Research Collaboration and License Agreement

CONFIDENTIAL TREATMENT


RESEARCH COLLABORATION AND LICENSE AGREEMENT


BETWEEN


ROCHE BIOSCIENCE


and


LEUKOSITE, INC.


* Confidential treatment requested: material has been omitted and filed separately with the Commission. 2
TABLE OF CONTENTS


1. Definitions............................................................


2. Grant..................................................................
2.1 License.......................................................
2.2 Third Party Agreements........................................
2.3 Sublicenses...................................................
2.4 Product Outside the Field of Research.........................


3. Due Diligence and Worldwide Marketing..................................
3.1 Diligence.....................................................
3.2 Marketing Reports.............................................


4. Confidential Information...............................................
4.1 Non-Disclosure................................................
4.2 Non-Confidential Information..................................
4.3 Permitted Disclosure..........................................


5. Research Collaboration.................................................
5.1 Object........................................................
5.2 Collaboration Management Council..............................
5.2.1 Oversight..............................................
5.2.2 Membership.............................................
5.2.3 Chair..................................................
5.2.4 Responsibilities.......................................
5.3 Meetings......................................................
5.4 CMC Deadlock..................................................
5.5 Conduct of Research Collaboration.............................
5.6 Visitation....................................................
5.7 Research Funding..............................................
5.7.1 RBS Funding at LKS.....................................
5.7.2 LKS Funding at LKS.....................................
5.7.3 RBS Funding at RBS.....................................
5.8 No Conflict With Research Collaboration.......................
5.9 Title to Equipment............................................
5.10 Term and Termination of the Research Collaboration............
5.10.1 Research Term.........................................
5.10.2 Termination by RBS....................................
5.11 Clinical and Regulatory Activity..............................


* Confidential treatment requested: material has been omitted and filed separately with the Commission. 3 6. Results of the Research Collaboration/Patents..........................
6.1 Mutual Disclosure.............................................
6.2 LKS Results...................................................
6.2.1 Title..................................................
6.2.2 Use....................................................
6.2.3 Patent Rights..........................................
6.3 Joint Results.................................................
6.3.1 Title..................................................
6.3.2 Use....................................................
6.3.3 Patent Rights..........................................
6.4 RBS Results...................................................
6.4. 1 Title.................................................
6.4.2 Use....................................................
6.4.3 Patent Rights..........................................
6.5 Publication...................................................
6.6 Infringement..................................................


7. Royalties and other Compensation
7.1 Royalties ...................................................
7.1.1 Amount.................................................
7.1.2 Patent Protection......................................
7.1.3 Competitive Pressures..................................
7.1.4 Other Royalties........................................
7.1.5 Royalty Term...........................................
7.1.6 Combination Product....................................
7.2 License Fee...................................................
7.3 Milestone Payments............................................
7.3.1 Amounts................................................
7.3.2 Replacement Product....................................
7.3.3 Termination............................................
7.4 Records.......................................................
7.5 Accounting Period.............................................


8. Representations and Warranties.........................................
8.1 Mutual Representations and Warranties.........................
8.2 LKS Representations and Warranties............................
8.3 Limitation....................................................


9- Indemnification.......................................................
9.1 LKS Indemnification...........................................
9.1..1 Research Collaboration................................
9.1.2 Products Liability.....................................
9.2 RBS Indemnification...........................................
9.3 Conditions to Indemnification.................................


-ii- 4 10. Assignment; Successors.................................................
10. 1 Assignment..............................................
10.2 Successors...............................................


11. Force Majeure..........................................................


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CONFIDENTIAL TREATMENT


RESEARCH COLLABORATION AND LICENSE AGREEMENT


This Agreement is entered into on July 12, 1996 (the "Effective Date") by and between SYNTEX (U.S.A.) INC., through its ROCHE BIOSCIENCE division (hereinafter referred to as "RBS"), a Delaware corporation located at 3401 Hillview Avenue, Palo Alto, California 94304, and LEUKOSITE, INC., a Delaware Corporation, located at 215 First Street, Cambridge, Massachusetts 02142 ("LKS").


WHEREAS, RBS is a member of the Roche Group, which is an international healthcare company which, among other things, develops, manufactures, markets and sells pharmaceutical products for human healthcare throughout the world; and


WHEREAS, LKS is the owner or exclusive licensee of certain technology and other proprietary know-how related to Products (as hereinafter defined); and


WHEREAS, RBS desires to obtain an exclusive right and license in and to such technology and proprietary know-how to develop and sell Products in the Territory (as hereinafter defined); and


WHEREAS, RBS desires to support additional research in the Field of Research as hereinafter defined to be conducted by LKS; and


WHEREAS, LKS is willing to grant the exclusive right and license desired by RBS and to conduct the research supported by RBS.


NOW, THEREFORE, in consideration of the mutual promises and other good and valuable consideration, the parties agree as follows:


1. DEFINITIONS.


The terms used in this Agreement have the following meaning:


1.1 "Accounting Period" shall have the meaning set forth in Section 7.5.


1.2 "Adjusted Gross Sales" means the gross sales invoiced by RBS for the Product(s) to Third Parties less deductions for returns (including withdrawals and recalls), rebates (retroactive price reductions, including Medicaid and similar types of rebates), volume (quantity) discounts,


* Confidential treatment requested: material has been omitted and filed separately with the Commission. 6
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discounts granted at the time of invoicing, sales taxes and other taxes directly linked to and included in the gross sales amount on a Product by Product basis for the countries concerned (excluding income and similar taxes).


1.3 "Affiliate" as applied to either party shall mean any company or other legal entity other than the party in question in whatever country organized, controlling, controlled by or under common control with that party. The term "control" means ownership or control, directly or indirectly, of at least fifty percent (50%) of the outstanding stock, voting rights or the right entitled to elect or appoint directors. Provided, however, Genentech, Inc., with offices located at 460 Point San Bruno Boulevard, South San Francisco, California, 94080, and its subsidiaries shall not be considered an Affiliate of RBS unless and until it is granted or extended rights under this Agreement upon written notice by RBS to LKS.


1.4 "Agreement Year" shall mean the twelve month period beginning on the date of execution of the Heads of Agreement, and each subsequent twelve (12) month period thereafter.


1.5 "Background Patent Right(s)" shall mean the LKS United States patent applications, including any division, continuation, or continuation-in-part thereof and any foreign patent application or equivalent corresponding thereto and any Letters Patent or the equivalent thereof issuing thereon or reissue, re-examination or extension (including Supplemental Protection Certificates) thereof, which are set forth in Appendix A attached hereto and made a part hereof.


1.6 "Calendar Quarter" shall mean the period of three (3) consecutive calendar months ending on March 31, June 30, September 30 or December 31, as the case may be.


1.7 "CBR Agreement" means the License Agreement effective as of June 15, 1993 between the Center for Blood Research and LKS.


1.8 "CMC" shall have the meaning set forth in Section 5.2.


1.9 "CMCC Agreement" means the License Agreement dated March 25, 1996 between the Children's Medical Center Corporation and LKS.


1.10 "commercially reasonable and diligent efforts" means, unless the Parties agree otherwise, those efforts consistent with the exercise of 7
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prudent scientific and business judgment, as applied to other products of similar scientific and commercial potential within the relevant product lines of RBS or, with respect to Section 5.5, LKS.


1.11 "Confidential Information" means all information and materials received by either party from the other party pursuant to this Agreement and all information and materials developed in the course of the Research Collaboration.


1.12 "FDA" shall mean the United States Food and Drug Administration.


1.13 "Field of Research" shall mean *********************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** **************************


1.14 "First Commercial Sale" shall mean in each country of the Territory, the first sale to a Third Party, in connection with the nationwide introduction of any Product by RBS, its Affiliates or Sublicensees following marketing and/or pricing approval by the appropriate governmental agency for the country in which the sale is to be made and, when governmental approval is not required, the first sale in that country in connection with the nationwide introduction of a Product in that country.


1.15 "Flat Fee" shall have the meaning set forth in Section 13.2.


1.16 "FTE" means full time-equivalent qualified scientist employee.


1.17 "Heads of Agreement" shall mean the agreement between the parties hereto entitled Heads of Agreement containing the basic terms of this Agreement and executed on April 18, 1996.


1.18 "High Throughput Screening" or "HTS " shall mean a *************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ***************************** 8
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1.19 "Imperial Agreement" means the License Agreement effective January 31, 1996 between The Imperial College of Science, Technology & Medicine and the Imperial Exploitation Limited, on the one hand, and LKS, on the other hand.


1.20 "IND" shall mean an Investigational New Drug application as such term is defined in the regulations of the FDA.


1.21 "Information" shall mean any data, formulas, process information or other information produced solely or jointly by LKS or RBS which is developed in and/or results from the Research Collaboration.


1.22 "Invention" shall mean any product, process, use, article of manufacture, composition of matter conceived or first actually or constructively reduced to practice, solely or jointly by LKS or RBS, which is developed in and/or results from the Research Collaboration.


1.23 "Joint Patents Rights" shall have the meaning set forth in Section 6.3.1.


1.24 "Joint Results" shall have the meaning set forth in Section 6.3.1.


1.25 "LKS Patent Rights" shall have the meaning set forth in Section 6.2.1.


1.26 "LKS Results" shall have the meaning set forth in Section 6.2.1.


1.27 "Major Market(s)" shall mean each of North America (the United States and Canada only), United Kingdom, Germany, France, and Japan.


1.28 "Material" shall mean any material or substance which is discovered, produced or derived solely or jointly by LKS or RBS, which is developed in and/or results from the Research Collaboration.


1.29 "NDA" shall mean a New Drug Application as such term is defined in the regulations of the FDA.


1.30 "Net Sales" means the ******************************************** ******************************************************************************** ******************************************************************************** 9
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******************************************************************************** ******************************************************************************** ************************************************************


1.31 "Other Royalties" shall have the meaning set forth in Section 7.1.4.


1.32 "Patent" means any United States patent application, including any division, continuation, or continuation-in-part thereof and any foreign patent application or equivalent corresponding thereto and any Letters Patent or the equivalent thereof issuing thereon or reissue, re-examination or extension (including Supplemental Protection Certificates) thereof.


1.33 "Patent Costs" means the fees and expenses paid to outside legal counsel and other Third Parties, and filing, prosecution and maintenance expenses, incurred in connection with the establishment and maintenance of rights under Patents.


1.34 "Patent Rights" means individually and collectively Background Patent Rights, LKS Patent Rights, RBS Patent Rights and Joint Patent Rights.


1.35 "Patent Protection" shall have the meaning set forth in Section 7.1.2.


1.36 "PLA" means a Product License Application as such term is defined by the FDA.


1.37 "Product" shall mean any article, composition, apparatus, material, method, process or service for therapeutic and diagnostic applications in humans in the Field of Research, including, but not limited to, small molecules, protein products, and gene therapy applications, which is or which incorporates or utilizes an Invention, Invention, Results and/or Material or the manufacture, import, sale, or use of which is covered by Patent Rights.


1.38 "RBS Patent Rights" shall have the meaning set forth in Section 6.4.1.


1.39 "RBS Patents" shall mean any United States patent application, including any division, continuation, or continuation in part thereof and any foreign patent application or equivalent corresponding thereto and any Letters Patent or the equivalent thereof issuing thereon 10
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or reissue, re-examination or extension (including Supplemental Protection Certificates) thereof, which is owned by or licensed by RBS and in and to which RBS has a transferable interest during the term of this Agreement insofar as it contains one or more claims to RBS Technology.


1.40 "RBS Results" shall have the meaning set forth in Section 6.4.1.


1.41 "RBS Technology" shall mean information and materials, including but not limited to, pharmaceutical, chemical and biological products, technical and non-technical data and information relating to the results of tests, assays, methods, and processes, and drawings, plans, diagrams and specifications and/or other documents containing such information and data owned by RBS or to which RBS has a transferable interest on the Effective Date and/or prior to termination of this Agreement and which are necessary for the manufacture, use or sale of a Product.


1.42 "Reciprocal Royalties" shall have the meaning set forth in Section 13.8.3.


1.43 "Research" shall mean the research performed by LKS and RBS in accordance with the Research Plan, as amended from time to time by agreement of the parties.


1.44 "Research Collaboration" shall have the meaning set forth in Section 5. 1.


1.45 "Research Plan" shall mean the written description of the research program for the research collaboration, including, but not limited to, goals, key decision points, timing to key decision points, resource commitments and other details identified by the CMC for the first Agreement Year as set forth in Appendix B attached hereto and made a part hereof, and for each subsequent Agreement Year of the Research Collaboration.


1.46 "Research Term" shall have the meaning set forth in Section 5.10.1.


1.47 "Results" means, collectively, LKS Results, Joint Results, and RBS Results.


1.48 "Royalty Term" shall have the meaning set forth in Section 7.1.5. 11
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1.49 "Sublicensee" shall mean any Third Party licensed by RBS to make, have made, import, use or sell any Product.


1.50 "Territory" shall mean all countries of the world.


1.51 "Third Party(ies)" shall mean a person or entity who or which is neither a party hereto nor an Affiliate of a party hereto.


1.52 "Third Party Agreement(s)" shall mean the CMCC Agreement, the Imperial Agreement, and the CBR Agreement.


1.53 "Valid Claim" shall mean a claim of an issued patent which has not lapsed or become abandoned or been declared invalid or unenforceable by a court of competent jurisdiction or an administrative agency from which no appeal can be or is taken.


1.54 The use herein of the plural shall include the singular, and the use of the masculine shall include the feminine.


2. GRANT.


2.1 License. LKS hereby grants to RBS and RBS hereby accepts from LKS an exclusive right and license under the Background Patents to make, have made, use and sell Products in the Territory. In addition, the parties shall grant each other the licenses for the Results as set forth in Section 6.


2.2 Third Party Agreements. To the extent information, inventions, materials and/or Patents licensed to RBS under this Agreement are rights which LKS has licensed from and under a Third Party Agreement(s), RBS understands and agrees as follows:


(i) The rights licensed to RBS by LKS are subject to the terms, limitations, restrictions and obligations of the Third Party Agreement(s).


(ii) RBS will comply with the terms, obligations, limitations and restrictions of the Third Party Agreement(s) applicable to sublicensees (excluding the financial provisions of such agreement). In particular Section 2.7 of the CMCC Agreement requires that Articles 2, 6, 7, 8, 9, 10, 11, 12 and 14 of that agreement be attached to any sublicense and such articles are attached hereto and made a part hereof as Appendix C. 12
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2.3 Sublicenses.


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******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ********************************************************************************


2.4 Product Outside the Field of Research. **************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ******************************************************************************** ********************************************************************************


3. DUE DILIGENCE AND WORLDWIDE MARKETING.


3.1 Diligence. RBS shall use commercially reasonable and diligent efforts to develop and register Products and upon registration, continue to use its commercially reasonable and diligent efforts to market and sell Products in each Major Market, taking into account the scientific and commercial potential for such Product or to sublicense the Products to Third Parties to do the same. Subject to the terms of this Section 3, all aspects relating to the marketing and sale of a Product shall be a business decision of RBS and its Affiliates. Subject to the terms of this Section 3, 13
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RBS or its Affiliates may choose not to market, distribute, or license the Product in a country based upon RBS' reasonable business judgment. The efforts of an Affiliate shall be deemed to be the efforts of RBS.


3.2 Marketing Reports. RBS or its Affiliates shall provide written reports to LKS on June 30th and December 31st of each year concerning the efforts being made in accordance with this Section with respect to a Product in each country of the Major Markets until launch of such Product in all Major Markets. The report shall contain information about the timing of Product launch in such countries. RBS or its Affiliates shall provide LKS with any additional information reasonably requested by LKS in this respect. No more frequently than once a year and upon LKS' request, RBS or its Affiliates shall also provide to LKS, both prior to and after marketing a Product, a brief summary of the marketing plans for each Product in the Major Markets and sales estimates for each Product to be sold in each Major Market. In addition, RBS or its Affiliates shall provide LKS with an overview of marketing activities and sales estimates on a per Product basis for the remaining countries in the Territory.


4. CONFIDENTIAL INFORMATION.


4.1 Non-Disclosure. Each party shall have the right to refuse to accept the other party's Confidential Information. Each party agrees not to disclose and to maintain the Confidential Information in strict confidence, to cause all of its Affiliates, sublicensees, agents, representatives and employees to maintain the disclosing party's Confidential Information in confidence and not to disclose any such Confidential Information to a third party without the prior written consent of the disclosing party and not to use such Confidential Information for any purpose other than as licensed under this Agreement.


4.2 Non-Confidential Information. The obligations of confidentiality will not apply to information which:


(i) was known to the receiving party or generally known
to the public prior to its disclosure hereunder; or


(ii) subsequently becomes known to the public by some
means other than a breach of this Agreement;


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