adequate remedy and without the necessity
of posting any bond, and/or a decree for specific performance, in accordance
with the provisions hereof.

10.5                          Assignment.  This Agreement may not be assigned by either
party without the prior written consent of the other party, except that either
party may assign this Agreement to any of its Affiliates or to a successor in
connection with the merger, consolidation, or sale of all or substantially all
of its assets or that portion of its business pertaining to the subject matter
of this Agreement, with prompt written notice to the other party of any such
assignment.  This Agreement shall inure
to the benefit of and be binding upon the parties and their respective lawful
successors and assigns.

10.6                          Compliance
With Law.  Nothing in this Agreement
shall be construed so as to require the commission of any act contrary to law,
and wherever there is any conflict between any provision of this Agreement and
any statute, law, ordinance, or treaty, the latter shall prevail, but in, such
event the affected provisions of the 

 Schedule 8 - Page 19
 Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.
 

 

 

Agreement shall be
conformed and limited only to the extent necessary to bring it within the
applicable legal requirements.

10.7                          Amendment
and Waiver.  This Agreement may be
amended, supplemented, or otherwise modified only by means of a written
instrument signed by both parties.  Any
waiver of any rights or failure to act in a specific instance shall relate only
to such instance and shall not be construed as an agreement to waive any rights
or fail to act in any other instance, whether or not similar.

10.8                          Severabi1ity.  In the event that any provision of this
Agreement shall, for any reason, be held to be invalid or unenforceable in any
respect, such invalidity or unenforceability shall not affect any other
provision hereof and the parties shall negotiate in good faith to modify the
Agreement to preserve (to the extent possible) their original intent.

10.9                          Entire
Agreement.  This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements or understandings
between the parties relating to the subject matter hereof.

IN WITNESS
WHEREOF, the undersigned have duly executed and delivered this Agreement as a
sealed instrument effective as of the Effective Date.

	
  DYAX CORP.

  	
   

  	
  CAMBRIDGE ANTIBODY

  
	
   

  	
   

  	
  TECHNOLOGY LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By: 

  	
   

  
	
  Name: 

  	
   

  	
   

  	
  Name: 

  	
   

  
	
  Title: 

  	
   

  	
   

  	
  Title: 

  	
   

  
									

 

 Schedule 8 - Page 20
 Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.
 

 

 

Exhibit A

Co-Development
Product

 Schedule 8 - Page 21
 Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.
 

 

 

Exhibit B

Co-Development
Plan

 Schedule 8 - Page 22
 Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks denote such omission.Exhibit 10.1

TRIUMPH GROUP,
INC.

AMENDED AND RESTATED DIRECTORS’ STOCK INCENTIVE PLAN

ARTICLE I

Purpose

The purpose of
this Amended and Restated Directors’ Stock Incentive Plan (the “Plan”),
previously named the Directors’ Stock Option Plan, is to enable Triumph Group, Inc.
to attract and retain qualified independent directors and to further promote
the mutuality of interests between such directors and the Company’s
stockholders.

ARTICLE II

Definitions

For purposes of this Plan, the following terms shall
have the following meanings:

2.1       “Affiliate”
shall mean any entity that is directly or indirectly controlled by the Company
or any entity in which the Company has a significant ownership interest as
determined by the Board.

2.2       “Award” shall
mean a Stock Option, Stock Award or Deferred Stock Unit, granted in accordance
with the terms of the Plan.

2.3       “Award Agreement”
means a Stock Option certificate, Stock Award Agreement or Deferred Stock Unit
Award Agreement, as the case may be.

2.4       “Board” shall
mean the Board of Directors of the Company.

2.5       “Code” shall
mean the Internal Revenue Code of 1986, as amended.

2.6       “Common Stock”
means the Common Stock, $.001 per value per share, of the Company.

2.7       “Company” means
Triumph Group, Inc., a Delaware corporation.

2.8       “Deferred Stock Unit” means
the right to receive shares of Common Stock, subject to a risk of forfeiture,
pursuant to Article VIII.

2.9       “Deferred Stock Unit
Agreement” shall mean the agreement, which may be in written or
electronic format, in such form and with such terms as may be specified by the
Board, evidencing the terms and conditions of an individual Deferred Stock Unit.
Each Deferred Stock Unit Award Agreement is subject to the terms and conditions
of the Plan.

2.10     “Effective Date”
shall mean the date on which the Plan is approved by the Company’s
stockholders.

2.11     “Eligible Director”
shall mean any member of the Board who, on the date of the granting of an
Award, is not an officer or an employee of the Company or any of the Company’s
subsidiaries.

2.12     “Fair Market Value”
for purposes of the Plan, unless otherwise required by any applicable provision
of the Code or any regulations issued thereunder, shall mean, as of any date,
the previous regular trading day’s closing price of actual sales of shares of
Common Stock on the principal national securities exchange on which the Common
Stock is listed, or if not listed, as reported on the Nasdaq Stock Market on
such date, or if such Common Stock was not listed or reported on such date, the
fair market value as determined under regulations under Section 409A of
the Code.

 1
 

 

2.13     “Mature Common Stock”
shall mean Common Stock owned for six months or more, or such other period as
the Board may determine subject to applicable accounting regulations, by the
respective Participant.

2.14     “Participant”
shall mean an Eligible Director to whom an Award has been granted under the
Plan.

2.15     “Retirement”
shall mean retirement from active service on the Board as determined by the
Board.

2.16     “Stock Award” shall
mean an award or issuance of shares of Common Stock pursuant to Article VII
of the Plan.

2.17     “Stock Award Agreement”
shall mean the agreement, which may be in written or electronic format, in such
form and with such terms as may be specified by the Board, evidencing the terms
and conditions of an individual Stock Award. Each Stock Award Agreement is
subject to the terms and conditions of the Plan.

2.18     “Stock Option”
or “Option” shall mean any option to
purchase shares of Common Stock granted pursuant to Article VI of the
Plan.

ARTICLE III

Administration

3.1       Administration. The
Plan shall be administered and interpreted by the Board.

3.2       Guidelines. Subject
to Article IX hereof, the Board shall have the authority to adopt, alter
and repeal such administrative rules, guidelines and practices governing the
Plan as it shall, from time to time, deem advisable; to interpret the terms and
provisions of the Plan and any Award granted under the Plan (and any agreements
relating thereto); and to otherwise supervise the administration of the Plan. The
Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any Award in the manner and to the extent it
shall deem necessary to carry the Plan into effect. Notwithstanding the foregoing,
no action of the Board under this Section 3.2 shall impair the rights of
any Participant without the Participant’s consent, unless otherwise required by
law.

3.3       Decisions Final. Any
decision, interpretation or other action made or taken in good faith by the
Board arising out of or in connection with the Plan shall be final, binding and
conclusive on the Company, all members of the Board and their respective heirs,
executors, administrators, successors and assigns.

ARTICLE IV

Share Limitation

4.1       Shares. The
maximum aggregate number of shares of Common Stock subject to Awards that may
be granted under the Plan is 115,000 (subject to any increase or decrease
pursuant to Section 4.2), which may be either authorized and unissued
shares of Common Stock or issued Common Stock reacquired by the Company. If any
Award granted under the Plan shall expire, terminate or be canceled for any
reason without having been exercised in full, the number of unissued shares
shall again be available for the purposes of the Plan.

4.2       Adjustments Upon Changes
in Capitalization. In the event of reorganization, recapitalization,
stock split, reverse stock split, spin-off, split-off, split-up, stock
dividend, issuance of stock rights, combination of shares, merger, consolidation
or any other change in the corporate structure of the Company affecting Common
Stock, or any distribution to stockholders in respect of stock other than a
cash dividend, the Board shall make such adjustments in the number and kind of
shares authorized by the

 2
 

 

Plan, in the minimum and maximum limits set forth in Article V
and in any outstanding Awards as it determines appropriate. No fractional
shares of Common Stock shall be issued pursuant to such an adjustment. The Fair
Market Value of any fractional shares resulting from adjustments pursuant to
this section shall, where appropriate, be paid in cash to the Participant. If
during the term of any Award granted hereunder the Company shall be, with the
prior approval of a majority of the members of the Board, merged into or
consolidated with or otherwise combined with or acquired by a person or entity,
or there is a liquidation of the Company, then at the election of the Board,
the Company may take such other action as the Board shall determine to be reasonable
under the circumstances to permit the Participant to realize the value of such
Award, including without limitation paying cash to such Participant equal to
the value of the Award or requiring the acquiring corporation to grant options
or stock to such Participant having a value equal to the value of the Award.

ARTICLE V

Eligibility and Grants of Awards

5.1       Eligible Directors. Only
Eligible Directors may be granted Awards under the Plan.

5.2       Annual Grants. The
Board may make an annual grant to each Eligible Director of Awards representing
not more than 1,250 Shares of Common Stock, provided however, that only for
purposes of calculating the maximum annual limit, an Option shall be considered
to give the holder the right to purchase only one-half of a share of Common
Stock. Except as otherwise provided in this Section, the Board shall have full
authority to determine whether an Award is an Option, a Stock Award or a
Deferred Stock Unit and the number of each type of Award to be granted.

5.3       New Director Grants. The
Board may grant to any Eligible Director, upon his or her initial election to
the Board, Awards representing up to 2,500 shares of Common Stock; provided
however, that only for purposes of calculating this limit, an Option shall be
considered to give the holder the right to purchase only one-half of a share of
Common Stock. Subject to the maximum limit set forth in the preceding sentence,
the number of shares of Common Stock subject to such Stock Options shall be
determined by the Board, and may be greater than or less than the number of
shares of Common Stock subject to any prior grants.

5.4       Discretionary Grants. In
addition to the grants described in 5.2 and 5.3 above, the Board may from time
to time grant additional Awards to any Eligible Director. The Board shall have
full authority to select the Eligible Directors to whom such Awards are to be
granted and to determine the number of shares of Common Stock to be covered by
each such Award.

ARTICLE VI

Stock Options

6.1       Options. Subject
to Article V, all Stock Options granted under
the Plan shall be non-qualified stock options (i.e., options
that do not qualify as incentive stock options under section 422 of the Code).

6.2       Grants. The
Board shall have full authority to grant Stock Options in its discretion
pursuant to this Article VI.

6.3       Terms of Options. Options
granted under the Plan shall be subject to the following terms and conditions
and shall contain such additional terms and conditions, not inconsistent with
the terms of the Plan, as the Board shall deem desirable:

(a)    Stock Option Certificate. Each
Stock Option shall be evidenced by, and subject to the terms of, a Stock Option
certificate executed by the Company. The Stock Option certificate shall specify
the number of shares of Common Stock subject to the Stock Option, the option
price, the option term,

 3
 

 

and such other terms and
conditions, consistent with the provisions of the Plan, as the Board shall deem
advisable.

(b)    Option Price. The
option price per share of Common Stock purchasable upon exercise of a Stock
Option shall be equal to the Fair Market Value of a share of Common Stock on
the date of grant.

(c)    Option Term. The
term of each Stock Option shall be ten years from the date of grant.

(d)    Exercisability. Stock
Options shall be exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Board at the time of grant;
provided that the Board may waive any installment exercise or waiting period
provisions, in whole or in part, at any time, based on such factors as the
Board shall, in its sole discretion, deem appropriate.

(e)    Method of Exercise. Stock
Options may be exercised in whole or in part at any time during the option term
by delivering to the Company written notice of exercise specifying the number
of shares of Common Stock to be purchased and the option price therefore. The
notice of exercise shall be accompanied by payment in full of the option price
and, if requested, by the representation described in Section 11.2. The
option price may be paid in cash or by check payable to the Company or, with
the consent of the Board on or after the date of grant, in whole or in part in
shares of Mature Common Stock or by a reduction in the number of shares of
Common Stock otherwise issuable upon such exercise, with the shares of Common
Stock in either case valued at the Fair Market Value on the date of exercise. Upon
payment in full of the option price and satisfaction of the other conditions
provided herein, a stock certificate representing the number of shares of
Common Stock to which the Participant is entitled shall be issued and delivered
to the Participant.

(f)     Termination. Unless
otherwise determined by the Board, Stock Options held by a Participant who
ceases to be a member of the Board shall be exercisable as follows:

(i)     If the Participant ceases to be a member of
the Board by reason of death, any Stock Option held by such Participant may
thereafter be exercised, to the extent such Option was exercisable at the time
of death or on such accelerated basis as the Board may determine at or after
grant, by the legal representative of the Participant’s estate, until the
expiration of the stated term of the Option or until such earlier time as the
Board may determine at the time the Option is granted or such accelerated basis
is determined.

(ii)    If the Participant ceases to be a member of
the Board by reason of disability (as determined by the Board), any Stock
Option held by such Participant may thereafter be exercised by the Participant
(or, where appropriate, the Participant’s legal representative), to the extent
it was exercisable at the time the Participant ceased to be a member of the
Board or on such accelerated basis as the Board may determine at or after
grant, until the expiration of the stated term of the Option or until such
earlier time as the Board may determine at the time the Option is granted or
such accelerated basis is determined.

(iii)   If the Participant ceases to be a member of
the Board for any reason other than death or disability, the Stock Option shall
terminate 90 days after the date on which the Participant ceased to be a member
of the Board; provided, however, that the Board may extend such exercise period
based on such factors as the Board shall, in its sole discretion, deem
appropriate, but not beyond the expiration of the stated term of the Option.

6.4       Rights as Stockholder. A
Participant shall not be deemed to be the holder of Common Stock, or have any
of the rights of a holder of Common Stock, with respect to shares subject to an
Option, until the Option is exercised and a stock certificate representing such
shares of Common Stock is issued to the Participant.

 4
 

 

ARTICLE VII

Stock Awards

7.1       Subject to Article V, The Board
shall have full authority to grant Stock Awards in its discretion pursuant to
this Article VII.

7.2       Each Stock Award shall be evidenced by a
Stock Award Agreement, the terms and conditions of which are consistent with
the following:

(a)    Restrictions and
Performance Criteria. Stock Awards shall vest at such time and in
such installments as determined by the Board; provided, however, that the
vesting of Stock Awards may be subject to the attainment of performance goals.

(b)    Forfeiture. Unless
otherwise provided in the Stock Award Agreement, upon the Participant’s ceasing
to be a member of the Board (other than as provided below in Sections 7.2(c) and
(d)), the shares of Common Stock subject to a Stock Award that have not yet
become vested pursuant to the Stock Award Agreement shall be forfeited. For
clarity, ceasing to be a member of the Board due to death shall be covered by
this paragraph.

(c)    Disability or Retirement
of Participant. Unless otherwise provided in the Stock Award
Agreement, if a Participant ceases to be a member of the Board due to
disability (as determined by the Board) or Retirement, all outstanding Stock
Awards granted to such Participant shall continue to vest, provided the
following conditions are met:

(i)     The Participant shall not render services
for any organization or engage directly or indirectly in any business which, in
the opinion of the Board, competes with, or is in conflict with the interest
of, the Company. The Participant shall be free, however, to purchase as an
investment or otherwise stock or other securities of such organizations as long
as they are listed upon a recognized securities exchange or traded
over-the-counter, or as long as such investment does not represent a
substantial investment in the opinion of the Committee or a significant (great
than 3%) interest in the particular organization. For the purposes of this
subsection, a company (other than an Affiliate) which is engaged in the
business of producing, leasing or selling products or providing services of the
type now or at any time hereafter made or provided by the Company or any of its
Affiliates shall be deemed to compete with the Company; and

(ii)    The Participant shall not, without prior
written authorization from the Company, use in other than the business of the
Company or any of its Affiliates, any confidential information or material
relating to the business of the Company or its Affiliates, either during or
after service on the Company’s Board.

(d)    Divestiture. If
a Participant will cease to be a member of the Board because of a divestiture
by the Company, prior to such termination of membership, the Board may, in its
sole discretion, accelerate the vesting of all or a portion of any outstanding
Stock Award granted to such Participant and provide that all forfeiture
provisions with respect to such Stock Awards shall lapse. The determination of
whether a divestiture will occur shall be made by the Board in its sole
discretion.

(e)    Rights as a Stockholder. The
Participant shall have the rights equivalent to those of a stockholder and shall
be a stockholder only after shares of Common Stock are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) to the Participant.

 5
 

 

ARTICLE VIII

Deferred Stock Units

8.1       Subject to Article V, the Board
shall have full authority to grant Deferred Stock Units in its discretion
pursuant to this Article VIII.

8.2       Each Deferred Stock Unit shall be
evidenced by a Deferred Stock Unit Award Agreement, the terms and conditions of
which are consistent with the following:

(a)    Restrictions and
Performance Criteria. Deferred Stock Units shall vest at such time
and in such installments as determined by the Board; provided, however, that
the vesting of Deferred Stock Units may be subject to the attainment of
performance goals.

(b)    Forfeiture. Unless
otherwise provided in the Deferred Stock Unit Award Agreement, upon the
Participant’s ceasing to be a member of the Board (other than as provided below
in Sections 8.1(c) and (d)), the shares of Common Stock subject to a
Deferred Stock Unit Award that have not yet become vested pursuant to the
Deferred Stock Unit Agreement shall be forfeited. For clarity, ceasing to be a
member of the Board due to death shall be covered by this paragraph.

(c)    Disability or Retirement
of Participant. Unless otherwise provided in the Deferred Stock Unit
Award Agreement, if a Participant ceases to be a member of the Board due to
disability (as determined by the Board) or Retirement, all outstanding Deferred
Stock Units granted to such Participant shall continue to vest, provided the
following conditions are met:

(i)     The Participant shall not render services
for any organization or engage directly or indirectly in any business which, in
the opinion of the Board, competes with, or is in conflict with the interest
of, the Company. The Participant shall be free, however, to purchase as an
investment or otherwise stock or other securities of such organizations as long
as they are listed upon a recognized securities exchange or traded
over-the-counter, or as long as such investment does not represent a
substantial investment in the opinion of the Committee or a significant (great
than 3%) interest in the particular organization. For the purposes of this
subsection, a company (other than an Affiliate) which is engaged in the
business of producing, leasing or selling products or providing services of the
type now or at any time hereafter made or provided by the Company or any of its
Affiliates shall be deemed to compete with the Company; and

(ii)    The Participant shall not, without prior
written authorization from the Company, use in other than the business of the
Company or any of its Affiliates, any confidential information or material
relating to the business of the Company or its Affiliates, either during or
after service on the Company’s Board.

(d)    Divestiture. If
a Participant will cease to be a member of the Board because of a divestiture
by the Company, prior to such termination of membership, the Board may, in its
sole discretion, accelerate the vesting of all or a portion of any outstanding
Deferred Stock Unit granted to such Participant and provide that all forfeiture
provisions with respect to such Deferred Stock Units shall lapse. The
determination of whether a divestiture will occur shall be made by the Board in
its sole discretion.

(e)    Dividend Equivalents.
The Deferred Stock Unit Award Agreement may provide that the holder of the
Deferred Stock Units will be entitled to receive payment from the Company at
such times as set forth in the Deferred Stock Unit Award Agreement in an amount
equal to each cash dividend (“Dividend Equivalent”) the Company would have paid
to such holder had he, on the record date for payment of such dividend, been
the holder of record of shares of Common Stock equal to the number of Deferred
Stock Units which had been awarded to such holder as of the close of business
on such record date. The Company shall establish a bookkeeping account on
behalf of each Participant in

 6
 

 

which the Dividend Equivalents that would have been
paid to the holder of Deferred Stock Units shall be credited. Such account will
not bear interest.

8.3       Rights as a Stockholder. The
Participant shall have the rights equivalent to those of a stockholder and
shall be a stockholder only after shares of Common Stock are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) to the Participant to the extent
described in the terms of a Deferred Stock Award Agreement.

ARTICLE IX

Termination or Amendment

9.1       Termination or Amendment
of Plan.

(a)    Except as provided in Subsection (b), the
Board may at any time amend, discontinue or terminate the Plan or any part
thereof (including any amendment deemed necessary to ensure that the Company
may comply with any regulatory requirement referred to in Article X);
provided, however, that, unless otherwise required by law, the rights of a
Participant with respect to Awards granted prior to such amendment,
discontinuance or termination may not be impaired without the consent of such
Participant.

(b)    Any amendment that constitutes a “material
revision” to the Plan requiring stockholder approval pursuant to the New York
Stock Exchange Corporate Governance Listing Standards shall not be effective
unless approved by the Company’s stockholders.

9.2       Amendment of Awards. The
Board may amend the terms of any Award previously granted, prospectively or
retroactively, but, subject to Article IV, no such amendment or other
action by the Board shall impair the rights of any holder without the holder’s
consent.

ARTICLE X

Unfunded Plan

10.1     Unfunded Status of Plan. The
Plan is intended to constitute an “unfunded” plan for incentive compensation. With
respect to any payment not yet made to a Participant by the Company, nothing
contained herein shall give the Participant any rights that are greater than
those of a general creditor of the Company.

ARTICLE XI

General Provisions

11.1     Nonassignment. Except
as otherwise provided in the Award Agreement, any Award granted hereunder and
the rights and privileges conferred thereby shall not be sold, transferred,
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise), and shall not be subject to execution, attachment or similar process.
Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose
of any such Award, right or privilege contrary to the provisions hereof, or
upon the levy of any attachment or similar process thereon, such Award and the
rights and privileges conferred hereby shall immediately terminate and the
Award shall immediately be forfeited to the Company.

11.2     Legend. The
Board may require each person acquiring shares hereunder to represent to the
Company in writing that the Participant is acquiring the shares without a view
to distribution thereof. The stock certificates representing such shares may
include any legend which the Board deems appropriate to reflect any
restrictions on transfer.

 

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All certificates representing shares of Common Stock delivered
under the Plan shall be subject to such stock transfer orders and other
restrictions as the Board may deem advisable under the rules, regulations and
other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, any applicable Federal or
state securities law, and any applicable corporate law, and the Board may cause
a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

11.3     Other Plans. Nothing
contained in the Plan shall prevent the Board from adopting other or additional
compensation arrangements, subject to stockholder approval if such approval is
required; and such arrangements may be either generally applicable or
applicable only in specific cases.

11.4     No Right to Continue as
Director. Neither the Plan nor the grant of any Award hereunder
shall confer upon any person the right to continue as a director of the Company
or obligate the Company to nominate any director for reelection by the Company’s
stockholders.

11.5     Listing and Other
Conditions.

(a)    If the Common Stock is listed on a national
securities exchange, the issuance of any shares of Common Stock upon exercise
of an Award shall be conditioned upon such shares being listed on such exchange.
The Company shall have no obligation to issue any shares of Common Stock upon
exercise of an Award unless and until such shares are so listed, and the right
to exercise any Award shall be suspended until such listing has been effected.

(b)    If at any time counsel to the Company shall
be of the opinion that any sale or delivery of shares of Common Stock upon
exercise of an Award is or may in the circumstances be unlawful or result in
the imposition of excise taxes under the statutes, rules or regulations of
any applicable jurisdiction, the Company shall have no obligation to make such
sale or delivery, or to make any application or to effect or to maintain any
qualification or registration under the Securities Act of 1933, as amended, or
otherwise with respect to shares of Common Stock, and the right to exercise any
Award shall be suspended until, in the opinion of said counsel, such sale or
delivery shall be lawful or shall not result in the imposition of excise taxes.

(c)    Upon termination of any period of suspension
under this Section 11.5, any Award affected by such suspension which shall
not then have expired or terminated shall be reinstated as to all shares
available before such suspension and as to shares which would otherwise have
become available during the period of such suspension, but no such suspension
shall extend the term of any Award.

11.6     Governing Law. The
Plan and actions taken in connection herewith shall be governed and construed
in accordance with the laws of the State of Delaware.

11.7     Construction. Wherever
any words are used in the Plan in the masculine gender they shall be construed
as through they were also used in the feminine gender in all cases where they
would so apply, and wherever any words are used herein in the singular form
they shall be construed as though they were also used in the plural form in all
cases where they would so apply.

11.8     Liability of Board Members.
No member of the Board nor any employee of the Company or any of its
subsidiaries shall be liable for any act or action hereunder, whether of
omission or commission, by any other member of employee or by any agent to whom
duties in connection with the administration of the Plan have been delegated
or, except in circumstances involving bad faith, gross negligence or fraud, for
anything done or omitted to be done by himself.

11.9     Costs. The
Company shall bear all expenses incurred in administering the Plan, including
expenses related to the issuance of Common Stock upon exercise of Stock
Options.

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11.10   Severability. If
any part of the Plan shall be determined to be invalid or void in any respect,
such determination shall not affect, impair, invalidate or nullify the
remaining provisions of the Plan which shall continue in full force and effect.

11.11   Successors. The
Plan shall be binding upon and inure to the benefit of any successor or
successors of the Company.

11.12   Headings. Article and
section headings contained in this Plan are included for convenience only and
are not to be used in construing or interpreting the Plan.

11.13   Change in Control. Upon
the occurrence of a Change in Control, each Award then outstanding shall become
immediately vested, and in the case of Options, exercisable to the full extent
of the shares of Common Stock subject thereto. For purposes of this Plan,
unless otherwise defined in the Award Agreement, a “Change in Control” shall be
deemed to have occurred if at any time after the Effective Date any “person” or
“group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “1934 Act”)) becomes the “beneficial
owner” (as defined in Section 13(d)(3) under the 1934 Act) of securities
of the Company representing more than 35 percent (35%) of the total
aggregate voting power of the Company’s then outstanding securities entitled to
vote generally in the election of directors, and such person or group owns more
aggregate voting power of the Company’s then outstanding securities entitled to
vote generally in the election of directors than any other person or group. Notwithstanding
anything else contained in this Section 11.13, a Participant shall be
eligible to exercise Awards both before and after a Change in Control to the
full extent otherwise permitted under the Plan.

ARTICLE XII

Term of Plan

12.1     Effective Date. The
Plan shall be effective as of the Effective Date.

12.2     Termination. Unless
sooner terminated, the Plan shall terminate ten years after it is adopted by
the Board and no Awards may be granted thereafter. Termination of the Plan
shall not affect Awards granted before such date, which will continue to be
exercisable after the Plan terminates.

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