General Terms and Conditions for Use of HuCAL Custom Monoclonal Antibody Development Services

MorphoSys AG is a German stock corporation having its principal place of business at Lena-Christ Str. 48, D-82152 Martinsried/ Planegg, Germany, and is doing business as AbD SEROTEC (“AbD”).

Any entity showing interest in or having access to AbD’s Services (as defined hereafter) shall be hereinafter referred to as “Customer”.

AbD and Customer shall each be referred to as a “Party” and collectively as “Parties”.

1. Services

AbD offers particular services for preparing antigens and generating custom human recombinant antibodies against antigens with its HuCAL technology for in vitro research use as further listed and described at www.ab-direct.com (collectively referred to as “Services”) and, unless Customer and AbD have agreed otherwise in a written document signed by both Parties, any discussions between AbD and Customer and any Services rendered by AbD shall be subject to the present General Terms and Conditions of Use of AbD’s Services (hereinafter “Terms & Conditions”).

2. Inquiry, Quote Request, Order Placement and Order Confirmation

(A)

To discuss any antibody project (hereinafter “Project”) with one of AbD’s specialists, Customer shall complete the Inquiry Form at www.ab-direct.com or contact AbD directly by phone, fax, email, or regular mail.

Phone:: +49-89-899-27-234 (Monday-Friday, 9:00 am-7:00 PM Central Europe Time)
Fax:: +49-89-899-27-5234
Email:: Antibodies.muc@ab-direct.com
Mail:: AbD
MorphoSys AG
Lena-Christ-Strasse 48
D-82152 Martinsried/Planegg
Germany

(B)

A verbal quote can normally be provided immediately, and a written quote (each, a “Quote”) will generally be provided to Customer within a few days. Such Quote shall be confidential, personal to Customer and non-transferable to any third party. Each Quote shall be consistent with AbD’s then-current pricing guidelines available at www.ab-direct.com or provided by AbD upon request, and shall be agreed upon by AbD and Customer. Each Quote shall notably contain the price of the Services, the schedule, the Deliverables and a description of the Project, and any other term agreed upon by AbD and Customer that is not explicitly set forth in these Terms & Conditions. AbD retains the right to refuse any Project.

(C)

Any order of Services and/or Deliverables (as defined hereafter) (each, an “Order”) shall be placed in writing by mail, facsimile or e-mail, by filling out the standard order form provided by AbD with each Quote, and shall include AbD’s related Quote number, Customer’s purchase Order number (as determined by Customer), the delivery address, the invoicing address, a brief summary of the Services to be provided, general and laboratory safety information about the purified proteins or other antigens or DNA for expression of antigens to be delivered by Customer, if any, (such purified proteins or other antigens or DNA for expression of antigens being hereinafter referred to as “Materials”) and the signature and details of a duly authorized person from Customer, all these requirements being essential to form an acceptable Order. Orders which are signed and sent by mail, facsimile or e-mail are considered binding to Customer, unless Customer provides AbD with a written notice of withdrawal prior to Order Confirmation by AbD. Orders are binding to AbD only if acceptance is confirmed in writing by mail, facsimile or e-mail by a duly authorized person from AbD (each, an “Order Confirmation”). Order Confirmation is subject to credit approval by AbD. Prior to Order Confirmation, AbD retains the right to decline any Order at its sole discretion.

(D)

If Customer notifies AbD a cancellation of Order after Order Confirmation was sent by AbD, then Customer shall reimburse AbD the pro rata portion of the Project price set out in the related Quote according to the work performed by AbD up to the date of receipt by AbD of such cancellation.

3. Supply of Materials and Limitations on Use

(A)

For each Project, Customer shall provide AbD (at the facilities AbD indicates) the Materials detailed in the related Order, if any, before the due date listed in the Quote, in order to be guaranteed the assigned screening start date. Information about how Customer must ship Materials to AbD is set out at www.ab-direct.com.

(B)

In addition to any other restrictions on the use of Materials:

a) AbD shall use the Materials solely for the purpose of performing the applicable Services and for no other purpose and shall not attempt to analyze, reverse engineer, deconstruct or in any way determine the structure, composition or sequence of the Materials;
b) AbD understands that the Materials may have biological and/or chemical properties that are unpredictable and unknown at the time of transfer, that they are to be used with caution and prudence, and are not to be used for testing in or treatment of humans.

4. Performance of Services, Shipping and Delivery

(A)

For each Order that is the subject of an Order Confirmation, AbD shall use commercially reasonable efforts to provide any Services in accordance with the specifications and schedule set forth in the related Quote.

(B)

With respect to each Project that is the subject of a Quote, “Deliverables” shall mean the custom recombinant antibody(ies) (tagged and screened, as detailed in the relevant Quote) directed against the Materials (each, an “Antibody”) and any information and data generated in the performance of the Services by AbD; provided, however, that “Deliverables” specifically excludes (i) any bacterial or mammalian antibody expression clone generated against Materials supplied by Customer (each, a “Clone”), (ii) the Clone’s DNA, and (iii) Antibody DNA sequence data ((i)-(iii) being collectively the “Retained Items”), which shall remain the property of AbD. AbD shall store the Clone for a period of five (5) years after its generation (“Storage Period”) for the exclusive use of Customer and shall not use it for any other purpose, either internally or for any third party. Such Storage Period shall be extended for one (1) year upon each re-order of Deliverables by Customer during the Storage Period. AbD may destroy the Clone at the end of such Storage Period and shall, upon written request by Customer, destroy the Clone before the end of such Storage Period.

(C)

Antibodies are shipped frozen on dry-ice. Customer will be notified by AbD by facsimile or e-mail before shipment to confirm Customer’s availability to receive the Deliverables. Customer will inform AbD immediately if there is any problem with the shipment or if it does not arrive as scheduled.

(D)

The delivery address for Deliverables shipped by AbD shall only be actual business locations used solely for Customer’s business purposes. AbD reserves the right to request additional information from Customer as necessary to confirm that the delivery address supplied is a business location. AbD may, at its sole discretion, refuse to ship orders to a location specified by Customer.

(E)

AbD will select the method of delivery. The risk of loss and damage passes to Customer upon AbD’s safe delivery of Deliverables in good condition to the transportation company. Customer will be responsible for insurance for loss or damage in transit. Unless otherwise confirmed in writing, Customer is responsible for all freight, shipping, and handling charges, which will be added to the invoice provided by AbD. Taxes imposed on the sale of any Deliverables will be added to the prices quoted, and will be the sole responsibility of Customer.

(F)

Claims by Customer for damage in transit should be made to the transportation company as follows: if, upon delivery, the outside of the packing case shows evidence of rough handling or damage, Customer shall request that the transportation company’s agent make a “Received in Bad Order” notation on the delivery receipt. If there is no exterior evidence of rough handling upon delivery, but concealed damage is evident upon unpacking the shipment, the transportation company should, within 48 hours of delivery, be requested to make out a “Bad Order” report. This procedure is necessary in order to maintain the right of recovery from the carrier. In addition, AbD must be informed within 10 (ten) days of receipt of damaged goods. Non-receipt claims on lost shipments should be made within 10 (ten) days of AbD’s notification of shipment.

5. Warranty, Duty to Inspect and Notice of Objection

(A)

Subject to Sections 5(B)-(D), AbD warrants its Deliverables to Customer against defects in materials and workmanship under normal use and application. AbD shall replace the defective Deliverables without delay, provided Customer complies with the requirements of Section 5(C). If, despite Customer’s compliance with the requirements of Section 5(C), AbD is unable to provide such replacement, then Customer shall have the right to claim a reduction in the purchase price or to rescind the purchase agreement. Customer shall not be entitled to any further rights or remedies. In particular, AbD shall not be responsible for any damages unless the Deliverables have a defect or in case of willful misconduct or gross negligence on the side of AbD.

(B)

Upon receipt of the shipment of Deliverables, Customer shall immediately:

a) check quantities and record any objections thereto on the delivery note and/or the acknowledgement of receipt and
b) check the frozen status of Deliverables and volumes per vial.

(C)

In case of a discovered defect, Customer shall comply with the following procedures and deadlines:

a) A notice of defect shall be made by no later than the expiry of the working day on which the Deliverables were received. In case a defect was already present at the time of receipt of the Deliverables but could not have reasonably been identified by Customer on the delivery day despite a first inspection in accordance with Section 5(A), a different deadline provision shall apply: in such case, the objection must be raised immediately and in no event later than two (2) weeks after receipt of the Deliverables. THE WARRANTY BY ABD FOR SUCH DEFECTS EXPIRES AFTER A MAXIMUM OF TWO (2) WEEKS FROM RECEIPT OF THE DELIVERABLES BY CUSTOMER.
b) The detailed notice shall be delivered to AbD within the aforementioned deadline in writing, by facsimile or e-mail. Any notice by telephone will not be accepted.
c) The notice must clearly specify the kind and amount of the alleged defect in relation to the Deliverables’ specifications laid out in the related Quote.
d) Customer agrees to make available for inspection the objected-to Deliverables at the place of inspection. Such an inspection may be performed by AbD or an expert nominated by AbD.
e) No Deliverables may be returned without prior authorization from AbD. Such authorization (and the assigned return authorization number) is necessary to ensure correct return of Deliverables and issuance of credit or exchange of Deliverables. Requests for permission to return deliverables must be made within the deadlines set out in Section 5(C)(a) above. Returned Deliverables should be clearly marked with sender’s name, address and return authorization number, and carefully packed and shipped prepaid.

(D)

Any Deliverables, objections to which have not been raised in accordance with the procedures and deadlines set out above in this Section 5, shall be regarded as approved and accepted. The right to object and/or return also shall cease to exist, when Customer has mixed or used the Deliverables or has started their processing.

6. Technical Assistance

Customer may call one of AbD’s technical specialists who are part of AbD’s Customer Support Department at +49-89-899-27-234 between the hours of 9:00 AM and 6:00 PM (Monday-Friday, Central European Time) for any technical assistance with regard to the Deliverables. Any questions may also be sent to AbD via email to Antibodies.muc@ab-direct.com.

7. Invoicing and Payment

(A)

AbD shall submit an invoice for Services and freight to Customer. Invoices for antigen preparation and deposits are issued by AbD when the antigen enters the screening process. Invoices for Deliverables are issued at the time of Deliverables’ shipment by AbD, unless otherwise indicated in the Quote.

(B)

All payments are due by Customer within thirty (30) days of date of invoice, provided that AbD has delivered the applicable Deliverables. The Deliverables remain the ownership of AbD until full payment. All taxes shall be borne by Customer. If, as a result of a change of law between the date of the applicable Quote and the delivery date, additional or increased charges – in particular duties, levies, currency compensation payments - become due, then AbD shall have the right to increase the invoiced price accordingly. The same shall apply to any fees for examination.

8. Licensed Use of the Deliverables

(A)

Deliverables are licensed to Customer (without the right to sublicense) by AbD only for In Vitro Research Use. Any other use of Deliverables (including in vivo or diagnostic uses, the use of Deliverables in clinical studies, whether as a drug to be studied or a tool, to demonstrate the safety and effectiveness of any drug for human applications(s), and any further sale, transfer or other disposition for value of Deliverables) is not allowed, unless under a specific written authorization from AbD, and shall require an additional license.

(B)

Customer covenants and agrees not to use the Deliverables except as otherwise permitted under a license granted by AbD, as set forth in Section 8(A). If Customer exceeds the scope of the license granted hereunder, such license shall immediately terminate and all Deliverables and derivative thereof shall immediately be destroyed by Customer.

(C)

Government regulations may require AbD to obtain written confirmation from Customer that AbD’s laboratory products are not being used for human diagnostic or therapeutic purposes and Customer agrees to provide AbD with such written confirmation upon reasonable advanced written notice to Customer by AbD. It is the Customer’s responsibility to ensure compliance with all state and federal laws and regulations concerning the use, storage and disposal of Deliverables.

9. AbD Record Keeping and Audit

(A)

AbD shall maintain complete and accurate records regarding the Services performed under this Agreement.

(B)

For reasonable cause or concerns, at the request and the expense of Customer, upon at least ten (10) days’ prior written notice, AbD shall permit an independent agent appointed by Customer, and reasonably acceptable to AbD, to examine the records mentioned in Section 9(A) solely to the extent necessary to verify the fulfillment of AbD’s obligations under these Terms & Conditions, provided that such agent has entered into a confidentiality agreement with AbD substantially similar to the confidentiality provisions of Section 11 of these Terms & Conditions.

10. Intellectual Property Rights

(A)

Customer shall be the owner of all intellectual property rights AbD generates related to the Materials when providing Services on behalf of Customer and of all intellectual property rights Customer generates while using the Materials and Deliverables as permitted hereunder.

(B)

AbD shall retain ownership of all intellectual property rights AbD generates related to the Deliverables and Retained Items at all times.

11. Confidentiality

(A)

“Confidential Information” shall mean financial, scientific, business and technical information (including information relating to AbD’s human antibody libraries, construction, screening, production of antibodies, and related proprietary technologies and information related to Materials and generally any Project) (i) disclosed by a Party in writing or other tangible form and marked “confidential” or (ii) initially disclosed by a Party in oral or other intangible form, reduced to a tangible form marked “confidential” and provided to the other Party within thirty (30) days from the date of the initial disclosure.

(B)

Each of the Parties agrees to hold Confidential Information received from the other Party in confidence and to protect the other Party’s Confidential Information from disclosure to the public and to third parties. Accordingly, each Party shall employ protective measures fully commensurate with those used by the Party to protect its own other confidential information. Such measures shall include restricting access to the other Party’s Confidential Information only to the Party’s employees, consultants, and contractors whose access is reasonably necessary to carry out a Project and who are bound by confidentiality provisions substantially similar to the provisions of Section 11 of these Terms & Conditions.

(C)

The receiving Party shall not be liable for the disclosure or use of Confidential Information that, as such receiving Party can demonstrate by competent physical evidence:

(a) at the time of disclosure has been published, patented or is otherwise publicly available; or
(b) after disclosure, becomes publicly available other than through a breach of these Terms & Conditions; or
(c) is known to the receiving Party prior to receipt from the other Party; or
(d) becomes known to the receiving Party from a source that legally obtained such information without an obligation of confidentiality or nondisclosure; or
(e) was developed without reference to or use of any Confidential Information provided pursuant to these Terms & Conditions; or
(f) is freely disclosed by the owner of the Confidential Information to a third party without an obligation of confidentiality or nondisclosure; or
(g) is disclosed pursuant to law, regulation or lawful order or process. In the event the receiving Party is subject to such law, regulation, order or process, the receiving Party will timely notify the transferring Party of the disclosure requirement in advance of the required disclosure so as to permit the transferring Party to oppose or limit such disclosure; or
(h) is approved in writing by the transferring Party for disclosure to a third party by the receiving Party.

(D)

For each Confidential Information transferred under these Terms & Conditions, the confidentiality obligations set forth herein shall bind the receiving Party for a period of five (5) years after such transfer.

(E)

AbD is very aware of Customer’s need for privacy. Any information collected at AbD’s website or communicated to AbD via telephone, in person or in writing is regarded as Confidential Information, subject to Sections 11(A) and 11(C), including Information related to any Project, whether such Project is further the subject of an Order or not.

(F)

AbD collects the following types of information from AbD’s website to improve AbD’s service and help AbD to tailor its offerings to meet Customer’s needs:

Customer’s computer domain name and e-mail address
Any information Customer provides in an email or Inquiry Form
Information Customer offers in response to on-site surveys or registration procedure
Information on what pages Customer visits

Customer shall contact AbD for any question about AbD’s privacy policy, as recommended in Section 2 of these Terms & Conditions.

(G)

Customer retains all rights and title to any Confidential Information sent to AbD for the purpose of Services. Upon request of Customer, any unused Confidential Information will be destroyed at the end of the Project or returned to Customer.

(H)

AbD and Customer agree not to use the other’s name or trademarks in any advertising, publicity or news release related to any Project without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed.

12. Product Safety Information

AbD is committed to providing Customer with accurate and easy-to-understand product safety information. This information is provided through appropriate label warnings and material safety data sheets (“MSDS”), which can be requested under www.ab-direct.com.

13. Representations and Warranties

(A)

Each of AbD and Customer represents and warrants to the other that (i) the placement of Order(s) and the performance of the Services have been duly authorized by all appropriate corporate action; and (ii) it is under no obligation which is inconsistent with these Terms & Conditions; and (iii) these Terms & Conditions are a legal and valid obligation, binding upon each of AbD and Customer and enforceable against each of them in accordance with the terms of these Terms & Conditions.

(B)

EXCEPT AS SET FORTH IN THESE TERMS & CONDITIONS, EACH OF ABD AND CUSTOMER ACKNOWLEDGES AND AGREES THAT ALL DELIVERABLES AND MATERIALS ARE BEING SUPPLIED TO THE OTHER WITH NO WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

(C)

EXCEPT AS SET FORTH IN THESE TERMS & CONDITIONS, ABD DOES NOT MAKE ANY REPRESENTATIONS OR EXTEND ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED WITH REGARD TO INFORMATION, DELIVERABLES OR SERVICES PROVIDED UNDER THESE TERMS & CONDITIONS. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR OF NON-INFRINGEMENT OR VALIDITY OF ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS.

(D)

EXCEPT AS EXPRESSLY SET FORTH HEREIN, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR LOST PROFITS, LOSS OF BUSINESS, BUSINESS INTERRUPTION, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY WHETHER BASED IN CONTRACT, WARRANTY, TORT (INCLUDING WITHOUT LIMITATION, NEGLIGENCE), STRICT LIABILITY, STATUTORY OR OTHERWISE, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

14. Indemnification

(A)

AbD shall indemnify and hold Customer and its agents, employees, officers and directors (the “Customer Indemnitees”) harmless from and against any and all liability, damage, loss, cost or expense (including reasonable attorneys’ fees) arising out of third party claims or suits related to (i) AbD’s negligence or willful misconduct in performance of its obligations under this Agreement; or (ii) breach by AbD of its representations and warranties set out in Section 13 of in this Agreement; provided, however, that AbD obligations pursuant to this Section 14(A) shall not apply to the extent such claims or suits result from any action or inaction of the Customer Indemnitees.

(B)

Customer shall indemnify and hold AbD and its agents, employees, officers and directors (the “AbD Indemnitees”) harmless from and against any and all liability, damage, loss, cost or expense (including reasonable attorneys’ fees) arising out of third party claims or suits related to (i) Customer’s negligence or willful misconduct in performance of its obligations under this Agreement; or (ii) breach by Customer of its representations and warranties set out in Section 13 of this Agreement; provided, however, that Customer’s obligations pursuant to this Section 14(B) shall not apply to the extent such claims or suits result from any gross negligence or willful misconduct of the AbD Indemnitees.

(C)

As a condition to its right to receive indemnification under Section 14(A) or Section 14(B), the non-indemnifying Party shall (i) promptly notify the indemnifying Party as soon as it becomes aware of a claim or action for which indemnification may be sought pursuant hereto, (ii) cooperate with the indemnifying Party in the defense of such claim or suit, and (iii) permit the indemnifying Party to control the defense of such claim or suit, including without limitation the right to select defense counsel. In no event, however, may the indemnifying Party compromise or settle any claim or suit in a manner which admits fault or negligence on the part of the non- indemnifying Party without the prior written consent of the non- indemnifying Party. The indemnifying Party shall have no liability under this Section 14 with respect to claims or suits settled or compromised without the indemnifying Party’s prior written consent.

15. Severability

In case any one or more of the provisions contained in these Terms & Conditions shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of these Terms & Conditions, and these Terms & Conditions shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If moreover, any one or more of the provisions contained in these Terms & Conditions shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

16. Independent Contractors

The relationship of AbD and Customer hereunder shall be that of independent contractors and nothing in Terms & Conditions should be construed to create a partnership, joint venture, or employer-employee relationship. Neither AbD nor Customer is an agent of the other and is authorized to make any representation, contract, or commitment on behalf of the other.

17. No Waiver

Any waiver of any provision of these Terms & Conditions shall not be effective unless provided in a written instrument signed by the waiving Party. No waiver by either Party of any breach of these Terms & Conditions shall be a waiver of any preceding or succeeding breach. No waiver by either Party of any right under these Terms & Conditions shall be construed as a waiver of any other right.

18. Applicable Laws

These Terms & Conditions, and the relationship between the Parties pursuant thereto, shall be construed, interpreted and applied in accordance with the laws of Germany, without reference to the conflict of law provisions thereof.