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EXHIBIT 10.11 PUBLIC HEALTH SERVICE PATENT LICENSE AGREEMENT--EXCLUSIVE

Patent License Agreement

EXHIBIT 10.11 PUBLIC HEALTH SERVICE

 

                       PATENT LICENSE AGREEMENT--EXCLUSIVE

 

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This Patent License Agreement involves

MILLENNIUM PHARMACEUTICAL

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Title: EXHIBIT 10.11 PUBLIC HEALTH SERVICE PATENT LICENSE AGREEMENT--EXCLUSIVE
Date: 3/10/2004
Industry: Biotechnology and Drugs     Sector: Healthcare

EXHIBIT 10.11 PUBLIC HEALTH SERVICE

 

                       PATENT LICENSE AGREEMENT--EXCLUSIVE

 

, Parties: millennium pharmaceutical
50 of the Top 250 law firms use our Products every day

 

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                                                                   EXHIBIT 10.11

 

               CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY

             WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS

                                 DENOTE OMISSIONS.

 

                              PUBLIC HEALTH SERVICE

 

                       PATENT LICENSE AGREEMENT--EXCLUSIVE

 

                                   COVER PAGE

 

For PHS internal use only:

 

     Patent License Number: [**]

 

     Serial Number(s) of Licensed Patent(s) and/or Patent Application(s):

 

            1)     U.S. Utility Patent Application No. [**].

 

            2)     U.S. Utility Patent Application No. [**].

 

     Licensee:     Millennium Pharmaceuticals, Inc.

                  75 Sidney Street

                  Cambridge, MA 02139

 

     Cooperative Research and Development AGREEMENT (CRADA) Number (if

     applicable): CRADA No. 0676

 

     Additional Remarks:   None

 

     Public Benefit(s): LICENSEE agrees, after its FIRST COMMERCIAL SALE, to

                        make reasonable quantities of LICENSED PRODUCT(S) or

                        materials produced through the use of LICENSED

                        PROCESS(ES) available on a compassionate use basis to

                         patients, either through the patient's physician(s)

                        and/or the medical center treating the patient; and

 

                        LICENSEE further agrees, after its FIRST COMMERCIAL SALE

                        and as part of its marketing and product promotion, to

                        develop written educational materials (e.g., brochures,

                        advertisements, etc.) directed to patients and

                        physicians detailing the LICENSED PRODUCT(S) and/or

                        medical aspects of using the LICENSED PRODUCT(S).

 

This Patent License Agreement, hereinafter referred to as the "AGREEMENT",

consists of this Cover Page, an attached AGREEMENT, a Signature Page, Appendix A

(List of Patent(s) and/or Patent Application(s)), Appendix B (Fields of Use and

Territory), Appendix C (Royalties), Appendix D (Modifications), Appendix E

(Benchmarks), and Appendix F (Commercial Development Plan). The Parties to this

Agreement are:

 

PHS Patent License Agreement--EXCLUSIVE CONFIDENTIAL (A#: A-271-2001]

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             1)     The National Institutes of Health ("NIH"), the Centers for

                   Disease Control and Prevention ("CDC"), or the Food and Drug

                   Administration ("FDA"), hereinafter singly or collectively

                   referred to as "PHS", agencies of the United States Public

                   Health Service within the Department of Health and Human

                   Services ("DHHS"); and

 

             2)     The person, corporation, or institution identified above

                   and/or on the Signature Page, having offices at the address

                   indicated on the Signature Page, hereinafter referred to as

                   "LICENSEE".

 

 

PHS Patent License Agreement--EXCLUSIVE CONFIDENTIAL (A#: A-271-2001]

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                     PHS PATENT LICENSE AGREEMENT -- EXCLUSIVE

 

                                    PREAMBLE

 

Whereas PHS and LICENSEE were parties to a Cooperative Research and Development

Agreement (CRADA) (CACR 0676) entered into in December 1998; and

 

Whereas in the course of performing biomedical research under the CRADA, PHS

investigators and employees of LICENSEE made certain inventions that resulted in

the filing of certain patent applications set forth in Appendix A; and

 

Whereas LICENSEE filed the patent application designated by Roman numeral I

listed in Appendix A; and

 

Whereas PHS filed the patent application designated by Roman numeral II listed

in Appendix A; and

 

Whereas PHS and LICENSEE intend to prosecute any claims under such patent

applications in accordance with the laws governing, and rules and regulations

of, the United States Patent and Trademark Office and to enter into this

agreement to promote the commercialization of said inventions.

 

Now, therefore, PHS and LICENSEE agree as follows:

 

1.    BACKGROUND

 

     1.01      In the course of conducting biomedical and behavioral research,

              PHS investigators made inventions that may have commercial

              applicability.

 

     1.02      By assignment of rights from PHS employees and other inventors,

              DHHS, on behalf of the United States Government, owns intellectual

              property rights claimed in any United States and/or foreign patent

              applications or patents corresponding to the assigned inventions.

              DHHS also owns any tangible embodiments of these inventions

              actually reduced to practice by PHS.

 

     1.03      The Secretary of DHHS has delegated to PHS the authority to enter

              into this AGREEMENT for the licensing of rights to these

              inventions.

 

     1.04      PHS desires to transfer these inventions to the private sector

              through commercialization licenses to facilitate the commercial

              development of products and processes for public use and benefit.

 

     1.05      LICENSEE desires to acquire commercialization rights to certain of

              these inventions in order to develop processes, methods, and/or

              marketable products for public use and benefit.

 

 

PHS Patent License Agreement--EXCLUSIVE CONFIDENTIAL (A#: A-271-2001]

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2.    DEFINITIONS

 

     2.01      "BENCHMARKS" mean the performance milestones that are set forth in

              Appendix E.

 

     2.02      "COMMERCIAL DEVELOPMENT PLAN" means the written commercialization

              plan attached as Appendix F.

 

     2.03      "FIRST COMMERCIAL SALE" means the initial transfer by or on behalf

               of LICENSEE or its sublicenses of LICENSED PRODUCTS or the initial

              practice of a LICENSED PROCESS by or on behalf of LICENSEE or its

              sublicenses in exchange for cash or some equivalent to which value

              can be assigned for the purpose of determining NET SALES. Transfer

              of LICENSED PRODUCTS or practice of a LICENSED PROCESS for test

              marketing, sampling and promotional uses, clinical trial purposes

              or compassionate or similar use shall not be considered to

              constitute a FIRST COMMERCIAL SALE.

 

     2.04      "GOVERNMENT" means the Government of the United States of America.

 

     2.05      "LICENSED FIELDS OF USE" means the fields of use identified in

              Appendix B.

 

     2.06      "LICENSED FIELDS OF USE I" means the field of use identified in

              Appendix B with the Roman numeral I.

 

     2.07      "LICENSED FIELDS OF USE II" means the field of use identified in

              Appendix B with the Roman numeral II.

 

     2.08      "LICENSED PATENT RIGHTS" shall means DHHS' ownership interest in:

 

              (a)    Patent applications (including provisional patent

                    applications and PCT patent applications) and/or patents

                     listed in Appendix A, all divisions and continuations of

                    these applications, all patents issuing from such

                    applications, divisions, and continuations, and any

                    reissues, reexaminations, renewals and extensions (including

                    any Supplemental Patent Certificate) of all such patents,

                    and any confirmation patent, registration patent or patent

                    of addition of all such patents;

 

               (b)    to the extent that the following contain one or more claims

                    directed to the invention or inventions disclosed in a)

                    above: i) continuations-in-part of a) above; ii) all

                    divisions and continuations of these continuations-in-part;

                    iii) all patents issuing from such continuations-in-part,

                    divisions, and continuations; iv) priority patent

                    application(s) of a) above; and v) any reissues,

                    reexaminations renewals and extensions (including any

                    Supplemental Patent Certificate) of all such patents and any

                    confirmation patent, registration patent or patent of

                    addition of all such patents;

 

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              (c)    to the extent that the following contain one or more claims

                    directed to the invention or inventions disclosed in a)

                    above: all counterpart foreign and U.S. patent applications

                    and patents to a) and b) above, including those listed in

                    Appendix A.

 

              LICENSED PATENT RIGHTS shall not include b) or c) above to the

              extent that they contain one or more claims directed to new matter

              which is not the subject matter disclosed in a) above.

 

     2.09      "LICENSED PROCESS(ES)" means processes which, in the course of

              being practiced would be within the scope of one or more claims of

              the LICENSED PATENT RIGHTS that have not been held unpatentable,

              invalid or unenforceable by an unappealed or unappealable judgment

              of a court of competent jurisdiction.

 

     2.10      "LICENSED PRODUCT(S)" means tangible materials which, in the

              course of manufacture, use, sale, offer for sale or importation

              would be within the scope of one or more claims of the LICENSED

              PATENT RIGHTS that have not been held unpatentable, invalid or

              unenforceable by an unappealed or unappealable judgment of a court

               of competent jurisdiction.

 

     2.11      "LICENSED TERRITORY" means the geographical area identified in

              Appendix B.

 

     2.12      "NET SALES" means the total gross receipts for sales or other

              disposition of LICENSED PRODUCTS or practice of LICENSED PROCESSES

              by or on behalf of LICENSEE or its sublicenses, whether invoiced

              or not, less returns and allowances, packing costs, insurance

              costs, freight out, taxes or excise duties imposed on the

              transaction (if separately invoiced), wholesaler and cash

              discounts in amounts customary in the trade to the extent actually

              granted, and credits or allowances given or made for wastage

               replacement, indigent patient and any other sales programs. No

              deductions shall be made for commissions paid to individuals,

              whether they be with independent sales agencies or regularly

              employed by LICENSEE, or sublicenses, and on its payroll, or for

              the cost of collections.

 

     2.13      "PRACTICAL APPLICATION" means to manufacture in the case of a

              composition or product, to practice in the case of a process or

              method, or to operate in the case of a machine or system; and in

              each case, under such conditions as to establish that the

              invention is being utilized and that its benefits are to the

              extent permitted by law or GOVERNMENT regulations available to the

              public on reasonable terms.

 

     2.14      "Research License" means a nontransferable, nonexclusive license

              to practice the LICENSED PATENT RIGHTS for purposes of research

              and not for purposes of commercial manufacture or distribution or

              in lieu of purchase.

 

3.    GRANT OF RIGHTS

 

     3.01      PHS hereby grants and LICENSEE accepts, subject to the terms and

              conditions of this AGREEMENT, an exclusive license including the

              right to grant sublicenses,

 

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              under the LICENSED PATENT RIGHTS in the LICENSED TERRITORY, to

              make and have made, to use and have used, to sell and have sold,

              to offer to sell, and to import and have imported any LICENSED

              PRODUCTS in the LICENSED FIELDS OF USE I and to practice and have

              practiced any LICENSED PROCESSES in the LICENSED FIELDS OF USE I.

 

     3.02      PHS hereby grants and LICENSEE accepts, subject to the terms and

              conditions of this AGREEMENT, a nonexclusive license including the

              right to grant sublicenses, under the LICENSED PATENT RIGHTS in

              the LICENSED TERRITORY, to make and have made, to use and have

              used, to sell and have sold, to offer to sell, and to import and

               have imported any Licensed Products in the LICENSED FIELDS OF USE

              II and to practice and have practiced any Licensed Processes in

              the LICENSED FIELDS OF USE II.

 

     3.03      Except as expressly provided herein, this AGREEMENT confers no

              license or rights by implication, estoppel, or otherwise under any

              patent applications or patents of PHS or under any patent

              applications or patents of LICENSEE, other than the LICENSED

              PATENT RIGHTS, regardless of whether such patents are dominant or

              subordinate to LICENSED PATENT RIGHTS.

 

4.    SUBLICENSING

 

     4.01      Upon written approval by PHS, which approval will not be

              unreasonably withheld or delayed, LICENSEE may enter into

              sublicensing agreements under the LICENSED PATENT RIGHTS, provided

              that if LICENSEE has not received any written response from PHS

              within twenty (20) days of PHS's receipt of LICENSEE's written

              submission of a sublicense for approval, such approval shall be

              deemed to have been given.

 

     4.02      LICENSEE agrees that any sublicenses granted by it will provide

              that the obligations to PHS of Paragraphs 5.01-5.04, 8.01, 10.01,

              12.05, and 13.06-13.07 of this AGREEMENT shall be binding upon the

              sublicense as if it were a Party to this AGREEMENT. LICENSEE

              further agrees to attach copies of these Paragraphs to all

              sublicense agreements.

 

     4.03      Any sublicenses granted by LICENSEE shall provide for the

              termination of the sublicense, or the conversion to a license

              directly between such sublicenses and PHS, at the option of the

              sublicense, upon termination of this AGREEMENT under Article 13.

              Such conversion is subject to PHS approval, such approval not to

              be unreasonably withheld or delayed, and contingent upon

              acceptance by the sublicense of the remaining provisions of this

              AGREEMENT.

 

     4.04      LICENSEE agrees to forward to PHS a copy of each fully executed

              sublicense agreements postmarked within thirty (30) days of the

              execution of such agreements. To the extent permitted by law, PHS

              agrees to maintain each such sublicense agreements in confidence.

 

PHS Patent License Agreement--EXCLUSIVE CONFIDENTIAL (A#: A-271-2001]

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5.    STATUTORY AND PHS REQUIREMENTS AND RESERVE GOVERNMENT RIGHTS

 

     5.01      (a) PHS reserves on behalf of the GOVERNMENT an irrevocable,

                  nonexclusive, nontransferable, royalty-free license to

                  practice all inventions licensed under the LICENSED PATENT

                  RIGHTS throughout the world by or on behalf of the GOVERNMENT

                  and on behalf of any foreign government or international

                   organization pursuant to any existing or future treaty or

                  agreement to which the GOVERNMENT is a signatory.

 

              (b) In the event that LICENSED PATENT RIGHTS are Subject

                  Inventions made under a Cooperative Research and Development

                  AGREEMENT (CRADA), LICENSEE grants to the GOVERNMENT, pursuant

                  to 15 U.S.C. Section 3710a(b)(1)(A), a nonexclusive,

                  nontransferable, irrevocable, paid-up license to practice

                  LICENSED PATENT RIGHTS or have LICENSED PATENT RIGHTS

                  practiced throughout the world by or on behalf of the

                  GOVERNMENT. In the exercise of such license, the GOVERNMENT

                  shall not publicly disclose trade secrets or commercial or

                  financial information that is privileged or confidential

                  within the meaning of 5 U.S.C. Section 552(b)(4) or which

                  would be considered as such if it had been obtained from a

                  non-Federal party.

 

     5.02      LICENSEE agrees that products used or sold in the United States

              embodying the LICENSED PATENT RIGHTS or produced through use of

              processes set forth in the LICENSED PATENT RIGHTS, but only to the

              extent LICENSEE does not otherwise have the right to manufacture

              such products in the absence of the licenses granted under this

              AGREEMENT, shall be manufactured substantially in the United

              States, unless a written waiver is obtained in advance from PHS.

 

     5.03      LICENSEE acknowledges that PHS may enter into future CRADAs under

              the Federal Technology Transfer Act of 1986 that relate to the

               subject matter of this AGREEMENT. LICENSEE agrees not to

              unreasonably deny requests for a RESEARCH LICENSE from such future

              collaborators with PHS when acquiring such rights is necessary in

              order to make a CRADA project feasible. LICENSEE may request an

              opportunity to join as a party to the proposed CRADA.

 

     5.04      (a) In addition to the reserved license of Paragraph 5.01 above,

                  PHS reserves the right to grant nonexclusive RESEARCH LICENSES

                  directly or to require LICENSEE to grant nonexclusive RESEARCH

                  LICENSES on reasonable terms. The purpose of this RESEARCH

                  LICENSE is to encourage basic research, whether conducted at

                  an academic or corporate facility. In order to safeguard the

                  LICENSED PATENT RIGHTS, however, PHS shall consult with

                  LICENSEE before granting to commercial entities a Research

                  License or providing to them research samples of materials

                  made through the LICENSED PROCESSES.

 

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              (b) In exceptional circumstances, and in the event that LICENSED

                  PATENT RIGHTS are Subject Inventions made under a CRADA, the

                  GOVERNMENT, pursuant to 15 U.S.C. Section 3710a(b)(1)(B),

                  retains the right to require the LICENSEE to grant to a

                  responsible applicant a nonexclusive, partially exclusive, or

                  exclusive sublicense to use LICENSED PATENT RIGHTS in the

                  LICENSED FIELD of Use I on terms that are reasonable under the

                  circumstances; or if LICENSEE fails to grant such a license,

                  the GOVERNMENT retains the right to grant the license itself.

                  The exercise of such rights by the GOVERNMENT' shall only be

                  in exceptional circumstances and only if the GOVERNMENT

                  determines (i) the action is necessary to meet health or

                  safety needs that are not reasonably satisfied by LICENSEE;

                  (ii) the action is necessary to meet requirements for public

                  use specified by Federal regulations, and such requirements

                  are not reasonably satisfied by the LICENSEE; or (iii) the

                   LICENSEE has failed to comply with an agreement containing

                  provisions described in 15 U.S.C. Section 3710a(c)(4)(B). The

                  determination made by the GOVERNMENT under this Article is

                  subject to administrative appeal and judicial review under 35

                  U.S.C. Section 203(2).

 

6.    ROYALTIES AND REIMBURSEMENT

 

     6.01      LICENSEE agrees to pay to PHS a noncreditable, nonrefundable

              license issue royalty as set forth in Appendix C.

 

     6.02      LICENSEE agrees to pay to PHS a nonrefundable minimum annual

              royalty as set forth in Appendix C, if any. The minimum annual

              royalty is due and payable on January 1 of each calendar year and

              may be credited against any earned royalties due for sales made in

              that year. The minimum annual royalty due for the first calendar

              year of this AGREEMENT may be prorated according to the fraction

              of the calendar year remaining between the effective date of this

              AGREEMENT and the next subsequent January 1.

 

     6.03      LICENSEE agrees to pay PHS earned royalties as set forth in

              Appendix C.

 

     6.04      LICENSEE agrees to pay PHS benchmark royalties as set forth in

              Appendix C.

 

     6.05      LICENSEE agrees to pay PHS sublicensing royalties as set forth in

              Appendix C.

 

     6.06      A patent or patent application licensed under this AGREEMENT shall

               cease to fall within the LICENSED PATENT RIGHTS for the purpose of

              computing earned royalty payments in any given country on the

              earliest of the dates that a) the application has been abandoned

              and not continued, b) the patent expires or irrevocably lapses, c)

              the claim has been held to be invalid or unenforceable by an

              unappealed or unappealable decision of a court of competent

              jurisdiction or administrative agency, or (d) the claim has been

              pending, in prosecution by PHS, for more then eight (8) years,

              except that such eight (8) year period shall be extended by any

              period during which examination of the claim is interrupted by (a)

              an interference

 

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              proceeding under 35 U.S.C. Section 135 or (b) the claim is under

              appeal by PHS from the decision of an examiner pursuant to 37

              C.F.R. 1.; provided that if the claim subsequently issues, it

              shall be deemed to fall within and shall be a claim under the

               LICENSED PATENT RIGHTS, on which royalties are due.

 

     6.07      No multiple royalties shall be payable because any LICENSED

              PRODUCTS or LICENSED PROCESSES are covered by more than one of the

              LICENSED PATENT RIGHTS.

 

     6.08      On sales of LICENSED PRODUCTS by LICENSEE to sublicenses or on

              sales made in other than an arm's-length transaction, the value of

              the NET SALES attributed under this Article 6 to such a

              transaction shall be that which would have been received in an

              arm's-length transaction, based on sales of like quantity and

              quality products on or about the time of such transaction.

 

     6.09      With regard to expenses associated with the preparation, filing,

              prosecution, and maintenance of all patent applications and

              patents included within the LICENSED PATENT RIGHTS incurred by PHS

              prior to the effective date of this AGREEMENT, LICENSEE shall pay

              to PHS, as an additional royalty, within sixty (60) days of PHS's

              submission of a statement and request for payment to LICENSEE, an

              amount equivalent to such patent expenses previously incurred by

               PHS.

 

     6.10      With regard to expenses associated with the preparation, filing,

              prosecution, and maintenance of all patent applications and

              patents included within the LICENSED PATENT RIGHTS incurred by PHS

              on or after the effective date of this AGREEMENT LICENSEE agrees:

 

              (a) to pay PHS on an annual basis, within sixty (60) days of PHS's

                  submission of a statement and request for payment, a royalty

                  amount equivalent to all such patent expenses incurred during

                  the previous calendar year(s); or

 

              (b) to pay such expenses directly to the law firm employed by PHS

                  to handle such functions. However, in such event, PHS and not

                  LICENSEE shall be the client of such law firm.

 

     6.11      LICENSEE may elect to surrender its license to PHS's interest in

              the LICENSED PATENT RIGHTS in any country of the LICENSED

              TERRITORY upon ninety (90) days written notice to PHS. In such

              case, PHS shall have the right, but not the obligation, to

              continue the prosecution and maintenance of such patent

              applications or patents in such country included within the

              LICENSED PATENT RIGHTS, at its sole expense.

 

7.    PATENT FILING, PROSECUTION, AND MAINTENANCE

 

     7.01      (a) Prior to the date this AGREEMENT becomes effective, PHS has

                  been responsible for the prosecution of the Patent Application

                  No. II in

 

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              Appendix A and LICENSEE has been responsible for the preparation,

              filing and prosecution of Patent Application No. I in Appendix A,

              each at its sole expense. After the effective date of this

              AGREEMENT, PHS shall be responsible for the preparation, filing,

              prosecution and maintenance of any and all patent applications or

              patents included in the LICENSED PATENT RIGHTS at LICENSEE's sole

              expense and shall on an ongoing basis promptly furnish copies of

              all patent-related documents to LICENSEE. Notwithstanding the

              foregoing, on a country-by-country basis, LICENSEE shall have the

              right to elect not to be responsible for expenses pursuant to this

              Section 7.01(a) with respect to any patent applications or patents

              included in the LICENSED PATENT RIGHTS, with the understanding

              that if LICENSEE makes such an election, the worldwide license

              granted in Paragraphs 3.01 and 3.02 shall exclude the specific

              patent applications or patents for which LICENSEE has made such

              election in such country. PHS shall select registered patent

              attorneys or patent agents to provide patent-related services

              related to the LICENSED PATENT RIGHTS, reasonably acceptable to

              LICENSEE. LICENSEE shall provide appropriate powers of attorney

              and other documents necessary to undertake such actions to the

               patent attorneys or patent agents providing such services. PHS and

              its attorneys or agents shall provide LICENSEE sufficient

              opportunity to comment on any document that PHS intends to file or

              to cause to be filed with the relevant intellectual property or

              patent office.

 

        (b)    PHS shall have the right and responsibility to prosecute and

              maintain patent prosecution for all LICENSED PATENT RIGHTS.

              LICENSEE shall make available to PHS or its authorized attorneys,

              agents or representatives, such of its employees whom PHS in its

              reasonable judgment deems necessary in order to assist it in

              obtaining patent protection for such LICENSED PATENT RIGHTS.

              LICENSEE shall provide appropriate powers of attorney and other

              documents necessary to undertake such actions to the patent

              attorneys or patent agents providing such services. PHS and its

               attorneys or agents shall provide LICENSEE sufficient opportunity

              to comment on any document that PHS intends to file or to cause to

              be filed with the relevant intellectual property or patent office.

 

        (c)    In the event PHS elects not to file or continue to seek or

              maintain patent protection on any LICENSED PATENT RIGHTS. LICENSEE

              shall have the right, at its sole expense, to prosecute and

              maintain in any country patent protection on such LICENSED PATENT

              RIGHTS in PHS's name. In any such case, PHS shall make available

              to LICENSEE or its authorized attorneys, agents or

              representatives, such of its employees whom LICENSEE in its

               reasonable judgment deems necessary in order to assist it in

              obtaining patent protection for such LICENSED PATENT RIGHTS.

              LICENSEE and its attorneys or agents shall provide PHS sufficient

              opportunity to comment on any document that LICENSEE intends to

              file or to cause to be filed with the relevant intellectual

              property or patent office.

 

PHS Patent License Agreement--EXCLUSIVE CONFIDENTIAL (A#: A-271-2001]

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     7.02      Each Party shall promptly inform the other as to all matters that

              come to its attention that may affect the preparation, filing,

              prosecution or maintenance of the LICENSED PATENT RIGHTS and

              permit each other to provide comments and suggestion with respect

              to the preparation, filing, prosecution and maintenance of

              LICENSED PATENT RIGHTS, which comments and suggestions shall be

              considered by the other Party.

 

8.    RECORD KEEPING

 

     8.01      LICENSEE agrees to keep accurate and correct records of LICENSED

              PRODUCTS made, used, sold, or imported and LICENSED PROCESSES

               practiced under this AGREEMENT appropriate to determine the amount

              of royalties due PHS. Such records shall be retained for at least

              five (5) years following a given reporting period and shall be

              available, not to exceed once during each calendar year, during

              the term of this agreement, during normal business hours for

              inspection at the expense of PHS by an accountant or other

              designated auditor selected by PHS for the sole purpose of

              verifying reports and payments hereunder. Any such accountant or

              auditor shall be reasonably acceptable to LICENSEE and shall

              execute a standard form of confidentiality agreement with

               LICENSEE. The accountant or auditor shall only disclose to PHS

              information relating to the accuracy of reports and payments made

              under this AGREEMENT. If an inspection shows an underreporting or

              underpayment in excess of five percent (5%) for any twelve (12)

              month period, then LICENSEE shall reimburse PHS for the cost of

              the inspection at the time LICENSEE pays the unreported royalties,

              including any late charges as required by Paragraph 9.08 of this

              AGREEMENT. All payments required under this Paragraph shall be due

              within thirty (30) days of the date PHS provides LICENSEE notice

              of the payment due.

 

     8.02      LICENSEE agrees to have an audit of sales and royalties conducted

              by an independent auditor at least every two (2) years if annual

              sales of the LICENSED PRODUCT or LICENSED PROCESSES are over

              fifteen (15) million dollars. The audit shall address, at a

              minimum, the amount of gross sales by or on behalf of LICENSEE

              during the audit period, terms of the license as to percentage or

              fixed royalty to be remitted to the GOVERNMENT, the amount of

               royalty funds owed to the GOVERNMENT under this AGREEMENT, and

              whether the royalty amount owed has been paid to the GOVERNMENT

              and is reflected in the records of the LICENSEE. The audit shall

              also indicate the PHS license number, product, and the time period

              being audited. A report certified by the auditor shall be

              submitted promptly by the auditor directly to PHS on completion.

              LICENSEE shall pay for the entire cost of the audit.

 

9.    REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS

 

     9.01      Prior to signing this AGREEMENT, LICENSEE has provided to PHS the

              COMMERCIAL DEVELOPMENT PLAN at Appendix F, under which LICENSEE

              intends to bring the subject matter of the LICENSED PATENT RIGHTS

              to the point of PRACTICAL APPLICATION. This COMMERCIAL DEVELOPMENT

              PLAN is hereby incorporated by

 

PHS Patent License Agreement--EXCLUSIVE CONFIDENTIAL (A#: A-271-2001]

Model 980611a   Page 11 of 31 (Final) (Millennium Pharmaceuticals, Inc.)

[November 12, 2002]

 

<Page>

 

              reference into this AGREEMENT. Based on this plan, performance

              BENCHMARKS are determined as specified in Appendix E.

 

     9.02      LICENSEE shall provide written annual reports on its product

              development progress or efforts to commercialize LICENSED PRODUCTS

              under the COMMERCIAL DEVELOPMENT PLAN within sixty (60) days after

              December 31 of each calendar year. These progress reports shall

              include progress on research and development, status of

              applications for regulatory approvals, manufacturing,

              sublicensing, marketing, importing, and sales during the preceding

              calendar year, as well as plans for the present calendar year. PHS

              also encourages these reports to include information on any of

             


 
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