-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MTjqtxT4Zrkcohfr5F/mLIvxR+3EhR9znHGMyWshgqxy17jmTrJp+gAPwDy5eD37 /JuGTYdo7yOdWbSR+Wp+QA== 0000873591-96-000018.txt : 19960816 0000873591-96-000018.hdr.sgml : 19960816 ACCESSION NUMBER: 0000873591-96-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDIMMUNE INC /DE CENTRAL INDEX KEY: 0000873591 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 521555759 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19131 FILM NUMBER: 96613334 BUSINESS ADDRESS: STREET 1: 35 W WATKINS MILL RD CITY: GAITHERSBURG STATE: MD ZIP: 20878 BUSINESS PHONE: 3014170770 MAIL ADDRESS: STREET 1: 35 W WATKINS MILL ROAD CITY: GAITHERSBURG STATE: MD ZIP: 20878 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q {X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 Commission File No. 0-19131 MEDIMMUNE, INC. (Exact name of registrant as specified in its charter) Delaware 52-1555759 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 35 West Watkins Mill Road, Gaithersburg, MD 20878 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (301) 417-0770 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] As of June 30, 1996, 21,655,284 shares of Common Stock, par value $0.01 per share, were outstanding. MEDIMMUNE, INC. Index to Form 10-Q Part I Financial Page Item 1. Financial Statements Balance Sheets 1 Statements of Operations 2 Condensed Statements of Cash Flows 3 Notes to Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5-7 Part II Other Information 8-9 Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults upon Senior Securities Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K CytoGam is a registered trademark and RespiGam is a trademark of the Company.
ITEM 1. FINANCIAL STATEMENTS MEDIMMUNE, INC. BALANCE SHEETS (in thousands, except share data) June 30, December 31, 1996 1995 ---------- ---------- ASSETS: (Unaudited) Cash and cash equivalents $9,743 $14,165 Marketable securities 71,324 23,874 Trade and contract receivables, net 7,573 3,919 Inventory, net 6,173 6,027 Other current assets 885 1,005 ---------- ---------- Total Current Assets 95,698 48,990 Property and equipment, net 10,445 8,255 Other assets 152 87 ---------- ---------- Total Assets $106,295 $57,332 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY: Accounts payable $1,367 $2,318 Accrued expenses 6,526 6,538 Product royalties payable 1,743 1,776 Other current liabilities 114 111 ---------- ---------- Total Current Liabilities 9,750 10,743 Long term debt 1,926 1,984 Other liabilities 925 826 ---------- ---------- Total Liabilities 12,601 13,553 ---------- ---------- Commitments and Contingencies SHAREHOLDERS' EQUITY: Preferred stock, $.01 par value; authorized -- -- 5,524,525 shares; none issued or outstanding Common stock, $.01 par value; authorized 216 177 30,000,000 shares; issued and outstanding 21,655,284 at June 30, 1996 and 17,706,137 at December 31, 1995 Paid-in capital 171,919 113,435 Accumulated deficit (78,441) (69,833) ---------- ---------- Total Shareholders' Equity 93,694 43,779 ---------- ---------- Total Liabilities and Shareholder's Equity $106,295 $57,332 ========== ==========
The accompanying notes are an integral part of these financial statements. Page 1 MEDIMMUNE, INC. STATEMENTS OF OPERATIONS (Unaudited) (in thousands except per share data) For the three For the six months ended months ended June 30 June 30, 1996 1995 1996 1995 -------- -------- -------- -------- REVENUES: Product Sales $6,830 $4,236 $13,454 $7,300 Contracts 97 3,624 4,907 6,487 -------- -------- -------- -------- Total revenues 6,927 7,860 18,361 13,787 -------- -------- -------- -------- COSTS AND EXPENSES: Cost of sales 4,063 2,911 8,122 5,468 Research and development 6,849 7,991 12,242 14,559 Selling, administrative and 4,202 2,138 8,559 4,658 general -------- -------- -------- -------- Total expenses 15,114 13,040 28,923 24,685 -------- -------- -------- -------- Operating Loss (8,187) (5,180) (10,562) (10,898) Interest income 1,206 374 2,074 690 Interest expense (59) (63) (120) (127) -------- -------- -------- -------- Net Loss ($7,040) ($4,869) ($8,608) ($10,335) ======== ======== ======== ======== Loss Per Common Share ($0.33) ($0.32) ($0.42) ($0.69) ======== ======== ======== ======== Shares Used in Computing Loss Per Share 21,386 15,436 20,340 15,029 ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements. PAGE 2
MEDIMMUNE, INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) For the six months ended June 30, 1996 1995 -------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: ($8,608) ($10,335) Net loss Noncash items: Depreciation and amortization 881 767 Amortization of discount on marketable (302) (167) securities Other changes in assets and liabilities (4,646) 1,838 -------- --------- Net cash used in operating activities (12,675) (7,897) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: (Increase)decrease in marketable securities (47,148) 2,143 Capital expenditures (3,071) (412) -------- --------- Net cash (used in)/provided by (50,219) 1,731 investing activities -------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of common 58,523 17,233 stock and exercise of stock options Decrease in long term debt (51) (46) -------- --------- Net cash provided by financing 58,472 17,187 activities -------- -------- Net (decrease) increase in cash and cash (4,422) 11,021 equivalents Cash and cash equivalents at beginning 14,165 6,350 of period -------- --------- Cash and cash equivalents at end of period $9,743 $17,371 ======== =========
The accompanying notes are an integral part of these financial statements. PAGE 3 MEDIMMUNE, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) General The financial information presented as of June 30, 1996 and 1995, and for the periods then ended is unaudited, but in the opinion of the Company's management contains all adjustments (which consist only of normal recurring adjustments) necessary for a fair presentation of such financial information. Inventory Inventory is comprised of the following (in thousands): June 30, 1996 December 31, 1995 ------------ --------------- Raw Materials 1,433 $2,193 Work in Process 3,653 2,510 Finished Goods 1,087 1,324 ------ ------ 6,173 $6,027 ====== ====== SUBSEQUENT EVENTS The Company broke ground on August 12, 1996 on its approximately $50 million manufacturing facility. On July 31, 1996, the Company purchased two adjacent parcels of land in Frederick, Maryland, totaling 26 acres, for $1.5 million. Additionally, on August 9, 1996, the Company signed an Engineering, Procurement, Construc- tion and Validation Agreement with Fluor Daniel to design, build, equip and validate the facility. The financing for the new facility is expected to be provided by a combination of $13 million of State, Frederick County and Frederick City loans and the proceeds from the recently completed convertible debt offering. The Company also has begun work on a $6 million expansion of its Gaithersburg, Maryland pilot plant facility for production of products undergoing human clinical evaluation. Construction of the pilot plant is expected to be completed in 1997. PAGE 4 ITEM 2. MEDIMMUNE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1996 AND 1995 Product sales grew to $6.8 million in second quarter 1996 from $4.2 million in second quarter 1995, an increase of 61%. CytoGam sales increased to $6.3 million, or 49%, primarily as a result of a 44% increase in vials sold, as well as a price increase which took effect in mid-1995. Sales of the Company's second product, RespiGam, amounting to $0.5 million, are expected principally during the RSV season which typically occurs from November through April. Contract revenue in the 1996 second quarter decreased to $0.1 million from $3.6 million in the 1995 quarter, reflecting the completion of milestone and research funding payments under the Company's strategic alliance with American Home Products ("AHP"), formerly American Cyanamid Company. Under the terms of the alliance, the Company and AHP will share in the profits or losses of RespiGam, sales for which commenced January, 1996; reimbursements or payments under this arrangement are deducted from or added to operating expenses. Cost of sales increased to $4.1 million in second quarter 1996 from $2.9 million in second quarter 1995 an increase of 40%. This increase was primarily attributable to a 44% increase in unit volume for CytoGam and the addition of cost of sales for RespiGam, offset by a reduction in the royalty paid on CytoGam sales in the 1996 period as a result of an amendment to the agreement with Connaught Laboratories, Inc. ("Connaught") Research, development and clinical spending was $6.8 million in this year's quarter compared to $8.0 million in the 1995 quarter, a decrease of 14%. Research and development expenses incurred in 1996 include costs of conducting the Company's MEDI-493 (RSV monoclonal antibody) and MEDI-500 (T10B9) clinical trials, while 1995 expenses included the costs of conducting RespiGam Phase 3 clinical trials. The 1996 quarter also includes a $0.5 million payment to Rockefeller University for a worldwide exclusive license to commercialize Rockefeller's Streptococcus pneumoniae technology. Selling, administrative and general expenses increased to $4.2 million in this year's quarter versus $2.1 million in the 1995 quarter, an increase of 97%. This increase was primarily a result of marketing expenses incurred for RespiGam and the first full quarter of expenses associated with the expanded sales force, partially offset by reimbursement from AHP of their share of RespiGam product line loss for the quarter, as well as a $0.6 million increase in general and administrative expenses primarily due to charges of $0.4 million for costs PAGE 5 incurred in connection with the Company's proposed manufacturing facility. Interest income of $1.2 million was earned in the 1996 second quarter, compared to $0.4 million in the second quarter of 1995 reflecting higher cash balances available for investment, partially offset by a decrease in interest rates which lowered the overall portfolio yield. Interest expense of $0.1 million was incurred in both the 1996 and 1995 quarters. The net loss incurred in the 1996 second quarter of $7.0 million, or $.33 per common share, compared to a net loss for the second quarter of 1995 of $4.9 million, or $.32 per common share. Shares used in computing loss per share were 21.4 million and 15.4 million for the 1996 and 1995 quarters, respectively. These results were consistent with the Company's objectives for the quarter and with the continued development of its immunotherapeutic and vaccine products. Quarterly financial results may vary significantly due to seasonality of RespiGam product sales, fluctuation in sales of CytoGam, research funding and expenditures for research, development and marketing programs. RespiGam sales are expected to occur primarily during, and in proximity to, the RSV season, which typically occurs between November and April in the United States. In the third and fourth quarters of 1996, the Company anticipates substantial increases in research and development expenses, primarily reflecting costs of MEDI-493 and MEDI-500 clinical trial programs. Production capacity may impose constraints on finished product availability of CytoGam and RespiGam. SIX MONTHS ENDED JUNE 30, 1996 AND 1995 Total revenue for the six months ended June 30, 1996 was $18.4 million compared to $13.8 million in the 1995 first half. Sales of CytoGam increased to $10.5 million in this year's first half from $7.3 million in the 1995 period, reflecting a 37% increase in units sold as well a price increase in mid-1995. RespiGam sales were $3.0 million in the first half of 1996 following receipt of marketing approval from the U. S. Food and Drug Administration ("FDA") on January 18, 1996. Contract revenue in the 1996 first half decreased to $4.9 million from $6.5 million in the 1995 period, primarily reflecting funding provided under the Company's strategic alliance with American Home Products. Cost of sales in the 1996 first half rose to $8.1 million from $5.5 million in the 1995 period, reflecting a 37% increase in unit volume of CytoGam and the addition of cost of sales for RespiGam. Cost of sales for both periods include the purchase of certain finished product inventory from a third party at a higher PAGE 6 per-unit cost in order to meet product demand due to supply shortages. Research, development and clinical spending decreased 16% to $12.2 million in this year's first half versus $14.6 million in the 1995 period. Expenses in the 1996 period include the costs of conducting MEDI-493 (RSV monoclonal antibody) and MEDI-500 (T10B9) clinical trials. Expenses in the 1995 period included the costs of Phase 3 RespiGam clinical trials. Selling, administrative and general expenses increased to $8.6 million in first half 1996 versus $4.7 million in first half 1995 primarily reflecting costs of marketing RespiGam and the expansion of the sales force, partially offset by AHP reimbursement of their share of RespiGam product line loss. Administrative expenses for first half 1996 included a charge of $0.4 million associated with the Company's proposed manufacturing facility. Interest income of $2.1 million was earned in the 1996 first half, compared to $0.7 million in the first half of 1995, reflecting higher cash balances available for investment, partially offset by a decrease in interest rates which lowered the overall portfolio yield. Interest expense of $0.1 million was incurred in both the 1996 and 1995 periods. The net loss incurred in the 1996 first half of $8.6 million, or $0.42 per common share, compared to a net loss for the first half of 1995 of $10.3 million, or $0.69 per common share. Shares used in computing loss per share were 20.3 and 15.0 million for 1996 and 1995, respectively. LIQUIDITY AND CAPITAL RESOURCES Cash and marketable securities at June 30, 1996 were $81.1 million compared to $38.0 million at 1995 year end. Net cash used in operating activities in the six months ended June 30, 1996 was $12.7 million, reflecting primarily the net loss for the period, an increase in accounts receivable, and a $2.7 million contractual payment to Connaught, offset by increased accruals for clinical trial expenses. Capital expenditures of $3.1 million for the six months were primarily for lab equipment and initial design of a new manufacturing facility. The Company expects to invest approximately $56 million in expansion of its pilot plant facility and on construction of a manufacturing facility during 1996 and 1997. In February 1996, the Company completed a public offering of 3.45 milion shares of common stock resulting in net proceeds of $58 million. Additionally, on July 8, 1996, the Company completed a convertible subordinated note offering for net proceeds of $58.0 million. The 7% notes, due 2003, will be used for the construction of the manufacturing facility, the development pilot plant and general corporate purposes. PAGE 7 ____________________ THE STATEMENTS IN THIS QUARTERLY REPORT THAT ARE NOT DESCRIPTIONS OF HISTORICAL FACTS MAY BE FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS REFLECT MANAGEMENT'S CURRENT VIEWS, ARE BASED ON CERTAIN ASSUMPTIONS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO, FACTORS SUCH AS PRODUCT DEMAND AND MARKET ACCEPTANCE RISKS, THE EARLY STAGE OF PRODUCT DEVELOPMENT, COMMERCIALIZATION AND TECHNOLOGICAL DIFFICULTIES, CAPACITY AND SUPPLY CONSTRAINTS AND OTHER RISKS DETAILED IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE CURRENTLY ANTICIPATED AS A RESULT OF THE FOREGOING OR OTHER FACTORS. PART II OTHER INFORMATION Item 1. Legal Proceedings - None Item 2. Changes in Securities - None Item 3. Defaults upon Senior Securities - None Item 4. Submission of Matters to a Vote of Security Holders - [Change in number of authorized shares] Item 5. Other Information - None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 10.57 Plasma Supply Agreement dated effective as of February 8, 1996, by and between DCI Management Group, Inc. and MedImmune, Inc. 10.58 License and Research Suport Agreement dated as of April 16, 1996, between The Rockefeller University and MedImmune, Inc. (b) Reports on Form 8-K: Report Date Event reported 4/18/96 MedImmune and Rockefeller University Establish Collaboration to Discover and Commercialize Products for Prevention and Treatment of PAGE 8 Streptococcus Pneumoniae 4/25/96 MedImmune Reports Product Sales Increase 116% for Q1 1996 6/6/96 MedImmune Secured Broad Patent Coverage for Human B19 Parvovirus Vaccine 6/20/96 MedImmune Announces Proposed Private Offering of Convertible Debt MedImmune Reports Data on New Lyme Disease Vaccine Candidate at International Lyme Meeting - Antibodies to Newly Discovered Decorin Binding Protein Prevent Infection in Animals 6/20/96 MedImmune In-Licenses Key Human Papillomavirus Vaccine Intellectual Property from German Cancer Research Center SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MEDIMMUNE, INC. (Registrant) Date: August 14, 1996 /s/David M. Mott President and Chief Operating Officer (Principal accounting and financial officer) PAGE 9 EX-10 2 PORTIONS OF THE FOLLOWING DOCUMENT HAVE DELETED DUE TO THE CONFIDENTIAL NATURE OF THE INFORMATION CONTAINED THEREIN. SUCH DELETIONS ARE INDICATED AS FOLLOWS: (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) THE CONFIDENTIAL INFORMATION HAS BEEN FILED SEPARATELY WITH THE COMMISSION EXHIBIT 10.57 PLASMA SUPPLY AGREEMENT This Plasma Supply Agreement, dated effective as of the 6th day of February, 1996 by and between DCI Management Group,Inc., a New Mexico Corporation, c/o G.W. Matlin, 71 South Bedford Road, Mount Kisco, New York, ("Supplier") and Medimmune, Inc., a Delaware corporation with offices at 35 West Watkins Mill Road, Gaithersburg, Maryland 20878 ("Purchaser"). WITNESSETH: WHEREAS, Purchaser desires to purchase Source Plasma (as defined by Title 21 CFR 600.01 et seq) from Supplier in connection with a program requiring plasma with acceptable neutralizing titers for respiratory syncytial virus (RSV) (hereafter termed "Product"); and WHEREAS, Supplier is willing to supply Purchaser's requirements for Product, up to specified levels; NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein set forth, the parties hereto agree as follows: 1.0 TERM AND RENEWAL 1.1 The initial term (the "Initial Term") of this Agreement shall begin on the effective date noted above and unless sooner terminated as provided herein shall continue for a period of three (3) years from the date of this Agreement. In anticipation of the parties extending this Agreement beyond the Initial Term, the parties agree that during the month of November, 1996 and annually thereafter they shall meet for the purpose of negotiating volumes and prices for the 12-month period three years into the future. For example in November, 1996 the parties shall meet to discuss volumes and prices for months 37-48. 2.0 PRODUCTS AND PRICES 2.1 Supplier shall supply to Purchaser for the Initial Term, and any extension thereof, Product in accordance with the specifications attached as Exhibit A hereto (hereafter the "Specifications") . 2.2 During the first twelve months of this agreement, Purchaser shall pay for Product purchased hereunder at a price equal to (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) per liter of plasma, F.O.B. Louisville, KY or Aberdeen, MD, or any destination in continental U.S. as directed by Purchaser. The price for months 13-24 will be reviewed on or before November 1, 1996, and on or before November 1, 1997 for months 25-36 of the contract. Based on existing plasma market prices for all source plasma types in the domestic and international market places there shall be a price increase each year. The minimum increase of the price hereunder for each 12 month period shall be the percentage change in the Consumer Price Index (All Urban Consumers CPI-U/United States City Average/All Items Indexed) over the previous twelve month period as determined and published by the United States Department of Labor/Bureau of Labor Statistics and the maximum shall be (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED). In no event shall the price ever be less than the initial price hereunder. The parties shall negotiate such price increase in good faith. If the parties cannot agree by December 15th on a new price, each party shall select a proposed price within the above parameters for submission to an arbitrator who shall select one party's proposal. The arbitrator shall be selected by the parties, and the arbitration shall be conducted, according to the rules of the American Arbitration Association, and the arbitrator's decision shall be final and non-appealable. Each party shall pay its own costs and expenses, including attorneys fees and costs incurred in any proceedings in court to confirm the arbitration decision. Pending the decision of the arbitrator, Purchaser shall pay one- half of Supplier's proposed price increase per liter for each liter of plasma purchased during the year and upon determination by the arbitrator of the applicable price for such year the parties shall promptly adjust their accounts retroactively, including interest on the amount owed at the prime rate as published daily in the Wall Street Journal (the "Prime Rate"). The actual price paid by Supplier for any tests required or recommended by the US FDA or adopted by the Plasma Industry which are not set forth in Section 5.2 shall be added to the agreed upon price and shall not be considered as part of the price increase for purposes of this Section. Such additional test costs which may occur during any period where the price has already been established shall automatically be added to the price per liter effective on test implementation date. Supplier shall use its best efforts to keep such cost to a minimum. 3.0 PAYMENT 3.1 Purchaser shall pay for Product at the price set forth in Section 2.2 Terms of payment are net thirty (30) days from date of shipment. 3.2 The price set forth in Section 2.2 includes manufacturing, packaging, quality control and holding of Product and does include the cost of shipment to the F.O.B. point. 3.3 Each invoice will include the following details: a) shipment number b) cost per shipment c) volume per shipment d) bill of lading number of each shipment e) center name f) number of cartons g) carton sequence h) cost per liter i) total volume j) total cost for the invoice 4.0 ORDER AND DELIVERY 4.1 Supplier shall provide Purchaser (through Purchaser's designee laboratory) at no cost to Purchaser plasma samples in amounts and at times mutually agreed upon by Purchaser and Supplier. In the event that a Plasmapheresis center is supplying plasma for two (2) of the Purchaser's plasma programs, the Supplier shall, as directed by the Purchaser provide two (2) separate plasma samples, one for each program to the same or different locations as designated by Purchaser. These samples shall enable Purchaser to test and identify plasma donors and/or plasma lots suitable for producing Product for Purchaser in accordance with the Specifications. 4.2 All sales of Product by Supplier to Purchaser hereunder shall be subject to the provisions of this Agreement and shall not be subject to the terms and conditions contained in any purchase order of Purchaser or confirmation of Supplier except insofar as any such purchase order or confirmation establishes Product ordered or sold thereunder and the delivery date and carrier thereof. 4.3 During the initial 24-month term of this Agreement Purchaser shall accept all material from identified acceptable RSV donors up to the following maximum volumes: for the period covering months 1 thru 12 -(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED); for the period covering months 13 thru 24 - (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)and for the period covering months 25 thru 36- (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED). Notwithstanding the aforesaid, after the initial 24 month period if Purchaser determines that its total annual volume needs of RSV plasma is less than the amount then currently being supplied by Supplier, Purchaser shall notify Supplier in writing of its anticipated total volume requirement from all vendors for months 25-36 of the Initial Term of the Agreement and in such event Supplier shall cease sending new donor samples for screening to Purchaser's laboratory in order to limit growth in RSV plasma production. Purchaser however, shall continue to purchase all material produced from previously approved donors for the period covering months 25 thru 36 up to a maximum of(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED). If at any time during the 25th - 36th months the average volume of plasma produced from previously approved donors drops below (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)of the needed total volume of material required by Purchaser from all Suppliers, then in such event Supplier shall resume sending samples of new donors plasma to Purchaser's laboratory for testing and approval, and Purchaser shall accept such RSV plasma from Supplier up to a level equal to (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) of Purchaser's total RSV annual volume requirements.If at any time during the initial 36-month period of thiscontract or any extension period Purchaser is unable toproduce finished product from the RSV plasma being suppliedas a result of U.S. Food and Drug Administration suspension or revocation of Purchaser's license or Purchaser's voluntary withdrawal of all finished product from the market place,then in such event Purchaser may elect to suspend this Agreement until such time as the production and sale of finished product is reinstated provided Purchaser accepts and timely pays for all RSV plasma from approved donors which was drawn from donors prior to the date of the Food and Drug Administration's suspension or revocation of Purchaser's license or Purchaser's voluntary withdrawal of all finished product from the market place. This paragraph shall not be interpreted as in any way being in conflict with Section 16.0 of this Agreement. 4.4 Supplier shall arrange insured common carrier transportation of Product to Purchaser's designated destination. Such carrier shall be a qualified shipper of perishable medical products and shall be approved in advance by both Purchaser and Supplier. Title to and risk of loss of Product shall pass to Purchaser at the time of delivery to the carrier at the F.O.B. point. Supplier shall use its best efforts to deliver quantities of the Product specified herein, it being understood that Purchaser shall accept Supplier's total RSV production from acceptable approved donors during the initial period of this contract up to the maximum herein before set forth sub section 4.3. Supplier's failure to supply quantities of RSV plasma equal to Purchaser's production needs or maximum volumes herein before set forth shall not be deemed a breach of contract, it being understood and agreed that the Supplier has no control over the volume of RSV plasma to be collected at various facilities. Supplier shall invoice Purchaser for Product no earlier than the date of shipment. 4.5 Supplier shall schedule the timely shipment of Product pursuant to Purchaser's requirements as established by Purchaser in writing. For the purpose of this Agreement, a timely shipment shall be a shipment that leaves the F.O.B. point not later than two weeks after approval from Purchaser to ship product. No shipment, however, shall be for less than 40 liters of material. It is also agreed that Supplier can ship prior to receipt of shipping authorization from Purchaser's designee laboratory; conditioned upon the following: A - Purchaser pays for material when units are authorized. Supplier can bill without authorization if authorization has not been received three (3) weeks from date of shipment of samples. B - Supplier will issue a credit memo to Purchaser for any unauthorized units that are shipped in error. 4.6 Supplier shall supply Purchaser a list of all centers covered by this Agreement. (Exhibit B) Supplier shall have the right to add additional centers to said list with prior written approval of Purchaser, so long as Purchaser is not then currently purchasing plasma from said additional centers. 5.0 QUALITY CONTROL 5.1 Supplier and its subcontractors and vendors shall manufacture Product in accordance with the Specifications. All plasma collection facilities shall be currently QPP certified by the American Blood Resources Association. 5.2 Plasma shipments will be accompanied by a plasma packing list that records for each unit shipped a unit number, donor identification number, draw date, volume and test results for HBsAg, ALT, Anti HIV I & II and Anti HCV. A six-month "look back" program on Donors reactive to HBsAg and Anti HIV I & II will remain in effect on all units shipped to Purchaser. The tests used for screening plasma shipped to Purchaser shall conform to the most current technology available for use in the plasma collection industry and shall conform to FDA requirements for such tests. 5.3 Supplier agrees that all Product supplied hereunder and the manufacture and delivery thereof shall be in compliance with all applicable laws and regulations (21 CFR 211.606 and 640). 5.4 Supplier shall provide Purchaser's Quality Control Department with a reasonable number of production samples of Product for QC testing by Purchaser. 5.5 All product manufactured and sold hereunder is subject to Purchaser's inspection, prior to acceptance pursuant to Section 6.1. 5.6 Purchaser shall have the right upon reasonable advance notice during normal business hours to inspect each facility at which Product is produced for the purpose of observing production and quality control and inspecting all documents applicable to manufacture, processing and holding of Product. Such inspections shall be limited to a frequency of no more than once every 12 months unless quality deviations occur, in which case Purchaser shall have the right to inspect more often. All source documents concerning laboratory testing shall be retained in accordance with FDA regulations and they shall be available for inspection by Purchaser. 5.7 Purchaser and Supplier shall immediately notify each other with respect to any "Look Back" and adverse Drug Reaction Reports with respect to Acceptable Donors and resulting Product. 6.0 ACCEPTANCE AND REJECTION 6.1 If upon receipt and inspection of Product by Purchaser at the destination specified in the shipping instructions, the shipment, or any portion thereof, does not conform to the order or the Specifications, Purchaser shall promptly notify Supplier of such condition and afford Supplier a reasonable opportunity to inspect the Product and make any appropriate adjustment or replacement. Supplier shall complete the adjustment or replacement within sixty (60) days of notification by Purchaser. The cost of any replacement shall be at the sole expense of Supplier including any return shipment or reshipment. During this period and at all times prior to shipment by Supplier, plasma is to remain stored at temperatures specified by FDA regulations. 6.2 In the event Purchaser experiences an over supply of Product resulting in excess inventory, upon reasonable written request by Purchaser, Supplier shall use its best efforts to assist Purchaser in selling such excess Product through Supplier's existing distribution channels. 7.0 COLLECTION SITES 7.1 Supplier and Purchaser will determine by mutual agreement the plasmapheresis locations which will provide samples and/or plasma for the program herein mentioned. Centers chosen will remain in the program until all Donors from a center are removed from the program due to antibody titer loss or the program comes to an end. Before admittance to the program all centers must provide to the Purchaser a completed Plasmapheresis Center Information Form, as supplied by the Purchaser or Purchaser's designee laboratory. It is agreed that no proprietary questions will be answered by Supplier. In addition, it is agreed that a general company overview can be utilized to answer questions that have the same answers for all centers. It is understood and agreed that the identification of donors by Purchaser as meeting Purchaser's specification for production of RSV Hyperimmune Globulin is proprietary information and that although Supplier does not know Purchaser's exact specifications Supplier is aware that once a donor has been identified as meeting such specifications, such plasma could potentially be sold to third parties for manufacture by such third parties into RSV Hyperimmune Globulin. Accordingly, it is agreed that supplier will not, during the term of this agreement and for twelve months thereafter, knowingly sell plasma from any approved donor identified by Purchaser as having RSV Antibody to any other purchaser for the intended use by such other purchaser in the manufacturing of RSV Hyperimmune Globulin. 8.0 TERMINATION 8.1 In addition to any other remedy it may have, either party shall have the right to terminate this Agreement if the other party fails to remedy and make good any material default in the performance of any material condition or obligation under this Agreement within sixty (60) days of written notice thereof. 8.2 The failure of either party to terminate this Agreement by reason of the breach of any of its provisions by other party shall not be construed as a waiver of the rights or remedies available for any subsequent breach of the terms or provisions of this Agreement. 8.3 The exercise of one remedy by a party shall not preclude such party from exercising additional remedies. 8.4 Upon termination of this Agreement, Purchaser must pay for any Product already delivered. 8.5 Either party may terminate this Agreement effective immediately upon giving notice of termination, if the other party shall file a petition in bankruptcy, shall be adjudicated as bankrupt, shall take advantage of the insolvency laws of any state, territory or country, shall make an assignment for the benefits of creditors, shall be voluntarily dissolved, or shall have a receiver, trustee or other court officer appointed for its property. 8.6 Purchaser further covenants and agrees that during the term of this Agreement and any renewal or extension period and for twelve (12) months thereafter, Purchaser shall not, without the express written consent of Supplier purchase any plasma of the same or similar specifications as set forth in Exhibit "A" directly or indirectly from any parties who have supplied such plasma to Supplier and which Supplier sold to Purchaser. It is agreed and understood that any breach by Purchaser of this covenant set forth in this sub paragraph 8.6 shall cause irreparable harm to Supplier and Supplier shall be entitled to obtain an injunction against Purchaser in addition to any other legal or equitable remedies available to Supplier. 9.0 WARRANTIES AND INDEMNIFICATIONS 9.1 Supplier warrants and represents that at the time of shipment, Product covered by this Agreement shall conform to the applicable Specifications and the other requirements expressly set forth in this Agreement and that the Supplier shall deliver Product to Purchaser free from claims or liens of third parties that may affect title to the Product. 9.2 Purchaser shall indemnify and hold Supplier harmless from any and all third party claims of disease related liability arising from the use in manufacturing of Product provided by Supplier, except those which result from Supplier's negligence or willful misconduct. Supplier shall promptly notify Purchaser of any such claims. Where Purchaser acknowledges that the indemnification is applicable with respect to such claims Purchaser shall control the defense, settlement or compromise of any such claims. 10.0 NOTICES 10.1 Any and all notices permitted or required to be given hereunder shall be sent by registered or certified mail, postage and fees paid, with return receipts requested, addressed as on the first page of this Agreement or at such other address as to which a party gives notice under this Section 10.1. Notice shall be deemed given as of the date of mailing. 11.0 ASSIGNMENT 11.1 Neither party shall assign this Agreement in whole or in part other than as part of the sale of all or substantially all of its business assets without the prior written consent of the other. Upon a permitted assignment, all of the provisions of this Agreement and all rights and obligations of the parties hereunder shall be binding upon and inure to the benefit and be enforceable by the successors and assigns of Supplier and Purchaser. 12.0 ENTIRE AGREEMENT 12.1 This Agreement, including the Exhibits attached hereto constitutes the sole and entire Agreement between the parties with respect to the sale of Product by Supplier to Purchaser and may not be altered or modified except in writing and signed by duly authorized officers of both parties. 13.0 INDEPENDENT CONTRACTOR 13.1 In all activities under this Agreement, Supplier shall act and be deemed an independent contractor with no authorization to in any way obligate or bind Purchaser. This Agreement shall not be deemed held or construed as creating a copartnership between Supplier and Purchaser for any purpose whatsoever. 14.0 SEVERABILITY 14.1 If any terms or provisions of this Agreement shall be invalid or unenforceable, the remaining terms hereof shall not be affected, but shall be valid and enforced to the fullest extent permitted by law, unless such invalid or unenforceable term or provision materially affects a party's rights or expected rights under this Agreement. 15.0 HEADINGS 15.1 The headings used in this Agreement are intended for guidance only and shall not be considered part of the written understanding between the parties hereto. 16.0 FORCE MAJEURE 16.1 Neither party shall be liable for non-performance caused by factors beyond that party's direct control, said factors including but not being limited to: (i) natural disasters or other "Acts of God"; (ii) riots, wars, or insurrection; or (iii) actions of any governmental agency, including rules, laws, orders, regulations and restrictions. 17.0 APPLICABLE LAW 17.1 This Agreement shall be construed and enforced in accordance with the law of the State of New York without reference to choice of law principles. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the day and year first above written. MEDIMMUNE, INC. DCI MANAGEMENT GROUP, INC. BY: David M. Mott BY: Ira London President Secretary 2/7//96 2/7/96 EXHIBIT A SPECIFICATIONS FOR RSV SOURCE PLASMA 1. PURCHASER'S DESIGNEE Plasma samples and plasma units are to be shipped for screening and processing to such persons or entities designated by Purchaser from time to time. Purchaser's designee for receipt of plasma samples shall be the Massachusetts Public Health Biologics Laboratory (MPHBL). Purchaser shall notify Supplier in writing of any change in such designee. 2. LICENSES Supplier shall supply Medimmune and its designee with documentation that each Source Plasma center of Supplier selected by Supplier for producing Product is currently licensed by the FDA for collection of Source Plasma (i.e. copy of FDA license). 3. PLASMA SAMPLES A 0.5 ml sample of plasma from each donation from donors for whom Supplier seeks qualifications must be submitted and received by Medimmune or its designee. 4. ACCEPTABLE RSV DONORS Medimmune or its designee will advise Supplier of donor acceptable for contributing to the RSV plasma supply program ("Acceptable Donors") based on the donor's RSV antibody titers. Acceptable Donors must also meet the FDA requirements for Source Plasma. Acceptable Donors will continue to remain acceptable based on their RSV titers until Medimmune or its designee notifies Supplier in writing that the donor is no longer acceptable. Acceptable Donors shall be removed from the RSV program immediately upon receiving such notification from Medimmune or its designee. Plasma from Acceptable Donors drawn up to the day after notification date will be accepted. 5. ACCEPTABLE RSV PLASMA UNITS All plasma drawn from Acceptable Donors (see item #4 above) will be accepted as long as the Donor remains an Acceptable Donor and the plasma meets all FDA requirements for Source Plasma. If a Donor becomes unacceptable, all plasma units collected up to the day after notification will be accepted but units drawn after that date will not be accepted (see item #4 above). Before shipping plasma units, Supplier must send a copy of the proposed "Plasma Packing List" (see item #6 below) to Medimmune or its designee for verification. 6. LABELLING AND TESTING Plasma shipments must be accompanied by a "Plasma Packing List" that records for each unit shipped in identification (i.e. "Control") number of the unit, a donor identification number, signature of pheresis center Manager, date plasma was drawn, volume and results of the HBsAg, Anti HIV I & II and Anti HCV, and ALT tests. 7. "LOOK BACK" Purchaser must be informed of any donor becoming positive for Anti HIV I & II or HBsAg, if plasma from that donor has been shipped to Purchaser anytime during the preceding 6 months, so the Purchaser can judge if previous donations are acceptable for fractionation. 8. DELIVERY AND SHIPPING A. Until Supplier is notified otherwise as contemplated in item #1 above, plasma should be shipped to: Baxter Hyland Protein Control 4501 Colorado Blvd. Los Angeles, CA 90039 B. Invoice should be sent to: Medimmune, Inc. 35 West Watkins Mill Road Gaithersburg, MD 20878 C. Plasma should be shipped frozen in suitable containers so that the plasma is maintained at temperatures specified by FDA regulations or required for product integrity. The requirement for product integrity of RSV is minus 20 degrees Celsius. D. Plasma is to be shipped in containers with cardboard dividers. Each case will have a barcode affixed on the outside of the carton. The exact details of information on barcode will be mutually agreed to. E. DCI will provide Medimmune a copy of Bill of Lading and Packing List for each unit within 48-hours of shipment. F. DCI will have management reports for Medimmune to review material expected, material received, material processed, and material cleared for shipment. It is agreed that DCI and MedImmune's MIS staff will review the best format for reports. DCI and MedImmune will review the ability for MedImmune to have access to certain data on the RSV computer system. At a minimum the information required would include, but not be limited to, the following data which might be accessed either weekly, monthly or quarterly: number of screens sent, number of donors enrolled, number of units authorized, number of units picked up/sent (broken down by shipment and volume), number of new donors enrolled, number of screens sent to enroll those donors, number of donors dropped from the program, enrollment dates, number of units sent since enrollment, date dropped from the program, and number of units sent weekly, monthly and/or quarterly. Data will be provided on any kind of ASCii file, preferably, delimited, with a standard output that is on PC accessible media. It is agreed that all donor information is confidential in addition, it is agreed that all software design, including Data Base structures and other proprietary information be confidential to the extent that such information is not already in Purchaser's possession or is not now hereafter entered in the public domain, such information is supplied only for Purchaser's internal use. At no time can it be discussed with any Third Party without prior written approval of Supplier. 9. The following are the procedures to cover all RSV Plasma collected from approved donors. A. DCI will send RSV confirm samples and paperwork for complete cartons only. The samples will be sent with an electronic packing form disk. B. The cover sheet will be modified (example attached) to indicate the number of cartons, individual carton numbers, and total units from each individual center. C. Mass Laboratory will inspect each incoming sample shipment and advise if the shipment was complete or which units are missing sample tubes. There will be a place on the coversheet for Mass Lab to confirm the number of samples received from each center. If a sample is missing, Mass will indicate in the space provided, the details indicating which bleed is missing a sample. It is understood that Mass has agreed that it will confirm within three days from receipt of the samples. D. DCI will give its best effort to obtain the missing sample and send it with the following weeks confirmed samples package. It is agreed that the packing list for the entire carton will be sent with the sample. Mass has agreed to give their best effort to release single unit shipments at the same time as the entire lot. E. Mass will advise DCI of any problem units within any individual carton. DCI will arrange for the corrected paperwork for the individual carton involved to be faxed to Mass. F. Within a two week period, it is Purchaser's and Supplier's understanding Mass will issue to DCI confirmation shipment verification. The verification will reflect the details of the original paperwork or the paperwork with any changes that were required by Mass prior to verification. We expect Mass to issue confirmation by entire lots, same as they receive them, confirmation including lot numbers. G. DCI Centers will ship to Bio Med when confirmation shipment verification is received. All paperwork will be modified if required to remove any problem units. The paperwork will be sent with shipping disk the same as always. A copy of the Bill of Lading will be included with paperwork. H. All Nabi and contract centers will send in modified paperwork to reflect any changes required by Mass prior to receipt of verification. Upon verification notice, DCI will submit corrected paperwork and shipping disk to Mass. The actual shipment will not leave the Queens Village warehouse until shipping approval is received. It is Purchaser's and Supplier's understanding that Mass will issue shipping approval within a two week period after date of shipment of samples to Mass. DCI may ship and bill MedImmune if approval is not received within the time period defined in section 4.5A of the RSV Agreement. EXHIBIT B (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) EX-10 3 PORTIONS OF THE FOLLOWING DOCUMENT HAVE DELETED DUE TO THE CONFIDENTIAL NATURE OF THE INFORMATION CONTAINED THEREIN. SUCH DELETIONS ARE INDICATED AS FOLLOWS: (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) THE CONFIDENTIAL INFORMATION HAS BEEN FILED SEPARATELY WITH THE COMMISSION EXHIBIT 10-58 LICENSE AND RESEARCH SUPPORT AGREEMENT AGREEMENT made as of the 16th day of April, 1996 by and between MEDIMMUNE, INC. ("LICENSEE"), a corporation organized and existing under the laws of the State of Delaware, having an office at 35 West Watkins Mill Road, Gaithersburg, Maryland 20878, and THE ROCKEFELLER UNIVERSITY ("ROCKEFELLER") a nonprofit education corporation organized and existing under the laws of the State of New York, having an office at 1230 York Avenue, New York, New York 10021. W I T N E S E T H: WHEREAS, ROCKEFELLER scientists have developed valuable technology and know-how related to methods and compositions for preventing and treating pneumococcal disease, which technology is described and/or otherwise identified in this Agreement and its attachments; WHEREAS, ROCKEFELLER wishes to conduct a program of continuing research in connection with such technology and is willing to grant a license for a fair and reasonable remuneration to the sponsor of such research, such license to cover both the existing technology which is the initial subject matter of this Agreement and to include an option to expand such license to include any new inventions or improvements developed in the course of such continuing research sponsored by the LICENSEE pursuant to the provisions of this Agreement; and WHEREAS, LICENSEE wishes to obtain such license and option rights and to sponsor the research program proposed by Rockefeller, all in the manner and subject to the term, conditions and understandings described herein; NOW, THEREFORE, the Parties hereto agree as follows: 1. DEFINITIONS The following terms will have the meanings assigned to them below when used in this Agreement. 1.1 "PARTY" shall mean either LICENSEE or ROCKEFELLER and "PARTIES" shall mean both COMPANY and LICENSEE. l.2 "LICENSED PATENT RIGHTS" shall mean (a) all patent application(s) concerning the subject matter of this Agreement which are listed on Exhibit "A" attached hereto and all patents which may issue thereon; (b) any patent and patent application covering any New Invention(s) defined below as to which the LICENSEE shall have exercised its option rights provided for in Paragraphs 2.5 and 4.2 of this Agreement; and (c) all patent applications which are divisions, continuations, continuations-in-part, reissues, renewals, foreign counterparts, extensions or additions of the patents and applications described in (a) and (b) hereof, and all patents which may issue thereon. 1.3 "NEW INVENTION(S)" shall mean all invention(s) made in the course of the Research Project, which inventions(s) are made by ROCKEFELLER faculty members, employees, agents or others working under ROCKEFELLER'S control, whether patentable or not. 1.4 "TECHNICAL INFORMATION" shall mean the technical data, information, materials and know-how owned by ROCKEFELLER and existing in a tangible form, at the date of this Agreement arising from the laboratories of DRS. ELAINE TUOMANEN and/or ROBERT MASURE at Rockefeller as set forth in Exhibit "A" or developed in the course of the RESEARCH PROJECT sponsored by LICENSEE hereunder, and which is needed in the practice of LICENSED PATENT RIGHTS. 1.5 "RESEARCH PROJECT" shall mean the program of research to be conducted by DRS. ELAINE TUOMANEN and ROBERT MASURE referred to in Paragraph 2 of this Agreement and described in further detail in Exhibit "B" attached hereto or in any amendment thereof that may be agreed to by the Parties, and which is sponsored by LICENSEE pursuant to the provisions of this Agreement. 1.6 "BUDGET" shall mean the budget for the RESEARCH PROJECT provided for in Paragraph 2.2 of this Agreement. 1.7 "TERRITORY" shall mean the entire world. 1.8 "PRODUCTS" shall mean any and all Products, the manufacture, use or sale which is or later becomes covered by a valid claim of LICENSED PATENT RIGHTS. 1.9 "NET SALES" shall mean all gross revenues recognized in accordance with generally accepted accounting principles from the sale of PRODUCTS by LICENSEE or any sublicensee of LICENSEE, less only returns and allowances actually paid or allowed, including, but not limited to, prompt payment and volume discounts, charge-backs from wholesalers and other allowances granted to customers or wholesalers of the PRODUCT, whether in cash or trade, freight packing, insurance, rebates, and sales and other taxes based on sales prices when deducted from the gross amount actually received by the selling company, but not including taxes when assessed on income or gross receipts derived from such sales. 1.10 "EFFECTIVE DATE" shall mean the date on which this Agreement has been executed by both PARTIES. 1.11 "VALID CLAIMS" 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. 1.12 The term "AFFILIATE" as applied to LICENSEE shall mean any company or other legal entity other than LICENSEE in whatever country organized, controlling or controlled by LICENSEE. The term "control" means possession, of the power to direct or cause the direction of the management and policies whether through the ownership of voting securities, by contract or otherwise. 2. RESEARCH PROJECT 2.1 The RESEARCH PROJECT consists of a program of research described in Exhibit "B" to be conducted by DRS. ELAINE TUOMANEN and ROBERT MASURE and their colleague scientists at ROCKEFELLER. The RESEARCH PROJECT may be modified by written agreement of the PARTIES. The PARTIES agree to cooperate with each other to the extent that they are reasonably able to do so in providing access to needed gene sequences of S. pneumoniae as soon as they become available to LICENSEE, needed reagents and similar materials as well as in the continuing review, redesign and/or redirection of the RESEARCH PROJECT, and will keep each other currently advised of the progress and results thereof during the period of sponsored research. The RESEARCH PROJECT is initially envisioned to be carried out over a three-year period. The PARTIES contemplate its renewal for an additional two-year period but only by mutual written consent. 2.2 LICENSEE agrees to provide funding to ROCKEFELLER for the RESEARCH PROJECT in accordance with the following BUDGET: Funding for the RESEARCH PROJECT shall be payable by LICENSEE to ROCKEFELLER quarterly in advance, in the amount of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) per year for each of the three (3) years initially contracted for (which annual amount includes overhead), with the direct cost to increase (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)each year (i.e., second year and beyond). 2.3 DRS. ELAINE TUOMANEN and ROBERT MASURE will be the Principal Investigators of the RESEARCH PROJECT and shall have full and complete control over the conduct and direction thereof. In the event that DRS. ELAINE TUOMANEN and ROBERT MASURE should leave ROCKEFELLER, or be unable or unwilling, for any reason, to continue with the RESEARCH PROJECT before its completion, ROCKEFELLER may propose one or more new Principal Investigators for LICENSEE'S consideration. If LICENSEE does not wish to continue the RESEARCH PROJECT under such circumstances, it may terminate its commitment for further research support, subject only to payment of any pro rated amount of the BUDGET that may be due up to the date of DRS. ELAINE TUOMANEN and ROBERT MASURE'S cessation of involvement in the RESEARCH PROJECT. 2.4 The Principal Investigator or another RESEARCH PROJECT Investigator designated by the Principal Investigator will supply LICENSEE with a reasonably detailed written report periodically as agreed between the Principal Investigators and the LICENSEE during the term of the sponsored RESEARCH PROJECT. Subject only to their terms of Paragraphs 2.6 and 2.7 herein, LICENSEE shall have the unrestricted right to use all results and data from the RESEARCH PROJECT for any purpose and in its internal research programs or in required governmental reports, without prior written approval of ROCKEFELLER. 2.5 ROCKEFELLER agrees that any NEW INVENTIONS made in the course of the RESEARCH PROJECT shall be promptly disclosed by ROCKEFELLER to LICENSEE, and the LICENSEE shall have the option to acquire an exclusive license to such NEW INVENTIONS, in the manner set forth in Paragraph 4.2 below. 2.6 ROCKEFELLER and LICENSEE recognize the traditional freedom of all scientists to publish and present promptly the results of the RESEARCH PROJECT. ROCKEFELLER and LICENSEE also recognize that exclusive patent rights can be jeopardized by public disclosure prior to the filing of suitable patent applications. Therefore, ROCKEFELLER agrees that each proposed publication, before submission to a publisher, will be submitted to LICENSEE for review in connection with preservation of exclusive patent rights. COMPANY shall have thirty (30) days in which to review each publication, which may be extended for an additional thirty (30) days when LICENSEE provides substantial and reasonable need for such extension. By mutual agreement, this period may be further extended for not more than an additional three (3) months. When requested by ROCKEFELLER in advance, LICENSEE, at its discretion, may allow for simultaneous submission of the publication to the publisher. Any publication by LICENSEE personnel will also be subject to similar pre-review by ROCKEFELLER before publication. Scientists at both ROCKEFELLER and LICENSEE will be expected to treat matters of authorship in a proper collaborative spirit, giving credit where it is due and proceeding in a manner which fosters cooperation and communication, but will not to do anything in this regard which will jeopardize the issuance of a valid patent. 2.7 ROCKEFELLER and LICENSEE agree to hold in confidence all information received from the providing party which is identified as confidential or proprietary information, and agree not to disclose it to any third party or use it for any purpose except as provided herein. The foregoing restrictions on use and disclosure shall not apply to any such information which: (a) is or later becomes generally available to the public by use, publication or the like, through no fault of the other PARTY; or (b) is obtained from a third party who had the legal right to disclose the same to the PARTY; or (c) the PARTY already possesses, as evidenced by its written records, predating receipt thereof from the other PARTY; and such restrictions shall survive termination of this Agreement. Notwithstanding the foregoing, LICENSEE shall have the right to disclose Confidential Information of ROCKEFELLER to a third party who undertakes an obligation of confidentiality and non-use with respect to such information, at least as restrictive as LICENSEE'S obligation under this Section. 2.8 During the period which Licensee is funding the RESEARCH PROJECT under this Agreement, the Principal Investigator may not seek or accept funding from a commercial sponsor using any information or materials developed or expected to be developed in the RESEARCH PROJECT. 2.9 (a) During the period in which LICENSEE holds a license, ROCKEFELLER and Principal Investigator shall not, without LICENSEE'S prior written approval, distribute or knowingly allow Materials developed in the RESEARCH PROJECT ("Materials") to be distributed to for-profit entities or persons known to be employed thereby or consulting or performing research therefor other than under a license permitted under this Agreement. (b) ROCKEFELLER and Principal Investigator shall have the right to transfer Materials to not-for-profit entities or persons known to be affiliated therewith provided that such entities or persons sign the Material Transfer Agreement set forth as Exhibit "C". 3. PATENTS 3.1 Prior Patent Expenses: Within five (5) business days following the execution of this Agreement, LICENSEE shall reimburse ROCKEFELLER for all unreimbursed out-of-pocket amounts expended by ROCKEFELLER, prior to the date hereof for the preparation, filing, prosecution and maintenance of LICENSED PATENT RIGHTS being licensed to LICENSEE pursuant to Paragraph 4.1 of this Agreement, said amount being(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED). 3.2 LICENSEE shall promptly decide whether or not it wishes ROCKEFELLER to file U.S. and/or foreign patent applications on any NEW INVENTION which may be patentable. ROCKEFELLER shall select qualified independent patent counsel to file and prosecute any such NEW INVENTION applications, including divisionals, continuations, continuations-in-part, reissues, and corresponding foreign applications. LICENSEE shall bear the reasonable cost of filing, prosecution, and maintenance of each such NEW INVENTION application to which LICENSEE has exercised its option provided in Paragraphs 2.5 and 4 hereof. 3.3 ROCKEFELLER shall arrange for LICENSEE representatives to meet with patent counsel at a reasonable time(s) and place(s). Upon request, ROCKEFELLER shall promptly deliver to LICENSEE copies of any patentability search reports made by patent counsel including any patents located, a copy of each Project Patent application, and a copy of each Project Patent that issues thereon. 3.4 LICENSEE shall promptly advise ROCKEFELLER of any decision not to continue to finance the filing, prosecution, or maintenance of any LICENSED PATENT RIGHTS in adequate time to allow ROCKEFELLER, at its own cost, to effectuate such filing, prosecution, or maintenance if it so desires; and shall, at the request of Rockefeller, take whatever steps may be necessary to return to ROCKEFELLER all rights which LICENSEE may have thereto. Nothing herein is intended or shall be construed as obligating ROCKEFELLER to apply for any U.S. or foreign patent at its own expense, or to defend, enforce, or support any LICENSED PATENT RIGHTS against any third party. 4. LICENSE 4.1 ROCKEFELLER grants to LICENSEE, an exclusive license, including the right to grant sublicenses, under LICENSED PATENT RIGHTS and TECHNICAL INFORMATION, for the full term of any patent issuing thereon, said exclusive license being a license to make, have made, use and sell PRODUCTS in any country of the TERRITORY, except to the extent that ROCKEFELLER'S right to do so may be subject to the provisions of 35 United States, Section 20l et seq., and regulations and rules promulgated thereunder and any agreements implementing the provisions of such Federal Laws and regulations and rules, none of which prevent the grant of the license herein described. 4.2 ROCKEFELLER grants to LICENSEE the exclusive right and option to add to the exclusive license granted in Paragraph 4.1, any NEW INVENTIONS. LICENSEE may exercise such option by notice in writing to ROCKEFELLER, at any time within three (3) months of receipt by LICENSEE of a written invention disclosure, which may be extended by an additional three (3) months when LICENSEE provides a reasonable basis for such extension. In the event that LICENSEE does not exercise such right and option with respect to a particular NEW INVENTION within the period specified, ROCKEFELLER shall be free to license such New Invention to a third party or parties. 4.3 LICENSEE'S license shall continue until the last to expire LICENSED PATENT RIGHT, after which LICENSEE shall have a fully paid up, non-cancelable license. Nothing herein is intended or shall be construed as obligating ROCKEFELLER to file or maintain any U.S. or foreign patents at its own expense, or to defend, enforce, or support any patent or patent applications which may be included in LICENSED PATENT RIGHTS to which it has granted license right to LICENSEE; provided, however, that ROCKEFELLER will cooperate with LICENSEE in its activity in applying for U.S. or foreign patents or in the defense or enforcement of LICENSED PATENT RIGHTS. Nothing herein is intended or shall be construed as obligating LICENSEE to maintain its license with respect to any patent or application licensed hereunder and to finance the preparation, filing, prosecution or maintenance of any patent application in any country or jurisdiction in which it believes it is not in the best business interest of LICENSEE to do so. 4.5 LICENSEE, or any Affiliate or Sublicensee of LICENSEE, shall have the right but not the obligation to institute patent infringement proceedings against third parties based on any LICENSED PATENT RIGHTS licensed hereunder. ROCKEFELLER agrees to give Notice to LICENSEE promptly, in writing, of each infringement of LICENSED PATENT RIGHTS of which ROCKEFELLER is or becomes aware during the term of this Agreement. If LICENSEE does not institute infringement proceedings against such third parties, ROCKEFELLER shall have the right, but not the obligation, to institute such proceedings within thirty (30) days of Notice of its intention to commence such proceedings given to LICENSEE, in writing, and provided that LICENSEE does not, within such thirty (30) day period, institute its own proceedings. The expenses of such proceedings, including lawyers' fees, shall be borne by the PARTY instituting suit. The PARTY instituting suit shall have the right to select counsel to conduct the suit. Each PARTY shall execute all necessary and proper documents and take all other appropriate action, including but not limited to being named as a participating party, to allow the other PARTY to institute and prosecute such proceedings. Any award paid by third parties as a result of such proceedings (whether by way of settlement or otherwise) shall first be applied toward reimbursement for the legal fees and expenses incurred, and the excess, if any, shall be shared on a pro rata basis based on the expenses incurred by each PARTY. 5. ROYALTIES AND OTHER LICENSE CONSIDERATION 5.1 As further consideration for the license grant provided in Paragraph 2.1, Licensee agrees to pay ROCKEFELLER the following amounts in the nature of royalties: (a) Initial License Fee: A one- time non-refundable payment of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) shall be due and payable upon the execution of this Agreement (b) Royalties on Net Sales of Products, as follows: (i) For NET SALES of PRODUCTS up (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) in any calendar year a royalty at the rate of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) of NET SALES; and (ii) For NET SALES of PRODUCTS in excess thereof, a royalty at the rate of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) of NET SALES The obligation to pay royalties hereunder is imposed only once with respect to the sale, lease or disposition of PRODUCTS regardless of the number of Valid Claims which cover such PRODUCTS. Additionally, there shall be no obligation to pay royalties on the sale, lease or disposition of PRODUCTS by LICENSEE to its AFFILIATES or sublicensees for resale, but in such instances, the obligation to pay royalties shall arise upon the sale by its LICENSEES, AFFILIATES or sublicensees to unrelated third parties. In the event that LICENSEE is required to pay royalties to a third party(s) for a PRODUCT covered by claims of the license herein granted, (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) of such royalties payable to such third party(s) will be creditable against royalties owed to ROCKEFELLER hereunder. In no event, however, will ROCKEFELLER'S royalty be reduced by more than (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) of that provided hereunder. (c) Milestone payments as follows: (i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) payable within sixty (60 days of the first approved submission of an IND in any country of the TERRITORY on a PRODUCT, (ii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) payable within sixty 60 days of the start of the first Phase III clinical trial in any country of the TERRITORY, (iii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) payable within sixty (60) days of the first FDA approval or its equivalent in any country of the TERRITORY on a PRODUCT. 5.2 Upon commencement of NET SALES of PRODUCTS which generate a royalty to the ROCKEFELLER pursuant to this Agreement, LICENSEE shall, within sixty (60) days of the close of the calendar quarter in which such Net Sales begin, make quarterly reports to the ROCKEFELLER indicating the total NET SALES of PRODUCTS in the quarter and the calculation of royalties due thereon. Any royalty then due and payable shall be included with such report. LICENSEE'S records shall be open to inspection by the ROCKEFELLER or a certified public accountant designated by the ROCKEFELLER, at reasonable times, and from time to time (but no more than once each calendar year), for the sole purpose of verifying the accuracy of the reports and the royalty payments. ROCKEFELLER shall bear the costs of such inspection unless the inspection establishes an error in the ROCKEFELLER'S favor of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) or more of the amount payable for the period of inspection. 5.3 LICENSEE agrees to provide to ROCKEFELLER periodically, but no more frequently than annually, which progress in research and development involving the LICENSED TECHNOLOGY and regulatory approvals, manufacturing and sublicensing information. 6. PUBLICITY LICENSEE will not use ROCKEFELLER'S name or the name of any member of its faculty or its staff for any public, commercial or advertising purposes without the prior written approval of the ROCKEFELLER and faculty or staff member involved; provided, however, that it is expressly agreed that LICENSEE may reveal or identity ROCKEFELLER or any member of its faculty or staff as the inventor, source or origin of any Technology, TECHNICAL INFORMATION or any PRODUCT or process for its own internal records or in any disclosures or filings required by governmental law or regulation. 7. PRODUCT LIABILITY (a) LICENSEE agrees to indemnify and hold harmless ROCKEFELLER and its trustees, officers, agents, faculty, employees, and students from any and all liability arising from injury or damage to person or property resulting directly or indirectly from LICENSEE'S use, manufacture, or sale of any PRODUCT covered by any Licensed Patent Rights or Technical Information. LICENSEE further agrees to obtain and maintain in force product liability and comprehensive general liability insurance against any claims or expenses for which it is obligated to indemnify as provided above in amounts not less than (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) per incident and (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) annual aggregate. The policies representing such insurance shall specify ROCKEFELLER as named insured. (b) LICENSEE'S indemnification under (a) shall not apply to any liability, damage, loss or expense to the extent that it is directly attributable to the negligent activities or intentional misconduct of the Indemnitees. (c) LICENSEE shall have the right to control the defense, settlement or compromise of any such action. (d) ROCKEFELLER shall promptly give the LICENSEE Notice of any claim asserted or threatened on the basis of which the Party giving such Notice intends to seek indemnification from LICENSEE as herein provided and shall fully cooperate with all reasonable requests of LICENSEE in the respect thereto. 8. TERMINATION 8.1 The licenses herein granted shall continue for the full term of any patents licensed hereunder as the same or the effectiveness thereof may be extended by any governmental authority, rule or regulation applicable thereto. 8.2 Either PARTY may terminate this Agreement in the event of a material breach by the other PARTY, provided only that the breaching PARTY is given Notice of the breach and a reasonable time, not to exceed thirty (30) days, in which to cure such breach, excepting, however, that the failure of LICENSEE to meet any payment of laboratory support provided for in Paragraph 2 hereof (or for any further term that may be agreed upon by the Parties) shall be deemed a material breach for which LICENSEE shall have but ten (10) days to cure or automatically forfeit all license rights hereunder and remain liable for damages for breach of contract. 8.3 ROCKEFELLER agrees that in the event this Agreement and/or the rights and licenses granted under this Agreement to LICENSEE are terminated, any sublicense granted under this Agreement, which provides for royalty rates payable to ROCKEFELLER at least equal to those provided for in Paragraph 5.1(b), shall remain in full force and effect as a direct license between ROCKEFELLER and the sublicensee under the terms and conditions of the sublicense agreement, subject to the sublicensee agreeing to be bound to ROCKEFELLER under such terms and conditions within thirty (30) days after ROCKEFELLER provides written notice to the sublicensee of the termination of LICENSEE'S rights and licenses under this Agreement. At the request of LICENSEE, ROCKEFELLER will acknowledge to a sublicensee, ROCKEFELLER'S obligations to the sublicensee under this Agreement. 9. TIMES AND CURRENCIES OF PAYMENT 9.1 Royalty payments shall be made in United States Dollars or, if sales are made in the currency of other countries, royalties shall be calculated in the currency of such other country and be converted into United States Dollars using the applicable exchange rate published in The Wall Street Journal on the last day of the applicable reporting period. 9.2 If at any time, legal restrictions prevent the prompt remittance of part or all royalties by Licensee with respect to any country where a PRODUCT is sold, LICENSEE shall have the right and option to make such payment by depositing the amount in local currency to ROCKEFELLER'S account in a bank or other depository in such country. 10. NOTICES Any Notice required to be given pursuant to this Agreement shall be made by personal delivery or, if by mail, then by registered or certified mail, return receipt requested, with postage and fees prepaid, by one PARTY to the other PARTY at the addresses noted below, or to such other address as such PARTY may designate in writing from time to time to the other PARTY. In the case of the LICENSEE, Notice should be sent to: MedImmune, Inc. 35 West Watkins Mill Road Gaithersburg, Maryland 20878 Attention: CEO In the case of ROCKEFELLER, Notice should be sent to: The Rockefeller University 1230 York Avenue New York, New York 10021 Attention: Office of the General Counsel 11. ASSIGNMENT; SUCCESSORS This Agreement shall not be assignable by either of the parties without the prior written consent of the other party (which consent shall not be unreasonably withheld), except that LICENSEE without the consent of ROCKEFELLER may assign this Agreement to an AFFILIATE or to a successor in interest or transferee of all or substantially all of the portion of the business to which this Agreement relates. 11.2 Subject to the limitations on assignment herein, this Agreement shall be binding upon and inure to the benefit of said successors in interest and assigns of LICENSEE and ROCKEFELLER. Any such successor or assignee of a party's interest shall expressly assume in writing the performance of all the terms and conditions of this Agreement to be performed by said party and such Assignment shall not relieve the Assignor of any of its obligations under this Agreement. 12. GOVERNING LAW This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to choice of law principles. 13. FURTHER ACTION At any time and from time to time, each PARTY agrees, without further consideration, to take such actions and to execute and deliver such documents as may be reasonable necessary to effectuate the purposes of this Agreement. 14. SEVERABILITY If any provision of this Agreement is invalid, illegal, or unenforceable, the balance of this Agreement shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. 15. COUNTERPARTS This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 16. FORCE MAJEURE The PARTIES shall not be liable in any manner for failure or delay in fulfillment of all or part of this Agreement, directly or indirectly caused by acts of God, governmental order or restrictions, war, war-like condition, revolution, riot, looting, strike, lockout, fire, flood or other similar or dissimilar causes or circumstances beyond the non-performing PARTY'S control. The non-performing PARTY shall promptly notify the other PARTY of the cause or circumstance and shall recommend its performance of its obligations as soon as practicable after the cause or circumstance ceases. 17. ENTIRE UNDERSTANDING This Agreement, together with the Exhibits hereto and the concurrently executed Agreement constitute the entire agreement between the PARTIES with respect to the subject matter hereof, supersedes all prior understanding and agreement by the PARTIES with respect to the subject matter hereof and may be modified only by written instrument duly executed by each PARTY. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written. MEDIMMUNE, INC. By: David M. Mott President THE ROCKEFELLER UNIVERSITY By: William H. Griesar Vice President and General Counsel EXHIBIT A Patent, Patent Applications and KNOW-HOW TECHNOLOGY EXHIBIT A-1 TITLE INVENTORS SERIAL NO. (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) BACTERIAL EXPORTED H. Robert Masure, PCT/94/09942 PROTEINS AND ACELLULAR Barbara J. Pearce and (EP,AU,CA,FI,JP,NO, VACCINES BASED THEREON Elaine Tuomanen NZ, US) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) EXHIBIT A-2 TITLE INVENTORS SERIAL NO. (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) EXHIBIT A-3 Pneumococcal genes of importance to disease and drug discovery (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) EXHIBIT B RESEARCH PROGRAM (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) EXHIBIT C MATERIAL TRANSFER AGREEMENT THIS MATERIAL TRANSFER AGREEMENT ("Agreement") is entered into by and between The Rockefeller University, 1230 York Avenue, New York, New York 10021-6399 ("ROCKEFELLER") ________________ ("Institution"). Whereas, Rockefeller and MedImmune, Inc. ("MI") have entered into a License Agreement dated April __, 1996 under which ROCKEFELLER has exclusively licensed to MI rights in Materials (defined below) and technology based on Materials; Whereas, Rockefeller is willing to provide to you Rockefeller's proprietary ________________ and mutually agreed additional materials (collectively "Material") in accordance with the following terms: Research Program. Institution shall undertake a research program ("Research Program") as described in Appendix A. Institution agrees that the Research Program shall be conducted by or under the direct supervision of ______________ ("Investigator"). The Research Program may be modified, upon mutual written agreement of Rockefeller and Institution. Reports. Institution shall furnish Rockefeller with a final written report summarizing the results of the Research Program within thirty (30) days of completion of the Research Program or termination of this Agreement. The final report will be sent to the person at Rockefeller who sent the Material or a designee thereof at Rockefeller. Rockefeller and MI shall have the unrestricted right to utilize all data and information developed under the Research Program in internal research. Research Materials. In consideration of the services provided by institution and the rights obtained by Rockefeller and MI under this Agreement, Rockefeller shall provide Investigator with mutually agreed upon quantity of the Material. The Materials and all other materials arising out of the conduct of the Research Program ("Program Materials") shall be used for the sole purpose of conducting the Research Program. Any Material or Program Materials remaining upon conclusion of this Agreement shall be returned to Rockefeller or at Rockefeller's option, destroyed, within thirty (30) days following completion of the Research Program or termination this agreement, or upon request of Rockefeller prior to the completion of the Research Program. Institution shall not provide either Materials or Program Materials to any third party without the prior written approval of Rockefeller. Confidentiality. For the term of this Agreement, and any subsequent extension, and for a period of five (5) years thereafter, Institution will not use, except as necessary for purposes of the Research Program, or disclose or provide to any third party without the prior written consent of Rockefeller any Confidential Information. For purposes of this Agreement, "Confidential Information" means all information, reagents, procedures, results, conclusions, and the like which are disclosed or provided to Institution by Rockefeller in connection with the Research Program. Institution shall have no obligation with respect to any portion of such Confidential Information which: (a) is or later becomes generally available to the public by use, publication or the like, through no fault of Institution; or (b) is obtained from a third party who had the legal right to disclose the same to Institution; or (c) Institution already possesses, as evidenced by its written records, predating receipt thereof from Rockefeller; or (d) was information that Institution believes in good faith is required to be disclosed to comply with any applicable law, regulation or order of a government authority or court of competent jurisdiction, in which event Institution shall use all reasonable efforts to advise Rockefeller in advance of the need for such disclosure. Publications. Institution shall submit all scientific articles, manuscripts, abstracts, and posters or summaries of any oral presentations relating to the Research Program to Rockefeller thirty (30) days prior to submission for publication or presentation. Rockefeller shall have thirty (30) days to review and comment on each proposed presentation or publication. Institution shall delete any Confidential Information and postpone publication or presentation for up to forty-five (45) days upon request by Rockefeller in order to allow appropriate patent applications to be filed. These periods can be extended by mutual agreement of the parties. Intellectual Property. Any inventions or discoveries made in performance of the Research Program solely by Investigator and/or any other personnel affiliated with institution ("Sole Inventions"), will belong to Institution. Institution shall have the right to obtain patent protection for Sole Inventions, at its expense. Any inventions or discoveries made in performance of the Research Program jointly by Investigator and/or other personnel affiliated with Institution and by Rockefeller's employees or affiliated personnel (collectively, "Joint Inventions"), shall belong jointly to Institution and Rockefeller. Rockefeller shall have the right to obtain patent protection for any Joint Inventions involving Rockefeller personnel, at its expense, unless otherwise agreed upon by Rockefeller. Institution shall promptly notify Rockefeller of all inventions and discoveries developed as a result of the Research Program. Rockefeller and MI shall have an exclusive option for the term of this Agreement and one (1) year thereafter to obtain an exclusive worldwide license, with the right to sublicense, for any such patent application, or patent issued thereon, filed for Sole Inventions and/or for Institution's interest in Joint Inventions. The license shall be negotiated in good faith by the parties and provide for appropriate compensation to Institution. In the event the parties fail to reach a mutually acceptable licensing arrangement within one hundred eighty (180) days after commencing negotiations, Institution shall grant to MI a royalty-free non- exclusive license under any Sole Invention and thereafter Institution shall be entitled to negotiate in good faith with a third party for a license to any patent application or patent on Sole Inventions or Institution rights in Joint Inventions. Warranty. Institution warrants that it is permitted to enter into this Agreement and that this Agreement is not inconsistent with other contractual arrangements of Institution. Term. The term of this Agreement shall be for a period of one (1) year from the date of execution of this Agreement, unless extended by written agreement between the parties. Any rights or obligations set forth herein which of their nature are intended to extend beyond the termination of this Agreement including but not limited to the confidentiality and option provisions, shall survive any such termination. Indemnification. Institution agrees to indemnity, defend, and hold Rockefeller harmless from any liability (including attorney's fees) resulting from any claim or demand arising from use of the Material by Institution. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their respective duly authorized officers or representatives on the respective dates indicated below. Institution Rockefeller University BY:____________________ By:____________________ Title:_________________ Title:_________________ Date:__________________ Date:__________________ AGREED: Investigator BY:_____________________ Title:__________________ Date:___________________ 1. Consultant is a member of the faculty of The Rockefeller University and heads a major laboratory there engaged in ongoing programs of scientific research. Nothing herein is intended or shall be construed as granting to the Company any rights or licenses to any inventions, developments or scientific data or technology arising out of research at The Rockefeller University. 2. If and to the extent Dr. Tuomanen completes the partial sequence information, while acting as a consultant under this contract, any technology describing the complete sequence and deemed under United States Patent law as belonging at least in part to The Rockefeller University shall be deemed a New Invention as that term is defined in the Research and License Agreement between The Rockefeller University and MedImmune, Inc. dated 4/16/96 and be subject to those option rights described in Paragraph 4.2 of such Agreement. -----END PRIVACY-ENHANCED MESSAGE-----