Document:

Exhibit 10.1

 

CONFIDENTIAL TREATMENT

 

LICENSE AND COLLABORATION AGREEMENT

 

 

By and Between

 

 

Dyax Corp.

 

 

And

 

 

Cubist Pharmaceuticals, Inc.,

 

 

*Confidential Treatment Requested. 
Omitted portions filed with the Securities and Exchange Commission (the
“Commission”).

 

 

EXECUTION COPY

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  ARTICLE II MANAGEMENT OF COLLABORATION AND
  LICENSE ACTIVITIES

  	
  17

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Joint
  Steering Committee

  	
  17

  
	
  2.2

  	
  Joint
  Manufacturing Committee

  	
  17

  
	
  2.3

  	
  Working
  Groups

  	
  17

  
	
  2.4

  	
  Membership

  	
  17

  
	
  2.5

  	
  Decision-Making

  	
  18

  
	
  2.6

  	
  Meetings of
  the JSC, JMC and Working Groups

  	
  18

  
	
  2.7

  	
  Alliance
  Managers

  	
  19

  
	
  2.8

  	
  Further
  Assurances

  	
  19

  
	
   

  	
   

  
	
  ARTICLE III LICENSE GRANTS; RIGHT OF FIRST
  OFFER; TRANSFERS AND ASSIGNMENTS

  	
  19

  
	
  3.1

  	
  Dyax Grants

  	
  19

  
	
  3.2

  	
  Right of
  First Offer; Additional Indication License Option

  	
  21

  
	
  3.3

  	
  Transfer of
  Product Inventory and Dyax Know How

  	
  22

  
	
  3.4

  	
  Grant Back
  License; Restrictions

  	
  22

  
	
  3.5

  	
  Dyax
  Retained Rights

  	
  24

  
	
  3.6

  	
  In-License
  of Blocking Third Party Patent Rights

  	
  24

  
	
   

  	
   

  
	
  ARTICLE IV DEVELOPMENT

  	
  24

  
	
  4.1

  	
  Ongoing
  Phase II Study

  	
  24

  
	
  4.2

  	
  Development
  Responsibilities

  	
  26

  
	
  4.3

  	
  Exchange of
  Information Regarding Clinical Studies

  	
  27

  
	
  4.4

  	
  Access to
  Clinical Data

  	
  28

  
	
  4.5

  	
  Exchange of
  Intellectual Property

  	
  28

  
	
  4.6

  	
  Access to
  Regulatory Submissions and Regulatory Approvals

  	
  28

  
	
  4.7

  	
  Complaints;
  Adverse Event Reporting Procedures; Notice of Adverse Events Affecting the Compound;
  Global Safety Database

  	
  29

  
	
  4.8

  	
  Diligent
  Development

  	
  30

  

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

i

 

	
  ARTICLE V COMMERCIALIZATION

  	
  31

  
	
  5.1

  	
  []*

  	
  31

  
	
  5.2

  	
  Advertising
  and Promotional Materials

  	
  31

  
	
  5.3

  	
  Sales and
  Distribution

  	
  32

  
	
  5.4

  	
  []*

  	
  32

  
	
  5.5

  	
  Treatment of
  []*

  	
  33

  
	
  5.6

  	
  Recalls,
  Market Withdrawals or Corrective Actions

  	
  34

  
	
   

  	
   

  
	
  ARTICLE VI MANUFACTURE AND SUPPLY OF
  PRIMARY PRODUCT

  	
  35

  
	
  6.1

  	
  Product
  Inventory

  	
  35

  
	
  6.2

  	
  Supply of
  Drug Substance

  	
  35

  
	
  6.3

  	
  Shortages

  	
  36

  
	
  6.4

  	
  Role of []*

  	
  36

  
	
  6.5

  	
  Step-In
  Rights

  	
  36

  
	
  6.6

  	
  Contract
  Manufacturer Agreements. Dyax shall:

  	
  37

  
	
  6.7

  	
  Transfer
  Price

  	
  37

  
	
  6.8

  	
  Manufacturing
  Improvements

  	
  37

  
	
  6.9

  	
  Commercial Supplier Selection; Process Development; Scale Up

  	
  38

  
	
  6.10

  	
  Supply
  Agreement

  	
  39

  
	
   

  	
   

  
	
  ARTICLE VII FINANCIAL PROVISIONS

  	
  39

  
	
  7.1

  	
  Upfront
  License Fee

  	
  39

  
	
  7.2

  	
  Inventory
  Supply Fee

  	
  40

  
	
  7.3

  	
  Development
  Milestones

  	
  40

  
	
  7.4

  	
  Sales
  Milestones

  	
  41

  
	
  7.5

  	
  Royalties

  	
  41

  
	
  7.6

  	
  Royalty
  Reports and Payments

  	
  46

  
	
  7.7

  	
  Audits

  	
  46

  
	
  7.8

  	
  Tax Matters

  	
  47

  
	
  7.9

  	
  United
  States Dollars

  	
  47

  
	
  7.10

  	
  Currency
  Exchange

  	
  47

  
	
  7.11

  	
  Blocked
  Payments

  	
  47

  
	
  7.12

  	
  Late
  Payments

  	
  47

  

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

ii

 

	
  ARTICLE VIII INTELLECTUAL PROPERTY
  OWNERSHIP, PROTECTION AND RELATED MATTERS

  	
  48

  
	
  8.1

  	
  Ownership of
  Inventions

  	
  48

  
	
  8.2

  	
  Prosecution
  and Maintenance of Patent Rights

  	
  49

  
	
  8.3

  	
  Third Party
  Infringement

  	
  50

  
	
  8.4

  	
  Claimed
  Infringement

  	
  53

  
	
  8.5

  	
  Patent Term
  Extensions

  	
  53

  
	
  8.6

  	
  Patent
  Marking

  	
  53

  
	
  8.7

  	
  Trademarks

  	
  53

  
	
   

  	
   

  
	
  ARTICLE IX CO-PROMOTION RIGHTS

  	
  54

  
	
  9.1

  	
  Exercise of
  Co-Promotion Option

  	
  54

  
	
  9.2

  	
  Terms of
  Co-Promotion

  	
  55

  
	
   

  	
   

  
	
  ARTICLE X CONFIDENTIALITY AND PUBLICITY

  	
  56

  
	
  10.1

  	
  Confidential
  Information

  	
  56

  
	
  10.2

  	
  Related
  Party, Employee, Consultant and Advisor Obligations

  	
  57

  
	
  10.3

  	
  Publicity

  	
  57

  
	
  10.4

  	
  Publications

  	
  58

  
	
   

  	
   

  
	
  ARTICLE XI REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

  	
  59

  
	
  11.1

  	
  RCT

  	
  59

  
	
  11.2

  	
  Representations
  of Validity and Authority

  	
  59

  
	
  11.3

  	
  Consents

  	
  59

  
	
  11.4

  	
  No Conflict

  	
  59

  
	
  11.5

  	
  Enforceability

  	
  60

  
	
  11.6

  	
  Legal
  Compliance

  	
  60

  
	
  11.7

  	
  Additional
  Representations and Warranties of Dyax

  	
  60

  
	
  11.8

  	
  No
  Warranties

  	
  64

  
	
  11.9

  	
  Indemnification

  	
  64

  
	
  11.10

  	
  No
  Consequential or Punitive Damages

  	
  66

  
	
   

  	
   

  
	
  ARTICLE XII TERM AND TERMINATION

  	
  67

  
	
  12.1

  	
  Term

  	
  67

  
	
  12.2

  	
  Termination
  Rights

  	
  67

  
	
  12.3

  	
  Consequences
  of Termination

  	
  70

  

 

*Confidential Treatment
Requested.  Omitted portions filed with the
Commission.

 

iii

 

	
  12.4

  	
  Survival

  	
  73

  
	
   

  	
   

  
	
  ARTICLE XIII FINAL DECISION-MAKING; DISPUTE
  RESOLUTION

  	
  73

  
	
  13.1

  	
  Referral to
  Executive Officers

  	
  73

  
	
  13.2

  	
  Final
  Decision-Making Authority Allocated to a Single Party

  	
  74

  
	
  13.3

  	
  Arbitration

  	
  75

  
	
   

  	
   

  
	
  ARTICLE XIV MISCELLANEOUS

  	
  76

  
	
  14.1

  	
  Choice of
  Law

  	
  76

  
	
  14.2

  	
  Notices

  	
  76

  
	
  14.3

  	
  Construction

  	
  77

  
	
  14.4

  	
  Severability

  	
  77

  
	
  14.5

  	
  Captions

  	
  77

  
	
  14.6

  	
  Entire
  Agreement; Integration

  	
  78

  
	
  14.7

  	
  Independent
  Contractors; No Agency

  	
  78

  
	
  14.8

  	
  Submission to
  Jurisdiction

  	
  78

  
	
  14.9

  	
  Assignment;
  Successors

  	
  78

  
	
  14.10

  	
  Execution in
  Counterparts; Facsimile Signatures

  	
  78

  
	
  14.11

  	
  Waiver

  	
  79

  
	
  14.12

  	
  Performance
  by Affiliates

  	
  79

  
	
  14.13

  	
  Force
  Majeure

  	
  79

  
	
  14.14

  	
  Export
  Control

  	
  79

  
	
  14.15

  	
  Costs

  	
  79

  
	
  14.16

  	
  Counterparts

  	
  79

  

 

	
  EXHIBIT A

  	
  Amino Acid
  Sequence of DX-88

  	
   

  
	
  EXHIBIT B

  	
  Existing
  Dyax Patent Rights

  	
   

  
	
  EXHIBIT C

  	
  Dyax
  Clinical Trials

  	
   

  
	
  EXHIBIT D

  	
  Agreements with Material Provisions

  	
   

  
	
  EXHIBIT E

  	
  Product
  Competitors

  	
   

  
	
  EXHIBIT F

  	
  Transferred
  Materials

  	
   

  
	
  EXHIBIT G

  	
  Ongoing
  Phase II Study Budget

  	
   

  
	
  EXHIBIT H

  	
  Form of
  Joint Press Release

  	
   

  
	
  EXHIBIT I

  	
  List of
  European Countries

  	
   

  
	
  EXHIBIT J

  	
  Existing Agreements with Financial Obligations

  	
   

  
	
  EXHIBIT K

  	
  Existing
  Patent Rights that were Filed Due to New Rules

  	
   

  

 

*Confidential
Treatment Requested.  Omitted portions
filed with the Commission.

 

iv

 

LICENSE AND COLLABORATION AGREEMENT

 

This License
and Collaboration Agreement (this “Agreement”) is made and effective as
of April 23, 2008 (the “Effective Date”) by and between Dyax Corp.,
a Delaware corporation, with offices at 300 Technology Square, Cambridge,
Massachusetts 02139, U.S.A. (“Dyax”) and Cubist Pharmaceuticals, Inc.,
a Delaware corporation, with offices at 65 Hayden Avenue, Lexington,
Massachusetts 02421, U.S.A. (“Cubist”).

 

INTRODUCTION

 

WHEREAS, Dyax
owns or controls certain patents, know-how and other rights related to its
proprietary novel kallikrein inhibitors, including the compound known as DX-88
(ecallantide);

 

WHEREAS,
Cubist is engaged in developing and commercializing biopharmaceuticals for the
acute care environment;

 

WHEREAS,
Cubist desires to obtain a license, under the know-how and intellectual
property owned and controlled by Dyax, to develop and commercialize kallikrein
inhibitors in the Field in the Cubist Territory (as such terms are defined
herein); and

 

WHEREAS, on
and subject to the terms and conditions set forth herein, Dyax is willing to
grant Cubist a license, under the know-how and intellectual property owned and
controlled by Dyax, to develop and commercialize Products and Cubist Products
in the Field in the Cubist Territory (as such terms are defined herein).

 

NOW,
THEREFORE, for and in consideration of the mutual covenants contained herein,
Dyax and Cubist hereby agree as follows:

 

ARTICLE I

 DEFINITIONS

 

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

 

1.1           “Additional
Indication License”.  Additional
Indication License shall have the meaning given to it in Section 3.2(a).

 

1.2           “Additional
Indication License Option”. 
Additional Indication License Option shall have the meaning given to
that term in Section 3.2(a).

 

1.3           “Additional
Indication License Option Notice”. 
Additional Indication License Option Notice shall have the meaning given
to that term in Section 3.2(c).

 

1.4           “Affiliate”.  Affiliate shall mean with respect to any
Party, any person controlling, controlled by or under common control with such
Party.  For purposes of this Section 1.4,
“control” shall mean (a) in the case of a person that is a corporate
entity, direct or indirect 

 

*Confidential
Treatment Requested.  Omitted portions
filed with the Commission.

 

 

ownership of
more than fifty percent (50%) of the stock or shares having the right to vote
for the election of directors of such person and (b) in the case of a
person that is an entity, but is not a corporate entity, the possession,
directly or indirectly, of the power to direct, or cause the direction of, the
management or policies of such person, whether through the ownership of voting
securities, by contract or otherwise.

 

1.5           “Alliance
Manager”.  Alliance Manager shall
have the meaning given to that term under Section 2.7.

 

1.6           “Applicable
Law” means the laws, rules, and regulations, including any
statutes, rules, regulations, guidelines, or other governmental requirements
that may be in effect from time to time and apply to the activities
contemplated by this Agreement.

 

1.7           “[]*
Agreement”.  []* Agreement means the
agreement by and between Dyax and []*, dated []*, as amended and in effect as
of the Effective Date.

 

1.8           “Bankruptcy
Code”.  Bankruptcy Code shall have
the meaning given to that term in Section 12.2(c).

 

1.9           “Blocking
Third Party Patent Rights”.  Blocking
Third Party Patent Rights shall mean, with respect to any country in the Cubist
Territory, on a country-by-country basis, Patent Rights in such country owned
or controlled by a Third Party that Cover a Product in final form, without
giving effect to any good faith filing or active prosecution requirements of
any Valid Claim of such Patent Rights, set forth in Section 1.159(b).  For the avoidance of doubt, the Patent Rights
licensed from []* by Dyax under the []* License Agreement and sublicensed to
Cubist under this Agreement shall not constitute Blocking Third Party Patent
Rights, unless any Patent Rights licensed from []* would constitute a “Blocking
Third Party Patent Right” after Cubist begins []* in accordance with the terms
of this Agreement.

 

1.10         “Breaching
Party”.  Breaching Party shall have
the meaning given to that term in Section 12.2(b)(i).

 

1.11         “Business
Day”.  Business Day shall mean a day
that is not a Saturday, Sunday or a day on which banking institutions in the
Commonwealth of Massachusetts are authorized by law to remain closed.

 

1.12         “CABG”.  CABG shall have the meaning given to that
term in Section 11.7(u).

 

1.13         “Calendar
Quarter”.  Calendar Quarter shall
mean each of the three-month periods ending on March 31, June 30, September 30
and December 31 of any year.

 

1.14         “Calendar
Year”.  Calendar Year shall mean each
twelve-month period ending on December 31st .

 

1.15         “Challenging
Party”.  Challenging Party shall have
the meaning given to that term in Section 12.2(d).

 

*Confidential
Treatment Requested.  Omitted portions
filed with the Commission.

 

2

 

1.16         “Change
of Control”.  Change of Control means
with respect to a Party, (i) the acquisition of more than fifty percent
(50%) of either (A) the then outstanding shares of common stock or (B) the
combined voting power of the then outstanding voting securities of such Party
entitled to vote generally in the election of directors; (ii) the
individuals who, as of the Effective Date, constituted the board of directors
of such Party (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of the Board; provided, that any
individual who becomes a member of such board of directors subsequent to the
Effective Date and whose election or nomination for election was approved by a vote
of at least a majority of the Incumbent Directors shall be treated as an
Incumbent Director unless he or she assumed office as a result of an actual or
threatened election contest with respect to the election or removal of
directors; (iii) the consummation of a consolidation, merger or similar
transaction or series of related transactions which results in the voting securities of such
Party outstanding immediately prior thereto ceasing to represent at least fifty
percent (50%) of the combined voting power of the surviving entity immediately
after such merger or consolidation; (iv) the stockholders of such
Party approve the complete liquidation or dissolution of such Party; or (v) the
consummation of a sale or transfer of all or substantially all of such Party’s
assets.

 

1.17         “cGCP” means current good clinical practices as defined in 21 CFR
§§ 50, 54, 56, 312 and 314  (or in the
case of foreign jurisdictions, comparable regulatory standards) as amended from
time to time, the International Conference of Harmonization (ICH) E6 “Good
Clinical Practice: Consolidated Guidance,” and in any successor regulation or
any official guidance documents issued by an applicable Regulatory Authority.

 

1.18         “cGLP” means current good laboratory practice standards as defined in
21 CFR Part 58 (or in the case of foreign jurisdictions, comparable
regulatory standards) as amended from time to time, and in any successor
regulation or any official guidance documents issued by a Regulatory Authority.

 

1.19         “cGMP” means current good manufacturing practices as contained in
21 CFR Parts 210 and 211 (or in the case of foreign jurisdictions, comparable
regulatory standards) as amended from time to time, and in any successor
regulation or any official guidance documents issued by a Regulatory Authority.

 

1.20         “Clinical
Study”.  Clinical Study shall mean a
Phase I Clinical Study, Phase II Clinical Study, Phase III Clinical Study,
Post-Approval Study or other clinical study or trial of a Product or Compound
in humans, as applicable.

 

1.21         “Clinical
Study Summary”.  Clinical Study
Summary shall have the meaning given to that term under Section 4.3(a).

 

1.22         “Commercialization”
or “Commercialize”. 
Commercialization or Commercialize shall mean activities directed to
obtaining pricing and reimbursement approvals, marketing, promoting,
distributing, importing, exporting or selling a product, including conducting
Post-Approval Studies.  Commercialization
shall not include any activities related to Manufacturing.

 

1.23         “Commercial
Supplier”.  Commercial Supplier has
the meaning given to it in Section 6.9(a).

 

*Confidential
Treatment Requested.  Omitted portions
filed with the Commission.

 

3

 

1.24         “Commercially
Reasonable Efforts”.  Commercially
Reasonable Efforts shall mean, with respect to a product and a Party, the
carrying out by such Party of obligations with respect to the product in a
commercially reasonable and diligent manner, using efforts not less than the
efforts such Party devotes to a product of similar market potential, profit
potential and strategic value, at a similar stage of its product life and based
on conditions then prevailing including the safety and efficacy of the compound
or product, the cost to Develop, Manufacture and Commercialize the product, the
risks inherent in the Development, Manufacture and Commercialization of the
product, the competitiveness of the marketplace, the proprietary position of
the compound or product, the likelihood of obtaining Regulatory Approval for
the product, the potential economic return from the product, and other
technical, legal, scientific, medical or commercial factors that such Party
deems in good faith to be relevant.

 

1.25         “Competing
Product”.  Competing Product shall
mean any pharmaceutical product, other than a Product, that is []*.

 

1.26         “Competitive
Infringement”.  Competitive
Infringement shall have the meaning given to that term under Section 8.3(b).

 

1.27         “Complaint”.  Complaint shall have the meaning given to
that term in Section 4.7(a).

 

1.28         “Compound”.  Compound shall mean DX-88 and any other
compound that has as a []*.

 

1.29         “Confidential
Information”.  Confidential
Information shall have the meaning given to that term under Section 10.1.

 

1.30         “Confidentiality
Agreement”.  Confidentiality
Agreement shall mean the Confidential Disclosure Agreement, dated as of June 5,
2007, by and between Cubist and Dyax.

 

1.31         “Control”
or “Controlled”.  Control or
Controlled shall mean, with respect to any intellectual property right or other
intangible property, the possession (whether by license or ownership, or by
control over an Affiliate having possession by license or ownership) by a
Party, other than pursuant to this Agreement, of the ability to grant to the
other Party access, ownership and/or a license or sublicense as provided herein
without violating the terms of any agreement with any Third Party;  []*:

 

(a)           []*, which shall be
consistent with all terms and conditions of the relevant []*.

 

1.32         “Controlling
Party”.  Controlling Party shall have
the meaning given to that term in Section 8.2(a).

 

1.33         “Co-Promotion
Agreement”.  Co-Promotion Agreement
shall have the meaning given to that term in Section 9.2.

 

*Confidential
Treatment Requested.  Omitted portions
filed with the Commission.

 

4

 

1.34         “Co-Promotion
Option”.  Co-Promotion Option shall
have the meaning given to that term in Section 9.1(a).

 

1.35         “Cost
of Sales”.  Cost of Sales shall
mean:  []*.

 

1.36         “Cover”,
“Covering” or “Covered”. 
Cover, Covering or Covered shall mean, with respect to a Compound, a
Product or technology, that (a) in the absence of a license granted under
a Valid Claim of an issued patent, the making, having made, use, offering for
sale, sale, or importation of a Compound or Product, or the practice of such
technology would infringe such Valid Claim, and (b) in the absence of a
license granted under a Valid Claim of a patent application, the making, use,
offering for sale, sale, or importation of a Compound or a Product or the
practice of such technology would infringe such Valid Claim if such Valid Claim
were to issue in a patent.  For the
avoidance of doubt, and without limiting other applications of this definition,
a Patent Right “Covers” a Product or Compound if the making, having made, use,
offer for sale, sale or importation of such Product or Compound would, in the
absence of a license granted under a Valid Claim of such Patent Right, infringe
such Patent Right.

 

1.37         “Cross
Field Sales”.  Cross Field Sales
shall mean []*.

 

1.38         “Cubist-Branded
Product”.  Cubist-Branded Product
shall mean the Primary Product as branded, packaged and otherwise
Commercialized by Cubist and/or its Related Parties for use in the Field in the
Cubist Territory.

 

1.39         [Reserved]

 

1.40         “Cubist
Improvements”.  Cubist Improvements
shall mean all Cubist Intellectual Property that is conceived, developed or
reduced to practice, by, or under the authority of, Cubist during the Term
using or incorporating Dyax Intellectual Property.

 

1.41         “Cubist
Indemnified Parties”.  Cubist
Indemnified Parties shall have the meaning given to that term in Section 11.9(b).

 

1.42         “Cubist
Intellectual Property”.  Cubist
Intellectual Property shall mean Cubist Know-How and Cubist Patent Rights,
collectively.

 

1.43         “Cubist
Know-How”.  Cubist Know-How shall
mean any Know-How that (a) []* is Controlled by Cubist or its Affiliates
on the Effective Date []*, and (b) is []*  for
the Development, Manufacture and/or Commercialization of Products or Cubist
Products as contemplated by this Agreement. 
Cubist Know-How shall include Cubist Sole Inventions and Cubist’s rights
in Joint Know-How.

 

1.44         “Cubist
Patent Rights”.  Cubist Patent Rights
shall mean Patent Rights, including Cubist’s rights in Joint Patent Rights,
that (a) Cover Cubist Know-How and (b) are Controlled by Cubist on
the Effective Date or []*.

 

1.45         “Cubist
Product”.  Cubist Product means a []*
that is being developed, manufactured or commercialized by Cubist or a Cubist
Affiliate.

 

*Confidential
Treatment Requested.  Omitted portions
filed with the Commission.

 

5

 

1.46         “Cubist Products Option”.  Cubist Products Option shall have the meaning
given to that term in Section 3.4(b).

 

1.47         “Cubist Promotional
Materials”.  Cubist Promotional
Materials shall have the meaning given to that term in Section 5.2(a).

 

1.48         “Cubist Sole Inventions”.  Cubist Sole Inventions shall have the meaning
given to that term under Section 8.1(a).

 

1.49         “Cubist Territory”.  Cubist Territory shall mean the United
States, Canada, Mexico and Europe.

 

1.50         “Cubist Trademarks”.  Cubist Trademarks shall have the meaning
given to that term under Section 8.7(b).

 

1.51         “Delivery Date”.  Delivery Date shall have the meaning given to
that term in Section 6.2(b).

 

1.52         “Detail”.  Detail shall mean (a) for Indications
appropriate and labeled for treatment of patients in a physician office
practice environment, a face-to-face meeting, in an individual or group
practice setting, between one or more target prescribers and a sales
representative of a Party or its designee, during which information regarding a
Product is communicated orally to the prescriber, and (b) for Indications
appropriate and labeled for treatment of patients in hospitals, a face-to-face
meeting, in a hospital setting, between one or more target physicians or
surgeons and a sales representative of a Party or its designee, during which
information regarding a Product is communicated orally to the physician or
surgeon.

 

1.53         “Development” or “Develop”.  Development or Develop shall mean
non-clinical and clinical research and drug development activities or uses,
including toxicology, test method development and stability testing, process
development, formulation development, delivery system development, quality
assurance and quality control development, statistical analysis, Clinical
Studies (other than Post-Approval Studies), regulatory affairs, and product
approval and clinical study regulatory activities (excluding regulatory
activities directed to obtaining pricing and reimbursement approvals), any
other activities relating to developing the ability to Manufacture a Compound
or Product, including bulk production and manufacturing process development
until commencement of the Manufacture of Product intended for commercial sale,
and any other activities related to obtaining Regulatory Approval for the
Product.

 

1.54         “Drug Product”.  Drug Product shall mean the Primary Product
filled into unit packages for final labeling and packaging for use in the
Field.

 

1.55         “Drug Substance”.  Drug Substance shall mean DX-88 in bulk form
manufactured for use as an active pharmaceutical ingredient, with or without
excipients or diluents.

 

1.56         “DX-88”.  DX-88 shall mean the compound known as DX-88
(ecallantide) with the amino acid sequence described in Exhibit A.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

6

 

1.57         “Drug Substance
Manufacturing Process”.  Drug
Substance Manufacturing Process shall mean the process used by Dyax or its
contract manufacturer or Related Parties, as of the Effective Date, to
Manufacture Drug Substance.

 

1.58         “Dyax-Branded Product”.  Dyax-Branded Product shall mean the Primary
Product as branded, packaged and otherwise Commercialized by Dyax and/or its
Related Parties for use in HAE or for an Other Hospital Indication.

 

1.59         “Dyax Field”.  Dyax Field shall mean the treatment of HAE,
[]*.  For the avoidance of doubt, the
Dyax Field shall exclude the Field.

 

1.60         [Reserved]

 

1.61         “Dyax Indemnified Parties”.  Dyax Indemnified Parties shall have the meaning
given to that term in Section 11.9(a).

 

1.62         “Dyax Intellectual
Property”.  Dyax Intellectual
Property shall mean Dyax Know-How and Dyax Patent Rights, collectively.

 

1.63         “Dyax Know-How”.  Dyax Know-How shall mean  any Know-How that (a) is Controlled by
Dyax or its Affiliates on the Effective Date []*, and (b) is []* for the
Development, Manufacture and/or Commercialization of a Product or Cubist
Product as contemplated by this Agreement; provided, however,
that Dyax Know-How shall not include any Know-How directly related to []*.  Dyax Know-How shall include Dyax Sole
Inventions and Dyax’s rights in Joint Know-How.

 

1.64         “Dyax Net Sales”.  Dyax Net Sales shall mean, with respect to a
Product or Cubist Product, the gross invoiced sales of such Product (other than
the Primary Product) or Cubist Product by Dyax and its Related Parties in the
Dyax Field in any country if such Product or Cubist Product is Covered by a
Valid Claim of a Cubist Patent Right in such country or for which the
Development, Manufacture or Commercialization made or makes use of Cubist
Know-How, less the deductions set forth in Section 1.109(a).  The provisions of Sections 1.109(b) and (c) shall
also apply to any such gross invoiced sales by Dyax and its Related Parties, as
if such sales were Net Sales made by Cubist or its Related Parties.  When applying the provisions of Section 1.109
to determine Dyax Net Sales pursuant to this section, the term “Cubist” shall
be replaced with the term  “Dyax.”

 

1.65         “Dyax Patent Rights”.  Dyax Patent Rights shall mean (a) the
Existing Dyax Patent Rights, (b) Dyax’s rights in the Joint Patent Rights,
(c) Patent Rights Controlled by Dyax that otherwise Cover Dyax Know-How
and (d) Patent Rights Controlled by Dyax that Cover Cubist Products provided, however, that Dyax Patent Rights shall not
include any Patent Rights directly related to []*.

 

1.66         “Dyax Promotional
Materials”.  Dyax Promotional
Materials shall have the meaning given to that term in Section 5.2(b).

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

7

 

1.67         “Dyax Sole Inventions”.  Dyax Sole Inventions shall have the meaning
given to that term under Section 8.1(a).

 

1.68         “Dyax Territory”.  Dyax Territory shall mean all countries of
the world outside of the Cubist Territory.

 

1.69         “EMEA”.  EMEA shall mean the European Medicines Agency
or any successor agency thereto.

 

1.70         “Europe”.  Europe shall mean the countries listed on Exhibit I
and any new countries within the geographical boundaries of the countries
listed on Exhibit I.

 

1.71         “European Licensee”.  European Licensee shall have the meaning
given to that term in Section 3.2(e).

 

1.72         “Executive Officers”.  Executive Officers shall mean the Chief
Executive Officer of Dyax (or a senior executive officer of Dyax designated by
Dyax’s Chief Executive Officer) and the Chief Executive Officer of Cubist (or a
senior executive officer of Cubist designated by Cubist’s Chief Executive
Officer).

 

1.73         “Existing Dyax Patent Rights”.  Existing Dyax Patent Rights shall mean (a) those
Patent Rights specifically listed on Exhibit B, and (b) all
other Patent Rights Controlled by Dyax or its Affiliates if such Patent Rights
exist as of the Effective Date and are []* for the Development, Manufacture or
Commercialization of a Compound or Product; provided, however,
that Existing Dyax Patent Rights shall not include any Patent Rights directly
related to []*.

 

1.74         “External Factors”.  External Factors shall have the meaning given
to that term under Section 4.8(b).

 

1.75         “FDA”.  FDA shall mean the United States Food and
Drug Administration or any successor agency thereto.

 

1.76         “FDCA”.  FDCA shall have the meaning given to that
term in Section 5.2(a).

 

1.77         “Field”.  Field shall mean use of a product to prevent
or treat bleeding during the conduct of any Surgical Procedure, including
without limitation the following specific Surgical Procedures:

 

(a)           on pump cardiopulmonary
bypass procedures;

 

(b)           off pump cardiopulmonary
bypass procedures;

 

(c)           spinal surgeries;

 

(d)           hip surgeries;

 

(e)           shoulder surgeries;

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

8

 

(f)            oncology surgeries;

 

(g)           radical prostatectomy;

 

(h)           radical hysterectomy;

 

(i)            Whipple procedures
(pancreaticoduodenonectomy);

 

(j)            intracranial procedures;

 

(k)           esophagogastrectomy;

 

(l)            thoracotomy, lung reduction
surgery, and lobe/pneumonectomy;

 

(m)          liver resection;

 

(n)           organ transplants; and

 

(o)           knee surgeries.

 

Notwithstanding anything to
the contrary, the Field shall specifically exclude all ophthalmic uses and all
uses in the treatment of HAE and/or other angioedemas (even during surgery).

 

1.78         “First Commercial Sale”.  First Commercial Sale shall mean, with
respect to a Product in a country, the first commercial sale of the Product in
such country following receipt of Regulatory Approval in such country.  Sales for test marketing, Clinical Study
purposes or compassionate, named patient or similar use shall not constitute a
First Commercial Sale.

 

1.79         “FTE”.  FTE means a full-time equivalent person
assigned by Dyax to perform work to be reimbursed by Cubist in accordance with
this Agreement at a rate of []* per annum per FTE (or []* per hour based on an FTE year of []*
hours).

 

1.80         “Funded Phase II Costs”. 
Funded Phase II Costs shall have the meaning given to that term in Section 4.1(b).

 

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

 

1.82         “Generic Approval”.  Generic Approval shall have the meaning given
to that term in Section 7.5(d).

 

1.83         “Generic Competition”.  Generic Competition shall mean, with respect
to a Product in a given country in a given Calendar Quarter, if, during such Calendar
Quarter, one or more Generic Product shall be commercially available in such
country and such Generic Product []* (such agreement not to be unreasonably
withheld)) []*; provided, however,
that, if []* selected in accordance with the foregoing) is unavailable to
determine []* for a country in the European Union (“EU”) where a Generic
Product is being sold, the average Generic Competition 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

9

 

of the countries in the EU
for which such data is available will be deemed to be the Generic Competition
for such country in which such data is not available.

 

1.84         “Generic Filing”.  Generic Filing shall have the meaning given
to that term in Section 7.5(d).

 

1.85         “Generic Product”.  Generic Product shall mean: (a) any
pharmaceutical product sold by a Third Party for use in the Field (other than a
Product sold by Cubist or its Related Parties) that contains as an active
ingredient (i) a Compound or (ii) another compound that contains the
[]*.  For purposes of this Section 1.85,
another compound will be considered to []* any pharmaceutical product (other
than a Product or Cubist Product that is Developed or Commercialized by a Party
pursuant to this Agreement) that is included in an application made before a
Regulatory Authority for marketing approval in the Cubist Territory (i) as
being a []*, or as having any other similar designation with respect to such
Product as provided under Applicable Law, or (ii) in which the applicant
of such application []*.

 

1.86         “HAE”.  HAE shall mean hereditary angioedema.

 

1.87         “IND”.  IND shall mean an Investigational New Drug
Application filed with FDA or a similar application to conduct Clinical Studies
filed with an applicable Regulatory Authority outside of the United States.

 

1.88         “Indemnified Party”.  Indemnified Party shall have the meaning
given to that term in Section 11.9(c)(i).

 

1.89         “Indemnifying Party”.  Indemnifying Party shall have the meaning given
to that term in Section 11.9(c)(i).

 

1.90         “Indication”.  Indication shall mean a use of a Product
approved by a Regulatory Authority (whether through a label expansion or a
separate Regulatory Approval) including, without limitation, each of the Surgical
Procedures set forth in items (a) through (o) of Section 1.77.

 

1.91         “In-License”.  In-License shall mean an agreement between a
Party and a Third Party pursuant to which such Party has licensed Blocking
Third Party Patent Rights, as more particularly described in Section 3.6.

 

1.92         “Initial Inventory Supply”.  Initial Inventory Supply shall have the
meaning given to that term in Section 6.2(c).

 

1.93         [Reserved]

 

1.94         “Intellectual Property”.  Intellectual Property shall mean Patent
Rights and Know-How.

 

1.95         “Invention”.  Invention shall mean any Know-How that is
conceived, reduced to practice and/or developed in the course of performance of
activities pursuant to this Agreement.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

10

 

1.96         “IRB”.  IRB shall have the meaning given to that term
in Section 4.8(b).

 

1.97         “JMC Recommended Changes”.  JMC Recommended Changes shall have the
meaning given to that term in Section 6.8(a).

 

1.98         “Joint Intellectual
Property”.  Joint Intellectual
Property shall mean Joint Know-How and Joint Patent Rights, collectively.

 

1.99         “Joint Inventions”.  Joint Inventions shall have the meaning given
to that term under Section 8.1(b).

 

1.100       “Joint Know-How”.  Joint Know-How shall mean any Know-How that
is conceived, developed, reduced to practice 
or acquired jointly by the Parties (or jointly by a Party and an
Affiliate or Related Party of the other Party) 
in connection with their activities pursuant to this Agreement,
including Joint Inventions.  Joint
Know-How may also include additional parties who contribute to such Joint
Know-How.

 

1.101       “Joint Patent Rights”.  Joint Patent Rights shall mean Patent Rights
that Cover Joint Know-How, excluding any Patent Rights that Cover Dyax Sole
Inventions as defined in Section 8.1(a).

 

1.102       “JMC”.  JMC shall have the meaning given to that term
in Section 2.2.

 

1.103       “JSC”.  JSC shall have the meaning given to that term
under Section 2.1(a).

 

1.104       “Know-How”.  Know-How shall mean any information and
materials, whether proprietary or not and whether patentable or not, including
without limitation ideas, concepts, inventions, formulas, methods, protocols,
procedures, knowledge, know-how, trade secrets, processes, assays, skills,
experience, techniques, designs, compositions, plans, documents, results of
experimentation and testing, including without limitation, pharmacological,
toxicological, and pre-clinical and clinical test data and analytical and
quality control data, improvements, discoveries, works of authorship, compounds
and biological materials.

 

1.105       “Losses”.  Losses shall have the meaning given to that
term in Section 11.9(a).

 

1.106       “Major EU Country”.  Major EU Country shall mean each of France,
Germany, Italy, Spain, and the United Kingdom.

 

1.107       “Manufacturing” or “Manufacture”.  Manufacturing or Manufacture shall mean
activities directed to producing, manufacturing, processing, filling,
finishing, packaging and labeling a product or component thereof.

 

1.108       “Manufacturing Cost”.  Manufacturing Cost shall mean with respect to
a batch of Drug Substance ordered by Cubist in accordance with this Agreement
or the Supply Agreement, the manufacturing Party’s []* costs, determined in
accordance with GAAP by such manufacturing Party in the ordinary course of its
business, incurred in Manufacturing and/or acquiring such batch of Drug
Substance which costs shall include, without limitation:

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

11

 

(a)           costs
incurred by the Manufacturing Party after the Effective Date associated with
[]*; provided that, in each case such costs are applicable to Drug Substance
Manufactured under this Agreement or the Supply Agreement;  []*;

 

(b)           the cost of goods produced,
which cost shall include []*; and

 

(c)           any other costs borne by the
manufacturing Party for []*.

 

Notwithstanding the foregoing, “Manufacturing
Costs” shall not include []*.

 

1.109       “Net Sales”.

 

(a)           Net Sales shall mean, with
respect to a Product, the gross invoiced sales of the Product by Cubist and its
Related Parties in the Field in the Cubist Territory, less the following
deductions to the extent included in the gross invoiced sales price for the
Product or otherwise directly paid or incurred by Cubist or its Related Parties
with respect to the sale of the Product:

 

(i)            []*.

 

(b)           Notwithstanding the
foregoing, in any case where the Product is sold or otherwise disposed of in a
transaction that is not an arm’s length sale of the Product exclusively for
cash that is separate from any sale or disposition of other products or of
services, Net Sales shall mean the greatest of:

 

(i)            []*.

 

(c)           With respect to sales of
Product in the Field in the Cubist Territory that is comprised of a Compound
combined with any other clinically active ingredient (a “Combination Product”),
the Net Sales of such Combination Product, for the purposes of determining
royalty payments, shall be determined by multiplying the Net Sales (as
determined above) of the Combination Product, during the applicable royalty
reporting period, by []*.  In the event
that such []* cannot be determined for both the Product and the other product(s) in
combination, Net Sales for purposes of determining royalty payments shall be
determined []*.  If Dyax disagrees with
Cubist’s good faith determination of Net Sales, Dyax shall provide Cubist with
written notice thereof within thirty (30) days after Cubist provides such
determination to Dyax, and the Parties shall seek in good faith to reach
agreement on the determination of Net Sales. 
If the Parties are unable to reach agreement within sixty (60) days
after Dyax’s notice to Cubist, either Party may seek resolution of the
determination of Net Sales with respect to a Combination Product under ARTICLE
XIII.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

12

 

1.110       “New Call Sites”.  New Call Sites shall have the meaning given
to that term in Section 9.2(a).

 

1.111       “New Information”.  New Information shall have the meaning given
to that term in Section 10.4.

 

1.112       “Non-Breaching Party”.  Non-Breaching Party shall have the meaning
given to that term in Section 12.2(b)(i).

 

1.113       “Ongoing Phase II Study”.  Ongoing Phase II Study means the Phase II
Clinical Study of DX-88, entitled KALAHARI 1 (Kallikrein Antagonism effect on
blood Loss Associated with Heart surgery Requiring Institution of bypass).

 

1.114       “Other Indication
Settings”.  Other Indication Settings
means the following []*.

 

1.115       “Other Hospital
Indication”.  Other Hospital
Indication shall mean []*.

 

1.116       “Party” or “Parties”.  Party shall mean either Dyax or Cubist.  Parties shall mean Dyax and Cubist.

 

1.117       “Patent Rights”.  Patent Rights shall mean patents and patent
applications and all substitutions, divisions, continuations,
continuations-in-part, reissues, reexaminations and extensions thereof, and all
counterparts thereof in any country.

 

1.118       “Phase I Clinical Study”.  Phase I Clinical Study shall mean a human
clinical study in any country in the world that would satisfy the requirements
of 21 C.F.R. §312.21(a) as amended from time to time.

 

1.119       “Phase II Clinical Study”.  Phase II Clinical Study shall mean a human
clinical study in any country in the world that would satisfy the requirements
of 21 C.F.R. §312.21(b) as amended from time to time.

 

1.120       “Phase III Clinical Study”.  Phase III Clinical Study shall mean a human
clinical study in any country in the world that would satisfy the requirements
of 21 C.F.R. §312.21(c) as amended from time to time.

 

1.121       “Phase II Plan”.  Phase II Plan shall mean the plan []* to []*.

 

1.122       “PHSA”.  PHSA shall have the meaning given to that
term in Section 5.2(a).

 

1.123       “Post-Approval Study”.  Post-Approval Study shall mean a clinical
study initiated in a country after receipt of Regulatory Approval for a
Compound or Product in the Field in the Cubist Territory.

 

1.124       “Primary Product”.  Primary Product means a Product that []*.

 

1.125       “Process Development
Costs”.  Process Development Costs
shall have the meaning given to that phrase in Section 6.9.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

13

 

1.126       “Product”.  Product shall mean, on a country-by-country
basis, any product which incorporates a Compound and is Covered by a Valid
Claim of a Dyax Patent Right or for which the Development, Manufacture or
Commercialization made or makes use of Dyax Know-How.

 

1.127       “Product Competitor”.  Product Competitor shall mean any Third Party
that is engaged in the manufacture and/or commercialization of a Competing
Product, or is []*, including those Third Parties set forth on Exhibit E.

 

1.128       “Product Inventory”.  Product Inventory shall mean the existing
supplies of Drug Product specifically described in Exhibit H
attached hereto.

 

1.129       “Product Shortage”.  A Product Shortage shall mean the occurrence
of any of the following events at any time during which Dyax is Manufacturing
Drug Substance for Cubist in accordance with Section 6.2:

 

(a)           []*.

 

Notwithstanding the
foregoing, the failure of Dyax to []* shall not be considered a Product
Shortage.

 

1.130       “Product Trademark(s)”.  Product Trademark(s) shall mean the
trademark(s) and service mark(s) for use in connection with the
distribution, marketing, promotion and sale of a Product in the Field in the
Cubist Territory, and/or accompanying logos, trade dress and/or indicia of
origin.

 

1.131       “Projected Launch Date”.  Projected Launch Date shall have the meaning
given to that term in Section 6.2(c).

 

1.132       “Projected Launch
Forecast”.  Projected Launch Forecast
shall have the meaning given to that term in Section 6.2(c).

 

1.133       “Projected Launch Notice”.  Projected Launch Notice shall have the
meaning given to that term in Section 6.2(c).

 

1.134       “Protected Time Period”.  Protected Time Period shall mean the period
commencing on []* and ending on []*.

 

1.135       “[]*”.  []* shall mean the []*.

 

1.136       “[]* License Agreement”.  []* License Agreement shall mean the License
Agreement effective []* between []* and Dyax, as may be amended from time to
time.

 

1.137       “[]* Intellectual
Property”.  []* Intellectual Property
shall mean the “[]*”, the “[]*” and the “[]*” as such terms are defined in
Paragraphs 1.3, 1.5 and 1.8 of the []* License Agreement.

 

1.138       “Receiving Party”.  Receiving Party shall have the meaning given
to that term in Section 10.2.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

14

 

1.139       “Regulatory Approval”.  Regulatory Approval shall mean the approval
of the applicable Regulatory Authority necessary for the marketing and sale of
a Product for a particular Indication in a country, including separate pricing
and/or reimbursement approvals that may be required.

 

1.140       “Regulatory Authority”.  Regulatory Authority shall mean any federal,
national, multinational, state, provincial or local regulatory agency,
department, bureau or other governmental entity with authority over the
clinical testing, manufacturing, marketing and/or sale of a pharmaceutical
product in a country, including without limitation the FDA in the United States
and the EMEA in the EU.

 

1.141       “Regulatory Materials” means regulatory applications, submissions, notifications,
registrations, approvals or other submissions made to or received from a
Regulatory Authority that are necessary or reasonably desirable in order to
Develop, Manufacture or Commercialize a Compound or Product in a particular
country, territory or possession. 
Regulatory Materials include, without limitation, INDs and Regulatory
Approvals, and amendments and supplements for any of the foregoing, and
applications for pricing and reimbursement approvals.

 

1.142       “Related Party”.  Related Party shall mean any of a Party’s
Affiliates and permitted Sublicensees, which term includes []*.

 

1.143       “Royalty Term”.  Royalty Term shall have the meaning given to
that term under Section 7.5(h).

 

1.144       “Safety Data”.  Safety Data means adverse event or adverse
experience information, as defined under 21 C.F.R. §600.80 as amended from time
to time, or the equivalent under any other Applicable Law, and other
information regarding health risks posed by a Compound or Product, including
Complaints and clinical trial information.

 

1.145       “Severed Clause”.  Severed Clause shall have the meaning given
to that term in Section 14.4.

 

1.146       “Sole Inventions”.  Sole Inventions shall have the meaning given
to that term under Section 8.1(a).

 

1.147       “Study Budget”.  Study Budget shall have the meaning given to
that term under Section 4.1(b).

 

1.148       “Sublicensee”.  Sublicensee of a Party shall mean a Third
Party to whom a license or sublicense under any Dyax Intellectual Property or
Cubist Intellectual Property, as the case may be, has been granted pursuant to,
and in full compliance with all applicable provisions of, this Agreement, to
Develop, Manufacture and/or Commercialize a Product or Cubist Product, or
otherwise has been granted rights to distribute, promote or sell a Product or
Cubist Product.  []*.

 

1.149       “Sublicensee Improvements”.  Sublicensee Improvements shall mean all
Intellectual Property Controlled by a Sublicensee that is conceived, developed
or reduced to 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

15

 

practice, by, or under the
authority of, such Sublicensee during the Term using or incorporating
Intellectual Property sublicensed to such Sublicensee under this Agreement.

 

1.150       “Sublicensee Notice”.  Sublicensee Notice shall have the meaning
given to that term in Section 3.1(d)(i).

 

1.151       “Supply Agreement”.  Supply Agreement shall have the meaning given
to that term under Section 6.10.

 

1.152       “Surgical Procedure”.  Surgical Procedure shall mean a procedure
involving the use of instruments (including lasers) to cut, abrade, suture or
otherwise physically change body tissues and/or organs.

 

1.153       “Term”.  Term shall have the meaning given to that
term under Section 12.1.

 

1.154       “Termination Notice”.  Termination Notice shall have the meaning
given to that term in Section 12.2(b)(i).

 

1.155       “Territory”.  Territory shall mean, the Cubist Territory or
the Dyax Territory, as the context requires.

 

1.156       “Third Party”.  Third Party shall mean any person other than
a Party or any of its Affiliates.

 

1.157       “Transfer Price”.  Transfer Price shall mean:

 

(a)           with respect to any amount
of Drug Substance delivered to Cubist for use in the Development of the
Product, []*; or

 

(b)           with respect to any amount
of Drug Substance delivered to Cubist for use in the Commercialization of the
Product, []*.

 

1.158       “United States”.  United States shall mean the United States of
America and its territories and possessions.

 

1.159       “Valid Claim”.  Valid Claim shall mean a claim (a) of
any issued, unexpired patent that has not been revoked or held unenforceable or
invalid by a decision of a court or governmental agency of competent
jurisdiction from which no appeal can be taken, or with respect to which an
appeal is not taken within the time allowed for appeal, and that has not been disclaimed
or admitted to be invalid or unenforceable through reissue, disclaimer or
otherwise or (b) of any patent application that was filed in good faith
and is being prosecuted actively and in good faith and has not been cancelled,
withdrawn or abandoned and has not been pending for []*.

 

1.160       “Working Group”.  Working Group shall have the meaning given to
that term under Section 2.3.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

16

 

ARTICLE II

MANAGEMENT OF COLLABORATION AND LICENSE ACTIVITIES

 

2.1           Joint Steering
Committee.

 

(a)           Formation; Purposes and
Principles.  Within ten (10) days
after the Effective Date, Dyax and Cubist shall establish a joint steering
committee (the “JSC”), which shall have overall responsibility for
oversight of the Parties’ activities under this Agreement.

 

(b)           Specific Responsibilities.  In addition to its overall responsibility for
such oversight established by this Agreement, the JSC shall in particular:

 

(i)            review, discuss and comment
on the clinical and regulatory activities of each Party with respect to
Products, including without limitation, the design of proposed Clinical
Studies;

 

(ii)           review, discuss and comment
on the strategy to seek and obtain Regulatory Approval for Products;

 

(iii)          review, discuss and comment
on the strategy of each Party to []*;

 

(iv)          review, discuss and comment
on the strategy of each Party to []*;

 

(v)           facilitate the exchange of
data, information, material and results that is required under this Agreement;

 

(vi)          review, discuss and comment
on other activities of the Parties under the terms of this Agreement; and

 

(vii)         perform such other functions
as are expressly provided for elsewhere in this Agreement or as are appropriate
to further the purposes of this Agreement as determined by the Parties.

 

2.2           Joint Manufacturing
Committee.  Within ten (10) days after the Effective Date, Dyax and
Cubist shall establish a joint manufacturing committee (the “JMC”),
which shall have responsibility for overseeing the Parties’ activities in
Manufacturing Primary Products under this Agreement.  In addition to its overall
responsibility for such Manufacturing activities, the JMC shall, in particular,
with respect to Primary Products: []*.

 

2.3           Working Groups.  From time to time, the JSC or JMC may
establish working groups (each, a “Working Group”) to oversee particular
projects or activities, and each such Working Group shall be constituted and
shall operate as the JSC or JMC determines.

 

2.4           Membership.  Each of the JSC, JMC and any Working Groups
shall be composed of an equal number of representatives appointed by each of
Dyax and Cubist.  The JSC and JMC shall
each initially have three (3) representatives of each Party, but the JSC
may change the size 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

17

 

of the JSC, and the JMC may
change the size of the JMC from time to time by mutual consent of the members
of the JSC and JMC, respectively.  Each
Party may replace its JSC, JMC and Working Group representatives at any time
upon written notice to the other Party. The JSC shall be chaired by []*.  The JMC shall be chaired by []*.  The chairperson shall be responsible for
calling meetings, preparing and circulating an agenda in advance of each
meeting, and preparing and issuing minutes of each meeting within thirty (30)
days thereafter; provided that, []* may call a meeting of the []* and []* may
call a meeting of the []* if there is an issue within such committee’s scope of
responsibility that such Party would like to have discussed at such committee
and the chair of the committee fails to promptly call a meeting upon such
Party’s reasonable request.

 

2.5           Decision-Making.

 

(a)           The JSC, JMC and any Working
Group []*.  With respect to decisions of
the JSC, JMC and any Working Group, the representatives of each Party shall
have collectively one vote on behalf of such Party.  Should the members of a Working Group
maintain their disagreement, for a period of []* after a Party’s delivery of
notice of such disagreement to the Working Group, on any matter for which []*
and Dyax or Cubist requests a resolution, the matter shall be []*.

 

(b)           Should the members of the
JSC maintain their disagreement, either with respect to a matter referred from
a Working Group or with respect to a matter []*, for a period of []* after the
matter is officially considered by the JSC, such matters shall be resolved []*.

 

(c)           Should the members of the
JMC maintain their disagreement with respect to a matter initially arising
within or otherwise referred to or under the authority of the JMC for a period
of []* after the matter is officially considered by the JMC, such matters shall
be resolved as follows:

 

(i)            []*.

 

2.6           Meetings of the JSC, JMC and
Working Groups.  The JSC,
JMC and any Working Groups shall hold meetings at such times as the JSC or JMC
shall determine, but in no event shall such meetings of the JSC and JMC be held
less frequently than []*.  The JSC, JMC
and any Working Groups shall meet alternately at Dyax’s facilities in
Cambridge, Massachusetts and Cubist’s facilities in Lexington, Massachusetts or
at such locations as the Parties may otherwise agree.  Other representatives of each Party or, with
prior approval of the other Party and subject to confidentiality and non-use
provisions which are no less stringent than those set forth in ARTICLE X of
this Agreement, representatives of Third Parties involved in the Development, Manufacture
or Commercialization of the Products, may attend meetings of the JSC, JMC or
such Working Group as nonvoting observers. 
Meetings of the JSC, JMC and any Working Groups may be held by audio or
video teleconference with the consent of each Party.  Each Party shall be responsible for all of
its own expenses of participating in the JSC, JMC and any Working Groups.  No action taken at a meeting of the JSC, JMC
or a Working Group shall be effective unless a representative of each Party is
present or participating; provided that, []*.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

18

 

2.7           Alliance Managers.  Each Party shall designate a single alliance
manager for all of the activities contemplated under this Agreement.  Such alliance managers will be responsible
for the day-to-day worldwide coordination of the activities contemplated by
this Agreement and will serve to facilitate communication between the
Parties.  Such alliance managers shall
have experience and knowledge appropriate for managers with such project
management responsibilities.  Each Party
may change its designated alliance manager from time to time upon notice to the
other Party.

 

2.8           Further Assurances.

 

(a)           Cubist shall make available
its employees, consultants and subcontractors engaged in the performance of its
Development, Manufacturing and Commercialization obligations under this
Agreement as may be reasonably necessary to consult with Dyax with respect to
such activities, upon reasonable notice during normal business hours as
coordinated through the Alliance Managers and the JSC and JMC.

 

(b)           Dyax shall provide Cubist
with such assistance and access to its employees, consultants and
subcontractors as may be reasonably necessary to assist Cubist in the
performance of Cubist’s Development, Manufacturing and Commercialization
obligations under this Agreement, upon reasonable notice during normal business
hours as coordinated through the Alliance Managers and the JSC and JMC.  In addition, Dyax will []*.

 

ARTICLE III

LICENSE GRANTS; RIGHT OF FIRST OFFER; TRANSFERS AND ASSIGNMENTS

 

3.1           Dyax Grants.

 

(a)           Grant of Rights for
Development.  Subject to
the terms and conditions of this Agreement, Dyax hereby grants to Cubist a
worldwide, exclusive right and license, with the right to grant sublicenses
solely as set forth in Section 3.1(d) below, under the Dyax
Intellectual Property, to Develop Products and Cubist Products for use and
Commercialization in the Field in the Cubist Territory.

 

(b)           Grant of Rights for
Commercialization. Subject to the terms and conditions of this
Agreement, Dyax hereby grants to Cubist an exclusive right and license, with
the right to grant sublicenses solely as set forth in Section 3.1(d) below,
under the Dyax Intellectual Property to sell, offer to sell, import and
otherwise Commercialize Products and Cubist Products in the Field in the Cubist
Territory.

 

(c)           Grant of Rights for
Manufacture.  Subject to
the terms and conditions of this Agreement, Dyax hereby grants to Cubist a
non-exclusive right and 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

19

 

license, with the right to grant sublicenses
solely as set forth in Section 3.1(d) below, under the Dyax
Intellectual Property, to Manufacture and have Manufactured (i) Drug
Product from Drug Substance, (ii) Drug Substance, and (iii) all other
Products and Cubist Products, in each case for use by or on behalf of Cubist
and its Related Parties in the Development and Commercialization of Products
and Cubist Products in the Field for the Cubist Territory.

 

(d)           Sublicense Rights.  Cubist shall be entitled to grant sublicenses
under the licenses granted to it under Sections 3.1(a), (b) and/or (c) to
Affiliates and Third Parties (including, without limitation, the right to grant
further sublicenses through multiple tiers subject to the terms of this
provision and the rest of this Agreement) under the following conditions:

 

(i)            []*;

 

(ii)           Cubist may only grant a
sublicense []*.

 

(iii)          Each permitted sublicense
under this Section 3.1(d) shall be in writing, shall not contravene
or be inconsistent or in conflict with the terms of this Agreement and shall
include provisions requiring the applicable Sublicensee to acknowledge and
agree that such sublicense is subject to the applicable license(s) granted
hereunder and []*.

 

(iv)          Cubist shall at all times
remain responsible for the performance of its Sublicensees, and for the
compliance by such Sublicensees with the obligations under this Agreement,
including without limitation Sections 3.4(c)(i) and 3.4(c)(ii).

 

(v)           Cubist shall provide or
cause to be provided to Dyax a copy of each such sublicense agreement []*; provided that Cubist shall have the right to redact any
terms contained in such sublicense agreement that are not material to Dyax’s
assessment of whether the sublicense agreement complies with the requirements
of this Section 3.1(d).

 

(e)           Third Party Service Organizations. Cubist shall
be entitled to utilize the services of Third Parties (including Third Party
contract research organizations, Third Party contract manufacturing
organizations and Third Party distributors and contract sales organizations) to
perform its Development, Manufacturing and Commercialization activities under
this Agreement and in accordance with the provisions of this Agreement; provided that Cubist shall remain at all times fully liable
for its responsibilities under this Agreement.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

20

 

(f)            Restrictions.  Cubist will not Develop or Commercialize any
Products for any mode of delivery other than intravenous (IV) delivery,
[]*.  To the extent that Cubist
identifies a use of a Product in the Field that would benefit from another form
of delivery other than IV, []*.  Cubist
will not exercise any of its rights to Manufacture under Section 3.1(c)(ii) unless
and until Cubist is permitted pursuant to, and in accordance with, ARTICLE VI
hereof.

 

3.2           Right of First
Offer; Additional Indication License Option.

 

(a)           Additional Indication
License Option.  In the
event that Dyax []* all or any portion of the rights to Develop or Commercialize
a Compound or a Product []* (in each case an “Additional Indication License”),
then, before granting such a license, Dyax shall offer Cubist in writing the
exclusive option to obtain such a license from Dyax (an “Additional
Indication License Option”). 
Notwithstanding anything to the contrary contained herein, the Parties
agree that Dyax will have no obligation to offer Cubist an Additional
Indication License Option with respect to []*.

 

(b)           []* Options.  Cubist acknowledges and agrees that an Additional
Indication License may []*, and that in such cases, Cubist’s Additional
Indication License Option  may only be
exercised by []*.  If (i) any
Additional Indication License Option offered to Cubist []*; and (ii) Cubist
and Dyax do not enter into a Additional Indication License pursuant to such
Additional Indication License Option in accordance with the provisions of Section 3.2(f) below;
and (iii) Dyax subsequently []* which is to be the subject of the
Additional Indication License, []* in accordance with the terms of this Section 3.2.

 

(c)           Terms.  The written notification by Dyax to Cubist of
an Additional Indication License Option (an “Additional Indication License
Option Notice”) shall set out []* an Additional Indication License.

 

(d)           Notice by Cubist.  Cubist shall notify Dyax in writing within
[]* of receipt of the Additional Indication License Option Notice (or such
other longer period as the Parties agree) whether or not it wishes to enter
into an Additional Indication License. 
If Cubist []*, then Dyax shall be free to grant an Additional Indication
License to any Third Party; provided that
Dyax shall not grant such an Additional Indication License []*.

 

(e)           []*.  If Dyax elects to negotiate an Additional
Indication License with []*.  For example,
Dyax shall not be permitted to []*.  Any
disputes regarding the application of this paragraph shall be resolved in
accordance with ARTICLE XIII.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

21

 

(f)            Negotiations. If Cubist
notifies Dyax in writing in accordance with Section 3.2(d) that it
wishes to enter into an Additional Indication License, the Parties shall []*.

 

(g)           Differing []*. Notwithstanding the foregoing, if after Dyax offers a Product to Cubist under a
particular Additional Indication License Option Notice such Product []*, Dyax
shall not grant any license to a Third Party to Develop or Commercialize such
Product []*.

 

3.3           Transfer of Product
Inventory and Dyax Know How.  As soon as practicable after the Effective
Date, Dyax shall transfer copies of all Dyax Know-How Controlled by Dyax as of
the Effective Date, as set forth on Exhibit F.  Promptly upon request of Cubist, Dyax will
transfer and assign to Cubist the Product Inventory.  Dyax further agrees to cause to be performed
such other lawful acts and to be executed such further assignments and other
lawful documents as Cubist may reasonably require in order to complete and
fully document the transfers and assignments required under this Section 3.3.  The technology transfers set forth in this Section 3.3
shall be conducted in an orderly fashion and in a time period and manner such
that the value, usefulness and confidentiality of the transferred Dyax Know-How
are preserved in all material respects.

 

3.4           Grant Back
License; Restrictions.

 

(a)           Subject to the terms and
conditions of this Agreement, Cubist hereby grants to Dyax:

 

(i)            with respect to the Primary
Product, a non-exclusive, royalty-free, right and license, with the right to
grant sublicenses (subject to subsection 3.4(c)), under any Cubist Intellectual
Property that is necessary to Develop, Manufacture and Commercialize the
Primary Product (A) in the Field in the Dyax Territory, and/or (B) outside
the Field in all countries of the world; and

 

(ii)           with respect to all Products
other than the Primary Product, an exclusive, royalty-bearing, right and
license, with the right to grant sublicenses (subject to subsection 3.4(c)),
under the Cubist Improvements to Develop, Manufacture and Commercialize such
Products (A) in the Field in the Dyax Territory, and/or (B) in the
Dyax Field in all countries of the world;

 

(b)           Subject to the terms and
conditions of this Agreement, Cubist hereby grants Dyax an exclusive option to
obtain exclusive license rights for the Development and Commercialization of
Cubist Products in the Dyax Field pursuant to the terms of this Section 3.4(b) (the
“Cubist Products Option”).  Cubist
will notify Dyax in writing within []* after an IND is filed by Cubist for each
Cubist Product for use in the Field, which notice shall include reasonably
sufficient information concerning such Cubist Product to enable Dyax to make a
determination regarding the exercise of 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

22

 

its Cubist Products Option. Dyax shall have
the right to notify Cubist of Dyax’s intent to exercise the Cubist Products
Option for such Cubist Product in writing at any time prior to []* after Cubist
or its Affiliate or Sublicensee has provided a clinical study report of a
successful Phase II Clinical Study  of such Cubist Product in the
Field.  If Dyax exercises the Cubist
Products Option in accordance with this Section, the Parties will negotiate in
good faith the terms of a license agreement in the Dyax Field on terms in
accordance with industry standards for []*. The terms of such agreement will
include royalties to be paid by Dyax to Cubist in accordance with the terms of Section 7.5(i) (provided
that, no milestone payments, upfront fees, or other royalty obligations will be
included in such agreement).  If the
Parties fail to reach agreement []*, Dyax’s option pursuant to this Section 3.4(b) will
expire with respect to such Cubist Product; provided, however,
that either Party may submit the disagreement regarding the proposed terms for
dispute resolution pursuant to ARTICLE XIII, and the Executive Officers or an
arbitration proceeding under Section 13.3 will determine the terms of such
agreement consistent with this Section 3.4(b).

 

(c)           Dyax shall have the right to
grant sublicenses under the licenses granted to it pursuant to Section 3.4
to its Affiliates and to Third Parties (including the right to grant further
sublicenses through multiple tiers subject to the terms of this provision and
the rest of this Agreement) under the following conditions:

 

(i)            Each sublicense agreement
shall be in writing, shall not contravene or be inconsistent or in conflict with
the terms of this Agreement, and shall include provisions requiring the
applicable Sublicensee to acknowledge and agree that such sublicense is subject
to the applicable license(s) granted hereunder and to other relevant terms
of this Agreement; and

 

(ii)           Dyax may only grant a
sublicense []*.

 

(iii)          Dyax shall at all times
remain responsible for the performance of its Sublicensees, and for the
compliance by such Sublicensees with the obligations under this Agreement,
including without limitation Sections 3.4(c)(i) and (ii), 4.2, 4.3, 4.4,
4.6, 4.7, 7.7, and ARTICLE V, ARTICLE VIII, ARTICLE X, Section 11.9(b),
and ARTICLE XII.

 

(d)           During the Term, Dyax will
not, and will not grant licenses to its Affiliates and Sublicensees to, []*.

 

(e)           Cubist will not, and will
not grant licenses to its Affiliates and Sublicensees to, []*.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

23

 

3.5           Dyax Retained Rights.  Subject to Sections 4.2(a), 4.2(b), and 4.3,
any rights of Dyax not expressly granted to Cubist, or otherwise expressly
restricted or limited, under this Agreement shall be retained by Dyax.  Without limiting the generality of the
immediately preceding sentence, Dyax shall retain the right to (i) exploit
and license Dyax Intellectual Property to Develop, Manufacture and
Commercialize Product in the Field in the Dyax Territory, without any duty to
account to Cubist or obtain Cubist’s consent for such exploitation or license, (ii) exploit
and license Dyax Intellectual Property to Develop, Manufacture and
Commercialize Products outside the Field in the Cubist Territory, without any
duty to account to Cubist or obtain Cubist’s consent for such exploitation, (iii) exploit
Dyax Intellectual Property for purposes unrelated to Products or Competing
Products without any duty to account to Cubist or obtain Cubist’s consent for
such exploitation, and (iv) otherwise exercise Dyax’s rights and perform
Dyax’s obligations under this Agreement and the Supply Agreement.  Notwithstanding the foregoing, Dyax and its
Related Parties shall have no rights under the Cubist Intellectual Property to
exploit the Dyax Intellectual Property, except as expressly set forth in Section 3.4.

 

3.6           In-License of Blocking Third
Party Patent Rights.  If, at any
time or from time to time after the Effective Date and during the Term, a Party
becomes aware of any Blocking Third Party Patent Rights that []*.  Each Party shall comply with all applicable
terms and conditions of the In-Licenses of the other Party and shall take such
actions as may be required to allow such Party to comply with its obligations
thereunder, including obligations relating to patent matters, confidentiality,
indemnification and diligence.

 

For clarity, the Parties
agree that the []* License Agreement shall not be considered an In-License
subject to the provision of this Section 3.6.

 

ARTICLE IV

DEVELOPMENT

 

4.1           Ongoing Phase
II Study.

 

(a)           From and after the Effective
Date, Cubist shall assume all authority and responsibility for the Ongoing
Phase II Study and shall be entitled to take any action with respect to the
Ongoing Phase II Study.  To that end,
Dyax shall and hereby assigns to Cubist all of Dyax’s rights with respect to
the Ongoing Phase II Study, and Dyax hereby delegates to Cubist, and Cubist
hereby assumes, all of Dyax’s obligations that arise after the Effective Date
with respect to the conduct of the Ongoing Phase II Study, including all
funding obligations, it being understood that Cubist assumes no financial
obligation that arose prior to the Effective Date that Cubist does not
expressly assume.  Notwithstanding the
foregoing, the Parties have agreed that Dyax shall, at Cubist’s written
request, continue to manage all operational activities needed to continue and
complete the Ongoing Phase II Study on behalf of Cubist and subject to Cubist’s
ultimate supervision, direction and authority. 
For the avoidance of doubt, Cubist may elect, in its sole discretion, to
discontinue the Ongoing Phase II Study; []*.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

24

 

(b)           From and after the Effective
Date, all reasonable internal and external costs and expenses incurred by Dyax
following the Effective Date in connection with the conduct of the Ongoing
Phase II Study, unless directed by Cubist to discontinue such Ongoing Phase II
Study or its activities pursuant thereto, shall be reimbursed by Cubist to the
extent requested by Cubist and to the extent included in the budget set forth
in Exhibit G (the “Study Budget”). 
Dyax shall track and calculate, in accordance with US GAAP and its
normal cost accounting practices, and shall keep a complete and accurate record
of, all costs incurred by it in connection with its conduct of the Ongoing
Phase II Study.  Such records shall include internal FTE time devoted to
the Ongoing Phase II Study under the Phase II Plan and copies of invoices from
Third Parties for activities using Third Party resources for the Ongoing Phase
II Study (together, the “Funded
Phase II Costs”).  Charges for Dyax FTEs shall only be paid to
the extent such FTEs are directly performing specific activities allocated to
Dyax under the Phase II Plan approved by Cubist and shall not include
management or supervisory personnel except to the extent such management or
supervisory personnel are directly performing activities under such Phase II
Plan.  Within ten (10) days after the end of each quarter while the
Ongoing Phase II Study is being conducted, Dyax shall submit to Cubist an
invoice setting forth in reasonable detail the Funded Phase II Costs incurred
by Dyax during such quarter accompanied by the relevant supporting
documentation.  Cubist will pay the
amounts owed under each such invoice within forty five (45) days after receipt
of such invoice. Cubist shall remain responsible for all reasonable
non-cancellable costs incurred by Dyax in accordance with this Agreement
pursuant to the Phase II Plan prior to the effective date of any termination of
the Ongoing Phase II Study by Cubist.

 

(c)           As soon as practical (but in
no event later than []*) following the Effective Date, Dyax shall (a) transfer
to Cubist the CTS IND under which the Ongoing Phase II Study is being conducted
(including every serial submission from 0000 to present and all communications
with Regulatory Authorities related to such IND), and (b) assign to Cubist
or its designee the Services Agreement, dated January 9, 2007, with
BatelleCRO relating to the conduct of the Ongoing Phase II Study.  Furthermore, Dyax agrees to cause to be
performed such other lawful acts and to execute such further assignments and
other lawful documents as Cubist may reasonably require in order to complete
and fully document the transfer and assignment required under this Section 4.1.

 

(d)           Throughout the conduct of
the Ongoing Phase II Study and upon the reasonable request of Cubist during the
Term thereafter, Dyax will make its employees and consultants of Dyax who are
knowledgeable regarding the Ongoing Phase II Study reasonably available to
consult with qualified 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

25

 

personnel of Cubist on
issues and questions related to the Ongoing Phase II Study.

 

4.2           Development
Responsibilities.

 

(a)           Subject to the terms and
conditions set forth in this Agreement, (including the JSC management and
supervision structure described in ARTICLE II and the obligation of each Party
to exchange relevant information) Cubist shall have the sole and exclusive
right, in the manner it deems appropriate to conduct all further Development of
Products and Cubist Products in the Field for the Cubist Territory, including
conducting Clinical Studies to support applications for Regulatory Approval for
the Products and Cubist Products in the Field for the Cubist Territory.  Except as otherwise provided herein, Cubist
shall bear one hundred percent (100%) of the development costs incurred in the
Development of Products and Cubist Products in the Field for the Cubist
Territory.  Cubist and its Related
Parties shall have the right to file, and to own, INDs, applications for
Regulatory Approval and Regulatory Approvals for the Products and Cubist
Products in the Field for the Cubist Territory. 
For clarity, Cubist (whether itself or through its Related Parties)
shall have the right to conduct Clinical Studies of the Products and Cubist
Products in the Field in the Dyax Territory if needed or useful to support
Cubist’s (or its Related Parties’) Development or Commercialization of the
Products in the Field for the Cubist Territory. 
Cubist will []* before seeking to commence (i.e., before filing any IND
to enable) any such Clinical Studies in the Dyax Territory so that the []*.

 

(b)           Subject to the terms and
conditions set forth in this Agreement, (including the JSC management and
supervision structure described in ARTICLE II and the obligation of each Party
to exchange relevant information) Dyax shall have the sole and exclusive right,
in the manner it deems appropriate (and subject to its obligations under this
Agreement) to Develop Products (i) in the Field for the Dyax Territory and
(ii) outside the Field throughout the world; including conducting all
Clinical Studies reasonably required to support applications for Regulatory
Approval for the Products.  Dyax shall
bear one hundred percent (100%)  of the
development costs incurred in the Development of Products in the Field for the
Dyax Territory and outside the Field. 
Dyax (and its Related Parties) shall have the right to file in its own
name, and to own, INDs, applications for Regulatory Approval and Regulatory
Approvals for the Products in the Field for the Dyax Territory and outside the
Field.  Dyax (whether itself or through
its Related Parties) shall have the right to conduct Clinical Studies of the
Products in the Field in the Cubist Territory if needed or reasonably useful to
support Dyax’s (or its or its Related Parties’) Development or
Commercialization of the Products in the Field for the Dyax Territory.  Dyax will []* before seeking 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

26

 

to commence (i.e., before filing any IND to
enable) such studies in the Cubist Territory so that the []*.

 

(c)           Cubist and its Related
Parties shall use Commercially Reasonable Efforts, via product packaging,
promotional materials and Cubist Trademarks, to distinguish the Cubist-Branded
Product in the Field for the Cubist Territory from the Dyax-Branded
Product.  Similarly, Dyax and its Related
Parties shall use Commercially Reasonable Efforts, via product packaging,
promotional materials and trademarks, to distinguish the Dyax-Branded Product
from the Cubist-Branded Product.  To the
extent allowable under Applicable Law, the Parties will []*.  It is anticipated that Cubist will sell the
Cubist-Branded Product through []* using a []* and Dyax will sell the
Dyax-Branded Product []*.  The Parties,
through the Alliance Managers, shall reasonably coordinate with each other in
order to facilitate the exchange of information necessary to fulfill their
respective obligations under this Section 4.2(c).

 

(d)           Each Party shall conduct the
Development, Manufacture and Commercialization of the Compounds and/or Products
in accordance with all Applicable Laws, rules and regulations, including
without limitation, current governmental regulations concerning cGLP, cGCP and
cGMP.

 

(e)           Each Party shall promptly
notify the other Party if such Party becomes aware of any information or
circumstance that is likely to have an adverse effect on the Development,
Manufacture or Commercialization of a Product in the other Party’s Territory or
licensed field.

 

4.3           Exchange of
Information Regarding Clinical Studies.

 

(a)           On an annual basis at a time
determined by the JSC, each Party shall provide the other Party with a written
summary, in a form mutually agreed by the Parties, of all Clinical Studies
planned by such Party and its Related Parties with respect to Compounds and
Products during such Calendar Year and the immediately following Calendar Year
(each a “Clinical Study Summary”). 
Each such Clinical Study Summary will be reviewed and discussed at the
JSC.  Furthermore, the Party receiving the
Clinical Study Summary shall have thirty (30) days after its receipt thereof to
[]* the Clinical Study Summary, and the submitting Party shall []* with respect
to such Clinical Study Summary.  If
however, the submitting Party []*.

 

(b)           At least thirty (30) days
prior to the submission by a Party or its Related Parties of any Clinical Study
protocol with respect to Compounds or Products to any Institutional Review
Board (or similar body), such Party shall submit the proposed protocol for such
proposed Clinical Study to the other Party for review.  The Party receiving the Clinical Study
protocol will not disclose the protocol to any Affiliate or Third Party without
the 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

27

 

prior written consent of the submitting
Party, which consent shall not be unreasonably withheld, delayed or
conditioned.  The Party receiving the
Clinical Study protocol shall have thirty (30) days after its receipt thereof
to []* the Clinical Study protocol, and the submitting Party shall []* with
respect to such Clinical Study protocol. 
If however, the submitting Party []*.

 

(c)           If a Party learns of a
safety concern related to or arising from a proposed Clinical Study protocol
prepared by such Party or its Related Parties, it shall provide prompt written
notice thereof to the other Party.   Actions regarding such safety concerns shall
be []*.

 

4.4           Access to Clinical Data.  Cubist acknowledges and agrees that all data
generated in connection with Development activities conducted by Cubist or its
Related Parties with respect to the Products in the Field for the Cubist
Territory may be used by Dyax and/or its Related Parties solely to obtain
Regulatory Approval for (i) Products in the Field in the Dyax Territory
and (ii) Products in the Dyax Field in all countries of the world.  In consideration for the access to and use of
such data, Dyax shall pay Cubist an amount equal to []* of the development
costs reasonably incurred by Cubist in the generation of such data; provided that such payment shall not be required with
respect to the use of any data generated by or on behalf of Cubist pursuant to
the conduct of the Ongoing Phase II Study. If Dyax and/or its Related Parties
wishes to obtain use of such clinical data generated by Cubist pursuant to this
Section 4.4, Dyax shall provide Cubist with notice thereof, and Cubist
shall provide Dyax with an invoice for []* of the development costs incurred by
Cubist in the Development of such clinical data as of the date of Dyax’s
written request.  Cubist shall transfer
the requested clinical data to Dyax and/or its Related Parties promptly after
receipt of the invoiced amount.

 

4.5           Exchange of Intellectual
Property.  In
accordance with and subject to ARTICLE X, on an ongoing basis during the
Term:  (a) []* that has not been
previously disclosed to Cubist and that is []*; and (b) []* that have not
been previously disclosed to Dyax and are []*.

 

4.6           Access to
Regulatory Submissions and Regulatory Approvals.

 

(a)           Cubist shall own all
regulatory submissions, including all INDs and applications for Regulatory
Approvals for the Products in the Field for the Cubist Territory, and all
regulatory submissions, including all INDs and applications for Regulatory
Approvals for the Cubist Products in all fields and countries, and shall be
responsible for seeking, obtaining and maintaining all such Regulatory
Approvals.  []* Dyax and its Related
Parties shall have the right to access all data contained or referenced in such
submissions (including INDs) or applications for Regulatory Approvals of the
Products, including all reports, correspondence and conversation logs, and Cubist
shall provide appropriate notification of Dyax’s and its Related Parties’
access and reference rights to the Regulatory Authorities.  Subject to payment of the amounts described
in Section 4.4, Cubist hereby grants, and shall ensure that its Related
Parties grant, to Dyax a “Right of Reference or Use,” as that term is defined
in 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

28

 

21 C.F.R. §314.3(b) as amended from time
to time, and any foreign equivalents, to any and all data contained or
referenced in any such submissions (including INDs) or applications for
Regulatory Approvals of the Products, including all reports, correspondence and
conversation logs, and Cubist shall provide appropriate notification of Dyax’s
access and reference rights to the Regulatory Authorities.

 

(b)           Dyax shall own all
regulatory submissions, including all INDs and applications for Regulatory
Approvals for Products inside the Field for the Dyax Territory and outside the
Field in all countries (except to the extent that Cubist is exercising its
rights granted to it under Section 3.1(a) outside of the Cubist
Territory,), and shall be responsible for seeking, obtaining and maintaining
all such Regulatory Approvals.  Dyax
hereby grants, and shall ensure that its Related Parties grant, to Cubist a
“Right of Reference or Use,” as that term is defined in 21 C.F.R. §314.3(b) as
amended from time to time, and any foreign equivalents, to any and all data
contained or referenced in any such submissions (including INDs) or
applications for Regulatory Approvals of the Products and Cubist Products,
including all reports, correspondence and conversation logs, and Dyax shall
provide appropriate notification of Cubist’s access and reference rights to the
Regulatory Authorities.

 

(c)           On an on-going basis during
the Term, the Parties shall provide each other with copies of []* related to
the Regulatory Approval of Products, including correspondence with Regulatory
Authorities, including, as applicable, []*.

 

4.7           Complaints;
Adverse Event Reporting Procedures; Notice of Adverse Events Affecting the
Compound; Global Safety Database.

 

(a)           Each Party will maintain a
record of any and all patient or health care provider complaints (“Complaints”)
and other Safety Data it receives with respect to the Compounds or the
Products.  Each Party will notify the
other Party in reasonable detail of any Complaint or other Safety Data received
by the Party with respect to the Products with sufficient time to allow the
other Party and its Related Parties to comply with any and all regulatory and
other requirements imposed upon them in any jurisdiction in which or for which
the Products are being Developed in Clinical Studies or Commercialized.

 

(b)           Each Party will provide the
other Party with all Complaint information and Safety Data in its control
relating to a Product which information is necessary or desirable for the other
Party to comply with all Applicable Laws with respect to the Products.  Each Party will provide such information to
the other Party within []* calendar days after its first receipt; provided  however, that
any information relating to a serious adverse experience (SAE), as that term is
defined at 21 C.F.R. §600.80 as 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

29

 

amended from time to time and analogous
regulations outside the United States, shall be provided to the other Party
within []* after its first receipt.  The
Party providing the Complaint information or Safety Data shall make all
reasonable efforts to assist the receiving Party with any follow-up
investigation necessary to comply with Applicable Laws with respect to the
applicable Products.

 

(c)           []* shall maintain, or []*
shall enter into an Agreement with a Third Party reasonably acceptable to []*
to maintain, a global adverse event database for the []* and shall generate
adverse event reports for []*’s use in []*. []* shall have access (including
electronic access) to all data in the global adverse event database. []* shall
reimburse []* for []* of []*’s reasonable []* of maintaining the global adverse
event database following the initiation of a Phase III Clinical Trial by Cubist
in the Field within thirty (30) days after receipt of an invoice from []*, such
invoice to be provided by []* no more frequently than once each Calendar
Quarter; provided that []* shall provide []* with
detailed written documentation supporting such costs.

 

(d)           With respect to (i) Products
in the Field for the Cubist Territory, and (ii) Cubist Products in all
fields in all countries, Cubist shall be responsible for submitting adverse
event reports to the applicable Regulatory Authorities. With respect to Products
inside the Field for the Dyax Territory and outside the Field in all countries,
Dyax shall be responsible for submitting adverse event reports to the
applicable Regulatory Authorities. 
Within ninety (90) days after the Effective Date the Parties will
develop and agree in writing upon safety data exchange procedures governing the
coordination of collection, investigation, reporting, and exchange of
information concerning any adverse experiences, and any product quality and
product complaints involving adverse experiences, and any other Safety Data,
related to the Products, sufficient to enable each Party to comply with its
legal and regulatory obligations.

 

(e)           The Parties acknowledge and
agree that all safety data maintained in the global adverse event database for
the Products may be used by both Parties and their respective Related Parties
to obtain all applicable Regulatory Approvals in accordance with the terms of
this Agreement.

 

4.8           Diligent Development.

 

(a)           Cubist (directly, or through
its Related Parties) shall []* Develop a Product for use in the Field and
Commercialization in the Cubist Territory. 
For the purpose of this Section 4.8(a), []* shall be deemed
satisfied by the performance of []* of the following in each Calendar Year
during the Term: (i) Cubist, together with its Related Parties, has
expended at least []*, or any lesser amount authorized by the JSC, in
Development of a Product; (ii) Cubist and/or any of its Related Parties is
[]*; (iii) Cubist 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

30

 

and/or any of its Related Parties has []*, (iv) the
[]* has occurred in the []* or (v) Cubist and/or any of its Related
Parties is []*.

 

(b)           Without limiting the
generality of Section 4.8(a), Cubist (directly or through its Related
Parties) agrees, subject to the provisions of this Section 4.8(b) and
Section 4.8(c), to achieve the following specific []* milestones for []*
Product in the Field for the Cubist Territory.

 

	
  Milestone
  Event

  	
   

  	
  Deadline

  	
   

  
	
  []*

  	
   

  	
  []*

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []*

  	
   

  

 

Each date indicated in this Section 4.8(b) (and
any subsequent dates) shall be extended automatically to reflect any delay in
the achievement of the applicable milestone attributable to External
Factors.  For purposes of this Section 4.8(b),
an “External Factor” shall mean []*. 
The relevant date(s) in this Section 4.8(b) (and any
subsequent dates) shall be extended by mutual agreement of the Parties based
upon the JSC’s reasonable assessment of the period of time required to reach
the applicable milestone event in light of the relevant External Factors.

 

(c)           In addition to the
foregoing, Cubist may also extend the period for completion of any milestone
event described in Section 4.8(b) above by []*.

 

(d)           Failure to Meet Diligence
Obligations.  If Cubist
fails to meet its obligations under Section 4.8 or 5.1 in any material
respect, then Dyax shall have, []*, the right to terminate this Agreement
pursuant to Section 12.2(b).

 

ARTICLE V

COMMERCIALIZATION

 

5.1           []*.  Cubist shall []* Commercialize a Product in
the Field in the United States and each of the Major EU Countries and shall
bear all costs and expenses of Commercializing the Product in the Field in the
Cubist Territory.

 

5.2           Advertising and Promotional
Materials.

 

(a)           Cubist shall be responsible
for the creation, preparation, production, reproduction and filing with the
applicable Regulatory Authorities, of relevant written sales, promotion and
advertising materials relating to a Product for Commercialization in the Field
for the Cubist Territory 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

31

 

(“Cubist Promotional Materials”).  All such Cubist Promotional Materials shall
be compliant in all material respects with all Applicable Laws, including the
United States Federal Food, Drug and Cosmetic Act (“FDCA”) and the
Public Health Service Act (“PHSA”). 
When distributing information related to the Product or its use
(including information contained in scientific articles, reference publications
and publicly available healthcare economic information), Cubist shall comply in
all material respects with all Applicable Laws. 
[]*.

 

(b)           Dyax shall be responsible for
the creation, preparation, production, reproduction and filing with the
applicable Regulatory Authorities, of relevant written sales, promotion and
advertising materials relating to products containing a Compound in the Field
for the Dyax Territory or outside the Field (“Dyax Promotional Materials”).  All such Dyax Promotional Materials shall be
compliant in all material respects with all Applicable Laws, including the FDCA
and the PHSA.  When distributing
information related to products containing a Compound or their use (including
information contained in scientific articles, reference publications and
publicly available healthcare economic information), Dyax shall comply in all
material respects with all Applicable Law. 
[]*.

 

5.3           Sales and
Distribution.

 

(a)           Except as provided in Section 5.5,
Cubist and its Related Parties shall be responsible for booking sales of the
Products in the Field in the Cubist Territory and shall be solely responsible
for handling all returns of the Products sold for use in the Field in the
Cubist Territory, as well as all aspects of the Product order processing,
invoicing and collection, distribution, inventory and receivables.

 

(b)           Except as provided in Section 5.5,
Dyax and its Related Parties shall be responsible for booking sales of Products
in the Field in the Dyax Territory and outside the Field and shall be solely
responsible for handling all returns of the products sold for use in the Field
in the Dyax Territory or sold for use outside the Field, as well as all aspects
of such product ordering, processing, invoicing and collection, distribution,
inventory and receivables.

 

(c)           Each Party shall ensure to
the degree possible that its distribution of Products in the Cubist Territory
shall []*.

 

5.4           []*.

 

(a)           Agreement by Dyax.  To the extent permitted by law in each
country in the Cubist Territory, Dyax shall not, and shall ensure that its
Related Parties agree not to, []*. 
Cubist shall be a third party beneficiary of any agreements between or
among Dyax and its Related Parties []*, with the 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

32

 

right to enforce such agreements.  Dyax shall provide Cubist with a copy of the
relevant sections of each such agreement promptly after the execution thereof.

 

(b)           Agreement by Cubist.  To the extent permitted by law in each
country in the Cubist Territory, Cubist shall not, and shall ensure that its
Related Parties agree not to, []*.  Dyax
shall be a third party beneficiary of the agreements between or among Cubist
and its Related Parties []*, with the right to enforce such agreements.  Cubist shall provide Dyax with a copy of the
relevant sections of each such agreement promptly after the execution thereof.

 

5.5           Treatment of []*.

 

(a)           U.S. Trigger.  The provisions of paragraphs (b) through
(h) of this Section 5.5 shall not be in effect until the occurrence
of one of the following events, after which such provisions shall be in full
force and effect during the Term:

 

(i)            The JSC determines that, at
any time after []* for the Primary Product for use in connection with
cardiothoracic surgery but before the []* of such Primary Product for such
Indication, []* has occurred in the U.S.;

 

(ii)           At any time after Cubist []*
for use of a Cubist-Branded Product in accordance with this Agreement, []*;

 

(iii)          Dyax achieves []*.

 

(b)           []* by Cubist.  Following the occurrence of any one of the
triggers described in subparagraphs (a)(ii) or (a)(iii) above, Cubist
shall []*. In such event, the Parties shall negotiate in good faith terms
governing such []* in accordance with industry standards and taking into
account the impact of []*.  If the
Parties are unable to agree on such terms, the terms shall be determined by the
Executive Officers or arbitration pursuant to ARTICLE XIII consistent with this
Section 5.5.

 

(c)           Tracking and Reporting.  Following any of the triggers described in
paragraph (a) above (but, in the case of the trigger of subparagraph
(a)(i), only until Cubist achieves Regulatory Approval in the U.S. for
marketing a Cubist-Branded Product in accordance with this Agreement), []* Such
reports of such sales during each Calendar Quarter shall be delivered by each
Party to the other within []* of the end of such Calendar Quarter.  Such reports shall include []*.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

33

 

(d)           Reimbursement.

 

(i)            By Dyax. Along with
each report described in subparagraph (c) above delivered by Dyax to
Cubist, Dyax shall pay Cubist []*.

 

(ii)           By Cubist. Along with
each report described in subparagraph (c) above delivered by Cubist to
Dyax, Cubist shall pay Dyax []*.

 

(e)           []*.   No earlier than []* months following []* in
connection therewith.  The Parties and
their Related Parties hereby agree to use Commercially Reasonable Efforts
(based upon available information and []* within such []*) to negotiate and
implement appropriate mechanisms to address such issues.  Such mechanisms
shall be as consistent as possible with the terms set forth in Sections 5.5(b),
5.5(c) and 5.5(d); provided, that any
corresponding trigger in []* to the []* trigger described in Section 5.5(a)(iii) above
(i.e., []*) shall also require a []*; and provided further, that
for []* within the []*, the mechanisms shall be as consistent as possible with
the terms set forth in Section 5.5(c) and
Section 5.5(d) only.  If the
Parties are unable to reach agreement by the time of []* on the appropriate
mechanisms to implement, the terms of such mechanisms shall be determined by
the Executive Officers and the executive officer(s) of Dyax’s or Cubist’s
Sublicensees or arbitration pursuant to ARTICLE XIII; provided,
that, for any such arbitration, “[]*” shall be substituted for “[]*”
and “[]*” shall be substituted for “[]*” in each instance such terms appear in
ARTICLE XIII, and the provision regarding the Federal Rules of Evidence
will not apply.

 

(f)            Audits.  Each Party will have to the right to audit
the Other Party’s records and books of account pertaining to this Section 5.5
in accordance with Section 7.7.

 

(g)           Liquidated Damages; Sole and
Exclusive Remedy.  The amounts
payable pursuant to Section 5.5(d)(i) shall be liquidated damages to
be paid to Cubist, and not a penalty to be paid by Dyax.  The amounts payable pursuant to Section 5.5(d)(ii) shall
be liquidated damages to be paid to Dyax, and not a penalty to be paid by
Cubist.  Notwithstanding the foregoing or
the terms of Section 5.4, a Party’s right to receive payment pursuant to Section 5.5
shall be such Party’s sole and exclusive remedy for all activities by the other
Party or such other Party’s Related Parties that would otherwise be a material
breach of Sections 5.4.

 

5.6           Recalls, Market Withdrawals or
Corrective Actions.  In the
event that any Regulatory Authority issues or requests a recall or takes a
similar action in connection with a Product anywhere in the world, or in the
event either Party reasonably determines that an event, incident or circumstance
has occurred that may result in the need for a recall or market 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

34

 

withdrawal of the Product,
the Party notified of such recall or similar action, or the Party that desires
such recall or similar action, shall, within twenty-four (24) hours advise the
other Party thereof by telephone or facsimile. Cubist shall, in consultation
with Dyax, determine whether to conduct a recall of the Product in the Field in
the Cubist Territory and the manner in which any such recall shall be conducted
(except in the case of a government mandated recall, when Cubist may act
without such advance notice but shall notify Dyax as soon as possible).  Similarly, Dyax shall, in consultation with
Cubist, determine whether to conduct a recall of Product in the Field in the
Dyax Territory, or outside the Field, and shall determine the manner in which
such recall shall be conducted (except in the case of a government mandated
recall, when Dyax may act without such advance notice but shall notify Cubist
as soon as possible).  []*, in which case
such other Party shall be responsible for the expenses; provided that
this will not limit any remedy that either Party may have against the other
Party in connection with such recall. Each Party will make available all of its
pertinent records that may be reasonably requested in order to affect a recall
conducted by the other Party.

 

ARTICLE VI

MANUFACTURE AND SUPPLY OF PRIMARY PRODUCT

 

6.1           Product Inventory.  Subject to product expiration and other
applicable requirements of law or regulation, Cubist shall be entitled to use
the Product Inventory transferred and assigned to Cubist under Section 3.3
in connection with the Development or Commercialization of the Primary Product
in the Field in or for the Cubist Territory.

 

6.2           Supply of Drug Substance.  During the Term, upon the request of Cubist,
which request may be made in writing at any time and from time to time after
the Effective Date, Dyax shall supply Drug Substance to Cubist (or its
designee) in reasonably sufficient quantities to satisfy the requirements of
Cubist and its Related Parties for use thereof in the Development and
Commercialization of the Product in the Field pursuant to this Agreement; provided,
however, that the foregoing obligation of Dyax to supply shall be
subject to the following provisions (or any more favorable terms regarding
forecasting, ordering, or other similar terms, that Dyax receives from its
contract manufacturing organization):

 

(a)           In order to allow Dyax the
ability to meet its obligations under this Section 6.2, forecasting will
commence []*.  []* will be provided by
each Party on a []* at the JMC meetings. 
Such forecasts will include []* for Drug Substance.

 

(b)           Dyax’s obligation to supply
Cubist (or its designee) with Drug Substance shall be limited to quantities
that are []*.

 

(c)           Cubist will have the right
to notify Dyax in writing (the “Projected Launch Notice”) of []* (“Projected
Launch Date”).  The Projected Launch
Notice []*.  The Projected Launch Notice
will include a []* for Commercialization in the []* after such projected First
Commercial Sale (the “Projected Launch Forecast”).  []*. 
The first such updated Projected Launch Forecast will include a []* of
Drug Substance Cubist expects to 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

35

 

require for Commercialization in the first
[]* months after the projected First Commercial Sale and the second such
updated Projected Launch Forecast will include a []* of Drug Substance Cubist
expects to require for Commercialization in the first []* after the projected
First Commercial Sale.  Each updated
Projected Launch Forecast shall not alter the amounts forecasted for the
periods covered by the previously-delivered Projected Launch Forecasts.  After receipt of the Projected Launch Notice,
Dyax will produce a supply of Drug Substance for Commercialization by Cubist in
accordance with the following schedule (the “Initial Inventory Supply”):

 

(i)                                     at least []*
prior to the Projected Launch Date, Dyax will have produced and delivered to
Cubist or Cubist’s designee a quantity of Drug Substance equal to the quantity
identified in the Projected Launch Forecasts for the []*;

 

(ii)                                  at least []*
prior to the Projected Launch Date, Dyax will have produced and delivered to
Cubist or Cubist’s designee a quantity of Drug Substance equal to the quantity
identified in the Projected Launch Forecasts for the first []*; and

 

(iii)                               upon the
Projected Launch Date, Dyax will have produced and delivered to Cubist or
Cubist’s designee a quantity of Drug Substance []*.

 

(d)                                 Dyax will
ensure that all Drug Substance produced pursuant to subsections 6.2(c)(i) —
(iii) (and all Drug Substance subsequently supplied pursuant to the Supply
Agreement) will be stable under normal storage conditions for []*.

 

6.3           Shortages.  Dyax will notify the JMC in writing as soon
as Dyax concludes that a Product Shortage is likely to occur.  In cases of shortages of Drug Substance,
available supplies will be allocated, as between the Parties []*.

 

6.4           Role of []*.  Except as otherwise provided in this Agreement
(including without limitation Section 13.2(c)) or agreed by the Parties,
[]* will have the right to make all decisions with respect to manufacturing of
Drug Substance, including without limitation, decisions relating to
Manufacturing procedures, work to support quality assurance, improving
Manufacturing Costs, Manufacturing efficiency and commercial scale-up
Manufacturing, provided  that
Dyax will Manufacture or have Manufactured Drug Substance in conformity with
all Applicable Law in the United States and Europe.

 

6.5           Step-In Rights.

 

(a)                                  Notwithstanding
the restrictions set forth in Section 3.1(f) that preclude Cubist
from Manufacturing or having Manufactured the Drug Substance in or for the
Cubist Territory, Cubist shall have the option, exercisable at 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

36

 

any time within []* after occurrence of any
of the following events (which cannot be attributed to a force majeure event
described in Section 14.13), []*.

 

(b)                                 If Cubist
elects to exercise its option under Section 6.5(a), then all of []*; provided however, that Dyax shall support the transfer of
Manufacturing information and technology then-untransferred to Cubist or to a
manufacturer of Drug Substance chosen by Cubist, including, without limitation,
the transfer of the then-current Manufacturing information and technology with
respect to Drug Substance, and the transfer of rights under the []*
Intellectual Property. Upon the transfer of rights under the []* Intellectual
Property, []*.  Furthermore, at Cubist’s
option, Dyax shall continue to Manufacture and supply Drug Substance []*, or
until such time as all of the technology transfer under this Section 6.5(b) has
been completed and a new manufacturer has been qualified. If Cubist supplies
Dyax or its Related Parties with Drug Substance, Dyax or its Related Parties
shall be responsible for the []* for such Drug Substance.

 

(c)                                  If Cubist
elects to exercise its option under Section 6.5(a), []*, including without
limitation, Sections 2.2, 2.5, 2.6, and 13.2.

 

6.6           Contract Manufacturer Agreements.  Dyax shall:

 

(a)                                  use
Commercially Reasonable Efforts to have included in any supply agreement
executed with a contract manufacturer that will Manufacture Drug Substance on
behalf of Dyax a provision that states []*; and

 

(b)                                 not amend any
agreement with a contract manufacturer in a manner that adversely affects
Cubist.

 

6.7           Transfer Price.  In consideration for the supply of Drug
Substance by Dyax to Cubist, Cubist shall pay to Dyax the applicable Transfer
Price for such Drug Substance.  The
Transfer Price shall be paid as follows:

 

(a)                                  if and to the
extent external Manufacturing Costs are incurred by Dyax in advance of actual delivery
of Drug Substance to Cubist, []*; provided, however,
that Dyax will not (i) amend any agreement with a contract manufacturer in
a manner that adversely affects Cubist, or (ii) amend any contract for the
Manufacture of Drug Substance that provides payment terms more favorable for
Drug Substance provided by the contract manufacturer for use by Dyax or any
other Dyax licensee than for Drug Substance provided by the contract
manufacturer for use by Cubist;

 

(b)                                 the balance of
the Transfer Price shall be paid by Cubist []*.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

37

 

6.8           Manufacturing Improvements.

 

(a)                                  JMC Recommended
Cost of Sales Reductions. 
Cubist will notify Dyax in writing after []* to be used in Cubist’s
first Phase III Clinical Trial and, along with such notice, []*.  If the Transfer Price for the Primary Product
for commercial use, as determined pursuant to 1.157(b), is greater than []* of
such estimated Net Sales price, Cubist may request that the JMC evaluate and
recommend changes to manufacturing processes or provide other recommendations
that will reduce the Manufacturing Costs and such commercial Transfer Price
(the “JMC Recommended Changes”). 
The JMC will, within ninety (90) days following Cubist’s request to the
JMC, issue a report to the Parties that identifies the JMC Recommended
Changes.  If the JMC is unable to reach
agreement regarding the changes to recommend, the JMC Recommended Changes will
be determined by the Executive Officers and arbitration, pursuant to ARTICLE
XIII and consistent with this Section 6.8(a).  Notwithstanding anything to the contrary in
the foregoing, the JMC shall not issue a report until resolution of any dispute
pursuant to Section 6.8(a).

 

(b)                                 Implementation;
Dyax Co-Funding.  Upon
Cubist’s receipt of the JMC’s report pursuant to Section 6.8(a), []*, one
or more of the JMC Recommended Changes. 
Dyax may, upon written notice to Cubist delivered within []* after
receipt of Cubist’s notice of election to implement, elect to pay for []* of
the expenses of implementing the JMC Recommended Changes selected by Cubist
(such election being the election to “Co-Fund”).  If Dyax has elected to Co-Fund, the JMC shall
promptly agree upon a plan to implement the JMC Recommended Changes (an
“Implementation Plan”).

 

(c)                                  Cubist Step-In Rights.  If Dyax []*, or if at any
time after []* Dyax does not []* obligation and: []*, then: (i) Cubist
will have the step-in rights set forth in Section 6.5(a)(x), and (ii) Dyax
and Dyax’s Related Parties may []*.

 

6.9           Commercial
Supplier Selection; Process Development; Scale Up.

 

(a)                                  Cubist may, at
any time following the Effective Date, by providing written notice to Dyax,
[]*.

 

(b)                                 In the event that Cubist has not provided written notice to Dyax under Section 6.9(a) at
the time of the initiation of a Phase III Clinical Study by Cubist for the
Primary Product, then, at any time thereafter, []* in accordance with Section 6.9(a) by
providing written notice thereof to Cubist.

 

(c)                                  Promptly
following a notice under Section 6.9(a) or (b), Dyax shall []*.  Dyax shall consult with Cubist about and
involve Cubist in []*.  The Parties []* all reasonable Third Party
costs associated with any: (i) programs associated with technology
transfer, process development and 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

38

 

validation activities, (ii) any
manufacturing scale-up required to meet the Drug Substance supply needs of the
Parties as forecasted in accordance with Section 6.2(a) and any
improvements associated with such manufacturing scale-up, and (iii) related
regulatory affairs activities; provided that,
in each case such costs are applicable to []* under this Section 6.9
(collectively, the costs under this Section 6.9 are the “Process
Development Costs”).

 

(d)                                 The Parties
will allocate any Drug Substance Manufactured in connection with the process
validation of such new Manufacturing process between the Parties on a []*
applicable to such Drug Substance, as set forth in Section 6.2(a).

 

6.10         Supply Agreement.

 

(a)                                  Within []*
following the Effective Date, the Parties shall use Commercially Reasonable
Efforts to negotiate in good faith and enter into a supply agreement, pursuant
to which Dyax will supply to Cubist Drug Substance (the “Supply Agreement”),
and a quality agreement in accordance with industry standards governing the
Drug Substance supplied pursuant to the Supply Agreement. The Supply Agreement
shall include the applicable terms set forth in Sections 6.1 through 6.9 of
this Agreement and shall contain such other provisions that the parties
mutually agree upon that are customary for supply agreements of this type.  Pending the execution and delivery of the
Supply Agreement, Manufacture of the Product shall be conducted in accordance
with the terms and conditions of this ARTICLE VI.  If the Parties do not reach agreement on the
terms of a Supply Agreement and quality agreement within such []* following the
Effective Date, such terms shall be determined by the Executive Officers or
arbitration pursuant to ARTICLE XIII consistent with this ARTICLE VI.

 

(b)                                 Each Party will
appoint at least one manufacturing logistics and quality assurance manager to
support the Parties’ respective Product Manufacturing activities, and to
function as a liaison with the JMC on matters relating to the Manufacture and
supply of Drug Substance and Drug Product.

 

ARTICLE VII

FINANCIAL PROVISIONS

 

7.1           Upfront License Fee.  Within five (5) days following the
Effective Date, Cubist shall pay to Dyax a non-refundable, non-creditable,
upfront license fee in the amount of Fifteen Million Dollars ($15,000,000).

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

39

 

7.2           Inventory Supply Fee.  Within thirty (30) days following Dyax’s delivery to Cubist of the Product Inventory in
accordance with Section 3.3, Dyax will send Cubist an invoice for an
inventory supply fee of []* in consideration for the expenses incurred by Dyax
in the manufacture of such Product Inventory; provided
that if any Product within such Product Inventory expires before use
in Development of the Primary Product, Cubist shall be entitled to return such
expired Product to Dyax (or destroy it at Dyax’s request) and receive a credit
against any amounts due to Dyax under Section 6.7 for the pro rated amount
of such expired Product based on the inventory supply fee described above.  Cubist will pay Dyax the amounts owed
pursuant to such invoice within forty-five (45) days after receipt of such
invoice.

 

7.3           Development Milestones.  Within thirty (30) days of the first
occurrence of each of the following events with respect to any Product, Cubist
shall make the following payments to Dyax:

 

	
  Milestone Event

  	
   

  	
  Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
   

  	
  First Indication

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  Upon the earlier of (i) the
  successful completion of the [] or (ii) []*

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Upon []*

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  Upon []* by Cubist or a
  Related Party of Cubist

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  Upon []*

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  Upon []* by Cubist or a
  Related Party of Cubist

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  Upon []* by Cubist or a
  Related Party of Cubist []

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  Upon []* in a [] by Cubist
  or a Related Party of Cubist

  	
   

  	
  $

  	
  []

  	
  *

  

 

	
  Milestone Event

  	
   

  	
  Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Second Indication

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  Upon []*

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Upon []*

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  Upon []* by Cubist or a
  Related Party of Cubist

  	
   

  	
  $

  	
  []

  	
  *

  

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

40

 

	
  (iv)

  	
   

  	
  Upon []*

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  Upon []* by Cubist or a
  Related Party of Cubist

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  Upon []* by Cubist or a
  Related Party of Cubist

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  Upon []* by Cubist or a
  Related Party of Cubist

  	
   

  	
  $

  	
  []

  	
  *

  

 

For the avoidance of doubt,
each of the foregoing milestone payments shall be paid only once by Cubist, and
once paid for any given Product or Cubist Product, shall not apply to any other
Product or Cubist Product subsequently developed by Cubist that subsequently
achieves the same milestone. 
Consequently, the maximum amount that Cubist could be obligated to pay
to Dyax under this Section 7.3 is []*.

 

7.4           Sales Milestones.  Within []* after the end of the Calendar Year
in which each of the following events first occur []* by Cubist or a Related
Party of Cubist, Cubist shall make the following payments to Dyax:

 

	
  Milestone Event

  	
   

  	
   

  	
  Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
   

  	
  First Calendar Year in
  which aggregate Net Sales for Products in all Indications in the Field in the
  Cubist Territory []*

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  First Calendar Year in
  which aggregate Net Sales for Products in all Indications in the Field in the
  Cubist Territory []*

  	
   

  	
  $

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  First Calendar Year in
  which aggregate Net Sales for Products in all Indications in the Field in the
  Cubist Territory []*

  	
   

  	
  $

  	
  []

  	
  *

  

 

For the avoidance of doubt,
each of the foregoing milestone payments is a separate payment and shall be
paid only once by Cubist.  Consequently,
the maximum amount that Cubist could be obligated to pay to Dyax under this Section 7.4
is []*.

 

7.5           Royalties.

 

(a)                                  Royalty Rates.  Subject to Sections 7.5(c), (d) and
(e) below, for each Calendar Year, Cubist shall pay to Dyax royalties on
the aggregate Net Sales of Products in the Field in the Cubist Territory by
Cubist or a Related Party of Cubist as follows:

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

41

 

	
  Calendar Year
  Net Sales of Products in the Field in the Cubist Territory

  	
   

  	
  Royalty Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
  Portion of Net Sales of Products that are less than or
  equal to []*

  	
   

  	
  []*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
  Portion of Net Sales of Products that are greater than []*
  and less than or equal to []*

  	
   

  	
  []*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
  Portion of Net Sales of Products that are greater than []*
  and less than or equal to []*

  	
   

  	
  []*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
  Portion of Net Sales of Products that are greater than []*

  	
   

  	
  []*

  	
   

  

 

(b)                                 Applicability
of Royalty Rates to Net Sales.  Royalties on
aggregate Net Sales of Products in the Field in the Cubist Territory in a
Calendar Year shall be paid at the rate applicable to the portion of Net Sales
within each of the Net Sales levels above during such Calendar Year.  For example, if during a Calendar Year, Net
Sales of Products in the Field in the Cubist Territory were equal to []*, the
royalties payable by Cubist would be calculated by adding (i) the
royalties with respect to the first []* at the first level percentage of []* x
[]* = []*), (ii) the royalties with
respect to the next []* at the second level percentage of []* x []* = []*) and (iii) the
royalties with respect to the next []* at the third level percentage of []* x []* = []*), for a total royalty amount of []*.

 

(c)                                  Royalty
Adjustments Following Loss of Intellectual Property Protection.  The royalties payable with respect to Net
Sales of a Product sold in the Field shall be reduced to []*  of the amounts otherwise payable pursuant to Section 7.5(a) during
any portion of the Royalty Term when there is no Valid Claim within the Dyax
Patent Rights Covering such Product in the Field (i) in the United States,
and (ii) on a country-by-country basis in Europe if the Dyax Know-How used
in the Manufacture or Commercialization of such Product no longer meets the
definition of “know-how” defined in Article 1(i) (Commission
Regulation (EC) No. 772/2004); provided that
if, []*.

 

(d)                                 []*.

 

(i)                                     During the []*.

 

(A)                              Subject to
subsection 7.5(d)(i)(C) below, in the event that []*, then beginning upon
commencement of []*.  

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

42

 

Notwithstanding anything to the contrary
above, this Section 7.5(d)(i)(A) shall apply if a []*.

 

(B)                                In the event a
Third Party []* for purposes of calculating the Transfer Price applicable to
all Drug Substance supplied by Dyax to be sold by Cubist in such country.

 

(C)                                If a Third
Party []*.  Such reimbursement, including
any accrued interest, shall be made within forty-five (45) days after Cubist’s
receipt of such notice from Dyax.

 

(D)                               Notwithstanding
the foregoing, if after the Effective Date []* of subsection 7.5(d)(i)(A) shall
not apply to any []*.

 

(E)                                 Notwithstanding
anything in this Section 7.5(d), Cubist shall remain obligated to make any
milestone payments due to Dyax under Sections 7.3 and 7.4.

 

(ii)                                  Other Generic
Competition   In the
event there is Generic Competition for a Product in a particular country of the
Cubist Territory in any of the  following
periods: []*, then, for each such country in which there is Generic Competition
during any such periods, the royalties payable pursuant to Section 7.5(a) for
such Product shall be reduced, on a country-by-country basis for the applicable
Calendar Quarter as follows:

 

	
  Share of Market Held by Generic Product

  	
   

  	
  Royalty Reduction

  
	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []*

  
	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []*

  
	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []*

  

 

In the event that Cubist does not reduce
royalties pursuant to this Section 7.5(d) for any Calendar Quarter
because, at the time that such royalties are due for such Calendar Quarter,
Cubist does not have sufficient information regarding market share of Generic
Competition, but subsequently determines that it was entitled to such a
reduction for such Calendar Quarter, Cubist may apply the reduction that it
would have been entitled to for such Calendar Quarter as a credit against
royalties owed to Dyax for the subsequent Calendar Quarter.

 

(e)                                  Blocking Third
Party Patent Rights; In-Licenses. If the Development,
Manufacture or Commercialization of a Product by Cubist in the Cubist Territory
in accordance with this Agreement infringes Blocking Third Party Patent Rights,
[]* of such Blocking Third Party Patent Rights that 

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

43

 

are reasonably allocable to the Development,
Manufacture or Commercialization of the Product in the Field for the Cubist
Territory.  The royalties payable by
Cubist to Dyax under Section 7.5(a), as reduced according to Sections 7.5(c) and
(d), will then be reduced []* pursuant to the applicable In-License; provided, however, that
in no event shall the provisions of this Section 7.5(e) operate to
reduce royalties payable by Cubist for any Calendar Quarter by more than []*,
and provided further, that if any royalties
payable to the Third Party cannot be used as a reduction in a given Calendar
Quarter due to the preceding proviso, the unused amount of such royalties
payable may be carried forward for use to off-set royalties payable to Dyax in
future Calendar Quarters.

 

(f)                                    Royalties to []*.  Dyax shall be responsible for and shall pay
all payments due to []* under the []* License Agreement; provided
that if upon Cubist’s []* of the Primary Product in the U.S. []*
such Primary Product is []*, Cubist royalty obligations pursuant to Section 7.5
shall increase by an amount equal to []* of the royalties Dyax owes to []*
under the []* License Agreement for Cubist Net Sales of the Primary Product (up
to a maximum of an additional []*)  as
required by the terms of the []* License Agreement as it exists as of the
Effective Date.

 

(g)                                 Cubist Products.  As additional consideration for the obligations
of each Party under this agreement, and subject to Sections 7.5(c), (d) and
(e), for each Calendar Year, Cubist shall pay to Dyax (i) upon the []* of
any of the milestone events referenced in Section 7.3 with respect to a
Cubist Product that have not otherwise occurred with respect to a Product, []*
with respect to a Product, and (ii) []* on the aggregate Net Sales of
Cubist Products (as Net Sales term is defined in Section 1.109 but
substituting “Cubist Product” for “Product” in such definition for purposes of
this Section 7.5(g)) in the Field in the Cubist Territory in accordance
with Section 7.5(a), including []*. 
The []* shall apply separately to aggregate Net Sales of Cubist Products
and aggregate Net Sales of Products.  For
example, if in a particular Calendar Year Cubist achieves Net Sales of Products
equal to []* and Net Sales of Cubist Products equal to []*, the royalties to be
paid based on the Net Sales of the Products shall be []* and the royalties to
be paid based on the Net Sales of the Cubist Products shall be []*.

 

(h)                                 Royalty Term. The royalty
payment obligations of Cubist with respect to each Product or Cubist Product in
any Indication at the rates set forth in Sections 7.5(a) and 7.5(g) (as
adjusted pursuant to the provisions of Section 7.5(c), (d) and/or (e) above)
shall commence in each country of the Cubist Territory on the date of []* in
such country and in such Indication, and continue (i) for each Product,
until the later of []*.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

44

 

(i)                                     Royalties Paid
By Dyax.  For each Calendar Year, Dyax
shall pay Cubist royalties on the aggregate Dyax Net Sales of Products that are
Covered by a Valid Claim of a Cubist Improvement or for which the Development,
Manufacture or Commercialization made or makes use of Cubist Know-How included
within the Cubist Improvements in the Dyax Field in any and all countries in
accordance with the royalty rates []*. 
The royalty payment obligations of Dyax with respect to a Product or
Cubist Product pursuant to this Section 7.5(i), []* or as provided below,
shall commence in each country []*. 
Notwithstanding the foregoing, in the event that Cubist either (a) grants
(or attempts to grant) to a Third Party rights that are exclusively licensed to
Dyax under Section 3.4(a)(ii) or (b) materially breaches its
obligations under Section 4.5 (each, a “Cubist Breach”), Dyax may provide
notice of such Cubist Breach to Cubist and, if Cubist has not cured the Cubist
Breach described in such notice within []* following receipt of such notice,
then Dyax may reduce the royalties due to Cubist pursuant to this Section 7.5
(and giving effect to all applicable reductions and credits under this Section 7.5)
by []*; provided that, if such Cubist Breach, by its nature, is curable, but
not within the foregoing []* cure period, then such cure period shall be
extended if Cubist provides a written plan for curing such Cubist Breach to
Dyax and uses Commercially Reasonable Efforts to cure such Cubist Breach in
accordance with such written plan; provided that
no such extension shall exceed []* without the written consent of Dyax, and
Dyax may not apply such royalty reduction until the expiration of such extended
cure period of such Cubist Breach has not been cured by such time.

 

(j)                                     General.

 

(i)                                     Only one
royalty shall be due with respect to the same unit of Product or Cubist
Product;

 

(ii)                                  No royalties
shall be due upon the sale or other transfer among a Party or its Related
Parties, but in such cases the royalty shall be due and calculated upon the
Party’s or its Related Party’s Net Sales to the first independent Third Party;

 

(iii)                               No royalties
shall accrue on the sale or other disposition of a Product or Cubist Product by
the Parties or their Related Parties for use in a Clinical Study or any other
Development activities; and

 

(iv)                              No royalties
shall accrue on the disposition of a Product or Cubist Product in reasonable
quantities by a Party or Related Parties as samples (promotion or otherwise) or
as donations (for example, to non-profit institutions or government agencies
for a non-commercial purpose).

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

45

 

7.6           Royalty Reports and Payments.  Within []* days after the end of each
Calendar Quarter for which royalties are payable by a Party with respect to Net
Sales pursuant to Section 7.5, such Party shall submit to the other Party
a report, on a country-by-country basis, providing in reasonable detail an
accounting of all Net Sales (including an accounting of all unit sales of
Products and Cubist Products) made during such Calendar Quarter in its
Territory and the calculation of the applicable royalties under Section 7.5.  Concurrently with the submission of such
report, such Party shall pay to the other Party all royalties payable by it
under Section 7.5, as indicated in the report.

 

7.7           Audits.  Each Party shall keep, and shall require its
Related Parties to keep, records and books of account containing all data
necessary for the calculation of the amounts payable under this Agreement,
including royalties payable under Section 7.5 and any reimbursement or
other compensation payable pursuant to Section 5.5.  Those records and books of account shall be
kept for at least []* following the end of the Calendar Year to which they
relate.  Upon the other Party’s written
request, an independent accounting firm appointed by agreement between the
Parties or, failing such agreement within []* of the initiation of discussions
between them on this point, such other Party 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 Related Parties
and is acceptable to the Party being audited pursuant to this Section, such
acceptance not to be unreasonably withheld, to inspect such records and books
of account.  In particular such firm:

 

(a)                                  shall be given
access to and shall be permitted to examine and copy such books and records of
the audited Party and its Related Parties upon []* notice having been given by
the auditing Party and at all reasonable times on Business Days for the purpose
of certifying that the Net Sales or other relevant sums calculated by the
audited Party and its Related Parties during any Calendar 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;

 

(b)                                 prior to any
such examination taking place, such accounting firm shall undertake to the
audited Party 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
the auditing Party, 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 Section envisages;

 

(c)                                  any such access
examination and certification shall occur no more than once per Calendar Year;

 

(d)                                 the audited
Party and its Related Parties shall make available personnel to answer queries
on all books and records required for the purpose of that certification; and

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

46

 

(e)                                  the cost of the
accountant shall be the responsibility of the audited Party if the
certification shows it to have underpaid monies to the auditing Party by more
than []* and the responsibility of the auditing Party otherwise.

 

7.8           Tax Matters.  If laws, rules or regulations require
withholding of income taxes or other taxes imposed upon payments set forth in
this ARTICLE VII, each Party shall make such withholding payments as required
and subtract such withholding payments from the payments set forth in this ARTICLE
VII.  Each Party shall submit appropriate
proof of payment of the withholding taxes to the other Party within a
reasonable period of time.  At the
request of a Party, the other Party shall, at such requesting Party’s cost,
give the requesting Party such reasonable assistance, which shall include the
provision of appropriate certificates of such deductions made together with
other supporting documentation as may be required by the relevant tax
authority, to enable the requesting Party to claim exemption from such
withholding or other tax imposed or obtain a repayment thereof or reduction
thereof and shall upon request provide such additional documentation from time
to time as is reasonably required to confirm the payment of tax.

 

7.9           United States Dollars.  All dollar ($) amounts specified in this
Agreement are United States dollar amounts.

 

7.10         Currency Exchange.  With respect to Net Sales invoiced or
expenses incurred in U.S. dollars, the Net Sales or expense amounts and the
amounts due to the receiving Party hereunder shall be expressed in U.S.
dollars.  With respect to Net Sales
invoiced or expenses incurred in a currency other than U.S. dollars, the Net
Sales or expense shall be expressed in the currency in which such Net Sales
were invoiced or such expense was incurred together with the U.S. dollar
equivalent, calculated using the average of the spot rate on the first and last
Business Days of the Calendar Quarter in which the Net Sales were made or the
expense was incurred.  The “closing
mid-point rates” found in the “dollar spot forward against the dollar” table published
by The Financial Times or any other publication as agreed to by the Parties
shall be used as the source of spot rates. 
All payments shall be made in U.S. dollars.

 

7.11         Blocked Payments.  In the event that, by reason of Applicable
Law in any country, it becomes impossible or illegal for a Party or its Related
Parties, to transfer, or have transferred on its behalf, royalties or other
payments to the other Party, such Party shall promptly notify the other Party
of the conditions preventing such transfer and such royalties or other payments
shall be deposited in local currency in the relevant country to the credit of
the other Party in a recognized banking institution designated by the other
Party or, if none is designated by the other Party within a period of thirty
(30) days, in a recognized banking institution selected by such Party or its
Related Party, as the case may be, and identified in a notice given to the
other Party.

 

7.12         Late Payments.  The owing Party shall pay interest to the
owed Party on the aggregate amount of any payments that are not paid on or
before the date such payments are due under this Agreement at a rate per annum
equal to the “prime” rate, as
published in The Wall Street Journal on the
date such payments are due,  []*, calculated on the
number of days such payments are paid after the date such payments are due and
compounded monthly.

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

47

 

ARTICLE VIII

INTELLECTUAL PROPERTY OWNERSHIP, 

PROTECTION AND RELATED MATTERS

 

8.1           Ownership of
Inventions.

 

(a)                                  Sole Inventions.  Each Party shall exclusively own all
Inventions made solely by such Party, its Affiliates and its and their
employees, agents, consultants and contractors (“Sole Inventions”).  Sole Inventions made solely by Cubist, its
Affiliates, and its and their employees, agents, consultants and contractors
are referred to herein as “Cubist Sole Inventions”.  Sole Inventions made solely by Dyax, its
Affiliates, and its and their employees, agents, consultants and contractors,
as well as []*, are referred to herein as “Dyax Sole Inventions”.

 

(b)                                 Joint
Inventions and Joint Know-How.  The Parties shall jointly own all Inventions
conceived or reduced to practice jointly by employees, agents, consultants, and
contractors of Cubist and its Affiliates and employees, agents, consultants and
contractors of Dyax and its Affiliates other than []*, (“Joint Inventions”),
in connection with their activities and pursuant to their respective rights and
obligations under this Agreement.  The
Parties shall jointly own all Joint Know-How and Joint Patent Rights. The
Parties shall jointly own all Joint Know-How and Joint Patent Rights on a
worldwide basis, subject to the licenses granted in Sections 3.1 and 3.4 of
this Agreement, without restriction by Field and in accordance with and bearing
with it the same rights as the joint ownership interests of co-inventors named
on United States patents under United States patent laws, including the right
to practice the Joint Know-How or Joint Patent Rights and to license others to
do the same, without obtaining the consent of or accounting to the other
Party.  In order to implement the rights
of joint ownership throughout the world as provided for in this Section 8.1(b),
each Party hereby assigns to the other Party, and, subject to the licenses
granted in Sections 3.1 and 3.4 of this Agreement, hereby grants to the other
Party all consents, licenses and waivers, in each case that are necessary to
achieve such joint ownership and the rights associated with such sole or joint
ownership worldwide, and agrees to provide documents evidencing or that may be
required to record such assignments, consents, licenses and waivers promptly upon
the other Party’s request and without regard to the existence of a pending
dispute pursuant to ARTICLE XIII of this Agreement.  Promptly after being requested in writing,
each Party shall provide to the other all documents and instruments required to
evidence or record any such assignments, consents, licenses or waivers, or (to
the extent otherwise consistent with this Agreement) to enforce rights in the
assigned Joint Patent Rights.

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

48

 

(c)                                  Inventorship.  For purposes of determining whether an
Invention is a Cubist Sole Invention, a Dyax Sole Invention or a Joint
Invention, questions of inventorship or whether the Invention must claim
priority to the Existing Dyax Patent Rights shall be resolved in accordance
with United States patent laws.  In the
event of a dispute among the Parties as to an inventorship determination, which
cannot be resolved by counsel to the Parties, the Parties shall refer the
determination to a Third Party patent counsel reasonably acceptable to the
Parties, who shall make a final determination of inventorship which shall be
binding upon the Parties and their respective inventors.

 

(d)                                 Employee
Assignments.  Each Party
will cause each of its employees, contractors and agents, and each of its
Affiliates’ employees, contractors and agents acting under authority from it or
its Affiliates before engaging in the Development or Commercialization of a
Compound or Product to enter into a binding written agreement or to be bound by
an established corporate policy to assign to such Party, or as such Party shall
direct, to assign to the other Party as a third party under such agreement, all
Inventions and Patent Rights conceived or reduced to practice by such employee,
contractor or agent.

 

8.2           Prosecution and
Maintenance of Patent Rights.

 

(a)                                  As used in this
Section 8.2, the term “Controlling Party” shall mean (i) Dyax
with respect to the filing, prosecution and maintenance of the Dyax Patent
Rights, and any Joint Patent Rights that []*, and (ii) Cubist with respect
to the filing, prosecution and maintenance of any Cubist Patent Rights included
within the Cubist Improvements and all other Joint Patent Rights. The Controlling
Party shall use Commercially Reasonable Efforts to prepare, file, prosecute and
maintain the Patent Rights for which it is responsible and shall confer with
and keep the other Party reasonably informed regarding the status of such
activities. In addition, the Controlling Party shall have the following
obligations with respect to the filing, prosecution and maintenance of any
Patent Rights for which it is responsible:

 

(i)                                     the Controlling
Party shall use Commercially Reasonable Efforts to provide to the other Party
for review and comment a substantially completed draft of any patent
application included within the Patent Rights for which it is responsible at
least thirty (30) days prior to the filing of any such patent application
and []* any comment from such Party;

 

(ii)                                  the Controlling
Party shall provide the other Party promptly with copies of all material
communications received from or filed in patent offices with respect to such
filings; and

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

49

 

(iii)                               the Controlling
Party shall consult with the other Party a reasonable time prior to taking or
failing to take action that would materially affect the scope, validity, enforceability,
or maintenance of any Valid Claim included within the Patent Rights for which
it is responsible, including, without limitation providing access by the other
Party to the complete files of any patent nullification, opposition,
interference, re-examination, reissue or patent term extension proceedings
instituted anywhere in the world without regard to Territory or Field under
this Agreement.

 

Furthermore, if the Controlling Party elects
not to undertake the preparation, filing, prosecution, defense and/or
maintenance of any Patent Right for which it is made a Controlling Party
hereunder  (or, after commencement of such
filing, prosecution, defense and/or maintenance, desires to cease the
prosecution or the maintenance of any Patent Rights for which it is responsible
and which Cover a Product), then the Controlling Party shall promptly notify
the other Party of such election and the other Party shall be entitled (but not
obligated), at its expense, to assume the preparation, filing, prosecution,
defense and/or maintenance of such Patent Rights.  []*.

 

(b)                                 Costs and
Expenses.  Any costs
and expenses incurred by a Party in preparing, filing, prosecuting, maintaining
or defending the Joint Patent Rights shall be []*.  Any reasonable out-of-pocket costs and
expenses incurred by the Parties in preparing, filing, prosecuting, maintaining
or defending the Dyax Patent Rights and Cubist Improvements Covering a Compound
or Product in the Field through a centralized international procedure for both
the Cubist Territory and the Dyax Territory that are not specific to the Cubist
Territory or the Dyax Territory shall be []*. 
In addition, the Parties []* all reasonable out-of-pocket costs and
expenses incurred in the Cubist Territory by Dyax in preparing, filing, prosecuting,
defending and/or maintaining any Dyax Patent Rights specifically Covering the
use of the Compound or Product in the Field, to the extent not included in the
expense-sharing provision of the immediately preceding sentence.

 

8.3           Third Party
Infringement.

 

(a)                                  Notice.  Each Party shall promptly report in writing
to the other Party during the Term any known or suspected (i) infringement
of any of the Dyax Patent Rights, Cubist Patent Rights included in the Cubist
Improvements or Joint Patent Rights or (ii) unauthorized use of any of the
Dyax Know-How, Cubist Know-How included in the Cubist Improvements or Joint
Know-How of which such Party becomes aware and shall provide the other Party
with all available evidence supporting such known or suspected infringement or
unauthorized use.

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

50

 

(b)                                 Cooperation
with Respect to Competitive Infringements. 
With respect to any infringement or unauthorized use described in
paragraph (a) above involving the development, manufacture or
commercialization by a Third Party of a Competing Product (a “Competitive
Infringement”), as soon as reasonably practicable after the receipt of such
notice, the Parties shall cause the JSC to meet and consider the appropriate
course of action with respect to such Competitive Infringement. With respect to
any Competitive Infringement, the Parties shall at all times cooperate, share
all material notices and filings in a timely manner, provide all reasonable
assistance to each other and use Commercially Reasonable Efforts to mutually
agree upon an appropriate course of action, including, as appropriate, the
preparation of material court filings and any discussions concerning
prosecution and/or settlement of any such claim.

 

(c)                                  Final Authority.  Final decisions on whether to initiate a
proceeding, and the course of action in such proceeding, including settlement
negotiations and terms with respect to any Competitive Infringement will be
made (i) with respect to Dyax Patent Rights and any Joint Patent Rights
that Cover the Primary Product or its use or manufacture in the Field, by []*, (ii) with
respect to any Cubist Patent Rights included in the Cubist Improvements, by []*,
and (iii) with respect to all other Joint Patent Rights, []*. Any
disagreement between the Parties concerning the enforcement of Joint Patent
Rights shall be determined under ARTICLE XIII. 
Furthermore, if Dyax determines not to undertake the enforcement of any
Dyax Patent Right against the Competitive Infringement in the Cubist Territory,
then Dyax shall promptly notify Cubist of such election and []*.  Notwithstanding the foregoing, if Dyax
determines not to undertake the enforcement of any Dyax Patent Right that []*,
then Dyax shall so notify Cubist, and the []* and any sales of Products and
Cubist Products Covered by such Dyax Patent Right []* for purposes of
determining []*.  Neither Party will
consent to the entry of any judgment or enter into any settlement with respect
to a Competitive Infringement without the prior written consent of the other
Party (which consent will not unreasonably be withheld, delayed or conditioned)
if such judgment or settlement includes a finding or agreement that any Dyax
Patent Right or Cubist Improvement is invalid or unenforceable, or results in
or requires a reduction in the scope of a claim in the Dyax Patent Right or
Cubist Improvement or abandonment of a claim in the Dyax Patent Right or Cubist
Improvement, or would enjoin or grant other equitable relief against the other
Party.

 

(d)                                 Conduct of
Litigation; Costs.  The Party
initiating suit with respect to any Competitive Infringement, shall have the
sole and exclusive right to select counsel for any suit initiated by it, which
selected counsel shall be []*.  The other
Party shall have the right to join, otherwise participate and be represented in
any such suit that is based on a Competitive Infringement in 

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

51

 

the Cubist Territory by its own counsel at
its own expense.  If and to the extent
Cubist is the initiating Party and is unable to initiate or prosecute such suit
solely in its own name or it is otherwise advisable in order to obtain an
effective remedy, Dyax will join such action voluntarily and will execute and
cause its Related Parties to execute all documents necessary for Cubist to
initiate litigation to prosecute and maintain such action.  Each Party shall offer reasonable assistance
to the initiating Party in connection therewith at no charge to the initiating
Party except for reimbursement of reasonable out-of-pocket expenses incurred in
rendering such assistance; []*.  The initiating
Party shall assume and pay all of its own out-of-pocket costs incurred in
connection with any litigation or proceedings initiated by it, including
without limitation the fees and expenses of the counsel selected by it.

 

(e)                                  Recoveries. With respect
to any suit or action that is based on a Competitive Infringement in the Cubist
Territory, any recovery obtained as a result of any such proceeding, by
settlement or otherwise, shall be applied in the following order of priority:

 

(i)                                     first, the
Parties shall be reimbursed for all costs incurred in connection with such
proceeding paid by the Parties and not otherwise recovered; and

 

(ii)                                  second, any
remainder shall be allocated and distributed between the parties as follows:

 

(A)                              if the entire
recovery was based upon the effect of the Competitive Infringement on the
Development, Manufacture or Commercialization of Products and/or Cubist
Products in the Field in the Cubist Territory, and Cubist has joined such
action pursuant to Section 8.3(d) then: the recovery shall be []*;

 

(B)                                if the entire
recovery was based upon the effect of the Competitive Infringement on the
Development, Manufacture or Commercialization of (i) Products inside the
Field for the Dyax Territory or (ii) Products outside the Field in any
country, or if Cubist has neither joined nor offered to provide assistance in
connection with such action pursuant to Section 8.3(d); then []*;

 

(C)                                if the entire
recovery was based upon the effect of the Competitive Infringement on the
Development, Manufacture or Commercialization of Products or Cubist Products in
each Party’s Territory and/or field, and Cubist has joined such action pursuant
to Section 8.3(d),  then the
recovery shall be []*, as determined by the Parties and their 

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

52

 

Related Parties in good faith.  Any amounts allocated to have been based on []*
shall be treated as []*.  If for any
reason the Parties and their Related Parties are unable to agree on such
allocation, such allocation shall be determined by the Executive Officers or
arbitration pursuant to ARTICLE XIII consistent with this Section 8.3.

 

8.4           Claimed Infringement.  In the event that a Party becomes aware of
any claim that the Development, Manufacture or Commercialization of a Product
infringes the intellectual property rights of any Third Party, such Party shall
promptly notify the other Party.  In any
such instance, the Parties shall cooperate and shall mutually agree upon an
appropriate course of action.  The costs
and expenses of any action instituted pursuant to this Section 8.4,
(including reasonable fees of attorneys and other professionals) shall be borne
by []*. Each Party shall provide to the other Party copies of any notices it
receives from Third Parties regarding any patent nullity actions, any
declaratory judgment actions and any alleged infringement or misappropriation
of Third Party intellectual property relating to the Development, Manufacture
or Commercialization of a Product.  Such
notices shall be provided promptly, but in no event after more than fifteen
(15) days following receipt thereof. 
Neither Party will enter into any settlement without the prior written
consent of the other Party (which consent will not unreasonably be withheld,
delayed or conditioned) if such settlement includes a finding, stipulation or
agreement that any Dyax Intellectual Property or Cubist Improvement is invalid
or unenforceable, or results in or requires a reduction in the scope or
abandonment of a claim or enforceable right in such Dyax Intellectual Property
or Cubist Improvement.  Any disputes as
to whether a Party has unreasonably withheld, delayed or conditioned its
consent shall be determined in accordance with ARTICLE XIII.

 

8.5           Patent Term Extensions.  The Parties shall cooperate, if necessary and
appropriate, with each other in gaining patent term extensions and supplemental
protection certificates wherever applicable to Patent Rights in the Cubist Territory
Controlled by either Party that Cover the Primary Product.  The Parties shall, if necessary and
appropriate, []*.

 

8.6           Patent Marking.  Each Party agrees to comply with the patent
marking statutes in each country in its Territory in which a Product is sold by
such Party and/or its Related Parties.

 

8.7           Trademarks.

 

(a)                                  Each Party and
its Affiliates shall retain all right, title and interest in and to its and
their respective corporate names and logos.

 

(b)                                 Cubist shall,
at its discretion, have the right to develop one or more trademark(s) for
use in the Field in the Cubist Territory in connection with a Product or Cubist
Product (“Cubist Trademarks”). 
Cubist shall use Commercially Reasonable Efforts to ensure that any
Cubist Trademark(s) shall be different from, and not confusingly similar
to, the trademark(s) and servicemark(s) used by Dyax or its
Affiliates or licensees with respect to the Development and Commercialization
of Products outside the Field of which Dyax has provided written notice to
Cubist prior to Cubist’s 

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

53

 

filing an application for trademark
registration in the Cubist Territory with respect to such Cubist
Trademark.  Following selection of Cubist
Trademarks by Cubist, its Affiliates or Sublicensees in accordance with the
foregoing, from time to time Cubist shall notify Dyax of such Cubist Trademarks
in writing and Dyax shall use Commercially Reasonable Efforts to ensure that
any trademark(s) and servicemark(s) used by Dyax, its Affiliates,
licensees or Sublicensees with respect to the Development and Commercialization
of Products outside the Field shall be different from, and not confusingly
similar to, such Cubist Trademark(s).  As
between the Parties, Cubist or its Sublicensees (or their respective local
Affiliates, as appropriate) shall own all rights to Cubist Trademarks, all
goodwill associated therewith throughout the Cubist Territory, and all rights
to any Internet domain names incorporating the applicable Cubist Trademarks or
any variation or part of such Cubist Trademarks as its URL address or any part
of such address.

 

(c)                                  Cubist will be
responsible, at its cost and expense, for establishing, maintaining and
enforcing the Cubist Trademarks in the Cubist Territory during the Term.

 

(d)                                 Nothing herein
shall be construed to grant a Party any license rights under the trademarks of
the other Party, or under any trademark registrations or goodwill associated
therewith.  Neither Party shall be
permitted to use the promotional materials of the other Party without such
other Party’s prior written consent.

 

ARTICLE IX

CO-PROMOTION RIGHTS

 

9.1           Exercise of
Co-Promotion Option.

 

(a)                                  Dyax shall have
the option (the “Co-Promotion Option”) to join Cubist in the marketing
and promotion of the Product in the Field in the Cubist Territory on terms set
forth in Section 9.2 below. Such Co-Promotion Option shall be exercisable
by Dyax at any time within []* following []*. Cubist shall provide Dyax
promptly with any information reasonably requested by Dyax to allow Dyax to
consider whether to exercise such option. To exercise its Co-Promotion Option,
Dyax shall deliver to Cubist a written exercise notice prior to the expiration
of such []* exercise period.

 

(b)                                 Should Dyax
fail to exercise its Co-Development Option within the []* exercise period as
required by Section 9.1(a), Dyax’s Co-Promotion Option shall expire with
respect to such Product and any subsequent Products.

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

54

 

9.2           Terms of Co-Promotion.  Following exercise of the Co-Promotion Option
as provided in Section 9.1(a), the Parties shall negotiate in good faith
and enter into a definitive agreement specifying the co-promotion activities of
the Parties for Products in the Field in the Cubist Territory (the “Co-Promotion
Agreement”).  Under the terms of the
Co-Promotion Agreement:

 

(a)                                  Dyax shall be
permitted to field at least []* but no more than []* sales representatives to
Detail the Products in the Field in the Cubist Territory.  Such sales representatives shall be allocated
to: []*.  Initially, a minimum of []*
sales representatives shall be engaged. 
However, unless otherwise agreed between the Parties, as []*, Details
shall be awarded to Dyax sales representatives []* until the maximum of []*
sales representatives are engaged.

 

(b)                                 Dyax shall be
permitted to field at least []* but no more than []* clinical science liaisons
in the marketing and promotion of Products to key opinion leaders in the Field
in the Cubist Territory.  The exact
number of such clinical science liaisons shall be negotiated by the parties in
good faith.

 

(c)                                  All sales
representatives and clinical science liaisons referenced in this Section 9.2
shall be Dyax employees, []*, although on a pro rata basis to be established in
the Co-Promotion Agreement taking to account any other products Detailed by
such Dyax sales representatives and clinical science liaisons in accordance
with industry standards.  For the
avoidance of doubt, such costs shall not include costs for any management or
supervisory personnel.  Such costs shall
be invoiced by Dyax on a monthly basis and paid by Cubist within []* following
receipt of such invoice.

 

(d)                                 The Parties
shall include provisions to account for performance standards, coordinating
activities, and incentive compensation consistent with Cubist’s standard
policies at the time, and shall provide that Cubist will maintain control over []*.

 

(e)                                  Dyax’s
co-promotion rights shall terminate in the event of: (i) Dyax is
developing or commercializing a product that is competitive with products then
being commercialized by Cubist; (ii) any Change of Control of Dyax whereby
Dyax’s successor is a Product Competitor or is developing or commercializing a
product that is competitive with products then being commercialized by Cubist.

 

The Parties shall finalize
and execute the Co-Promotion Agreement, which will include the terms above and
other terms in accordance with industry standards as negotiated by the Parties,
as soon as practicable after Dyax’s exercise of the Co-Promotion Option, but in
any event within []*.   If the Parties
fail to reach agreement on the terms of such Co-Promotion Agreement within such

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

55

 

the []* day period, the
terms of such Co-Promotion Agreement will be determined by the Executive
Officers or arbitration pursuant to ARTICLE XIII and consistent with this Section 9.2.

 

ARTICLE X

CONFIDENTIALITY AND PUBLICITY

 

10.1 Confidential Information. 
During the Term and []* after any termination or expiration thereof,
each Party agrees to keep in confidence and not to disclose to any Third Party,
or use for any purpose, except pursuant to, and in order to carry out, the
terms and objectives of this Agreement, any Confidential Information of the
other Party.  As used herein, “Confidential
Information” shall mean all trade secrets or confidential or proprietary
information designated as such in writing by the disclosing Party, whether by
letter or by the use of an appropriate stamp or legend, prior to or at the time
any such trade secret or confidential or proprietary information is disclosed
by the disclosing Party to the receiving Party. 
Notwithstanding the foregoing, information which is orally or visually
disclosed to the receiving Party by the disclosing Party, or is disclosed in
writing without an appropriate letter, stamp or legend, shall constitute
Confidential Information if (x) it would be apparent to a reasonable
person, familiar with the disclosing Party’s business and the industry in which
it operates, that such information is of a confidential or proprietary nature,
the maintenance of which is important to the disclosing Party, or if (y) the
disclosing Party, within []* after such disclosure, delivers to the receiving
Party a written document or documents describing such information and
referencing the place and date of such oral, visual or written disclosure and
the names of the employees or officers of the receiving Party to whom such disclosure
was made.  Confidential Information shall
also include all Proprietary Information (as such term is defined in the
Confidentiality Agreement) disclosed by the disclosing Party pursuant to the
Confidentiality Agreement prior to the Effective Date.  The restrictions on the disclosure and use of
Confidential Information set forth in the first sentence of this Section 10.1
shall not apply to any Confidential Information that:

 

(a)                                  was known by
the receiving Party or its Affiliates prior to disclosure by the disclosing
Party hereunder (as evidenced by the receiving Party’s or its Affiliates’
written records);

 

(b)                                 is part of the
public domain or otherwise publicly known prior to disclosure by the disclosing
Party or its Affiliates, or becomes part of the public domain or otherwise
publicly known through no fault of the receiving Party or its Affiliates;

 

(c)                                  is disclosed to
the receiving Party or its Affiliates by a Third Party having a legal right to
make such a disclosure without violating any confidentiality or non-use
obligation that such Third Party has to the disclosing Party or its Affiliates;
or

 

(d)                                 is
independently developed by the receiving Party or its Affiliates (as evidenced
by the receiving Party’s written records).

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

56

 

Notwithstanding the
obligations of confidentiality and non-use set forth above, a receiving Party
may provide Confidential Information disclosed to it to (i) governmental
or other Regulatory Authorities in order to obtain patents or to gain or
maintain approval to conduct Clinical Studies or to otherwise Develop,
Manufacture or Commercialize Products and Cubist Products (as applicable); provided, that such Confidential Information shall be
disclosed only to the extent reasonably necessary to obtain patents or
authorizations or to otherwise Develop, Manufacture or Commercialize such
Products and Cubist Products in accordance with this Agreement, (ii) the
extent required by Applicable Law, including by the rules or regulations
of the United States Securities and Exchange Commission or similar regulatory
agency in a country other than the United States or of any stock exchange or
listing entity, (iii) any bona fide actual or prospective underwriters,
investors, lenders, other financing sources, collaborators, licensees,
sublicensees, strategic partners or acquirors, in each case who are obligated
to keep such information confidential on terms no less strict than those in
this Section 10.1, to the extent reasonably necessary to enable such
actual or prospective underwriters, investors, lenders, other financing
sources, collaborators, licensees, sublicensees, strategic partners or
acquirors to determine their interest in underwriting or making an investment
in, or otherwise providing financing to, collaborating or partnering with,
licensing intellectual property from, or acquiring, the receiving Party.  In addition, if either Party is required to
disclose Confidential Information of the other Party by regulation, law or
legal process, including by the rules or regulations of the United States
Securities and Exchange Commission or similar regulatory agency in a country
other than the United States or of any stock exchange or listing entity, such
Party shall provide prior notice of such intended disclosure to such other
Party if practicable under the circumstances and shall disclose only such
Confidential Information of such other Party as is required to be disclosed.

 

10.2         Related Party, Employee, Consultant
and Advisor Obligations.  Except as
set forth in Section 10.1, each Party (the “Receiving Party”)
agrees that it and its Related Parties shall provide or permit access to
Confidential Information received from the other Party only to the Receiving
Party’s Related Parties, employees, consultants, advisors and permitted
subcontractors, and to the employees, consultants, advisors and permitted
subcontractors of the Receiving Party’s Related Parties, who have a need to
know such Confidential Information to assist the Receiving Party with the
Development, Manufacturing and Commercialization of Products in accordance with
this Agreement and who are subject to obligations of confidentiality and
non-use with respect to such Confidential Information no less strict than the
obligations of confidentiality and non-use of the Receiving Party pursuant to Section 10.1;
provided, that Dyax and Cubist shall
each remain responsible for any failure by its Related Parties, and its and its
Related Parties’ respective employees, consultants, advisors and permitted
subcontractors, sublicensees and sub-distributors, to treat such Confidential
Information as required under this Section 10.2.

 

10.3         Publicity.

 

(a)                                  Following the
execution of this Agreement, the Parties shall issue a joint press release
regarding the subject matter of this Agreement in the form of the form of press
release attached at Exhibit H. 
After such initial joint press release, neither Party shall issue a
press release or public announcement relating to a Compound, a Product or this
Agreement 

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

57

 

without the prior written approval of the
other Party, which approval shall not be unreasonably withheld, except that a
Party may (i) issue such a press release or public announcement if the
contents of such press release or public announcement have previously been made
public other than through a breach of this Agreement by the issuing Party;
and/or (ii) issue such a press release or public announcement if required
by applicable regulation or law, including without limitation by the rules or
regulations of the United States Securities and Exchange Commission or similar
regulatory agency in a country other than the United States or of any stock
exchange or listing entity; provided that
the other Party has received prior notice of such intended press release or
public announcement and opportunity to comment, if practicable under the
circumstances and, with respect to press releases and public announcements made
pursuant to the foregoing clause (ii), the Party subject to the requirement
includes in such press release or public announcement only such information
relating to a Product or this Agreement as is required by such applicable
regulation or law.

 

(b)                                 The terms of
this Agreement shall be treated as Confidential Information of both
Parties.  Such terms may be disclosed by
a Party to prospective and actual licensees, sublicensees, employees,
consultants, agents, accountants, lawyers, advisers bankers, lenders and
investors of the disclosing Party, who are bound to obligations of
confidentiality and non-use substantially equivalent in scope to those set
forth in this ARTICLE X.  In addition, if
at any time a Party is legally required to file a copy of this Agreement with
the Securities and Exchange Commission (or its counterpart in any country other
than the U.S.) in connection with any public offering of such Party’s
securities or regular reporting obligations as a public company, such Party
shall attempt to obtain confidential treatment of economic and trade secret
information for which such treatment is reasonably available in accordance with
Applicable Law and SEC practice and shall seek the consent of the other Party,
which consent shall not be unreasonably withheld, conditioned or delayed.

 

10.4         Publications.  During the Term, if either Dyax or Cubist
desires to publicly disclose any New Information in scientific journals or
publications or through scientific presentations, the publishing Party shall
provide the other Party an advance copy of any such proposed abstracts,
posters, scientific presentations and scientific publications incorporating the
New Information prior to submission for publication.  With regard to abstracts, posters, and
scientific presentations, the advance copy shall be provided to the other Party
at least []* days prior to submission.  
With regard to scientific publications, the advance copy shall be
provided to the other Party at least []* days prior to submission.  The other Party shall have a reasonable
opportunity to recommend any changes []*. 
Disputes concerning publication shall be resolved by the JSC.  For the purposes of this Section 10.4, “New
Information” shall mean any and all new ideas, inventions, data, writings,
protocols, discoveries, improvements, trade secrets, materials or other
proprietary information which has not been previously disclosed to the public, 

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

58

 

which may arise or be
conceived or developed by the Parties or their Related Parties during the Term
pursuant to this Agreement to the extent specifically related to the
Development, Manufacture or Commercialization of a Compound or Product.

 

ARTICLE XI

REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

 

11.1         []*.   
Dyax represents and warrants that it has obtained all consents from []*
that are necessary to grant the license under Section 3.1(c) and to
enable Cubist to fully assign its rights and obligations under this Agreement
in accordance with Section 14.9, and such consent is irrevocable.

 

11.2         Representations of Validity and
Authority.  Dyax and Cubist each
represents and warrants to the other Party that, as of the Effective Date:

 

(a)                                  it is duly
organized and validly existing under the laws of its state of incorporation;

 

(b)                                 has full
corporate right, power and authority to enter into this Agreement and to
perform its respective obligations under this Agreement and that it has the
right to grant to the other the licenses and sublicenses granted pursuant to
this Agreement; and

 

(c)                                  Neither it nor
any Third Party engaged by it, in any capacity, has been debarred or is subject
to debarment or has otherwise been disqualified or suspended from performing
scientific or clinical investigations or otherwise subjected to any
restrictions or sanctions by the FDA or any other governmental or regulatory
authority or professional body with respect to the performance of scientific or
clinical investigations;

 

11.3         Consents.  Dyax and Cubist each represents and warrants
to the other Party that, except for any Regulatory Approvals, pricing and/or
reimbursement approvals, manufacturing approvals and/or similar approvals
necessary for the Development, Manufacture or Commercialization of the
Products, all necessary consents, approvals and authorizations of all
government authorities and other persons required to be obtained by it as of
the Effective Date in connection with the execution, delivery and performance
of this Agreement have been obtained by the Effective Date.

 

11.4         No Conflict.  Dyax and Cubist each represents and warrants
to the other Party that, notwithstanding anything to the contrary in this
Agreement, the execution and delivery of this Agreement by such Party, the
performance of such Party’s obligations hereunder and the licenses and
sublicenses to be granted by such Party pursuant to this Agreement (a) do
not conflict with or violate any requirement of any laws, rules or
regulations existing as of the Effective Date and applicable to such Party and (b) do
not conflict with, violate, breach or constitute a default under any contractual
obligations of such Party or any of its Affiliates existing as of the Effective
Date.

 

*Confidential treatment requested.  Omitted portions filed with the commission.

 

59

 

11.5         Enforceability.  Dyax and Cubist each represents and warrants
to the other Party that, as of the Effective Date, this Agreement is a legal
and valid obligation binding upon it and is enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable insolvency and other Applicable Law affecting creditors’ rights
generally or by the availability of equitable remedies.

 

11.6         Legal Compliance.  In conducting any Development, Manufacturing
or Commercialization activities hereunder, each of Cubist and Dyax shall comply
with, and shall use Commercially Reasonable Efforts to ensure that its
Affiliates and licensees and its and its Affiliates’ and licensees’ employees,
agents, clinical institutions and clinical investigators comply with, all applicable
statutory and regulatory requirements with respect to Products including (as
applicable):  the Acts, regulatory
provisions regarding protection of human subjects, financial disclosure by
clinical investigators, Institutional Review Boards (IRB), cGCP, cGLP, cGMP,
IND regulations, and any conditions imposed by a reviewing IRB or Regulatory
Authority, laws, rules and regulations, and comparable statutes and
regulatory requirements in other jurisdictions.

 

11.7         Additional Representations and
Warranties of Dyax.  Dyax represents
and warrants to Cubist that, as of the Effective Date:

 

(a)                                  The Dyax
Intellectual Property is not subject to any encumbrance, lien or claim of
ownership by any Third Party.  Dyax has
not granted any license to any Third Party under any of the Dyax Intellectual
Property to: (i) Develop or Commercialize a Compound, Product or Competing
Product in the Field; or (ii) Manufacture a Compound, Product or Competing
Product for Commercialization in the Field.

 

(b)                                 Dyax is the
sole and exclusive owner of all right, title and interest in and to the Dyax
Patent Rights.  Other than the Existing
Dyax Patent Rights set forth on Exhibit B, there are no other Dyax Patent
Rights.

 

(c)                                  Other than the
Dyax Intellectual Property set forth on Exhibit B and the []* Intellectual
Property, there are no other Patent Rights or Know-How owned by Dyax or its
Affiliates, or licensed to Dyax or its Affiliates, that are (i) []*, or (ii) other
than Dyax Know-How and Dyax Patent Rights excluded from Sections 1.63, 1.65,
and 1.73, []*.

 

(d)                                 Neither Dyax
nor any of its Affiliates is or has been a party to any agreement with the U.S.
Federal government or an agency thereof pursuant to which the U.S. Federal
government or such agency provided funding for []* or pursuant to which the
U.S. Federal government has rights in []*.

 

(e)                                  No claim of
infringement of the Patent Rights of any Third Party has been made, nor to the
best of Dyax’s knowledge threatened, against Dyax or any of its Affiliates with
respect to the Development, Manufacture or Commercialization of any Compound or
Products, and there are no other 

 

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60

 

claims, judgments or settlements against or
owed by Dyax or to which Dyax is a party or pending or, to the best of Dyax’s
knowledge, threatened claims or litigation, in either case relating to the
Compounds or Product.  To the best of
Dyax’s knowledge, there are no Patent Rights or trade secret rights owned or
controlled by a Third Party that would be infringed or misappropriated by
[]*.  There are no Patent Rights or trade
secret rights owned or controlled by a Third Party that would be infringed or
misappropriated by the making, having made, use, sale, offer to sell or
importation of []* as of the Effective Date. 
To the best of Dyax’s knowledge, Cubist’s use and exploitation of []*
will not misappropriate any confidential information or trade secret of any
Third Party.

 

(f)                                    Dyax has provided
Cubist with a complete and correct copy of the []* License Agreement and the
[]* Agreement.  To the best of Dyax’s
knowledge, such agreements remain in full force and effect as of the Effective
Date, and except for those agreements listed on Exhibit J the []* License
Agreement and the []* Agreement are the only agreements as of the Effective
Date between Dyax and any Third Party that imposes an obligation to make
material payments to a Third Party based on []*.

 

(g)                                 The Product
Inventory (i) was Manufactured in accordance with cGMP and all Applicable
Law; (ii) conforms in all respects to the required specifications; (iii) is
free from material defects in materials and workmanship; (iv) does not
contain any material that would cause the Product Inventory to be adulterated
or misbranded under Applicable Law; and (v) was Manufactured, to the best
of Dyax’s knowledge, []*.

 

(h)                                 There are no investigations, inquiries, actions or other proceedings
pending before or, to the best of Dyax’s knowledge, threatened by any Regulatory Authority or other
government agency with respect to []*,
and Dyax has not received written notice threatening any such investigation,
inquiry, action or other proceeding.

 

(i)                                     Dyax is the
sole and exclusive owner of the Existing Dyax Patent Rights and Dyax Know-How
listed on Exhibit F and has the right to perform its obligations hereunder
and to grant to Cubist the rights and licenses set forth in this Agreement in
and to the Dyax Intellectual Property. 
Except as set forth on Exhibit K, all applicable fees have been
timely paid to file, prosecute and maintain the Existing Dyax Patent
Rights.  To the best of Dyax’s knowledge,
the Existing Dyax Patent Rights are subsisting, or pending, and are not invalid
or unenforceable.  The conception, development
and reduction to practice of the Existing Dyax Patent Rights have not
constituted or involved the misappropriation of trade secrets or other rights
or property of any Third Party.

 

(j)                                     Each person who
has contributed to the conception of an invention claimed in the Dyax Patent
Rights has been identified to the United States 

 

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61

 

Patent & Trademark Office and the
applicable patent offices in all other countries where such Dyax Patent Right
is filed, registered, nationalized or validated and is named on such Dyax
Patent Right. Each inventor of any invention claimed in any Dyax Patent Right
has assigned all of that inventor’s right, title and interest in and to the
Dyax Patent Right to Dyax, and such assignment has been recorded at the United
States Patent & Trademark Office and at the applicable patent offices
in all other countries where such Dyax Patent Right is nationalized or
validated.

 

(k)                                  To the best of
Dyax’s knowledge, each person associated with the invention, filing or
prosecution of any Dyax Patent Right has complied with the obligation under
Applicable Law to disclose to the relevant patent authority, during the
pendency of any patent application included in the Dyax Patent Rights,
information known by any such person to be material to the patentability of the
pending claims in such application.

 

(l)                                     None of the
Dyax Patent Rights existing on the Effective Date is involved in any action for
declaratory judgment, nullity action, reexamination, interference proceeding,
or other attack upon its validity, title or enforceability, and Dyax has not
received any written request, demand or notice from any Third Party or
governmental authority threatening or disclosing any such action, proceeding or
attack with respect to any of the Dyax Patent Rights.

 

(m)                               There is no
action or proceeding pending or, to the best of Dyax’s knowledge, threatened
that relates to, affects or arises in connection with any Dyax Intellectual
Property, []*; and Dyax is not subject to any order, ruling or judgment of any
governmental or Regulatory Authority that could reasonably be expected to
impair or delay the ability of Dyax to perform its obligations under this
Agreement.

 

(n)                                 []*.

 

(o)                                 Dyax has made
available to Cubist all clinical study reports, formulation development study
reports, Regulatory Materials, and all other material safety data and
documentation in Dyax’s control regarding or related to []*.  To the best of Dyax’s knowledge, all such
clinical study reports, formulation development study reports, Regulatory
Materials, data and documentation are true and complete as of the Effective
Date.

 

(p)                                 Dyax has
prepared, maintained and retained all Regulatory Materials required to be
maintained or reported pursuant to and in accordance with all Applicable Law
and, to best of Dyax’s knowledge, the Regulatory Materials do not contain any
materially false and misleading statements; Dyax has conducted, and has caused
its contractors and consultants to conduct, any and all formulation development
and clinical studies related 

 

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62

 

to []* in accordance with cGCP, cGMP, and
cGLP, to the extent required, and all other Applicable Law.

 

(q)                                 Dyax has
disclosed to Cubist all material information in its possession relating to any
interaction with the FDA and other Regulatory Authorities regarding []*.

 

(r)                                    To the best of
Dyax’s knowledge, Dyax has obtained all necessary licenses, consents,
approvals, permits and authorizations to enable it to carry on its research and
business related to the Dyax Intellectual Property []*, and all such licenses,
consents, approvals, permits and authorizations are in effect;

 

(s)                                  True and
complete copies of all of Dyax’s agreements, including terminated or expired
agreements with material provisions that have survived such termination or
expiration, relating in any material manner to the Dyax Intellectual Property
[]* have been made available to Cubist and such agreements are listed on Exhibit D.  Except as identified on such Exhibit D,
each such agreement is in full force and effect.  Dyax is not, and to the best of its knowledge
no other party to any such agreement is, in breach of or in default, in any
material respect, under any such agreement; and to the best of Dyax’s
knowledge, no event or circumstance has occurred which constitutes, or after notice
or lapse of time or both, would constitute a material breach or default
thereunder on the part of Dyax or any other party thereto, or which would
result in a right to accelerate or a loss of material rights under any such
agreement that has not been cured or waived;

 

(t)                                    The execution and delivery of this Agreement,
the performance contemplated hereby, and the grant of rights and licenses hereunder will not (i) result in a breach of any judgment, decree,
order or approval of any court of law or authority applicable to the Dyax
Intellectual Property []*; (ii) cause any acceleration or maturity of any
loan or debt agreement or obligation relating to or secured by the Dyax
Intellectual Property []*; (iii) result in the creation or imposition of
any encumbrance upon or give to any other person or entity any interest or
right (including any right of termination or cancellation or change) in or with
respect to the Dyax Intellectual Property []* except as expressly permitted herein; or result in any termination of,
or change in the terms of, or conditions of, or rights or obligations under,
any permit or approval of any authority applicable to the Dyax
Intellectual Property []*; or (iv) result in a violation of, or
be in material conflict with, or constitute a material default, under any
agreement in existence as of the Effective Date between Dyax and Third Parties
and that it is not party to any other agreements that limits Cubist’s rights under this Agreement;

 

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63

 

(u)                                 Prior to the
Effective Date, Dyax has (i) completed three Phase II Clinical Studies,
one Phase III Clinical Study, and initiated a second Phase III Clinical Study
of DX-88 for the treatment of HAE, (ii) completed a Phase I/II Clinical
Study of DX-88 for the prevention of blood loss in patients undergoing on-pump
coronary artery bypass graft (“CABG”) procedures, and (iii) initiated
the Ongoing Phase II Study.  The Clinical
Studies set forth in clauses (i) and (ii), and the other Clinical Studies
of the Compound conducted or initiated by Dyax prior to the Effective Date are
set forth more specifically in Exhibit C; and

 

(v)                                 Genzyme
Corporation (“Genzyme”) has assigned to Dyax all of Genzyme’s interest
in Dyax-Genzyme LLC, and the Termination Agreement, dated as of February 20,
2007, by and between Genzyme and Dyax, as amended, is valid and enforceable in
accordance with its terms, Dyax-Genzyme LLC has been dissolved, and all assets
of Dyax-Genzyme LLC have been distributed to Dyax as a result of such
dissolution.

 

11.8         No Warranties.  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
HEREIN, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY, AND EACH PARTY HEREBY
DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NONINFRINGEMENT WITH RESPECT TO THE COMPOUNDS AND THE
PRODUCTS.  EACH PARTY HEREBY DISCLAIMS
ANY REPRESENTATION OR WARRANTY THAT THE DEVELOPMENT, MANUFACTURE AND
COMMERCIALIZATION OF THE PRODUCT PURSUANT TO THIS AGREEMENT WILL BE SUCCESSFUL.

 

11.9         Indemnification.

 

(a)                                  By Cubist. Cubist will
defend, indemnify and hold harmless Dyax, its Related Parties and their respective
directors, officers, employees and agents (the “Dyax Indemnified Parties”)
from and against all claims, demands, liabilities, damages, penalties, fines,
costs and expenses, including reasonable attorneys’ and expert fees and costs,
and costs or amounts paid to settle (collectively, “Losses”), arising
from or occurring as a result of a Third Party’s claim (including any Third
Party product liability or infringement claim), action, suit, judgment or
settlement to the extent such Losses (other than any Losses with respect to
which Dyax is required to indemnify the Cubist Indemnified Parties pursuant to Section 11.9(b))
are due to or based upon:

 

(i)                                     the material
breach by Cubist of the terms of, or the material inaccuracy of any
representation or warranty made by it in, this Agreement or the Supply
Agreement or Co-Promotion Agreement; or

 

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64

 

(ii)                                  the
Development, Manufacture and Commercialization of a Product or Cubist Product
in the Field by Cubist or its Related Parties, wholesale distributors or
contractors, except to the extent that such Losses arise out of, and are
allocable to, (x) the negligence, recklessness, bad faith, intentional
wrongful acts, omissions or violations of law or breach of this Agreement
committed by the Dyax Indemnified Parties, or (y) any manufacturing defect
in any Drug Substance supplied to Cubist by or on behalf of Dyax.

 

(b)                                 Dyax will
defend, indemnify and hold harmless Cubist, its Related Parties and their
respective directors, officers, employees and agents (the “Cubist
Indemnified Parties”) from and against all Losses arising from or occurring
as a result of a Third Party’s claim (including any Third Party product
liability or infringement claim), action, suit, judgment or settlement that is
due to or based upon:

 

(i)                                     material breach
by Dyax of the terms of, or the material inaccuracy of any representation or
warranty made by it in, this Agreement or the Supply Agreement or Co-Promotion
Agreement; or

 

(ii)                                  any
manufacturing defect in any Drug Substance supplied to Cubist by or on behalf
of Dyax; or

 

(iii)                               the
Development, Manufacture and Commercialization of a Product, including without
limitation any Development of DX-88 prior to the Effective Date, by Dyax or its
Related Parties, wholesale distributors or contractors, except to the extent
that such Losses arise out of, and are allocable to the negligence,
recklessness, bad faith, intentional wrongful acts, omissions or violations of
law or breach of this Agreement committed by the Cubist Indemnified Parties.

 

(c)                                  Claims for
Indemnification.

 

(i)                                     A person
entitled to indemnification under this Section 11.9 (an “Indemnified
Party”) shall give prompt written notification to the person from whom
indemnification is sought (the “Indemnifying Party”) of the commencement
of any action, suit or proceeding relating to a Third Party claim for which
indemnification may be sought or, if earlier, upon the assertion of any such
claim by a Third Party (it being understood and agreed, however, that the
failure by an Indemnified Party to give notice of a Third-Party claim as
provided in this Section 11.9 shall not relieve the Indemnifying Party of
its indemnification obligation under this Agreement except and only to the
extent that such Indemnifying

 

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65

 

Party is actually prejudiced as
a result of such failure to give notice).

 

(ii)           Within
thirty (30) days after delivery of such notification, the Indemnifying Party
may, upon written notice thereof to the Indemnified Party, assume control of
the defense of such action, suit, proceeding or claim with counsel reasonably
satisfactory to the Indemnified Party. 
If the Indemnifying Party does not assume control of such defense, the
Indemnified Party shall control such defense.

 

(iii)          The
Party not controlling such defense may participate therein at its own expense; provided, that if the Indemnifying Party assumes control of
such defense and the Indemnified Party reasonably concludes, based on advice
from counsel, that the Indemnifying Party and the Indemnified Party have
conflicting interests with respect to such action, suit, proceeding or claim,
the Indemnifying Party shall be responsible for the reasonable fees and
expenses of counsel to the Indemnified Party solely in connection therewith; provided  further, however,
that in no event shall the Indemnifying Party be responsible for the fees and
expenses of more than one counsel in any one jurisdiction for all Indemnified
Parties.

 

(iv)          The
Party controlling such defense shall keep the other Party advised of the status
of such action, suit, proceeding or claim and the defense thereof and shall
consider recommendations made by the other Party with respect thereto.

 

(v)           The
Indemnified Party shall not agree to any settlement of such action, suit,
proceeding or claim without the prior written consent of the Indemnifying
Party, which shall not be unreasonably withheld or delayed.  The Indemnifying Party shall not, without the
prior written consent of the Indemnified Party, agree to any settlement of such
action, suit, proceeding or claim or consent to any judgment in respect thereof
that does not include a complete and unconditional release of the Indemnified
Party from all liability with respect thereto or that imposes any liability or
obligation on the Indemnified Party.

 

11.10       No Consequential or
Punitive Damages.  NEITHER PARTY
HERETO WILL BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL,
EXEMPLARY, PUNITIVE OR MULTIPLE DAMAGES ARISING OUT OF THIS AGREEMENT OR THE
EXERCISE OF ITS RIGHTS HEREUNDER, OR FOR LOST PROFITS ARISING FROM OR RELATING
TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.  NOTHING IN THIS SECTION 11.10 IS
INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF
EITHER PARTY

 

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WITH RESPECT
TO THIRD PARTY CLAIMS OR WITH RESPECT TO A BREACH OF A PARTY’S OBLIGATIONS OF
CONFIDENTIALITY OR NON-USE IN ARTICLE X.

 

ARTICLE XII

 TERM AND TERMINATION

 

12.1         Term.  Unless terminated earlier in accordance with
this ARTICLE XII, this Agreement shall remain in force for the period
commencing on the Effective Date and ending on the expiration of the last
Royalty Term to expire under this Agreement (the “Term”).  Upon the expiration of the Royalty Term with
respect to a Product or Cubist Product in each country, the licenses granted in
Section 3.1 with respect to such Product or Cubist Product shall survive
as perpetual, fully paid-up, non-royalty-bearing licenses with respect to such
country and such Product or Cubist Product.

 

12.2         Termination
Rights.

 

(a)                                  Termination
for Convenience.  Cubist shall have
the right to terminate this Agreement at any time after the Effective Date on
[]* prior written notice to Dyax.

 

(b)                                 Termination
For Material Breach.

 

(i)                                     Upon
any of the Material Breaches (as defined below) of this Agreement by a Party
(the “Breaching Party”), the other Party (the “Non-Breaching Party”)
may seek to terminate this Agreement by providing written notice to the
Breaching Party specifying the nature of the Material Breach (a “Termination
Notice”).  The following breaches
shall be considered “Material Breaches”:

 

(A)                              Material
Breaches by Dyax:

 

(1)                                  A
grant by Dyax to a Third Party of rights that are exclusively licensed to
Cubist under Sections 3.1(a) and 3.1(b);

 

(2)                                  A
grant by Dyax to a Third Party of rights that are subject to Cubist’s
Additional Indication License Option under Section 3.2 (Right of First
Offer; Additional Indication License Option);

 

(3)                                  A
material breach by Dyax of the terms of Section 3.3 (Transfer of Product
Inventory and Dyax Know-How);

 

(4)                                  A
material breach by Dyax of its obligations under Section 4.5;

 

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(5)                                  A
material breach by Dyax of its obligations under Section 6.5(b);

 

(6)                                  A
material failure to pay amounts owed by Dyax to Cubist under the terms of Section 5.5
and/or ARTICLE VII (Financial Provisions);

 

(7)                                  A
material breach by Dyax of its obligations to use Commercially Reasonable
Efforts to prepare, file, prosecute and maintain the Patent Rights for which it
is responsible under Section 8.2; and

 

(8)                                  a
material breach by Dyax of any of the representations or warranties in Section 11.7
that has a material adverse effect on the ability of Cubist or its Related
Parties to Develop, Manufacture, or Commercialize Products under this
Agreement.

 

(B)                                Material
Breaches by Cubist:

 

(1)                                  A
grant of sublicense by Cubist to a Product Competitor in breach of  Section 3.1(d);

 

(2)                                  A
material failure to pay amounts owed by Cubist to Dyax for Drug Substance
Manufactured under the terms of ARTICLE VI (Manufacture and Supply);

 

(3)                                  A
material failure to pay amounts owed by Cubist to Dyax under the terms of Section 5.5
and/or ARTICLE VII (Financial Provisions); and

 

(4)                                  A
material breach by Cubist of its obligations under Section 4.8 (Diligent
Development) or 5.1 (Commercially Reasonable Efforts).

 

(ii)                                  The
termination shall become effective []* following receipt of the Termination
Notice by the Breaching Party unless the Breaching Party cures the noticed
Material Breach during such notice period. 
Notwithstanding the foregoing, (i) if such Material Breach, by its
nature, is incurable, the Non-Breaching Party may terminate this Agreement
immediately upon receipt of the Termination Notice by the Breaching Party and (ii) if
such Material Breach (other than a payment breach), by its nature, is curable,
but not within the

 

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68

 

foregoing cure period, then
such cure period shall be extended if the Breaching Party provides a written
plan for curing such Material Breach to the Non-Breaching Party and uses
Commercially Reasonable Efforts to cure such Material Breach in accordance with
such written plan; provided that
no such extension shall exceed []* without the written consent of the
Non-Breaching Party.

 

(iii)                               Notwithstanding
the provisions of Section 12.2(b)(i) and (ii), if either Party gives
a Termination Notice to the other Party pursuant to this Section 12.2(b),
and, as of the end of the cure period set forth in Section 12.2(b)(ii) above,
the Parties are engaged in an arbitration pursuant to Section 13.2 in
which the Non-Breaching Party is disputing the basis for such termination
pursuant to this Section 12.2(b), then this Agreement shall not terminate
unless and until the arbitrator issues an award upholding such basis for
termination (or unless the Breaching Party is no longer disputing such basis in
good faith, if earlier, and the Breaching Party cures such Material Breach
within []* after the issuance of such award).

 

(c)                                  Termination
for Bankruptcy. A Party may terminate this Agreement should the other Party
commit an act of bankruptcy, be declared bankrupt, voluntarily file or have
filed against it a petition for bankruptcy or reorganization unless such
petition is dismissed within []* of filing or such petition is for a
reorganization under Chapter 11 of the Bankruptcy Code (as defined below) or
any relevant foreign equivalent thereof and such Party is not in default at the
time of the filing of such petition or at any time during such reorganization
of any of its obligations under this Agreement or any Supply Agreement, enter
into a procedure of winding up to dissolution, or should a trustee or receiver
be appointed for its business assets or operations. All rights and licenses
granted under or pursuant to this Agreement are, and shall otherwise be deemed
to be, for the purposes of Section 365(n) of Title 11, U.S. Code (“Bankruptcy
Code”) license rights to “intellectual property” as defined under Section 101(60)
of the Bankruptcy Code. The Parties agree that any Party, as a licensee
hereunder, shall retain and may fully exercise all of its rights and elections
under the Bankruptcy Code or any relevant foreign equivalent thereof.

 

(d)                                 Termination
for Patent Challenges. In the event that a Party or its Related Parties
(the “Challenging Party”) shall (i) commence or participate in any
action or proceeding before a judicial or administrative body (including any
patent opposition or re-examination proceeding) challenging the validity of any
of the Patent Rights licensed to the Challenging Party hereunder, or any claim
thereof or (ii) actively assist any other Person in bringing or
prosecuting any action or proceeding before a judicial or

 

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administrative body (including
any patent opposition or re-examination proceeding) challenging the validity of
any of such Patent Rights or any claim thereof, the other Party will have the
right to give notice to the Challenging Party (which notice must be given, if
at all, within []* after the other Party first learns of the foregoing) that
the Agreement will terminate []* following such notice, and, unless the Challenging
Party withdraws or causes to be withdrawn all such challenge(s) within
such []* period, the Agreement will so terminate.  Notwithstanding the foregoing, in the event
of a disagreement between the Parties with regard to whether a Party’s acts
justify termination pursuant to this Section 12.2(d), either Party may
refer such matter for dispute resolution pursuant to ARTICLE XIII, and any
termination rights under this Section 12.2(d) shall be stayed until
completion of all dispute resolution proceedings in accordance with ARTICLE
XIII.

 

(e)                                  Termination
Following a Change of Control. 
Within []* following a Change of Control of Cubist, either Cubist or its
successor shall deliver to Dyax a signed certification stating that it intends
to continue to adhere to all of the terms and conditions contained in this
Agreement, including without limitation the terms set forth in Section 4.8
and Section 5.1.  If such
certification is not delivered to Dyax within such []* period, Dyax shall
provide written notice to Cubist or its successor and Dyax shall be entitled to
terminate this Agreement if such signed certificate is not provided by Cubist
or its successor within []* after delivery of such written notice to Cubist or
its successor.

 

12.3         Consequences
of Termination.

 

(a)                                  Termination
by Dyax As A Result of Cubist’s Bankruptcy or Material Breach.  Without limiting any other legal or equitable
remedies that Dyax may have (except for the limitation described in Section 4.8(d)),
if Dyax terminates this Agreement in accordance with Sections 12.2(b), 12.2(c) or
12.2(d), then (i) any sublicense granted by Cubist pursuant to this
Agreement to a Sublicensee that is not then in material breach of any provision
applicable to such sublicense under this Agreement shall survive and be deemed
to be a direct a license between Dyax and such Sublicensee on the terms of this
Agreement and, other than as pertaining to Compounds and Products included in
surviving sublicenses, Cubist shall as promptly as practicable transfer to Dyax
or Dyax’s designee (A) possession and ownership of all governmental or
regulatory correspondence, conversation logs, filings and approvals (including
all Regulatory Approvals and pricing and reimbursement approvals) relating to
the Development, Manufacture or Commercialization of Products and all Cubist
Trademarks, (B) copies of all data, reports, records and materials in
Cubist’s possession or Control relating to the Development, Manufacture or
Commercialization of the Products, including all

 

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non-clinical and clinical data
relating to the Product, and (C) all records and materials in Cubist’s
possession or Control containing Confidential Information of Dyax, (ii) appoint
Dyax as Cubist’s and/or Cubist’s Related Parties’ agent for all Product-related
matters involving Regulatory Authorities in the Cubist Territory until all
Regulatory Approvals and other regulatory filings have been transferred to Dyax
or its designee as provided in Subsection (a)(i) above, (iii) if the
effective date of termination is after First Commercial Sale of any Product
hereunder, then Cubist shall, subject to any surviving sublicense agreements
with Third Parties, appoint Dyax as its exclusive distributor of the Products
in the Field in the Cubist Territory and grant Dyax the right to appoint
sub-distributors, until such time as all Regulatory Approvals in the Cubist
Territory have been transferred to Dyax or its designee as provided in
Subsection (a)(i) above, (iv) if Cubist or its Related Parties are
Manufacturing Drug Product, at Dyax’s option supply the Drug Product to Dyax in
the Cubist Territory on terms no less favorable than those on which Cubist supplied
the Drug Product prior to such termination to its most favored distributor in
the Cubist Territory, until such time as all Regulatory Approvals in the Cubist
Territory have been transferred to Dyax or its designee, Dyax has obtained all
necessary manufacturing approvals and Dyax has procured or developed its own
source of Drug Product supply, provided that such obligation to supply shall
not exceed a period of []*, and (v)  if Dyax so requests, Cubist shall use
Commercially Reasonable Efforts to transfer to Dyax any Third Party agreements
to which Cubist is a party that relate solely to the Development, Manufacture
or Commercialization of Products.  Cubist
shall execute all documents and take all such further actions as may be
reasonably requested by Dyax in order to give effect to the foregoing clauses (i) through
(v).

 

(b)                                 Termination
by Dyax Following A Change of Control. 
Without limiting any other legal or equitable remedies that Dyax may
have, if Dyax terminates this Agreement in accordance with Sections 12.2(e),
then (i) Dyax shall agree to pay []*, which amount shall be payable in
three (3) equal installments, the first of which shall be payable on the
termination date and second and third of which shall be payable, respectively,
on the first and second anniversary of such termination date and (ii) the
provisions of Section 12.3(a)(i)-(iv) shall apply, and Cubist shall
execute all documents and take all such further actions as may be reasonably
requested by Dyax in order to give effect to the foregoing clauses (i) and
(ii).

 

(c)                                  Termination
by Cubist for Convenience. Without limiting any other legal or equitable
remedies that Dyax may have, if Cubist terminates this Agreement in accordance
with Section 12.2(a), then the provisions of Section 12.3(a)(i)-(iv) shall
apply, and Cubist shall execute all documents

 

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and take all such further
actions as may be reasonably requested by Dyax in order to give effect to the
foregoing.

 

(d)                                 Termination
by Cubist As A Result of Dyax’s Bankruptcy or Material Breach.  Without limiting any other legal or equitable
remedies that Cubist may have, if Cubist complies with the provisions to terminate  this Agreement in accordance with Sections
12.2(b), 12.2(c) or 12.2(d), then Cubist may either terminate the
Agreement as so provided or, by notice to Dyax, instead elect to continue the
Agreement, with the following consequences, as applicable:

 

(i)                                     If
Cubist elects to continue this Agreement, as of the date of Cubist’s written
notice:  (A) effective as of the
date Cubist would have had the right to terminate this Agreement, the royalty
and milestone payments payable pursuant to ARTICLE VII hereof shall be reduced,
as liquidated damages to be paid to Cubist, and not as a penalty to be paid by
Dyax, to []* of the amounts that otherwise would have been payable to Dyax
(after giving effect to all applicable reductions and credits); (B) Dyax
rights under ARTICLE IX shall terminate; and (C) Sections 2.2, 3.4 (and
all other sections pertaining to Dyax’s rights with respect to Cubist
Products), 4.8, and 5.1, and the requirement to exchange Promotional Materials
pursuant to Section 5.2, shall terminate and  all other provisions of this Agreement shall
remain in full force and effect without change.

 

(ii)                                  If
Cubist elects to terminate this Agreement, as of the effective date of such
termination, all rights and obligations of the Parties under this Agreement shall
terminate except as set forth in Section 12.4.

 

(e)                                  Consequences
of any Termination.  In the event of
any termination of this Agreement in accordance with Section 12.2:

 

(i)                                     the
Parties shall each return or destroy (at the other Party’s instruction) the
other Party’s Confidential Information; provided that, each Party shall be
entitled to retain one copy of the other Party’s Confidential Information by
its legal counsel; and

 

(ii)                                  (x) Dyax’s
license under Section 3.4(a)(i) shall survive, (y) Dyax’s license
under Section 3.4(a)(ii) and the Parties’ related rights and
obligations under Section 7.5(i) and Section 7.6 shall survive,
and (z) subject to any existing sublicense agreements with Cubist’s
Related Parties, Cubist shall grant Dyax an exclusive license, with a right to
grant sublicenses, under all Cubist Improvements to Develop, Manufacture and
Commercialize the Primary Product inside the Field in the Cubist
Territory.  The license surviving

 

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pursuant to the preceding
clause (x) shall be royalty-free, fully-paid and perpetual.

 

(iii)                               If
Cubist has completed a Phase II Clinical Trial in accordance with its protocol
and satisfied Cubist’s obligations under Section 4.4, in consideration of
the data provided by Cubist under Section 4.4, Dyax shall pay royalties to
Cubist on the aggregate Net Sales of Products by Dyax or its Related Parties
(other than for sales of the Primary Product outside of the Field or outside
the Cubist Territory) in any and all countries for which Dyax uses or
references data (except if referenced solely for safety purposes) provided by
Cubist under Section 4.4 to achieve Regulatory Approval at []* of the
royalty rates set forth in the table of Section 7.5(a) (and giving
effect to all applicable reductions and credits under Section 7.5) and in
accordance with Sections 7.6-7.12 for a period of []* years from []* of each
such Product; provided, further, that, in the case of a termination by Cubist
in accordance with Sections 12.2(b), 12.2(c) or 12.2(d), Dyax shall in
addition pay to Cubist []* of the milestones described in Sections 7.3 and 7.4
with respect to such Products, but substituting “Dyax” for “Cubist” and vice
versa and ignoring the field limitations in interpreting such Sections.

 

12.4         Survival.  In the event of any expiration or termination
of this Agreement, (a) all liabilities and obligations that arose or
accrued prior to the effective date of such expiration or termination,
including without limitation all financial obligations under ARTICLE VII owed
as of the effective date, (b) the provisions set forth in Sections 4.7(a),
5.5(f), 5.6, 7.7, 7.8, 7.9, 7.10, 8.1, 10.1, 10.2, 10.3, 11.8, 11.9 (including
without limitation the right of either Party to seek indemnification in
accordance with the terms of Section 11.9 with respect to Losses due to or
based on a material breach by a Party of the terms of, or the material
inaccuracy of any representation or warranty made by it in, this Agreement,
where such Losses are based on facts or circumstances that occurred during the
Term), 11.10, 12.3, 12.4, and to the limited extent necessary to implement any
of the other surviving provisions, ARTICLE I, ARTICLE XIII and ARTICLE XIV and
the Exhibits, and (c) all other provisions contained in this Agreement
that by their terms survive expiration or termination of this Agreement, shall
survive.

 

ARTICLE XIII

FINAL DECISION-MAKING; DISPUTE RESOLUTION

 

13.1         Referral to
Executive Officers.  If for any
reason the JSC or JMC cannot resolve any matter properly referred to it, either
Party may refer the matter to the Executive Officers for resolution.  If after discussing such matter, or any other
matter to be resolved pursuant to this ARTICLE XIII pursuant to this Agreement,
in good faith and attempting to find a mutually satisfactory resolution to the
issue, the Executive Officers fail to come to consensus within fifteen (15)
Business Days after the date on which the matter is referred to the Executive

 

*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

73

 

Officers, the
provisions of Section 13.2 shall apply, with any dispute over the applications
of such provisions to be resolved in accordance with the provisions of Section 13.3.  The resolutions so reached through the
provisions of Section 13.2 or 13.3 shall be binding on the Parties.

 

13.2         Final
Decision-Making Authority Allocated to a Single Party.  If the Executive Officers fail to come to
consensus on any matter referred to the Executive Officers within the period
for resolution set forth in Section 13.1, then:

 

(a)                                  on
matters solely relating to the Development, Regulatory Approval, and Commercialization
of Products in the Field in the Cubist Territory, Cubist shall have the final
decision-making authority;

 

(b)                                 on
matters solely relating to the Development, Regulatory Approval, and
Commercialization of (i) Products in the Field in the Dyax Territory, or (ii) any
other product incorporating a Compound outside the Field throughout the world;
Dyax shall have the final decision-making authority;

 

(c)                                  on
any matter that is reasonably likely to materially and adversely impact the
safety profile of a Product in Indications outside the Field (including, but
not limited to, matters relating to Product formulation and safety), Dyax shall
have the final decision-making authority; on any matter that is reasonably
likely to materially and adversely impact the safety profile of a Product in
Indications inside the Field (including, but not limited to, matters relating
to Product formulation and safety), Cubist shall have the final decision-making
authority; provided, that if the Parties maintain
their disagreement on whether such matter is reasonably likely to materially
and adversely impact the safety profile of the Product, then either Party may
refer the matter to arbitration pursuant to Section 13.3 to resolve such
disagreement;

 

(d)                                 notwithstanding
the foregoing provisions of this Section 13.2, neither Party shall have
final decision-making authority pursuant to this Section 13.2 with respect
to matters (i) over which the other Party is expressly allocated final
decision-making authority elsewhere in this Agreement and (ii) for which
this Agreement expressly provides that a decision shall not be made without the
approval or consent of the other Party; 
and

 

(e)                                  unless
otherwise provided for specifically in this Agreement, Dyax may []* or
Commercialization of a Product or Cubist Product in the Field, and Cubist may
[]*; provided, that if the Parties disagree
as to whether an action by a Party is []* to the extent described in this Section 13.2(e),
then either Party may refer the matter to arbitration pursuant to Section 13.3
to resolve such disagreement.

 

*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

74

 

13.3         Arbitration.  Any dispute arising out of or relating to
this Agreement that is not finally resolved through the provisions of Section 13.1
or Section 13.2, including without limitation the interpretation of this
Agreement and any breach or alleged breach of this Agreement, shall be resolved
through binding arbitration as described below; provided,
that specific matters for which this Agreement expressly provides that a
decision shall not be made without the approval or consent of one or both of
the Parties shall not be subject to resolution under this Section 13.3,
unless the Agreement specifies that the reasonableness or unreasonableness of
such Party’s approval or consent shall be decided pursuant to this Article XIII
Furthermore, the following procedures will apply to all arbitration proceedings
pursuant to this Agreement:

 

(a)                                  A
Party may submit such dispute to arbitration by notifying the other Party, in
writing, of such dispute.  Within thirty
(30) days after receipt of such notice, the Parties shall designate in writing
a single arbitrator to resolve the dispute; provided, however, that if the Parties cannot agree on an arbitrator
within such thirty (30)-day period, the arbitrator shall be selected by the
Boston, Massachusetts office of the American Arbitration Association.  The arbitrator shall be a lawyer knowledgeable
and experienced in the law concerning the subject matter of the dispute and a
technical expert in the applicable field if the subject matter of the dispute
involves a technical issue, and shall not be an Affiliate, employee,
consultant, officer, director or stockholder of either Party or of a Related
Party of either Party.

 

(b)                                 Within
thirty (30) days after the designation of the arbitrator, the arbitrator and
the Parties shall meet, at which time the Parties shall be required to set
forth in writing all disputed issues and a proposed ruling on the merits of
each such issue.

 

(c)                                  The
arbitrator shall set a date for a hearing, which shall be no later than
forty-five (45) days after the submission of written proposals pursuant to Section 13.3(b),
to discuss each of the issues identified by the Parties.  The Parties shall have the right to be
represented by counsel.  Except as
provided herein, the arbitration shall be governed by the Commercial
Arbitration Rules of the American Arbitration Association; provided, however, that
the Federal Rules of Evidence shall apply with regard to the admissibility
of evidence and the arbitration shall be conducted by a single arbitrator.

 

(d)                                 The
arbitrator shall use his or her best efforts to rule on each disputed
issue within thirty (30) days after the completion of the hearings described in
this Section 13.3.  The
determination of the arbitrator as to the resolution of any dispute shall be
binding and conclusive upon all Parties. 
All rulings of the arbitrator shall be in writing and shall be delivered
to the Parties.

 

*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

75

 

 

(e)           The
(i) attorneys’ fees of the Parties in any arbitration, (ii) fees of
the arbitrator and (iii) costs and expenses of the arbitration shall be
borne by the Parties as determined by the arbitrator.

 

(f)            Any
arbitration pursuant to this Section 13.3 (including the meeting under (b) and
the hearing under (c) of this Section 13.3) shall be conducted in
Boston, Massachusetts.  Any arbitration
award may be entered in and enforced by a court in accordance with Section 14.8.

 

(g)           Nothing
in this Section 13.3 shall be construed as limiting in any way the right
of a Party to seek injunctive relief with respect to any actual or threatened
breach of this Agreement from, or to bring an action in aid of arbitration in,
a court in accordance with Section 14.8. 
Should any Party seek injunctive relief, then for purposes of
determining whether to grant such injunctive relief, the dispute underlying the
request for such injunctive relief may be heard by a court in accordance with Section 14.8.

 

(h)           The
arbitrator shall not award damages excluded pursuant to Section 11.10.

 

ARTICLE
XIV

 MISCELLANEOUS

 

14.1         Choice of Law.  This Agreement shall be governed by and
interpreted under, and any court action in accordance with Section 14.8
shall apply, the laws of the Commonwealth of Massachusetts excluding its
conflicts of laws principles.  The
Parties agree that the United Nations Conventions on Contracts for the
International Sale of Goods, the 1974 Convention on the Limitation Period in the
International Sale of Goods, and the Protocol amending such 1974 Convention,
done at Vienna April 11, 1980, shall not apply to this Agreement.

 

14.2         Notices.  Any notice or report required or permitted to
be given or made under this Agreement by one of the Parties to the other shall
be in writing and shall be deemed to have been delivered upon personal delivery
or (a) four days after deposit in the mail or the business day next
following deposit with a reputable overnight courier and (b) in the case
of notices provided by facsimile (which notice shall be followed immediately by
an additional notice pursuant to clause (a) above if the notice is of a
default hereunder), upon completion of transmissions to the addressee’s
facsimile number, as follows (or at such other addresses or facsimile numbers
as may have been furnished in writing by one of the Parties to the other as
provided in this Section 14.2):

 

	
  If to Dyax:

  	
  Dyax Corp.

  
	
   

  	
  300
  Technology Square

  
	
   

  	
  Cambridge,
  Massachusetts 02139

  
	
   

  	
  U.S.A.

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Chief
  Executive Officer

  
	
   

  	
  []*

  

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

76

 

	
  With a copy
  to:

  	
  Dyax Corp.

  
	
   

  	
  300
  Technology Square

  
	
   

  	
  Cambridge,
  Massachusetts 02139

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  General
  Counsel

  
	
   

  	
  []*

  	
   

  
	
   

  	
   

  	
   

  
	
  If to
  Cubist:

  	
  Cubist
  Pharmaceuticals, Inc.

  
	
   

  	
  65 Hayden
  Avenue

  
	
   

  	
  Lexington,
  Massachusetts 02421

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  General
  Counsel

  
	
   

  	
  Facsimile
  No.: 

  	
  (781)
  860-1407

  
	
   

  	
   

  
	
  With a copy
  to:

  	
  Ropes &
  Gray LLP

  
	
   

  	
  One
  International Place

  
	
   

  	
  Boston,
  Massachusetts 02110-2624

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Marc A.
  Rubenstein

  
	
   

  	
  Facsimile
  No.:  (617) 951-7050

  
				

 

14.3         Construction.  This Agreement has been prepared jointly and
shall not be strictly construed against either Party.  Any reference in this Agreement to an
Article, Section, subsection, paragraph, clause, or Exhibit shall be
deemed to be a reference to any Article, Section, subsection, paragraph,
clause, or Exhibit, of or to, as the case may be, this Agreement.  Except where the context otherwise requires, (a) any
definition of or reference to any agreement, instrument or other document
refers to such agreement, instrument other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein or therein), (b) any
reference to any laws refers to such laws as from time to time enacted,
repealed or amended, (c) the words “herein,” “hereof” and “hereunder,” and
words of similar import, refer to this Agreement in its entirety and not to any
particular provision hereof, and (d) the words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “but not limited to,”
“without limitation” or words of similar import.

 

14.4         Severability.  If, under Applicable Law, any provision of
this Agreement is invalid or unenforceable, or otherwise directly or indirectly
affects the validity of any other material provision(s) of this Agreement
(such invalid or unenforceable provision, a “Severed Clause”), it is
mutually agreed that this Agreement shall endure except for the Severed
Clause.  The Parties shall consult one
another and use their commercially reasonable efforts to agree upon a valid and
enforceable provision that is a reasonable substitute for the Severed Clause in
view of the intent of this Agreement.

 

14.5         Captions.  All captions herein are for convenience only
and shall not be interpreted as having any substantive meaning.

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

77

 

14.6         Entire Agreement;
Integration.  This Agreement
(together with all Exhibits) constitutes the entire agreement between the
Parties hereto with respect to the within subject matter and supersedes all
previous agreements, whether written or oral. 
This Agreement may be amended only in writing signed by properly
authorized representatives of each of Dyax and Cubist.

 

14.7         Independent
Contractors; No Agency.  Neither
Party shall have any responsibility for the hiring, firing or compensation of
the other Party’s employees or for any employee benefits.  No employee or representative of a Party
shall have any authority to bind or obligate the other Party to this Agreement
for any sum or in any manner whatsoever, or to create or impose any contractual
or other liability on the other Party without said Party’s written
approval.  For all purposes, and
notwithstanding any other provision of this Agreement to the contrary, Cubist’s
legal relationship under this Agreement to Dyax shall be that of independent
contractor.

 

14.8         Submission to
Jurisdiction.  Each Party (a) submits
to the exclusive jurisdiction of the state and federal courts sitting in
Boston, Massachusetts, with respect to actions or proceedings arising out of or
relating to this Agreement in which a Party brings an action in aid of
arbitration, (b) agrees that all claims in respect of such action or
proceeding may be heard and determined only in any such court, and (c) agrees
not to bring any action or proceeding arising out of or relating to this
Agreement in any other court, other than an action or proceeding seeking
injunctive relief or brought to enforce an arbitration ruling issued pursuant
to Section 13.3.  Each Party waives
any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety or other security that might
be required of the other Party with respect thereto.  Each Party may make service on the other
Party by sending or delivering a copy of the process to the Party to be served
at the address and in the manner provided for the giving of notices in Section 14.2.  Nothing in this Section 14.8, however,
shall affect the right of any Party to serve legal process in any other manner
permitted by law.

 

14.9         Assignment;
Successors.  Neither Dyax nor Cubist
may assign this Agreement in whole or in part, nor any rights hereunder,
without the prior written consent of the other Party, which consent shall not
be unreasonably withheld; provided that
either Party may assign this Agreement to: 
(a) an Affiliate on the condition that the assigning Party shall
remain primarily liable hereunder for the prompt and punctual payment and
performance of all obligations of the assignee or (b) a Third Party in
connection with a sale or transfer of all or substantially all of the assigning
Party’s business or assets to which this Agreement relates.  Dyax and its Affiliates may only assign Dyax
Intellectual Property subject to Cubist’s rights under this Agreement that
relate to such Dyax Intellectual Property and only if the assignee of such
rights agrees in writing to be bound accordingly.  Any assignment made other than in accordance
with the immediately preceding sentences shall be wholly void and invalid, and
the assignee in any such assignment shall acquire no rights whatsoever, and the
non-assigning Party shall not recognize, nor shall it be required to recognize,
such assignment.  This Section 14.9
limits both the right and the power to assign this Agreement and/or rights
under this Agreement.  This Agreement
shall be binding upon, and shall inure to the benefit of, all permitted
successors and assigns.

 

14.10       Execution in
Counterparts; Facsimile Signatures. 
This Agreement may be executed in counterparts, each of which counterparts,
when so executed and delivered, shall be

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

78

 

deemed to be
an original, and all of which counterparts, taken together, shall constitute
one and the same instrument even if both Parties have not executed the same
counterpart.  Signatures provided by
facsimile transmission shall be deemed to be original signatures.

 

14.11       Waiver.  The waiver by either Party hereto of any
right hereunder, or of the failure of the other Party to perform, or of a
breach by the other Party, shall not be deemed a waiver of any other right
hereunder or of any other breach or failure by such other Party whether of a
similar nature or otherwise.

 

14.12       Performance by
Affiliates.  To the extent that this
Agreement imposes obligations on Affiliates of a Party, such Party agrees to
cause its Affiliates to perform such obligations.  Either Party may use one or more of its
Affiliates to perform its obligations and duties hereunder and Affiliates of a
Party are expressly granted certain rights herein; provided that each such
Affiliate shall be bound by the corresponding obligations of such Party and the
Parties shall remain liable hereunder for the prompt payment and performance of
all their respective obligations hereunder.

 

14.13       Force Majeure.  Neither Party shall be held liable to the
other Party nor be deemed to have defaulted under or breached the Agreement for
failure or delay in performing any obligation under this Agreement when such
failure or delay is caused by or results from causes beyond the reasonable
control of the affected Party including, but not limited to, embargoes, war,
acts of war (whether war be declared or not), insurrections, riots, civil
commotions, strikes, lockouts or other labor disturbances, fire, floods, or
other acts of God, or acts, omissions or delays in acting by any governmental
authority or the other Party.  The
affected Party shall notify the other Party of such force majeure circumstances
as soon as reasonably practical, and shall promptly undertake all reasonable
efforts necessary to cure such force majeure circumstances.

 

14.14       Export Control.  This Agreement is made subject to any
restrictions concerning the export of products or technical information from
the United States of America or other countries which may be imposed by
Applicable Law from time to time.  Each
Party agrees that it shall not export, directly or indirectly, any technical
information acquired from the other Party under this Agreement or any products
using such technical information to a location or in a manner that at the time
of export requires an export license or other governmental approval under
Applicable Law, without first obtaining the written consent to do so from the
appropriate agency or other governmental entity.

 

14.15       Costs.  Each Party shall bear its own legal costs of
and incidental to the preparation, negotiation and execution of this Agreement.

 

14.16       Counterparts.  This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

[THE REMAINDER OF THIS PAGE HAS BEEN
INTENTIONALLY LEFT BLANK]

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

79

 

IN WITNESS
WHEREOF, Dyax and Cubist have caused this Agreement to be duly executed by
their authorized representatives under seal, effective as of the date first
above written.

 

	
   

  	
  DYAX CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Henry E.
  Blair

  
	
   

  	
  Name: Henry E. Blair

  
	
   

  	
  Title: Chairman, CEO and President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CUBIST
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Michael
  W. Bonney

  
	
   

  	
  Name: Michael W. Bonney

  
	
   

  	
  Title: President and CEO

  

 

*Confidential Treatment
Requested.  Omitted portions filed with
the Commission.

 

80

 

EXHIBIT A

 

Amino Acid Sequence of DX-88

 

[]*

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

EXHIBIT B

 

Existing Dyax Patent Rights

 

	
  MATTER

  	
   

  	
  SERIAL

  	
   

  	
  PATENT

  	
   

  	
  PUBL

  	
   

  	
  TITLE

  	
   

  	
  STATUS

  	
   

  	
  ISSUE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[]*

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

EXHIBIT C

 

Dyax Clinical Trials

 

[]*

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

EXHIBIT D

 

Agreements with Material Provisions

 

[]*

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

EXHIBIT E

 

Product Competitors

 

[]*

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

EXHIBIT F

 

Transferred Materials

 

[]*

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

EXHIBIT G

 

Ongoing Phase II Study Budget

 

[]*

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

EXHIBIT H

 

Form of Joint Press Release

 

                                                                                                                   

 

	
  Dyax Contacts:

  	
  Cubist Contact:

  
	
  Ivana Magovevi-Liebisch

  	
  Eileen C. McIntyre

  
	
  Executive Vice President of

  	
  Senior Director, Corporate

  
	
  Administration and General Counsel

  	
  Communications

  
	
  (617) 250-5759

  	
  (781) 860-8533

  
	
  imagovcevic@dyax.com

  	
  eileen.mcintyre@cubist.com

  
	
   

  	
   

  
	
  Nicole Jones

  	
   

  
	
  Director, Investor Relations

  	
   

  
	
  (617) 250-5744

  	
   

  
	
  njones@dyax.com

  	
   

  

 

Dyax Corp. and Cubist
Pharmaceuticals, Inc. Sign Development and

Commercialization Agreement for DX-88 Surgical Indications

 

Cambridge,
MA, and Lexington, MA,  April 24, 2008 – Dyax Corp. (NASDAQ: DYAX) and Cubist
Pharmaceuticals, Inc. (NASDAQ: CBST) today announced that they have signed
an exclusive license and collaboration agreement for the development and commercialization
of the intravenous formulation of DX-88 for the prevention of blood loss during
surgery in North America and Europe.

 

Dyax will
receive a $15 million upfront payment, an additional $2.5 million milestone
payment in 2008 and is eligible to receive up to an additional $214 million in
clinical, regulatory and sales-based milestone payments.  Dyax is also entitled to receive tiered,
double-digit royalties based on sales of DX-88 by Cubist. The agreement provides
an option for Dyax to retain certain US co-promotion rights. Going
forward, Cubist will be responsible for costs associated with the ongoing DX-88
on-pump cardiothoracic surgery (CTS) Phase 2 trial, known as Kalahari 1, as
well as all further development costs associated with DX-88 in the licensed
indications in the Cubist territory

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

Dyax retains
exclusive rights to DX-88 in all other indications, including its hereditary
angioedema program, currently in its second Phase 3 trial, as well as for the
manufacturing of DX-88.   Dyax also plans
to develop DX-88 in other angioedemas.

 

“Cubist brings
a wealth of clinical resources and commercial expertise in the development of a
hospital-based therapy, which will serve to maximize the potential of DX-88 in
the prevention of blood loss during surgery,” commented Henry E. Blair,
Chairman, President and Chief Executive Officer of Dyax.  “Furthermore, this partnership validates DX-88’s
potential as a multi-indication franchise and underlines the tremendous
possibilities of this valuable asset.”

 

“DX-88
immediately leverages our strong acute care clinical development and regulatory
capabilities. Assuming approval, it will be an excellent fit with our proven
acute care commercial infrastructure as well,” commented Mike Bonney, President
and CEO of Cubist.  “As a potent plasma
kallikrein inhibitor, DX-88 has the potential to be a breakthrough therapy in
reducing blood loss and inflammation in multiple surgical indications. There is
a serious unmet medical need and a large market opportunity for a successful
therapy here.”

 

About
DX-88 in Surgery

 

DX-88, a
Dyax-discovered potent inhibitor of plasma kallikrein, is being tested in an
ongoing Phase 2 clinical trial (Kalahari 1) evaluating DX-88 in the prevention
of blood loss during on-pump CTS, which includes coronary artery bypass graft
(CABG) and heart valve and replacement procedures.  The trial followed the completion of a Phase
1/2 proof-of-concept trial for the prevention of blood loss during high risk
CABG surgery.

 

About Dyax

 

Dyax is
focused on advancing novel biotherapeutics for unmet medical needs, with an
emphasis on oncology and inflammatory indications.  Dyax utilizes its proprietary drug discovery
technology to identify antibody, small protein and peptide compounds for
clinical development.

 

Dyax’s lead product candidate is DX-88, a recombinant small protein
that is currently in clinical trials for its therapeutic potential in two
separate indications.  Dyax has completed
three Phase 2 trials and a Phase 3 trial of DX-88 for the treatment of
hereditary angioedema (HAE).  A second
Phase 3 trial, known as EDEMA4, is currently being conducted under a Special
Protocol Assessment (SPA).  DX-88 has
orphan drug designation in the U.S. and E.U., as well as Fast Track designation
in the U.S. for the treatment of acute attacks of HAE.

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

Dyax identified DX-88 and other compounds in its pipeline using its
patented phage display technology, which rapidly selects compounds that bind
with high affinity and specificity to therapeutic targets.  Dyax leverages this technology broadly with
over 70 revenue generating licenses and collaborations for therapeutic
discovery, as well as in non-core areas such as affinity separations,
diagnostic imaging, and research reagents.

 

Dyax is
headquartered in Cambridge, Massachusetts, and has antibody discovery
facilities in Liege, Belgium.  For online
information about Dyax Corp., please visit www.dyax.com.

 

About Cubist

 

Cubist Pharmaceuticals, Inc. is a biopharmaceutical company
focused on the research, development, and commercialization of pharmaceutical
products that address unmet medical needs in the acute care environment.  In the U.S., Cubist markets CUBICIN®
(daptomycin for injection), the first antibiotic in a new class of
anti-infectives called lipopeptides. 
As announced today, Cubist is developing DX-88, a clinical stage
compound in-licensed from Dyax Corp., as an IV therapy for use in reducing
blood loss and inflammation in CTS. The Cubist product pipeline also includes
pre-clinical programs that address unmet medical need in Gram-positive
infections, Gram-negative infections, CDAD (Clostridium
difficile-associated diarrhea), and HCV (Hepatitis C
infections.)  Cubist is headquartered in
Lexington, MA.  Additional information
can be found at Cubist’s web site at www.cubist.com.

 

Dyax
Disclaimer

 

This press release contains
forward-looking statements, including statements regarding the expected
benefits and milestone and royalty payments from Dyax’s collaboration agreement
with Cubist for the intravenous formulation of DX-88 for the prevention of
blood loss during surgery.  Statements
that are not historical facts are based on Dyax’s current expectations,
beliefs, assumptions, estimates, forecasts and projections about the industry
and markets in which Dyax competes.  The
statements contained in this release are not guarantees of future performance
and involve certain risks, uncertainties and assumptions, which are difficult
to predict.  Therefore, actual outcomes
and results may differ materially from what is expressed in such
forward-looking statements.  Important
factors which may affect the expected benefits of Dyax’s collaboration with
Cubist include the risks that: Dyax’s future benefits from this collaboration
will depend on the efforts and priorities of Cubist, which may be subject to
changes in Cubist’s business direction or priorities; DX-88 may not show
sufficient therapeutic effect or an acceptable safety profile in clinical
trials for the prevention of blood loss during surgery or could take a
significantly longer time to gain regulatory approval and market acceptance
than Dyax or Cubist expects or may never gain such approval or acceptance;
others may develop technologies

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

or products superior to or
on the market before DX-88 for the prevention of blood loss during surgery; and
other risk factors described or referred to in Dyax’s most recent Annual Report
on Form 10-K and other periodic reports filed with the Securities and
Exchange Commission.  Dyax cautions
investors not to place undue reliance on the forward-looking statements
contained in this release. These statements speak only as of the date of this
release, and Dyax undertakes no obligations to update or revise these
statements, except as may be required by law. 
Dyax specifically disclaims responsibility for information describing
Cubist and its business other than the collaboration agreement with Dyax.

 

Dyax, the Dyax logo and EDEMA4 are registered
trademarks and service marks of Dyax Corp. 
Kalahari 1 is a service mark of Dyax Corp.

 

Cubist Safe Harbor Statement

 

This press release contains forward-looking
statements, including statements regarding the development and
commercialization of DX-88 for the prevention of blood loss during surgery. There are many factors that could cause actual results to differ materially
from those in these forward-looking statements. These factors include the
following: (i) DX-88 may not show sufficient therapeutic effect or an
acceptable safety profile in clinical trials in Cubist’s field; (ii) clinical
trials of DX-88 may not be successful or conducted in a timely manner; (iii) DX-88
could take a significantly longer time to gain regulatory approval and market
acceptance than Cubist or Dyax expects or may never gain such approval or
acceptance in Cubist’s field; (iv) others may develop technologies or
products superior to, and/or which reach the market before, DX-88 in Cubist’s
field; (v) technical difficulties or excessive costs relating to the
manufacture of DX-88; (vi) a smaller market for DX-88 in Cubist’s field
than Cubist currently anticipates; (vii) Cubist and Dyax may not be  able to maintain and enforce the intellectual
property protecting DX-88; and (viii) other unanticipated or unexpected
risks that may be encountered with respect to the development, manufacture or
commercialization of DX-88.  Additional factors that could cause
actual results to differ materially from those projected or suggested in any
forward-looking statements are contained in Cubist’s recent filings with the
Securities and Exchange Commission, including those factors discussed under the
caption “Risk Factors” in such filings.  These
statements speak only as of the date of this release, and Cubist undertakes no
obligation to update or revise these statements, except as may be required by
law.  Cubist specifically disclaims
responsibility for information describing Dyax and its business other than the
collaboration agreement with Cubist.

 

Cubist and CUBICIN are registered trademarks
of Cubist Pharmaceuticals, Inc.

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

EXHIBIT I

 

List of European Countries

 

[]*

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

EXHIBIT J

 

Existing Agreements with Financial Obligations

 

[]*

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.

  	
   

  	
   

  

 

 

EXHIBIT K

 

Existing Dyax Patent Rights That Were Filed Due to New Rules

 

	
  MATTER

  	
   

  	
  SERIAL

  	
   

  	
  PATENT

  	
   

  	
  PUBL

  	
   

  	
  TITLE

  	
   

  	
  STATUS

  	
   

  	
  ISSUE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[]*

 

	
  *Confidential Treatment
  Requested. Omitted portions filed with the Commission.Exhibit 4.2

 

AMENDMENT
NO. 1 TO RIGHTS AGREEMENT

 

This
Amendment No. 1 to Rights Agreement (this “Amendment”)
is dated as of July 31, 2008 by and between INCYTE CORPORATION (f/k/a
Incyte Pharmaceuticals, Inc.), a Delaware corporation (the “Company”), and  MELLON
INVESTOR SERVICES LLC (f/k/a ChaseMellon Shareholder Services, L.L.C.), a New
Jersey  limited liability company (the “Rights Agent”), with reference to
the following:

 

A.            The Company and the Rights Agent entered into that
certain Rights Agreement dated as of September 25, 1998 (the “Agreement”) in order to implement a
stockholder rights plan as more fully described therein.  Terms with initial letters capitalized that
are not otherwise defined herein shall have their respective meanings as set
forth in the Agreement.

 

B.            The Company desires to amend the Agreement in certain
respects in order to increase the threshold of ownership in the Company’s
securities necessary to cause investors to become Acquiring Persons and thereby
trigger the occurrence of a Distribution Date.

 

C.            Under the Agreement, the Company and the Rights Agent may
amend the Agreement at any time prior to a Distribution Date, which has yet to
occur.

 

                NOW,
THEREFORE, pursuant to Section 27 of the Agreement, the Company and the
Rights Agent hereby amend, effective upon the date hereof, the Agreement as
follows:

 

Section 1.               Change in Definition of
Acquiring Person.  As set forth in Section 1(a) of
the Agreement, the threshold of Beneficial Ownership by a Person (together with
all Affiliates and Associates) of 15% of the shares of Common Stock then
outstanding at which such Person shall, subject to the provisions of the
Agreement, be deemed to be an Acquiring Person is hereby changed to 20%.  In addition, as conforming changes, all
references to “15%” in the Agreement (e.g., in
Sections 1(a) and 24(a)) are hereby changed to “20%.”

 

Section 2.               Change in Liability.  The following language shall be added to the
end of Section 21(c):

 

Anything to the contrary
notwithstanding, in no event will the Rights Agent be liable for special,
punitive, indirect, incidental or consequential loss or damages of any kind
whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage.

 

Section 3                Counterparts.  This Amendment may be executed in any number
of counterparts, each which shall be deemed an original, and all of this
together shall constitute one instrument.

 

[Remainder
of the page is blank.]

 

1

 

IN WITNESS WHEREOF, this
Amendment is executed as of the date first written above.

 

	
   

  	
  INCYTE CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Patricia A. Schreck

  
	
   

  	
  Name:

  	
  Patricia A. Schreck

  
	
   

  	
  Title:

  	
  Executive Vice President and General

  
	
   

  	
   

  	
  Counsel

  
	
   

  	
   

  
	
   

  	
  MELLON INVESTOR SERVICES
  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Edward Schmitt

  
	
   

  	
  Name:

  	
  Edward Schmitt

  
	
   

  	
  Title:

  	
  Assistant Vice President

  
						

 

2

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