Document:

a50852874ex10_2.htm

Dyax Corp. has requested that portions of this document be accorded confidential treatment pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. Confidential materials omitted and filed separately with the Securities and Exchange Commission.  Asterisks [*****] denote such omission.

CONFIDENTIAL DOCUMENT

Exhibit 10.2

 

 

AMENDED AND RESTATED

SECOND TECHNOLOGY TRANSFER AND LICENSE AGREEMENT

This AMENDED AND RESTATED SECOND TECHNOLOGY TRANSFER AND LICENSE AGREEMENT ("Agreement"), effective as of March 31, 2007 (the "Effective Date"), is between DYAX CORP., a Delaware corporation, of 300 Technology Square, Cambridge, Massachusetts 02139 ("Dyax"), and IMCLONE SYSTEMS INCORPORATED, a Delaware corporation, of 180 Varick Street, New York, New York 10014 ("ImClone").

WHEREAS Dyax possesses intellectual property and know-how related to, among other things, the discovery of antibodies having novel binding properties using phage display;

WHEREAS ImClone researches, develops, manufactures and sells human therapeutic products;

WHEREAS, Dyax and ImClone previously entered into a Technology Transfer and License Agreement, dated effective March 13. 2000 (the “First Agreement”) under which ImClone obtained from Dyax rights to use Dyax’s antibody phage display technology;

WHEREAS, the First Agreement was superseded and replaced by a Second Technology Transfer and License Agreement, entered into between Dyax and ImClone effective as of March 31, 2003 (the "Second Agreement"), under which ImClone obtained from Dyax additional rights, including the right to use the Dyax Antibody Library (as defined herein), for the purpose of discovering antibodies having novel binding properties;

WHEREAS, under the Second Agreement, as amended to date, ImClone's rights to use Dyax’s antibody phage display technology are due to terminate on May 31, 2007;

WHEREAS,  ImClone and Dyax wish to extend the term under which ImClone can continue to use Dyax’s antibody phage display technology and amend certain other terms under the Second Agreement; and

WHEREAS, the parties hereto acknowledge that ImClone delivered the sum of $[*****] to Dyax on or about May, 2007 as a good faith payment of anticipated license fees due under the Second Agreement; and

WHEREAS, to accomplish the foregoing, the parties have agreed to amend and restate the Second Agreement as set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement, the Parties hereby agree that, from and after the Effective Date hereof, the Second Agreement is hereby amended and restated as follows:

ARTICLE 1.  DEFINITIONS

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

1.1           "Affiliate" means a corporation or other legal entity that controls, is controlled by, or is under common control with such party.  For purposes of this definition, "control" means the ownership, directly or indirectly, of more than fifty percent (50%) of the outstanding equity securities of a corporation which are entitled to vote in the election of directors or a more than fifty percent (50%) interest in the net assets or profits of an entity which is not a corporation.;

1.2 "Affimed License" certain Patent Cross-License Agreement dated August 4, 2003 by and between Affimed Therapeutics AG ("Affimed") and Dyax, a copy of which has been provided to ImClone.

 

1.3 "Affimed Patent Rights" has the meaning set forth in Attachment C-1.

 

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

1.5 "Antibody Compound" means (i) any Antibody Derived from the Dyax Antibody Library, (ii) any Research Licensed Intermediate Derived from the Dyax Technology (as defined in the First Agreement) or (iii) any Antibody Derived from any Research Licensed Intermediate.

 

1.6 "Biosite License" means the license agreement effective March 28, 2002 between Biosite Incorporated ("Biosite") and Dyax, a copy of which has been provided to ImClone.

1.7 "Biosite Know-How Rights" sometimes referred to as Biosite Know-How. shall mean all trade secret and other know-how rights of Biosite in the Confidential Information provided to Dyax under the Biosite License that may be transferred to ImClone, including but not limited to, the Confidential Information described in Attachment D-2 and any subsequent disclosures as they may occur from time to time in accordance with the terms of the Biosite License.

1.8 "Biosite Patent Rights"  shall mean, collectively, (a) all patents and patent applications described in Attachment D-1, (b) all patents that have issued or in the future issue therefrom, including without limitation utility, model and design patents and certificates of invention, and (c) all divisionals, continuations, continuations-in-part, reexaminations, reissues, renewals, extensions or additions to any such patent applications and patents, as well as all foreign counterparts thereof.

1.9 "CAT License" means certain Amended and Restated License Agreement dated as of July 30, 2007 by and between Cambridge Antibody Technology Limited ("CAT") and Dyax, a copy of which has been provided to ImClone, as amended.

 

1.10 "CAT Patent Rights" has the meaning set forth in Attachment H-3.

1.11 "CAT Product License" means the license under the CAT Patent Rights with respect to Licensed Products to a particular Target that is granted to Dyax by CAT under the CAT License for sublicense to ImClone as described in Section 4.1 herein.  The form of the CAT Product License is set forth in Attachment H-2.

1.12 "Derived" means identified, obtained, discovered, developed, produced, created, synthesized, designed, or resulting from, based upon or otherwise generated from.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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1.13 "Domantis License" means that certain Cross License Agreement dated April 6, 2006 by and between Domantis Limited ("Domantis") and Dyax, a copy of which has been provided to ImClone.

 

1.14 "Domantis Patent Rights" has the meaning set forth in Attachment E-1.

 

1.15 "Dyax" means Dyax as identified above and any Affiliate of Dyax.

1.16 "Dyax Antibody Library" means the proprietary phagemid library of human antibody sequences described in Attachment A-1 and any Library Improvements (as hereinafter defined) that are made to the Dyax Antibody Library by ImClone.

1.17 "Dyax Know-How" shall mean the proprietary know-how of Dyax described in Attachment A-1 and previously or hereafter delivered to ImClone pursuant to this Agreement.

1.18 "Dyax Materials” means the expression vectors and associated host cell strains set forth in Attachment A-1 and any improvements made to any such Dyax Materials by ImClone while using such Dyax Materials in accordance with the license rights set forth in Section 3.1(a) as well as the protocols for use of the Dyax Antibody Library and Dyax Materials listed in Attachment A-1.

1.19 "Dyax Patent Rights" means the patents and patent applications listed in Attachment A-2 and any patents issuing from such applications, together with any reissues, reexaminations, renewals and extensions thereof, and all continuations, continuations-in-part and divisionals of the applications throughout the world. "Dyax Patent Rights" shall also include any patents or patent applications, whether now existing or obtained in the future, owned or controlled by Dyax containing a claim that would be infringed by the practice of the patent rights set forth in Attachment A-2 pursuant to the rights granted under this Agreement.  As of the Effective Date, Attachment A-2 consists of all patent and patent applications that Dyax owns or controls and licenses on a standardized non-exclusive basis with the Dyax Antibody Library.

1.20 "Dyax Technology" means Dyax Patent Rights and/or Dyax Know-How and/or Dyax Antibody Library and/or Dyax Materials.

 

1.21 "First Commercial Sale" means the first commercial sale of any Licensed Product in any country after grant of a Marketing Authorization.

1.22 "Genentech License" means the license agreement effective September 19, 2002 between Dyax and Genentech, Inc. ("Genentech"), a copy of which has been provided to ImClone.

1.23 “Genentech Patent Rights” shall mean United States Patents Nos. 5,750,373, 5,780,279, 5,821,047, 5,846,765, 6,040,136 and any reissues, reexaminations, renewals and extensions thereof, and all continuations, continuations-in-part and divisionals of the foregoing, and patents that issue on such applications; and all counterparts thereto in countries outside the United States, including, without limitation, the patents and patent applications listed herein as Attachment F-1.

1.24 "ImClone" means ImClone as identified above and any Affiliate of ImClone.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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

1.26 "In Vitro Diagnostic Product" means a Licensed Product intended for use as an "in vitro diagnostic" (as defined in 21 CFR § 809.3) labeled in accordance with 21 CFR §§ 809.10.

1.27  "Library Improvements" means any improvement to the Dyax Antibody Library made by ImClone such as an increase in the library diversity, efficiency of display, infectivity of the phage and the like, and each library that is derived by ImClone from the Dyax Antibody Library.

1.28 "Library License Term" means the period during which ImClone may continue to use the Dyax Technology to identify, isolate and generate Antibody Compounds, as set forth in Section 11.1 hereof.

 

1.29 "Licensed Product" means any [*****].

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

1.31 "Marketing Authorization" means any approval (including all applicable pricing and governmental reimbursement approvals) required from the FDA or relevant foreign equivalent to market and sell a Licensed Product in a particular country.

1.32 "Net Sales" means with respect to a Licensed Product sold by ImClone, its sublicensees and Marketing Partners, the price invoiced  on all sales or other dispositions of such Licensed Product (or in the case of a sale or other disposition other than at arm’s length, the price which would have been invoiced in a bona fide arm’s length transaction) but deducting the costs of packing, transport and insurance, customs duties, any credits actually given for returned or defective Licensed Product, normal trade discounts actually given, and sales taxes, VAT or other similar tax charged on an included in the invoice price to the purchaser. "Marketing Partner" as used herein shall mean a non-Affiliate third party to whom ImClone has granted the right to distribute a Licensed Product, where such third party is responsible for the marketing and promotion of such Licensed Product within the applicable territory.

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

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

1.35 "Previously Sublicensed CAT Product Licenses" means the [*****] sublicenses previously obtained by ImClone prior to the date of this Agreement with respect to CAT Product Licenses to the following Targets:  [*****] Homo sapiens kinase insert domain receptor (also know as KDR).

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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1.36 "Research Licensed Intermediate" means any fusion protein (including, without limitation any chimeric binding protein) genetic package (including without limitation any virus, spore or cell) or other intermediate compound, or any compound or sequence derived from any of the foregoing that is discovered, made or developed by ImClone prior to the expiration or termination of this Agreement using any of the Dyax Technology.

1.37 "Royalty Period" means the calendar quarter, or partial calendar quarter, commencing with the calendar quarter containing the date of the First Commercial Sale of any Licensed Product in each country, and each calendar quarter thereafter.

1.38 "Target" means DNA as identified by a full length protein sequence that it encodes.

1.39 "Therapeutic Field of Use" means shall mean human therapeutics only and not for any in vitro or in vivo diagnostics, purification or separations, research products nor for any other purposes.

1.40 "Therapeutic Product" means a Licensed Product intended for use to treat or prevent a medical condition in humans.

1.41 "Third Party Phage Display Agreements" means (a) the Affimed License, (b) the Biosite Agreement, (c) the CAT License, (d) the Genentech Agreement, (e) the XOMA License and (f) the Domantis Agreement.

 

1.42 "Transferred Materials" has the meaning set forth in the XOMA License.

 

1.43 "Valid Claim" means a claim of an issued and unexpired patent that has not been permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise.

 

1.44 "XOMA License" that certain Amended and Restated License Agreement dated October 27, 2006 by and between XOMA Ireland Limited ("XOMA") and Dyax, a copy of which has been provided to ImClone.

1.45 "XOMA Know How" means unpatended and/or unpatentable technical information, including ideas, concepts, inventions, discoveries, data, designs, formulas, specifications, procedures for experiments and tests and other protocols, whether now existing or obtained in the future, owned by XOMA which XOMA has the right to license or sublicense and which may be necessary for the practice of the applicable XOMA Patent Rights or which would be misappropriated by the activities of Dyax or ImClone hereunder but for this Agreement.  XOMA Know-How shall not include the XOMA Patent Rights.

1.46 "XOMA Patent Rights" has the meaning set forth in Attachment G-2.

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

ARTICLE 2.

DYAX TECHNOLOGY TRANSFER

2.1. Transfer to ImClone.   ImClone acknowledges that Dyax has previously transferred the Dyax Antibody Library, Dyax Materials and Dyax Know-How to ImClone for use by ImClone in accordance with the terms and conditions of this Agreement.   Following the first anniversary of the Effective Date and thereafter during the Library License Term (including any extensions exercised by ImClone under Section 11.1(a)), upon ImClone’s request, which request may be made no more frequently than once in any [*****] month period, Dyax shall make additional transfers of the Dyax Antibody Library at least sufficient for [*****] selections at no additional cost or expense to ImClone.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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2.2. Updates. On the first anniversary of the Effective Date and each such anniversary thereafter during the Library License Term, Dyax shall provide ImClone with all material updates and improvements made by Dyax to the Dyax Antibody Libraries, Dyax Materials and all related Dyax Know-How ("Updates") at no additional cost to ImClone and such Updates shall thereafter be deemed to be included in the Dyax Technology licensed to ImClone under Section 3.1.

2.3. Automation Technology Option.  During the Library License Term, ImClone shall have the option to obtain a license to Dyax's proprietary automation technology (including its Webphage software) and any Dyax Know-How relating thereto upon payment of a license fee of [*****].  In the event that ImClone elects to exercise this option then, based on recommendations by Dyax, ImClone will order and pay for all automation equipment, which Dyax will set up at ImClone's facilities over a period of [*****] weeks ([*****] working days) after delivery of equipment.

ARTICLE 3.

GRANT OF DYAX, AFFIMED, BIOSITE, DOMANTIS, GENENTECH AND XOMA RIGHTS

3.1 Dyax License Rights.  During the Library License Term, ImClone shall have rights to use and practice the Dyax Technology, Affimed Patent Rights, Biosite Patent Rights, Biosite Know-How Rights, Domantis Patent Rights, Genentech Patent Rights, XOMA Patent Rights and XOMA Know-How as follows:

 

	
(a)  

	
Dyax Antibody Library.  Dyax hereby grants to ImClone (i) a world-wide, nonexclusive license, without the right to grant sublicenses, to use the Dyax Antibody Library and to practice the Dyax Patent Rights solely in connection with the use of the Dyax Antibody Library to research, develop and make Antibody Compounds and (ii) a world-wide, non-exclusive license, with the right to sublicense, to use the Antibody Compounds in order to make, have made, use, sell or import Licensed Products; provided however, that ImClone shall have no rights to make, have made, use, sell or import Licensed Products unless ImClone has obtained a sublicense under a CAT Product License with respect to the applicable Target as described in Section 4.1 herein (which sublicense must be obtained prior to the commencement of the first Phase I Clinical Trial of a Therapeutic Antibody Product or prior to the first filing for Marketing Authorization for any Diagnostic Antibody Product).

	
(b)  

	
Dyax Materials.   In connection with the practice of the license rights set forth in Section 3.1(a)(i), Dyax hereby grants to ImClone a worldwide, non-exclusive, non-transferable license, without the right to grant sublicenses, to use the Dyax Materials on its own behalf only to identify Antibody Compounds from the Dyax Antibody Library and to make quantities of Antibody Compounds that are reasonably required for research and development activities only.   ImClone shall have no right to use the Dyax Materials other than to make Antibody Compounds for the limited purposes and in the limited amounts as herein provided.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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3.2 Third Party Sublicense  Rights.    During the Library License Term, ImClone shall have rights to use and practice the Affimed Patent Rights. Biosite Patent Rights, Biosite Know-How Rights, Domantis Patent Rights, Genentech Patent Rights, XOMA Patent Rights and XOMA Know-How as follows:

	
(a)  

	
Affimed Sublicense.

	
i.  

	
Upon the terms and conditions set forth in Section 3.2(a)(ii) below, ImClone shall have a sublicense under the Affimed Patent Rights and the Affimed Know How (the "Affimed Sublicense") for use with the Dyax Antibody Library and the Antibody Compounds as permitted by the license granted in Section 3.1(a).

	
ii.  

	
ImClone hereby acknowledges and agrees that the Affimed Sublicense granted to ImClone under Section 3.2(a) is subject to the following terms and conditions:

	
1.  

	
Nothing in this Agreement shall be deemed to grant ImClone rights under the Affimed Patent Rights broader than the field and scope of the license granted to Dyax under the Affimed License; and nothing in this Agreement shall be deemed to grant ImClone the right to (i) make, sell, offer for sale or import any composition of matter other than Products which would, but for the licenses granted herein, infringe a Valid Claim of the Affimed Patent Rights, or (ii) use any phage or phagemid library other than the Dyax Antibody Library;

 

	
2.  

	
The Affimed Sublicense shall be subject to the applicable terms and conditions of the Affimed License;

 

	
3.  

	
ImClone agrees that, promptly after execution of this Agreement, Dyax shall deliver to Affimed only those relevant portions of this Agreement evidencing the sublicense granted hereunder is in compliance with the terms and conditions set forth in the Affimed License;

 

	
4.  

	
In the event that the Affimed License is terminated prior to its expiration for any reason, the Affimed Sublicense shall terminate; and

 

	
5.  

	
If ImClone fails to comply with any terms and conditions set forth herein, the Affimed Sublicense shall automatically terminate.

 

	
(b)  

	
Biosite Sublicense.

	
i.  

	
Upon the terms and conditions set forth in Section 3.2(b)(ii) below, ImClone shall have a sublicense under the Biosite Patent Rights and the Biosite Know How (the "Biosite Sublicense") for use with the Dyax Antibody Library and the Antibody Compounds as permitted by the license granted in Section 3.1(a).

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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ii.  

	
ImClone hereby acknowledges and agrees that the Biosite Sublicense granted to ImClone under Section 3.2(b)(i) is subject to the following terms and conditions:

	
1.  

	
ImClone shall comply with the restrictions imposed by Biosite on any potential sublicensee under Section 2.2 of the Biosite License;

	
2.  

	
Nothing in this Biosite Sublicense shall be deemed to grant ImClone rights under the Biosite Patent Rights and Biosite Know-How Rights broader than the rights granted to the Dyax Antibody Library and the Dyax Patent Rights under this Agreement and such rights to the Biosite Patent Rights and Biosite Know-How are limited to use with the Dyax Antibody Library and Antibody Compounds as permitted by Article 3 of the Agreement;

	
3.  

	
ImClone and its Affiliates shall not enforce (or attempt or purport to enforce) against Biosite or its Affiliates any patent that claims (or purports to claim) any process of, any composition for or any use of (i) Biosite Know-How Rights, provided that such Biosite Know-How Rights have been disclosed to ImClone by Dyax, (ii) creating, constructing or producing immune libraries from immunized rodents for the purpose of phage display therefrom of antibodies or binding fragments thereof, or (iii) phage display of antibodies or binding fragments thereof, or (iv) selecting or producing antibodies or binding fragments thereof derived from such libraries.  The Biosite Sublicense shall automatically terminate upon any breach of this covenant, which shall survive any termination of the Biosite Sublicense;

	
4.  

	
The Biosite Know-How Rights shall be treated as Confidential Information under this Agreement and shall be afforded the same protection as the Confidential Information of Dyax;

	
5.  

	
A signed copy of this Biosite Sublicense (with any provisions of the Agreement  reasonably deemed necessary by Dyax and Biosite) shall be provided to Biosite in order to confirm that Dyax has complied with Biosite’s restrictions on granting sublicenses contained in the Biosite License;

	
6.  

	
In the event that the Biosite License be terminated early, the Biosite Sublicense shall also terminate; and

	
7.  

	
The Biosite Sublicense shall not become effective until all of the conditions of this Section 3.2(b)(ii) have been met.

	
8.  

	
The parties expressly acknowledge that the term of the Biosite Sublicense shall be coextensive with the term of the Agreement; provided, however, that the Biosite Sublicense is subject to early termination, upon written notice by Dyax to ImClone, if the Biosite License terminates early for any reason.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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(c)  

	
Domantis Sublicense.

	
i.  

	
 Upon the terms and conditions set forth in Section 3.2(c)(ii) below,  ImClone shall have a sublicense under the Domantis Patent Rights (the "Domantis Sublicense") for use with the Dyax Antibody Library and the Antibody Compounds as permitted by the license granted in Section 3.1(a).

	
ii.  

	
ImClone hereby acknowledges and agrees that the Domantis Sublicense granted to ImClone under Section 3.2(c)(i) is subject to the following terms and conditions:

	
1.  

	
Nothing in this Agreement shall be deemed to grant ImClone rights under the Domantis Patent Rights broader than the field and scope of the license granted to Dyax under the Domantis License; and nothing in this Agreement shall be deemed to grant ImClone the right to (a) make, sell, offer for sale or import any composition of matter other than Products which would, but for the licenses granted herein, infringe a Valid Claim of the Domantis Patent Rights, or (b) use any phage or phagemid library other than the Dyax Antibody Library; and

 

	
2.  

	
ImClone agrees that, promptly after execution of this Agreement, Dyax shall have the right to notify Domantis of this Agreement in compliance with the terms and conditions set forth in the Domantis License.

 

	
(d)  

	
Genentech Sublicense.

	
i.  

	
Upon the terms and conditions set forth in in Section 3.2(d)(ii) below,  ImClone shall have a sublicense under the Genentech Patent Rights (the "Genentech Sublicense") for use with the Dyax Antibody Library and the Antibody Compounds as permitted by the license granted in Section 3.1 (a).

	
ii.  

	
ImClone hereby acknowledges and agrees that the Genentech Sublicense granted to ImClone under Section 3.2(d)(i) is subject to the following terms and conditions:

	
1.  

	
ImClone shall comply with the restrictions imposed by Genentech on any potential Genentech Sublicensee under Section 2.3 of the Genentech License;

	
2.  

	
Nothing in the Genentech Sublicense shall be deemed to grant ImClone rights under the Genentech Patent Rights broader than the rights granted to the Dyax Antibody Library and the Dyax Patent Rights under the Agreement and such rights to the Genentech Patent Rights are limited to use with the Dyax Antibody Library and Antibody Compounds as permitted under Article 3 of the Agreement;

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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3.  

	
A signed copy of this Genentech Sublicense (with any provisions of the Agreement reasonably deemed necessary by Dyax and Genentech) shall be provided to Genentech in order to confirm that Dyax has complied with Genentech’s restrictions on granting sublicenses contained in the Genentech License;

	
4.  

	
In the event that the Genentech License is terminated early, the Genentech Sublicense shall also terminate; and

	
5.  

	
The Genentech Sublicense shall not become effective until all of the conditions of this Section 3.2(d)(ii) have been met.

	
6.  

	
The parties expressly acknowledge that the term of the Genentech Sublicense shall be coextensive with the term of the Agreement; provided, however, that the Genentech Sublicense is subject to early termination, upon written notice by Dyax to ImClone, if the Genentech License terminates early for any reason.

	
(e)  

	
XOMA Covenant.

	
i.  

	
Upon the terms and conditions set forth in in Section 3.2(e)(ii) below,  ImClone shall have the benefit of the covenant not to sue conferred pursuant to the XOMA License with regard to infringement of the XOMA Patent Rights or misappropriation of the XOMA Know-How (the "XOMA Covenant") solely to the extent reasonably necessary to permit the use by ImClone of the Dyax Antibody Library and Antibody Compounds as permitted by the license granted in Section 3.1(a); but the benefit of the covenant shall expressly exclude the use and practice of the XOMA Patent Rights or XOMA Know-How for commercial or industrial manufacture or any activities solely directed to the creation of such manufacturing capabilities.

	
ii.  

	
ImClone hereby acknowledges and agrees that the XOMA Covenant granted to ImClone under Section 3.2(e)(i) is subject to the following terms and conditions:

	
1.  

	
ImClone will abide by each of the limitations, restrictions and other obligations applicable to ImClone provided for in the XOMA License including, without limitation, the restrictions on use of Transferred Materials for purposes other than Research and Development;

 

	
2.  

	
ImClone covenants not to use the Transferred Materials for any purpose other than for Research and Development purposes;

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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3.  

	
ImClone agrees that the "first sale" doctrine does not apply to any Disposition of Transferred Materials;

 

	
4.  

	
ImClone shall Dispose of Transferred Materials only to a third party who otherwise meets the definition of a Dyax Collaborator under the XOMA License and who executes a written agreement in which its undertakes all of the obligations set forth herein;

 

	
5.  

	
XOMA shall be an intended third party beneficiary with respect to the foregoing provisions of Section 3.2(e)(ii)(1) through (4);

 

	
6.  

	
If ImClone or any person or entity controlled by ImClone contests the validity or enforceability of any of the XOMA Patent Rights hereunder, XOMA shall have the right to terminate (or cause Dyax to terminate) all of the rights hereby granted to ImClone under the XOMA Patent Rights;

 

	
7.  

	
ImClone acknowledges and agrees that it has received from Dyax, and is subject to the relevant provisions of, the following documents: (i) a redacted copy of the XOMA License containing all of the limitation, restrictions and other obligations provided therein with respect to the XOMA Patent Rights; and (ii) the Form of Notice attached hereto as Attachment G-2 and incorporated herein;

 

	
8.  

	
ImClone acknowledges and agrees that nothing in this Agreement shall be construed as a release or waiver of past, present or future infringement of the XOMA Patent Rights by ImClone acting outside the scope of this Agreement nor as a release from Dyax from any claim of infringement of the XOMA Patent Rights nor as any right to release any third party from any claim of infringement under the XOMA Patent Rights;

 

	
9.  

	
ImClone acknowledges and agrees that the XOMA Covenant shall not extend to infringement of the XOMA Patent Rights arising out of making or the means or methods used to make any amount of a licensed Antibody or Licensed Product other than those quantities of Antibody reasonably required for Research and Development purposes; provided, however, that Dyax or ImClone shall be permitted to make or have made any licensed Antibody by any means of its selection other than those which otherwise infringe a Valid Claim of the XOMA Patent Rights;

 

	
10.  

	
ImClone acknowledges and agrees that the XOMA Covenant shall become void and without effect as to ImClone if ImClone fails to materially discharge or comply with any terms of this Agreement with respect to the XOMA Patent Rights;

 

	
11.  

	
ImClone acknowledges and agrees that the XOMA Covenant is personal to Dyax and ImClone and cannot be assigned or transferred;

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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12.  

	
ImClone agrees that Dyax shall have the right to deliver to XOMA a written report which shall specify the name, address and contact person for ImClone; and

 

	
13.  

	
In the event of the termination of the XOMA License by Dyax, the licenses and rights granted to Dyax and ImClone under the XOMA License shall survive.  In the event of the termination of the XOMA License by XOMA, the licenses and rights granted to Dyax and ImClone under the XOMA License shall terminate.

 

ARTICLE 4.

GRANT OF CAT RIGHTS

4.1 CAT Patent Rights.

	
(a)  

	
Upon the terms and conditions set forth in Section 4.1(b) below, ImClone shall have the right, (i) during the Library License Term, to use the CAT Patent Rights for the purposes of carrying out research and development activities in relation to identifying Antibody Compounds, and (ii) to obtain through Dyax a sublicense of one or more CAT Product Licenses, in order for ImClone to make, have made, use, sell or import Licensed Products to a particular Target.  The parties hereto expressly acknowledge the existence of the Previously Sublicensed CAT Product Licenses obtained by ImClone prior to the date hereof and further expressly acknowledge and agree that the right of ImClone to obtain one or more sublicenses of CAT Product Licenses through Dyax hereunder shall be in addition to the Previously Sublicensed CAT Product Licenses currently held by ImClone.

	
(b)  

	
ImClone hereby acknowledges and agrees that the rights granted to ImClone under Section 4.1(a) with respect to the CAT Patent Rights is subject to the following terms and conditions:

	
i.  

	
CAT Product License:

	
1  

	
As required by the CAT License, in the event that ImClone wishes to develop and commercialize any Product with respect to a Target, then prior to the commencement of the first Phase I Clinical Trial in relation to any Therapeutic Antibody Product or prior to the first filing for Marketing Authorization for any Diagnostic Antibody Product, ImClone must first obtain a sublicense under a CAT Product License with respect to such Target.

	
2  

	
Dyax hereby warrants and represents that, under the CAT License, CAT has granted Dyax certain options to obtain CAT Product Licenses.  During the Library License Term, Dyax will reserve for ImClone options for up to four (4) CAT Product Licenses to be exercised by Dyax on ImClone’s behalf in accordance with the terms of this Agreement (the "Initial Product License Allotment"). Upon the date on which ImClone has depleted its Initial Product License Allotment, provided that Dyax has unexercised options available under the CAT Agreement and provided further that such unexercised options have not been reserved for other Dyax collaborators or for Dyax's internal development programs, Dyax shall reserve for ImClone options for up to an additional four (4) CAT Product Licenses to be exercised by Dyax on ImClone’s behalf (the "Second Product License Allotment").  In addition, after exercising the options reserved for ImClone in the Second Product License Allotment, then, upon each request of ImClone, provided that Dyax has unexercised options available under the CAT Agreement and provided further that such unexercised options have not been reserved for other Dyax collaborators or for Dyax's internal development programs, Dyax shall exercise one or more options for CAT Product Licenses on ImClone's behalf in accordance with the terms set forth herein.  For the avoidance of doubt, the parties hereto acknowledge and agree that the Previously Sublicensed CAT Product Licenses shall be in addition to and shall under no circumstances be counted against the Initial Product License Allotment or the Second Product License Allotment.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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3  

	
In order to determine whether a CAT Product License can be obtained with respect to a Target, ImClone must first request that Dyax submit such Target (the "Nominated Target") through the CAT Gatekeeping Procedure described in herein.

	
ii.  

	
CAT Gatekeeping.

	
1  

	
Any request by ImClone that Dyax submit a Nominated Target through the CAT Gatekeeping Procedure shall be in writing and must identify the Nominated Target against which Antibody Compounds are directed (which must be accompanied by a GenBank® accession number, if available, or similar information which uniquely identifies such Nominated Target).

	
2  

	
Upon receipt of a request by ImClone under paragraph (b)(i) above, Dyax shall promptly (but in no event more than [*****] days) request that CAT subject the Nominated Target to CAT's Gatekeeping Procedure (as described in Attachment H-1 hereto) in accordance with the CAT License.

	
3  

	
If CAT notifies Dyax under the CAT License that the Nominated Target has not passed the CAT Gatekeeping Procedure, then Dyax shall promptly notify ImClone in writing that Dyax will not be granted a CAT Product License, and ImClone shall have no right to obtain a CAT Product License above with respect to such Nominated Target; provided, however, that if requested by ImClone, Dyax will exercise its rights with respect to an Expert as set forth in paragraph 3 of Attachment H-1 hereto.

	
4  

	
If CAT determines that the Nominated Target has passed the CAT Gatekeeping Procedure (or the Expert determines that CAT did not correctly apply the CAT Gatekeeping Procedure as set forth in paragraph 3 of Attachment H-1 hereto), then pursuant to the terms of the CAT License, CAT is obligated to notify Dyax (the "Target Acceptance Notification") that a CAT Product License is available for such Target and Dyax shall promptly notify ImClone in writing thereof.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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iii.  

	
Sublicense of CAT Product License.  Upon receipt of a Target Acceptance Notification, ImClone may, by written notice and by payment of the Product License Fee referred to in Section 6.3 of the Agreement, request that Dyax secure a CAT Product License for the Nominated Target.  In such event, Dyax shall have [*****] business days in which to obtain a CAT Product License with respect to such Nominated Target, and to deliver to ImClone a fully executed redacted copy thereof.  Within [*****] business days following delivery of such redacted copy, Dyax and ImClone shall enter into a written sublicense agreement, the form of which is attached hereto as ATTACHMENT I.

	
iv.  

	
Effect of Termination of CAT License.  Pursuant to the terms of the CAT License, upon termination of the CAT License, Dyax represents and warrants that (1) any CAT Product License granted to Dyax before the date of termination shall continue and the Parties will continue to be bound by the terms of the CAT License in relation to any such CAT Product License, and (2) any sublicense granted by Dyax to ImClone under a CAT Product License pursuant to this Agreement will continue in force provided that ImClone is not in breach of the relevant sublicense and ImClone agrees to enter into a direct agreement with CAT upon the terms of the CAT Product License Agreement.  The Parties acknowledge that ImClone derives independent and significant value from the agreements set forth in the CAT License and may rely thereon and to that extent only shall have the right to enforce the provisions of paragraph 4.1(b)(iv) above and be a third party beneficiary for that purpose only.

	
v.  

	
ImClone Acknowledgement.  As required by the CAT License, ImClone hereby acknowledges and agrees that Dyax must request, and be granted a CAT Product License, in relation to a Therapeutic Antibody Product prior to Dyax or ImClone's commencement of the first Phase I Clinical Trial in relation to such Therapeutic Antibody Product or in relation to a Diagnostic Antibody Product prior to Dyax or ImClone's first filing for Marketing Authorization in relation to such Diagnostic Antibody Product.

	
vi.  

	
Third Party Beneficiary Right.  As required by the CAT License, ImClone agrees that CAT shall be a third party beneficiary of the any sublicense granted by Dyax to ImClone under a CAT Product License and CAT shall have the right to enforce (including claim damages as a result of any breach) of such sublicense.  If at any time CAT does have to enforce its rights under such sublicense Dyax will, if requested by CAT, supply to CAT a copy of the relevant sublicense as soon as possible.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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ARTICLE 5.

LIMITATION OF RIGHTS AND COVENANTS

5.1 Limitation of Rights. ImClone acknowledges that its rights with respect to the Dyax Technology, Affimed Patent Rights, Biosite Patent Rights, Biosite Know-How, CAT Patent Rights, Genentech Patent Rights, XOMA Patent Rights and XOMA Know-How are limited to those expressly granted in this Articles 3 and 4.  ImClone agrees that, except as expressly set forth in this Agreement, no other rights or licenses, express or implied, are granted to any patents, patent applications, inventions, trademarks, trade secrets or other intellectual property, or to any materials, information, data or know-how, of the other party.  Without in any way limiting the scope of the foregoing, ImClone further also acknowledges and agrees that:

 

	
(a)  

	
ImClone shall not transfer the Dyax Antibody Library, Dyax Materials, or Dyax Know-How to any third party and shall not perform services using the Dyax Antibody Library, Dyax Materials or Dyax Know-How for any third party;

 

	
(b)  

	
Dyax has previously licensed and will continue to license use of the Dyax Antibody Library to third parties and as such it may be possible that third parties may generate the same Antibodies as ImClone and therefore have access and rights to same, and nothing contained in this Agreement shall be deemed to prohibit or restrict Dyax from continuing to supply Dyax Antibody Library to third parties, or serve as the basis for any claim of liability against Dyax as a result of such activities; and

 

	
(c)  

	
Dyax has used and will continue to use the Dyax Antibody Library and Dyax Patent Rights in connection with Dyax's own internal research and development activities to discover Antibodies and as such it may be possible for Dyax to generate Antibodies or products that are the same or similar to Antibodies or products developed by ImClone; and

 

	
(d)  

	
any materials provided by Dyax to ImClone under this Agreement, including without limitation the Dyax Materials (but excluding Antibody Compounds generated by ImClone) are to be used for research purposes only.

 

5.2 Covenant Not to Sue.  In partial consideration for the grant of rights hereunder, ImClone agrees not to enforce against Dyax any patent right owned or controlled by ImClone that arose from ImClone’s use of the Dyax Antibody Library or any of the inventions claimed in the Dyax Patent Rights ("ImClone Patent Right") that Dyax may infringe in using the Dyax Antibody Library or the inventions claimed in the Dyax Patent Rights. Nothing in this Section 5.2 is intended to grant Dyax any rights to nonsuit with respect to any claim in any patent right owned or controlled by ImClone, any Antibody Compound or any Licensed Product.  The parties agree that the covenant not to sue in this Section 5.2 survives termination of this Agreement and is a right that transfers with any sale or disposition by ImClone of the ImClone Patent Right. ImClone will obtain from any subsequent owner or transferee of any ImClone Patent Right a written agreement to abide by the terms of this covenant not to sue, and ImClone hereby agrees that Dyax will be a third party beneficiary, to the extent of this covenant not to sue, of any assignment or other transfer of an ImClone Patent Right to any third party.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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5.3 Additional Covenant.  In partial consideration for the grant of rights hereunder, ImClone agrees that neither it nor any of its Affiliates, sublicensees or collaborators (to the extent they claim rights or receive rights under this Agreement) shall seek a judgment of invalidity or unenforceability of, enter into any opposition to, and/or appeal from any decision with respect to validity or enforceability of the Dyax Patent Rights (or other intellectual property rights of Dyax relating to the Dyax Antibody Library or Dyax Materials) and shall not assist or otherwise cooperate with another party in any attempt to obtain judgment, opposition or appeal with respect to the rights Dyax Technology unless compelled by a court of competent jurisdiction or otherwise required by law, without first giving Dyax written notice [*****] days prior to such action when such notice is possible.  Dyax and ImClone agree that this covenant is a material term of this Agreement, and breach of this covenant will constitute a material breach of this Agreement.

ARTICLE 6.

PAYMENTS AND REPORTS

6.1 Technology Transfer and License Fees.  In consideration for the rights granted to ImClone under this Agreement, ImClone shall pay to Dyax an initial license fee of [*****].  The parties hereto acknowledge that ImClone has previously advanced the sum of [*****] to Dyax, which shall be credited against the initial license fee.  On the date that this Agreement is executed by the parties hereto, ImClone shall pay to Dyax the outstanding balance of [*****] by wire transfer.

6.2 Annual License Maintenance Fee.  Commencing with the first (1st) anniversary of the Effective Date and on each anniversary of the Effective Date thereafter during the Library License Term, ImClone shall pay to Dyax an annual license maintenance fee of [*****] by wire transfer on or before each such anniversary; provided that the amount of this annual fee shall be adjusted if the Library License Term is extended as provided in Section 11.1.

6.3 Product License Fee.  ImClone shall pay to Dyax a product license fee of [*****], by wire transfer, upon execution of any and each sublicense with respect to a CAT Product License between Dyax and ImClone.   The sublicense shall not come into effect until such fee is paid.

6.4 Therapeutic Development Milestones.  Except as set forth in Section 6.8, within [*****] days after the occurrence of the following events (each a "Therapeutic Development Milestone"), ImClone will make the following payments to Dyax:

	
  

	
(a)

	
$[*****] upon initiation of first Phase I Clinical Trial for a Therapeutic Product;

	
  

	
(b)

	
$[*****] upon initiation of the first Phase III Clinical Trial for a Therapeutic Product;

	
  

	
(c)

	
$[*****] upon first filing for Marketing Authorization in the first Major Market country; and

	
  

	
(d)

	
$[*****] upon first Marketing Authorization of a Therapeutic Product in the first Major Market country

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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The payment in relationship to each Therapeutic Development Milestone shall be made for the first Indication of each Therapeutic Product to each Target.  For each additional Indication of a Therapeutic Product to the same Target additional Therapeutic Development Milestone payments shall be required as set forth in subparagraphs (a) through (d), provided that the amount of each such payment shall be reduced by [*****].  For purposes of this Section, "Indication" means a new and distinct primary disease (for example cancer versus inflammation) and does not refer to the subsequent filing of a different type of the same primary disease (for example colon versus breast cancer).

6.5 Therapeutic Product Royalties.  Except as set forth in Section 6.8, ImClone agrees to pay Dyax royalties on all Net Sales at the royalty rate of [*****]% for all Therapeutic Products, subject to Section 6.8(c).  Royalty payments shall be made together with the reports required by Section 6.11.

6.6 In Vitro Diagnostic Development Milestones.  Except as set forth in Section 6.8, within [*****] days after the occurrence of the following events (each an "In Vitro Diagnostic Development Milestone"), ImClone will make the following payments to Dyax in connection with each Target:

	
(a)  

	
$[*****] upon first filing for Marketing Authorization in the first Major Country for an In Vitro Diagnostic Product

	
(b)  

	
$[*****] upon grant of Marketing Authorization in each Major Market country, provided that payment with regard to the first country in Europe that is subject to the Marketing Authorization of the European Medicines Evaluation Agency shall satisfy the requirement for Europe, the intention being that this milestone shall not be paid more than three times, once for US, once for Europe and once for Japan.

6.7  Royalties on In Vitro Diagnostic Products.  ImClone agrees to pay Dyax royalties on all Net Sales at the royalty rate of [*****]% for all In Vitro Diagnostic Products. Royalty payments shall be made with the reports required by Section 6.11.

6.8 Financial Terms with Respect to Previously Sublicensed CAT Product Licenses.  Notwithstanding anything to the contrary contained in this Agreement, in the prior versions of this Agreement or in any sublicense previously executed with respect to the Previously Sublicensed CAT Product Licenses, ImClone shall make only the following payments to Dyax with respect to any Therapeutic Products developed to a Target that is the subject of one of the Previously Sublicensed CAT Product Licenses:

(a)           Therapeutic Development Milestones.

	
  

	
(i)

	

$575,000 upon initiation of first Phase I Clinical Trial for a Therapeutic Product;

 

	
  

	
(ii)

	
$1,000,000 upon initiation of the first Phase III Clinical Trial for a Therapeutic Product;

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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(iii)

	
$1,650,000 upon first filing for Marketing Authorization in the first Major Market country; and

	
  

	
(iv)

	
$2,000,000 upon first Marketing Authorization of a Therapeutic Product in the first Major Market country.

Each Therapeutic Development Milestone shall be paid only once in connection with each Target. Dyax acknowledges the prior receipt of the milestone payment referred to in item (i) above with respect to Therapeutic Products directed to each of the Targets covered by the Previously Sublicensed CAT Product Licenses.

	
  

	
(b)

	
Maintenance Fee: ImClone agrees to pay Dyax, on every anniversary of each of the Previously Sublicensed CAT Product Licenses, an annual license maintenance fee in the amount of $[*****] for each Target to which the Previously Sublicensed CAT Product Licenses apply.   This obligation shall continue on a Target by Target basis for each year or part thereof prior to the First Commercial Sale by ImClone of a Therapeutic Product for the applicable Target for which ImClone shall then owe royalties pursuant to Section 4.9(c) hereof.

	
  

	
(c)

	

Therapeutic Royalties:  [*****]% on Net Sales of all Therapeutic Products.  Royalty payments shall be made with the reports required by Section 6.11.

6.9 Length of Royalty Obligation.  Royalties to be paid pursuant to Sections 6.5, 6.7 and 6.8(c) shall be payable with respect to each Licensed Product on a country by country basis for a period of ten years from the date of First Commercial Sale of such Licensed Product; provided, however, with respect to any of the CAT Patents which have been licensed to CAT by the Medical Research Council, a royalty obligation of [*****]% of Net Sales of Therapeutic Products (which, for avoidance of doubt, are included in the royalty amounts set forth in Section 6.5) and [*****]% of Net Sales of In Vitro Diagnostic Products (which, for avoidance of doubt, is included in the royalty amount set forth in Section 6.7) shall be payable from the tenth anniversary of the First Commercial Sale until the last Valid Claim of such CAT Patent if such time period is longer than ten years from the date of First Commercial Sale.

6.10 No Offset.  Except as expressly provided herein, ImClone shall not be entitled to offset any royalties that may be due to any third party in connection with the development, manufacture, use or sale of any Licensed Product against any royalties due to Dyax under this Agreement.  ImClone shall be responsible for any and all fees, royalties and other payments that may be due to any third party for any License Product, provided that Dyax shall be responsible for the payment of all fees, royalties and other payments under the Third Party Phage Display Agreements.  All fees payable by ImClone under this Article 6 shall are non-refundable and, unless otherwise expressly provided, may not be credited against any other sums which may be payable by ImClone under this Agreement.

6.11 Commercial Reports and Payments.   Prior to the First Commercial Sale of a Licensed Product, ImClone agrees, upon request from Dyax, to provide annual summary reports on the status of its research and development activities with respect to such Licensed Product.  Commencing with the First Commercial Sale of a Licensed Product in any country, within [*****] days after the conclusion of each Royalty Period, ImClone shall deliver to Dyax a report showing on a country-by-country basis for the applicable Royalty Period, Net Sales of each Licensed Product made by or on behalf of ImClone.  The statement shall include details of Net Sales broken down to show the country of the sales and the total Net Sales in such country. If no royalties or other payments are due to Dyax for any Royalty Period, the report shall so state.  Concurrent with these reports, ImClone shall remit to Dyax any payment due for the applicable Royalty Period.  ImClone acknowledges and agrees that Dyax may furnish the reports provided hereunder to CAT and that Dyax will treat the reports as confidential and will require CAT to do the same.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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6.12  Payments in U.S. Dollars.  All payments due under this Agreement shall be paid by wire transfer in United States dollars in immediately available funds to the account set forth below or to such other account that may be subsequently designated to ImClone by Dyax in writing. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the Wall Street Journal) on the last working day of the calendar quarter preceding the applicable calendar quarter.  Such payments shall be without deduction of any withholding taxes, value-added taxes, exchange, duty, collection, or other similar charges, unless required by law.  Any tax (other than VAT) which ImClone is required to pay or withhold with respect of the payments to be made to Dyax hereunder shall be deducted from the amount otherwise due provided that, in regard to any such deduction, ImClone shall give Dyax such assistance, which shall include the provision of such documentation as may be required by any revenue authority and other revenue services, as may be reasonably necessary to enable Dyax to claim exemption therefrom or obtain a repayment thereof or a reduction thereof and shall upon request provide such additional documentation from time to time as is needed to confirm the payment of tax.

6.13 Records.  ImClone shall maintain complete and accurate records and books of account containing all data necessary for the calculation of the amounts payable to Dyax pursuant to this Agreement.  The rights of Dyax this Section 6.13 shall also be for the benefit of CAT.  The records and books of account shall be retained for seven (7) years following the calendar year to which they relate.  Upon Dyax’s written request a firm of accountants appointed by agreement between the parties, or failing such agreement within [*****] business days of the initiation of discussions between them on this point, Dyax shall have the right to cause an international firm of independent certified public accountants that has not performed auditing services for either party or their Affiliates acceptable to ImClone, 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 upon [*****] business days notice having been given by Dyax and at all reasonable times on business days for the purpose of certifying the Net Sales or other relevant sums calculated by ImClone during any calendar year were 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 firm of accountants shall undertake to ImClone 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, but shall only use the same for 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 year and will not go back over records more than two (2) years old;

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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(d)

	
ImClone shall make available personnel to answer queries on all books and records required for purpose of that certification; and

	
  

	
(e)

	
the cost of the account shall be the responsibility of ImClone if the certification shows it to have underpaid Dyax by more than [*****] and the responsibility of Dyax otherwise.

6.14. Late Payments.  Any payments by ImClone that are not paid on or before the date such payments are due under this Agreement, without prejudice to any right or remedy available to Dyax it shall be entitled to charge ImClone interest (both before and after judgment) of the amount unpaid at the annual rate of [*****] calculated on a daily basis until payment in full is made without prejudice to Dyax’s right to receive payment on the due date.

 

6.15. Payments Made by Wire Transfer.  All payments made to Dyax under this Agreement shall be made by wire transfer to the following bank account of Dyax, or such other bank account as notified by Dyax to ImClone from time to time:

 

[*****]

6.16 ImClone Acknowledgement.  ImClone acknowledges and agrees that the amount of milestones and royalties due under this Article 6 and the duration of the royalty payments have been chosen for the convenience of the Parties as payment for use of the Dyax Antibody Library and Dyax Materials during the Library License Term to identifiy, generate, develop, produce or obtain Antibody Compounds and Licensed Products.

 

ARTICLE 7.

OWNERSHIP OF TECHNOLOGY AND INVENTIONS

Dyax is and shall remain the owner of the Dyax Antibody Library and all Dyax Patent Rights.  Dyax shall also be and remain the owner of the Dyax Materials and ImClone shall assign to Dyax any improvements to the Dyax Materials that ImClone makes while using the Dyax Materials.  ImClone shall own the Antibody Compounds and the Licensed Products and all data developed pursuant to the licenses granted hereunder.  ImClone acknowledges that the license rights to the Dyax Antibody Library and Dyax Patent Rights as granted hereunder are non-exclusive and that Dyax has granted and will continue to grant the same or similar rights to third parties.   ImClone further acknowledges that Dyax or any third party may independently discover, make or develop the same or a similar Antibody Compound or Licensed Product as ImClone may discover, make or develop under this Agreement.  Subject to the foregoing acknowledgment, ImClone may seek patent protection for any of the Antibody Compounds or Licensed Products.  Each of Dyax and ImClone agree to execute such applications, assignments and other documents, and to take such other actions as may reasonably be requested by the other party from time to time, in order to give effect to the ownership provisions of this Article 7.

ARTICLE 8.

CONFIDENTIALITY AND PUBLICITY

8.1. Confidentiality.  With respect to any confidential information received from or disclosed by the other party ("Confidential Information"), each party undertakes and agrees to:

	
(a)  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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(b)  

	
ensure that only those of its officers, directors, consultants, advisors and employees who are directly concerned with the carrying out of this Agreement have access to the Confidential Information on a strictly "need to know" basis and are informed of the secret and confidential nature of it and are obligated to maintain it in keeping with the obligations of confidentiality and limited use applying to the party herein;

	
(c)  

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

	
(d)  

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

	
(e)  

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

ImClone acknowledges and agrees that Dyax shall be permitted to disclose this Agreement in confidence to Affimed, Biosite, Domantis, Genentech, XOMA and CAT to the extent reasonably necessary to comply with Dyax’s obligations pursuant to the Affimed License, Biosite License, Domantis License, Genentech License, XOMA License and the CAT License with regard to the transferring of rights granted pursuant to those agreements to ImClone hereunder.  The obligations of the parties under this Article 8 shall survive the termination or expiration of this Agreement.

8.2 The obligations of referred to in Section 8.1 above shall not extend to any Confidential Information which: (i) was in the public domain or became part of the public domain prior to this Agreement, through no fault of the receiving party (ii) is known to the receiving party (having been generated independently by the receiving party or by a third party in circumstances where it has not been derived directly or indirectly from any Confidential Information of the disclosing party prior to receipt from the disclosing party), provided that evidence of such knowledge is furnished by the receiving party to the disclosing party within [*****] days of receipt of that Confidential Information (iii) is or was disclosed to the receiving party at any time by a third party having no obligation of confidentiality with respect to such Confidential Information or (iv) is required to be disclosed (including as part of any regulatory submission or approval process) or for the purposes of patent protection or pursuant to federal or state securities laws or regulatory requirements, provided that prompt written notice of this requirement has been given to the protected party so that it may, if so advised, seek appropriate relief to prevent such disclosure, provided always that in such circumstances such disclosure shall be only to the extent so required and shall be subject to prior consultation with the protected party with a view to agreeing on the timing and content of such disclosure.

8.3 Publicity.  No public announcement or other disclosures concerning the terms of this Agreement shall be made, whether directly or indirectly, by any party to this Agreement (except confidential disclosures to professional advisors) without first obtaining the approval of the other party and agreement upon the nature and text of such announcement or disclosure except that: (i) a party may disclose those terms which it is required by regulation or law to disclose, provided that it takes advantage of all provisions to keep confidential as many terms as possible; and (ii) a party desiring to make such public announcement or other disclosure shall inform the other party of the proposed announcement or disclosure in reasonably sufficient time prior to public release, and shall provide the other party with a written copy thereof in order to allow such party to comment upon such announcement or disclosure.  Each party agrees that it shall cooperate fully with the other respect to all disclosures regarding this Agreement to the U.S. Securities and Exchange Commission and any other comparable foreign body including requests for confidential information or proprietary information of either party included in any such disclosure.  Notwithstanding the foregoing, ImClone shall have all rights and exclusive authority to issue any press release or public disclosure regarding Licensed Products developed hereunder.  ImClone agrees that Dyax may include ImClone on a list of Dyax licensees.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

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ARTICLE 9.

REPRESENTATIONS, WARRANTIES AND COVENANTS

9.1. Authorization.  Each party represents and warrants to the other that it has the legal right and power to enter into this Agreement, to extend the rights and licenses granted to the other in this Agreement, and to fully perform its obligations hereunder, and that the performance of such obligations will not conflict with its charter documents or any agreements, contracts, or other arrangements to which it is a party.

9.2 Additional Dyax Representations and Warranties.  Dyax represents and warrants that:

(a) it has ownership of the Dyax Antibody Library and the Dyax Patent Rights and that it has the full legal right and power to enter into the obligations and grant the rights and licenses set forth in this Agreement and such licenses are not in conflict with any licenses granted by Dyax to any third party or in conflict with any other obligation of Dyax to any third party;

(b) other than what has been disclosed by Dyax in its annual and periodic filings with the Securities and Exchange Commission, Dyax is not aware of any other action, suit, inquiry or investigation which is pending against Dyax relating to the Dyax Antibody Library, the Dyax Materials or the Dyax Patent Rights or that questions or threatens the validity of this Agreement;

(c) it does not own or have rights to any patent application or patents that would be infringed by use of the Dyax Antibody Library other than those as to which ImClone has been granted rights under this Agreement;

(d) it has not received from a Third Party, nor has any actual knowledge that any Third Party intends to assert any claim that the use of the Dyax Antibody Library infringes the intellectual property rights of a Third Party; and

(e) other than patents as to which ImClone has been granted rights under this Agreement, as of the Effective Date, it has no knowledge of a granted patent that would be infringed by use of the Dyax Libraries.

9.3 Dyax Covenants Regarding The Third Party Phage Display Agreements.  Dyax hereby covenants and agrees that with respect to each Third Party Phage Display Agreement for the duration that the activities of ImClone may require a license thereunder (i) it shall not consent to any amendment or modification or termination of the Third Party Phage Display Agreements that would materially and adversely affect the licenses granted hereunder without the written consent of ImClone, such consent not to be unreasonably withheld; (ii) it shall not assign any of the Third Party Phage Display Agreements without the written consent of ImClone, such consent not to be unreasonably withheld, except that such consent shall not be required for assignment in connection with the transfer or sale of all or substantially all of its antibody phage display business, or in the event of its merger, consolidation, change in control or similar transaction, provided that such assignment does not adversely affect the Third Party Phage Display Agreements or ImClone’s rights thereunder; and (iii) it shall promptly advise ImClone of any notice of a breach or intent to terminate any Third Party Phage Display Agreement that is received, and to the extent permitted under the Third Party Phage Display Agreement, ImClone shall have the right but not the obligation to cure any such breach.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

-22-

  

9.4 Dyax Disclaimer of Warranties.   With regard to the Dyax Antibody Library and the Dyax Patent Rights, nothing in this Agreement shall be construed as a warranty or representation by Dyax that ImClone’s use of the Dyax Antibody Library and the practice of the Dyax Patent Rights in connection therewith will result in any Antibody Compounds or Licensed Product or as a warranty or representation by Dyax that the exploitation of the Dyax Antibody Library, Dyax Patent Rights, or any Antibody Compound or any Licensed Product will be free from infringement of patents of third parties.  Other than as set forth in Sections 9.1, 9.2 and 9.3 hereof, DYAX DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND WITH REGARD TO THE DYAX PATENT RIGHTS, DYAX ANTIBODY LIBRARY AND THE DYAX MATERIALS, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ANY WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE OR THE WARRANTY OF NONINFRINGEMENT.

9.5 Limitation of Liability.   Neither party shall be liable to the other for consequential, incidental, indirect or punitive damages arising under this Agreement.

ARTICLE 10.

INDEMNIFICATION

10.1 ImClone Indemnification.  ImClone shall indemnify, defend, and hold harmless Dyax and its directors, officers, employees, and agents and their respective successors, heirs and assigns (the "Dyax Indemnified Parties") against any liability, damage, loss, or expense (including reasonable attorneys fees and expenses of litigation) incurred by or imposed upon the Dyax Indemnified Parties or any one of them in connection with any claims, suits, actions, demands, or judgments of any third party arising out of the use by ImClone of the Dyax Antibody Library or Dyax Materials or that concerns any Antibody Compound or Licensed Product made, used, sold or furnished by ImClone or for any breach by ImClone of its obligations under this Agreement or any sublicense granted by Dyax to ImClone under a CAT Product License, or of any of the obligations of ImClone with regard to the use of the Biosite Patent Rights, Biosite Know-How, Genentech Patent Rights, XOMA Patent Rights, XOMA Know-How and CAT Patent Rights as set forth in this Agreement, except to the extent that those claims are caused by the negligent or willful acts of the Dyax Indemnified Parties; provided, however, that, as a condition of such indemnification obligation, the Dyax Indemnified Parties or any one of them shall promptly notify ImClone of any such claim, suit, action or demand and shall give ImClone sole control, and full authority, information and assistance, in the defense or settlement thereof.

10.2 Dyax Indemnification.  Dyax shall indemnify, defend, and hold harmless ImClone and its directors, officers, employees, and agents and their respective successors, heirs and assigns (the "ImClone Indemnified Parties") against any liability, damage, loss, or expense (including reasonable attorneys fees and expenses of litigation) incurred by or imposed upon the ImClone Indemnified Parties or any one of them in connection with any claims, suits, actions, demands, or judgments arising out of the inaccuracy of any representation or the breach of any warranty, covenant, or obligation of Dyax contained in this Agreement, except to the extent that those claims are caused by the negligent or willful acts of the ImClone Indemnified Parties; provided, however, that, as a condition of such indemnification obligation, the ImClone Indemnified Parties or any one of them shall promptly notify Dyax of any such claim, suit, action or demand and shall give Dyax sole control, and full authority, information and assistance, in the defense or settlement thereof.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

-23-

  

10.3 The obligations and rights under this Article 10 shall survive the termination or expiration of this Agreement.

ARTICLE 11.

TERM AND TERMINATION

	
11.1  

	
Term of Library License.

 

	
(a)  

	
Unless earlier terminated in accordance with this Section 11.1, the term during which ImClone may continue to use and practice the Dyax Technology, Affimed Patent Rights. Biosite Patent Rights, Biosite Know-How Rights, Domantis Patent Rights, Genentech Patent Rights, XOMA Patent Rights and XOMA Know-How (the "Library License Term") shall commence on the Effective Date and remain in effect until the first to occur of (i) the sixth (6th)  anniversary of the Effective Date, or (ii) the termination of this Agreement.

 

	
(b)  

	
Provided that this Agreement has not been previously terminated, ImClone may extend the Library License Term beyond the sixth (6th) anniversary of the Effective Date, by delivering written notice to Dyax, which notice must be accompanied by an extension fee of [*****].  Upon receipt of such notice and such fee, the Library License Term shall be extended for an additional four (4) years (i.e. for years 6-10), provided that ImClone continues to pay the annual license maintenance fee of [*****] required under Section 6.2.

 

	
(c)  

	
ImClone shall have the right to terminate the Library License Term at any time by providing [*****] days prior written notice to Dyax.

 

	
(d)  

	
Upon expiration or termination of the Library License Term, the Library License will terminate and ImClone shall immediately cease all use of the Dyax Technology licensed under this Agreement and shall, as directed by Dyax, return to Dyax or destroy all quantities of the Dyax Antibody Library and Dyax Materials in ImClone's possession; otherwise this Agreement shall remain in full force and effect.

 

	
11.2  

	
Term of Agreement.

 

	
(a)  

	
Expiration.  Unless earlier terminated as provided in Sections 11.2(b), (c) and (d) below, this Agreement shall commence on the Effective Date and shall remain in effect with respect to each Antibody Compound until the expiration date of the last to expire of Valid Claims licensed to ImClone hereunder.

 

	
(b)  

	
Termination by ImClone.  ImClone shall have the right to terminate this Agreement at any time by providing [*****] days prior written notice to Dyax.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

-24-

  

 

	
(c)  

	
Termination by Dyax.  In the event that ImClone fails to make timely payment of any amounts due to Dyax under Article 6 of this Agreement, Dyax may terminate this Agreement upon [*****] days prior written notice to ImClone, unless ImClone pays all past-due amounts prior to the expiration of such [*****] day notice period.  In the event that (i) ImClone breaches its covenant under Section 5.3, or (ii) Imclone or any of its Affiliates, sublicensees or collaborators (to the extent they claim rights or receive rights under this Agreement) seeks a judgment of invalidity or unenforceability of, enters into any opposition to, and/or appeal from any decision with respect to validity or enforceability of the Dyax Patent Rights or the Dyax Technology or assists or otherwise cooperates with another party in any such attempt to obtain judgment, opposition or appeal unless compelled by a court of competent jurisdiction or otherwise required by law, Dyax may terminate this Agreement immediately by written notice to ImClone.

 

	
(d)  

	
Termination for Other Material Breach.  In the event that either party commits a material breach of any of its obligations under this Agreement other than those described in Section 11.2(c), and such party fails to remedy that breach within [*****] days after receiving written notice thereof from the other party, then the other party may immediately terminate this Agreement upon written notice to the breaching party.

 

	
11.3  

	
Effect of Expiration or Termination of Agreement.

 

	
(a)  

	
Upon the expiration or earlier termination of this Agreement and except as expressly provided for herein, all Confidential Information received hereunder shall be returned or destroyed at the disclosing party’s election (provided that the receiving party may retain one copy to the extent necessary to comply with any contractual or other legal obligations applicable thereto), all rights and licenses granted to ImClone hereunder shall terminate and ImClone shall immediately cease all use of the Dyax Technology licensed under this Agreement and shall, as directed by Dyax, return to Dyax or destroy all quantities of the Dyax Antibody Library and Dyax Materials in ImClone's possession.  Subject to the payment provisions of Article 6, ImClone may continue to use Antibody Compounds and licensed Antibody information in existence as of the date of expiration or termination, in accordance with the license rights set forth in Articles 3 and 4 herein, which shall survive the expiration or earlier termination of this Agreement with respect to such Antibody Compounds, as shall the rights of ImClone under the Previous CAT Product Licenses and any additional sublicense of any CAT Product License granted to Dyax by CAT in accordance with Section 4.2 before the end of the Term, subject to the terms of each such sublicense.

 

	
(b)  

	
In addition to the survival described in the last sentence of Section (a) above, the following provisions shall survive the expiration or termination of this Agreement:  Articles 1, 6, 7, 8, 10 and 12 and Sections 6.13, 9.3, 9.4 and this Section 11.3.

 

	
(c)  

	
Upon expiration or termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation that matured prior to the effective date of such expiration or termination.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

-25-

  

 

	
(d)  

	
In the event that ImClone disputes a payment obligation and ImClone notifies Dyax of such dispute and makes the payment under protest, then notwithstanding such payment, ImClone shall have the right to bring an action as to whether or not ImClone is obligated to make such payment and to the extent ImClone prevails in such action, Dyax shall return such disputed payment to ImClone.

 

	
(e)  

	
This Agreement may be terminated only as expressly provided in this Article 11.

 

ARTICLE 12.

MISCELLANEOUS

12.1 Relationship of Parties.  Nothing in this Agreement or in the course of business between Dyax and ImClone shall make or constitute either party a partner, employee or agent of the other.  Neither party shall have any right or authority to commit or legally bind the other in any way whatsoever including, without limitation, the making of any agreement, representation or warranty.

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

	
If to DYAX:

	
If to ImClone:

	  
	
Dyax Corp.

	
ImClone Systems Incorporated

	
300 Technology Square

	
180 Varick Street

	
Cambridge, MA 02139

	
New York, NY 10014

	
Attention: Vice President, Business Development

	
Attention: General Counsel

	
Facsimile: (617) 225-2501

	
Facsimile: [*****]

	
Attention: Corporate Counsel

	
Attention: _____________________

	
Facsimile: (617) 225-7708

	
Facsimile: ______________________

 

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

12.3 Assignment.  This Agreement may be assigned by Dyax to a party owning the rights to the Dyax technology without the prior written consent of ImClone.  The performance of the ImClone hereunder is of a personal nature and, therefore, neither this Agreement nor the licenses granted to ImClone under Articles 3 and 4 may be assigned, sublicensed (except as expressly provided under Articles 3 and 4), or otherwise transferred to a third party by the ImClone without the prior written consent of Dyax, and any such attempted assignment, sublicense or transfer, directly or indirectly, shall be void and of no force or effect.  Notwithstanding anything to the contrary herein, ImClone shall be entitled to assign and transfer its rights and obligations under this Agreement to a subsidiary or Affiliate without the prior written consent of Dyax provided that such subsidiary or Affiliate agrees in writing to expressly assume the obligations of ImClone hereunder, or to a successor in connection with a merger, consolidation, or sale of all or substantially all of its assets or that portion of its business pertaining to the subject matter of this Agreement with prompt written notice to Dyax of such merger, consolidation or sale.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

-26-

  

 

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

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

12.6 Force Majeure.  No party shall be liable for failure or delay in performance of any obligation under this Agreement if such failure or delay is caused by circumstances beyond the control of the party concerned, including, without limitation, failures resulting from fires, earthquakes, power surges or failures, accidents, labor stoppages, war, revolution, civil commotion, acts of public enemies, blockade, embargo, inability to secure materials or labor, any law, order, proclamation, regulation, ordinance, demand, or requirement having a legal effect of any government or any judicial authority or representative of any such government, acts of God, or acts or omissions of communications carriers, or other causes beyond the reasonable control of the party affected, whether or not similar to the foregoing.  Any such cause shall delay the performance of the affected obligation until such cause is removed.

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

12.8 Headings.  All headings used in this Agreement are inserted for convenience only and are not intended to affect the meaning or interpretation of this Agreement or any Article or Section hereof.

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

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

[SIGNATURE PAGE FOLLOWS]

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

-27-

  

 

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement as a sealed instrument effective as of the date first above written.

 

	
DYAX CORP.

	
IMCLONE SYSTEMS INCORPORATED

	  
	
By: /s/ Gustav Christensen

	
By: /s/ Larry Witte

	
Name: Gustav Christensen

	
Name: Larry Witte

	
Title: EVP & Chief Business Officer

	
Title: SVP, Research

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

-28-

  

ATTACHMENT A-1

Dyax Antibody Library:

[*****]

Dyax Materials:

[*****]

Written procedures for use of the Dyax Antibody Library and Dyax Materials.

Dyax Know-How:

Any written procedures relating to the use of the Dyax Antibody Libraries and Dyax Materials, including without limitation, the manual provided by Dyax.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

ATTACHMENT A-2

DYAX PATENT RIGHTS

[*****]

The parties agree that Dyax will periodically supplement the Dyax Patent Rights with new patents or patent applications necessary to use the Dyax Antibody Library to research, develop and make Antibody Compounds which are filed or acquired by Dyax subsequent to the Effective Date of the Agreement.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

ATTACHMENT B

[RESERVED]

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

ATTACHMENT C-1

 

AFFIMED PATENT RIGHTS

 

[*****]

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

ATTACHMENT D-1

BIOSITE PATENT RIGHTS

 

 

[*****]

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

ATTACHMENT D-2

Biosite Know-How Rights

 

 

[*****]

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

ATTACHMENT E-1

DOMANTIS PATENT RIGHTS

 

[*****]

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

ATTACHMENT F-1

GENENTECH PATENT RIGHTS

 

[*****]

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

ATTACHMENT G-1

XOMA FORM OF NOTICE

XOMA owns a number of patents covering various aspects of bacterial antibody expression and phage display.

 

XOMA has licensed these patents on a non-exclusive basis to Dyax.

 

Under the license agreement with XOMA:

 

●           Dyax cannot provide phage display services or transfer phage display materials, products or information to you without first showing you a redacted copy of its license from XOMA and this notice.

 

●           If you and Dyax enter into a written agreement by which you become a "Dyax Collaborator," then you will be permitted to use Dyax phage display services, Dyax phage display materials, products and information to research, develop and commercialize antibody products.

 

●           Collaborators do not, however, have the right to produce commercial quantities of such antibodies using XOMA's patented technology. Rather, collaborators only have the right to make research and development quantities of antibodies using the XOMA patent rights. Thereafter, unless the collaborator obtains a commercial production license from XOMA (which may be available), the collaborator must produce commercial quantities of antibodies using a method that does not infringe XOMA patent rights.

 

●           Therefore, if you and Dyax enter into a written agreement, that agreement must contain certain provisions specified in the license agreement with XOMA, including:

 

	
●  

	
Terms pursuant to which you, as the recipient of any transferred materials, would agree to abide by each of the limitations, restrictions and other obligations provided for by the license agreement with XOMA, including, without limitation, the restrictions on use of such transferred materials for purposes other than research and development.

 

	
●  

	
A covenant not to use transferred materials for any purpose other than for research and development purposes otherwise authorized by the license agreement with XOMA.

 

	
●  

	
A provision that the "first sale" doctrine does not apply to any disposition of transferred materials.

 

	
●  

	
An agreement by you to further dispose of transferred materials only to a third party who otherwise meets the definition of a "Dyax Collaborator" set forth in the license agreement with XOMA and who executes a written agreement in which it undertakes all of the obligations applied to the transferring party.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

ATTACHMENT G-2

 

XOMA PATENT RIGHTS

 

 

[*****]

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

ATTACHMENT H-1

CAT GATEKEEPING PROCEDURE

 

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

	
1.

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

	
2.

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

NOTES:

	
1.

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

	
2.

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

	
3.

	
Within [*****] after notice is given to Dyax of a refusal by CAT to grant a Product Licence in respect of any Nominated Target, Dyax may notify CAT that it wishes to appoint an Expert to make such enquiries of CAT as may be reasonably necessary for the Expert to be able to confirm to Dyax that the CAT Gatekeeping Procedure had been correctly applied by CAT in respect of such Nominated Target. CAT shall provide such information to the Expert as the Expert may reasonably determine is required in order to make such confirmation. For the avoidance of doubt the Expert shall not be entitled (unless CAT consents) to enter CAT premises in order to carry out its enquiries, shall only provide the confirmation to Dyax on a "Yes/No" basis and shall not give or be obliged to give to Dyax any other information obtained from CAT in respect of the CAT Gatekeeping Procedure or the relevant Nominated Target. The Expert shall, prior to making any enquiries of CAT, enter into a confidential disclosure agreement with CAT. Notwithstanding the foregoing, CAT shall not be obliged to respond to the enquiries of the Expert if to do so would, or would reasonably be expected to, cause a breach in terms of any agreement CAT may have with any other Third Parties; provided, however, that such disclosure subject to the confidential disclosure agreement shall be treated by CAT in the same manner as disclosure in its normal business operations. The Expert shall complete its investigations and provide the confirmation to Dyax (with a copy to CAT) within [*****] days after appointment by Dyax, and payment of the Expert's fee shall be conditioned on such delivery being timely made. If such written confirmation is not made within such [*****] days period, then a replacement Expert shall be appointed within [*****] days thereafter, subject to same terms and conditions stated above. If an Expert provides notice that he or she cannot complete the analysis because CAT has failed without good reason to provide any information requested as provided above, then CAT shall have no more than [*****] days to provide the information and the Expert shall then have no more than [*****] days after the information is provided to the Expert to evaluate the information and make a determination. Failure of the second Expert to provide such written confirmation to Dyax on a "Yes/No" basis within [*****] days after appointment shall be irrevocably deemed to be confirmation that CAT correctly applied the CAT Gatekeeping Procedure to the Nominated Target in question, provided, however that until (i) CAT provides all information that it is required to provide in accordance with this Appendix C and (ii) the expiration of any extension required for the Expert to evaluate such information, there shall not be deemed to be any such confirmation that CAT correctly applied the CAT Gatekeeping Procedure to the Nominated Target in question.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

 

 

 

 

ATTACHMENT H-2

FORM CAT PRODUCT LICENSE

 

 

Private & Confidential

 

____________________________________

 

 

CAMBRIDGE ANTIBODY TECHNOLOGY LIMITED (1)

And

DYAX CORP. (2)

 

____________________________________

 

 

PRODUCT LICENCE FOR ______

 

_____________________________________

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

THIS AGREEMENT is made:

 

BETWEEN:

 

	
(1)

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

 

	
(2)

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

 

BACKGROUND:

 

	
(a)

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

 

	
(b)

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

 

	
(c)

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

 

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

 

1. Definitions

 

	
1.1  

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

 

	
  

	
"Acceptance Fee" means _________ Dollars (US $_____).

 

	
  

	
"______________" means the options for licences granted pursuant to Clause __ of the Amendment Agreement.

 

	
  

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

 

	
  

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

 

	
  

	
"Amendment Agreement" means the agreement executed by Dyax and CAT on 3 January 2003, as amended.

 

	
  

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

 

	
  

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

 

	
  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

	
  

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

 

	
  

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

 

	
  

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

 

"Dyax Sublicensee" means any sublicensee of Dyax under this Agreement.

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

	
  

	
"Party" means CAT or Dyax.

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

	
"Product" means a Diagnostic Antibody Product or a Therapeutic Antibody Product.

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

	
"Status Report" has the meaning set forth in Clause 4.1.

 

	
  

	
"Target" means __________________ , as set out in Schedule 3.

 

	
  

	
"Territory" means all countries of the world.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

	
  

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

 

	
  

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

 

	
  

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

 

	
  

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

 

	
1.2  

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

 

	
1.3  

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

 

	
1.4  

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

 

	
1.5  

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

 

2. Grant of Product Licence

 

	
2.1  

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

 

	
2.2  

	
The Product Licence granted under this Agreement is pursuant to Dyax's exercise of one (1) option ________________ under the Amendment Agreement.

 

	
2.3  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

	
2.4  

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

 

3. Sub-Licensing

 

	
3.1  

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

 

	
3.2  

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

 

	
3.3  

	
Dyax (and where relevant each Dyax Sublicensee) will be liable for any breach of the sublicences granted in accordance with Clause 3.2; provided, however, that Dyax's liability for such breach by a sublicensee shall be limited to the amount that has been received or is thereafter received by Dyax directly or indirectly from such sublicensee pursuant to the sublicense agreement; and provided, further, that any written agreement with a sublicensee shall contain a provision pursuant to which CAT shall be a third party beneficiary of such sublicence agreement and shall have the right to enforce (including claim damages as a result of any breach) such sublicence agreement. If at any time CAT does have to enforce its rights under a sublicence agreement Dyax will, if requested by CAT, supply to CAT a copy of the relevant sublicence as soon as possible. For the avoidance of doubt, sublicensing by Dyax to a Dyax Sublicensee is permitted as is sublicensing by a Dyax Sublicensee to a sublicensee. No further sublicensing of the rights and obligations under this Agreement is permitted.

 

4. Status Report

 

Dyax will provide to CAT a brief summary of the status of each Product against the Target that Dyax or Dyax Sublicensees desire to Exploit under this Agreement ("Status Report"). During the Term, Dyax will submit such Status Report to CAT for a particular Product prior to the time Dyax or Dyax Sublicensees begin the first human clinical trial with respect to such Product. Dyax will prepare and provide to CAT an annual update to such Status Report by March 31st of each year which will summarize the status of the particular Product in the preceding calendar year.

 

5. Gatekeeping

 

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

 

6. Consideration

 

	
6.1  

	
Therapeutic Antibody Products

 

	
6.1.1  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

	
Initiation of first Phase I Clinical Trial

	
US $_____________

	
Initiation of first Phase III Clinical Trial

	
US $_____________

	
First filing for Marketing Authorisation in one Major Market country

	
US $_____________

	
Marketing Authorisation granted in the United States

	
US $_____________

	
6.1.2  

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

 

	
6.2  

	
Diagnostic Products

 

	
6.2.1  

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

 

	
First filing for Marketing Authorisation in one Major Market country

	
US $_____________

	
Marketing Authorisation granted in each Major Market Country

	
US $_____________

 

	
6.2.2  

	
With respect to Diagnostic Antibody Products, Dyax shall pay CAT royalties on a country-by-country basis in an amount equal to ____ percent (____%) of Net Sales of Diagnostic Antibody Products sold by or on behalf of Dyax or any Dyax Sublicensee.

 

	
6.3  

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

 

7. Provisions Relating to Payment of Consideration

 

	
7.1  

	
All milestone payments shall be paid by Dyax within thirty (30) days of the applicable milestone being achieved and no milestone payments shall be refundable or creditable against any other sum payable by Dyax hereunder for any reason.

 

	
7.2  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

	
7.3  

	
All payments shall be made free and clear of and without deduction or deferment in respect of any disputes or claims whatsoever and/or as far as is legally possible in respect of any taxes imposed by or under the authority of any government or public authority. Any tax (other than VAT) which Dyax is required to pay or withhold with respect of the payments to be made to CAT hereunder shall be deducted from the amount otherwise due provided that, in regard to any such deduction, Dyax shall give CAT such assistance, which shall include the provision of such documentation as may be required by any revenue authority and other revenue services, as may reasonably be necessary to enable CAT to claim exemption therefrom or obtain a repayment thereof or a reduction thereof and shall upon request provide such additional documentation from time to time as is needed to confirm the payment of tax. If by law, regulation or fiscal policy of a particular country, a remittance of royalties in the currency stipulated in Clause 7.2 above, as the case may be, is restricted or forbidden, notice thereof will be promptly given to CAT, and payment of the royalty shall be made by the deposit thereof in local currency to the credit of CAT in a recognized banking institution designated by CAT or its Affiliates. When in any country a law or regulation that prohibits both the transmittal and deposit of such payments ceases to be in effect, all royalties or other sums that Dyax would have been under obligation to transmit or deposit but for the prohibition, shall forthwith be deposited or transmitted promptly to the extent allowable.

 

	
7.4  

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

 

	
7.4.1  

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

 

	
7.4.2  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

	
7.4.3  

	
any such access examination and certification shall occur no more than once per Year and will not go back over records more than [*****] years old;

 

	
7.4.4  

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

 

	
7.4.5  

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

 

	
7.5  

	
All payments due to CAT under the terms of this Agreement are expressed to be exclusive of value added tax (VAT) howsoever arising. If CAT is required to charge VAT on any such payment, CAT will notify Dyax. Dyax will then use all commercially reasonable endeavours to obtain a VAT registration as soon as reasonably possible in order to allow it to reclaim any VAT so chargeable. If Dyax does obtain a VAT registration then VAT will be added to any relevant payment at the applicable rate. If having used all commercially reasonable endeavours Dyax is not able to reclaim the VAT (in whole or in part) the parties agree that the amount of any VAT payable will be shared between them equally.

 

	
7.6  

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

 

	
7.7  

	
If Dyax fails to make any payment to CAT hereunder on the due date for payment, without prejudice to any other right or remedy available to CAT it shall be entitled to charge Dyax interest (both before and after judgment) of the amount unpaid at the annual rate of LIBOR (London Interbank Offering Rate) plus four percent (4%) calculated on a daily basis until payment in full is made without prejudice to CAT's right to receive payment on the due date.

 

8. Confidentiality

 

	
8.1  

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

 

	
(a)  

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

 

	
(b)  

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

 

	
(c)  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

	
(d)  

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

 

	
(e)  

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

 

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

 

	
8.2  

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

 

	
(a)  

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

 

	
(b)  

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

 

	
(c)  

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

 

	
(d)  

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

 

	
8.3  

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

 

	
(a)  

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

 

	
(b)  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

9. Indemnification

 

	
9.1  

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

 

	
9.2  

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

 

	
9.3  

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

 

10. Infringement and Patent Prosecution

 

	
10.1  

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

 

	
10.2  

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

 

11. Termination

 

	
11.1  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

	
11.2  

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

 

	
11.2.1  

	
Dyax or a Dyax Sublicensee (or its sublicensee) has not filed an IND for a Therapeutic Antibody Product, or a 510(k) or IDE for a Diagnostic Antibody Product within five (5) years after the Commencement Date; or

 

	
11.2.2  

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

 

	
11.3  

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

 

	
11.4  

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

 

	
(a)  

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

 

	
(b)  

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

 

	
(c)  

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

 

	
(d)  

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

 

	
(e)  

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

12. Consequences of Termination

 

Upon termination of this Agreement for any reason whatsoever:

 

	
(a)  

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

 

	
(b)  

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

 

	
(c)  

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

 

	
(d)  

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

 

	
(e)  

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

 

13. Dispute Resolution

 

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

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

  

  

  

 

14. Notices

 

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

 

	
If to Dyax:

	
If to CAT:

	
Dyax Corp.

	
Cambridge Antibody Technology Limited

	
300 Technology Square

	
The Milstein Building

	
Cambridge, MA 02139

	
Granta Park, Cambridge

	
Attention: Chief Executive Officer  

	
Cambridgeshire CB1 6GH

	
Facsimile: (617) 225-2501

	
United Kingdom

	
 

	
Attention: Company Secretary

	
 

	
Facsimile: 011-44-(0)1223 471472

 

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

15. Governing Law

 

	
15.1  

	
This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

	
15.2  

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

 

16. Specific Performance

 

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

 

 

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17. Assignment

 

This Agreement may not be assigned by either party without the prior written consent of the other party, except that either Party may assign the benefit and/or burden of this Agreement to any Affiliate of it or any Third Party, provided that such Affiliate or Third Party undertakes to the other Party to be bound by the terms of this Agreement. This Agreement shall inure to the benefit of and be binding upon the parties and their respective lawful successors and assigns.

 

18. Compliance With Law

 

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

 

19. Amendment and Waiver

 

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

 

20. Severability

 

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

 

21. Entire Agreement

 

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

 

 

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

 

	
SIGNED by

	
)

	 
	  	
)

	 
	  	
)

	 
	
for and on behalf of

	
)

	Authorised Signatory 
	
CAMBRIDGE ANTIBODY 

	)	 
	
TECHNOLOGY LIMITED 

	)  	 
	 	 	 
	 	 	 
	 	 	 
	
SIGNED by

	)  	 
	
 

	
)

	 
	
 

	
)

	 
	
for and on behalf of

	

)

	Authorised Signatory 
	
DYAX CORP.

	
)

	 
	
 

	
)

	 

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

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ATTACHMENT H-3

CAT PATENT RIGHTS

 

 

[*****]

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.

 

 

 

 

ATTACHMENT I

 

SUBLICENSE AGREEMENT

This SUBLICENSE AGREEMENT ("Sublicense"), dated effective as of _______________, 20___ (the "Effective Date"), is entered into between DYAX CORP., a Delaware corporation, of 300 Technology Square, Cambridge, Massachusetts 02139 ("Dyax"), and _______________ of _______________ ("Sublicensee").

WHEREAS, under the terms of that certain Amended and Restated Licence Agreement by and between Dyax and Cambridge Antibody Technologies Limited ("CAT"), dated June 21, 2006, as amended to date (collectively, the “Amended Agreement”) Dyax has the right to obtain product licenses, on a target-by-target basis, to develop and commercialize therapeutic and diagnostic antibody products identified using CAT’s proprietary technology and know-how;

 

WHEREAS, Dyax and CAT have executed one such product license, under which CAT granted Dyax rights to develop and commercialize therapeutic and diagnostic antibody products to the target described on Attachment A (the "Product License");

 

WHEREAS, a redacted version of the Product License is attached hereto as Attachment B;

 

WHEREAS, pursuant to a Collaboration Agreement by and between Dyax and Sublicensee, dated effective _______________, 20___, (the "Collaboration Agreement"), Sublicensee has the right to obtain through Dyax a sublicense of the Product License; and

WHEREAS, Sublicensee desires to obtain through Dyax a sublicense of the Product License.

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

1.             GRANT OF SUBLICENSE.

Subject to the terms and conditions set forth in Section 2 of this Sublicense, Dyax hereby grants to Sublicensee a world-wide, non-exclusive license of the rights granted to it under Clause 2.1 of the Product License.  Sublicensee is permitted to sublicense its rights under this Sublicense in accordance with the terms and conditions set forth in Clauses 3.2 and 3.3 of the Product License.

2.             SUBLICENSEE OBLIGATIONS.

 

2.1           Obligations Under Product License. Sublicensee agrees to abide by all of the terms and conditions applicable to Dyax and/or Sublicensee (as a Dyax Sublicensee) under the Product License and agrees that all obligations of Dyax to CAT under the Product License shall also be obligations of Sublicensee to Dyax, except for (i) any obligations of Dyax contained in Clause 6 (Consideration) and Clause 7 (Provisions Relating to the Payment of Consideration) of the Product License and (ii) any portion of the Product License that has been redacted by Dyax. Notwithstanding the foregoing, Sublicensee's obligations pursuant to this Section 2.1 are conditional upon (i) Sublicensee receiving timely notice (in the manner provided in Section 10.2 of the Collaboration Agreement) from Dyax relating to (a) any change in such terms and conditions, and (b) any notice, claim or demand made by CAT under the Product License; and (ii) the parallel performance of Dyax to the extent both parties are required to perform to satisfy the obligations of Dyax or Sublicensee (as a Dyax Sublicensee) under the Product License.  Sublicensee shall be entitled to the benefit of any diligence period extensions obtained by Dyax under Clause 11.2.1 of the Product License that are requested and paid for by Sublicensee.  All payments for any such extensions shall be creditable to Sublicensee to the fullest extent allowed Dyax by CAT.

 

 

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2.2           Obligations Under Collaboration Agreement.  Sublicensee acknowledges and agrees that all of the terms and conditions contained in the Collaboration Agreement, as amended to date, remain in full force and effect, and Sublicensee agrees to abide by all of its obligations set forth thereunder.

 

2.3           Milestones and Royalties.  Notwithstanding anything to the contrary contained in the Product License, the sublicense granted to Sublicensee under Section 1 of this Sublicense shall be subject to only the milestone and royalty payments set forth in Article 4 of the Collaboration Agreement and Sublicensee shall have no payment obligations under the Product License or this Sublicense.

2.4           Indemnification for Sublicensee Breach.  Sublicensee shall indemnify and hold Dyax and its Affiliates, officers, directors, employees and agents ("Dyax Indemnified Parties") harmless from and against any liability, damage, loss or expense (including reasonable attorney fees and expenses of litigation) incurred by the Dyax Indemnified Parties to CAT under or arising out of the Product License, to the extent that such liability, damage, loss or expense was incurred by any of the Dyax Indemnified Parties as a result of a breach of this Sublicense or the Library License Agreement by Amgen.

3.             DYAX OBLIGATIONS.

3.1           Obligations Under Collaboration Agreement.  Dyax acknowledges and agrees that all of the terms and conditions contained in the Collaboration Agreement, as amended to date, remain in full force and effect, and Dyax agrees to abide by all of its obligations set forth thereunder.

3.2           Amendment to Product License.  Dyax agrees that it shall not amend the Product License in any way that materially and adversely affects or reduces the rights and licenses granted to Sublicensee under this Sublicense.

4.             TERM AND TERMINATION.

This Sublicense shall expire upon expiration of the Product License and shall terminate upon termination of the Product License; provided that, at Sublicensee's election, upon termination of the Product License, Sublicensee's rights hereunder will continue in force provided that Sublicensee is not in breach of this Sublicense and agrees to enter into a direct agreement with CAT upon the terms of the Product License.

5.             MISCELLANEOUS.

CAT shall be a third party beneficiary of this Sublicense and shall have the right to enforce its terms (and claim damages as a result of any breach).  This Sublicense shall be not be assignable by Sublicensee, except that Sublicensee may assign the benefit and/or burden of this Sublicense to any Affiliate of it or any Third Party ("Affiliate" and "Third Party" being defined in the Collaboration Agreement), provided that such Affiliate or Third Party undertakes to Dyax to be bound by the terms of this Sublicense. This Sublicense shall be binding upon, and shall inure to the benefit of, the parties hereto and their successors and assigns. This Sublicense may be not be amended except pursuant to a written instrument signed by parties hereto.  No provisions of this Sublicense may be waived except by an instrument in writing signed by the party sought to be bound.  Neither this Sublicense nor any part hereof, including this provision against oral modifications, may be modified, waived or discharged except pursuant to a written agreement signed by both parties.

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

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IN WITNESS WHEREOF, the parties have caused this Sublicense to be executed by their respective duly authorized representatives as of the Effective Date.

 

	
DYAX CORP.

	
SUBLICENSEE:

	  
	
By: _________________________

	
By: _________________________

 

 

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FIRST AMENDMENT

TO

AMENDED AND RESTATED SECOND TECHNOLOGY TRANSFER AND LICENSE AGREEMENT

This FIRST AMENDMENT TO THE AMENDED AND RESTATED SECOND TECHNOLOGY TRANSFER AND LICENSE AGREEMENT ("First Amendment"), dated effective as of March 31, 2011 (the "Amendment Date"), is entered into by and between DYAX CORP., a Delaware corporation having a principal place of business at 300 Technology Square, Cambridge, Massachusetts 02139 ("Dyax") and IMCLONE SYSTEMS, A WHOLLY OWNED SUBSIDIARY OF ELI LILLY AND COMPANY, an Indiana corporation, of Lilly Corporate Center, Indianapolis, Indiana  46285 ("ImClone").  This First Amendment amends the Amended And Restated Second Technology Transfer and License Agreement, dated March 31, 2007, by and between Dyax and ImClone, (the “Second Amended and Restated Agreement”) which is attached hereto as Exhibit A.  Terms not otherwise defined herein shall have the respective meanings attributed to them in the Second Amended and Restated Agreement

WHEREAS, Dyax and ImClone previously entered into a Technology Transfer and License Agreement, dated effective March 13, 2000 (the “First Agreement”) under which ImClone obtained from Dyax rights to use Dyax’s antibody phage display technology;

WHEREAS, the First Agreement was superseded and replaced by a Second Technology Transfer and License Agreement, entered into between Dyax and ImClone effective as of March 31, 2003 (the “Second Agreement”), under which ImClone obtained from Dyax additional rights, including the right to use the Dyax Antibody Library, for the purpose of discovering antibodies having novel binding properties;

WHEREAS the Second Agreement was amended and restated effective as of March 31, 2007 (“Second Amended and Restated Agreement”)

WHEREAS, Dyax and ImClone wish to recognize that certain defined terms from the First Agreement are referenced in the Second Amended and Restated Agreement, and agree that those defined terms survive, and;

WHEREAS, Dyax and ImClone desire to amend certain terms and conditions set forth in the Second Amended and Restated Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this First Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

I.              AMENDMENTS.

Section 4.1(b) of the Original Agreement is hereby deleted in its entirety and replaced with the following in lieu thereof:

 

 

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(b)

	
ImClone hereby acknowledges and agrees that the rights granted to ImClone under Section 4.1(a) with respect to the CAT Patent Rights are subject to the following terms and conditions:

	
i.  

	
CAT Product License:

	
1  

	
As required by the CAT License, in the event that ImClone wishes to develop and commercialize any Product with respect to a Target, then prior to the commencement of the first Phase I Clinical Trial in relation to any Therapeutic Antibody Product or prior to the first filing for Marketing Authorization for any Diagnostic Antibody Product, ImClone must first obtain a sublicense under a CAT Product License with respect to such Target.

	
2  

	
Dyax hereby warrants and represents that, under the CAT License, CAT has granted Dyax certain options to obtain CAT Product Licenses.  During the Library License Term, Dyax will reserve for ImClone options for up to [*****] CAT Product Licenses to be exercised by Dyax on ImClone’s behalf in accordance with the terms of this Agreement (the "Initial Product License Allotment"). Upon the date on which ImClone has depleted its Initial Product License Allotment, provided that Dyax has unexercised options available under the CAT Agreement and provided further that such unexercised options have not been reserved for other Dyax collaborators or for Dyax's internal development programs, Dyax shall reserve for ImClone options for up to an additional [*****] CAT Product Licenses to be exercised by Dyax on ImClone’s behalf (the "Second Product License Allotment").  In addition, after exercising the options reserved for ImClone in the Second Product License Allotment, then, upon each request of ImClone, provided that Dyax has unexercised options available under the CAT Agreement and provided further that such unexercised options have not been reserved for other Dyax collaborators or for Dyax's internal development programs, Dyax shall exercise [*****] options for CAT Product Licenses on ImClone's behalf in accordance with the terms set forth herein.  For the avoidance of doubt, the parties hereto acknowledge and agree that the Previously Sublicensed CAT Product Licenses shall be in addition to and shall under no circumstances be counted against the Initial Product License Allotment or the Second Product License Allotment.

 

 

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3  

	
In order to determine whether a CAT Product License can be obtained with respect to a Target, ImClone must first request that Dyax submit such Target (the "Nominated Target") through the CAT Gatekeeping Procedure described in herein.

	
ii.  

	
CAT Gatekeeping.

	
1  

	
Any request by ImClone that Dyax submit a Nominated Target through the CAT Gatekeeping Procedure shall be in writing and must identify the Nominated Target against which Antibody Compounds are directed (which must be accompanied by a GenBank® accession number, if available, or similar information which uniquely identifies such Nominated Target).

	
2  

	
Upon receipt of a request by ImClone that Dyax submit a Nominated Target through the CAT Gatekeeping Procedure under  Section 4.1(b)(i) above, Dyax shall promptly (but in no event more than [*****] days) request that CAT subject the Nominated Target to CAT's Gatekeeping Procedure (as described in Attachment H-1 hereto) in accordance with the CAT License.

	
3  

	
If CAT notifies Dyax under the CAT License that the Nominated Target has not passed the CAT Gatekeeping Procedure, then Dyax shall promptly notify ImClone in writing that Dyax will not be granted a CAT Product License, and ImClone shall have no right to obtain a CAT Product License above with respect to such Nominated Target; provided, however, that if requested by ImClone, Dyax will exercise its rights with respect to an Expert as set forth in paragraph 3 of Attachment H-1 hereto.

 

 

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4  

	
If CAT determines that the Nominated Target has passed the CAT Gatekeeping Procedure (or the Expert determines that CAT did not correctly apply the CAT Gatekeeping Procedure as set forth in paragraph 3 of Attachment H-1 hereto), then pursuant to the terms of the CAT License, CAT is obligated to notify Dyax (the "Target Acceptance Notification") that a CAT Product License is available for such Target and Dyax shall promptly notify ImClone in writing thereof.

	
iii.  

	
Pursuant to the terms of the CAT License and subject to ImClone's payment of a non-refundable reservation fee of [*****], ImClone shall have the right to place a Nominated Target on the Reservation List, whereby such a Nominated Target will be reserved for a period of [*****] months from the date that Dyax received the Target Acceptance Notice for such Nominated Target.  ImClone may extend the reservation period by an additional [*****] months subject to ImClone’s payment of a non-refundable reservation fee of [*****] at least [*****] business days before the expiration of the [*****] month reservation period.  In no event shall ImClone have more than [*****] Nominated Targets placed on the Reservation List at any one time.  For the purposes of this Section 4.1(b)(iii), Reservation List shall mean the list of Nominated Targets for which Dyax will reserve a CAT Product License during the reservation period; provided that if, at any time a Nominated Target is on the Reservation List in accordance with this Section 4.1(b)(iii), Dyax receives notice from CAT that a Third Party has requested from CAT an exclusive license withrespect to a Nominated Target pursuant to an agreement entered into between CAT and that Third Party prior to January 3, 2003, Dyax will then so notify ImClone.  ImClone will then have [*****] days from the date of such notice to decide whether or not it wishes to take a CAT Product License for that Nominated Target.  If ImClone notifies Dyax within [*****] days that it does not wish to take such a CAT Product License or fails to notify Dyax during such [*****] day period, then such Nominated Target shall no longer be reserved and CAT may grant an exclusive license to a Third Party with respect to such Nominated Target.  The [*****] and [*****] reservation fees are non-refundable and may not be credited towards any other amounts due under this Agreement.

 

 

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iv.  

	
Sublicense of CAT Product License.  Upon receipt of a Target Acceptance Notification, or at any point during the reservation period described in Section 4.1(b)(iii), ImClone may, by written notice and by payment of the Product License Fee referred to in Section 6.3 of the Agreement, request that Dyax secure a CAT Product License for the Nominated Target.  In such event, Dyax shall have [*****] business days in which to obtain a CAT Product License with respect to such Nominated Target, and to deliver to ImClone a fully executed redacted copy thereof.  Within [*****] business days following delivery of such redacted copy, Dyax and ImClone shall enter into a written sublicense agreement, the form of which is attached hereto as ATTACHMENT I.

	
v.  

	
Effect of Termination of CAT License.  Pursuant to the terms of the CAT License, upon termination of the CAT License, Dyax represents and warrants that (1) any CAT Product License granted to Dyax before the date of termination shall continue and the Parties will continue to be bound by the terms of the CAT License in relation to any such CAT Product License, and (2) any sublicense granted by Dyax to ImClone under a CAT Product License pursuant to this Agreement will continue in force provided that ImClone is not in breach of the relevant sublicense and ImClone agrees to enter into a direct agreement with CAT upon the terms of the CAT Product License Agreement.  The Parties acknowledge that ImClone derives independent and significant value from the agreements set forth in the CAT License and may rely thereon and to that extent only shall have the right to enforce the provisions of Section 4.1(b)(v)(2) above and be a third party beneficiary for that purpose only.

	
vi.  

	
ImClone Acknowledgement.  As required by the CAT License, ImClone hereby acknowledges and agrees that Dyax must request, and be granted a CAT Product License, in relation to a Therapeutic Antibody Product prior to Dyax or ImClone's commencement of the first Phase I Clinical Trial in relation to such Therapeutic Antibody Product or in relation to a Diagnostic Antibody Product prior to Dyax or ImClone's first filing for Marketing Authorization in relation to such Diagnostic Antibody Product.

	
vii.  

	
Third Party Beneficiary Right.  As required by the CAT License, ImClone agrees that CAT shall be a third party beneficiary of the any sublicense granted by Dyax to ImClone under a CAT Product License and CAT shall have the right to enforce (including claim damages as a result of any breach) of such sublicense.  If at any time CAT does have to enforce its rights under such sublicense Dyax will, if requested by CAT, supply to CAT a copy of the relevant sublicense as soon as possible.

 

 

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II.             MISCELLANEOUS

(A)           From and after the date of this First Amendment, the term "Agreement" as used in the Second Amended and Restated Agreement shall mean the Second Amended and Restated Agreement , as amended by this First Amendment.  Except as expressly amended hereby, the terms of the Second Amended and Restated Agreement  shall remain in full force and effect and all such terms are hereby ratified and confirmed.

(B)           This First Amendment may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.

(C)           This First Amendment shall be governed by the laws of the laws of the Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed by their respective duly authorized representatives as of the Amendment Date set forth above.

 

	
DYAX CORP.

	
IMCLONE SYSTEMS INCORPORATED

	  
	
By: /s/ Andrew D. Ashe

	
By: /s/ Bernhard Ehmer, M.D.

	 	 
	
Name: Andrew D. Ashe

	
Name: Bernhard Ehmer, M.D.

	 	 
	
Title: Vice President and Associate General Counsel         

	
Title: President

 

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.

Asterisks denote such omission.iRobot Exhibit 10.1 3.29.14

MANUFACTURING SERVICES AGREEMENT
between
KIN YAT INDUSTRIAL COMPANY LIMITED
and
IROBOT CORPORATION
    

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

MANUFACTURING SERVICES AGREEMENT

This Non-Exclusive Manufacturing Agreement (this “Agreement”) is entered into by and between Kin Yat Industrial Company Limited, (“Kin Yat”), having offices at 7/F., Galaxy Factory Building, 25-27 Luk Hop Street, San Po Kong, Kowloon, Hong Kong, and iRobot Corporation, a Delaware corporation (“iRobot”), having its principal place of business at 8 Crosby Drive, Bedford, MA  01730. Kin Yat and iRobot are referred to herein as “Party” or “Parties”.
    
RECITALS

A.    Kin Yat is in the business of providing sophisticated manufacturing services that are unique in kind and quality, including designing, developing, manufacturing, testing, configuring, assembling, packaging and shipping highly specialized electronic assemblies and systems.

B.    iRobot is in the business of designing, developing, distributing, marketing and selling products containing highly specialized electronic assemblies and systems.

C.    Whereas, the Parties desire that Kin Yat manufactures, tests, configures, assembles, packages and/or ships certain electronic assemblies and systems pursuant to the terms and conditions set forth in this Agreement.

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

TERMS
		
	1
	Definitions.  In addition to terms defined elsewhere in this Agreement, the capitalized terms set forth below shall have the following meaning:

1.1    “Additional Services” means services such as, design for manufacturability, manufacturing design test support, computer assisted design for manufacturability, test development services, volume production and advanced packaging technologies all as specified and approved by iRobot and agreed to by Kin Yat.

1.2    “Affiliate” means with respect to a Person, any other Person which directly or indirectly controls, or is controlled by, or is under common control with, the specified Person.  For purposes of the preceding sentence, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, or direct or indirect ownership (beneficially or of record) of, or direct or indirect power to vote, 50% or more of the outstanding shares of any class of capital stock of such Person (or in the case of a Person that is not a corporation, 50% or more of any class of equity interest).

1.3    “Assigned Components” means the components or materials specifically identified in Schedule 1 as “assigned” and for which iRobot has identified the applicable supplier from whom Kin Yat is authorized to source such component or material for incorporation into the Product.

1.4    “AVL” means the confidential list of Suppliers Designated by iRobot from which Kin Yat is authorized to purchase the applicable Assigned Components and Generic Components, if any for use in the manufacture of Products.

1.5    “Class Failure” “Class Failure” means a defect caused by (i) Kin Yat’s failure to manufacture the Product to conform to the Specifications or other requirements in this Agreement, or (ii) the failure of Kin Yat to comply with any applicable law, rule, regulation, court order or decree that is applicable to Kin Yat’s performance of its obligations set forth in this Agreement, or (iii) the gross negligence or willful misconduct of Kin Yat’s personnel performing Manufacturing Services for iRobot under this Agreement; wherein, such defect occurs in more than [***], attributable to the same root cause, of the total number of a particular Product (as identified by the applicable Product serial numbers) supplied under this Agreement over a rolling [***] period within the Warranty Period.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

    

1.6    Kin Yat shall be defined to include any Kin Yat Subsidiary. (if applicable).

1.7    “Commercially Reasonable Efforts” means those efforts that would be deemed both commercially practicable and reasonably financially prudent after having taken into account all relevant commercial considerations.  “Relevant commercial considerations” shall be deemed to include, without limitation, (1) all pertinent facts and circumstances; (2) financial costs; (3) resource availability and impact; (4) probability of success; and (5) other commercial practicalities.

1.8    “Components” means those Assigned Components, Generic Components, and Consigned Components.

1.9    “Consigned Components” means those components or materials specifically identified in Schedule 1 as “consigned” and provided by or on behalf of iRobot to Kin Yat for assembly into Products.  

1.10    “Defect” means Product that does not conform to Specifications within the warranty Period, resulting from, but not limited to, non-conforming Components, materials, processes, packaging, and transportation.

1.11    “EDI” shall mean electronic data interchange.

1.12    “Effective Date” shall mean the date upon which the terms and conditions of this Agreement shall become effective by and between the Parties. The Parties have agreed that the Effective Date of this Agreement shall be September 23, 2013.

1.13    “Encumbrance” means any encumbrance, lien, charge, hypothecation, pledge, mortgage, title retention agreement, security interest of any nature, adverse claim, exception, right of set-off, any matter capable of registration against title, option, right of pre-emption, privilege or any contract to create any of the foregoing.

1.14    “Fee and Price Schedule” shall mean the prices and fees set forth in Schedule 2 for the applicable Product identified therein, and any future Fee and Price Schedule for new Product as added in writing from time to time upon mutual agreement of the Parties.

1.15    “FCA” means that Kin Yat must at its own expense and risk deliver the Product cleared for export into the custody of the designated carrier at the applicable Port of Origin.

1.16    “Generic Components” means the components or materials identified in Schedule 1 for incorporation into the Product and for which iRobot has not identified any specific supplier or source from whom Kin Yat is authorized to source such component or material. 

1.17    “including” shall be defined to have the meaning “including, without limitation.”

1.18    “in writing” shall mean written documents, EDI with phone confirmation, verified faxes and successfully transmitted e-mails.

1.19    “Intellectual Property” means any and all intellectual property and tangible embodiments thereof, including without limitation inventions, discoveries, designs, specifications, developments, methods, modifications, improvements, processes, know-how, show-how, techniques, algorithms, databases, computer software and code (including software and firmware listings, assemblers, applets, compilers, source code, object code, net lists, design tools, user interfaces, application programming interfaces, protocols, formats, documentation, annotations, comments, data, data structures, databases, data collections, system build software and instructions), mask works, formulae, techniques, supplier and customer lists, trade secrets, graphics or images, text, audio or visual works, materials that 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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document design or design processes, or that document research or testing, schematics, diagrams, product specifications and other works of authorship. 

1.20    “Intellectual Property – KIN YAT” shall mean both Intellectual Property – Created by Kin Yat and Intellectual Property - Existing by Kin Yat, collectively.

1.21    “Intellectual Property – Created by Kin Yat” means any improvements to the Technical Manufacturing Information – KIN YAT that are newly created or developed, and reduced to practice by Kin Yat in (i) preparing any Product provided pursuant to this Agreement, or (ii) performing the Manufacturing Services or any other work provided pursuant to this Agreement; but shall not include any Intellectual Property - Existing by Kin Yat.

1.22    “Intellectual Property – Existing by “Kin Yat” means any Intellectual Property, including the Technical Manufacturing Information – KIN YAT, created or developed by Kin Yat outside the scope of this Agreement during the Term or owned or controlled by Kin Yat prior to the execution of this Agreement; and all improvements, modifications or enhancements to the foregoing made by or on behalf of Kin Yat.

1.23    “Intellectual Property Rights” means, collectively, all rights in, to and under patents, trade secret rights, copyrights, trademarks, service marks, trade dress and similar rights of any type under the laws of any governmental authority, including without limitation, all applications and registrations relating to the foregoing.

1.24    “iRobot Intellectual Property” means all Intellectual Property, tangible embodiments thereof and all other materials provided or made available to Kin Yat by iRobot, including, without limitation the Specifications.

1.25    “iRobot Property” means all property, including all Product and Consigned Components, other Components paid for my iRobot, inventories, work in process (WIP), Loaned Equipment, Specifications, test equipment, software and documentation, and support maintenance or design documentation, furnished to Kin Yat by iRobot or otherwise paid for by iRobot in connection with this Agreement for Kin Yat’s use in performing its obligations hereunder.

1.26    “iRobot Quarter End” means iRobot’s fiscal calendar which follows the 4-4-5 week format identified in Schedule 6, which Schedule shall be updated by iRobot on an annual basis on or before December 1st.

1.27    “Lead-time” means the mutually agreed upon minimum amount of time in advance of shipment that Kin Yat must receive a Purchase Order in order to deliver Product by the requested delivery date.

1.28    “Loaned Equipment” means capital equipment (including tools) which is loaned to Kin Yat by or on behalf of iRobot to be used by Kin Yat to perform the Manufacturing Services and includes all equipment, tools and fixtures purchased specifically for iRobot, by Kin Yat, to perform the Manufacturing Services and that are paid for in full by iRobot.

1.29    “Manufacturing Services” means the services performed by Kin Yat hereunder which shall include but not be limited to manufacturing, testing, configuring, assembling, packaging and/or shipping of the Product, and all Reasonable and Customary Support Services, and any Additional Services, all in accordance with the Specifications.

1.30    “Marks” means trademarks, service marks, trademark and service mark applications, trade dress, trade names, logos, insignia, symbols, designs or other marks identifying a Party or its products.

1.31    “Materials Declaration Requirements” means any requirements, obligations, standards, duties or responsibilities pursuant to any environmental, product composition and/or materials declaration laws, directives, or regulations, including international laws and treaties regarding such subject matter; and any regulations, interpretive guidance or enforcement policies related to any of the foregoing, including, but not limited to, the following examples:  Directive 2002/95/EC of the European Parliament and of the Council of 27 January 2003 on the restriction of the use 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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of certain hazardous substances in electrical and electronic equipment (“RoHS”), Directive 2002/96/EC of the European Parliament and of the Council of 27 January 2003 on waste electrical and electronic equipment (“WEEE”), and European Union Member State implementations of the foregoing; the People’s Republic of China (PRC) Measures for the Administration of the Control of Pollution by Electronic Information Products (China RoHS) (电子信息产品污染控制管理办法) promulgated on February 28, 2006 (including any pre-market certification (“CCC mark”) requirements thereunder and including relevant standards adopted by the PRC Ministry of Information Industry or other applicable PRC authority); PRC General Administration of Quality Supervision, Inspection and Quarantine’s Circular 441 (2006); Japanese Industrial Standard C0950:2005(J-Moss Japan RoSH); the California Electronic Waste Recycling Act of 2003; Act on the Recycling of Electrical and Electronics Equipment and Automobiles (1.1.2008) (Korea RoHS), Waste Act (2004) and secondary legislation (based on EU directives ) (Croatia), Regulation (EC) No 1907/2006, Regulation concerning the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), establishing a European Chemicals Agency amending Directive 1999/45/EC and repealing Council Regulation (EEC) No 793/93 and Commission Regulation (EC) No 1488/94 as well as Council Directive 76/769/EEC and Commission Directives 91/155/EEC, 93/67/EEC, 93/105/EC and 2000/21/ECand/or other similar legislation. The Materials Declaration Requirements shall include compliance with Brazil RoHS, Mexico RoHS and Argentina RoHS as each of these countries promulgates their own legislation.

1.32    Conflict Minerals.
Kin Yat represents and warrants that it is in full compliance with conflict minerals laws, including, without limitation, Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 as it may be amended from time to time and any regulations, rules, decisions or orders relating thereto adopted by the Securities and Exchange Commission or successor governmental agency responsible for adopting regulations relating thereto (collectively, “Dodd-Frank Section 1502”).  Kin Yat must cooperate with iRobot to make available to iRobot and/or its agents, material declarations that identify the sources of and amount of all substances contained in the Products. Unless iRobot specifically agrees in writing that a particular Product may contain a particular material, Kin Yat will also provide a statement that the Products do not contain various materials at issue in applicable laws and regulations. Kin Yat must declare each Product’s compliance to all applicable hazardous material legislation and identify any substances that are banned or must be declared under applicable laws. In addition, Kin Yat will use Commercially Reasonable Efforts to make available documentation that supports the declaration. Without limiting the generality of the foregoing, Kin Yat agrees to disclose to iRobot, upon iRobot’s request, to the extent known or discoverable by Kin Yat following reasonable inquiry, the original source of all minerals contained in the Product. If Kin Yat does not know the original source of the minerals, Kin Yat agrees to cooperate with iRobot, including disclosing from whom Kin Yat purchased the minerals and urging others to disclose such information, so that the original source of minerals can be accurately determined and reported. Kin Yat shall comply with all laws regarding the sourcing of minerals, including, without limitation, laws prohibiting the sourcing of minerals from mines controlled by combatants and Dodd-Frank Section 1502.  Without any further consideration, Kin Yat shall provide such further cooperation as iRobot may reasonably require in order to meet any obligations it may have under conflict minerals laws, including, without limitation, under Dodd-Frank Section 1502.

1.33    “Minimum Volume” means the minimum volume, if any, set forth on Schedule 1 for a particular Product.

1.34    “Newly Created Intellectual Property” means, other than the Kin Yat Intellectual Property, any and all Intellectual Property, tangible embodiments thereof and all other materials created, developed, reduced to practice, or otherwise resulting from any work, Manufacturing Services or other services performed by either or both Parties, including, but not limited to, by any of its or their employees, agents or contractors, under this Agreement.

1.35    “Non-Conforming Product” means any Product that does not conform to the Specifications.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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1.36    “Non-Disclosure Agreement” means that certain Mutual Non-Disclosure Agreement between the Parties dated August 29, 2006, attached hereto as Schedule 4.

1.37    “NRE Costs” shall consist of expenses, excluding the Waived NRE Costs, incurred by Kin Yat under this Agreement, including design engineering services, testing, fixturing and tooling and other out-of-pocket costs, in each case for work performed by Kin Yat for iRobot pursuant to iRobot’s prior written consent.  For the avoidance of doubt, NRE Costs shall not include any costs or expenses incurred by Kin Yat for any Reasonable and Customary Support Services.

1.38    “Port of Origin” means [***] or another port designated by iRobot in writing.

1.39    “Packaging and Shipping Specifications” means the packaging and shipping specifications set forth in Schedule 1 and otherwise supplied and/or approved by iRobot.

1.40    “Person” means any corporation, business entity, natural person, firm, joint venture, limited or general partnership, limited liability entity, limited liability partnership, trust, unincorporated organization, association, government, or any department or agency of any government.

1.41    “Product Specifications” means the technical specifications and requirements provided by iRobot to Kin Yat for the manufacture and supply of Products or the provision of Manufacturing Services, including all manufacturing information, technical data and manuals, design information, drawings, documentation, packaging requirements, testing requirements, Specifications, or any other criteria written and provided to Kin Yat by iRobot, including the Quality and Test Procedures, the Packaging and Shipping Specifications, and the Materials Declaration Requirements.

1.42    “Products” means the products manufactured and assembled by Kin Yat on behalf of iRobot under this Agreement as identified in Schedule 1 (or any subsequent Schedule 1 prepared for any product to be manufactured hereunder) including any updates, renewals, modifications or amendments thereto. 

1.43    “Production Start Date” means the first day immediately following the business week during which Kin Yat manufactures and delivers against  the product quantities listed in Schedule 1 

1.44    “Proprietary Information and Technology” means “Proprietary Information” as defined in the Non-Disclosure Agreement, as amended in Section 16 below.

1.45    “Reasonable and Customary Support Services” mean all services and activities related to reporting for iRobot and its customers, root cause analysis, testing, trials, inventory audits and reconciliation, development and delivery of samples, participation and support of any new Product introduction.

1.46    “Product” means any and all configurations of the “Product” SKUs manufactured and assembled by Kin Yat on behalf of iRobot under this Agreement as identified in the initial Schedule 1 to this Agreement.

1.47    “Specifications” means the technical specifications for manufacturing Products under this Agreement as set forth in Schedule 1, any bill of materials, designs, schematics, assembly drawings, process documentation, test specifications, current revision number, and Approved Vendor List, and other requirements otherwise supplied and/or approved by iRobot.  Specifications may be amended from time to time by amendments in the form of written engineering change orders agreed to by the Parties.

1.48    “SOW” means the statement of work for each Product set forth in any Schedule 1 as amended in writing from time to time upon mutual agreement of the Parties.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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1.49    “Subsidiary(ies)” means any corporation, partnership, joint venture, limited liability entity, trust, association or other business entity of which a Party or one or more of its Subsidiaries, owns or controls more than 50% of the voting power for the election of directors, managers, partners, trustees or similar parties.

1.50    “Suppliers Designated by iRobot” means suppliers designated, specified and/or approved by iRobot.

1.51    “Technical Manufacturing Information – KIN YAT” means the manufacturing information, process and technology used by Kin Yat or third parties under its control to design, develop, test or manufacture the Products including, but not limited to: (i) specifications, software, test software, schematics, drawings, designs, mask works, topography or other materials pertinent to the most current revision level of manufacturing of the Products; (ii) copies of all inspection, manufacturing, test and quality control procedures and any other work processes; (iii) jig, fixture and tooling designs; (iv) Kin Yat general knowledge and information relating to the Products; and (v) support documentation.

1.52    “Term” means the Initial Term and each Renewal Term, collectively.

1.53    “Quality and Test Procedures” means the testing specifications, quality requirements, standards, procedures and parameters supplied and/or approved by iRobot, including without limitation, the specifications and quality requirements plans for the Product and certain Components attached hereto as Schedule 3.

1.54    “Waived NRE Costs” means, collectively, [***].

2List of Schedules.  This Agreement includes the following Schedules for each Product to be manufactured hereunder, which are hereby incorporated herein and made a part of this Agreement:

Schedule 1 – Statement of Work and Specifications
Schedule 2 – Fee and Price Schedule (Final Kin Yat Quote)
Schedule 3 – Quality and Test Procedures
Schedule 4 – Non-Disclosure Agreement
Schedule 5 – Trademark Usage Guidelines
Schedule 6 – iRobot Quarter End

3Manufacturing Services.  Kin Yat will manufacture the Product in accordance with the Specifications and any applicable Purchase Order.  When requested by iRobot, and subject to appropriate fee and cost adjustments, Kin Yat will provide Additional Services for existing or future Product manufactured by Kin Yat for iRobot.  iRobot shall be solely responsible for the sufficiency and adequacy of the Specifications.  

3.1    Quality and Test Procedures.  All Products manufactured and supplied by Kin Yat shall, at minimum, adhere to this Agreement and the Specifications attached hereto.  Kin Yat shall continuously perform the applicable quality tests and procedures and monitor such compliance at all times, including during the preparation for production as well as during production.  In addition to the minimum required tests specified, Kin Yat shall employ its own internal quality system and apply the necessary tools, processes and procedures to ensure that the contracted Product covered by this Agreement complies with the Specifications. This may include, but not be limited to, process control for parts and assemblies, incoming inspection of fabricated or sourced parts, final inspections, subassembly inspections and testing, etc.  iRobot shall be solely responsible for the sufficiency and adequacy of the Specifications. Kin Yat is responsible for designing and/or purchasing and maintaining all necessary test and fixture equipment to conduct such testing and procedures. Kin Yat is responsible for worker’s training, worker’s instructions, preventive and/or on-conditional (as needed) maintenance plans, and calibration plans. 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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3.2    Packaging and Shipping.  Kin Yat will package and ship the Product in accordance with the Packaging and Shipping Specifications.  iRobot shall be solely responsible for the sufficiency and adequacy of the Packaging and Shipping Specifications. In the event Kin Yat fails to comply with the Packaging and Shipping Specifications, Kin Yat will reimburse iRobot for the cost of rework to the extent that such error can be rectified with rework. 

3.3    Items to be Supplied by iRobot.  iRobot shall supply to Kin Yat, according to the terms and conditions specified herein, iRobot Proprietary Information and Technology and, if applicable, the Loaned Equipment if any, and Consigned Components pursuant to Section 12.1. iRobot will also provide to Kin Yat all Specifications, Quality and Test Procedures, Packaging and Shipping Specifications, Product design drawings, approved vendor listings where applicable, material component descriptions (including approved substitutions), manufacturing process requirements, and any other specifications necessary for Kin Yat to perform the Manufacturing Services.  iRobot shall be solely responsible for delay in delivery, defects and enforcement of warranties related to the Consigned Components.

3.4    Items to be Supplied by Kin Yat.  Kin Yat will employ the Kin Yat Manufacturing Process, the Reasonable and Customary Support Services, any required manufacturing technology, manufacturing capacity, labor, manufacturing and quality related fixtures, design services in support of manufacturing process (to include fixture design), transportation logistics (as required by FCA Port of Origin), systems and facilities necessary for Kin Yat to perform the Manufacturing Services.  It is expected that engineering support (at Kin Yat’s expense) of product, packaging and process improvements will continue for the life of the Product, even after all requirements are met. Tooling that is designed and fabricated specific to manufacture, assembly, inspection or testing of iRobot Product is the sole property of iRobot, including related design documentation

3.5     Facilities Access.  iRobot shall have the right, during normal business hours by appointment and at its expense to inspect, review, monitor and oversee the Manufacturing Services, provided that such inspection shall not disrupt Kin Yat’s normal business operations.  iRobot shall cause each of its employees, agents and representatives who have access to Kin Yat’s facilities, to maintain, preserve and protect all Proprietary Information and Technology of Kin Yat and the confidential or proprietary information and technology of Kin Yat’s other customers in accordance with the Non-Disclosure Agreement.  iRobot shall further have the right to bring iRobot’s customers to Kin Yat’s facility, by appointment and under the same obligations to Kin Yat surrounding protection of Kin Yat’s Proprietary Information and Technology and Kin Yat’s customers’ confidential or proprietary information and technology. iRobot’s employees have the right to obtain relevant artifacts (such as reports, process tracking charts etc.) and take photographs and videos of iRobot related Products, Components, manufacturing processes, tests, fixtures, tools or items at any time during the inspection with the consent of Kin Yat whose consent shall not be unreasonably withheld.

3.6    Materials Procurement. 

3.6.1    Kin Yat will use Commercially Reasonable Efforts to procure Assigned Components and Generic Components from the applicable designated supplier per iRobot’s AVL, where applicable, and otherwise from suppliers chosen by Kin Yat and approved by iRobot, in amounts necessary to fulfill Purchase Orders against the Forecasts.  Kin Yat will be responsible for the quality inspection of all Components (except for the Consigned Components) and all other parts and adherence to the Product Specifications in the assembly and manufacturing process.  iRobot will be responsible for the part functionality set forth in the iRobot Specifications.  Kin Yat is responsible for managing, and the performance of, the suppliers of the Assigned Components and Generic Components, including but not limited to purchasing, component inventory control, customs paperwork and Value Added Tax (VAT), and is ultimately responsible for verifying that all Components conform to the Product Specifications.  iRobot will be responsible for managing the pipeline of iRobot controlled Consigned Components.  Kin Yat will be responsible for managing the pipeline of all Assigned Components, Generic Components, and any Consigned Components controlled by Kin Yat.  Kin Yat shall use Commercially Reasonable Efforts to obtain terms and conditions that from all suppliers that allow return privileges for Generic Components (subject to agreed upon reasonable minimum order quantities).  iRobot may authorize Kin Yat to procure Generic Components and Assigned Components necessary, without a Purchase 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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Order, by issuing a written authorization to purchase such Components (“Material Authorization”), to meet specific Forecast or Purchase Order demand.  In the event of schedule changes, Kin Yat shall use Commercially Reasonable Efforts to cancel all applicable material and parts purchase orders and reduce material and parts inventory through return for credit programs or allocate such materials and parts for other customer orders. iRobot shall be responsible for all liability for materials and parts Kin Yat cannot return or reuse elsewhere after Commercially Reasonable Efforts to mitigate such liability, if those materials were ordered by Kin Yat acting on iRobot’s Material Authorization or Purchase Order.  Kin Yat’s obligation to exercise Commercially Reasonable Efforts to return/reuse any materials shall extend to all Components (except for the Consigned Components not controlled by Kin Yat) regardless of classification.  

3.6.2    End of Life Component Reporting. Kin Yat is responsible for continuous monitoring of the AVL for end-of-life component condition. Kin Yat is responsible for periodic reporting, no less frequently than [***] of the market condition for each component of any currently in production by iRobot’s product AVL.

3.6.3    Long-Lead Components.  Kin Yat shall not purchase any Component designated in Schedule 2 as a “long lead” Component by iRobot without a Material Authorization. Kin Yat shall use Commercially Reasonable Efforts to continuously improve lead time for all Components.  With iRobot’s prior written consent, Kin Yat may pre-purchase Generic Components and Assigned Components, or pre-build sub assemblies, modules, core robots or even completed SKU quantities in order to meet Forecast volumes, or anticipated volumes under Purchase Orders.

3.6.4    Exclusive Components.  With respect to any Assigned Components or Consigned Components (controlled by Kin Yat) that have been customized by a supplier or manufacturer specifically for any iRobot Product, Kin Yat shall require each such supplier not to sell or supply such custom Component to any other Person.

3.7    Materials Declaration.

3.7.1    iRobot shall notify Kin Yat in writing of the specific Materials Declaration Requirements that iRobot determines to be applicable to the Products and shall be solely liable for the adequacy and sufficiency of such determination and information.  Kin Yat shall be responsible for collecting, and having available at all times, all third party supplier’s documentation certifying compliance with such Materials Declaration Requirements with respect to any and all components, parts or material used in connection with the Manufacturing Services under this Agreement.  Kin Yat shall utilize its supplier qualification process to ensure that each supplier, its Components and its documentation are trustworthy and in compliance with all such Materials Declaration Requirements.  Upon written request of iRobot, Kin Yat shall provide to iRobot copies of such documents, including any compliance certificates. 

3.7.2    Without limiting the foregoing Section 3.7.1, Kin Yat shall ensure that it has enforceable agreements with each of its suppliers under this Agreement, excluding suppliers of Consigned Components, so that Kin Yat may fulfill Kin Yat’s obligations under this Section 3.7.1 and that iRobot is an intended third party beneficiary under such agreements.  

3.8    Product Evaluation. Acceptance of the Product will occur upon iRobot’s or its designee’s receipt of the Product.  Notwithstanding the foregoing, iRobot reserves the right to inspect or evaluate the Product to determine if it conforms, in all material respects, to the Specifications, either at Kin Yat’s premise or third party location.  Given reasonable and adequate advance notification to Kin Yat and by appointment, iRobot may, at its discretion, perform inspections of the Product at random or on a continual basis, on site at Kin Yat’s premises. In the event that the Product does not meet the Specifications, such Product will be deemed Non-Conforming and iRobot will have all available remedies with respect to Non-Conforming Products as set forth in this Agreement.   Acceptance, inspection or evaluation by iRobot does not relieve Kin Yat of its obligations to the services and warranties as set forth in this Agreement.

3.9    Purchase Order Performance.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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3.9.1    Kin Yat shall fill and deliver the Products purchased under a Purchase Order by the due date specified on such Purchase Order.  Purchase Orders to Kin Yat will be launched at lead-times mutually agreed between Kin Yat and iRobot in advance of issuance of Purchase Orders. 

3.9.2    Kin Yat agrees that time is of the essence with respect to all deliveries and performance.  If Kin Yat fails to timely perform or deliver within [***] of the delivery requirements of any standalone Purchase Order from iRobot, for reasons under Kin Yat’s direct control, Kin Yat is liable to iRobot for all direct, reasonable costs incurred as a result of such delay including expediting costs. In the event of a delay, Kin Yat shall use Commercially Reasonable Efforts to expedite delayed Products and/or performance, shall pay all reasonable expediting costs, including expedited delivery costs.

3.9.3    For purposes of this Agreement, “On–time” delivery means: delivery of 100% of the Products purchased under a Purchase Order are delivered by the due date indicated on iRobot’s Purchase Order for such Products minus  [***], plus [***].  Kin Yat will monitor and report to iRobot monthly “On-time” delivery per Purchase Order, and such report shall include the number of Purchase Orders placed by iRobot within the Lead Time versus number of Purchase Orders delivered On-time.

3.10    Assigned and Consigned Components. 

3.10.1    iRobot may elect to assign a specific supplier and part number for any component or material, including for example; rechargeable batteries, battery chargers, masked IC components, motors, packaging material, and gears.  In such case, Kin Yat shall source such Assigned Components from the applicable supplier and implement supply optimization inventory practices.  Kin Yat will be responsible for all purchasing, quality control, component inventory control, [***] inventory management, customs paperwork and VAT for all Assigned and Generic Components. Kin Yat shall handle all Components as required by the Product Specification and as otherwise instructed by iRobot, and shall be responsible for any and all expenses related to its compliance with such material handling requirements.  In the event that iRobot elects to transfer to Kin Yat the purchasing responsibility for any Consigned Component, Kin Yat shall assume such responsibility as soon as reasonably practicable.  The Parties will work in good faith to identify and implement all reasonable measures to allow for Kin Yat to assume such purchasing responsibility for such Consigned Component.  Except for any Consigned Components controlled by Kin Yat pursuant to this Section 3.10.1, iRobot shall be solely responsible for delay in delivery, defects and enforcement of warranties related to all Consigned Components.

3.10.2    Kin Yat will segregate, conspicuously identify and safeguard all iRobot owned and Consigned Components in such fashion to clearly identify the Consigned Components as the property of iRobot.  Kin Yat shall maintain all Components, at its own expense, in efficient working order and good repair, and otherwise in accordance with the Product Specifications. 

3.10.3    Upon placement of Consigned Components into Kin Yat’s facility, title and possession of the materials shall transfer to iRobot as if it were an actual shipment of Product to iRobot.  Insurance covering the Consigned Components will be the responsibility of iRobot. Such insurance includes a waiver of subrogation against Kin Yat.  Kin Yat shall hold inventory on consignment for support of iRobot’s Products and business at levels mutually agreed upon by iRobot and Kin Yat, but no less than an amount to satisfy Purchase Orders against the current Forecasts.  Kin Yat will at all times utilize [***] inventory management for all Consigned Components.  In the event that Kin Yat’s failure to utilize [***] inventory management for all Consigned Components results in any such Component remaining in Kin Yat’s inventory for more than [***], then Kin Yat shall, at its own expense, coordinate with the applicable supplier for the return and replacement of such Components for new or properly updated Components.  If “iRobot” does not place Purchase Orders that consume Consigned Components consistent with applicable Forecast, the Parties will negotiate in good faith the disposition of Consigned Components held by Kin Yat.  Kin Yat shall provide to iRobot upon request an accounting of all Consigned Components and all other Components, Products and materials of iRobot at Kin Yat’s premises or otherwise under Kin Yat’s control with reasonable details. 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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3.10.4    Sales of Products and Components. Without iRobot’s prior written consent, Kin Yat shall not, directly or indirectly, sell, supply or otherwise transfer any Product or Component to any Person other than iRobot or iRobot’s designated customer or distributor.

4Quality

4.1    Governing Quality documents.

4.1.1    General Quality Requirements.  Kin Yat shall comply with the requirements stated therein for defining general iRobot supplier quality performance.

4.1.2    Production Line Test Specification (PLTS).  The PLTS is provided to Kin Yat by iRobot in order for Kin Yat to establish a production line test process to verify and to demonstrate that the contracted product has been assembled and minimally tested to meet the product requirements as defined in the relevant product specifications

4.1.3    Design Validation Test Specification (DVTS).  Suppliers who provide design services to iRobot shall demonstrate that the contracted product has been designed and qualification tested according to the DVTS to meet the performance requirements of its intended application as defined in the relevant product specifications.

4.2     Quality Management System.  Kin Yat shall maintain a Quality System that is certified to an internationally recognized quality management system standard, such as ISO 9001 or equivalent. 
4.3     Engineering Changes.  Kin Yat shall not make any changes to product or design without receiving prior written approval from iRobot for the change request and for implementation of the change into production.
4.4.     Manufacturing Changes.  Kin Yat shall not make any changes to the manufacturing process that may affect the product form, fit, function or safety without receiving prior written approval from iRobot.
4.5     Defects.   Defects in product resulting in failure to meet iRobot product specifications, due to inadequate assembly procedures and production verification testing are the responsibility of the Kin Yat regardless of whether the defect occurred during manufacturing or after iRobot acceptance.    
4.6    Corrective Action.  In the event that defects are produced, Kin Yat shall notify iRobot and implement containment activities to prevent further defective product from affecting iRobot supply chain.  For defective product within Kin Yat’s supply chain, Kin Yat shall make necessary arrangements, at its sole expense, to screen, rework and / or replace.  Kin Yat shall supply to iRobot a written corrective action plan of its root cause(s) investigation and actions to prevent recurrence of identified root cause(s)
4.7     Quality Control Plan (QCP).  Kin Yat shall develop a Quality Control Plan (QCP), approved by iRobot, to define the necessary process controls and production testing and inspection methods to ensure the fabrication and assembly processes deliver products that meet the Specifications supplied by iRobot.
4.8      Subcontractor Qualification. Kin Yat shall be responsible for qualifying all  subcontractors of all Assigned Components and Generic Components pursuant to Kin Yat’s existing qualification methodology and process. 
4.9     Serial Number identification and traceability.  Kin Yat shall identify each unit of the contracted product produced with a unique identifier number.  This serial number shall provide information relevant to the date of production, shift, line, and traceability to critical component lots/batches and processes.    The format of this serial number shall be agreed upon between Kin Yat and iRobot prior to commencement of production. 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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4.10    Certifications. Regulatory compliance certifications are required as a condition for the production, shipment, sale, and disposal of all iRobot products, and as such, iRobot is obligated to maintain a commitment to meeting all regulatory compliance requirements.  As a condition of the compliance certification process, the Products and Kin Yat’s manufacturing facility shall be subject to periodic audits and certification testing.  Kin Yat shall provide objective evidence that it meets such requirements pertaining to all regulatory, quality, and compliance requirements and will provide such information upon request from iRobot.  Objective evidence shall include, but is not limited to, existing certification documents and certification inspection reports from Kin Yat and each of its suppliers.
4.10.1 Product Specific Certifications. iRobot is responsible for maintaining all existing product certifications.  Kin Yat shall comply, and shall cause its suppliers to comply, with any and all Product specific, certification-related requirements such as: informing iRobot of the source and manufacturing part number of every Component and validation that Kin Yat’s processes are compliant to such certification requirements.  Kin Yat shall support all recertification requirements for all Product certifications.  All Product licenses and Product certifications shall be in iRobot’s name.  In the event that iRobot requires Product changes which result in Product recertification, iRobot will bear any licensing and external testing fees for all such Product certifications.  In the event that Kin Yat requires Product changes which result in Product recertification, Kin Yat will notify iRobot immediately and bear any licensing and external testing fees for all product certifications.

4.10.2    Manufacturing Facility Specific Certifications. Kin Yat shall support and maintain any pre-requisite site specific requirements related to the Product certification requirements.  Kin Yat shall bear any fees associated with these pre-requisite site specific certifications.  All pre-requisite site specific certifications shall be maintained in Kin Yat’s name.  In the event that iRobot requires product or business changes which result in additional site specific certifications by Kin Yat, Kin Yat shall promptly take all actions necessary to comply with such requirements.  In addition, Kin Yat shall promptly execute documents and take such further action as iRobot shall reasonably request in order to comply with any certification required by any customer or distributor of iRobot.  
4.10.3    Records Retention.  For a period of [***] from delivery of each Product (items produced under the [***] are considered Product), Kin Yat shall maintain accurate and complete records for all Products manufactured hereunder, including, but not limited to, all configuration and engineering records.  This shall include all records relating to product traceability to ensure both forward and reverse traceability.  Records shall contain, as a minimum, all information relating to the following:
[***]

4.10.4    Product specification and standards. All Products must conform in all respects to the Product Specifications provided by iRobot for the items stated on the bill of materials or Purchase Order.  Any Kin Yat proposed change to Product requires mutual agreement in writing prior to implementing such change.  Kin Yat shall notify iRobot in writing and receive approval of any changes to Components, other materials, parts or sources of supply, process chemistries, test procedures, quality reporting or other major processes, and to ensure that any such changes do not compromise the requirements under this Agreement or the Specifications, quality, or reliability of Products ordered, or which may affect form, fit or function.

4.10.5    Secure Testing Facility.  Kin Yat shall provide intellectual property secure on-site facilities for iRobot’s final inspection quality control team, as well as the necessary inspection technicians to assist during inspections.

4.11    Returned Products.  Kin Yat shall establish a program for analyzing Product returns and for tracking Product return rates and failure types. Kin Yat will utilize iRobot provided Return product information in such analysis and tracking.  Kin Yat shall provide objective evidence to demonstrate appropriate corrective actions, as needed, to address Product Returns root cause.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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4.12    Recalls. If iRobot reasonably decides to, or is required by any government authority or court of competent jurisdiction to, initiate a product recall, withdrawal or field correction with respect to, or if there is any governmental seizure of, any Product, iRobot will notify Kin Yat of the details regarding such action, including providing copies of all relevant documentation concerning such action.  Kin Yat will assist iRobot in investigating any such situation and all regulatory contacts that are made and all activities concerning seizure, recall, withdrawal or field correction will be coordinated and made by iRobot, and all communications in connection with any recall, shall come solely from iRobot.  If any such recall, withdrawal, field correction or seizure results from (i) failure of any Product to conform to the Specifications or any warranty or other requirement set forth in this Agreement, or (ii) the failure of Kin Yat to comply with any applicable law, rule, regulation, standard, court order or decree or (iii) the gross negligent or intentional wrongful act or omission of Kin Yat in connection with the production of Product hereunder, then, in addition to the rights, remedies and obligations under Section 5, Kin Yat shall be responsible for the full cost and expense of any such seizure, recall, withdrawal or field correction.  For the purposes of this Agreement, the expenses of any recall, withdrawal, field correction or seizure shall include, without limitation, the out-of-pocket expenses of notification and destruction or return of the recalled Product and all other out-of-pocket costs incurred in connection with such recall, in addition to any lost profits of either Party under any circumstances or any administrative or overhead charge.

		
	5
	Warranty & Remedy.

5.1    Kin Yat Warranty. [***] warranty period.

5.1.1    Product Warranty. Kin Yat represents, warrants and covenants that: (i) it will perform the Manufacturing Services and manufacture the Product in accordance with IPC-A 610 Class 2 workmanship standard, the Product Specifications, applicable law, and the terms and conditions of this Agreement, (ii) the Products will be manufactured, processed and assembled by Kin Yat, and be free from defects in workmanship in accordance with the Product Specifications, (iii) the Products will conform, in all material respects, to the Product Specifications, be new or newly manufactured and include only new Components, and (iv) the Products will be free and clear of all Encumbrances. The foregoing warranty shall apply to any Product that is repaired or re-manufactured by or on behalf of Kin Yat under this Agreement. This Product warranty is extended to, and may only be enforced by, iRobot. 

5.2    Components Warranty.  Kin Yat will pass on to iRobot all warranties from Component suppliers to the extent that they are transferable. Kin Yat shall use Commercially Reasonable Efforts to ensure that all Assigned Components used in the Product are procured from suppliers on the AVL, unless otherwise agreed to by the Parties in writing.

5.3    Survival of Warranty.  Product warranties will survive any inspection, delivery, acceptance or payment by iRobot and be in effect for the longer of (i) [***] from the date of invoice of the Product from Kin Yat to iRobot, (ii) for Products purchased by an end-user customer within [***] from the date such Product is initially delivered to iRobot or to iRobot’s designated carrier, [***] of the warranty period from iRobot to such end-user customer for such Product, or (iii) such other term as agreed to by the Parties, following the date such Product is initially delivered to iRobot or to iRobot’s designated carrier (such period, the “Warranty Period”).  Should there be a breach of any of the warranties specified during the Warranty Period, Kin Yat will either (A) repair or replace the Product that contains a defect caused by a breach of the warranty set forth herein; or (B) issue a credit to iRobot in an amount equal to [***]. Product warranties will survive for the full term of the Warranty Period, regardless of whether such Product becomes obsolete or whether Kin Yat ceases to manufacture such Product or ceases to provide the Manufacturing Services.

5.4    Repair or Replacement of Defective Product. Kin Yat may elect, in its sole discretion, to repair or re-manufacture any Non-Conforming Products caused by a breach of the warranty set forth in this Section 5.  Any such repair or re-manufacture shall be pursuant to Kin Yat’s standard return material authorization process and procedure (“RMA”), pursuant to which iRobot will request an RMA number from Kin Yat for such Non-Conforming Product.  

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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iRobot shall then consign the Non-Conforming Products along with objective documentation of the applicable breach of warranty (“Defect”), FOB Kin Yat’s repair facility in the same country and region as the Non-Conforming Products (or such other location as agreed to by the Parties in writing), and specify the Kin Yat assigned RMA number.  Kin Yat will repair or re-manufacture the Non-Conforming Products within [***] of receipt by Kin Yat of such Non-Conforming Products, and in the event the Defect is confirmed, Kin Yat will reimburse iRobot for the reasonable cost of transporting the Non-Conforming Products to Kin Yat’s designated facility and Kin Yat will deliver the repaired or re-manufactured Products, FCA iRobot’s designated destination.  If no such Defect is confirmed, iRobot shall reimburse Kin Yat for all fees, costs and expenses incurred to analyze and, if requested by iRobot, repair or re-manufacture the non-defective Products and iRobot shall bear responsibility for all transportation costs to and from Kin Yat’s designated repair facility. 

5.5    Class Failure.  In the event that Kin Yat is notified (such notification being oral or otherwise) of a Class Failure, Kin Yat shall:

5.5.1    Within 24 hours of learning of such Class Failure, provide iRobot with a status report and details of a proposed interim solution; and

5.5.2    No later than [***] following notification of such Class Failure, provide iRobot with a root cause analysis and corrective action plan.

In each of the foregoing cases, iRobot will make available such information and assistance reasonably required to allow Kin Yat to conduct its root cause analysis and to provide its corrective action plan.

5.6    Component Failures. In the event that a Non-Conforming Product is the result of a Component, Kin Yat will pass on to iRobot all available warranty remedies pursuant to Section 5.2. In addition, Kin Yat will negotiate with the Component suppliers (save for the suppliers of Consigned Component not controlled by Kin Yat), at iRobot’s discretion and with iRobot present or on iRobot’s behalf, for additional remedies outside of the Component warranty pursuant to Section 5.2.  Kin Yat shall not enter into any settlement with respect to Component failures that affects iRobot’s rights or interests without iRobot’s prior written approval, which shall not be unreasonably withheld.  In the event that such negotiations do not resolve the matter to iRobot’s reasonable satisfaction, and the available warranty remedies under Section 5.2 do not cover the full cost of Component repair or replacement, Kin Yat will provide iRobot with prior written notice regarding any additional costs required to repair or re-manufacture the affected Products. In the event that cost details are not readily available and iRobot requires immediate repair or replacement of the affected Products, iRobot may elect to authorize Kin Yat to proceed with repair or re-manufacture of the affected Products on a not to exceed basis. iRobot will be liable for any additional costs actually incurred by Kin Yat to repair or re-manufacture the affected Products, provided that iRobot has given Kin Yat written approval before such costs were incurred.

5.7    Refunds due to Class Failure or Recall. In the event any Class Failure or Recall of a Product results from a breach of any of the warranties under this Agreement during the Warranty Period, then Kin Yat shall promptly refund to iRobot the full purchase price paid for all Products subject to such Class Failure or Recall, and all other reasonable costs to cure the Class Failure or Recall (example: shipping costs, partner penalties etc).

5.8    Third Party Repair and Re-Manufacture; Other Defects. Notwithstanding anything to the contrary in this Agreement, iRobot may itself, or through a third party, and at its own expense, repair or re-manufacture any Product (whether or not such Product is defective) without any obligation or liability to Kin Yat.  If iRobot wishes Kin Yat to undertake repair or re-manufacture of Products that are Non-Conforming due to reasons other than a breach by Kin Yat of its warranty obligations hereunder, the Parties will mutually agree on an allocation of costs for the repair and/or re-manufacture process prior to Kin Yat performing such work.

5.9    Limitation of Warranty. 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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5.9.1    THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 5 AND 16.3 ARE IN LIEU OF, AND EACH PARTY EXPRESSLY DISCLAIMS, AND EACH OTHER PARTY EXPRESSLY WAIVES, ALL OTHER WARRANTIES AND REPRESENTATIONS OF ANY KIND WHATSOEVER WHETHER EXPRESS, IMPLIED, STATUTORY, ARISING BY COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN THE TRADE OR OTHERWISE, INCLUDING ANY WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OR MISAPPROPRIATION OF ANY RIGHT, TITLE OR INTEREST OF ANY PARTY OR ANY THIRD PARTY.  NO ORAL OR WRITTEN STATEMENT OR REPRESENTATION OUTSIDE OF THIS AGREEMENT BY EITHER  PARTY, ITS AGENTS OR EMPLOYEES SHALL CONSTITUTE OR CREATE A WARRANTY OR EXPAND THE SCOPE OF ANY WARRANTY HEREUNDER. 

5.9.2    KIN YAT’S WARRANTY SHALL NOT APPLY TO ANY PRODUCT THAT HAS BEEN SUBJECTED TO TESTING FOR OTHER THAN SPECIFIED ELECTRICAL CHARACTERISTICS OR TO OPERATING AND/OR ENVIRONMENTAL CONDITIONS IN EXCESS OF THE MAXIMUM VALUES ESTABLISHED IN IROBOT’S APPLICABLE SPECIFICATIONS, OR TO HAVE BEEN THE SUBJECT OF ANYONE OTHER THAN KIN YAT OR ITS AGENTS OR CONTRACTORS MISHANDLING, ACCIDENT, MISUSE, NEGLECT, IMPROPER TESTING, IMPROPER OR UNAUTHORIZED REPAIR, ALTERATION, DAMAGE, ASSEMBLY, PROCESSING OR ANY OTHER INAPPROPRIATE OR UNAUTHORIZED ACTION OR INACTION THAT ALTERS PHYSICAL OR ELECTRICAL PROPERTIES.  THIS WARRANTY SHALL NOT APPLY TO (a) ANY MATERIAL CONSIGNED OR SUPPLIED BY IROBOT TO KIN YAT INCLUDING BUT NOT LIMITED TO IROBOT INTELLECTUAL PROPERTY, IROBOT’S PROPRIETARY INFORMATION AND TECHNOLOGY AND IROBOT’S TOOLING, OR (b) ANY DEFECT IN THE PRODUCT  ARISING FROM ANY DRAWING, DESIGN, SPECIFICATION, PROCESS, TESTING OR OTHER PROCEDURE, ADJUSTMENT OR MODIFICATION SUPPLIED AND APPROVED BY IROBOT.

5.10    ECO Upgrade.  RMA’s for any engineering changes or upgrades under any ECR or ECN upgrades will also be subject to the RMA process. Kin Yat will analyze each ECR and ECN and provide a per unit upgrade/change cost and expected completion and delivery date.

5.11    The Liability of Kin Yat  to iRobot for any one act of default by reason of the breach of the warranty under this Agreement shall be limited to the extent that all or any damages (if proven) together shall in no event greater than [***] affected by such breach which has/have been received and accepted by Kin Yat and paid for by iRobot.

6Limitation Of Liability; Specific Performance; Equitable Relief 

6.1    EXCEPT WITH REGARD TO ANY LIABILITY THAT ARISES FROM A PARTY’S INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 19 OR A BREACH BY EITHER PARTY OF ITS CONFIDENTIALITY OBLIGATIONS SET FORTH IN SECTION 16, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER PERSON OR ENTITY UNDER ANY CONTRACT, TORT, STRICT LIABILITY, NEGLIGENCE, OR OTHER LEGAL OR EQUITABLE CLAIM OR THEORY FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR INDIRECT DAMAGES, LOSS OF GOODWILL OR BUSINESS PROFITS, LOST REVENUE, WORK STOPPAGE, DATA LOSS, COMPUTER FAILURE OR MALFUNCTION, OR FOR ANY AND ALL OTHER EXEMPLARY OR PUNITIVE DAMAGES WHETHER SUCH PARTY WAS INFORMED OR WAS AWARE OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE.  THE FOREGOING SHALL NOT EXCLUDE OR LIMIT EITHER PARTY’S LIABILITY FOR DEATH OR PERSONAL INJURY RESULTING FROM ITS NEGLIGENCE TO THE EXTENT THAT SUCH LIABILITY CANNOT BY LAW BE LIMITED OR EXCLUDED.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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6.2    Kin Yat acknowledges and agrees that a breach by it of its obligations to perform the Manufacturing Services, including the manufacture and/or supply Product under this Agreement, would cause irreparable harm to iRobot because the Manufacturing Services are unique in kind and quality and, moreover, suitable substitutes are unobtainable or unreasonably difficult or inconvenient for iRobot to procure and Kin Yat further acknowledges and agrees that iRobot could not be adequately compensated by money damages. Accordingly, in addition to any other remedies that may be available, in law, in equity or otherwise, in the case of any such actual or threatened breach, iRobot shall be entitled to obtain specific performance (including an order of a court requiring that Kin Yat manufacture and/or supply Product under this Agreement), without the necessity of posting a bond or proving actual damages.  Finally, Kin Yat agrees that such equitable relief (including without limitation, specific performance), is a reasonable outcome of any actual or threatened breach contemplated by this Section 6.2, and Kin Yat hereby knowingly assumes the risk that a court or other tribunal may order specific performance. Kin Yat further acknowledges and agrees that any equitable relief ordered by a court or tribunal would not be a penalty.

6.3    iRobot retains all rights not expressly granted hereunder and any and all remedies herein expressly conferred upon iRobot will be deemed cumulative with, and not exclusive of, any other remedy conferred hereby, or by law or equity upon iRobot, and the exercise by iRobot of any one remedy will not preclude the exercise of any other remedy available under this Agreement or otherwise.

7Delivery, Risk of Loss and Payment Terms. For purposes of this Agreement terms of sale for all Product shipments shall be FCA Port of Origin. (per Incoterms 2010).  Risk of loss for Product shipments will pass to iRobot (or to iRobot’s designee invoiced by Kin Yat) upon delivery to the Port of Origin and receipt by the freight partner responsible for delivering the goods to the appropriate destination.  For any shipments where Kin Yat acts as an agent in completing the Shipper’s Export Declaration and managing iRobot’s exports on behalf of iRobot, where iRobot is the exporter of record (Principal Party in Interest - PPI), iRobot hereby grants Kin Yat a limited Power of Attorney to act on its behalf in managing its exports.  Title for Product will pass to iRobot upon receipt of full payment for the purchase price by iRobot.

7.1    Payment. iRobot shall pay Kin Yat all monies when due, including all NRE Costs associated with this Agreement.  Payment of all invoices shall be net [***] from date of iRobot’s receipt of each such invoice.  Payment to Kin Yat shall be in U.S. dollars and in immediately available funds.  Any equipment, tooling, component, material or other goods or property, which is purchased by Kin Yat in order to perform its obligations under this Agreement, shall become the property of iRobot once Kin Yat is reimbursed for all NRE Costs, if any.  Kin Yat shall be responsible for maintaining, segregating and CONSPICUOUSLY labeling the iRobot Property as “ iRobot PROPERTY” and carrying out applicable repairs based on reasonable wear and use. Kin Yat shall invoice iRobot for actual outstanding NRE Costs and other monies due at [***] intervals (or such other intervals as deemed appropriate) during the term of this Agreement and upon cancellation, termination or expiration of this Agreement.  Kin Yat agrees to request advance written approval from iRobot should resource requirements, and thereby NRE Costs, increase materially relative to estimated NRE Costs initially agreed by the Parties.  Upon such request, Kin Yat shall provide to iRobot reasonably detailed supporting documentation and/or descriptions of the NRE Costs for which Kin Yat seeks reimbursement. iRobot is not obligated to accept any additional reimbursement request from Kin Yat.  Unless otherwise agreed by iRobot, all prices are FCA, Port of Origin. 

7.2    Taxes.  iRobot shall be responsible for all federal, foreign, state and local sales, use, excise and other taxes (except taxes based on Kin Yat’s income), all delivery, shipping, and transportation charges and all foreign agent or brokerage fees, document fees, custom charges and duties.

7.3    Disputed Invoices. If a Kin Yat invoice does not meet the invoicing requirements of this Agreement, or iRobot in good faith disputes any invoiced charges, iRobot will notify Kin Yat of the disputed items in writing on or before the payment due date and may withhold payment of the disputed charges pending resolution of the dispute.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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7.4    Reservation of Rights. Any payments made by iRobot under the Agreement, and any acceptance of Products, will be without prejudice to iRobot’s right to subsequently claim or determine that it has overpaid Kin Yat or to require Kin Yat to remedy any deficiencies in KinYat’s performance as provided in this Agreement.

8Import and Export. iRobot shall be the importer of record for all Product shipments to iRobot facilities and shall be responsible for obtaining any required import licenses necessary for iRobot to import Product and/or receive shipments of Product from Kin Yat or its designated carrier, any U.S. Federal Communications Commission’s identifier, if applicable and any other licenses required under US or foreign law applicable to iRobot’s obligations under this Agreement.  Kin Yat shall be responsible for obtaining any required export licenses necessary for Kin Yat to ship Product, including certificates of origin, manufacturer’s affidavits, and U.S. Federal Communications Commission’s identifier, if applicable and any other licenses required under US or foreign law applicable to Kin Yat’s obligations under this Agreement.   iRobot agrees that it shall not knowingly require Kin Yat to ship or deliver any Product, assembly, component or any technical data or software which violate any export controls or limitations imposed by the United States or any other governmental authority, or to any country for which an export license or other governmental approval is required at the time of export without first obtaining all necessary licenses and approvals and paying all duties and fees.  Each Party shall be responsible for securing all applicable licenses, certifications, approvals and authorizations that are necessary for such Party to comply with applicable import and export laws, rules and regulations for the shipment and delivery of the Product under this Agreement. iRobot shall also be responsible for complying with any legislation or regulations governing the importation of the Product into the country of destination and for payment of any duties thereon.

9Cost Management. 

9.1    Cost Summary and Management.  The cost summary included set forth on Schedule 2, prepared by Kin Yat, contains a detailed SKU-level (SKU as defined by iRobot) cost summary, Incoterm FCA Port of Origin, complete with all formulas and assumptions, to provide full access and visibility to all component, labor, assembly and mark-up costs.  During each Renewal Term, the Parties shall meet from time to time on an executive level as required, but no less than on an [***], to identify cost reduction opportunities where each Party will share overall financial objectives of the on-going relationship between the Parties.  Kin Yat shall at all times employ an Open Book Pricing approach to cost management and pricing of Components, Products and the Manufacturing Services to achieve Sustainable and Competitive Pricing for the Products and Manufacturing Services provided to iRobot under this Agreement.  For purposes of this Agreement, the phrase “Sustainable and Competitive Pricing” means stable pricing over time for the Products and Manufacturing Services provided to iRobot under this Agreement that is favorable against that which could be reasonably attained from other contract manufacturers for comparable volumes of substantially similar products and comparable manufacturing services. For purposes of this Agreement, the term “Open Book Pricing” means providing detailed costing information to iRobot which includes; a fully-costed bill of materials, markups related to the sourcing and manufacturing of the Components and the Product and an explanation of all adders on material or value add (in place as of the Effective Date). In addition, Kin Yat shall provide detailed overviews of the relevant financial costing model to iRobot’s representatives and professional advisors. By [***], Kin Yat shall provide final fixed price quotation for upcoming iRobot fiscal year.

9.2    Price. The Price for each Product is set forth in Schedule 2 (the “Product Price”), and includes the complete price for such Product, including the fully-costed bill of materials, Kin Yat’s Gross Margin (as defined in Schedule 2), and any and all other added fees and costs related to the Manufacturing Services, Reasonable and Customary Support Services. The Product Price for each Product shall not be increased during the period beginning on the Effective Date and ending on [***], during such time Kin Yat shall manage its supply chain and absorb any and all increases.  Pricing will be reviewed by the Parties on an [***] basis, on or before [***], and will be revised consistent with increases or decreases in materials, components, equipment and other costs and expenses applicable to the manufacture of the Product.    By [***], Kin Yat shall provide final fixed price quotation for upcoming iRobot fiscal year.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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9.3    Source Transparency. Kin Yat will submit a full list of suppliers to iRobot for each Product at the time of any cost summary submittal, along with the supplier part number (in case of Generic Components).  Kin Yat will submit every supplier or part number change to iRobot for iRobot’s approval before such change goes into effect, including a summary or certification that such proposed changed part conforms to the Product Specifications.

9.4    Cost Transparency.  COGS (Cost of Goods Sold) is a key factor in iRobot engaging Kin Yat to produce and deliver the Product.  So that iRobot has full visibility to the current and ongoing status of Kin Yat’s COGS, Kin Yat will provide updated costing in the agreed upon format within [***] of any change submittal. If Kin Yat fails to provide cost impact information within [***] after any iRobot Specification changes, iRobot will consider the lack of response to mean that there is no cost impact. Any cost change would be considered valid only after iRobot’s approval. No less frequently than [***], Kin Yat will, upon iRobot’s request, provide a microeconomic report that includes all critical prices and costs included in the Product Price (such as labor, exchange rate or select material as required by iRobot).

10Tooling and fixtures.  iRobot shall own any and all tooling, fixtures, molds, equipment, software and firmware made available to Kin Yat by iRobot, developed for or on behalf of iRobot, or otherwise paid for by iRobot (“iRobot Tooling”).  Kin Yat may manufacture, have manufactured, and use the iRobot Tooling only to perform the Manufacturing Services under the Agreement and shall use and treat the iRobot Tooling with a high degree of care, and in any case no less than the same degree of care it would for its own equipment, tooling, molds or supplies.  Kin Yat shall attach an identifying label showing iRobot’s ownership in a conspicuous place on each unit of iRobot Tooling, if possible, and shall secure and segregate the iRobot Tooling in such fashion to clearly identify the iRobot Tooling as the property of iRobot.  Kin Yat shall maintain the iRobot Tooling, at its own expense, in efficient working order and good repair based on reasonable wear and use, and otherwise in accordance with iRobot’s reasonable instructions.  Kin Yat shall keep all iRobot Tooling free of any Encumbrances, and shall not transfer any iRobot Tooling, or any rights in the iRobot Tooling to any Person.  Kin Yat shall deliver all iRobot Tooling to iRobot or iRobot’s designee, or at iRobot’s request, make available for pickup, upon the termination or expiration of this Agreement, or upon iRobot’s earlier request. Kin Yat shall execute documents and take such further action as iRobot shall reasonably request to protect iRobot’s interest in the iRobot Tooling. Kin Yat will at the expense of iRobot deliver to iRobot any of the above mentioned tooling within [***] upon iRobot’s written request.  Kin Yat will adhere to the record keeping of iRobot Tools in accordance with iRobot requirements set forth in Section 4.10.3 or as otherwise described Schedule 1.  Kin Yat shall make such records available for inspection by iRobot or iRobot’s designee Kin Yat upon iRobot’s reasonable request.

		
	11
	Forecast, Purchase Orders; Change Orders, Rescheduling and Cancellation.

11.1    Forecast.  iRobot will provide to Kin Yat, on a [***], a non-binding, rolling [***] planning forecasts at a core robot level and on a SKU based level, indicating iRobot’s monthly Product requirements, as amended by iRobot from time to time (each, a “Forecast”).
 
11.2    Purchase Orders.  iRobot will issue orders for Products hereunder using its standard form of purchase order (“Purchase Order”). Each Purchase Order will identify the applicable Product by SKU, quantity, price denominated in US currency, delivery terms, and other customary terms.  Except for the Product Price and  delivery date contained in such Purchase Order, the terms and conditions in this Agreement shall prevail over any conflicting terms and conditions in any Purchase Order.  Such Purchase Orders will be issued by iRobot at least [***] prior to the date of ex-factory for all Products on each such Purchase Order. For select SKUs and as defined in Schedule 1, iRobot and Kin Yat will develop strategies to achieve [***] lead time.

11.3    Purchase Order Acknowledgment. Kin Yat will notify iRobot electronically within [***] if it utilizes EDI, or if in writing, within [***] of receipt of a Purchase Order, and inform iRobot in writing of any reason Kin Yat is unable to meet a requested delivery date or any other Purchase Order requirements.   The Purchase Order will not 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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constitute a binding obligation on Kin Yat until and unless Kin Yat accepts the Purchase Order in accordance with this Agreement.

11.4    Changes to Forecast: At any time, prior to the issue of a Purchase Order, iRobot may reschedule and/or cancel any forecast demand.

11.5    Changes to Manufacturing Services, Packaging and Shipping Specifications and Test Procedures. iRobot may, in writing, request a change to the Manufacturing Services, Packaging and Shipping Specifications and Test Procedures at any time.  Within [***] after receipt of iRobot’s written request Kin Yat will analyze the requested change and provide iRobot with an assessment of the effect that the requested change will have on cost, manufacturing, scheduling, delivery and implementation.  iRobot will be responsible for all costs associated with any accepted changes.  Any such change shall be documented in a written change order and shall become effective only upon mutual written agreement of both Parties to the terms and conditions of such change order, including changes in time required for performance, cost and applicable delivery schedules.

11.6    Production Increases, Rescheduling Delivery. iRobot may, in writing, request increases in production volume or acceleration of open Purchase Order at any time.  If Kin Yat is unable to satisfy or comply with iRobot’s requested increase in production volume within the requested time frame for delivery, Kin Yat will provide the reasons preventing Kin Yat from satisfying the requested increase within [***] after receipt of iRobot’s request.  Any such change shall be documented in a written change order and shall become effective only upon mutual written agreement of both Parties to the terms and conditions of such change order, including changes in time required for performance, cost and applicable delivery schedules.  Kin Yat shall utilize its global supply network to assess availability of shared material across accounts to minimize instances in which Kin Yat is unable to meet an increase in a Purchase Order quantity requested by iRobot. It is further understood that iRobot will not incur additional chargers due to Kin Yat’s decision to meet an accelerated delivery schedule or request for increased quantities by utilizing Generic Components from another account’s material.

11.7    Product Configuration Changes and Engineering Changes.  iRobot may request configuration or engineering changes to a Product in writing at any time.  Kin Yat will analyze the request and determine if it can meet the requested changes within the required Lead-time.  If Kin Yat can satisfy the requested change it will provide iRobot within [***] after receipt of the configuration or engineering request notice, a notice of acceptance of the requested changes.  In the event that any requested change in the form, fit or function or Specification of any Product results in a significant increase in the cost of such Product, or in the length of time required for the manufacture or delivery thereof, then Kin Yat shall provide iRobot with a detailed cost analysis regarding such requested change using Open Book Pricing as contemplated under Section 9.1.  Following iRobot’s acknowledgment of such detailed cost analysis, the Parties will negotiate in good faith an equitable adjustment to the price of such Product and/or expected changes to the delivery schedule for such Product.  If Kin Yat is unable to satisfy or comply with iRobot’s requested changes within the requested time frame for delivery, Kin Yat will provide the reasons preventing Kin Yat from satisfying the requested increase within [***] after receipt of iRobot’s request. Any such change shall be documented in writing and shall become effective only upon mutual written agreement of both Parties of the terms and conditions of such change, including changes in time required for performance, cost (including cost of materials on hand or on order in accordance with original Purchase Order) and applicable delivery schedules.

11.8    Treatment of Obsolete/End-of-Life Material. Upon receiving notice from iRobot of an engineering change or that any Product, component or assembly has become obsolete or has reached end-of-life, Kin Yat will, within a reasonable period after receiving such notice, provide iRobot with an analysis of iRobot’s liability to Kin Yat for components and materials acquired or scheduled to be acquired to manufacture such Product.  iRobot’s liability shall include the price of finished Product and Kin Yat’s costs (including cancellation fees and charges), plus applicable margin, of WIP, safety stock components and materials and components and materials on hand or on order within 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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applicable Lead-times.  Kin Yat will use Commercially Reasonable Efforts to assist iRobot in minimizing iRobot’s liability by taking the following steps:

		
	•
	As soon as is commercially practical reduce or cancel Component and material orders to the extent contractually permitted.

		
	•
	Return all Components and materials to the extent contractually permitted. 

		
	•
	Make all Commercially Reasonable Efforts to sell Components and materials to iRobot approved third parties.

		
	•
	Assist iRobot to determine whether current WIP should be completed, scrapped or shipped to iRobot or its designee “as is”.

11.9    Rescheduled Delivery out, reduction of quantity, and Cancellation of Orders. iRobot may request Kin Yat to reschedule the delivery date for any Product, decrease quantity on open Purchase Order, and cancel pending Purchase Orders in accordance with this Section. The charges to iRobot for deferring delivery of a Purchase Order, reducing quantity or cancellation of a Purchase Order are outlined below:

	
			
	Days Prior to
Delivery Date
	Reschedule
Terms
	Cancellation
Liability

	[***] Days
	Kin Yat is not obligated to adhere to the request, but must consider each request in good faith.
	iRobot may not cancel a  Purchase Order to be delivered within [***] days of the applicable delivery date without payment to Kin Yat for the work incurred to date.

	[***] Days from original delivery date
	iRobot may reschedule out the delivery, reduce quantity or cancel the order.

	Material on hand, non-cancelable and non-returnable materials, to the extent issued under a Material Authorization by iRobot, and applicable labor charges for WIP, provided, that such liability applies only to the extent that Kin Yat is unable to reallocate such material to any existing Purchase Order of iRobot, or, if authorized by iRobot, to a purchase order of another customer of Kin Yat.

Notwithstanding anything to the contrary in this Agreement, any reschedule out of a delivery date, reduction of quantity and/or cancellation of a Purchase Order (in whole or in part) will not affect any Product Price.

12Logistics.  Kin Yat will maintain control over all Products while in Kin Yat’s care, custody, and control. Kin Yats shall cooperate with iRobot and its suppliers and logistics services providers. Kin Yat will provide relevant and necessary information to iRobot relating to receipt, storing and shipment of Products. Kin Yat will coordinate with iRobot personnel, iRobot logistics services providers, and iRobot customers to execute the shipment of Products as instructed by iRobot.

12.1    Receiving.  From time to time iRobot may ship Components, including batteries and Integrated Circuits (IC’s, processors) directly to Kin Yat. Kin Yat will verify actual quantities and SKU’s of such Components received as compared to the quantities and SKU’s indicated on the shipping documents, process the Components into their inventory system, and notify iRobot of the quantity actually received by SKU.  Kin Yat will also indicate any exceptions, at the time of reporting the receipt, as related to over, short or damage. The reporting of receipts and exceptions is made to iRobot. 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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12.2    Storage and maintenance of inventory.  All Products and Components will be stored in a manner to maintain inventory control and to prevent damage as instructed by iRobot reasonably. Kin Yat will maintain inventories and locations of iRobot Products and Components on their own perpetual inventory and/or warehouse management system. Kin Yat and iRobot will compare on a monthly basis all inventories, reconcile results and Kin Yat will cycle count the Components with the five highest variances.

12.3    Physical inventory audit.  

12.3.1    On a [***] basis Kin Yat will arrange a cut-off date for and complete a physical inventory audit of all Consigned Components.  Because the [***] Components contain valuable intellectual property of iRobot, there is no shrinkage allowance for such Components. Variances will be identified and reported to Kin Yat by iRobot within [***] of the physical inventory. Within [***] of being notified of any such variance, Kin Yat shall provide iRobot a written report that, in iRobot’s sole discretion, explains the variance, or iRobot will charge or deduct from its next payment for the unexplained variance. All other Consigned Components are subject to a shrinkage allowance of [***]% of the volume of such Component or Product received during the [***] period immediately prior to the physical inventory audit.

12.3.2    On a [***] basis Kin Yat will arrange a cut-off date for and complete a physical inventory audit of all finished Products that have passed the applicable quality inspections, but remain unshipped and in Kin Yat’s possession at the end of such quarter.  Kin Yat shall deliver such audit report to iRobot by the second business day immediately following the end of each iRobot Quarter End.

12.4    Shipping to iRobot locations. Most of the Products are designed to withstand a maximum of two pallet high floor storage. Components, including chips and batteries must be single stacked on the floor or stored in pallet racks.  iRobot may direct Kin Yat to ship to specific iRobot locations and distributions centers such as, but not limited to, [***]. Incoterms for sale to iRobot are FCA Port (or airport) of Origin.  iRobot will select the freight forwarder and communicate local contacts to Kin Yat. Based on selection of forwarder or ocean carrier, iRobot will specify the Port of Origin.  iRobot will be responsible for paying the transportation costs from the origin port or airport to the destination, Kin Yat will arrange empty container delivery in accordance with the shipping schedule communicated to Kin Yat by iRobot. Upon receipt of container, Kin Yat will inspect the container for any signs of damages to flooring, any holes in the roof or side of the containers, and any sign of tampering with the latching device (tampering to include drilling out rivets and replacing the rivets with bolts). If the container has holes, damages or signs of tampering Kin Yat will request a replacement container. Products will be loaded on the container, floor stacked, in a manner to prevent damage and to fully utilize the container. Kin Yat shall adhere to any specific pallet configuration requested and provided by iRobot.  If there is a requirement to ship on wooden pallets, then the pallets must meet the guidelines of ISPM15 and be appropriately marked, indicating the pallets meet the standards.  iRobot will be responsible for the costs associated with purchasing these pallets. Containers must be sealed with a cargo seal that meets or exceeds ISO/PAS 17712:2006.

12.5    Direct shipment to iRobot Customers. From time to time, iRobot may direct Kin Yat to arrange for shipping directly to iRobot’s customers in accordance with specific Incoterms identified by iRobot at that time. The container inspection requirements and pallet requirements under Section 12.4 shall apply to any shipments directly to iRobot’s customers. 

12.6    Inventory losses and gains. As  Kin Yat is responsible for the care, custody and control of iRobot’s products, risk will be balanced with responsibility in the following way. Physical inventories and cycle counts will be conducted as indicated above. During the first month after the first anniversary date of the contract and each subsequent anniversary date, the losses and gains of inventory, based on iRobot’s perpetual inventory will be netted and a final loss or gain identified. 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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13Duty to Mitigate Costs.  Both Parties shall, in good faith, undertake Commercially Reasonable Efforts to mitigate the costs of termination, expiration or cancellation.  Kin Yat shall make Commercially Reasonable Efforts to cancel all applicable component and material purchase orders and reduce component inventory through return for credit programs or allocate such components and materials for alternate iRobot programs if applicable, or other customer orders provided the same can be used within [***] of the termination date.

14Term.  Unless earlier terminated as provided in Section 15 below, the term of this Agreement shall commence on the Effective Date and shall continue until the second anniversary of the Production Start Date (the “Initial Term”), and shall automatically renew for successive two-year terms (each, a “Renewal Term”) unless (a) following the first Renewal Term, Kin Yat provides written notice to iRobot of its intent not to renew this Agreement within twelve (12) months prior to the end of the then existing Renewal Term, or (b) iRobot provides written notice to Kin Yat of its intent not to renew this Agreement within [***] prior to the end of the then existing Term. 

15Termination.  This Agreement may be terminated as follows:

15.1    Termination for Cause.  Either Party may terminate this Agreement based on the material breach by the other Party of the terms of this Agreement, provided that the Party alleged to be in material breach receives written notice setting forth the nature of the breach at least [***] prior to the intended termination date. During such time the Party in material breach may cure the alleged breach and if such breach is cured within such [***] period, no termination will occur and this Agreement will continue in accordance with its terms.  If such breach shall not have been cured, termination shall occur upon the termination date set forth in such notice.

15.2    Termination for Bankruptcy/Insolvency. Upon the happening of any of the following events with respect to a Party, except as otherwise prohibited by the United States bankruptcy laws, this Agreement may be terminated immediately:

15.2.1    The appointment of a receiver or custodian to take possession of any or all of the assets of a Party, or should a Party make an assignment for the benefit of creditors, or should there be an attachment, execution, or other judicial seizure of all or a substantial portion of a Party’s assets, and such attachment, execution or seizure is not discharged within [***]. 

15.2.2    A Party becomes a debtor, either voluntarily or involuntarily, under Title 11 of the United States Code or any other similar law and, in the case of an involuntary proceeding, such proceeding is not dismissed within [***] of the date of filing. 

15.2.3    The dissolution or termination of the existence of a Party whether voluntarily, by operation of law or otherwise.

15.3    Termination Consequences.  

15.3.1    If this Agreement is terminated for any reason, iRobot shall not be excused from performing its obligations under this Agreement with respect to payment for all monies due to Kin Yat hereunder including fees, costs and expenses incurred by Kin Yat up to and including the effective date of such termination in accordance with Section 15.3.3. The following Sections 3.8, 3.10.4, 4.5, 4.11.3, 4.13, 5, 6, 7, 8, 10, 13, 15.3, 15.4, 15.5, 16, 17.1, 17.2, 17.3, 17.4, 18, 19, 23, 25 and Schedule 4 shall survive the expiration, cancellation or termination of this Agreement.

15.3.2    All Purchase Orders issued prior to the effective date of the termination or expiration will be fulfilled pursuant to and subject to the terms of this Agreement, even if the delivery dates of Products under such Purchase Orders are after such effective date of expiration or termination.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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15.3.3    Within [***] of the effective date of the expiration or termination of this Agreement for any reason other than Kin Yat’s material uncured breach, iRobot shall purchase at Kin Yat’s cost any raw materials (including packaging materials) that Kin Yat has purchased exclusively for the production of Products for iRobot, WIP  and finished Product that have not been shipped previously to iRobot.  At its option iRobot may, in lieu of purchasing such raw materials at cost, place Purchase Orders with Kin Yat for additional Product under the terms of this Agreement in order to extinguish existing stocks of such raw materials.  In the event that the Agreement terminates as a result of a material uncured breach by Kin Yat, iRobot shall be under no obligation to purchase any unused raw materials from Kin Yat.  In the event that the Agreement terminates for any other reason, iRobot shall purchase from Kin Yat all Product inventory (including WIP and finished Product).  Kin Yat shall accommodate last buy order from iRobot

15.3.4    Return of Product and Materials Supplied by iRobot.  Upon the effective date of expiration or termination of this Agreement for any reason whatsoever, Kin Yat shall immediately deliver to iRobot or its designee all Product, Specifications, Components, packaging materials and other materials purchased by or on behalf of iRobot and all other materials or supplies provided by iRobot.  Kin Yat shall also deliver to iRobot or its designee all Product produced hereunder, and shall invoice iRobot in accordance with the terms of Section 7.1.  

15.4    Manufacturing Rights upon Termination. If Kin Yat ceases to manufacture and/or supply any Product due to any termination of this Agreement by iRobot pursuant to Sections 15.1 or 24, or if Kin Yat elects not to renew the Term pursuant to Section 14, then Kin Yat hereby grants to iRobot a non-exclusive, royalty-free, worldwide, transferable, perpetual irrevocable license to all of its Intellectual Property Rights under the Technical Manufacturing Information – KIN YAT to make, have made, sell, offer for sale, import, use, reproduce, modify, adapt, display, distribute, and make Products and other versions of the Products. iRobot may sublicense these rights to third parties, provided any such third party complies with the terms of this license and any associated obligations of confidentiality. Upon iRobot’s exercise of its rights under this Section 15.4, Kin Yat shall promptly provide to iRobot all information, including manufacturing know-how and other materials required to enable iRobot to independently manufacture, test and repair the Products. 

15.5    Transition Assistance.  Upon expiration or earlier termination of this Agreement, Kin Yat will support iRobot in making an orderly transition to a successor third party manufacturer during a period lasting no longer than [***] (the “Transition Period”) at the expense of iRobot.  During such Transition Period, (a) Kin Yat shall provide, in a timely and professional manner, services reasonably necessary to transition the Manufacturing Services to a successor third party manufacturer; and (b) all of the terms and conditions of this Agreement shall continue to be in full force and effect, including Manufacturer’s obligations to continue providing the Manufacturing Services.  In addition, Kin Yat shall provide such technical assistance to iRobot or its designated third party manufacturer, as iRobot may reasonably request in connection with such transition.  At the end of such Transition Period, or upon iRobot’s earlier request, Kin Yat shall deliver to iRobot, or to iRobot’s agent all tooling, fixtures, Components, Products (including WIP), tangible embodiments of iRobot’s Proprietary Information and Technology and all documentation and materials related to the Products at the expense of iRobot.

		
	16
	Confidentiality.

16.1    Both parties acknowledge that, by reason of their relationship, they may have access to certain information and/or materials concerning the business, plans, products, services and clients (including, but not limited to, information and materials contained in technical data) and including information necessary for the Services (“Confidential Information”), which is confidential and of substantial value and which value would be impaired if such information were disclosed to third parties. The parties agree that the handling of confidential information shall be pursuant to the Non-Disclosure Agreement, which is incorporated herein by reference. 
16.2    Kin Yat agrees that it will have any personnel of Kin Yat providing Services execute a written Non-Disclosure Agreement (“NDA”) substantially similar in nature and scope to and no less protective of the Company than the Non-Disclosure Agreement.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

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   16.3   Each Party represents and warrants to the other that it has adopted policies and procedures with respect to the receipt and disclosure of confidential or proprietary information, such as the Proprietary Information and Technology with its employees, agents and representatives.  Each Party represents and warrants to the other Party that it will cause each of its employees, agents and representatives to maintain and protect the confidentiality of the other Party’s Proprietary Information and Technology pursuant to the terms and conditions of the Non-Disclosure Agreement.

		
	17
	Intellectual Property Rights.

17.1    Intellectual Property – Existing by Kin Yat.

17.1.5    Except for the license rights granted to iRobot under this section 17.1.1, Kin Yat shall retain all right, title and ownership to any and all Intellectual Property – Existing by Kin Yat and all Intellectual Property Rights therein.  

17.1.6    Kin Yat shall not incorporate any Intellectual Property – Existing by Kin Yat into any Products without iRobot’s prior written approval.  To the extent any Intellectual Property – Existing by Kin Yat is incorporated by or on behalf of Kin Yat within or used by or on behalf of Kin Yat in connection with any Product, Kin Yat hereby grants to iRobot a non-exclusive, royalty-free, fully paid up, worldwide, perpetual, license under all of its Intellectual Property Rights in or to the  Intellectual Property – Existing by Kin Yat to make, have made, sell, offer for sale, import, use, reproduce, modify, adapt, display, distribute, and make other versions of, the Product and the right to sublicense third parties (including but not limited to manufactures, system integrators, value added resellers, distributors and other resellers) for iRobot to use, sell, test, improve, support and distribute the Products and to otherwise manufacture and support discontinued Products; provided however, that no license to the Technical Manufacturing Information – KIN YAT shall be granted under this Section 17.1.2. 

17.2    Kin Yat Created Intellectual Property – Created by Kin Yat.

17.2.1    Except for the license rights granted to iRobot under 17.1.1, Kin Yat shall retain all right, title and ownership to any and all Intellectual Property – Created by Kin Yat and all Intellectual Property Rights therein.

17.2.2    Kin Yat hereby grants to iRobot a non-exclusive, royalty-free, fully paid up, worldwide, perpetual, irrevocable license under all of its Intellectual Property Rights in or to the Technical Manufacturing Information – KIN YAT developed under this Agreement that is unique to the Products for iRobot’s internal use and the use by third party suppliers or manufacturers on behalf of iRobot to develop, design, improve, test and support the Products. 
17.2.3    Any such unique Technical Manufacturing Information – KIN YAT will be used by Kin Yat solely for the design, development, testing and manufacturing of Products for iRobot.

17.3    iRobot Intellectual Property.  iRobot shall retain all right, title and ownership to any and all iRobot Intellectual Property and all Intellectual Property Rights therein.

17.4    Newly Created Intellectual Property.  

17.4.1    The Newly Created Intellectual Property constitutes “works made for hire” for iRobot, and iRobot will be considered the author and will be the owner of the Newly Created Intellectual Property and all Intellectual Property Rights therein or related thereto.  If any Newly Created Intellectual Property does not qualify for treatment as “works made for hire”, or if Kin Yat retains any interest in any Newly Created Intellectual Property for any other reason, Kin Yat hereby grants, assigns and transfers, and will grant, assign and transfer, to iRobot all ownership and interest in such Newly Developed Intellectual Property, including without limitation any and all Intellectual Property Rights in and to any Newly Created Intellectual Property or that claim or cover any Newly Created Intellectual Property.  Kin Yat acknowledges that all personnel performing Manufacturing Services for iRobot under this Agreement have 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

23

    

executed appropriate agreements with Kin Yat so that Kin Yat may fulfill Kin Yat’s obligations under this Section 17.  Kin Yat agrees to execute any documents of assignment or registration requested by iRobot relating to any and all Newly Created Intellectual Property.  Kin Yat agrees to cooperate fully with iRobot, both during and after the engagement, with respect to the procurement, maintenance and enforcement of Intellectual Property Rights in or related to Newly Created Intellectual Property.

17.4.2    During the Term plus any period of support that may survive termination or expiration of this Agreement, Kin Yat agrees to inform iRobot of any Newly Created Intellectual Property.

17.5    Trademark Usage. Nothing in this Agreement gives either Party a right to use the other Party’s Marks or implies the grant of any license from one Party to the other to use any Marks.  Notwithstanding the foregoing, and subject to the terms and conditions of this Agreement, iRobot grants to Kin Yat a limited, non-exclusive, non-transferable, non-assignable, royalty-free license during the Term to reproduce any Mark set forth on Schedule 4, or otherwise designated in writing by iRobot (“iRobot Marks”) solely for the purpose placing such Marks on Products sold to iRobot and any applicable packaging, and for no other business or non-business purposes whatsoever and no other goods or services whatsoever, in accordance with the following:

17.5.1    All reproductions of iRobot Marks must be approved in writing by iRobot and must be in accordance with iRobot’s then current Trademark Usage Guidelines (“Mark Guidelines”), a copy of which is included in Schedule 4;

17.5.2    Kin Yat may not combine any iRobot Marks with, or create a composite mark using any iRobot Mark with, a trademark of Kin Yat or any third party, or use any of the iRobot Marks or any part thereof as part of its corporate name, or use any name or mark confusingly similar to any of the iRobot Marks;

17.5.3    No other rights or licenses, except that expressed in this Section 17.5 are granted to Kin Yat in and to any iRobot Mark, whether expressly, by implication, by estoppel, or otherwise;

17.5.4    As between iRobot and Kin Yat, the iRobot Marks are and shall remain the sole and exclusive property of iRobot and Kin Yat shall not acquire any right, title or interest in or to any iRobot Mark as a result of this Agreement (other than the limited license expressly granted in this Section 17.5) and all use of the iRobot Marks by Kin Yat and all goodwill generated thereby shall inure solely to the benefit of iRobot;

17.5.5    Kin Yat admits the validity of, and agrees not to challenge the iRobot Marks;

17.5.6    If any application for registration is or has been filed in any country by Kin Yat which relates to any name or mark which, in the sole opinion of iRobot, is confusingly similar, deceptive or misleading with respect to any of the iRobot Marks, Kin Yat shall immediately abandon any such application or registration or at iRobot’s sole discretion, assign it to iRobot, and reimburse iRobot for all costs and expenses of any opposition, cancellation or related legal proceedings, including attorney’s fees, instigated by iRobot or its authorized representative, in connection with any such registration or application; and

17.5.7    Upon any notice from iRobot that Kin Yat’s use of the iRobot’s Marks fails to conform with the Mark Guidelines, or any other provision of this Section 17.5, Kin Yat shall cease use of the iRobot Marks, until such failure has been corrected to the satisfaction of iRobot.

17.6    Kin Yat Marks. Kin Yat agrees and warrants that it will not use any Kin Yat or third party Mark (excluding authorized Marks of the iRobot) on any Product, packaging materials or documentation without iRobot’s prior written authorization.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

24

    

17.7    Grant of License to iRobot Intellectual Property.  In addition to Clause 17.5, iRobot hereby grants to Kin Yat a limited, non-exclusive, non-transferable, non-assignable, non-sublicensable and royalty-free right and license to use iRobot Intellectual Property, Proprietary Information and Technology and specifications solely for the purpose of performing its obligations under this Agreement, including manufacturing Products pursuant to this Agreement and supplying such Products only to iRobot.  Such limited right and license shall extend to no other materials or for any other purpose and shall terminate automatically upon expiration or termination of the relevant Purchase Order or this Agreement for any reason.

18Manufacturing Services for Competitive Products.  In order to protect the iRobot’s Proprietary Information and Technology, during the Term of this Agreement and for a period of [***] following the termination of this Agreement for any reason, Kin Yat will not, without the iRobot’s express written consent, engage in any design, development, manufacturing, testing, configuring, assembling, packaging, shipping and/or selling of any product that is or is intended to be, directly or indirectly competitive with any of the Products, including, without limitation, any robotic floor care product. 

19Indemnification.

19.1    Kin Yat’s Indemnity Obligations. Kin Yat shall indemnify, defend and hold iRobot and its employees, Subsidiaries, Affiliates, successors and assigns (“iRobot Indemnified Parties”) harmless from and against any and all losses, liabilities, damages (including consequential, special and/or punitive damages), claims, expenses, suits, recoveries, judgments and fines (including reasonable attorneys’ fees and expenses) (collectively “Losses”) that may be incurred by any iRobot Indemnified Party arising out of (a) any damage to property or injury or death occurring to any person arising out of any failure by Kin Yat to provide Product in conformance with the Specifications; (b) any injury to person or property or death occurring to any Kin Yat employees, subcontractors, agents or any other individuals on Kin Yat’s premises, except to the extent such injury to person or property or death was caused by the presence of iRobot’s employees or agents on Kin Yat’s premises; (c) any claim, action or proceeding brought by any governmental authority arising out of or resulting from the Manufacturing Services for Product that does not conform to the Specifications; (d) any breach by Kin Yat of any of its respective obligations, representations or warranties under this Agreement, including a breach which results in a recall of Product as contemplated under Section 4; (e) any other grossly negligent or willful act or omission on the part of Kin Yat; (f) the operation, ownership or control of the facilities of Kin Yat, its Affiliates or its subcontractors or the manufacturing, generation, processing, storage, transportation, distribution, treatment, disposal or other handling of the Products or materials used in the manufacture and packaging of the Products, or associated by-product, raw materials, intermediates, wastes, hazardous materials, emissions, releases, spills, leaks or discharges, or returned Products, Kin Yat, Affiliates of Kin Yat, or subcontractors of Kin Yat or its Affiliates, or their officers, directors, employees, agents or contractors; (g) any claim relating to the infringement of patent or other intellectual property rights relating to the manufacturing process employed by Kin Yat in performing the Manufacturing Services for Products or that Kin Yat asserts as owning in connection with the manufacturing of the Product or (h) violation of any applicable law, regulation, or rule in connection with the Manufacturing Services for Products hereunder, provided that the indemnity under this Section 19.1 shall not apply if any Loss is caused by (1) Kin Yat’s use of materials, trademarks and symbols supplied by iRobot, Kin Yat’s reliance upon the Specifications, iRobot Intellectual Property, iRobot’s Proprietary Information and Technology and/or the Packaging and Shipping Specifications in accordance with the terms of this Agreement, or (2) defects in design or product liability caused by iRobot or its agents, or (3) the gross negligence or willful misconduct of iRobot.

19.2    iRobot’s Indemnity Obligations. Except to the extent subject to Kin Yat’s indemnification of iRobot as provided in Section 19.1, iRobot shall indemnify, defend and hold Kin Yat and its employees, Subsidiaries, Affiliates, successors and assigns (“Kin Yat Indemnified Parties”) harmless from and against any and all Losses, arising from any third party claims asserted against any Kin Yat Indemnified Party, to the extent based on any of the following: (a) making, using or selling the Product, proper and authorized use of the Specifications, iRobot Intellectual Property, Packaging and Shipping Specifications, Proprietary Information and Technology of iRobot, any Product, or any 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

25

    

information, technology and processes supplied and/or approved by iRobot or otherwise required by iRobot of Kin Yat, in connection with Kin Yat’s performance of its obligations under this Agreement; (b) any recall or actual noncompliance with Materials Declaration Requirements; (c) that Kin Yat’s use of any item in subsection (a) in connection with performing its obligations under this Agreement infringes any patent, copyright or other intellectual property right of a third party,  (d) performance of the Manufacturing Services in accordance with the Product Specifications, and (e) any other grossly negligent or willful act or omission on the part of iRobot.

19.3    Indemnification Procedures.  Any Person that may be entitled to indemnification under this Agreement shall give the other Party prompt notice of any claim and cooperate with the indemnifying Party at its expense.  The Indemnifying party shall have the right to assume the defense (at its own expense) of any such claim through counsel of its own choosing by so notifying the Party seeking indemnification within [***] of the first receipt of such notice.  The Party seeking indemnification shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnifying party.  The Indemnifying party shall not, without the prior written consent of the indemnified party, agree to the settlement, compromise or discharge claim.

20Relationship of Parties. Kin Yat shall perform its obligations hereunder as an independent contractor.  Nothing contained herein shall be construed to imply a partnership or joint venture relationship between the Parties. The Parties shall not be entitled to create any obligations on behalf of the other Party, except as expressly contemplated by this Agreement.  The Parties will not enter into any contracts with third parties in the name of the other Party without the prior written consent of the other Party.

21Insurance. During the Term and at all times that Kin Yat performs work for iRobot, Kin Yat will maintain in full force and effect, at Kin Yat’s own expense, for the benefit of both Kin Yat and iRobot, insurance coverage to include:

21.1 Kin Yat shall maintain for the term of this Agreement, at its own expense: a comprehensive or commercial general liability policy including contractual liability products/completed operation and broad form property damage coverage, affording protection on an occurrence basis for claims arising out of bodily injury, death, and property damage, and having limits of not less than; a combined single limit of $[***] per occurrence with a $[***] aggregate limit of liability and (ii) Worker’s Compensation insurance as required by the laws of the state, province, country or similar authority(ies) where the services will be performed (iii) Commercial Automobile Liability Insurance - bodily injury and property damage combined single limit of RMB[***]. Such comprehensive or commercial general liability policy insurance shall name iRobot as an additional insured and may not be canceled or changed without at least [***] prior written notice to iRobot.  Prior to the commencement of Services, Kin Yat shall provide a certificate of insurance to iRobot evidencing these requirements and shall provide updated certificates as applicable.  Kin Yat shall also be liable to maintain, at its sole expense, travel insurance coverage and any legally mandated health insurance.

21.2   Additional Requirements. All deductibles on policies providing coverage will be paid by Kin Yat. In the event Kin Yat is self-insured for matters described above, Kin Yat agrees to respond to any claims or losses made against or incurred by iRobot in the same fashion as if insurance had been purchased.  In no event will the coverage or limits of any insurance required under this Section 21, or the lack or unavailability of any other insurance, be deemed to limit or diminish either Party’s obligations or liability to the other Party under this Agreement, including but not limited to, each Party’s indemnification obligations as set forth in Section 19. Kin Yat will obtain the necessary insurance within [***] of the Effective Date. 

		
	22
	Business Continuity Plan.

22.1    Risk Management and Continuity Plans. Kin Yat will develop and keep current a formal business continuity plan detailing Kin Yat’s plans, procedures and designated resources for timely response to and recovery from potential civil, natural, and physical plant disasters that could reasonably be expected to disrupt production and delivery to iRobot (“Business Continuity Plan”). Upon request, Kin Yat will make such plan available to iRobot or its designated representative for review. 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

26

    

22.2    Notification. Kin Yat agrees to notify iRobot as soon as possible in the event of a crisis that disrupts manufacturing or delivery of Products. Unless authorized in advance in writing by iRobot, Kin Yat will not refer to iRobot in public and media communications about the crisis and subsequent recovery.

22.3    Loss Control. Kin Yat will be responsible for maintaining its facilities and operations in accordance with applicable fire protection and loss control laws, regulations and industry standards.

23Publicity. Without the written consent of the other Party, neither Party shall refer to this Agreement in any publicity or advertising or disclose to any third party any of the terms of this Agreement.  Notwithstanding the foregoing, neither Party will be prevented from, at any time, furnishing any information to any governmental or regulatory authority, including the United States Securities and Exchange Commission or any other foreign stock exchange regulatory authority, that it is by law, regulation, rule or other legal process obligated to disclose, so long as the other Party is given advance written notice of such disclosure pursuant to Section 2.4 of the Non-Disclosure Agreement.  In addition, a Party may disclose the existence of this Agreement and its terms to its attorneys and accountants, suppliers, customers and others only to the extent necessary to perform its obligations and enforce its rights hereunder, and to existing and prospective investors and/or acquirers that are contemplating a potential investment in or acquisition of such Party, provided, however, that any and all such suppliers, customers, investors, acquirers and advisers are bound by agreements or, in the case of professional advisers, ethical duties, to treat, hold and maintain such information in accordance with the terms and conditions of the Non-Disclosure Agreement.

24Force Majeure. 

24.1    Subject to Section 24.2.2 below, neither Party shall be liable for any failure or delay in the performance of its obligations under this Agreement to the extent such failure or delay is due to causes beyond such party’s reasonable control, including but not limited to, acts of God, acts of civil or military authority, legal restrictions, fires, explosion, embargo, mobilization, riot, epidemics, and to the extent the following are on a national basis, strikes, industrial disturbances, shortage of material, electricity, oil or transport, or restriction in the use of power.  Events set forth  above are referred to individually and collectively as “Force Majeure Events.” The Parties expressly acknowledge that Force Majeure Events do not include vandalism, or the non-performance of third parties or subcontractors relied on for the delivery of the Manufacturing Services, unless such failure or non-performance by a third party or subcontractor is itself caused by a Force Majeure Event, as defined above. Upon the occurrence of a Force Majeure Event, the non-performing Party shall be excused from any further performance or observance of the affected obligation(s) for as long as such circumstances prevail, and such Party continues to attempt to recommence performance or observance to the greatest extent possible without delay.

24.2    Notwithstanding any other provision of this Section 24, a Force Majeure Event shall obligate and require Kin Yat to commence and successfully implement all of the Manufacturing Services relating to disaster recovery set forth in its Business Continuity Plan within the time period described therein.  If a Force Majeure Event causes a material failure or delay in the performance of any Manufacturing Services for more than [***] consecutive days, iRobot may, at its option, and in addition to any other rights iRobot may have, procure such Manufacturing Services from an alternate source until Kin Yat is again able to provide such Manufacturing Services.  iRobot shall continue to pay Kin Yat the charges due and payable hereunder during such period, but Kin Yat shall not be entitled to any additional payments as a result of the Force Majeure Event.  If a Force Majeure Event causes a material failure or delay in the performance of any Manufacturing Services under this Agreement for more than [***] consecutive days, iRobot may, at its option, and in addition to any other rights iRobot may have, immediately terminate this Agreement without liability to Kin Yat.

25Miscellaneous.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

27

    

25.1    Notices.  All notices, demands and other communications made hereunder shall be in writing and shall be given either by personal delivery, by nationally recognized overnight courier (with charges prepaid), by facsimile or EDI (with telephone confirmation) addressed to the respective Parties at the following addresses:

    
	
		
	Notice to Kin Yat:
	Kin Yat Industrial Company Limited
7th Floor Galaxy Factory Building
25-27 Luk Hop Street
San Po Kong, Kowloon
Hong Kong
Facsimile: (852) 2351 1867
Attn: Mr. Vincent Fung

	 
	 

	with a copy to:
	Kin Yat Holdings Limited
25-27 Luk Hop Street
San Po Kong, Kowloon
Hong Kong
Facsimile: (852) 2351 1867
Attn: General Counsel

	 
	 

	Notice to iRobot:
	iRobot Corporation
8 Crosby Drive
Bedford, MA 01730
Facsimile: (781) 430-3001
Attn: General Counsel

25.2    Expenses and Costs. Each Party shall pay their own expenses in connection with the negotiation of this Agreement.  All fees and expenses incurred in connection with the resolution of Disputes shall be allocated as further provided in Section 25.15 below. 

25.3    Amendment. No course of dealing between the Parties hereto shall be effective to amend, modify, or change any provision of this Agreement.  This Agreement may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Party against whom such change is to be enforced.  The Parties may, subject to the provisions of this Section 25.3, from time to time, enter into supplemental written agreements for the purpose of adding any provisions to this Agreement or changing in any manner the rights and obligations of the Parties under this Agreement or any Schedule hereto.  Any such supplemental written agreement executed by the Parties shall be binding upon the Parties. 

25.4    Partial Invalidity.  Whenever possible, each provision of this Agreement shall be interpreted in such a way as to be effective and valid under applicable law.  If a provision is prohibited by or invalid under applicable law, it shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

25.5    Monies.  All references to monies in this Agreement shall be deemed to mean lawful monies of the United States of America.

25.6    Entire Agreement.  This Agreement, the Schedules and any addenda attached hereto or referenced herein, constitute the complete and exclusive statement of the agreement of the Parties with respect to the subject matter of this Agreement, and replace and supersede all prior agreements and negotiations by and between the Parties. Each Party acknowledges and agrees that no agreements, representations, warranties or collateral promises or inducements have been made by any Party to this Agreement except as expressly set forth herein or in the Schedules and any addenda 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

28

    

attached hereto or referenced herein, and that it has not relied upon any other agreement or document, or any verbal statement or act in executing this Agreement.  These acknowledgments and agreements are contractual and not mere recitals.  In the event of any inconsistency between the provisions of this Agreement and any Schedule and any addenda attached hereto or referenced herein, the provisions of this Agreement shall prevail unless expressly stipulated otherwise, in writing executed by the Parties.  Pre-printed language on each Party’s forms, including purchase orders, that conflict with the terms and conditions of this Agreement, are shall not constitute part of this Agreement and shall be deemed unenforceable.

25.7    Binding Effect. This Agreement shall be binding on the Parties and their successors and assigns; provided, however, that Kin Yat shall not assign, delegate or transfer, in whole or in part, this Agreement or any of its rights or obligations arising hereunder, without the prior written consent of iRobot.  Any purported assignment without such consent shall be null and void.

25.8    Anti-Corruption Laws.  Kin Yat represents that it has a copy of, and is familiar with, the United States Foreign Corrupt Practices Act, 15 U.S.C. §78dd-2 (the “FCPA”), and the purposes of the FCPA, including the FCPA’s prohibition of the payment or the gift of any item of value, either directly or indirectly, by or on behalf of a company organized under the laws of the United States of America or any of its states to an official, employee, or officer of, or person acting in an official capacity for, a government or international organization for the purpose of influencing any action or decision, or inducing him to use his influence with the government or organization in a manner contrary to his position or creating an improper advantage to assist a company in obtaining or retaining business for, with, or in that country or organization or directing business to any person.  Kin Yat represents and warrants that it will take no action that would constitute a violation of the FCPA or any law.  Moreover, Kin Yat represents and warrants that no government official is a principal, owner, officer, employee or agent of any entity in which Kin Yat has an interest, and no government official has any material financial interest in the business of Kin Yat.  Further, Kin Yat represents and warrants that Kin Yat and its Affiliates do and shall comply with all applicable legal requirements and iRobot’s policies against corrupt business practices, against money laundering and against facilitating or supporting persons who conspire to commit crimes or acts of terror against any person or government.  Kin Yat agrees that it will notify iRobot in writing immediately of the occurrence of any event, which renders the foregoing representations and warranties of this paragraph incorrect. 

25.9    Child/Forced Prison Labor Laws.  Kin Yat, by signing this agreement, represents and warrants that it and its subcontractors/suppliers will comply with all applicable local government regulations regarding minimum wage, living conditions, overtime, working conditions, child labor laws and the applicable labor and environmental laws. Kin Yat further represents and warrants that it and its subcontractors/suppliers do not use any form of forced prison labor and/or child labor under the age of 15 or the minimum age required by local government, whichever is older.

25.10    Waiver. Waiver by either Party of any breach of any provision of this Agreement shall not be considered as or constitute a continuing waiver or a waiver of any other breach of the same or any other provision of this Agreement. 

25.11    Captions. The captions contained in this Agreement are inserted only as a matter of convenience or reference and in no way define, limit, extend or describe the scope of this Agreement or the intent of any of its provisions.

25.12    Construction. Since both Parties have engaged in the drafting of this Agreement, no presumption of construction against any Party shall apply.

25.13    Section References. All references to Sections or Schedules shall be deemed to be references to Sections of this Agreement and Schedules attached to this Agreement, except to the extent that any such reference specifically refers to another document.  All references to Sections shall be deemed to also refer to all subsections of such Sections, if any.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

29

    

25.14    Business Day. If any time period set forth in this Agreement expires upon a Saturday, Sunday or U.S. national, legal or bank holiday, such period shall be extended to and through the next succeeding business day. 

25.15    Dispute Resolution.

              25.15.1     Kin Yat and iRobot mutually agree to the settlement by arbitration of all claims or controversies each party may have against the other relating in any manner whatsoever to this Agreement or its terms. Except for the right to obtain provisional remedies or interim relief, which right is preserved without any waiver of the right to arbitration, arbitration under this Agreement shall be the exclusive remedy for all such arbitrable claims. Kin Yat and iRobot also agree that arbitration shall be held in Boston, Massachusetts if such arbitration is sought by Kin Yat and in Hong Kong if such arbitration is sought by iRobot, and shall be in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”), and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitrator(s) shall have the authority to award or grant both  legal, equitable and declaratory relief. Such arbitration shall be final and binding on the parties.
 
           25.15.2   Kin Yat and iRobot agree that in the event that any action, either civil or arbitral is brought to enforce this Agreement by either Kin Yat or iRobot, the prevailing party shall be entitled to an award of all reasonable attorneys’ fees and legal costs, in addition to other relief. 

             25.15.3 The Parties agree that the existence, conduct and content of any negotiation or arbitration pursuant to this Section 25.15 shall be kept confidential and no Party shall disclose to any Person any information about such negotiation or arbitration, except as set forth in Section 16 or 23.

           25.15.4   IN THE EVENT OF ANY DISPUTE BETWEEN THE PARTIES, WHETHER IT RESULTS IN PROCEEDINGS IN ANY COURT IN ANY JURISDICTION OR IN ARBITRATION, THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY, AND HAVING HAD AN OPPORTUNITY TO CONSULT WITH COUNSEL, WAIVE ALL RIGHTS TO TRIAL BY JURY, AND AGREE THAT ANY AND ALL MATTERS SHALL BE DECIDED BY A JUDGE OR ARBITRATOR WITHOUT A JURY TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW.

             25.15.5   Notwithstanding anything contained in this Section 25.15 to the contrary, in the event that either Party is seeking temporary or preliminary injunctive relief, including any action for equitable relief, such Party may proceed in the Massachusetts Courts without prior negotiation or arbitration for the limited purpose of avoiding immediate and irreparable harm.

25.16     Insider Trading. Kin Yat will not, and will cause its Affiliates and Subsidiaries to not, transact in any securities of iRobot based on the manufacture of any Product under this Agreement or any Proprietary Information and Technology of the iRobot or from communicating any such information to any other Person in connection with the trading of such securities.  
25.17      Other Documents. The Parties shall take all such actions and execute all such documents that may be necessary to carry out the purposes of this Agreement, whether or not specifically provided for in this Agreement.
25.18      Counterparts. This Agreement may be executed by facsimile and delivered in one or more counterparts, each of which shall be deemed to be an original and all of which, taken together, shall be deemed to be one agreement.
25.19      Even-Handed Construction.  The terms and conditions as set forth in this Agreement have been arrived at by sophisticated parties with equal bargaining power, each having an opportunity to consult with counsel, after mutual negotiation, and it is the intention of the Parties that its terms and conditions not be construed against any Party merely because it was prepared by one of the Parties.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

30

    

25.20      Governing Law and Jurisdiction. All disputes, claims or controversies arising out of this Agreement, or the interpretation, negotiation, validity or performance of this Agreement, or the transactions contemplated hereby shall be governed by the laws of the State of New York, without application of conflicts of law principles. The provisions of the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.  

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

31

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives.

	
					
	IROBOT CORPORATION
	 
	KIN YAT INDUSTRIAL COMPANY LIMITED

	 
	 
	 
	 
	 

	By:
	/s/ Alison Dean
	 
	By:
	/s/ Vincent Fung

	 
	Signature
	 
	 
	Signature

	 
	 
	 
	 
	 

	Name:
	Alison Dean
	 
	Name:
	Vincent Fung

	 
	(Print)
	 
	 
	(Print)

	 
	 
	 
	 
	 

	Title:
	CFO
	 
	Title:
	Director

	 
	 
	 
	 
	 

	Date:
	1/22/14 *
	 
	Date:
	Feb.10.2014

	 
	* agreed to be effective as of 9/23/13
	 
	 
	 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

    

SCHEDULE 1
TO MANUFACTURING SERVICES AGREEMENT
BETWEEN Kin Yat AND iRobot

STATEMENT OF WORK

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

    

SCHEDULE 2
TO MANUFACTURING SERVICES AGREEMENT
BETWEEN Kin Yat AND iRobot

FEE AND PRICE (FINAL QUOTE)

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

SCHEDULE 3
TO MANUFACTURING SERVICES AGREEMENT
BETWEEN Kin Yat AND iRobot

QUALITY AND TEST PROCEDURES

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

SCHEDULE 4
TO MANUFACTURING SERVICES AGREEMENT
BETWEEN Kin Yat AND iRobot

NON-DISCLOSURE AGREEMENT

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

SCHEDULE 5
TO MANUFACTURING SERVICES AGREEMENT
BETWEEN Kin Yat AND iRobot

TRADEMARK USAGE GUIDELINES

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions. 

SCHEDULE 6
TO MANUFACTURING SERVICES AGREEMENT
BETWEEN Kin Yat AND IROBOT

IROBOT QUARTER END

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act - [***] denotes omissions.

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