Agreement For Construction And Operation

DATED 6 October 1994


(1) THE UNIVERSITY OF OXFORD
(2) THE MEDICAL RESEARCH COUNCIL
(3) LEUKOSITE, INC.
(4) LEUKOSITE LIMITED


AGREEMENT


For the construction and operation of a
Therapeutic Antibody Centre
within the University of Oxford


MORRELL, PEEL & GAMLEN
-Solicitors-
1 St Giles Oxford OX1 3JR 2
THIS AGREEMENT dated 6 October 1994 ("the Effective Date") is made between:


(1) THE CHANCELLOR MASTERS AND SCHOLARS OF THE UNIVERSITY OF OXFORD whose
administrative offices are at Wellington Square, Oxford OV 2JD, England
("the University");


(2) THE MEDICAL RESEARCH COUNCIL of 20 Park Crescent, London W1 N4AL, England
("the MRC");


(3) LEUKOSITE, INC., a Delaware Corporation, whose principal place of business
is at 800 Huntington Avenue, Boston, Massachusetts MA 02115, USA
("LeukoSite (US)"); and


(4) LEUKOSITE LIMITED, an English Company which is a wholly-owned subsidiary
of Leukosite (US), and whose registered office is at 39 Victoria Street,
London SE1H 0EE, England ("LeukoSite (UK)".)


1 DEFINITIONS


In this Agreement, the following expressions shall have the following
meanings:


1.1 "LeukoSite" means LeukoSite (US) and LeukoSite (UK), jointly and
severally;


1.2 "the TAC" means the Therapeutic Antibody Centre which the University
intends to construct and operate an a site at the Churchill
Hospital, Oxford leased from The Oxford Radcliffe Hospital Trust:
set out in the First Schedule to this Agreement for illustration
purposes are a Site Location Plan and a drawing of possible layouts
for the floors of the Centre: the primary function of the Centre
will be the production of antibodies for use in clinical research;


1.3 "the Mobilization Date" means a date notified by the University to
LeukoSite (UK), being the date on which both the following
conditions are fulfilled:


1.3.1 the University obtains such permissions and consents as in the
reasonable opinion of the University are sufficient to enable
the work of constructing the TAC to begin on site; and 3
1.3.2 the University enters into a binding agreement with The Oxford
Radcliffe Hospital Trust for the grant of a lease of the site
for the TAC to the University;


1.4 "the Research" means all research which is conducted in the TAC by
employees of the University, or under their direction and
supervision;


1.5 "Research Information" means data, formulae, process information
or other information developed in the course of the Research;


1.6 "Research Invention" means any process, use, article of manufacture
or composition of matter conceived or first actually or
constructively reduced to practice in the course of the Research;


1.7 "Research Material" means any material or substance which is
discovered, produced or derived in the course of the Research;


1.8 "the Technology Transfer Period" means the period of five (5) years
after the TAC becomes operational;


1.9 "Notified Discoveries" means Research Information, Research
Inventions and Research Material notified by the University to
LeukoSite (UK) under clause 3.2;


1.10 "the Pro Forma License" is set cut in the Second Schedule to this
Agreement;


1.11 "the Option Period" means the period beginning on the date of
notification of a Notified Discovery under clause 3.2 and ending on
whichever is the first to occur of twelve (12) months thereafter or
the service of a counter-notice by LeukoSite (UK) under clause 3.3:
the University will not unreasonably refuse a reasoned request from
LeukoSite (UK) for an extension of the twelve-(12)-month period in
relation to any individual Notified Discovery.


-2- 4 2 FUNDING FOR THE TAC


2.1 The MRC will contribute * per annum throughout the Technology
Transfer Period towards the costs of staff, consumables, equipment,
indirect costs and other day-to-day running expenses of the TAC, and
* towards the cost of constructing and equipping the TAC. The exact
timing of capital payments within financial years is to be discussed
between the University and the MRC, but the intention is to front-
end load payments to 1995/96 or earlier, subject to written evidence
of expenditure; provided that, subject to written evidence of
expenditure, the entire capital contribution of the MRC will be
paid by the MRC by the end of its 1995/96 fiscal year.


2.2 The University has agreed with other parties for the payment by such
parties of further set sums towards the cost of constructing and
equipping the TAC.


2.3 The contributions by the MRC and the parties referred to in clause
2.2 will be subject to the University's acceptance of certain terms
and conditions of grant, but the University confirms and warrants to
LeukoSite (without prejudice to the second sentence of clause 3.4)
that such terms and conditions will not give either the MRC or the
other parties any claim to the ownership of Notified Discoveries.


2.4 LeukoSite (UK) will contribute the sum of three million United
States dollars (US $3,000,000) towards the cost of constructing and
equipping the TAC. Of this sum, $500,000 will be paid on the
Mobilization Date, and the balance will be paid at six-(6)-monthly
intervals thereafter by means of ten (10) installments, each of
$250,000.


2.5 Whenever a party is obliged to make a payment under the preceding
sub-clauses which attracts value-added, sales, use, excise or other
similar taxes or duties. the party under such obligation shall be
responsible for paying the taxes and duties.


2.6 Except as otherwise provided by the MRC's terms and conditions of
grant or by an agreement signed by or on behalf


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* Confidential treatment requested: material has been omitted and filed separately with the Commission. 5
of the University, as between the parties to this Agreement the full
and unencumbered title to all equipment purchased or constructed
using funds provided by the other parties shall vest in the
University.


3 TRANSFER OF TECHNOLOGY TO LEUKOSITE


3.1 Performance by the University of this clause 3 is subject to and
conditional upon:


3.1.1 receipt by the University of the contributions and funds
which are referred to in clauses 2.1, 2.2 and 2.4;


3.1.2 the grant of an appropriate lease of the site for the TAC
by The Oxford Radcliffe Hospital Trust to the University;
and


3.1.3 the obtaining of all permissions and consents required for
the construction of the TAC.


The University will use all reasonable endeavours to secure the
lease, permissions and consents referred to in clauses 3.1.2 and
3.1.3; to procure the construction and equipping of the TAC in an
appropriate and timely manner; and to operate the TAC efficiently
and in accordance with good laboratory practice.


3.2 Throughout the Technology Transfer Period:


3.2.1 a written report shall be submitted by the University to
LeukoSite (UK) within ninety (90) days after the end of each
six (6) months following the date on which the TAC becomes
operational: such report shall itemize the Research
Information and Research Material generated during the
six-(6)-month period: the University may file additional
reports if and whenever the University prefers not to wait for
the end of a six-(6)-month period but instead to start time
running immediately under clause 3.5 with respect to any
particular Research Information or Research Material;


3.2.2 the University will use all reasonable endeavours to report
Research Inventions promptly to LeukoSite


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(UK), as and when such Inventions are made and documented.


3.3 If LeukoSite does not intend to exploit any Notified Discovery
commercially, LeukoSite (UK) shall inform the University promptly by
serving a counter-notice to that effect.


3.4 LeukoSite (US) shall have the right in accordance with clause 3.5 to
take a license over each Notified Discovery, on the terms of the Pro
Forma License, with such modifications (if any) as the parties may
agree. The royalties received by the University under each such
license are to be divided between the University and the MRC in
accordance with formulae which will be established by separate
agreement between those two parties.


3.5 During the Option Period:


3.5.1 LeukoSite is licensed to use the Notified Discovery for
evaluation purposes. No license is granted for any other
purpose, and LeukoSite will keep the Notified Discovery
confidential by using the same care and discretion to avoid
its disclosure to any third party as LeukoSite uses with
respect to strictly-confidential information of its own which
it does not wish to be disclosed to others; and


3.5.2 the University will not negotiate with or enter into any
agreement or arrangement with any third party for the
commercial exploitation of the Notified Discovery.


Should LeukoSite (UK) during the Option Period give the University
notice of LeukoSite's desire to exercise the right granted in clause
3.4, the parties will complete a license of the Notified Discovery
in the form of the Pro Forma License, utilizing the material
provided by the University in the notification under clause 3.2 in
order to complete the blanks in Paragraphs 1.3, 1.5 and 1.6 and
Appendix B. Should the parties be unable to agree any of the wording
for the blanks in Paragraphs 1.3, 1.5 and 1.6 and Appendix B by the
end of the Option Period, the issue or issues in dispute shall be
settled in London by an arbitrator. The arbitrator shall be a
barrister specializing in intellectual property law, who has no
prior association with either party, or who is otherwise


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acceptable to both parties. He shall be nominated for the purpose by
the then Chairman of the General Council of the Bar. The license
granted to LeukoSite in clause 3.5.1, and the obligation accepted by
the University in clause 3.5.2, will both be extended until the
arbitration is concluded and the license over the Notified Discovery
completed.


3.6 If LeukoSite (UK) serves a counter-notice on the University under
clause 3.3, or if by the end of the Option Period LeukoSite has
given no notice to the University of a wish to exercise the right
granted in clause 3.4:


3.6.1 LeukoSite shall at the University's election either -


3.6.1.1 return all materials and documentation for the
Notified Discovery to the University; or


3.6.1.2 destroy all materials and documentation, in which
event LeukoSite shall provide the University with
written certification of such destruction, signed by
authorized representatives of both LeukoSite (US) and
LeukoSite (UK);


3.6.2 the University shall be free to license the Notified Discovery
to third parties; provided that if the University purposes to
grant such a license to a third party, the University shall
notify LeukoSite; and LeukoSite shall have the right within
the period of thirty (30) days after such notification to
obtain a license on the terms offered to the third party.


4 LIMITATION OF LIABILITY


4.1 The University makes no representation or warranty that advice or
information given by any of its employees, students, agents or
appointees who work in the TAC, or the content or use of any
materials, works or information provided in connection with the
Research, will not constitute or result in infringement of
third-party rights.


4.2 The University accepts no responsibility for any use which may be
made of the results of the Research, nor for any


-6- 8
reliance which may be placed on such results, nor for advice or
information given in connection with them.


4.3 Without prejudice to any right which the other parties may have to
claim against the University, each of the other parties to this
Agreement undertakes to make no claim against any employee, student,
agent or appointee of the University, being a claim which seeks to
enforce against any of them any liability whatsoever in connection
with this Agreement or its subject-matter.


4.4 The liability of any party for any breach of this Agreement, or
arising in any other way out of the subject-matter of this
Agreement, will not extend to any incidental or consequential
damages or losses including (without limitation) loss of profits.


4.5 The maximum liability of the University to each of the other parties
under or otherwise in connection with this Agreement or its
subject-matter shall not exceed a sum equal to the aggregate of all
moneys received by the University from both LeukoSite and the MRC
under clause 2, together with interest on the balance of such moneys
from time to time outstanding, accruing from day to day at the
Lloyds Bank PLC Base Rate from time to time in force and compounded
annually as at 31 December.


4.5 If any sub-clause of this clause 4 is held to be invalid or
unenforceable under any applicable statute or rule of law then it
shall be deemed to be emitted, and if as a result any party becomes
liable for loss or damage which would otherwise have been excluded
then such liability shall be subject to the remaining sub-clauses of
this clause 4.


5 DURATION AND TERMINATION


5.1 The period of this Agreement shall begin on the Effective Date.
Subject to the following sub-clauses of this clause 5, it shall then
continue throughout the Technology Transfer Period.


5.2 The University may terminate this Agreement by giving not less than
seven (7) days' written notice to all the other parties:


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5.2.1 if LeukoSite (US) makes an assignment for the benefit of its
creditors, files a petition for protection under the US
Bankruptcy Code, is adjudicated insolvent, or applies for a
receiver or trustee of any part of its property;


5.2.2 if any proceeding of a type described in clause 5.2.1 is
commenced against LeukoSite (US) and remains undismissed for a
period of thirty (30) days;


5.2.3 if LeukoSite (US) indicates its consent to any proceeding
of a type described in clause 5.2.1;


5.2.4 if LeukoSite (UK) suffers distress or execution, is the
subject of a petition for a bankruptcy order, goes or is put
into liquidation, has a receiver or administrative receiver
appointed over any substantial part of its business, or seeks
any form of protection against its creditors from any
competent court or tribunal.


Provided that the foregoing shall not be applicable in a case filed
under Chapter 11 of the United States Bankruptcy Code until the case
is converted to a Chapter 7 by a final non-appealable order.


5.3 If the University has not notified a Mobilization Date to LeukoSite
(UK) under clause 1.3 within the period of ninety (90) days after
the Effective Date, LeukoSite (US) and LeukoSite (UK) shall each
have the night to terminate this Agreement by giving not less than
seven (7) days' written notice to all the other parties. These
rights shall become exerciseable on and from the end of the
ninety-(90)-day period: they shall cease to be exerciseable if and
when a Mobilization Date is notified by the University to LeukoSite
(UK) under clause 1.3. Furthermore, if either LeukoSite (US) or
LeukoSite (UK) exercises its right under this subclause but the
University notifies a Mobilization Date during the seven-(7)-day
period of the notice from LeukoSite (US) or LeukoSite (UK), the
notice from LeukoSite (US) or (as the case may be) LeukoSite (UK)
shall be of no effect.


5.4 By giving ninety (90) days' written notice to all the other parties
of the intention to terminate, the University may


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terminate this Agreement for any material breach of this Agreement
by either the MRC or LeukoSite.


5.5 By means of similar notice, the MRC and LeukoSite (US) shall each
have the night to terminate this Agreement for any material breach
by the University.


5.6 Any notice under clauses 5.4 or 5.5 shall include a detailed
statement describing the nature of the breach. If the breach is
capable of being remedied and is remedied within the ninety-(90)-day
notice period, then the termination shall not take effect. If the
breach is of a nature such that it can be fully remedied but not
within the ninety-day notice period, then termination shall also not
be effective if the party involved begins to remedy the breach
within that period, and then continues diligently to remedy the
breach until it is remedied fully. If the breach is incapable of
remedy, then the termination shall take effect at the end of the
ninety day period in any event.


5.7 The expiration of the Technology Transfer Period, or the termination
of this Agreement under the preceding sub-clauses of this clause 5,
shall mean the termination, with effect from the expiry date or (as
the case may be) the effective date of termination, of the
obligations imposed on the parties under clauses 2.1 through 2.5 and
clause 3 (save only in relation to Notified Discoveries which have
been notified by the University to LeukoSite (UK) under clause 3.2
before the expiry date or the effective date of termination). The
remaining clauses shall survive the expiration of the Technology
Transfer Period and the termination of this Agreement, for whatever
reason. The duration of any licenses granted pursuant to clauses 3.4
and 3.5 shall be determined by the provisions for duration and
termination in each such license, and shall not be affected by the
operation of the termination clauses in this Agreement.


6 GENERAL


6.1 Clause headings are inserted in this Agreement for convenience only,
and they shall not be taken into account in the interpretation of
this Agreement.


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6.2 This Agreement shall not be assignable by any of the parties without
the prior written consent of all the other pates (which consent
shall not be unreasonably withheld or delayed), except that
LeukoSite without the consent of the other parties may assign this
Agreement to a successor in interest or transferee of all or
substantially all of the portion of the business to which the
Agreement relates.


6.3 Without prejudice to the University's other rights and remedies, if
LeukoSite (UK) fails to perform any of its obligations under this
Agreement, or commits any breach of those obligations, LeukoSite
(US) will indemnify the University against all losses, costs,
claims, demands and liabilities which may be incurred or suffered by
the University as a result of such non-performance or breach,
provided that LeukoSite (US) is promptly notified. LeukoSite (US)
shall then have the right to control the defense, settlement or
compromise of any such claim which is brought by a third party.


6.4 Subject to HM Treasury rules as they apply to Research Councils, if
another party to this Agreement fails to make any payment due to the
University under this Agreement then, without prejudice to the
University's other rights and remedies consequent upon breach of
this Agreement, the University may charge interest on the balance
outstanding, accruing from day to day at the rate of two per cent
(2%) per annum above the Lloyds Bank PLC Base Rate from time to time
in force and compounded annually as at 31 December.


6.5 If the performance by any party of any of its obligations under this
Agreement (other than an obligation to make payment) shall be
prevented by circumstances beyond its reasonable control, then such
party shall be excused from performance of that obligation for the
duration of the relevant event.


6.6 Unless such use is required by law, no party shall use the name of
any other party in any press release or product advertising, or for
any other commercial purpose, without that other party's prior
written consent; provided, however, that:


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6.6.1 publication of the sums received in the University's Annual
Report and similar publications shall not be regarded as a
breach of this clause;


6.6.2 the University will not unreasonably withhold consent to the
use of the University's name by LeukoSite in connection with a
financing.


6.7 Until further notice, the following shall be the parties'
representatives for the purpose of receiving invoices, payments,
statements, requests, notices and other documents under this
Agreement:


in the case of invoices, payments and statements addressed to
the University -.


The Administrator
Sir William Dunn School of Pathology,
University of Oxford
South Parks Road
OXFORD CX1 3RE
England;


in the case of requests, notices and other documents
addressed to the University -


The Director of the Research Services Office
University of Oxford
University Offices
Wellington Square
OXFORD OX1 2JD
England;


in the case of invoices, payments and statements
addressed to the MRC -


Helen Gadsden
Finance Division
The Medical Research Council
20 Park Crescent
LONDON W1N 4AL
England;


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in the case of requests, notices and other documents
addressed to the MRC -


The Head of the Technology Transfer Group
The Medical Research Council
20 Park Crescent
LONDON WIN 4AL
England;


in the case of LeukoSite (US) -


The President
LeukoSite, Inc.
800 Huntington Avenue
BOSTON Massachusetts MA 02115 USA;


in the case of LeukoSite (UK) -


The Managing Director
LeukoSite Limited
c/o Mark Andrew esq.
Messrs Bingham, Dana & Gould
39 Victoria Street
LONDON SCE1H OEE England.


6.3 Nothing in this Agreement shall create, imply or evidence any
partnership or joint venture between the parties or the relationship
between any of them of principal and agent.


6.9 This Agreement and its two (2) Schedules (which are incorporated
into and made a part of this Agreement) constitute the entire
agreement between the ...