Development & License Agreement Between Autoimmune Inc. & Rycor Tech. Investment

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Exhibit 10.34

Portions of this exhibit have been omitted pursuant to a request for confidential treatment of those portions filed with the Securities and Exchange Commission. Such confidential portions have been filed with the Securities and Exchange Commission and are denoted in this exhibit by an asterisk (*).

DEVELOPMENT AND LICENSE AGREEMENT

between


AUTOIMMUNE INC.


and


RYCOR TECHNOLOGY INVESTMENTS CORP.

dated as of August 1, 2000 Table of Contents

TABLE OF CONTENTS


ARTICLE 1. DEFINITIONS 5

1.1 "Affiliate 5

1.2 "Development Phase" 5

1.3 "Effective Date" 5

1.4 "Field" 6

1.5 "Final Marketing Approval" 6

1.6 "Improvements" 6

1.7 "Licensed Products" 6

1.8 "Net Sales" 6

1.9 "Patent Rights" 6

1.10 "Third Party" 6

1.11 "Valid Claim" 6

ARTICLE 2. LICENSE GRANTS 7

2.1

Grant of License Rights by AutoImmune to Rycor 7

2.2 Sublicense 7

2.3 Reserved Rights of the United States Governmental and Brigham & Women's Hospital 7

2.4 Marketing and Distribution Rights and Obligations 7

2.5 No Other Technology Rights 7

ARTICLE 3. EFFORTS DURING DEVELOPMENT PHASE 7

3.1 Diligent Efforts of Rycor 7

3.2 Information Exchange, Reports 8

3.3 Right to Use Data 8

3.4 Attendance at Regulatory Meetings 8

ARTICLE 4. PAYMENTS 8

4.1 Diligence Payments 8

4.2 Royalties 9

4.2.1 Royalty Calculation 9

4.2.2 Royalty Reports, Exchange Rates 9

4.2.3 Audits 9

4.2.4 Foreign Royalties 10

4.2.5 Interest on Late Payments 10

ARTICLE 5. INTELLECTUAL PROPERTY 10

5.1 Filing, Prosecution and Maintenance of Patent Rights 10

5.1.1 Prosecution and Maintenance 10

5.1.2 Abandonment; Failure to Pay 10

5.1.3 Cooperation 10

5.2 Infringement by Others 10

5.2.1 Prosecution by AutoImmune 11

5.2.2 Prosecution by Rycor 11

5.3 Declaratory Actions 11

5.4 Infringement Action Against Rycor 11

5.5 Cooperation 12

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5.6 Improvements 12

ARTICLE 6. CONFIDENTIALITY 12

6.1 Nondisclosure Obligations 12

6.1.1 General 12

6.1.2 Limitations 12

6.2 Terms of this Agreement 13

6.3 Publications 13

6.3.1 Procedure 13

6.3.2 Delay 13

6.3.3 Resolution 13

6.4 Prohibition 13

6.5 Injunctive Relief 14

ARTICLE 7. REPRESENTATIONS AND WARRANTIES 14

7.1 Mutual Representations 14

7.1.1 Organization 14

7.1.2 Authorization 14

7.1.3 Binding Agreement 14

7.1.4 No Inconsistent Obligation 14

7.2 Limitations 14

7.2.1 Disclaimer of Warranty 14

7.2.2 Disclaimer of Certain Damages 15

7.2.3 Further Limitation 15

ARTICLE 8. INDEMNITY 15

8.1 Rycor Indemnity Obligations 15

8.2 AutoImmune Indemnity Obligations 15

8.3 Procedure 15

8.4 Insurance 16

ARTICLE 9. EXPIRATION AND TERMINATION 16

9.1 Expiration 16

9.2 Termination 16

9.2.1 Termination by Either Party 16

9.2.2 Termination by AutoImmune 16

9.3 Survival 17

9.4 Non-Limitation of Rights 17

ARTICLE 10. MISCELLANEOUS 17

10.1 Force Majeure 17

10.2 Assignment 17

10.3 Severability 17

10.4 Notices 18

10.5 Applicable Law 19

10.6 Dispute Resolution 19

10.6.1 Good Faith Attempt to Resolve 19

10.6.2 Mediation 19

10.6.3 Arbitration 19

10.6.4 Right to Seek Injunctive Relief 20

10.6.5 No Other Proceedings 20

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10.6.6 Status Quo 20

10.7 Public Announcements 20

10.8 Entire Agreement 20

10.9 Headings 20

10.10 Independent Contractors 20

10.11 Exports 20

10.12 Waiver 21

10.13 Counterparts 21

10.14 Interpretation 21

10.15 Identification of Patent Rights; Patent Marking 21

EXHIBIT A ? List of Patent Rights 22

EXHIBIT B ? RoyaltyRates 24 Table of Contents

DEVELOPMENT AND LICENSE AGREEMENT


THIS DEVELOPMENT AND LICENSE AGREEMENT dated as of August 1, 2000 (the "Agreement") is made between AUTOIMMUNE INC., a Delaware corporation ("AutoImmune"), and RYCOR TECHNOLOGY INVESTMENTS CORP., a corporation under the laws of the Province of Alberta, Canada ("Rycor").


RECITALS

1. AutoImmune is a biopharmaceutical company that develops drug therapies for the treatment of inflammatory diseases.

2. During the course of its work in the area of Inflammatory disease research, AutoImmune has developed certain proprietary technology related to methods and formulations for treating disease.

3. AutoImmune is interested in licensing this technology for use in the Field (as hereafter defined) to a third party which can maximize its potential by conducting clinical trials necessary to obtain approval from appropriate governmental regulatory authorities of products embodying such technology, and then selling such products on a worldwide basis.

4. Rycor is interested in obtaining an exclusive, worldwide license to AutoImmune's technology in the Field.


5. AutoImmune is willing to grant such a license upon the terms and conditions set forth below.


NOW, THEREFORE, in consideration of the premises and of the covenants herein contained, the parties hereto mutually agree as follows:


ARTICLE 1. DEFINITIONS


1.1 "Affiliate" shall mean any corporation or other entity which directly or indirectly controls, is controlled by or is under common control with a party to this Agreement. A corporation or other entity shall be regarded as in control of another corporation or entity if it owns or directly or indirectly controls more than fifty (50%) of the voting stock or other ownership interest of the other corporation or entity, or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or other entity or the power to elect or appoint fifty percent (50%) or more of the members of the governing body of the corporation or other entity.


1.2 "Development Phase" shall mean for each Licensed product the period commencing on the Effective Date and continuing until Final Marketing Approval for the Licensed Product has been obtained in the country.


1.3 "Effective Date" shall mean the date first written above. Table of Contents

1.4 "Field" shall mean the administration of native myelin basic protein (MBP) peptides by injection to non-mucosal sites for the treatment of multiple sclerosis.

1.5 "Final Marketing Approval" shall mean final approval of the governing health authority to market (including pricing approval where needed) a Licensed Product in a country.

1.6 "Improvements" shall mean all inventions, whether or not patentable information, know-how and data of any kind owned or controlled by, or licensed (with the right to sublicense) to, Rycor at any time during the term of this Agreement for use in connection with the development, manufacture or use of Licensed Products.

1.7 "Licensed Products" shall mean any product for use in the Field, or any method of making or using such a product for use in the Field, which, but for the license granted herein, would be within a Valid Claim of a pending patent application included in the Patent Rights or which would infringe a Valid Claim of a pending patent application or an issued patent included in the Patent Rights.


1.8 "Net Sales" shall mean the gross invoice sales price for the Licensed Products sold by Rycor, its Affiliates and/or its and their sublicensees less sales, tariff duties and/or use taxes directly imposed with reference to particular sales and separately invoiced. The transfer of the Licensed Products by Rycor or one of its permitted sublicensees to (i) an Affiliate of Rycor or (ii) another permitted sublicensee of Rycor shall not be considered a sale; in such cases, Net Sales shall be determined based on the invoiced sales price by the Affiliate or permitted sublicensee to its customer in an arms length transaction, less the deductions allowed under this Section. Every other commercial use or disposition of Licensed Products by Rycor or, to the extent permitted under Article 2, by permitted sublicensees of Rycor, other than reasonable quantities of promotional samples or bona fide sale to a bona fide customer shall be considered a sale of the Licensed Products at the weighted average Net Sales price then being invoiced by the seller in arm's length transactions.

1.9 "Patent Rights" shall mean the United States and foreign patent applications set forth in Exhibit A hereto; any other United States and foreign patent applications owned or controlled by or licensed (with the right to sublicense), to AutoImmune and/or its Affiliates during the term of this Agreement necessary or useful for the manufacture, use or sale of Licensed Products; any division, continuation or continuation-in-part of any such applications; any foreign patent applications corresponding to any such patent applications; and any United States or foreign patents or the equivalent thereof issuing thereon or any reissue or extension thereof.

1.10 "Third Party" shall mean any entity other than AutoImmune or Rycor and their respective Affiliates.

1.11 "Valid Claim" shall mean either (a) a claim of an issued and unexpired patent which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been declared to be invalid or unenforceable through reissue or disclaimer or otherwise or (b) a claim of a pending patent application which claim was Table of Contents

filed in good faith and has not been abandoned or finally rejected without the possibility of appeal or refiling of said application.


ARTICLE 2. LICENSE GRANTS


2.1 Grant of License Rights by AutoImmune to Rycor. Subject to the provisions of Section 2.3, AutoImmune hereby grants to Rycor the exclusive worldwide right and license under the Patent Rights to use, manufacture, have manufactured, import, offer for sale and sell the Licensed Products for use in the Field.


2.2 Sublicenses. Rycor shall have the right to grant sublicenses under the Patent Rights to Affiliates of Rycor and, with the prior written consent of AutoImmune, which consent shall not be unreasonably withheld, to Third Parties. A copy of each sublicense granted by Rycor under this Agreement shall be furnished to AutoImmune promptly after execution thereof. Any such sublicense shall conform to the terms hereof, and Rycor shall be responsible for the performance by its sublicensees of all obligations imposed under the terms of this Agreement.


2.3 Reserved Rights of the United States Governmental and Brigham & Women's Hospital. Rycor acknowledges that the license granted herein is subject to any rights of the United States Government under 35 U.S.C. a7a7200-212 and a license retained by the Brigham & Women's Hospital to use technology developed at the institution for its own internal research purposes.


2.4 Marketing and Distribution Rights and Obligations. Rycor shall have the exclusive worldwide right under the Patent Rights to market and distribute the Licensed Products. Rycor agrees, at its own expense, to use diligent efforts to market the Licensed Products to obtain maximum sales of the Licensed Products.


2.5 No Other Technology Rights. Except as otherwise expressly provided in this Agreement, under no circumstances shall a party hereto, as a result of this Agreement, obtain any ownership interest in or other right to any technology, know-how, patents, pending patent applications, products or biological materials of the other party, including items owned, controlled or developed by the other party, or transferred by the other party to said party, at any time pursuant to this Agreement. Without limitation of the foregoing, in no event shall Rycor obtain any license, ownership interest in, or other right to, any technology, know-how, patents, pending patent applications, products or biological materials of AutoImmune relating to (a) native myelin or MBP-based peptides conjugated, linked or bound to other proteins (e.g., fusion proteins), (b) native myeline or MBP-based peptides administered with heat shock proteins or adjuvants, (c) non-native myelin or MBP-based peptides (e.g., altered peptide ligands), or (d) any other field of use, including, without limitation, mucosal administration of myelin or MBP-based peptides.


ARTICLE 3. EFFORTS DURING DEVELOPMENT PHASE


3.1 Diligent Efforts of Rycor. During the Development Phase and thereafter, Rycor agrees, at its own expense, to use diligent efforts to perform research, preclinical development and clinical development with respect to Licensed Products and to seek and use its best efforts to obtain Final Market Approvals for Licensed Products throughout the world at the earliest Table of Contents

practicable date. Rycor shall have sole responsibility for filing and obtaining health registrations for all Licensed Products and shall have sole ownership of any such health registrations which it obtains.


3.2 Information Exchange, Reports. During the Development Phase and thereafter, Rycor shall keep AutoImmune informed as to its progress related to the Licensed Products, including but not limited to prompt disclosure of any information on adverse reactions and summarized results of all preclinical or clinical studies or tests performed by Rycor or its Affiliates and sublicensees. Once every twelve months following the Effective Date, Rycor shall provide AutoImmune with a reasonably detailed report describing Rycor's progress during the preceding twelve months with respect to Rycor's efforts under this Agreement.

3.3 Right to Use Data. Rycor shall retain copies of all information and data which Rycor generates during the course of preclinical and clinical trials conducted during the Development Phase, and Rycor shall grant AutoImmune a perpetual, non-exclusive, worldwide, royalty-free license to use any such information or data for any purpose, including the right to sublicense the right to such use. In the event this Agreement is terminated other than by Rycor pursuant to Section 9.2.1, AutoImmune shall retain such license and shall have unrestricted access to and use of such information and data for any purpose, including any regulatory purpose.

3.4 Attendance at Regulatory Meetings. Rycor will provide AutoImmune with reasonable prior notice of all meetings between its representatives and regulatory authorities regarding marketing approval of the Licensed Products. AutoImmune shall have the right to have a representative present at all important meetings; provided, however, that Rycor may revoke this right with respect to any particular meeting (other than with the FDA) if, in its good faith reasonable judgment, the presence of AutoImmune will be a detriment to the success of the meeting.

ARTICLE 4. PAYMENTS


4.1 Diligence Payments. In consideration for entering into this agreement and in partial consideration for the licenses granted herein, on each of the dates set forth below, Rycor shall make the corresponding payment sated below in United States dollars by wire transfer in accordance with instructions provided by AutoImmune. Payments made by Rycor to AutoImmune pursuant to this Section 4.1 are not refundable under any circumstances and will not be credited against royalty payments due to AutoImmune pursuant to Section 4.2.


On the first day of the first month following the Effective Date and on the first day of each of the successive eleven months, $2,500.00

On the first day of the thirteenth month following the Effective Date and on the first day of each of the successive eleven months $5,000.00


On the first day of the twenty-fifth month following the Effective Date and on the first day of each of the successive eleven months $7,500.00 Table of Contents

On the first day of the thirty-seventh month following the Effective Date and on the first day of each of the successive eleven months $10,000.00


On the first day of the forty-ninth month following the Effective Date and on the first day of each of the successive eleven months $12,500.00.

On the first day of the sixty-first month following the Effective Date and on the first day of each successive month $15,000.00

4.2 Royalties. Following the First Commercial Sale of a Licensed Product, Rycor will pay, on a quarterly basis without offset or deduction, a royalty in the amounts set forth below on Net Sales of the Licensed Product during the previous quarter.


4.2.1 Royalty Calculation. As additional consideration for the licenses granted to Rycor, Rycor, its Affiliates and/or sublicensees shall pay to AutoImmune a royalty on Net Sales the rates set forth on Exhibit B.


4.2.2 Royalty Reports, Exchange Rates. During the term of this Agreement following the First Commercial Sale of a Licensed Product, Rycor shall within forth-five (45) days after each calendar quarter furnish to AutoImmune a written quarterly report showing: (i) the gross sales of the Licensed Products sold by Rycor, its Affiliates, and its sublicensees during the reporting period and the calculation of Net Sales from such gross sales; (ii) the royalty due thereon; (iii) withholding taxes, if any, required by law to be deducted in respect of such royalties; and (iv) the exchange rates used in determining the amount of United States dollars. All sales in currencies other than United States dollars shall be converted into United States dollars calculated at the exchange rate published in The Wall Street Journal on the last day of the calendar quarter. If no royalty is due for any royalty period hereunder, Rycor shall so report. Rycor shall keep complete and accurate records in sufficient detail to properly reflect all gross sales and Net Sales and to enable the royalties payable hereunder to be determined.


4.2.3 Audits. Upon the written request of AutoImmune, Rycor shall permit an internal auditor or independent public accountant selected by AutoImmune and acceptable to Rycor which acceptance shall not be unreasonably withheld or delayed, to have access during normal business hours to such records of Rycor as may be reasonably necessary to verify the accuracy of the royalty reports described herein, in respect of any calendar year ending not more than thirty-six (36) months prior to the date of such request. All such verifications shall be conducted at AutoImmune's expense and not more than once in each calendar year. In the event such AutoImmune representative concludes that additional royalties were owed to AutoImmune during such period, the additional royalty shall be paid by Rycor within thirty (30) days of the date AutoImmune delivers to Rycor such representative's written report so concluding. The fees charged by such representative shall be paid by AutoImmune unless the audit discloses that the royalties payable by Rycor for ...