Document:

Exhibit
10.1

 

FOURTH AMENDMENT TO LEASE

 

 

 

THIS AGREEMENT, dated for reference
purposes only, June 23, 2003, is made by and between Union Bank of California,
N.A., as Successor in Interest to Copper Mountain Trust Corporation, Trustees,
for Quest
Group Trust VI (“Landlord”), and Pixelworks, Inc., an Oregon Corporation
(“Tenant”).

 

 

RECITALS:

 

A.                                   The parties hereto entered into a Lease
dated May 1, 1998, and amended by Addendum A dated May 1, 1998 and First
Amendment to Lease dated August 11, 2000, and Second Amendment to Lease dated
January 24, 2001, and Third Amendment to Lease dated March 1, 2002 (the
“Lease”), for certain real property commonly known as Suite 207, 4,671 rentable
square feet, Suite 111, 997 rentable square feet, Suite 110, 1,742 rentable square
feet, Suite 107, 1,910 rentable square feet, Suite 105, 1,374 rentable square
feet, and Suite 100, 3,029 rentable square feet, for a total of 13,696 rentable
square feet, known as the “Premises”, located in Lakeside Center, a Class A
office building described as 8100 S.W. Nyberg Road, Tualatin, Oregon 97062.

 

B.                                     The parties desire to amend certain
provisions thereof.

 

 

NOW, THEREFORE, the parties hereto hereby agree as
follows:

 

 

1.               Effective October 1, 2003, Tenant and
Landlord agree to extend the lease term for an additional 12 months, through
September 30, 2004.  The base rent for
the Premises (13,696 rentable square feet) shall be $22.00 per rentable square
foot per year or $25,109.00 per month through September 30, 2004.

 

2.               Tenant will lease the Premises in “as is”
condition.  Any tenant improvements to
the Premises would be at Tenant’s cost with Landlord approval.  Any tenant improvement construction work
must be performed by a contractor signatory to the construction unions.

 

3.               Tenant’s base year for operating expenses
for the Premises shall continue to be calendar year 2002.  Prorata share of operating expenses for the
Premises shall be 24.72%.

 

4.               Landlord does not pay a broker fee on the
Premises lease extensions.

 

5.               As amended by this Fourth Amendment to
Lease, the Lease shall remain in full force and effect, including all items in
the Fourth Amendment to Lease now signed.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this
Lease Amendment.

 

 

	
  LANDLORD:

  	
   

  	
  TENANT:

  	
   

  
	
  Union
  Bank of California, N.A., as Trustee

  	
   

  	
  Pixelworks,
  Inc., an Oregon Corporation

  
	
  for
  Quest Group Trust VI

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   /s/
  Tim West

  	
   

  	
  By: 

  	
   /s/
  Hans Olsen

  	
   

  
	
  Tim
  West, Vice President

  	
   

  	
   

  	
    Hans Olsen, Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  Date: 7/11/03

  	
   

  	
  Date: 6/30/03Exhibit 10.1

 

	
   

  	
  Confidential materials omitted and filed

  separately with the Securities and

  Exchange Commission.  Asterisks denote

  such omission.

  

 

 

DATED
AS OF JANUARY 3, 2003

 

 

CAMBRIDGE
ANTIBODY TECHNOLOGY LIMITED   (1)

 

and

 

DYAX
CORP.    (2)

 

 

AMENDMENT
AGREEMENT

 

 

 

TABLE OF CONTENTS

 

 

	
  1.

  	
  DEFINITIONS

  
	
   

  	
   

  
	
  2.

  	
  AMENDMENT OF ORIGINAL
  AGREEMENTS

  
	
   

  	
   

  
	
  3.

  	
  OPTION FOR PRODUCT LICENSES

  
	
   

  	
   

  
	
  4.

  	
  TARGET OPTION
  NOTICE AND GATEKEEPING PROCEDURE

  
	
   

  	
   

  
	
  5.

  	
  GRANT
  OF PRODUCT LICENCE

  
	
   

  	
   

  
	
  6.

  	
  TERMS OF THE PRODUCT
  LICENCES

  
	
   

  	
   

  
	
  7.

  	
  GRANT OF OTHER PURPOSES
  LICENCE

  
	
   

  	
   

  
	
  8.

  	
  CONSIDERATION

  
	
   

  	
   

  
	
  9.

  	
  PROVISIONS
  RELATING TO PAYMENT OF CONSIDERATION

  
	
   

  	
   

  
	
  10.

  	
  CAT
  DEVELOPMENT LICENSE FOR DYAX THERAPEUTIC ANTIBODY PRODUCTS

  
	
   

  	
   

  
	
  11.

  	
  CO-DEVELOPMENT
  AGREEMENT OPTION

  
	
   

  	
   

  
	
  12.

  	
  REDUCTION
  OF ROYALTY UNDER ORIGINAL AGREEMENTS

  
	
   

  	
   

  
	
  13.

  	
  REPRESENTATIONS AND
  WARRANTIES

  
	
   

  	
   

  
	
  14.

  	
  DURATION
  AND TERMINATION

  
	
   

  	
   

  
	
  15.

  	
  SUBLICENSING OF DYAX
  PATENT RIGHTS

  
	
   

  	
   

  
	
  16.

  	
  GOVERNING LAW AND
  JURISDICTION

  
	
   

  	
   

  
	
  17.

  	
  ASSIGNMENT

  
	
   

  	
   

  
	
  18.

  	
  MISCELLANEOUS

  

 

 

THIS AGREEMENT is
made as of January 3, 2003

 

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 (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 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 in the Original
Agreements).

 

(d)                                 By
this Agreement the Parties wish to amend the terms of the Original Agreements.

 

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:

 

1

 

“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, 8.3.1
and 8.3.4(a) hereof.

 

“Additional Diagnostic Licences” means the
Product Licences detailed in Clause 3.8.

 

“Additional
Licence Allocation”  means the [*****] Product Licences in
Clauses 3.5 and 3.6.

 

“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.

 

“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 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.

 

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

 

2

 

“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 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

 

3

 

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
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 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.

 

“CAT Stock”  means the ordinary shares of
Cambridge Antibody Technology Group plc that trade on the Official List of
UKLA.

 

“CAT Stock Price” means the price which is
the average weighted volume price of CAT Stock as published in the Daily
Official List of the UKLA over the period of the preceding 20 full trading days
immediately prior to the date upon which Consideration Shares fall to be
allotted and issued to Dyax in accordance with Clause 12.6.

 

“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 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

 

4

 

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.

 

“Consideration
Shares”  means any CAT Stock allotted and issued by
CAT to Dyax in accordance with Clause 12.6.

 

“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 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 outside the Excluded Field 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 3.7.

 

5

 

“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 the Patent Rights
(as defined in the Original Agreements) under the Original Agreements.

 

“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.

 

“Elan Agreement” means the Research,
Development and Commercialisation Agreement made by and among Elan Pharma
International Limited and CAT dated 24 January 2001.

 

6

 

“Excluded Field” means the [*****]
and/or [*****]
of [*****]
useful for [*****] and/or [*****] of [*****] of the following [*****]
wherein the [*****] or [*****] is [*****] and/or [*****]

 

(a)                                  [*****]
conditions, including but not limited to (i) [*****], and (ii) [*****],
but in both instances, [*****] the [*****] in [*****]
associated with [*****] (including, without limitation, [*****] and/or [*****],
using either (A) [*****] directed at [*****] or any [*****] including, without
limitation, the administration of [*****] or (B) use of a [*****],
including, without limitation, the administration of [*****];

 

(b)                                 [*****]

 

(c)                                  [*****],
including, but not limited to, (i) [*****] (ii) [*****] and (iii) [*****]

 

(d)                                 [*****]

 

(e)                                  [*****]
and/or

 

(f)                                    [*****],
as a disease of the [*****],

 

provided,
however, that for the purpose of this Agreement, the term “Excluded
Field” shall not include [*****] of the[*****] caused by [*****].

 

“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 or Other Product by Dyax or a Dyax Sublicensee
(or its sublicensee) in any country after grant of a Marketing Authorisation.

 

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

 

7

 

“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.

 

“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.

 

“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.

 

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

 

8

 

“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 or 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.

 

“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.

 

“Other Purposes” has the meaning set forth
in Clause 7.

 

“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.

 

9

 

“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).

 

“Primary Application” means a major
application of an Antibody 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 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.

 

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

 

10

 

“Specified Diagnostic Agreements” means (i)
the [*****]
effective [*****] between Dyax and [*****],
a wholly owned subsidiary of [*****], and (ii) the [*****] effective [*****]
between Dyax, [*****],  and (iii) the
[*****]
effective [*****]
between Dyax and [*****], 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 outside the Excluded Field 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.

 

“UKLA” means the United Kingdom Listing
Authority.

 

“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.

 

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

 

11

 

“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.

 

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.                                      Amendment of Original Agreements

 

2.1                                 In
accordance with Clause 9.6 of both the Original Agreements, this Agreement
hereby amends the Original Agreements, as follows:

 

2.1.1                        Clause 2.4
of the Therapeutic Product License Agreement is hereby amended by: (a) deleting
the words “the Schedule 1 Patents” in the third line and replacing those words
with “the Antibody Phage Display Patents and the CAT Know-How (as defined in
the Amendment Agreement between CAT and Dyax dated as of January 3,
2003)”; and (b) deleting “[*****]” in the fourth sentence of Clause
2.4

 

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

 

12

 

and replacing it with the words “[*****] provided that Dyax
may only exercise [*****] on behalf of a Dyax Sublicensee (as
defined in the Amendment Agreement between CAT and Dyax dated as of
January 3, 2003) to which Dyax had committed, prior to the Commencement
Date, [*****],
if so requested by such Dyax Sublicensee.” 
For the avoidance of doubt, [*****] will still be subject to Clauses
2.4, 4.1.4, 4.1.5 and 4.1.6 of the Therapeutic Product Licence Agreement
without giving effect to the amendments to such clauses set forth in this
Agreement.

 

2.1.2                        Clause 12
of this Agreement hereby amends:

 

(i)                                     Clause
4.1.6 of the Therapeutic Product License Agreement and Clause 4.1.5 of the
Antibody Diagnostic License Agreement relating to royalty payments;

 

(ii)                                  Clause
4.1.5 of the Therapeutic Product License Agreement relating to NDA milestone
payments, and Clause 4.1.4 of the Antibody Diagnostic License Agreement
relating to 510(k) or pre-marketing approval milestone payments; and

 

(iii)                               Clauses
4.1.2 of both Original Agreements relating to maintenance fees.

 

2.1.3                        Clause 15
of this Agreement hereby amends Clause 2.1 of both Original Agreements.

 

2.2                                 All
other terms of the Original Agreements not amended or replaced by this
Agreement remain in full force and effect. 
In the event of a conflict between this Agreement and the Original
Agreements, the terms of this Agreement will prevail.

 

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

 

13

 

3.                                      Option for Product Licences

 

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)                                  the
Initial License Allocation of up to [*****] Product Licences for Therapeutic
Antibody Products and/or Diagnostic Antibody Products as set out in Clauses
3.2, 3.3 and 3.4;

 

(b)                                 the
Additional Licence Allocation of up to [*****] Product Licences for Therapeutic
Antibody Products and Diagnostic Antibody Products as set out in Clauses 3.5
and 3.6. 

 

(c)                                  [*****]
Diagnostic Collaboration Licences for Diagnostic Antibody Products as set out
in Clause 3.7; and

 

(d)                                 [*****]
Additional Diagnostic Licences for Diagnostic Antibody Products as set out in
Clause 3.8.

 

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.

 

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

 

14

 

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,
subject to Clause 3.6, 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.

 

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

 

15

 

3.6                                 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 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 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
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 3.7 has not been

 

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

 

16

 

exercised by Dyax on or
before 31 December 2017, then the option for such Product Licence will
lapse irrevocably.

 

3.8                                 In
addition to the options for Product Licences granted by CAT to Dyax in Clauses
3.2 through 3.7, 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.

 

3.9                                 CAT
agrees that, commencing with the Commencement Date, it will not enter into
any  agreement or arrangement with any
Third Party whereby a field of use under the 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.

 

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

 

3.11                           Prior
to [*****],
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 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.

 

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

 

17

 

4.                                      Target Option Notice and Gatekeeping
Procedure

 

4.1                                 If
Dyax wishes to develop and commercialise any CAT Licensable Antibodies 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”);

 

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

 

(c)                                  represent
and warrant to CAT in writing that it believes that the Primary Application of
the Nominated Target is outside the Excluded Field; and

 

(d)                                 provide
CAT with sufficient information available to Dyax to allow CAT to:

 

(i)                                     conduct
an assessment of the Nominated Target and proposed Product to determine whether
or not the Primary Application of the Nominated Target and proposed Product and
the intended or actual use of the Nominated Target and proposed Product is in
the Excluded Field; and

 

(ii)                                  subject
the Nominated Target to such family, motif sequence analysis or other customary
or scientifically established techniques as may be used to determine whether or
not the Primary Application of the Nominated Target and or Product is in the
Excluded Field.

 

4.2                                 Dyax
may request that the procedure described in this Clause 4 be carried out in
relation to a Nominated Target at any time without requesting at the same time
that a Product Licence be granted in relation to that Nominated Target.  If CAT notifies Dyax that a Product Licence
is available for the Nominated Target in accordance with Clause 4.4.1 below,
such Nominated Target will then be reserved for Dyax and Dyax Sublicensee for

 

18

 

a period of [*****] from the date of such CAT
notice.  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.  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.

 

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

 

(a)                                  subject
the Nominated Target to such [*****] as CAT in its sole discretion may
determine in order to confirm that the Primary Application of the Nominated
Target is not in the Excluded Field;

 

(b)                                 conduct
an assessment of the Nominated Target using information available to CAT to
determine whether or not the Nominated Target’s Primary Application and the
intended or actual use of the Nominated Target is in the Excluded Field;

 

(c)                                  make
such reasonable inquiries of Dyax in respect of the intended or actual use of
the Nominated Target as CAT deems fit; and

 

(d)                                 submit
the Nominated Target to the CAT Gatekeeping Procedure.

 

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

 

4.4.1                        notify
Dyax in writing that CAT shall, subject to the payment of applicable Acceptance
Fee set out in Clause 8, grant to Dyax a Product Licence in the Territory; or

 

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

 

19

 

4.4.2                        notify
Dyax in writing that either (i) the Nominated Target’s Primary Application is
in the Excluded Field or (ii) the Nominated Target has not passed the CAT
Gatekeeping Procedure, in which case Dyax shall not be granted a Product
Licence and Dyax and Dyax Sublicensees shall have no right to use the Antibody
Phage Display Patents in respect of such Nominated Target.

 

4.5                                 CAT
agrees that:

 

(a)                                  CAT
will notify Dyax immediately to the extent (i) the definition of Excluded Field
is narrowed or terminated by any agreement between CAT and Elan Pharma
International Ltd (or its successors or assigns) pursuant to the terms of the
Elan Agreement or (ii) CAT otherwise is not bound by the Excluded Field
restriction to the same extent as set forth in the Elan Agreement in effect on
the Commencement Date of this Agreement. 
Commencing with the date upon which (i) or (ii) above becomes effective
as between CAT and Elan Pharma International Ltd (or its successors or assigns)
such narrowed definition of Excluded Field shall replace the definition set out
at the beginning of this Agreement.  If
CAT ceases to be bound by the Excluded Field restriction in its entirety, then
the provisions in this Agreement relating to the Excluded Field shall no longer
apply;

 

(b)                                 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;

 

(c)                                  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

 

(d)                                 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

 

20

 

for the purposes of this
Clause 4.  Any such information will be
deemed to be Confidential Information of Dyax.

 

5.                                      Grant of Product Licence

 

5.1                                 To
Dyax.  In the event CAT notifies
Dyax under Clause 4.4.1 above that a Product Licence can be granted to Dyax
with respect to Products against a Nominated Target, 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 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 the Parties agree that the terms
and conditions and the form of the first Product Licence executed by the
Parties under this Agreement shall serve as the same for each subsequent Product
Licence executed under this Agreement.

 

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 License Allocation under
Clauses 3.2 to 3.4 and the Additional Licence Allocation under Clauses 3.5 and
3.6.

 

5.3                                 It
shall not be a breach of any provision of this Agreement if following the grant
of any Product Licence by CAT to Dyax it is subsequently discovered by either
Party that the Nominated Target in question has a Primary Application in the
Excluded Field; provided always that that Party promptly so notifies the other
in writing and in such event any Product Licence granted by CAT to Dyax shall remain
in full force and effect.

 

5.4                                 Nothing
herein shall prevent CAT from meeting any obligations it has to Third Parties
under any agreements (including the Elan Agreement) in respect of any Nominated
Target for which Dyax submits a Target Option Notice under Clause 4.1 where
such Nominated Target’s Primary Application is determined by CAT under Clause 4
either to

 

21

 

be in the Excluded Field or 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.

 

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

 

5.5.1                        in
relation to a Therapeutic Antibody Product prior to Dyax [*****] commencement of the [*****]
in relation to the Product; or

 

5.5.2                        in
relation to a Diagnostic Antibody Product prior to Dyax [*****] for [*****]
on the relevant [*****].

 

5.6                                 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.

 

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

 

5.8                                 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 3.11 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.

 

5.9                                 Dyax
(and where relevant each Dyax Sublicensee) will be liable for any breach of the
clauses listed in Clause 5.8 above by a sublicensee; provided, however, that
Dyax’s liability for such breach by a sublicensee shall be limited [*****]
; and provided, further,

 

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

 

22

 

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 Licences

 

Each Product Licence
granted to Dyax shall include the following terms:

 

6.1                                 The
Product Licence shall grant rights under the 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 expires, or ten (10) years after First Commercial Sale of such
Product in the country of sale, whichever occurs later;

 

6.4                                 Dyax
or the 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
litigation) incurred by or imposed upon the CAT Indemnitees or any one of them
in connection with any claims, suits, actions,

 

23

 

demands or judgments by or in favour of any Third
Party concerning any manufacture, use or sale of any Product by Dyax or the
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 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 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;

 

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
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;

 

24

 

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
five (5) years after the grant of that Product Licence; 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 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;

 

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;

 

25

 

(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 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 Purposes Licence

 

7.1                                 Subject
to the terms of Clause 6 and Clauses 8.4, 8.5 and 8.6 of this Agreement, CAT
hereby grants to Dyax a non-exclusive licence in the Territory, with the right
to sublicence, under the 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 or utilize the CAT Know-How (“Other
Product”).  The foregoing
licence for Other Purposes 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 for Other Purposes are expressly subject
to any rights which CAT has granted to any Third Party prior to the
Commencement Date or may grant to any Third Party after the Commencement Date
provided that any rights granted by CAT to any Third Party after the
Commencement Date 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.

 

26

 

7.2                                 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.

 

7.3                                 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:

 

(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 7.3(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;

 

27

 

8.                                      Consideration

 

8.1                                 Initial
License Allocation for Therapeutic Antibody Products.

 

8.1.1           With
respect to each Product Licence from the Initial License 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

  	
   

  	
  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 $[*****]

  

 

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 [*****]
percent ([*****]%)
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 Clauses 3.5 and 3.6 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:

 

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

 

28

 

	
  Acceptance
  Fee

  	
   

  	
  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 Clauses 3.5 and 3.6 for Therapeutic Antibody Products, Dyax will 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.

 

8.3.3                        Product
Licences for Diagnostic Products.

 

8.3.1           Initial
License Allocation and Additional Licence Allocation.  With respect to each Product Licence from
the Initial License Allocation and Additional Licence  Allocation 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 $[*****]

  

 

8.3.2           With
respect to each Product Licence for a Diagnostic Antibody Product from the
Initial Licence Allocation and from the Additional Licence Allocation granted
to Dyax, Dyax shall pay CAT royalties on a country-by-country basis in an

 

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

 

29

 

amount equal to [*****]
percent ([*****]%)
of Net Sales of Diagnostic Antibody Products sold by or on behalf of Dyax or
any Dyax Sublicensee.

 

8.3.3                           Diagnostic
Collaboration Licences under the Specified Diagnostic Agreements.  With respect to each Product Licence from
the Diagnostic Collaboration Licences allocation for a Diagnostic Antibody
Product developed under the Specified Diagnostic Agreements, the Dyax
Sublicensee shall pay CAT royalties on a country-by-country basis in an amount
equal to [*****]
percent ([*****]%) of Net Sales of the Diagnostic
Antibody Product sold by or on behalf of Dyax or the Dyax Sublicensee. [*****]
will be [*****]
in respect of [*****] developed under the [*****].

 

8.3.4                           Additional
Diagnostic Licenses.

 

(a)                                  With
respect to each Product Licence from the Additional Diagnostic Licences
allocation for Diagnostic Antibody Products, Dyax or the Dyax Sublicensee 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

  	
   

  	
  US $[*****]

  
	
  First
  filing for Marketing Authorisation in one Major Market country

  	
   

  	
  US $[*****]

  
	
  Marketing
  Authorisation granted in the United States

  	
   

  	
  US $[*****]

  
	
  Marketing
  Authorisation granted in each Major Market Country other than the United
  States

  	
   

  	
  US $[*****]

  

 

(b)                                 With
respect to each Product Licence from the Additional Diagnostic Licences
allocation for Diagnostic Antibody Products, Dyax or the Dyax Sublicensee shall

 

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

 

30

 

pay CAT royalties on a
country-by-country basis in an amount equal to [*****] percent ([*****]%)
of the Net Sales of the Diagnostic Antibody Product sold by or on behalf of
Dyax or a 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[*****] percent ([*****]%)
of Net Sales of each Other Product sold by or on behalf of Dyax or the
sublicensee.

 

8.5                                 In
addition to the royalty payments in Clause 8.4, and subject to Clause 8.7.3,
Dyax will pay to CAT [*****] percent ([*****]%) 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 the Commencement Date.

 

8.7                                 Dyax
Antibody Libraries and Funded Discovery Activities.

 

8.7.1                        In respect
of any agreements concluded between Dyax and any Dyax Partner before the
Commencement Date under which Antibody Libraries or Antibodies derived
therefrom are made available to such Dyax Partner, the Parties agree that:

 

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

 

31

 

(a) Dyax will retain all amounts (including without
limitation 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.

 

8.7.2                           In
respect of any agreements concluded between Dyax and any Dyax Partner after the
Commencement Date 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 8.7.2.

 

8.7.3                           The
provisions of this Clause 8.7 shall not apply to Other Products, which shall be
handled solely in accordance with Clauses 8.4, 8.5 and 8.6 above.

 

8.8                                 All
royalties due to CAT pursuant to any Product Licence under Clauses 8.1.2,
8.2.2, 8.3.2, 8.3.3 or 8.3.4(b) or sums due to CAT in respect of any Other
Product or any Other

 

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

 

32

 

Purpose under Clauses 8.4
and 8.5 or any other sums due to CAT under Clause 8.7.2 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 or Other Product or
Other Purpose, whichever occurs later.

 

8.9                                 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.

 

8.10                           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 Antibody Phage
Display Patents; provided that (i) any amounts paid to Dyax from any such Dyax
Sublicensee will be dealt with in accordance with Clause 8.5 or 8.7, 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.

 

9.                                      Provisions relating to Payment of
Consideration

 

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

 

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

 

33

 

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 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 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.  Any tax
(other than VAT) which Dyax is required to pay or withhold with respect of the
payments to be made to CAT hereunder shall be deducted from the amount
otherwise due

 

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

 

34

 

provided that, in regard
to any such deduction, Dyax shall give CAT such assistance, which shall include
the provision of such documentation as may be required by any revenue authority
and other revenue services, as may reasonably be necessary to enable CAT to
claim exemption therefrom or obtain a repayment thereof or a reduction thereof
and shall upon request provide such additional documentation from time to time
as is needed to confirm the payment of tax. 
If by law, regulation or fiscal policy of a particular country, a
remittance of royalties in the currency stipulated in Clause 9.2 above, as the
case may be, is restricted or forbidden, notice thereof will be promptly given
to CAT, and payment of the royalty shall be made by the deposit thereof in
local currency to the credit of CAT in a recognized banking institution
designated by CAT or its Affiliates. 
When in any country a law or regulation that prohibits both the
transmittal and deposit of such payments ceases to be in effect, all royalties
or other sums that Dyax would have been under obligation to transmit or deposit
but for the prohibition, shall forthwith be deposited or transmitted promptly
to the extent allowable.

 

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

 

35

 

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 five percent (5%) 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.  If CAT is required to charge VAT on any such payment, CAT will
notify Dyax.  Dyax will then use all
commercially reasonable endeavours to obtain a VAT registration as soon as
reasonably possible in order to allow it to reclaim any VAT so chargeable.  If Dyax does obtain a VAT registration then
VAT will be added to any relevant payment at the applicable rate.  If

 

36

 

having used all
commercially reasonable endeavours Dyax is not able to reclaim the VAT (in
whole or in part) the parties agree that [*****].

 

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.

 

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 four percent (4%) 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

 

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

 

37

 

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 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

 

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

 

38

 

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 6.

 

12.                               Reduction of Royalty under Original
Agreements

 

12.1                           Subject
to Clauses 12.2 and 12.9, CAT will have no further obligation whatsoever to
make any payments to Dyax under the Original Agreements, in particular under:

 

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

 

39

 

12.1.1           Clause 4.1.6 of the
Therapeutic Product License Agreement and Clause 4.1.5 of the Antibody
Diagnostic Product License Agreement which both relate to royalties;

 

12.1.2           Clause 4.1.5 of the
Therapeutic Product License Agreement relating to NDA milestone payments and
Clause 4.1.4 of the Antibody Diagnostic Product License Agreement relating to
510(k) or pre-marketing approval milestone payments; and

 

12.1.3           Clauses 4.1.2 of both
Original Agreements relating to maintenance fees (including any maintenance
fees which became due on December 31, 2002).

 

12.2         The elimination of CAT’s
obligation to make payments in Clause 12.1 shall not apply to any obligation
CAT may have to pay royalties to Dyax in relation to the sums CAT may receive
in relation to the D2E7 product, whether under the Abbott Agreement or any
agreement which replaces or amends the Abbott Agreement, but such obligation shall
be amended as set out in Clauses 12.3 through 12.11 below.  Notwithstanding Clause 4.2 of the
Therapeutic Produce Licence Agreement, CAT shall satisfy any obligation it may
have to make royalty payments to Dyax in relation to the sums CAT may receive in
relation to the D2E7 product within [*****] ([*****]) days of the date
royalties are due to CAT by Abbott Laboratories Inc (“Abbott”) the Abbott
Agreement.  Other than as set forth in
the preceding sentence, CAT shall remain subject to Clause 4.2 of the Therapeutic
Product Licence Agreement.

 

12.3                           In the
event that CAT disputes that milestones or royalties are payable to Dyax in
relation to D2E7 under the Original Agreements for any reason, then the Parties
shall resolve such a dispute by using the arbitration procedure set out in
Clause 16.2, but only if [*****] agrees to be bound by the decision
of the arbitrator(s).

 

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

 

40

 

12.4                           If a
dispute cannot be resolved by reference to arbitration in accordance with
Clause 12.3 above because Abbott refuses to be bound by the arbitration
decision, then the dispute will be resolved in accordance with the Original
Agreements.  The Parties agree that if a
dispute arises in relation to D2E7 which would give either Party the right to
terminate the Original Agreements, such right will take effect to allow that
Party to terminate the Original Agreements in respect of D2E7 alone.

 

12.5                           Dyax
hereby grants to CAT the options set out in subclauses 12.5.1 to 12.5.3 below
to eliminate any obligation it may have to make any payments to Dyax in respect
of D2E7 under the Original Agreements:

 

12.5.1                  If neither Party
has given notice to commence arbitration proceedings regarding D2E7 under
Clause 12.3, then CAT may at its option pay Dyax in accordance with Clause 12.6
the sum of [*****] pounds sterling (£[*****]):or

 

12.5.2                  If either Party
has given notice to commence arbitration proceedings regarding D2E7 under
Clause 12.3 but no decision has been rendered by the arbitrators, then CAT may
at its option pay Dyax in accordance with Clause 12.6 the sum of [*****]
pounds sterling (£[*****]) and, if CAT so elects, the
arbitration proceedings will cease immediately; or

 

12.5.3                  If the
arbitration proceedings under Clause 12.3 have resulted in a final decision
from the arbitrators, then CAT shall have [*****] days to elect whether to accept the
decision of the arbitrators or instead to pay Dyax in accordance with Clause
12.6 the sum of [*****] pounds sterling (£[*****]). 
If CAT elects to pay such sum, the decision of the arbitrators will not
be binding on the parties.

 

12.6                           CAT
shall exercise the options in Clause 12.5 by sending a written notice to Dyax
(“Royalty
Reduction Option Notice”). Such a notice shall set out whether CAT
elects to pay the sum due in cash or by the allotment of CAT Stock (or a
combination of both).

 

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

 

41

 

Such sum shall be payable
within [*****]days
of the date of the Royalty Reduction Option Notice. If CAT has elected to pay
any part of the sum in cash it shall be paid by wire transfer and if by the
allotment of CAT Stock (in whole or in part) it shall allot and issue, credited
as fully paid, to Dyax such number of shares of CAT Stock as shall have an
aggregate value of the relevant amount payable under the particular option
based on the CAT Stock Price determined as of the date the CAT Stock is
allotted and a duly completed application has been properly filed to procure
the admission to trading of the allotted shares of CAT Stock on the Official
List of the UKLA.  Such shares of CAT
Stock will rank pari passu in all respects with the existing issued shares of
CAT Stock.

 

12.7                           If CAT
does not elect to exercise the options in Clauses 12.5 then CAT and Dyax agree
to accept and be bound by the final decision of the arbitrators.

 

12.8                           The
options under Clauses 12.5 shall terminate if legal proceedings regarding D2E7
arise under the Original Agreements (a) before (i) [*****] has agreed to refer a
dispute regarding D2E7 to binding arbitration in accordance with Clause 12.3
above or (ii) [*****] has [*****] a [*****] or (b) after [*****] listed
in subclause (a), either [*****] or [*****] regarding D2E7 other
than [*****]
in accordance with Clause [*****] hereof.

 

12.9                           The
parties agree that should any milestone be payable by CAT to Dyax in respect of
D2E7 in accordance with Clause 4.1.5 of the Therapeutic Product License
Agreement such payment will be due on [*****] of the relevant [*****]
or [*****]
and not when the [*****].

 

12.10                     As a
condition of CAT electing to exercise the options in Clause 12.6 by way of the
allotment and issue of Consideration Shares (in whole or in part), CAT shall:

 

12.10.1            immediately apply to
the UKLA for the relevant number of such Consideration Shares to be admitted to
Official List of the UKLA;  and

 

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

 

42

 

12.10.2            use all reasonable
endeavours to procure the admission of such Consideration Shares to trading on
the Official List of the UKLA as soon as possible thereafter.

 

12.11       Any clause in this
Agreement or in any mutually agreed press release made by either Party in
relation to this Agreement is without prejudice to either Party’s respective
position (which is expressly reserved) on whether or not royalties or milestone
payments are due from CAT to Dyax in relation to D2E7.

 

13.          Representations and Warranties

 

13.1         Dyax represents, warrants
and undertakes to CAT that:

 

13.1.1      CAT has informed Dyax of
CAT’s obligations under the Elan Agreement in so far as those obligations
relate to the Excluded Field Targets and Antibodies;

 

13.1.2      in Exploiting any Product
pursuant to any Product Licences granted by CAT hereunder, Dyax’s primary
purpose in doing so will be outside the Excluded Field;

 

13.1.3      the information that it will
provide under Clause 4.1(d) will be sufficient to allow CAT to:

 

(i)            conduct an assessment
of the Nominated Target and proposed Product to determine the Primary
Application of the Nominated Target and proposed Product and the intended or
actual use of the Nominated Target and proposed Product; and

 

(ii)           subject the Nominated
Target to such family, motif sequence analysis or other customary or
scientifically established techniques as may be used to determine whether or
not the Primary Application of the Nominated Target and or Product is in the
Excluded Field.

 

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

 

43

 

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

 

13.2.2      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;

 

13.3         CAT represents, warrants
and undertakes for the benefit of Dyax:

 

13.3.1      that directors of CAT are
and will on the date any Consideration Shares are allotted and issued in
accordance with this Agreement duly authorised pursuant to Section 80 and/or
Section 89, Companies Act 1985 (England and Wales) to allot and issue such
Consideration Shares to Dyax;

 

13.3.2      all requirements to ensure
the valid allotment and issue of any Consideration Shares to be issued to Dyax
pursuant to this Agreement (including the waiver of pre-emption rights) will,
prior to the allotment and issue of the Consideration Shares, have been duly
complied with;

 

13.3.3      CAT will comply with all
obligations of the UKLA in relation to the admission to trading of any
Consideration Shares on the Official List of the UKLA within the time limits
laid down by the UKLA;

 

13.3.4      CAT has complied with all
requirements of the UKLA as to the timing and content of announcements and
other public disclosure;

 

13.3.5      CAT has provided to Dyax a
complete and accurate description of CAT’s material obligations under the Elan
Agreement (in so far as those obligations relate to the Excluded Field, Targets
and Antibodies) and CAT’s Gatekeeping Procedure;

 

44

 

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

 

13.3.7      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;

 

13.3.8      CAT is not currently 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 is engaged in with [*****] in relation to the so called [*****] patents
and others;

 

13.3.9      the Elan Agreement has not
been modified or amended and remains in full force and effect on the
Commencement Date of this Agreement

 

14.          Duration and Termination

 

14.1         The options granted by
CAT in Clause 3 will continue until: (a) 31 December 2017; (b) the
termination of this Agreement in accordance with Clause 14.3 below; or (c) Dyax
or its Antibody business is acquired by, or Dyax merges with, any Competing
Antibody Company; whichever event occurs first; provided, however, that in the
case of any merger of Dyax with any Competing Antibody Company the options will
continue if immediately following the merger the equity securities of the
surviving entity then held by its equity security holders who were equity
security holders of Dyax Corp. immediately before the merger represent at least
[*****]%
of the post-merger value of

 

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

 

45

 

the surviving entity
using the weighted average price of the common stock of the surviving entity on
the day immediately prior to the effective date of the merger.

 

14.2         The term of this
Agreement shall commence upon the Commencement Date and shall terminate upon
(a) 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 8 of this Agreement, whichever event occurs last.

 

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;

 

46

 

(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;

 

(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;

 

47

 

(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; and

 

(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.

 

15.                               Sublicensing of Dyax Patent Rights

 

15.1                           Section
2.1 of both the Original Agreements are hereby amended so that:

 

15.1.1                  the words
“without the right to grant sublicences” are removed; and

 

15.1.2                  the following
sentences are inserted at the end of Section 2.1:

 

“CAT shall have no right
to grant sublicences under the license to Patent Rights granted to CAT in this
Section 2.1, except CAT may grant a sublicence under the Patent Rights to any
Third Party to which CAT is licensing, selling or otherwise transferring
Antibodies or Antibody Libraries (as defined in the Amendment Agreement between
Dyax and CAT dated as of January 3, 2003) solely for use by such Third
Party with the Antibodies 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 Section 2.1 (License Grant), Clause 6 (Indemnification) and Clause
8 (Confidentiality & Publicity) of the Original Agreements.  For the avoidance of doubt, in no event
shall CAT have the right to sublicense the Patent Rights to any Third Party
which is a bare licensee under CAT’s Antibody Phage Display Patents (as defined
in the Amendment Agreement between Dyax and

 

48

 

CAT dated as of
January 3, 2003).  Any Third Party
which is granted a sublicense under the Patent Rights by CAT shall have no
right to grant further sublicenses.”

 

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 arising out
of or in connection with milestones or royalties payable to Dyax in relation to
D2E7 under the Original Agreements shall (provided that Abbott agrees to be
bound by the decision of the arbitrators before arbitration commences) be
referred to and finally resolved by arbitration under the procedure set out in Schedule
5 by the neutral arbitrators appointed in accordance with such procedure.

 

16.3         Except for any dispute
regarding D2E7, which shall be resolved under Clause 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 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 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 notice to the other Party

 

49

 

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.

 

18.          Miscellaneous

 

The terms of Clause 8
(Confidentiality & Publicity) and Section 9.1 (Notice), Section 9.3  (Specific Performance), Section 9.5
(Compliance with Law),  Section 9.6
(Amendment and Waiver), Section 9.7 (Severability) and Section 9.8 (Entire
Agreement) of the Original Agreements shall apply, mutatis mutandis, to the
Parties under this Agreement and shall be deemed to be incorporated herein.

 

50

 

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

 

 

	
  SIGNED
  by

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
    /s/
  John Aston

  
	
  for
  and on behalf of

  	
  )

  	
  Director
  & Authorised Signatory

  
	
  CAMBRIDGE
  ANTIBODY

  	
  )

  	
   

  
	
  TECHNOLOGY
  LIMITED

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
    /s/
  Jack Morgan

  
	
  for
  and on behalf of

  	
  )

  	
  Senior
  Vice President  &

  
	
  DYAX
  CORP.

  	
  )

  	
  Authorised
  Signatory

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  

 

51

 

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.

 

52

 

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.

 

53

 

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; or

 

2.                                       CAT
is, at the date of the submission of the Target Option Notice by Dyax, engaged
in bona fide discussions with a Third Party concerning the Nominated Target; or

 

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

 

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

 

54

 

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 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

 

55

 

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.  The procedure described in this paragraph 3
will not apply to any determination by CAT that the Primary Application of a
Nominated Target is in the Excluded Field, where CAT’s decision will be final
if made in good faith.

 

“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.

 

56

 

Schedule
3

 

CAT
Know-How

 

[*****]

 

[*****]

 

[*****]

 

[*****]

 

[*****]

 

[*****]

 

CAT may supplement
the above with any revisions which it may make to [*****] or with any new [*****] at
its discretion from time to time (in each case accompanied by notice to Dyax
under the Agreement) or with [*****].

 

 

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

 

57

 

Schedule
4

 

Competing
Antibody Companies

 

 

[*****]

 

 

[Omitted material consists of one (1) page of text.]

 

 

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

 

58

 

Schedule
5

 

Alternative Dispute Resolution

 

The
Parties recognise that bona fide disputes as to certain matters may arise from
time to time during the Term that relate to either Party’s rights and/or
obligations.  To have such a dispute
resolved by this Alternative Dispute Resolution (“ADR”) provision, a Party
first must send written notice of the dispute to the other Party for attempted
resolution by good faith negotiations between their respective presidents (or
their designees) of the affected subsidiaries, divisions, or business units
within twenty-eight (28) days after such notice is received.  (All references to “days” in this ADR
provision are to calendar days.  If the
last day of any time period established hereunder is an official holiday or a
non-business day at either Party’s principal place of business, the period is
extended until the first business day that follows; however, holidays and
non-business days that otherwise occur during the running of the time period
are included in calculating the period.)

 

If the
matter has not been resolved within twenty-eight (28) days of the notice of
dispute, or if the Parties fail to meet within such twenty-eight (28) days,
either Party may initiate a binding ADR proceeding as provided herein.  The Parties shall have the right to be
represented by counsel in such a proceeding.

 

1.                                       To
begin an ADR proceeding, a Party shall provide written notice to the other
Party of the issues to be resolved by ADR. 
Within fourteen (14) days after its receipt of such notice, the other
Party may, by written notice to the Party initiating the ADR, add additional
issues to be resolved within the same ADR.

 

2.                                       Within
twenty-one (21) days following receipt of the original ADR notice, the Parties
shall select a mutually acceptable neutral to preside in the resolution of any
disputes in this ADR proceeding.  If the
Parties are unable to agree on a mutually acceptable neutral within such
period, either Party may request the President of the CPR Institute for Dispute
Resolution (“CPR”), 366 Madison Avenue, 14th Floor, New York, New York  10017, to select a neutral pursuant to the
following procedures or such other procedures as the CPR shall require:

 

(a)                                  The
CPR shall submit to the Parties a list of not less than five (5) candidates
within fourteen (14) days after receipt of the request, along with a Curriculum
Vitae for each candidate.  No
candidate shall be an employee, director, or shareholder of either Party or any
of their subsidiaries or Affiliates or sublicensees.

 

(b)                                 Such
list shall include a statement of disclosure by each candidate of any
circumstances likely to affect his or her impartiality.

 

(c)                                  Each
Party shall number the candidates in order of preference (with the number one
(1) signifying the greatest preference) and shall deliver the list to the CPR
within seven (7) days following receipt of the list of candidates.  If a Party believes a conflict of interest
exists regarding any of the candidates, that Party shall provide a written explanation
of the conflict to the CPR and the opposing Party along with its list showing
its order of preference for the candidates. 
Any Party failing to return a list of preferences on time shall be
deemed to have no order of preference.

 

59

 

(d)                                 If
the Parties collectively have identified fewer than three (3) candidates deemed
to have conflicts, the CPR immediately shall designate as the neutral the
candidate for whom the Parties collectively have indicated the greatest
preference.  If a tie should result
between two candidates, the CPR may designate either candidate.  If the Parties collectively have identified
three (3) or more candidates deemed to have conflicts, the CPR shall review the
explanations regarding conflicts and, in its sole discretion, may either (i)
immediately designate as the neutral the candidate for whom the Parties
collectively have indicated the greatest preference, or (ii) issue a new list
of not less than five (5) candidates, in which case the procedures set forth in
subparagraphs 2(a) – 2(d) shall be repeated.

 

3.                                       No
earlier than fifty-six (56) days nor later than one hundred twelve (112) days
after selection, the neutral shall hold a hearing to resolve each of the issues
identified by the Parties.  The ADR
proceeding shall take place at a location agreed upon by the Parties.  If the Parties cannot agree, the neutral
shall designate a location other than the principal place of business of either
party or any of their subsidiaries or Affiliates.

 

4.                                       At
least seven (7) days prior to the hearing, each Party shall submit the
following to the other Party and the neutral:

 

(a)                                  a
copy of all exhibits on which such Party intends to rely in any oral or written
presentation to the neutral;

 

(b)                                 a
list of any witnesses such party intends to call at the hearing, and a short
summary of the anticipated testimony of each witness;

 

(c)                                  a
proposed ruling on each issue to be resolved, together with a request for a
specific damage award or other remedy for each issue.  The proposed rulings and remedies shall not contain any
recitation of the facts or any legal arguments and shall not exceed one (1)
page per issue;

 

(d)                                 a
brief in support of such Party’s proposed rulings and remedies, provided that
the brief shall not exceed twenty (20) pages. 
This page limitation shall apply regardless of the number of issues
raised in the ADR proceeding.

 

Except as expressly set
forth in subparagraphs 4(a) – 4(d) and except as follows, no discovery shall be
required or permitted by any means, including depositions, interrogatories,
requests for admissions, or production of documents unless the neutral, upon
the written application of either Party, rules that some or all of the
requested discovery is necessary in order properly to resolve the dispute.  Any request for discovery shall be submitted
to the neutral in writing and served on the other Party, which may submit and
serve an opposition to the request for discovery.  The neutral shall establish the timing and other conditions of
any discovery that is permitted.  In no
event shall discovery prevent the hearing from taking place within one hundred
twelve days after the selection of the neutral.  The neutral shall have full authority to sanction either Party in
connection with any discovery proceedings, including but not limited to the
sanctions of excluding certain evidence or ruling for the opposing Party on the
merits of the dispute.

 

60

 

5.                                       The
hearing shall be conducted on consecutive business days and shall be governed
by the following rules:

 

(a)                                  Each
Party shall be entitled to twenty-five (25) hours of hearing time to present
its case.  The neutral shall determine
whether each Party has had the twenty-five (25) hours to which it is entitled.

 

(b)                                 Each
Party shall be entitled, but not required, to make an opening statement, to
present regular and rebuttal testimony, documents or other evidence, to
cross-examine witnesses, and to make a closing argument.  Cross-examination of witnesses shall occur
immediately after their direct testimony, and cross-examination time shall be
charged against the Party conducting the cross-examination.

 

(c)                                  The
Party initiating the ADR shall begin the hearing and, if it chooses to make an
opening statement, shall address not only issues it raised but also any issues
raised by the responding Party.  The
responding Party, if it chooses to make an opening statement, also shall
address all issues raised in the ADR. 
Thereafter, the presentation of regular and rebuttal testimony and
documents, other evidence, and closing arguments shall proceed in the same
sequence.

 

(d)                                 Except
when testifying, witnesses shall be excluded from the hearing until closing
arguments.

 

(e)                                  Settlement
negotiations, including any statements made therein, shall not be admissible
under any circumstances.  Affidavits
prepared for purposes of the ADR hearing also shall not be admissible.  As to all other matters, the neutral shall
have sole discretion regarding the admissibility of any evidence.

 

(f)                                    Neither
the Parties nor anyone acting on their behalf shall have any ex parte contact
with the neutral or any neutral candidate during any part of the proceedings
provided for herein.

 

The
neutral shall (in accordance with paragraph 3 above) hold a hearing to resolve
each of the issues identified by the Parties no earlier than fifty-six days but
no later than one hundred twelve days after his or her selection.  The neutral in his or her discretion may
hold one or more pre-hearing proceedings for the purpose of planning and scheduling
or other matters relating to the hearing.

 

6.                                       Within
seven (7) days following completion of the hearing, each Party may submit to
the other Party and the neutral a post-hearing brief in support of its proposed
rulings and remedies, provided that such brief shall not contain or discuss any
new evidence and shall not exceed ten (10) pages.  This page limitation shall apply regardless of the number of
issues raised in the ADR proceeding. 
The post-hearing brief also shall include a statement of any reasonable
legal fees and expenses that the Party seeks to recover pursuant to
sub-paragraph 12 below.  In the event
that there is more than one issue in dispute, the statement of fees and
expenses shall be apportioned to reflect the fees and expenses incurred for
each issue.

 

61

 

7.                                       The
neutral shall rule on each disputed issue within fourteen (14) days following
completion of the hearing.  Such ruling
shall adopt in its entirety the proposed ruling and remedy of one of the
Parties on each disputed issue but may adopt one Party’s proposed rulings and
remedies on some issues and the other Party’s proposed rulings and remedies on
other issues.  The neutral shall not
issue any written opinion or otherwise explain the basis of the ruling.

 

8.                                       The
neutral shall be paid a reasonable fee plus expenses.  These fees and expenses, along with the reasonable legal fees and
expenses of the prevailing Party (including all expert witness fees and
expenses), the fees and expenses of a court reporter, and any expenses for a
hearing room, shall be paid as follows:

 

(a)                                  If
the neutral rules in favour of one Party on all disputed issues in the ADR, the
losing Party shall pay 100% of such fees and expenses.

 

(b)                                 If
the neutral rules in favour of one Party on some issues and the other Party on
other issues, the neutral shall issue with the rulings a written determination
as to how such fees and expenses shall be allocated between the parties.  The neutral shall allocate fees and expenses
in a way that bears a reasonable relationship to the outcome of the ADR, with
the Party prevailing on more issues, or on issues of greater value or gravity,
recovering a relatively larger share of its legal fees and expenses.

 

9.                                       The
rulings of the neutral and the allocation of fees and expenses shall be
binding, non-revisable, and non-appealable –except that within 7 days after
receipt of a decision by the neutral, a Party may request the neutral to
correct a clerical, typographical, computational or other such error –and may
be entered as a final judgement in any court having jurisdiction and may be
entered as a final judgement in any court having jurisdiction.

 

10.                                 Except
as provided in the Agreement or as required by law, the existence of the
dispute, any settlement negotiations, the ADR hearing, any submissions
(including exhibits, testimony, proposed rulings, and briefs), and the rulings
shall be deemed Confidential Information. 
The neutral shall have the authority to impose sanctions for unauthorised
disclosure of Confidential Information.

 

11.                                 All
disputes referred to ADR, the statute of limitations, and the remedies for any
wrong that may be found, shall be governed by the laws set forth in Clause 16.1
of the Agreement.

 

12.                                 The
neutral may not award punitive and/or incidental, consequential or special
damages.  The Parties hereby waive the
right to punitive and/or incidental, consequential or special consequential
damages.

 

13.                                 The
hearings shall be conducted in the English language.

 

14.                                 The
neutral shall have full authority to resolve any issue pertaining to the
arbitration that is not specifically addressed herein, and in doing so shall be
guided by the CPR’s Rules for Non-Administered Arbitration then in effect.

 

62

 

Schedule
6

 

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.

 

C.                                     Pursuant
to Article 11 of the Amendment Agreement, 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 Amendment Agreement).

 

D.                                    CAT
has exercised its option under the Amendment Agreement 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 Amendment Agreement.

 

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

 

63

 

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.

 

64

 

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.

 

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.

 

65

 

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 Amendment Agreement).

 

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 Amendment Agreement.

 

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

 

66

 

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
Amendment Agreement.

 

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.

 

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 one hundred and
ten percent (110%) of the amount budgeted, without the prior written approval
of the Steering Committee.

 

67

 

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.

 

(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

 

68

 

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 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.

 

69

 

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:

 

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 [*****] percent ([*****] %) 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 [*****] percent
([*****]%)
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 [*****] percent
([*****]%)
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

 

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

 

70

 

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 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;

 

71

 

(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 fifty percent (50%) of all Direct Costs incurred by
Dyax prior to and including the date of the first IND filing for the Co-Development
Product.  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 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

 

72

 

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

 

73

 

extent permitted by law,
at two (2) 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 five percent (5%) 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

 

74

 

Rights solely to perform
CAT’s Co-Development Activities in accordance with the Co-Development Plan in
the Field and in the CAT Territory.

 

(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

 

75

 

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.

 

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.

 

76

 

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 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

 

77

 

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 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.

 

78

 

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 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.

 

79

 

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 be [*****] percent ([*****] %) 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 [*****]
percent ([*****]%) 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 [*****] percent
([*****]%)
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.

 

(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

 

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

 

80

 

(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 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

 

81

 

(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.  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:

 

82

 

	
  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 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

 

83

 

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:

  	
   

  
									

 

84

 

Exhibit
A

 

Co-Development
Product

 

85

 

Exhibit
B

 

Co-Development
Plan

 

86

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