Exhibit 10.1

COLLABORATION AND LICENSE AGREEMENT

This Agreement is entered into as of January 7, 2007 by and between:

SEATTLE GENETICS, INC., a Delaware corporation, having its principal place of
business at 21823 30th Drive S.E., Bothell, Washington 98021

(hereinafter referred to as “SGI”)

and:

AGENSYS, INC., a California corporation, having its principal place of business
at 1545 17th Street, Santa Monica, CA 90404

(hereinafter referred to as “Agensys”).

WITNESSETH

WHEREAS, SGI owns or controls intellectual property rights relating to
technology useful for linking proprietary cytotoxins to other molecules such as
antibodies capable of directing such cytotoxins to specific tissues and/or
cells;

WHEREAS, Agensys is currently conducting research and development programs to
discover antigens that may have activity in certain disease-related pathways,
and to develop antibodies that bind to those antigens;

WHEREAS, the Parties have created and conducted initial characterization work
regarding ADCs (as defined below) to [***] pursuant to the terms and subject to
the conditions of the Initial Agreement (as defined below);

WHEREAS, Agensys wishes to obtain, and SGI wishes to grant, options to exclusive
research licenses under SGI’s patent rights and know-how related to SGI’s
proprietary cytotoxin and linker technology to up to [***] (as defined below)
for use in conjunction with Agensys’ antibodies and options to exclusive
commercial licenses to three (3) of such Designated Antigens; and

WHEREAS, the Parties desire to establish a collaboration to utilize SGI’s
proprietary cytotoxin and linker technology for use in conjunction with certain
of the Agensys’ antibodies and to develop and commercialize such antibodies for
diagnostic, prophylactic and therapeutic uses.

CONFIDENTIAL

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Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as [***]. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

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NOW, THEREFORE, in consideration of the mutual covenants and obligations set
forth herein, the Parties hereto, intending to be legally bound, agree as
follows:

Article 1

DEFINITIONS AND INTERPRETATION

Section 1.1 Definitions: For the purposes of this Agreement the following words
and phrases shall have the following meanings:

“AAA” has the meaning set forth in Section 23.3.4.

“[***]” [***].

“ADC” or “Antibody-Drug Conjugate” means an antibody that is linked to a
cytotoxin or cytostatic agent (generally, “cytotoxins”) and that contains, uses
or is made using SGI Technology.

“ADC Product Candidate” means each ADC comprising an Antibody targeted to a
Designated Antigen to which Agensys has a Research License under Section 10.1.1
and which has not yet been designated as a Collaboration Product or Unilateral
Product hereunder.

“ADC Research Program” means the research conducted pursuant to Article 3.

“ADC Research Program Term” means the term of the ADC Research Program set forth
in Section 3.2.

“Adverse Event” means any unfavorable and unintended medical occurrence in a
human patient or subject who is administered a Product, including any
undesirable sign (including abnormal laboratory findings of clinical concern),
symptom or disease temporally associated with the use of such Product, whether
or not considered related to such Product.

“Affiliate” of a Party means any corporation or other business entity that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with a Party. As used in this
definition of Affiliate, the term “control” means the direct or indirect
ownership of [***] or more of the stock having the right to vote for directors
thereof or the ability to otherwise control the management thereof.

“Agensys ADC Know-How” means all Program Inventions developed by Agensys using
SGI Technology, and that are necessary or useful for identifying, developing,
making, using or selling ADC Product Candidates, Agensys Products or Agensys
Licensed Products that specifically bind to any Designated Antigen or Exclusive
Antigen.

“Agensys ADC Patents” means all patent applications and patents that are
Controlled by Agensys that claim Agensys ADC Know-How and/or ADC Product
Candidates (to the extent SGI consents to the filing of such patent applications
with respect to ADC Product Candidates in accordance with Section 10.1).

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“Agensys Collaboration Know-How” means any and all technical information,
processes, formulae, data, inventions, methods, know-how and trade secrets, that
relate to Collaboration Inventions made by or assigned to Agensys under
Section 15.1.3(a).

“Agensys Collaboration Patents” means Patents that claim Collaboration
Inventions made by or assigned to Agensys pursuant to Section 15.1.3(a).

“Agensys Collaboration Technology” means the Agensys Collaboration Know-How and
the Agensys Collaboration Patents.

“Agensys In-Licenses” means the agreements between Agensys and the indicated
Third Parties listed on Schedule E, as amended from time to time by Agensys.

“Agensys Independent Know-How” means all technical information, processes,
formulae, data, inventions, methods, know-how and trade secrets Controlled by
Agensys that are (a) used by Agensys in the ADC Research Program, or (b) used by
Agensys in the Development or Commercialization Program, including technical
information, processes, formulae, data, inventions, methods, know-how and trade
secrets that relate to (x) the composition, method of using or method of making
an Exclusive Antigen, Designated Antigen or Collaboration Antigen, or (y) the
composition, method of using or method of making an Antibody that binds
specifically to an Exclusive Antigen, Designated Antigen or Collaboration
Antigen. For purposes of clarity, Program Inventions and Collaboration
Inventions shall not be deemed to be Agensys Independent Know-How.

“Agensys Independent Patents” means all patent applications and patents that
claim Agensys Independent Know-How and/or Agensys Materials.

“Agensys Independent Technology” means the Agensys Independent Know-How, Agensys
ADC Know-How, Agensys Independent Patents and Agensys ADC Patents.

“Agensys Licensed Product” means any and all products containing an ADC
comprised of an Antibody that binds specifically to an Exclusive Antigen, that
was never a Collaboration Antigen hereunder, and that is attached to a cytotoxin
or cytostatic agent included in the Drug Conjugation Materials: (a) the
manufacture, use, sale, offer for sale or import of which would infringe a Valid
Patent Claim of an SGI Patent if not for the licenses granted in this Agreement;
or (b) which utilize, incorporate, are derived from or are made using SGI
Know-How.

“Agensys Materials” means any tangible chemical, biological or physical
materials (including but not limited to Antibodies but excluding Products and
ADC Product Candidates) that are furnished by or on behalf of Agensys to SGI in
connection with this Agreement.

“Agensys Product” has the meaning set forth in Section 5.9.1.

“Agensys Sublicensee” shall have the meaning set forth in Section 10.1.3.

 

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“Agensys Technology” means the Agensys Independent Technology and the Agensys
Collaboration Technology.

“Agreement” means this agreement, all amendments and supplements to this
Agreement and all schedules to this Agreement, including the following:

 

Schedule A

   -    Outline Research Plan

Schedule B

   -    SGI Patents

Schedule C

   -    Designated Antigens and Exclusive Antigens (to be added by amendment)

Schedule D

   -    Designated Antigen Specific Research Plans (to be added by amendment)

Schedule E

   -    Agensys In-Licenses

Schedule F

   -    [***]

Schedule G

   -    Initial Collaboration Product Plan

Schedule H

   -    Initial JSC Representatives

Schedule I

      Terms for Co-Promotion Agreement

“[***]” means that certain Antigen designated by Agensys as [***] and as
conjugated by SGI under the Initial Agreement.

“Antibody” or “Antibodies” means any antibody, or fragment thereof, that binds
specifically to an Antigen.

“Antigen” means a protein [***], that are [***] by Agensys and for which the
[***] and as set forth in [***].

“Applicable Law” means any law or statute, any rule or regulation issued by a
government authority (including courts and Regulatory Authorities) and any
judicial, governmental, or administrative order, judgment, decree or ruling, in
each case as applicable to the subject matter and the parties at issue.

“Approved Subcontractor” means a subcontractor engaged by a Party that has been
approved by the JSC to perform specific obligations of the subcontracting Party.

“[***]” means the SGI Technology licensed to SGI under the [***] (as defined in
the definition of “SGI In-Licenses”).

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“Breaching Party” has the meaning set forth in Section 17.5.

“Calendar Quarter” means any of the three-month periods beginning January 1,
April 1, July 1 and October 1 in any year.

“Calendar Year” means (a) with respect to the first Calendar Year, the period
beginning on the Effective Date and ending on December 31, 2007 (the “First
Calendar Year”), and (b) with respect to each subsequent Calendar Year, the
twelve (12) month period beginning on the day following the end of the First
Calendar Year and each succeeding twelve (12) month period thereafter, as
applicable; except that the last Calendar Year shall end upon the expiration or
termination of this Agreement.

“Change in Control” has the meaning set forth in Article 20.

“Claims” has the meaning set forth in Section 18.1.

“Clinical Trials” mean any one of Phase I Clinical Trials, Phase II Clinical
Trials, or Phase III Clinical Trials.

“Collaboration Accounting Policies” means the accounting policies as agreed to
by the Parties and implemented by the JSC to be used in determining Development
Costs and Product Profit, which will be, in all material respects, consistent
with GAAP and any applicable regulations in the United States.

“Collaboration Antigen” means the Initial Collaboration Antigen, the Second
Collaboration Antigen and any other Antigen so designated pursuant to Sections
4.5.2 or 9.7.

“Collaboration Invention” means any process, formulae, method, chemical
compound, biological or physical material (including ADCs and Collaboration
Products), invention, technology, know-how, trade secret or data conceived or
reduced to practice by either Party or jointly by both Parties in the conduct of
the activities under the Development Program or Commercialization Program or
pursuant to the Parties activities under the Collaboration Program.
Collaboration Inventions shall not include Program Inventions.

“Collaboration Product” means the Initial Collaboration Product and the Second
Collaboration Product or any other Collaboration Product so designated pursuant
to Section 9.7 or Section 4.5.2.

“Collaboration Product Inventions” has the meaning set forth in
Section 15.1.3(c).

“Collaboration Product Trademark” has the meaning set forth in Section 8.8.

 

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“Collaboration Program” means the collaborative research, development,
manufacturing, Regulatory Approval and Commercialization activities undertaken
pursuant to any Development and Commercialization Plan(s) under this Agreement.

“Collaboration Sublicensee” means any Third Party to whom a Party has, or the
Parties have, granted the right to develop, sell, distribute or otherwise
Commercialize a Collaboration Product, in each case pursuant to a Third Party
Collaboration Agreement or as otherwise proposed by the JSC and approved by the
written consent of the Parties.

“Collaboration Technology” means the Agensys Collaboration Technology, the SGI
Collaboration Technology and the Joint Collaboration Technology.

“Combination Product” means (a) with respect to any Agensys Licensed Product, a
product that contains, in addition to an ADC, one or more other ingredients that
(i) are not included within Drug Conjugation Technology, and (ii) have
independent biologic or chemical activity as a therapeutic agent when present
alone, and (b) with respect to any other Unilateral Product or Collaboration
Product, a product that contains or is sold together in combination with one or
more active ingredients or products.

“Commercialization” or “Commercialize” means, with respect to a Collaboration
Product, any and all activities to establish and maintain commercial sales for
such Collaboration Product which are undertaken pursuant to a Commercialization
Plan. These activities shall include: (a) the pre-launch marketing and launch
activities for a Collaboration Product, (b) the marketing, promotion,
distribution, offering for sale and selling of a Collaboration Product,
(c) importing and exporting a Collaboration Product for commercial sale,
(d) conducting Phase III-B Studies and Phase IV Studies with respect to such
Collaboration Product and (e) manufacturing Collaboration Product for commercial
sale (except for scale-up activities prior to First Commercial Sale, which shall
be considered Development activities), including inventory build to support the
launch and making manufacturing improvements after launch; in each case in
accordance with the applicable Commercialization Plan. When used as a verb,
“Commercialize” means to engage in Commercialization.

“Commercialization Expenses” shall mean (a) [***], (b) [***], (c) [***],
(d) [***], (e) [***] (to the extent not deducted in [***]), (f) [***], (g) [***]
(to the extent not included in [***]), (h) [***], and (i) other costs as
mutually agreed by the Parties, all allocated to such Collaboration Product and
calculated in accordance with the Collaboration Accounting Policies,
consistently applied.

“Commercialization Plan” means the commercialization plan to be prepared and
approved by the JSC from time to time and the related budget to be prepared and
approved by the JSC for each Calendar Year during which it is anticipated that
Commercialization activities will occur hereunder, to be updated as necessary
during each Calendar Year, setting forth, among other things, a master plan for
the Commercialization of Collaboration Products as well as each Party’s
responsibilities in connection therewith.

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“Commercialization Program” means the collaborative commercialization activities
undertaken by the Parties with respect to Collaboration Products as set forth in
Article 8.

“Commercially Reasonable Efforts” means, (a) with respect to the efforts to be
expended by a Party to accomplish a particular objective, the good-faith and
diligent efforts that such Party would normally use to accomplish a similar
objective under similar circumstances, and (b) with respect to the research,
development or Commercialization of a Collaboration Product, an Agensys Product
or a SGI Product, such efforts as are [***], taking into account commercially
relevant factors such as (as applicable) stage of development, product life,
market potential and regulatory issues. Commercially Reasonable Efforts shall be
determined on a [***] and [***] for a particular Collaboration Product, Agensys
Product or SGI Product, and it is anticipated that the level of effort may be
different for different markets, and may change over time, reflecting changes in
the status of such Product and the market(s) involved. Without limiting the
forgoing, Commercially Reasonable Efforts with respect to a Collaboration
Product, an Agensys or a SGI Product requires that the relevant Party:
(a) [***], and (b) [***].

“Confidential Information” has the meaning set forth in Section 14.1.

“Control” means, with respect to any information or intellectual property right,
possession by a Party of the ability to grant the right to access or use, or to
grant a license or a sublicense to, such information or intellectual property
right as provided for herein without violating (a) the terms of any agreement
with any Third Party or (b) any Applicable Law. In the case of an Antigen, such
Antigen will be deemed to be Controlled by Agensys if Agensys Controls (in
accordance with the foregoing sentence) a [***], or [***], and/or [***], at the
time such Antigen is [***] a Designated Antigen under Section 3.5 of this
Agreement.

“Co-Promote” or “Co-Promotion” mean use of the respective sales forces of the
Parties or their Affiliates to jointly promote a Collaboration Product, where
“promote” means the process of direct contact between the respective sales
forces and persons or entities who are able to purchase or influence the
purchase of such Collaboration Product in accordance with and as further defined
in Schedule I and the Co-Promotion Agreement.

“Co-Promotion Agreement” has the meaning set forth in Schedule I.

“Cost of Goods” shall mean:

(a) with respect to Drug Conjugation Materials and ADC Product Candidates
supplied to Agensys pursuant to the ADC Research Program:

(i) [***]; and

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(ii) [***].

(b) with respect to Unilateral Products or a component thereof supplied pursuant
to Section 6.3.2 (the “Goods”), [***]. Direct costs will include [***]. Indirect
costs identifiable to the production effort will include, [***]. Notwithstanding
anything in this Agreement to the contrary, Cost of Goods will [***].

(c) with respect to Collaboration Products, [***] of such Collaboration Product,
[***]. Direct costs will include [***]. Indirect costs identifiable to the
production effort will include, [***]. Notwithstanding anything to the contrary,
[***].

The above (a) – (c) shall only include costs incurred by either Party prior to
the Effective Date to the extent such costs ([***]) [***].

“Designated Antigen” means each of the [***] Antigens designated as such and set
forth in Schedule C in accordance with Section 3.5 of this Agreement, but
excluding any Collaboration Antigen.

“Designated Antigen Research Plan” means the research activities, schedule and
budget for each Designated Antigen under the ADC Research Program to be agreed
upon by the Parties and appended to this Agreement as Schedule D after the
Effective Date and revised as needed from to time by the Parties. An outline
Designated Antigen Research Plan is attached hereto as Schedule A.

“Development” or “Develop” means, with respect to Collaboration Products, any
and all preclinical and clinical drug development activities and manufacturing
activities undertaken pursuant to the Initial Collaboration Product Plan or an
Manufacturing, Preclinical and Clinical Development Plan in order develop a
Collaboration Product up to and including obtaining Regulatory Approval for such
Collaboration Product for an indication and to perform manufacturing scale up to
enable commercial scale manufacturing prior to launch (except that inventory
build shall be considered a Commercialization activity). These activities shall
include preclinical research, stability testing, toxicology testing, formulation
activities, reformulation activities, process development, manufacturing
scale-up activities, development stage manufacturing, quality assurance/quality
control development, clinical studies (including Phase III Studies, other than
Phase III-B Studies) and other activities to obtain the applicable Regulatory
Approvals; in each case in accordance with the applicable Initial Collaboration
Product Plan or Manufacturing, Preclinical and Clinical Development Plan, as
applicable. When used as a verb, “Develop” means to engage in Development.

“Development Costs” means, with respect to the Collaboration Program, the actual
direct and indirect costs incurred by a Party from the Effective Date
identifiable to the Collaboration Program in support of: (a) the research,
development, and clinical studies required to support development and
registration for a Collaboration Product; (b) the manufacture and validation of
pilot and scale up lots; and (c) the application for Regulatory Approval (if any
is required), including software for system operation and/or data analysis,
calculated in accordance with the Collaboration

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Accounting Policies, consistently applied. The actual costs will include the
direct and indirect costs of conducting research, development, and clinical
activities with respect to the Collaboration Program. Direct costs will include
[***]. Indirect costs identifiable to the research and development effort will
include, [***] in support of the research and development process, including
[***].

“Development Program” means the collaborative development activities undertaken
by the Parties with respect to Collaboration Products as described in Article 4
and Article 5.

“Direct Marketing Expenses” shall mean the following costs incurred by the
Parties or its Affiliates in the marketing and promotion of the Collaboration
Product: (i) [***], (ii) [***], (iii) [***] and (iv) [***] or other study
(including pharmacovigilence programs and outcome studies) that the JSC
considers necessary or economically justifiable. For the avoidance of doubt,
Direct Marketing Expenses shall [***].

“DMF” means (i) a Drug Master File filed with the FDA (and any foreign
counterpart of a U.S. Drug Master File) and (ii) all supplements and amendments
that may be filed with respect to thereto.

“Drug Conjugation Materials” means the compounds monomethyl Auristatin E and
monomethyl Auristatin F and certain variants, derivatives, analogues and salts
thereof, as well as compounds that are useful in attaching such compounds to
Antibodies, in each case to the extent included in or covered by the SGI
Technology. Drug Conjugation Materials shall also include Improvements to Drug
Conjugation Materials and any additional cytotoxic or cytostatic compounds that
are included in New Technologies and that the Parties agree to include under
this Agreement pursuant to Section 10.4.2. For the avoidance of doubt, Drug
Conjugation Materials do not include ADC Product Candidates.

“Drug Conjugation Technology” means chemical compositions and methods, including
methods of manufacture, that are Controlled by SGI and that are useful to attach
cytotoxins or cytostatic compounds to Antibodies, including the composition and
methods of making and using cytotoxic or cytostatic compounds, as well as
compositions and methods useful for attaching the foregoing cytotoxic or
cytostatic compounds to Antibodies.

“Effective Date” means the date set forth in the first line of this Agreement.

“EMEA” means the European Medicines Agency and any successor agency(ies)
thereto.

“Events of Force Majeure” has the meaning set forth in Article 19.

“Exclusive Antigen” means collectively, the First Exclusive Antigen, the Second
Exclusive Antigen and the Third Exclusive Antigen, but specifically excluding
any Collaboration Antigen.

“Exclusive License” has the meaning set forth in Section 10.1.2.

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“FDA” means the United States Food and Drug Administration, and any successor
agency(ies) thereto.

“FD&C Act” means the United States federal Food, Drug & Cosmetic Act, as
amended.

“Field” means the treatment and diagnosis of conditions and diseases [***];
provided that, with respect to the [***], the [***].

“Financial Statement” means a financial statement in a form as may be reasonably
agreed upon by the Parties from time to time in accordance with the terms of
this Agreement and consistent with the Collaboration Accounting Policies.

“First Commercial Sale” means, in each country of the Territory, the first
commercial sale of a Product by a Party, its Affiliates or Sublicensees to a
Third Party (other than a sublicensee) following, if required by law, Regulatory
Approval and, when Regulatory Approval is not required by law, the first
commercial sale in that country, in each case for use or consumption of such
Product in such country by the general public. Sales 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.

“First Exclusive Antigen” means the first Designated Antigen for which Agensys
obtains an Exclusive License pursuant to Section 10.1.2 of this Agreement, as
set forth in Schedule C in accordance with Section 3.5 of this Agreement.

“Full Time Equivalent” or “FTE” means the equivalent of full-time work of a
person, carried out by one or more employees of the Parties, who devotes a
portion of his or her full time, consisting of [***], in support of any of the
activities contemplated hereunder during any period of [***].

“GAAP” means generally accepted accounting principles in the United States or
equivalent International Financial Reporting Standards outside the United
States.

“Good Clinical Practices” or “GCP” means the then-current standards, practices
and procedures set forth in the guidelines entitled “Guidance for Industry E6
Good Clinical Practice: Consolidated Guidance,” including related regulatory
requirements imposed by the FDA, any successor agency and, as applicable, the
equivalent thereof in jurisdictions outside the United States, as applicable.

“Good Laboratory Practices” or “cGLP” means the then-current standards for
laboratory activities for pharmaceuticals, as set forth in the FD&C Act and
applicable regulations and guidances promulgated thereunder, including without
limitation the Code of Federal Regulations, as amended from time to time.

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“Good Manufacturing Practices” or “cGMP” means the then-current good
manufacturing practices as set forth in the FD&C Act and applicable regulations
and guidances promulgated thereunder, including without limitation the Code of
Federal Regulations, as amended from time to time, for the manufacturing and
testing of pharmaceutical materials.

“Improvements” means all patentable or non-patentable inventions, discoveries,
or know-how developed by either Party or jointly by the Parties during the Term
that utilize, incorporate, are directly derived from, or relate to, the SGI
Independent Technology; provided that Improvements shall not include [***].

“Information” has the meaning set forth in Section 14.1.

“IND” means (a) an Investigational New Drug Application filed with the FDA or
its equivalent in any country outside the United States where a regulatory
filing is required or obtained to conduct a clinical trial; or (b) with respect
to any country where a regulatory filing is not required or obtained to conduct
a clinical trial, the first enrollment of a patient in the first trial involving
the first use of a Product in humans.

“Indemnitee” has the meaning set forth in Section 18.1.1. The term “Indemnitee”
may refer to either or both the Agensys Indemnitees and the SGI Indemnitees, as
the context may indicate.

“Indemnitor” has the meaning set forth in Section 18.3.

“Independent Patents” means the Agensys Independent Patents and the SGI
Independent Patents.

“Independent Technology” means the Agensys Independent Technology and the SGI
Independent Technology.

“Indirect Marketing Expenses” means all indirect marketing, promotion and
operational expenses incurred by the Parties or its Affiliates for Collaboration
Product, which shall be [***] (the “IME Percentage”). Such [***] shall be
adjusted by the Parties in the event that [***] or more from the IME Percentage
currently being used by the Parties. Examples of Indirect Marketing Expenses
included in the calculation of the IME Percentage include, but are not limited
to, [***].

“Initial Agreement” means the Material Transfer Agreement dated as of
February 9, 2004 by and between the Parties, as amended.

“Initial Collaboration Antigen” means that certain Antigen designated by Agensys
as [***], the sequence of which is attached as Schedule F.

“Initial Collaboration Product” means any and all products containing an ADC
comprised of an Antibody that binds specifically to the Initial Collaboration
Antigen.

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“Initial Collaboration Product Plan” means the research activities, schedule and
budget for the Initial Collaboration Product under the Development Program
agreed upon by the Parties and appended to this Agreement as Schedule G and
updated and revised as needed from time to time by the Parties.

“Initiation” means, with respect to a human clinical trial, the dosing of the
first patient with a Product pursuant to the clinical protocol for the specified
clinical trial.

“Internal Expenses” means all expenses associated with an FTE. The rate per FTE
shall include, but shall not be limited to, direct labor (including fringe
benefits), [***]. The Parties agree that for a [***] following the execution of
this Agreement, the rate per FTE shall be [***] for each Party. Commencing upon
the [***] of the Effective Date and upon [***] thereafter, the rate per FTE
shall be increased by the percentage increase, if any, in the [***], All Items,
as published by the [***], for the [***] prior to such anniversary date for
which data is available. The initial FTE rate and any applicable annual
increases shall be referred to as the “FTE Fees.”

“IP and Trademark Costs” means all costs relating to Joint Collaboration
Invention Patents and Collaboration Product Trademarks.

“Joint Collaboration Invention Know-How” means any and all technical
information, processes, formulae, data, inventions, methods, know-how and trade
secrets relating to the jointly owned Collaboration Inventions.

“Joint Collaboration Invention Patents” means all Patents that claim jointly
owned Collaboration Inventions.

“Joint Collaboration Technology” means the Joint Collaboration Invention
Know-How and the Joint Collaboration Invention Patents.

“Joint Know-How” means the Joint Program Invention Know-How and the Joint
Collaboration Invention Know-How.

“Joint Patents” means the Joint Program Invention Patents and the Joint
Collaboration Invention Patents.

“Joint Program Invention Know-How” means any and all technical information,
processes, formulae, data, inventions, methods, know-how and trade secrets
relating to the jointly owned Program Inventions.

“Joint Program Invention Patents” has the meaning set forth in Section 15.10.1.

“Joint Steering Committee” has the meaning set forth in Section 4.3.1.

“Lead Regulatory Party” has the meaning set forth in Section 7.1.

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“Liabilities” has the meaning set forth in Section 18.1.1.

“Major Market Countries” means the United States, Great Britain, France,
Germany, Spain, Italy and Japan.

“Manufacturing, Preclinical and Clinical Development Plan” or “Development Plan”
means manufacturing, preclinical and clinical development plans to be prepared
and approved by the JSC from time to time and the related budget to be prepared
and approved by the JSC for each Calendar Year during which it is anticipated
that Development activities will occur hereunder, to be updated as necessary
during each Calendar Year, setting forth, among other things, a master plan for
the Development of Collaboration Products as well as each Party’s
responsibilities in connection therewith. For the avoidance of doubt, the
Initial Collaboration Product Plan shall be considered a Development Plan
hereunder.

“Net Sales” means the invoiced gross sales by a Party, and their respective
Affiliates and Sublicensees (a “Selling Party”) for commercial sales of Products
to a Third Party (other than a Sublicensee) [***]:

 

  (a) [***];

 

  (b) [***];

 

  (c) [***]; and

 

  (d) [***].

All of the [***] from the gross invoiced sales prices of Products shall be
determined in accordance with GAAP. In the event a Selling Party makes any
adjustments to such [***] after the associated Net Sales have been reported
pursuant to this Agreement, the adjustments shall be reported, reconciled and
settled in the next report with appropriate adjustment of payments (including
royalties) due.

Sales of Products by and between a Party and its Affiliate, or a Party or a
Party’s Affiliate and its respective Sublicensees, are excluded (and not to be
calculated as constituting a deductible) from this definition of Net Sales,
provided that the final sales of Products by such Affiliates or Sublicensees to
Third Parties are included in Net Sales. Transfers of Products for donation,
laboratory research and development purposes, testing and/or clinical studies
shall be excluded from this definition of Net Sales.

In the event a Product is sold as part of a Combination Product, the Net Sales
from the Combination Product, for the purposes of determining payments
hereunder, shall be determined by [***] in finished form in the country in which
the Combination Product is sold, in each case during the applicable period or,
[***]. In the event that such average sale price cannot be determined for the
Product, on the one hand, and all other product(s) included in the Combination
Product, on the other, Net Sales for the purposes of determining any payments
(including royalties) shall be mutually agreed upon by the Parties based on the
relative value contributed by each component, such agreement to be negotiated in
good faith.

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“[***]” means any [***] that either: (a) [***] or (b) [***] (x) [***] existing
as of the Effective Date, or (y) [***]. [***] shall include without limitation
[***] other than those included in the Drug Conjugation Materials as of the
Effective Date that SGI Controls during the Term.

“Notice of Dispute” has the meaning set forth in Section 23.3.1.

“Opt-In Decision” has the meaning set forth in Section 4.1.2.

“Opt-In Period” has the meaning set forth in Section 4.1.2.

“Opt-In Right” has the meaning set forth in Section 4.1.2.

“Option” has the meaning set forth in Section 10.1.2.

“Option Period” means the period commencing on the Effective Date and continuing
until expiration or termination of the Research License Period for each
Designated Antigen as set forth in Section 3.2.

“Patents” means (a) patent applications filed in the Territory, (b) all patents
including supplemental protection certificates that have issued or in the future
issue from any of the foregoing, including, without limitation, utility models,
design patents and certificates of invention and (c) all divisionals,
continuations, continuations-in-part, reissues, re-examination certificates,
renewals, extensions or additions to any such patents and patent applications
(as applicable).

“Parties” means Agensys and SGI, and “Party” means either of them.

“Payments to Third Parties” has the meaning set forth in Section 10.5.2.

“Phase I Clinical Trial” means the first administration of a candidate drug in a
human clinical trial in any country that would satisfy the requirements of
21 CFR 312.21(a).

“Phase II Clinical Trial” means a controlled dose human clinical trial
prospectively designed to evaluate the efficacy and safety of a candidate drug
in the targeted patient population and to define the optimal dosing regimen in
any country that would satisfy the requirements of 21 CFR 312.21(b).

“Phase III Clinical Trial” means a controlled, and usually multi-center, human
clinical trial, involving patients with the disease or condition of interest to
obtain sufficient efficacy and safety data to support Regulatory Approval of a
candidate drug that would satisfy the requirements of 21 CFR 312.21(c).

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“Phase III-B Study” means a clinical study which provides for product support
(i.e., a clinical trial which is not required for receipt of initial Regulatory
Approval but which may be useful in providing additional drug profile data or in
seeking a label expansion) commenced before receipt of Regulatory Approval for
the indication for which such trial is being conducted.

“Phase IV Study” means a post-marketing study to delineate additional
information about a pharmaceutical product’s risks, benefits, and optimal use,
commenced after receipt of Regulatory Approval in the indication for which such
Regulatory Approval was obtained, including a trial that would satisfy the
requirements of 21 CFR 312.85.

“Plans and Budgets” means the Manufacturing, Preclinical and Clinical
Development Plan and the Commercialization Plan.

“Product” means a Unilateral Product or a Collaboration Product, as applicable.

“Product Profit” means the profits or losses resulting from the
Commercialization of Collaboration Products and shall be equal to Net Sales of
Collaboration Products less Commercialization Expenses; provided, however that
[***]. Product Profit shall also include [***].

“Program Invention” means any process, formula, method, chemical compound,
biological or physical material (including ADC Product Candidates, and
Unilateral Products), invention, technology, know-how, trade secret or data
conceived or reduced to practice by either Party or jointly by both Parties in
the conduct of the activities under the ADC Research Program, or in the
development or commercialization of Unilateral Products outside of the
Collaboration Program and solely in accordance with the licenses and rights set
forth under this Agreement and/or under the Initial Agreement only; provided,
that Program Inventions shall not include Improvement Inventions to Seattle
Genetics Material/Technology (as defined in the Initial Agreement) made pursuant
to the Initial Agreement that are not related to a Designated Antigen or an
Exclusive Antigen, each of which shall remain governed by the terms of the
Initial Agreement. Program Inventions shall not include Collaboration
Inventions.

“Promotional Materials” has the meaning set forth in Section 8.6.

“Publication” has the meaning set forth in Section 14.6.

“Regulatory Approval” means final regulatory approval (including, where
applicable, pricing approval in the event that actual sales do not take place
before such approval) required to market a Product for a disease or condition in
accordance with the Applicable Laws and regulations of a given country. In the
United States, its territories and possessions, Regulatory Approval means
approval of a New Drug Application (“NDA”), Biologics License Application
(“BLA”) or an equivalent by the FDA.

“Regulatory Authority” means the FDA, the EMEA, or any comparable national or
territorial regulatory entity within the Territory having substantially the same
functions.

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“Research License” has the meaning set forth in Section 10.1.1.

“Research License Period” means, other than as provided in Section 4.5.2, for
each Designated Antigen, the earlier of (a) [***], or (b) [***].

“Royalty Reports” has the meaning set forth in Section 11.9.

“Royalty Term” means, on a Product-by-Product and country-by-country basis, the
period commencing on the First Commercial Sale of a Product and ending upon
[***]: (a) [***]; or (b) (x) [***], or (y) [***] (i) [***] (A) [***], and
(B) [***].

“Sales Training Expenses” has the meaning sent forth in Schedule I.

“Second Collaboration Antigen” means that certain Designated Antigen with
respect to which SGI exercises its Opt-In Right pursuant to Section 4.1.2.

“Second Collaboration Product” means any and all products containing an ADC
comprised of an Antibody that binds specifically to the Second Collaboration
Antigen.

“Second Exclusive Antigen” means a Designated Antigen, other than the First
Exclusive Antigen or the Third Exclusive Antigen, for which Agensys exercises an
Option for an Exclusive License pursuant to Section 10.1.2 of this Agreement, as
set forth in Schedule C in accordance with Section 3.5 of this Agreement.

“Serious Adverse Event” means any Adverse Event occurring at any dose in
response to the administration of Product that: (a) results in death or
threatens life; (b) results in persistent or significant disability/incapacity;
(c) results in or prolongs hospitalization; (d) results in a congenital anomaly
or birth defect; or (e) is otherwise medically significant.

“SGI Collaboration Know-How” means any and all technical information, processes,
formulae, data, inventions, methods, know-how and trade secrets, that relate to
Collaboration Inventions made by or assigned to SGI under Section 15.1.3(b).

“SGI Collaboration Patents” means Patents that claim the Collaboration
Inventions made by or assigned to SGI under Section 15.1.3(b).

“SGI Collaboration Technology” means the SGI Collaboration Patents and the SGI
Collaboration Know-How.

“SGI In-Licenses” means the following agreements between SGI and the indicated
Third Parties: (a) the License Agreement between [***] and SGI dated [***], as
amended (the “[***]”); (b) the License Agreement between [***] and SGI dated
[***], as amended (the “[***]”); and (c) any other license agreement between SGI
and a Third Party covering [***] under which Agensys is granted a sublicense
under this Agreement as provided in Section 10.4.2.

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“SGI Independent Know-How” means any and all technical information, processes,
formulae, data, inventions, methods, know-how and trade secrets, that relate to
Drug Conjugation Materials or are useful to practice the Drug Conjugation
Technology and that have been, or hereafter are during the Term, Controlled by
SGI. SGI Independent Know-How shall include Improvements and Program Inventions
Controlled by SGI but shall exclude New Technologies unless included pursuant to
Section 10.4.2. For purposes of clarity, Collaboration Inventions shall not be
deemed to be SGI Independent Know-How.

“SGI Independent Patents” means:

(a) any patents and patent applications listed in Schedule B to this Agreement,
which shall be amended from time to time to reflect any other patents and patent
applications;

(b) any patents and patent applications covering Improvements that are not
Agensys ADC Patents and, solely to the extent the Parties so agree pursuant to
Section 10.4.2, New Technologies, in each case that are Controlled by SGI;

(c) any future patents issued from any patent applications referred to above and
any future patents issued from any continuation, continuation-in part (to the
extent Controlled by SGI), or divisional of any of the foregoing patent
applications or any patent applications from which the foregoing patents issued,
in each case to the extent Controlled by SGI; and

(d) any reissues, reexaminations, confirmations, renewals, registrations,
substitutions, extensions, or counterparts of any of the foregoing, in each case
to the extent Controlled by SGI.

“SGI Independent Technology” means SGI Independent Patents and SGI Independent
Know-How.

“SGI Materials” means any tangible chemical, biological or physical materials
(excluding Products and ADC Product Candidates) that are furnished by or on
behalf of SGI to Agensys in connection with this Agreement.

“SGI Patents” means the SGI Independent Patents and the SGI Collaboration
Patents.

“SGI Product” has the meaning set forth in Section 5.9.1.

“SGI Technology” means the SGI Independent Technology and the SGI Collaboration
Technology.

“Sublicensee” means an Agensys Sublicensee, SGI Sublicensee or a Collaboration
Sublicensee, as applicable.

“Supply Fees” has the meaning set forth in Section 11.1.2.

 

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“Term” has the meaning set forth in Article 17.

“Territory” means all countries in the world.

“Third Exclusive Antigen” means a Designated Antigen, other than the First
Exclusive Antigen or the Second Exclusive Antigen, for which Agensys exercises
an Option for an Exclusive License pursuant to Section 10.1.2 of this Agreement,
as set forth in Schedule C in accordance with Section 3.5 of this Agreement.

“Third Party” means any person or entity other than SGI and its Affiliates, and
Agensys and its Affiliates.

“Third Party Collaboration Agreement” means any agreement pursuant to which a
Third Party is granted rights to commercialize (including to develop and
commercialize) one or more Collaboration Products, including development
agreements, collaboration agreements, marketing and marketing/distribution
agreements, promotion agreements or other similar agreements, in each case in
accordance with the provisions of Section 5.9.2.

“Third Party License Agreement” has the meaning set forth in Section 10.5.1.

“Unilateral Product Maintenance Fee” has the meaning set forth in Section 11.3.

“Unilateral Product” means any Agensys Product, Agensys Licensed Product or SGI
Product.

“Valid Patent Claim” means (a) an unexpired claim of an issued patent which has
not been found to be unpatentable, invalid or unenforceable by an unreversed and
unappealable decision of a court or other authority in the subject country; or
(b) a claim of an application for a patent that has been pending for less than
[***].

Section 1.2 Certain Rules of Interpretation in this Agreement and the Schedules.

Unless otherwise specified, all references to monetary amounts are to United
States of America currency (U.S. Dollars);

The preamble to this Agreement and the descriptive headings of Articles and
Sections are inserted solely for convenience of reference and are not intended
as complete or accurate descriptions of the content of this Agreement or of such
Articles or Sections;

The use of words in the singular or plural, or with a particular gender, shall
not limit the scope or exclude the application of any provision of this
Agreement to such person or persons or circumstances as the context otherwise
permits;

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The words “include” and “including” have the inclusive meaning frequently
identified with the phrases “without limitation” and “but not limited to”;

The word “day” shall mean a calendar day and the words “business day” shall mean
a day other than a Saturday, a Sunday, or any day that is a holiday for the
United States Postal Service;

Unless otherwise specified, time periods within or following which any payment
is to be made or act is to be done shall be calculated by excluding the day on
which the period commences and including the day on which the period ends and by
extending the period to the next business day following if the last day of the
period is not a business day in the jurisdiction of the Party to make such
payment or do such act; and

Whenever any payment is to be made or action to be taken under this Agreement is
required to be made or taken on a day other than a business day, such payment
shall be made or action taken on the next business day following such day to
make such payment or do such act.

Article 2

THE COLLABORATION RELATIONSHIP

Section 2.1 Overview. SGI and Agensys will collaborate to identify ADCs for
development and commercialization on the terms set forth herein. Initially, the
Parties will jointly develop and commercialize Initial Collaboration Products.
In addition, SGI will grant Agensys Research Licenses to [***], three (3) of
which will be convertible by Agensys into Exclusive Licenses and Exclusive
Antigens, respectively, pursuant to Section 10.1.2. SGI will generate ADC
Product Candidates targeted to each such Antigen, pursuant to the ADC Research
Program described in Article 3. SGI will have the right to opt-in to development
and commercialization of ADC Product Candidates as set forth in Section 4.1.2.
If SGI elects to exercise its right to opt in to development of an ADC targeting
any such Antigen, the Parties will jointly develop and commercialize ADCs
targeting such Antigen pursuant to the provisions of this Agreement.

Article 3

RESEARCH PROGRAM FOR DESIGNATED ANTIGENS

Section 3.1 Objective and Conduct of the Research Program for Designated
Antigens. Agensys intends to conduct research, with SGI’s support, on [***], to
evaluate and select ADCs targeting three (3) Exclusive Antigens for development
and commercialization by Agensys as Agensys Licensed Products (the “ADC Research
Program”), subject to SGI’s Opt-In Right. The Parties shall use Commercially
Reasonable Efforts to develop a specific Research Plan for each Designated
Antigen within [***] from the date such Antigen is accepted by SGI pursuant to
Section 3.5, each of which shall be included in this Agreement under Schedule D.
All research work performed by Agensys and SGI hereunder shall be performed in a
good scientific manner and in compliance with all Applicable Laws.

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Section 3.2 Term of the ADC Research Program. The term of the ADC Research
Program shall commence on the Effective Date and end on the earlier of
(a) [***], or (b) termination of this Agreement in accordance with Article 17
(the “ADC Research Program Term”). The Parties agree to use all Commercially
Reasonable Efforts to timely and diligently achieve all aspects of the ADC
Research Program.

Section 3.3 Delivery of Drug Conjugation Materials. In support of the ADC
Research Program, during the ADC Research Program Term, SGI will deliver Drug
Conjugation Materials to Agensys in accordance with the mutually agreed upon
times, quantities and specifications included in the Designated Antigen Research
Plans to enable Agensys to attach such materials to Agensys’ Antibodies to
create ADCs. [***]. All such Drug Conjugation Materials and other information
provided by SGI to Agensys hereunder will be deemed Confidential Information of
SGI pursuant to Article 14.

Section 3.4 SGI Preparation of ADC Product Candidates. In order to enable
Agensys to select three (3) Exclusive Antigens during the ADC Research Program
Term, SGI will prepare in accordance with the Designated Antigen Research Plans
mutually agreed upon research quantities of ADC Product Candidates using the
Drug Conjugation Materials and Agensys Materials [***].

Section 3.5 Availability of Antigens. Agensys shall provide SGI with a
confidential written description of each Antigen, including to the extent
available, the GenBank accession number and the cDNA and amino acid sequence for
each Antigen, which Agensys desires to have accepted as a Designated Antigen for
purposes of this Agreement (the “Proposed Designated Antigen”). In addition,
simultaneous with Agensys’ submission of such information to SGI, Agensys shall
notify SGI (a) [***], and (b) [***]. Agensys shall have the ability to nominate
Antigens as one of the [***] for a period of [***] from the Effective Date, at
which time Agensys shall no longer be able to nominate Antigens as Designated
Antigens, provided that, Agensys may only nominate a maximum of [***] Antigens
as Designated Antigens hereunder. Within [***] following SGI’s receipt of such
written notice with respect to a particular Antigen, (i) SGI shall notify
Agensys in writing whether the Exclusive License described in Section 10.1.2 of
this Agreement is available with respect to such Antigen, and (ii) [***] (a
“Notice of Unavailability”). Schedule C to this Agreement will be amended from
time to time to list the Designated Antigens and the First, Second and Third
Exclusive Antigens, if applicable. The Parties hereby acknowledge and agree that
SGI will accept an Antigen nominated by Agensys as a Designated Antigen unless
(a) [***], (b) [***], or (c) [***] that have been designated by Agensys as
Designated Antigens as of the date of receipt of the written notice from
Agensys. The matters described in Sections 3.5(a), 3.5(b) and 3.5(c) shall be
the sole reasons for such Antigen to be deemed not available to Agensys under
this Section 3.5. Notwithstanding the foregoing, if SGI provides Agensys a
Notice of Unavailability, [***].

Section 3.6 Additional Activities under ADC Research Program. Upon mutual
agreement of the Parties, the ADC Research Program may also include the
development by SGI of a technology transfer program for the conjugation of
cytotoxins to Antibodies, including associated purification and analytics.

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Section 3.7 Payment. Agensys shall pay SGI the amounts set forth in Section 11.1
for any research efforts or other assistance provided by SGI pursuant to the ADC
Research Program.

Section 3.8 Supply of Agensys Materials. From time to time during the ADC
Research Program Term, Agensys may supply SGI with Agensys Materials for use in
the ADC Research Program. Except as provided elsewhere in this Agreement with
respect to the development and commercialization of Collaboration Products or
SGI Products, SGI hereby agrees that (a) it shall not use Agensys Materials for
any purpose other than conducting the Designated Antigen Research Plans; (b) it
shall use the Agensys Materials only in compliance with all Applicable Laws;
(c) it shall not transfer any Agensys Materials to any Third Party without the
prior written consent of Agensys; (d) Agensys shall retain full ownership of all
such Agensys Materials; and (e) upon the expiration or termination of this
Agreement, SGI shall at the instruction of Agensys either destroy or return any
unused Agensys Materials.

Section 3.9 Supply of SGI Materials. From time to time during the ADC Research
Program Term, SGI may supply Agensys with SGI Materials for use in the ADC
Research Program. Except as provided elsewhere in this Agreement with respect to
the development and commercialization of Collaboration Products, Agensys
Products or Agensys Licensed Products, Agensys hereby agrees that (a) it shall
not use SGI Materials for any purpose other than conducting the Designated
Antigen Research Plans; (b) it shall use the SGI Materials only in compliance
with all Applicable Laws; (c) it shall not transfer any SGI Materials to any
Third Party without the prior written consent of SGI; (d) SGI shall retain full
ownership of all such SGI Materials; and (e) upon the expiration or termination
of this Agreement, Agensys shall at the instruction of SGI either destroy or
return any unused SGI Materials.

Section 3.10 Disclosure of Drug Conjugation Technology. During the ADC Research
Program Term, SGI shall (a) disclose to Agensys such SGI Independent Technology
as is reasonably useful to enable Agensys to use the Drug Conjugation Materials
and Drug Conjugation Technology as provided in the Designated Antigen Research
Plan or to practice the Research License and (b) upon Agensys’ reasonable
written request and with adequate notice to SGI, make available to Agensys at
SGI’s facilities, SGI’s personnel to provide a reasonable amount of technical
assistance and/or training to Agensys’ personnel. All such technical assistance
and/or training shall be agreed in advance in writing and Agensys shall pay to
SGI for such technical assistance and/or training an amount equal to SGI’s
Internal Expenses in accordance with Section 11.1 for SGI employees providing
such assistance.

Section 3.11 Encumbrance of Designated Antigens. During the ADC Research Program
Term, Agensys shall not enter into any Third Party collaboration or license
agreement with any Third Party relating to [***] Antigen that has become a
Designated Antigen, and/or Antibodies targeted to [***] Antigen, in any oncology
indication, other than for research, development or commercialization of any
such Antibody solely [***] which have become Designated Antigens pursuant to
Section 3.5.

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Article 4

COLLABORATION PRODUCTS

Section 4.1 Designation of Collaboration Products.

4.1.1 Initial Collaboration Product Development. Upon the Effective Date, the
Parties will collaborate to identify, develop and commercialize ADCs to the
Initial Collaboration Antigen in accordance with the Initial Collaboration
Product Plan. The Parties will collaborate to Develop and Commercialize such
Initial Collaboration Product in accordance with the Development Program and the
Commercialization Program.

4.1.2 Opt-In Regarding Second Collaboration Product.

(a) As long as SGI retains an Opt-In Right hereunder, not later than [***]
targeting a Designated Antigen, Agensys will provide SGI with (i) [***],
(ii) [***], (iii) [***], (iv) [***], and (v) [***]. In addition, simultaneous
with Agensys’ submission of such information to SGI, Agensys shall notify SGI of
(a) [***], and (b) [***].

(b) SGI shall have until [***] after [***] (the “Opt-In Period”) to determine
whether SGI will elect (the “Opt-In Right”) to co-fund the development and
commercialization of such ADC Product Candidate and associated Designated
Antigen (the “Opt-In Decision”).

(c) If SGI exercises its Opt-In Right, SGI shall provide written notice to
Agensys of its Opt-In Decision, accompanied by an [***] prior to the expiration
of the Opt-In Period. Effective as of the date of such notice, (A) the
Designated Antigen to which the ADC Product Candidate is targeted would become
the Second Collaboration Antigen and any ADC targeting such Collaboration
Antigen would become the Second Collaboration Product, (B) Agensys would grant
SGI a co-exclusive license with respect to such Collaboration Antigen and the
corresponding antibodies on the same terms as the Initial Collaboration Antigen
and Initial Collaboration Product as set forth in Section 10.2.2, (C) the
Parties would share equally all further research, development, clinical and
commercialization costs for such Second Collaboration Product, subject to
oversight of the JSC; and (D) [***].

(d) If SGI does not notify Agensys of its decision to exercise its Opt-In Right
with respect to a Designated Antigen during the Opt-In Period, then contingent
upon Agensys’ obtaining an Exclusive License pursuant to Section 10.1.2,
(A) such Antigen would become an Exclusive Antigen and ADCs targeting such
Exclusive Antigen would become Agensys Licensed Products, (B) Agensys would
retain the Exclusive License to develop such Agensys Licensed Products on its
own and would be obligated to pay SGI the fees, milestones and royalties set
forth in Article 11 below and (3) SGI would maintain its Opt-In Right with
respect to additional Antigens submitted pursuant to the process set forth in
this Section 4.1.2.

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(e) If the [***].

(f) SGI agrees that the information listed in Section 4.1.2(a) shall be
Confidential Information of Agensys and to hold in strict confidence all
information disclosed to it in accordance with Article 14, shall be used by SGI
solely for the purpose of making the Opt-In Decision, and shall return all such
materials to Agensys (and shall not keep any copies of such materials) not later
than [***] after providing notice of its decision not to exercise its Opt-In
Right.

4.1.3 Exclusion for [***]. Notwithstanding the provisions of Section 4.1.2, in
the event that Agensys decides to [***]. Upon such notice by Agensys, Agensys
shall exercise its right to [***] with respect to [***] pursuant to
Section 10.1.2 and, contingent upon such exercise by Agensys, [***] shall become
an [***] hereunder and [***] shall become [***] hereunder. For the avoidance of
doubt, Agensys may not [***], unless it (a) provides SGI the notice provided for
in this Section 4.1.3, and (b) exercises [***] with respect to [***] hereunder.

Section 4.2 Payments for Collaboration Products. The Parties will make the
following payments for each Collaboration Product:

4.2.1 Initial Payments with Respect to the Second Collaboration Product. Within
[***] of SGI’s exercise of its Opt-In Right under Section 4.1.2 only, SGI shall
pay to Agensys a [***]; provided that the total amount of such [***]. For the
avoidance of doubt, all payments owed or paid by [***] up to and including the
[***] for such Collaboration Product shall be [***] and in no event shall [***].

4.2.2 Reimbursement of Development Costs. The Parties shall reimburse each other
for Development Costs incurred after the Effective Date with respect to all
Collaboration Products as set forth in Section 12.2 below.

Section 4.3 Management of Collaboration. The activities of the Parties with
respect to research, development and commercialization of Collaboration Products
shall be overseen by a Joint Steering Committee as set forth in this
Section 4.3.

4.3.1 Establishment of Joint Steering Committee. Upon the Effective Date, the
Parties will establish a joint steering committee (“Joint Steering Committee” or
“JSC”) to provide oversight for the research, development and commercialization
undertaken pursuant to this Agreement for Collaboration Products during the
Term. The Joint Steering Committee will be composed of [***] representatives
from each Party. The representatives of each Party to the JSC as of the
Effective Date are listed on Schedule H. Either Party may change its
representatives to the JSC upon prior written notice to the other Party in
accordance with this Agreement. It is anticipated that the membership of the JSC
may change over time in accordance with the development stage of the
Collaboration Product(s). Each Party shall insure that the representatives named
by such Party

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for membership on the JSC have the requisite seniority level and expertise to
oversee the activities of the collaboration during the Term. Any member of the
Joint Steering Committee may designate a substitute of at least equal seniority
and a similar level of expertise to attend and perform the functions of that
member at any meeting of the Joint Steering Committee.

4.3.2 Responsibilities. The JSC shall be responsible for the following
functions:

(a) supplementing, updating and amending, to the extent required, the Initial
Collaboration Product Plan within [***] after the Effective Date;

(b) reviewing, coordinating and monitoring the activities and progress of the
Parties in implementing the Initial Collaboration Product Plan, and ensuring
each Party’s compliance therewith;

(c) establishing, reviewing, coordinating and monitoring the activities and
progress of the Parties in implementing a Development Plan for each
Collaboration Product, and ensuring each Party’s compliance therewith;

(d) establishing the Plans and Budgets for each Collaboration Product, and
reviewing, coordinating and monitoring each Party’s compliance therewith;

(e) establishing the goals and strategy for the manufacture and development of
Collaboration Products, including regulatory strategies;

(f) approving protocols for, and prioritization of, Clinical Trials and
indications for Collaboration Products;

(g) establishing the Commercialization Plans for each Collaboration Product and
reviewing, coordinating and monitoring each Party’s compliance therewith;

(h) establishing the goals and strategy for the commercialization of
Collaboration Products;

(i) overseeing the Parties activities with respect to Collaboration Inventions
as set forth in this Agreement;

(j) establishing and overseeing subcommittees responsible for development and/or
commercialization of Collaboration Products hereunder; and

(k) performing such other functions as are specifically designated to the JSC in
this Agreement or otherwise as agreed upon by the Parties.

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4.3.3 Meetings. The Joint Steering Committee shall meet not less than [***] on
such dates and at such times as agreed to by SGI and Agensys, with all scheduled
meetings to alternate between Seattle, Washington and Santa Monica, California,
or at such other locations as determined by the Joint Steering Committee. Upon
the determination of the Joint Steering Committee, any such meeting may be
conducted by conference telephone or videoconference; provided, however, that
not less than [***] shall be in person. Telephonic and videoconference meetings
shall be [***] of each Party are in attendance or participating in the meeting.
Each Party may permit such non-voting observers visitors to attend meetings of
the Joint Steering Committee as the Joint Steering Committee determines. Each
Party shall be responsible for its own costs in connection with the meetings of
the Joint Steering Committee.

4.3.4 Decisions; Actions Without Meeting. Any approval, determination or other
action of the Joint Steering Committee shall require [***] of the Joint Steering
Committee, with each Party’s representatives [***]. Action that may be taken at
a meeting of the Joint Steering Committee also may be taken without a meeting if
a written consent setting forth the action so taken is agreed in writing [***].

4.3.5 Authority. It shall be conclusively presumed that each voting member of
the Joint Steering Committee has the authority and approval of such member’s
respective senior management in casting the vote described in Section 4.3.4 on
matters as described in this Article 4. Notwithstanding the creation of the
Joint Steering Committee, each Party to this Agreement shall retain the rights,
powers and discretion granted to it hereunder, and the Joint Steering Committee
shall not be delegated or vested with any such rights, powers or discretion
unless such delegation or vesting is expressly provided for herein or the
Parties expressly so agree in writing. The Joint Steering Committee shall not
have power to amend or modify this Agreement, to change the time any payment is
due from one Party to another, or to impose additional economic burdens on
either Party beyond those specifically contemplated by this Agreement without
the prior written consent of the Party on which such burden is imposed.

4.3.6 Disputes; Final Decision Making Authority. Any disputes or disagreements
arising in the Joint Steering Committee that are unable to be resolved within
[***] after the matter is first referred to the Joint Steering Committee shall
be referred to executive officers of each Party with subject matter expertise
for the current dispute for resolution. If such executive officers are unable to
resolve a matter within [***] after the matter is first referred to them, the
matter shall be referred to the [***] of each Party for resolution. If the [***]
are unable to resolve a matter within [***] after the matter is first referred
to them, then the final decision on such matters shall be made through expedited
“Short Form Arbitration” in accordance with Section 23.4.

Section 4.4 Collaboration Accounting Policies. Promptly, but in no event later
than [***], following the Effective Date the Parties shall develop the
Collaboration Accounting Policies. Following adoption by the Parties, the
Collaboration Accounting Policies can be changed or deviations approved only
with the written consent of both Parties.

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Section 4.5 Certain Terms Relating to [***].

4.5.1 Requests for [***]. No later than [***], Agensys shall [***] requesting a
[***] pursuant to [***] with respect to [***]. No later than [***], Agensys
shall [***] of the requirement to [***] set forth in [***]. If necessary, [***]
in order to insure that the provisions of [***] will not be [***]. SGI shall be
provided with [***]. In addition, if it is likely that the requirements of
[***], or any [***], as the case may be, then no later than [***] prior to [***]
set forth in [***] with respect to any [***] shall request either additional
[***] or, in the case where [***] have already been granted, [***] such that, if
[***], the provisions of [***] would not be [***], as the case may be. Agensys
shall provide SGI with [***].

4.5.2 [***] Collaboration Antigens. In the event that (a) Agensys [***], and
[***] of receipt of such [***], or (b) [***], and such [***] is not resolved
within [***], or (c) the commercial license with respect to any Collaboration
Antigen, [***], or (d) the [***], or (e) with respect to the [***] of the time
periods set forth in [***], (each of (a) through (e), a “Triggering Event”) then
with respect to each Collaboration Antigen or SGI Product Antigen that is the
subject of such Triggering Event (a “[***]”), (x) SGI may in its sole
discretion, pursuant to written notice to Agensys within [***] of the Triggering
Event, [***] in accordance with the provisions of this Agreement [***], or
(y) if the Triggering Event is (e) above, SGI may, [***], pursuant to the terms
of this Agreement, provided that, [***]; provided further, that if SGI elects to
exercise its rights under this Section 4.5.2(y) and any Triggering Event occurs
pursuant to subsections (a) through (d), [***], provided that, such designation
may only occur within [***] of [***], and provided further, that the Research
License Period for such [***] of (a) [***], and (b) [***].

4.5.3 Credit for [***]. Agensys shall [***] that relate to a [***], Agensys
shall [***] under this Agreement with respect to any other Collaboration
Product, provided that, if SGI does [***] after the Triggering Event, Agensys
shall [***].

4.5.4 [***]; Notification. In addition, in the event that any [***] as a result
of a [***], or the [***] or other [***], (each an “[***]”) with respect to any
Collaboration Antigen, any SGI Product Antigen (provided the [***] occurred
prior to the Collaboration Antigen becoming an SGI Product Antigen), and/or
products targeting such Antigens, [***], provided that, in the case of a payment
that is accelerated, but would otherwise become due and [***] under this
Agreement, SGI shall [***], provided, SGI and Agensys are obligated to share
such costs on the Payment Date. [***]. [***]. [***]. Agensys shall promptly, and
in no event later than [***], advise SGI through the JSC of any and all [***],
including without limitation, [***].

Article 5

DEVELOPMENT PROGRAM FOR COLLABORATION PRODUCTS

Section 5.1 Preparation of Manufacturing, Preclinical and Clinical Development
Plan. Promptly, but in no event later than [***] after designation of a
Collaboration Product under Section 4.1, the JSC shall prepare and agree upon
the initial Manufacturing,

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Preclinical and Clinical Development Plan for the then current Calendar Year.
Thereafter, the Joint Steering Committee shall prepare a Manufacturing,
Preclinical and Clinical Development Plan for each Calendar Year during which it
is anticipated that Development activities will occur at least [***] prior to
the commencement of such Calendar Year. In the event that the JSC does not
approve such Manufacturing, Preclinical and Clinical Development Plan, then the
Manufacturing, Preclinical and Clinical Development Plan in effect for the prior
Calendar Year shall be automatically extended for up to [***] while the JSC
works to agree upon an updated Manufacturing, Preclinical and Clinical
Development Plan for such Calendar Year which is satisfactory to the Parties.

5.1.1 Review and Amendment of Manufacturing, Preclinical and Clinical
Development Plan. The JSC shall review the then current Manufacturing,
Preclinical and Clinical Development Plan from time to time, but at least every
[***], and shall prepare and approve updates and amendments as appropriate.

5.1.2 Content of Manufacturing, Preclinical and Clinical Development Plan. Each
Manufacturing, Preclinical and Clinical Development Plan shall contain the
specific Development objectives to be achieved during the applicable Calendar
Year, the specific activities to be performed by each of the Parties in
connection with the Development of the Collaboration Products, the timelines for
performing such activities and a detailed budget for performing such activities.
Each Manufacturing, Preclinical and Clinical Development Plan shall be
consistent with the other terms and conditions of this Agreement. For purposes
of clarity, the allocation of regulatory activities relating to the Development
of Collaboration Products shall be governed by Article 7 unless otherwise agreed
upon in writing by the JSC.

Section 5.2 Development Activities. Each Party shall use Commercially Reasonable
Efforts to perform its obligations with respect to the Development of
Collaboration Products in accordance with the Manufacturing, Preclinical and
Clinical Development Plan and all such activities shall be conducted in
accordance with all Applicable Laws, including as applicable, GCPs, GLPs and
GMPs. As part of such efforts, each Party shall commit the personnel and
facilities necessary to carry out its obligations under the Manufacturing,
Preclinical and Clinical Development Plan. Neither SGI nor Agensys shall be
required to undertake any activity relating to the Development of a
Collaboration Product that it believes, in good faith, may violate any
Applicable Law. The Parties acknowledge and agree that neither Party guarantees
the success of the Development tasks undertaken hereunder.

Section 5.3 Reports. Each Party shall submit periodic written reports to the JSC
as may be required by the Manufacturing, Preclinical and Clinical Development
Plan, but in all cases no less than [***] per [***], detailing its activities
with respect to the Development of the Collaboration Product, including all
Development Costs incurred by such Party during such [***] and all FTEs utilized
in such [***] in connection with such Development activities. The JSC shall use
such periodic reports to monitor the Parties’ respective contributions to the
Development of the Collaboration Product.

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Section 5.4 Development Costs. Unless otherwise provided in this Agreement, the
Parties will [***] all Development Costs (which have been set forth in the
applicable approved Manufacturing, Preclinical and Clinical Development Plan or
in the Initial Collaboration Product Plan, as applicable) with respect to the
Development activities hereunder in accordance with the provisions of
Article 12. The JSC shall review on a quarterly basis the Development Costs
against the budget for such expenses in the applicable Calendar Year. If in the
course of such quarterly review the JSC determines that the actual amounts
incurred for Development Costs are likely to be higher than budgeted, the JSC
shall review the reasons for such potential overrun and determine whether such
overrun is appropriate. The JSC may, if appropriate, amend the Manufacturing,
Preclinical and Clinical Development Plan to permit such overrun or to reduce
such activities such that no overrun is expected. [***].

Section 5.5 Audit.

5.5.1 Development Cost Records. For so long as any Development activities are
conducted hereunder and for a period of [***] thereafter, each Party shall keep
and maintain, and shall require its Affiliates to keep and maintain, accurate
and complete records of activities performed by each such Party (including
Development Costs incurred and FTEs utilized) in connection with its Development
activities hereunder. Not more than [***], each Party shall have the right to
engage an independent certified public accounting firm of nationally recognized
standing and reasonably acceptable to the other Party, which shall have the
right to examine in confidence the relevant books, records or other relevant
reports, of such other Party and its respective Affiliates as may be reasonably
necessary to determine and/or verify the accuracy of the reports submitted to
the JSC in connection with the performance of a Party’s Development obligations
hereunder.

5.5.2 Procedure. Such examination shall be conducted, and each Party shall make
its records available, during normal business hours, after at least [***] prior
written notice shall have been provided by the other Party, as applicable, and
shall take place at the facility(ies) where such records are maintained. Each
such examination shall be limited to pertinent books, records and reports for
any year ending not more than [***] prior to the date of request; provided,
that, no Party shall be permitted to audit the same period of time more than
[***]. Before permitting such independent accounting firm to have access to such
books and records, the non-requesting Party may require such independent
accounting firm and its personnel involved in such audit to sign a
confidentiality agreement (in form and substance reasonably acceptable to such
Party) as to any confidential information which is to be provided to such
accounting firm or to which such accounting firm will have access while
conducting the audit under this paragraph. The accounting firm shall provide
both SGI and Agensys with a written report stating whether the reports submitted
by SGI or Agensys, as applicable, are correct or incorrect and the specific
details concerning any discrepancies. Such accounting firm may not reveal to the
other Party any information learned in the course of such audit other than the
amount of any such discrepancies. Each Party agrees that all such information
shall be Confidential Information of the other Party and further agrees to hold
in strict confidence all information disclosed to it in accordance with
Article 14.

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5.5.3 Cost of Audit. The Party initiating such Audit shall bear the full cost of
such audit unless such audit discloses that the actual expenses incurred in the
conduct of a Party’s obligations under a Development Plan, as applicable, are
lower than that reported by such Party by [***], in which case the other Party
shall [***].

Section 5.6 Development Program Records. All work conducted by either Party in
connection with the Development Program under this Article 5 and, with respect
to the Initial Collaboration Product, Article 4 as well, shall be completely and
accurately recorded in sufficient detail and in good scientific manner and in
any event completely separated from any work done under the ADC Research
Program. On reasonable notice, and at reasonable intervals, each Party shall
have the right to inspect and copy all such records of the other Party
reflecting Development done hereunder to the extent reasonably required to carry
out its obligations and to exercise its rights hereunder. All such records shall
be considered Collaboration Inventions.

Section 5.7 Liability. In connection with conduct of the Development activities
hereunder, each Party shall be responsible for, and hereby assumes, any and all
risks of personal injury or property damage attributable to the negligent acts
or omissions of that Party or its Affiliates, and their respective directors,
officers, employees and agents.

Section 5.8 Use of Approved Subcontractors. Either Party may perform some or all
of its obligations under the Development Program through one or more Approved
Subcontractors; provided, that (a) none of the rights of the other Party
hereunder are diminished or are otherwise adversely affected as a result of such
subcontracting and (b) the Approved Subcontractor undertakes in writing all
obligations of confidentiality and non-use regarding both Party’s Confidential
Information which are substantially the same as those undertaken by the Parties
hereunder. In the event that a Party performs one or more of its obligations
under the Development Program through any such Approved Subcontractor, then such
Party shall at all times be responsible for the performance by such Approved
Subcontractor of such Party’s obligations hereunder.

Section 5.9 Termination of Co-Funding; Out-License of Collaboration Products.

5.9.1 Voluntary Termination by Either Party. Either Party shall have the right
to terminate its co-funding obligation (the “Non-Continuing Party”) for the
Collaboration Program for the Initial Collaboration Products and/or the
Collaboration Program for the Second Collaboration Products, effective [***]
(the “Opt-Out Date”) after providing irrevocable, written notice to the other
Party (the “Continuing Party”) of such election to terminate (the “Opt-Out
Notice”). For the avoidance of doubt, if a Party exercises its right to
terminate its co-funding obligation with respect to a Collaboration Program,
such termination shall cover [***]. Within [***] after receipt of such notice,
the Continuing Party shall notify the Non-Continuing Party in writing whether or
not it elects to assume sole responsibility for, and all costs and obligations
of, the continued Development and Commercialization of such Collaboration
Product. If the Continuing Party so elects, upon the effective date of such
termination: (a) such Collaboration Product shall

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thereafter be deemed an “Agensys Product” if Agensys is the Continuing Party or
an “SGI Product” if SGI is the Continuing Party; (b) the Non-Continuing Party
shall [***], and (c) promptly after the Non-Continuing Party’s election, the
Parties shall work together to transfer and assign all regulatory documents,
contracts, materials and Information that related solely to such Unilateral
Product to the Continuing Party or its designees to the extent necessary for the
Continuing Party to assume such sole responsibility. The Non-Continuing Party
shall [***] for the Development of such Unilateral Product and shall [***] with
respect to such Product through the effective date of such termination, except
that the Non-Continuing Party shall remain responsible for its share of
non-cancellable Development Costs that have already been approved by the JSC
beyond the effective date of termination. If the Continuing Party utilizes the
goods or services purchased with such non-cancellable Development Costs, the
Continuing Party shall [***].

5.9.2 Third Party Collaboration Agreements. In the event the JSC determines to
engage a Third Party to collaborate with the Parties with respect to the
Development or Commercialization of a Collaboration Product, or in the event
that both Parties wish to opt-out of Development of a Collaboration Product, the
JSC shall determine the strategy, timing and other matters relating to finding
such Third Party and entering into the appropriate Third Party Collaboration
Agreement. At such time as the JSC determines to recruit a Third Party, the JSC
shall determine whether to designate a Party to take the lead in negotiating and
entering into the applicable Third Party Collaboration Agreement or to allocate
such responsibilities between the Parties. If one Party is designated to take
the lead in negotiating the Third Party Collaboration Agreement, such Party
shall provide the other Party with term sheets and agreement drafts during the
negotiations (including any proposed execution version) for review and comment
and the designated Party shall not enter into any such Third Party Collaboration
Agreement (or any amendment, waiver or other modification thereof) without the
written approval of the other Party. [***]. If neither Party wishes to continue
the Development and Commercialization of a Collaboration Product, and the JSC
decides not to license such Collaboration Product to a Third Party or if no good
faith negotiation has commenced with a Third Party within a [***] after both
Parties have exercised their right to opt-out, then (a) [***] and (b) [***].

Article 6

MANUFACTURE AND SUPPLY OF COLLABORATION PRODUCTS

Section 6.1 Clinical Trial Supply. The Parties agree to develop a [***] to each
Collaboration Product as soon as practicable after the selection of the Antibody
to be incorporated in the Collaboration Product. As part of the Manufacturing,
Preclinical and Clinical Development Plan for each Collaboration Product, the
JSC shall direct the transition from any use of a [***] to manufacture the
Collaboration Product to the use of a [***] to manufacture the Collaboration
Product. The Parties hereby agree that the Lead Regulatory Party, or a Third
Party designated by such Lead Regulatory Party and approved by the JSC, shall be
responsible for all process science and manufacturing issues related to
developing a [***] and any manufacture of a Collaboration Product using a [***]
required for Clinical Trials. The costs of manufacturing Collaboration Product
using either a [***] or [***] for Clinical Trials shall be deemed Development
Costs. All materials for Clinical Trials shall be produced in accordance with
all relevant manufacturing standards and all applicable laws and cGMPs.

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Section 6.2 Commercial Supply. As part of each Commercialization Plan for each
Collaboration Product, the JSC shall propose which Party, or Third Party(ies),
shall be responsible for manufacturing the Collaboration Product and the
components thereof for commercial sale in the Territory.

Section 6.3 Supply Agreements.

6.3.1 SGI or Agensys as Supplier. In the case where either SGI or Agensys agrees
to be responsible for manufacturing a Collaboration Product (or any component
thereof) under the Collaboration Program for research, development, clinical
studies and/or commercial sale, the Parties shall enter into a clinical supply
agreement or commercial supply agreement, as applicable, on customary and
reasonable terms and conditions. Each such supply agreement shall provide, among
other things, for a transfer price for such Collaboration Product (or any
component thereof) at such Party’s [***], forecasting and ordering requirements
and inventory maintenance requirements, and shall be reasonably acceptable to
the JSC.

6.3.2 Supply Cooperation. To the extent a Party manufactured a Collaboration
Product (or any component thereof) prior to an Opt-Out Date, such Party shall
continue such manufacturing for a period of [***] following delivery of the
Opt-Out Notice and shall cooperate with the Continuing Party in providing
reasonable quantities of such component(s), SGI Product or Agensys Product (as
the case may be) to effectuate the smooth transition of such manufacture to the
Continuing Party or to a Third Party selected by the Continuing Party. At the
request of the Continuing Party the Non-Continuing Party shall continue to
manufacture reasonable quantities of such component(s), SGI Product or Agensys
Product (as the case may be) [***]. The provisions of this Section 6.3.2 are
contingent on the Continuing Party paying the Non-Continuing Party for such
manufacture at the rate of [***] of Non-Continuing Party’s [***].

6.3.3 Third Party as Supplier. In the case where the JSC elects to designate a
Third Party to be responsible for manufacturing a Collaboration Product (or any
component thereof) for clinical studies and/or commercial sale, the Parties
shall enter into a clinical supply agreement or commercial supply agreement, as
applicable, with such Third Party on customary and reasonable terms and
conditions. Each such supply agreement shall provide, among other things, for
forecasting and ordering requirements and inventory maintenance requirements,
and shall be reasonably acceptable to the JSC. The JSC shall determine the
strategy, timing and other matters relating to finding such Third Party and
entering into the appropriate clinical supply agreement or commercial supply
agreement, as applicable. At such time as the JSC determines to recruit a Third
Party, the JSC shall determine whether to designate a Party to take the lead in
negotiating and entering into the applicable clinical supply agreement or
commercial supply agreement, as applicable, or to allocate such responsibilities
between the Parties. If one Party is designated to take the lead in negotiating
such agreement, such Party shall provide the other Party

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with term sheets and agreement drafts during the negotiations (including any
proposed execution version) for review and comment and the designated Party
shall not enter into any such clinical supply agreement or commercial supply
agreement, as applicable, (or any amendment, waiver or other modification
thereof) without the written approval of the other Party.

Article 7

REGULATORY MATTERS FOR COLLABORATION PRODUCTS

Section 7.1 General. The JSC shall be responsible for overseeing, monitoring and
coordinating regulatory actions, communications and filings with, and
submissions to, all applicable Regulatory Authorities with respect to a given
Collaboration Product and shall delegate operational activities to the Party
that is named “Sponsor” of the regulatory filing as per 21 CFR 312.3 (Part B)
and/or 21 CFR 312.50 with respect to such Collaboration Product (the “Lead
Regulatory Party”). The Parties agree to develop a [***] to each Collaboration
Product as soon a practicable after the selection of the Antibody to be
incorporated in the Collaboration Product. As Lead Regulatory Party for the
Initial Collaboration Product, [***] “Sponsor” on the IND for the Initial
Collaboration Product comprising the [***] (the “[***]”). Subject to JSC
approval, [***] “Sponsor” on the IND for the Initial Collaboration Product
comprising the [***] to the Initial Collaboration Antigen (the “[***]”).
Following Initiation of the first clinical trial under the [***], no further
Clinical Trials would be Initiated under the [***], unless specifically
requested by the JSC. As Lead Regulatory Party for the Second Collaboration
Product [***] “Sponsor” on each IND for the Second Collaboration Product.

Section 7.2 Ownership of Regulatory Approvals. Unless otherwise proposed by the
JSC and agreed to by the Parties, the Lead Regulatory Party shall own all INDs,
BLAs and other Regulatory Approvals for the Collaboration Product for which it
is responsible. The Lead Regulatory Party shall promptly license, transfer,
provide a letter of reference with respect to, or take other action necessary to
make available such Regulatory Approvals (including INDs and BLAs) to the other
Party as may be reasonably necessary to enable such other Party to fulfill its
Development and Commercialization obligations hereunder. SGI shall, in all
cases, prepare, own and be responsible for the section of the applicable DMF
that describes the Drug Conjugation Technology. Agensys may reference such
section, but shall have no right, and SGI shall have no obligation, to provide
any such information to Agensys and may require the applicable Regulatory
Authority to maintain such information as confidential.

Section 7.3 Regulatory Coordination.

7.3.1 Responsibilities of Lead Regulatory Party. The Lead Regulatory Party shall
oversee, monitor and coordinate all regulatory actions, communications and
filings with, and submissions to, all applicable Regulatory Authorities with
respect to the relevant therapeutic areas of the relevant Collaboration Product.
The Lead Regulatory Party shall also be responsible for interfacing,
corresponding and meeting with the applicable Regulatory Authorities with
respect to the relevant therapeutic areas of the relevant Collaboration Product.
The Lead Regulatory Party will use its best efforts to include a representative
of the other Party in all meetings and telephone discussions between
representatives of the Lead Regulatory Party and such Regulatory Authority
related to a Collaboration Product.

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7.3.2 Review of Correspondence. The Lead Regulatory Party shall provide the
other Party with drafts of any material documents and other correspondence to be
submitted to a Regulatory Authority pertaining to a Collaboration Product,
sufficiently in advance of submission so that the other Party may review and
comment on such documents or other correspondence and have a reasonable
opportunity to influence the substance of such submissions. The Lead Regulatory
Party shall promptly provide the other Party with copies of any documents or
other correspondence received from or submitted to a Regulatory Authority
pertaining to a Collaboration Product.

Section 7.4 Assistance. Each Party shall cooperate with the other Party to
provide all reasonable assistance and take all actions reasonably requested by
the other Party that are necessary to enable such Party to comply with any
regulatory requirements under Applicable Law with respect to any Collaboration
Product, including (a) obtaining and maintaining Regulatory Approvals,
(b) submitting annual reports and (c) performing pharmacovigilance activities.
Such assistance and actions shall include, among other things, notifying the
other Party within [***] of any information it receives from a Regulatory
Authority which (i) raises any material concerns regarding the safety or
efficacy of a Collaboration Product, (ii) indicates or suggests a potential
material liability for either Party to Third Parties arising in connection with
a Collaboration Product or (iii) is reasonably likely to lead to a recall or
market withdrawal of a Collaboration Product.

Section 7.5 Adverse Events.

7.5.1 Reporting to Government Authorities. Each Party shall, and shall cause its
respective Affiliates to, furnish timely notice as required by applicable
worldwide regulations (i.e. currently not later than [***] for deaths and
immediately life-threatening Adverse Events and not later than [***] for Serious
Adverse Events to all competent governmental agencies in the Territory of all
side effects, drug interactions and other Adverse Events identified or suspected
with respect to any Product administered, distributed, marketed and sold under
authority of any IND or Regulatory Approval. Each Party shall provide the other
Party with all necessary assistance in complying with all Adverse Event
reporting requirements established by, or required under, any applicable IND
and/or Regulatory Approval in the Territory. Accordingly, each Party shall
provide the other with timely information, in accordance with the time frames
set forth below, on any side effects, drug interactions and Serious Adverse
Events relating to any Product to the extent that such Serious Adverse Events
could affect the Regulatory Approval for the Product, or relate to the safety,
efficacy or potency of the Product.

7.5.2 Reporting to Other Party. Each Party shall, and shall cause its respective
Affiliates to, furnish the other Party written notice of all side effects, drug
interactions and other Serious Adverse Events regarding a Product reported to
such Party or its Affiliates within [***] after any such report. Each Party
shall also use its best efforts to obtain, and to furnish to the

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other Party hereto, such information, including, but not limited to, patients,
circumstances, consequences and sources of information, reasonably sufficient to
permit that other Party to evaluate such side effects, drug interactions or
other Serious Adverse Events of the Product. Each Party shall retain all
documents, reports, studies and other materials relating to any and all such
side effects, drug interactions, or other Serious Adverse Events, as the case
may be. Upon reasonable written notice, each Party shall permit the other Party
hereto to inspect, and to make copies of, all such documents, reports, studies
and other materials, subject to all applicable laws and regulations regarding
patient confidentiality and privacy.

Article 8

COMMERCIALIZATION OF COLLABORATION PRODUCTS

Section 8.1 Objectives for Commercialization of Collaboration Products. The
Parties shall collaborate in Commercializing the Collaboration Products in
accordance with the Commercialization Plan and Co-Promotion Agreement (if
applicable) with the objective of achieving the commercial potential of the
Collaboration Products and sharing equally in (i) all Development Costs and
Commercialization Expenses and (ii) any Product Profit. The Parties agree and
acknowledge that, to the extent a given Collaboration Product is Commercialized
for use in different therapeutic areas, such Collaboration Product shall have a
different commercial presentation for each such therapeutic area (e.g.,
different dosage strengths or other differentiating characteristics).

Section 8.2 Commercialization Principles. The Parties shall mutually agree, in
no event later than [***] after the initiation of the first [***] with respect
to a Collaboration Product, a mechanism or structure (including, if required,
the formation of a jointly owned entity subject to the written approval of both
Parties) that maximizes the positive Product Profit to be shared equally between
the Parties. In the event the Parties intend to utilize sales representatives
employed by one or both of the Parties to Co-promote Collaboration Products they
shall enter into a Co-Promotion Agreement the terms of which shall include
without limitation the terms set forth in Schedule I and the applicable
provisions of this Article 8.

Section 8.3 Preparation of Commercialization Plan. Promptly, but in no event
later than [***] after the initiation of the first [***] with respect to a
Collaboration Product: (i) the JSC shall prepare and approve an initial
Commercialization Plan for a duration to be decided by the JSC but for not less
than the balance of the then current Calendar Year plus the following Calendar
Year for review and final written approval by the Parties. Thereafter, the JSC
shall prepare a Commercialization Plan for each Calendar Year during which
Commercialization activities are anticipated to occur at least [***] prior to
the commencement of such Calendar Year. Each Commercialization Plan shall
contain the specific Commercialization objectives to be achieved during the
applicable period, the specific activities to be performed by each of the
Parties in connection with the Commercialization of the Collaboration Products
(including promotion, distribution, detailing and marketing activities), as well
as a detailed budget for performing such activities. Each Commercialization Plan
shall be consistent with the terms and conditions of both this Agreement and the
Co-Promotion Agreement (if applicable).

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8.3.1 Amendment of Commercialization Plan. The JSC shall update and amend, as
appropriate, the then current Commercialization Plan from time to time.

Section 8.4 Commercialization Activities. Each Party shall use Commercially
Reasonable Efforts to perform its obligations with respect to the
Commercialization of the Collaboration Products in accordance with the
applicable Commercialization Plan and Co-Promotion Agreement (if applicable) and
all such activities shall be conducted in accordance with all Applicable Laws,
including GMPs. As part of such efforts, each Party shall commit the personnel
and other resources necessary to carry out its obligations under the
Commercialization Plan and Co-Promotion Agreement (if applicable). Neither Party
shall be required to undertake any activity relating to the Commercialization of
a Collaboration Product that it believes, in good faith, may violate any
Applicable Law.

Section 8.5 Reports. Each Party shall submit periodic reports to the JSC, as may
be required by the Commercialization Plan and Co-Promotion Agreement (if
applicable), but in all cases no less than [***] per [***], detailing its
activities with respect to the Commercialization of the Collaboration Product,
including all Commercialization Expenses incurred by such Party for such [***]
and all FTEs utilized in connection with such Commercialization activities. The
JSC shall use such periodic reports to monitor the Parties’ respective
contributions to the Commercialization of the Collaboration Products.

Section 8.6 Promotional Materials. The JSC shall be responsible for creating and
developing advertising, promotional, educational and communication materials for
marketing, advertising and promotion of the Collaboration Products in the
Territory which are intended for distribution to Third Parties (including
medical professionals) and to the Parties’ respective sales forces in accordance
with the terms of the Commercialization Plan (the “Promotional Materials”). The
Parties shall jointly own all copyrights in and to any Promotional Materials
which are specifically directed to the Collaboration Products and each Party
shall execute all documents and take all actions as are reasonably requested by
the other Party to effectuate such joint ownership in such copyrights. Neither
Party shall produce (other than as concepts for consideration by the JSC),
distribute or otherwise use any Promotional Materials relating to the
Collaboration Products which have not been approved in accordance with the
procedures established by the JSC.

Section 8.7 Recalls and Medical Inquiries. The JSC shall establish procedures
for handling any recalls or customer complaints with respect to Collaboration
Products and responding to medical inquiries regarding the Collaboration
Products for approval by the JSC. Without limiting the generality of the
foregoing, prior to the First Commercial Sale of a Collaboration Product, the
Parties shall enter into a pharmacovigilance agreement detailing each Party’s
pharmacovigilance responsibilities in connection with the Collaboration
Products. Expenses of any recall shall be included in Commercialization
Expenses, except that each Party shall be solely

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responsible for costs of a recall to the extent based on (i) the negligence,
recklessness or willful misconduct of that Party or its Affiliate, or (ii) the
failure by that Party to manufacture or have manufactured by an Affiliate or
Third Party the Collaboration Product in accordance with all applicable laws and
cGMPs.

Section 8.8 Product Trademarks. The Parties’ shall propose and through the JSC
select the trademark, trade dress, logos and slogans under which each
Collaboration Product shall be exclusively marketed (each a “Collaboration
Product Trademark”). The Parties shall register the Collaboration Product
Trademark and shall take all such actions as are required to continue and
maintain in full force and effect the trademarks and the registrations thereof.
The Parties shall jointly own the trademarks which are specifically directed to
the Collaboration Products and each Party shall execute all documents and take
all actions as are reasonably requested by the other Party to effectuate such
joint ownership in such copyrights. Collaboration Product Trademarks shall be
used only pursuant to the terms of this Agreement to identify, and in connection
with the marketing of, Collaboration Products and shall not be used by either
Party to identify, or in connection with the marketing of, any other products.

Section 8.9 Commercialization Expenses. Commercialization Expenses shall be
provided for in a budget to be included in the Commercialization Plan, and shall
be borne equally on a Collaboration Product-by-Collaboration Product basis
pursuant to Article 12. The JSC shall review on a [***] basis the
Commercialization Expenses against the budget for such expenses in the
applicable [***]. If in the course of such quarterly review the JSC determines
that the actual amounts incurred for Commercialization Expenses are likely to be
higher than budgeted, the JSC shall review the reasons for such potential
overrun and determine whether such overrun is appropriate. The JSC may, if
appropriate, amend the Commercialization Plan to permit such overrun or to
reduce such activities such that no overrun is expected. To the extent that a
Party incurs expenses in connection with the Commercialization of a
Collaboration Product [***] of the [***] (as the same may be amended from time
to time), [***].

Section 8.10 Audit. For so long as any Commercialization activities are
conducted hereunder and for a period of [***] thereafter, each Party shall keep
and maintain, and shall require its Affiliates to keep and maintain, accurate
and complete records of activities performed by each such Party (including
Commercialization Expenses incurred) in connection with the Commercialization
activities hereunder. Not more than [***] per [***], each Party shall have the
right to engage an independent certified public accounting firm of nationally
recognized standing and reasonably acceptable to the other Party, which shall
have the right to examine in confidence the relevant books, records and other
relevant reports of such other Party and its respective Affiliates as may be
reasonably necessary to determine and/or verify the accuracy of the reports
submitted to the JSC in connection with the performance of a Party’s
Commercialization obligations and the provisions of Section 5.5.2 and
Section 5.5.3 shall apply with respect to such inspection and costs related
thereto, mutatis, mutandis.

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Section 8.11 Public Statements Regarding Collaboration Products. Each Party
shall ensure that no claims or representations in respect of the Collaboration
Products or the characteristics thereof are made by or on behalf of it (by
members of its sales force or otherwise) which do not represent an accurate
summary or explanation of the labeling of the Collaboration Product or a portion
thereof, except to the extent permitted by Applicable Law.

Section 8.12 Labeling. To the extent not prohibited by Applicable Law and
subject to approval by the applicable Regulatory Authorities, all product labels
for Collaboration Products shall include, in equal prominence, the names of both
SGI and Agensys; provided, however, that the name of a non-Continuing Party (as
hereinafter defined) shall not be required to be displayed on product labels.

Section 8.13 Liability. In connection with conduct of the Commercialization
activities hereunder, each Party shall be responsible for, and hereby assumes,
any and all risks of personal injury or property damage attributable to the
negligent acts or omissions of that Party or its Affiliates, and their
respective directors, officers, employees and agents.

Section 8.14 Use of Subcontractors. Each Party may perform its obligations
regarding the Commercialization of Collaboration Products through one or more
Approved Subcontractors; provided, that, such Party shall at all times be
responsible for the performance by its Approved Subcontractor and such Party
otherwise complies with the requirements for use of Approved Subcontractors as
set forth in Section 5.8.

Article 9

DEVELOPMENT AND COMMERCIALIZATION OF UNILATERAL PRODUCTS

Section 9.1 Development and Commercialization of Unilateral Products.

Section 9.2 Diligence. Each Party shall use Commercially Reasonable Efforts to
develop, manufacture and commercialize Unilateral Products. Agensys shall have
sole responsibility for making all decisions regarding the development,
manufacture and marketing of Agensys Products and Agensys Licensed Products and
SGI shall have sole responsibility for making all decisions regarding the
development, manufacture and marketing of SGI Products.

Section 9.3 Conduct. Each Party shall comply with all Applicable Laws (including
GCPs, GLPs and GMPs, to the extent applicable) in the development and
commercialization of such Unilateral Products, and shall cause its Affiliates
and Sublicensees to do the same.

Section 9.4 Funding and Progress Reports. Except as expressly set forth herein,
as between SGI and Agensys, Agensys shall be solely responsible for funding all
costs of the development and commercialization of Agensys Products and Agensys
Licensed Products and SGI shall be solely responsible for funding all costs of
the development and commercialization of SGI Products. The Parties shall keep
each other informed in a timely manner as to the progress of the development of
Unilateral Products.

 

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Section 9.5 Manufacturing. Except as otherwise expressly set forth in this
Agreement, Agensys shall be responsible for all manufacturing and supply of
Agensys Products and Agensys Licensed Products and SGI shall be responsible for
all manufacturing and supply of SGI Products. Notwithstanding the foregoing,
during the term of the ADC Research Program, [***] (a) use Commercially
Reasonable Efforts to [***], (b) shall consult with [***], and (c) [***]. In the
event [***] any materials pursuant to either (b) or (c) above, and such
materials are to be cGMP materials, the Parties shall negotiate in good faith a
supply agreement governing the terms of any such supply by [***] prices and
other such terms as may be appropriate and customary in agreements for the
supply of similar products at similar volumes.

Section 9.6 Regulatory. Agensys shall be solely responsible for, and shall
solely own, all applications for Regulatory Approval with respect to Agensys
Licensed Products and Agensys Products and SGI shall be solely responsible for,
and shall solely own, all applications for Regulatory Approval with respect to
SGI Products. If ownership of a regulatory filing for a former Collaboration
Product cannot be assigned to the Continuing Party under Section 5.9.1 in any
country, the non-Continuing party shall grant to the Continuing Party a
permanent, exclusive and irrevocable right of access and reference to such
regulatory filing for such former Collaboration Product in such country. Should
Agensys desire to file an IND or an application for Regulatory Approval, or
equivalents of the foregoing, for an Agensys Licensed Product or Agensys
Product, SGI will use Commercially Reasonable Efforts to provide at Agensys’
request, technical information reasonably required by Agensys, including
information relating to the [***], as well as documents necessary to compile the
Chemistry Manufacturing and Controls section of any application for Regulatory
Approval, or to provide other [***] data for such filings, and any other
relevant information as the Parties may mutually agree. Agensys shall [***] in
providing any such information [***] personnel engaged in such activities, as
set forth in Section 11.1. Alternatively, if SGI (a) has a DMF with the FDA or
equivalent that contains information related to Drug Conjugation Materials that
is useful to support an IND or application for Regulatory Approval, or (b) does
not have a DMF with the FDA or equivalent that contains information related to
Drug Conjugation Materials that is useful to support an IND or application for
Regulatory Approval, then Agensys may request that [***]. In the case of 9.6(a)
or (b), Agensys shall have a right of reference to such [***].

Section 9.7 [***].

Section 9.7.1 General. [***]. For the avoidance of doubt, [***] have a [***] for
any Designated Antigen which becomes a Collaboration Antigen or a SGI Product
Antigen, as the case may be, to the extent [***] (prior to the time such Antigen
became a [***]) an IND that includes a [***]. For the avoidance of doubt, [***].
Upon (a) [***], or (b) a [***] (prior to the time such Antigen [***]) an IND
that includes a [***] (as the case may be) and [***] have [***] from receipt of
the [***] (as the case may be) to decide whether to [***]. If [***] to [***],
such [***]

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and its associated Antigen shall become a [***], respectively, and all
provisions that apply to [***] shall apply to such [***] and associated [***],
mutatis, mutandis, provided [***], [***] shall [***] for [***] of its
Development Costs specifically incurred by [***] with respect to such [***] to
such [***] up until the [***], and such [***].

9.7.2 Reports. [***] shall submit periodic reports to [***] than [***] each
[***], detailing [***] activities with respect to the Development for an [***]
to any [***]. Unless and until such [***] product becomes a [***], all such
information shall be considered [***].

Article 10

LICENSES AND RELATED RIGHTS

Section 10.1 Licenses to Agensys.

10.1.1 Research License. Subject to the terms and conditions of this Agreement,
SGI shall automatically be deemed to have granted to Agensys and its Affiliates
an exclusive, worldwide, royalty-free license under the SGI Independent
Technology solely to conduct the ADC Research Program in accordance with
Article 3 of this Agreement (the “Research License”). The Research License shall
include the right to evaluate and conduct research on ADC Product Candidates
solely for the purpose of determining Agensys’ interest in obtaining an
Exclusive License for such Designated Antigen, but shall not include (a) the
right to grant sublicenses thereto to any Third Party, (b) the right to initiate
any human clinical trial utilizing such ADC Product Candidate in any country or
(c) the right to make, have made, use or sell an ADC Product Candidate or any
SGI Independent Technology. In addition, Agensys shall not, (i) without SGI’s
prior written permission, file any patent applications that claim ADC Product
Candidates to Designated Antigens unless and until Agensys obtains an Exclusive
License as set forth in Section 10.1.2, at which time Agensys may file such
patent applications relating to such Exclusive Antigen subject to the terms and
conditions of this Agreement, or (ii) without SGI’s prior written permission,
make any publications directly relating to ADC Product Candidates unless and
until Agensys obtains the Exclusive License set forth in Section 10.1.2, at
which time Agensys may make such publications to such Exclusive Antigen subject
to the terms and conditions of this Agreement, including, without limitation,
Section 14.6. Notwithstanding the foregoing, Agensys shall be allowed to send
ADC Product Candidates under a material transfer or similar agreement to a bona
fide Third Party research collaborator for pre-clinical research, provided that
such Third Party collaborator is bound by obligations of confidentiality and
assignment of inventions to Agensys or SGI, as applicable, consistent with the
terms of this Agreement. The Research License shall continue on a Designated
Antigen-by-Designated Antigen basis for the Research License Period and shall
expire with respect to each Designated Antigen on the earlier of (i) [***], or
(ii) [***], or (iii) [***]. For the avoidance of doubt, all Research Licenses
granted hereunder shall terminate immediately upon the date Agensys obtains the
last of three (3) Exclusive Licenses hereunder.

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10.1.2 Option for Exclusive License. Subject to the provisions of this
Agreement, SGI hereby grants Agensys and its Affiliates an option to obtain an
Exclusive License (each an “Option”) described below to up to three
(3) Exclusive Antigens. Agensys may exercise the Option at any time during the
applicable Research License Period (and subject to SGI’s Opt-In Right as set
forth in Section 4.1.2) by notifying SGI in writing and paying SGI the Option
Exercise Fee described in Section 11.2 if applicable. Subject to SGI’s Opt-In
Right as set forth in Section 4.1.2, (a) such Designated Antigen shall be deemed
an Exclusive Antigen, for purposes of this Agreement, and (b) SGI shall be
deemed to have granted to Agensys and its Affiliates an exclusive (even as to
SGI), royalty-bearing license under the SGI Independent Technology, with the
right to sublicense as permitted in Section 10.1.3, to discover, develop, have
developed, make, have made, import, use, offer for sale, sell and have sold
Agensys Licensed Products within the Field in the Territory (an “Exclusive
License”), without any further action of the Parties. The Exclusive License
shall continue for the Royalty Term, unless earlier terminated pursuant to
Article 17. Agensys must exercise the Option with respect to each Designated
Antigen within [***] from the later of (i) [***], and (ii) [***]. For the
avoidance of doubt, if SGI no longer has an Opt-In Right, Agensys must exercise
the Option within [***].

10.1.3 Right to Sublicense Agensys Licensed Products. Agensys and its Affiliates
shall have the right to grant sublicenses of each Exclusive License to any Third
Party (each an “Agensys Sublicensee”) with respect to any Agensys Licensed
Product, provided, such sublicense includes the assignment or license by Agensys
to such Agensys Sublicensee of the right, under intellectual property that was
not licensed from SGI hereunder, to make, have made, use, sell, offer to sell or
import such Agensys Licensed Product. Agensys shall remain fully liable for
payment of milestones, royalties and other amounts owing under this Agreement.
Each sublicensee shall comply with the terms and conditions of this Agreement
and the SGI In-Licenses applicable to Agensys (including all terms of this
Agreement identified as applicable to Sublicensee). Agensys shall also require
any such Agensys Sublicensee to agree in writing to keep such books and records
as are necessary for Agensys to calculate royalties or milestones payable
hereunder and will obtain for SGI rights to review the information concerning
such books and records in accordance with the terms of this Agreement. Agensys
shall notify SGI of each sublicense granted to Third Parties hereunder and shall
provide SGI with the name and address of each Agensys Sublicensee and a
description of the rights granted and the territory covered by each Agensys
Sublicensee.

10.1.4 License to Agensys for Collaboration Products. Subject to the terms of
this Agreement, SGI hereby grants Agensys a worldwide, co-exclusive license
(with SGI), including the right to sublicense (as proposed by the JSC and
approved by the written consent of the Parties and in accordance with
Section 10.7), under the SGI Technology and SGI’s interest in the Joint Patents
to (a) perform its obligations hereunder with respect to the Collaboration
Antigens and associated Collaboration Products in accordance with the
Development Plan as mutually agreed upon by the Parties through the JSC, and
(b) to make, have made, use, research, develop, test, sell, offer to sell, have
sold and import Collaboration Products within the Field in the Territory in
accordance with the Commercialization Plan as mutually agreed upon by the
Parties through the JSC.

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10.1.5 License to Agensys for Unilateral Products. Subject to the terms of this
Agreement, SGI hereby grants Agensys a worldwide, exclusive license (even as to
SGI) under the SGI Patents, SGI Technology and SGI’s interest in the Joint
Patents solely to make, have made, use, research, develop, test, sell, offer to
sell, have sold and import Agensys Products and Agensys Licensed Products within
the Field in the Territory. Agensys may grant sublicenses of the licenses
granted in this Section 10.1.5 solely for the purpose of research, development,
manufacturing and Commercialization of Agensys Products.

Section 10.2 Licenses to SGI.

10.2.1 License to SGI for Designated Antigens. Subject to the provisions of this
Agreement, Agensys hereby grants to SGI during the ADC Research Program Term a
non-exclusive, royalty-free license under the Agensys Independent Patents,
Agensys ADC Patents, Agensys Independent Know-How and Agensys ADC Know-How,
solely to enable SGI to perform or have performed its responsibilities under the
ADC Research Program with respect to Designated Antigens and associated ADC
Product Candidates. SGI may sublicense the rights granted under this
Section 10.2.1 only with the prior written consent of Agensys. Any such
permitted sublicense shall be expressly made subject to the applicable terms and
conditions of this Agreement.

10.2.2 License to SGI for Collaboration Products. Subject to the terms of this
Agreement, Agensys hereby grants SGI a worldwide, co-exclusive license (with
Agensys), including the right to sublicense (as proposed by the JSC and approved
by the written consent of the Parties and in accordance with Section 10.7) under
the Agensys Technology and Agensys’ interest in the Joint Patents to (a) perform
its obligations hereunder with respect to the Collaboration Antigens and
associated Collaboration Products in accordance with the Development Program as
mutually agreed upon by the Parties through the JSC, and (b) to make, have made,
use, develop, test, sell, offer to sell, have sold and import Collaboration
Products within the Field in the Territory in accordance with the
Commercialization Plan as mutually agreed upon by the Parties through the JSC.

10.2.3 License to SGI for SGI Products. Subject to the terms of this Agreement,
Agensys hereby grants SGI a worldwide, exclusive license under the Agensys
Technology and Agensys’ interest in the Joint Patents solely to make, have made,
use, develop, test, sell, offer to sell, have sold and import SGI Products
within the Field in the Territory. SGI may grant sublicenses of the licenses
granted in this Section 10.2.3 solely for the purpose of research, development,
manufacturing and Commercialization of SGI Products. In addition, subject to the
terms of this Agreement, Agensys hereby grants SGI a fully-paid-up,
royalty-free, worldwide, non-exclusive license under the Agensys Technology and
Agensys’ interest in the Joint Patents (including antibodies and materials
generated during the Collaboration Program for the applicable SGI Product)
solely to make, have made, use, develop, test, sell, offer to sell, have sold
and import diagnostic products within the Field in the Territory for the sole
purpose of enabling SGI to commercialize such SGI Product. Such non-exclusive
license shall terminate when the exclusive license to which it relates under
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Section 10.3 Rights to Sublicense Collaboration Products. Each Party and its
Affiliates shall have the right to grant sublicenses of each license set forth
under Sections 10.1.4 and 10.2.2 with respect to any Collaboration Product to
Approved Subcontractors and Collaboration Sublicensees.

Section 10.4 Improvements and New Technologies for Exclusive Antigens.

10.4.1 Improvements. In the event that, during the ADC Research Program Term,
either Party conceives, develops or reduces to practice an Improvement, such
Party shall promptly notify the other Party of the discovery of such
Improvement. SGI shall own all Improvements and, to the extent that any such
Improvements shall have been conceived, developed or reduced to practice by
Agensys, Agensys hereby assigns all of its right, title and interest therein to
SGI. SGI’s interest in any such Improvements shall be included in the SGI
Independent Technology and licensed to Agensys pursuant to the Research License
and/or Exclusive License(s) provided in this Article 10.

10.4.2 [***]. Subject to the [***], [***] and its Affiliates shall have the
right to practice any [***] that arise during the ADC Research Program Term
pursuant to the Research Licenses and/or Exclusive Licenses with respect to
[***] granted under Article 10 as follows: [***] of any [***] that arise during
the ADC Research Program Term only by providing to [***] a [***] of such [***],
including all [***] under which [***] would be able to access such [***], such
terms to be [***] to [***] than those [***] of [***]. If [***] at its [***] is
interested in [***] such [***] with respect to [***], the Parties shall discuss
[***] for such [***] pursuant to this Agreement, which shall include [***] use
of such [***] with respect to such [***] and; provided that the [***] shall be
deemed to include [***] and [***] (as applicable) relating to or covering such
[***] only after the Parties execute an amendment to this Agreement specifying
such [***]. Except as set forth in the foregoing sentence and any [***]
including any such [***], [***] shall be [***].

10.4.3 Amendment of [***]. [***] shall be amended from time to time to add the
patents and patent applications [***] covering [***] in accordance with this
Section 10.4.

Section 10.5 New Collaboration Technologies.

10.5.1 New Collaboration Technologies. If either Party reasonably believes that
a license to, or other acquisition of, rights under Third Party intellectual
property rights is reasonably necessary for the Development or Commercialization
of a Collaboration Product, or an ADC targeting the Initial Collaboration
Antigen, and should be included in the collaboration hereunder, then such Party
may propose entering into a license (or other appropriate acquisition agreement)
with such Third Party regarding such intellectual property rights to the JSC and
include with such proposal the results of any due diligence such Party may have
conducted. If the JSC agrees that such proposed agreement should be entered into
(a “Third Party License Agreement”), then the Parties may jointly obtain such
license (provided, however that the JSC may designate a Party (or both Parties)
to take the lead in negotiating such Third Party License Agreement on such

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terms (economic or otherwise) as the Parties may mutually agree. In the event
the JSC proposes one Party to take the lead in negotiating the Third Party
License Agreement, and subject to such Party’s consent to such role, such Party
shall provide the other Party with terms sheets and agreement drafts during the
negotiations (including any proposed execution version) for review and comment
and the designated Party shall not enter into any such Third Party License
Agreement (or any amendment, waiver or other modification thereof) without the
written approval of the other Party. From and after the execution of each Third
Party License Agreement entered into in accordance with this Section 10.5.1, the
payments owing to such Third Party arising from the activities of the Parties in
the conduct of the Development or Commercialization of a Collaboration Product,
or an ADC targeting a Collaboration Antigen, shall be shared by the Parties as
described in Section 10.5.2. For purposes of clarity, the foregoing is not
intended to obligate either Party to enter into, or prevent either Party from
entering into, any agreement not approved by the JSC for use in connection with
the Development or Commercialization of a Collaboration Product so long as the
Party acquiring such rights assumes all financial and other obligations
associated therewith and such proposed agreement does not otherwise adversely
impact the rights granted to the other Party hereunder or the conduct of the
Development Plan and/or Commercialization Plan.

10.5.2 Payments to Third Parties. Any amounts paid to a Third Party (whether in
the form of a royalty, up-front payment, milestone or otherwise) from and after
the Effective Date on account of any payments under a Third Party License
Agreement, in each case as a result of the activities under the Development
and/or Commercialization Program hereunder, shall be considered a [***], as
applicable (the “Payments to Third Parties”); provided, however that to the
extent the agreements giving rise to such Payments to Third Parties cover
multiple products, only an allocable portion of such payment shall be considered
a “[***]” hereunder (based on the overall number of products covered by such
agreement as compared to the number of [***] covered by such agreement) as
reasonably determined by the JSC and agreed by the Parties.

Section 10.6 Compliance with the SGI In-Licenses.

10.6.1 SGI In-Licenses.

(a) General. Agensys, its Affiliates and Sublicensees shall comply with all
obligations, covenants and conditions of the SGI In-Licenses applicable to
Agensys and its Affiliates and Sublicensees, and any amendments thereto,
following written disclosure thereof by SGI to Agensys. The Parties agree that
[***].

(b) SGI Obligation. SGI will not enter into any amendment to an SGI In-License
that [***].

10.6.2 Agensys In-Licenses.

(a) General. SGI, its Affiliates and Sublicensees shall comply with all
obligations, covenants and conditions of the Agensys In-Licenses applicable to
SGI and its Affiliates and Sublicensees, and any amendments thereto, following
written disclosure thereof by Agensys to SGI. The Parties agree that [***].

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(b) Agensys Obligation. Agensys will not enter into any amendment to an Agensys
In-License(s) that [***].

Section 10.7 Sublicensing General Provisions. A Party granting sublicenses under
Section 10.1.5 or 10.2.3, as the case may be, shall remain fully liable for
payment of milestones, royalties and other amounts owing under this Agreement.
Each sublicense shall comply with the terms and conditions of this Agreement and
the SGI In-Licenses applicable to Agensys or the Agensys In-Licenses applicable
to SGI, as the case may be, (including all terms of this Agreement identified as
applicable to Sublicensee). The Sublicensing Party shall also require any such
Collaboration Sublicensee to agree in writing to keep such books and records as
are necessary for such Party to calculate amounts payable hereunder and will
obtain for the non Sublicensing Party rights to review the information
concerning such books and records in accordance with the terms of this
Agreement. The Sublicensing Party shall notify the non-Sublicensing Party of
each sublicense granted to Third Parties hereunder and shall provide the
non-Sublicensing Party with the name and address of each Sublicensee and a
description of the rights granted and the territory covered by each Sublicensee
and a copy of the sublicense agreement. The Sublicensing Party may redact from
such sublicense agreements any terms that are not relevant to the terms of this
Agreement, so long as the terms that are relevant to the terms of this
Agreement, including the terms related to the royalties and milestones payable
under this Agreement, remain comprehensible. The terms of each sublicense
agreement shall be the Confidential Information of the Sublicensing Party. The
Parties shall jointly determine the procedures for sublicensing to Collaboration
Sublicensees pursuant to Section 10.3 through the JSC.

Article 11

FEES, ROYALTIES AND PAYMENTS FOR UNILATERAL PRODUCTS

Section 11.1 Research Fees for Designated Antigens. Agensys shall pay to SGI the
following amounts in consideration of the ADC Research Program:

11.1.1 Agensys shall pay SGI all applicable FTE Fees for technical assistance
and/or training as requested in writing by Agensys pursuant to this Agreement.
Within [***] after the end of each [***], SGI shall submit a report to Agensys
supporting the calculation of the FTE Fees due for such [***]. Agensys shall pay
all FTE Fees to SGI within [***] of receipt of each FTE Fees report.

11.1.2 Agensys shall pay SGI for all research grade Drug Conjugation Materials,
ADC Product Candidates, Agensys Licensed Products or Agensys Products delivered
by SGI to Agensys at the rate of [***] of [***] therefor (the “Supply Fees”).
Within [***] after the end of each [***], SGI shall submit a report to Agensys
supporting the calculation of the Supply Fees due for such [***]. Agensys shall
pay all Supply Fees to SGI within [***] of receipt of each Supply Fees report.

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Section 11.2 Option Exercise Fee. If Agensys obtains an Exclusive License to a
Designated Antigen pursuant to Section 10.1.2 that becomes the second (2nd) or
third (3rd) Exclusive License because SGI has either (a) elected not to exercise
its Opt-In Right, and/or (b) has already utilized its Opt-In Right with respect
to a previous Exclusive Antigen, then Agensys would pay SGI a fee of [***] with
respect to the second (2nd) Exclusive License and [***] with respect to the
third (3rd) Exclusive License. For purposes of clarification, there shall be no
exercise payment associated with the first (1st) Exclusive Antigen.

Section 11.3 Exclusive License Maintenance Fees. With respect to each Unilateral
Product, the Continuing Party, in the case of an SGI Product or Agensys Product,
and Agensys in the case of an Agensys Licensed Product, shall be required to pay
an annual maintenance fee to the non-Continuing Party, or to SGI in the case of
an Agensys Licensed Product, in the sum of [***] for each associated Unilateral
Product by wire transfer of immediately available funds (the “Unilateral Product
Maintenance Fee”). Such Unilateral Product Maintenance Fee shall be due on the
yearly anniversary of (i) the date the Option was exercised by Agensys or
(ii) the date such ADC Product Candidate or Collaboration Product became a
Unilateral Product, up through the date on which the Continuing Party, or
Agensys in the case of an Agensys Licensed Product, receives Regulatory Approval
for a Unilateral Product. Notwithstanding the foregoing, the Unilateral Product
Maintenance Fee will not be payable if any payments have been made under [***]
of this Agreement with respect to the same Unilateral Product during the [***]
preceding the date on which a Unilateral Product Maintenance Fee is due.

Section 11.4 Payments on Agensys Products and SGI Products.

11.4.1 General. During the Royalty Term, the Continuing Party would pay the
following royalties (“Royalties”) on Net Sales of each SGI Product or Agensys
Product, as the case may be, dependent on the stage of development when the
Opt-Out Notice occurred:

 

Stage

  

Percent

[***]

   [***]

[***]

   [***]

[***]

   [***]

Section 11.4.2 Payments for the [***]. If applicable and subject to Section 4.5,
SGI shall also pay to Agensys [***] on SGI Products occurring after such SGI
Product became a SGI Product (i.e., after the Opt-Out Date) pursuant to [***].
In the event of any conflict between the terms related to calculation of [***]
payable [***].

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Section 11.5 Royalties Payable on Agensys Products and Agensys Licensed
Products.

11.5.1 General. Notwithstanding the provisions of Section 11.3, during the
Royalty Term, Agensys shall pay a royalty to SGI of [***] of Net Sales of
Agensys Licensed Products in each Calendar Year.

11.5.2 Royalties Payable for the Benefit of [***]. If applicable, Agensys shall
also pay to SGI a royalty of [***] of Net Sales of Agensys Products and Agensys
Licensed Products in each Calendar Year pursuant to the terms and conditions of
the [***]. In the event of any conflict between the terms related to calculation
of royalties payable under the [***] and the terms of this Agreement, the terms
of the [***].

Section 11.6 Payment Terms. Royalties shown to have accrued by each Royalty
Report provided for under Sections 11.4 or 11.5 of this Agreement shall be due
[***] after the date such Report is due pursuant to Section 11.9.2.

Section 11.7 Third Party Royalties; Adjustments to Royalties.

11.7.1 General. Each Party shall be solely responsible for paying all royalties
owed to Third Parties by such Party on account of sales of Unilateral Products
by such Party, its Affiliates or Sublicensees, including royalties owed due to
use of the SGI Technology pursuant to the SGI In-Licenses or owed due to use of
the Agensys Technology pursuant to the Agensys In-Licenses, [***]. Agensys shall
be responsible for the payment of all other consideration (including any
milestone payments) due and payable under the SGI In-Licenses triggered by
Agensys’ development of Agensys Licensed Products or Agensys Products except as
described in the foregoing sentence and/or except as set forth in [***] with
regard to any [***]. SGI represents and warrants that all Third Party royalties
and milestones owed pursuant to the existing SGI In-Licenses are described in
Schedule B (“SGI Existing Third Party Royalties”). Agensys represents and
warrants that all Third Party royalties and milestones owed pursuant to the
existing Agensys In-Licenses are as set forth in [***] (“Agensys Existing Third
Party Royalties”).

11.7.2 Adjustment to Royalties Owed on Agensys Products and Agensys Licensed
Products. If the royalty payable to [***] under [***] above by [***], is [***]
to less than [***] of Net Sales (the amount of any such [***]), then the royalty
otherwise due and payable by Agensys to SGI under Sections 11.4 and 11.5 shall
be [***] of the [***]; provided, that any such [***] in the Royalty set forth in
Sections 11.4 or 11.5 shall be [***].

Section 11.8 Milestone Payments. For each Unilateral Product, the Continuing
Party shall pay the non-Continuing Party, or in the case of Agensys Licensed
Products, Agensys shall pay SGI the following amounts within [***] after each
Unilateral Product achieves the stated milestone:

(a) [***];

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(b) [***];

(c) [***];

(d) [***];

(e) [***];

(f) [***];

(g) [***]; and

(h) [***].

If any of (a) through (d) above is achieved before a preceding milestone payment
has become due, then such payment shall be deemed to become due upon achievement
of the subsequent milestone. Milestone payments for Unilateral Products (other
than Agensys Licensed Products) shall only be due for milestones that occur
after the date a Product becomes a Unilateral Product hereunder.

Section 11.9 Royalty Reports, Exchange Rates.

11.9.1 Royalty Reports. During the Royalty Term, any Party paying royalties
hereunder (the “Paying Party”) shall furnish to the non-Paying Party, with
respect to each Calendar Quarter, a written report showing, on a consolidated
basis in reasonably specific detail and on a country-by-country basis, (a) the
Net Sales of Products sold by the Paying Party, its Affiliates and its
Sublicensees in the Territory during the corresponding Calendar Quarter
including a description of the credits and offsets deducted on a Product by
Product and country by country basis to calculate Net Sales; (b) the royalties
payable in U.S. dollars, if any, which shall have accrued hereunder based upon
such Net Sales of Products; (c) the withholding taxes, if any, required by law
to be deducted in respect of such royalties; (d) the dates of the First
Commercial Sale of each Product in each country in the Territory, if it has
occurred during the corresponding Calendar Quarter; and (e) the exchange rates
(as determined pursuant to Section 11.9.3 herein) used in determining the
royalty amount expressed in U.S. dollars (collectively, “Royalty Reports”).

11.9.2 Report Due Date. Royalty Reports shall be due on the [***] following the
end of the [***] to which such Royalty Report relates. The Parties shall keep
complete and accurate records in sufficient detail to properly reflect all gross
sales and Net Sales and to enable the royalties payable hereunder to be
determined.

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11.9.3 Exchange Rates. With respect to sales of Products invoiced in U.S.
dollars, the gross sales, Net Sales, and royalties payable shall be expressed in
U.S. dollars. With respect to sales of Products invoiced in a currency other
than U.S. dollars, the gross sales, Net Sales and royalties payable shall be
expressed in the currency of the invoice issued by the party making the sale
together with the U.S. dollars equivalent of the royalty due, calculated at the
average rate of exchange published as U.S. daily closing rates by Reuters during
the applicable Calendar Quarter.

Article 12

FINANCIAL PROVISIONS FOR COLLABORATION PRODUCTS

Section 12.1 Development Costs. Unless otherwise provided in this Agreement,
during the Term, SGI and Agensys shall [***] all Development Costs.

Section 12.2 Reporting and Payment of Development Costs.

12.2.1 Reports.

(a) Within [***] after the end of each Calendar Quarter during which any
Development activities are performed hereunder, SGI shall report to Agensys
SGI’s individual Development Cost items (with appropriate supporting
information) actually incurred during such Calendar Quarter (the “SGI
Development Cost Report”).

(b) Within [***] after the end of each Calendar Quarter during which any
Development activities are performed hereunder, Agensys shall report to SGI
Agensys’ individual Development Cost items (with appropriate supporting
information) actually incurred during such Calendar Quarter (the “Agensys
Development Cost Report”).

(c) The SGI Development Cost Reports and the Agensys Development Cost Reports
will be in such form as the JSC may reasonably agree from time to time.

(d) Within [***] after the end of each Calendar Quarter, the JSC (or the Party
appointed by the JSC) shall provide one consolidated Financial Statement for the
Development Costs to each Party. Within [***] after receipt of the Financial
Statement, the [***].

Section 12.3 Collaboration Product Profit. During the Term, SGI and Agensys
shall share equally (50:50) in all Product Profit created by each Collaboration
Product.

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Section 12.4 Reporting and Payment of Commercialization Expenses and Product
Profit.

12.4.1 Reports. Pursuant to Section 8.2 the Parties shall mutually agree,
through the JSC, a mechanism or structure to under which they will share equally
(50:50) in all Product Profit created by each Collaboration Product. In reaching
this agreement the Parties shall also define and mutually agree, through the
JSC, the appropriate arrangements for making reports and payments between the
Parties.

Section 12.5 Product Profit Term. Unless this Agreement is earlier terminated
pursuant to Article 17, the Parties shall share Product Profit hereunder with
respect to each Collaboration Product until each such Collaboration Product is
permanently withdrawn from, and is no longer being sold anywhere in, the
Territory.

Section 12.6 Other Research Expenses, Development Costs and Commercialization
Expenses. For purposes of clarity, the Parties hereto agree and acknowledge that
all expenses which are not set forth in the Initial Collaboration Product Plan,
or in an Manufacturing, Preclinical and Clinical Development Plan, or
Commercialization Plan, (as each may be amended by the JSC from time to time),
or otherwise approved by the JSC, shall be borne by the Party incurring such
expenses.

Section 12.7 Internal Resources. The Parties agree and acknowledge that it is
intended that the activities under each Manufacturing, Preclinical and Clinical
Development Plan and Commercialization Plan, when taken as a whole for a given
Calendar Year, be allocated and assigned to each Party such that the internal
resources devoted to, and participation by the Parties in, the Development and
Commercialization activities hereunder, taken as a whole, be substantially equal
on an ongoing basis for such Calendar Year. The JSC may propose amendments to
the Manufacturing, Preclinical and Clinical Development Plan and the
Commercialization Plan as necessary to maintain substantial equality in
resources devoted to, and participation by the Parties in, such activities for
review and approval by the JSC.

Article 13

PAYMENT TERMS; BOOKS AND RECORDS; AUDIT

Section 13.1 Payment Terms.

13.1.1 Currency. All payments hereunder will be in United States dollars in
immediately available funds and will be made by wire transfer from a United
States bank located in the United States to such bank account as payee may
designate in writing from time to time.

13.1.2 Exchange. All amounts accruing in a currency other than United States
dollars will be converted to United States dollars using an exchange rate equal
to the arithmetic average of the U.S. daily closing rates published by Reuters
during the applicable Calendar Quarter for which payments are being made. The
conversation calculations will be provided in any statement reporting converted
amounts.

 

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13.1.3 Late Fee. Any payments or portions thereof due hereunder which are not
paid on the date such payments are due under this Agreement will bear interest
at a rate equal to the lesser of (i) the prime rate as published in The Wall
Street Journal, Eastern Edition, under the heading “Money Rates,” on the first
day of each calendar quarter in which such payments are overdue, plus [***], or
(ii) the maximum rate permitted by law, calculated on the number of days such
payment is delinquent, compounded monthly using a three hundred sixty-five
(365)-day year.

13.1.4 Legal Restrictions. If at any time legal restrictions prevent the prompt
remittance of any monies owed with respect to the Products in any jurisdiction,
the remitting Party will notify the receiving Party and make such payments by
depositing the amount thereof in local currency in a bank account or other
depository in such country in the name of the receiving Party or its designee,
and the remitting Party will have no further obligations under this Agreement
with respect thereto.

Section 13.2 Record Keeping. In accordance with GAAP consistently applied, each
Party and its Affiliates will maintain, and will use Commercially Reasonable
Efforts to cause its permitted sublicensees, contractors and agents to maintain,
books of account and accurate records relating to the Collaboration Program and
each Collaboration Product and Unilateral Product and all amounts payable or
receivable under this Agreement, in sufficient detail to permit the other Party
to confirm the correctness of such items. All books of account and records will
be maintained for a period not less than relevant time permitted for audit of
such accounts and records pursuant to Section 13.3 below and for any applicable
tax period.

Section 13.3 Audits. Upon the written request of a Party (the “Requesting
Party”) and not more than once in each Calendar Year, the other Party (the
“Responding Party”) will permit an independent certified public accounting firm
of nationally recognized standing, selected by the Requesting Party and
reasonably acceptable to the Responding Party, at the Requesting Party’s
expense, to have access during normal business hours to the records of the
Responding Party as may be reasonably necessary to verify the accuracy of the
reports provided under Articles 11 and 12, for any year ending not more than
[***] prior to the date of such request. The provisions of Section 5.5.2 and
Section 5.5.3 shall apply with respect to such inspection and the costs of such
inspection, mutatis, mutandis.

Section 13.4 Tax Matters. Except as otherwise provided below, all amounts due
from any paying Party to any receiving Party under this Agreement are gross
amounts. The paying Party shall be entitled to deduct the amount of any
withholding taxes payable or required to be withheld by it, its Affiliates,
licensees, or sublicensees (as applicable) to the extent such paying Party, its
Affiliates, licensees, or sublicensees (as applicable) actually pay such
withheld amounts to the appropriate governmental authority on behalf of the
receiving Party. The paying Party shall use Commercially Reasonable Efforts to
minimize any such taxes, levies or charges required to be

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withheld on behalf of the receiving Party. The paying Party promptly shall
deliver to the receiving Party proof of payment of all such taxes, levies and
other charges, together with copies of all communications from or with such
governmental authority with respect thereto, and shall cooperate with the
receiving Party in seeking any related tax credits that may be available to the
receiving Party with respect thereto.

Article 14

CONFIDENTIALITY

Section 14.1 Confidential Information. For purposes of this Agreement,
“Confidential Information” means all information, data, documents (including,
without limitation, unpublished patent applications), inventions, trade secrets,
know-how or materials (collectively, “Information”) supplied by the other Party
under this Agreement, whether disclosed orally, visually, in writing or in any
tangible or electronic form or media, that is confidential or proprietary and is
marked or otherwise identified as “Confidential” or which the receiving party
should reasonably recognize as being confidential. Confidential Information may
be owned by the disclosing Party or its Affiliates or held by the disclosing
Party or its Affiliates under an obligation of confidentiality to a Third Party.
Confidential Information of SGI shall include SGI Independent and Collaboration
Know-How and SGI’s interest in any Improvements, Program Inventions,
Collaboration Inventions and [***]. Confidential Information of Agensys shall
include Agensys Independent and Collaboration Know-How, Agensys Materials and
Agensys’ interest in Program Inventions and Collaboration Inventions. The terms
of this Agreement shall be the Confidential Information of both Parties.
Confidential Information of a Party may also include information relating to
such Party’s or its Affiliates’ research programs, development, marketing,
manufacturing, regulatory matters, business practices and finances. Information
shall not be considered Confidential Information to the extent the receiving
Party can demonstrate by competent evidence that such Information:

(a) has been published or otherwise entered the public domain other than by
breach by the receiving Party or its Affiliates of this Article 14 or directly
or indirectly under another agreement between the Parties that imposed
obligations of confidentiality;

(b) has been disclosed to the receiving Party or its Affiliates by a Third
Party, provided such Information was not obtained by such Third Party directly
or indirectly from the disclosing Party or its Affiliates on a confidential
basis;

(c) prior to disclosure by the disclosing Party under this Agreement or directly
or indirectly under another agreement between the Parties that imposed
obligations of confidentiality, was already in the possession of the receiving
Party or its Affiliates; or

(d) was developed independently of and without reference to the disclosing
Party’s or its Affiliates’ Confidential Information.

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Section 14.2 Non-Disclosure Obligations. Except as otherwise provided in this
Article 14, during the Term and for a period of [***] thereafter, each Party
shall maintain in confidence, and use only for purposes as expressly authorized
and contemplated by this Agreement, all Confidential Information supplied by the
other Party or its Affiliates under this Agreement. Each Party shall use at
least reasonable care, and in no event less than the same standard of care as it
uses to protect its own Confidential Information, to ensure that its and its
Affiliates’ employees, agents, consultants and clinical investigators only make
use of the other Party’s Confidential Information for purposes as expressly
authorized and contemplated by this Agreement and do not make any unauthorized
use or disclosures of such Confidential Information.

Section 14.3 Permitted Disclosures. Notwithstanding Section 14.1, Confidential
Information may be disclosed by the receiving Party or its Affiliates solely to
the extent such Confidential Information:

(a) is permitted to be disclosed by prior written consent of the other Party;

(b) is disclosed in the filing, prosecution or maintenance of patents solely in
accordance with this Agreement, provided (i) such disclosure may be only to the
extent reasonably necessary for such purpose and (ii) the receiving Party
complies with the obligations set forth in Section 14.1 hereof;

(c) is disclosed to a Regulatory Authority solely in accordance with this
Agreement to gain or maintain a Regulatory Approval provided such disclosure may
be only to the extent reasonably necessary for such purpose;

(d) is deemed necessary by the receiving Party to be disclosed to such Party’s
financial advisors, attorneys or independent accountants for the sole purpose of
enabling such financial advisors, attorneys or independent accountants to
provide professional advice to the receiving Party on the condition that such
Third Parties are bound by confidentiality and non-use obligations customary for
the type of professional and are advised that the information being disclosed is
confidential;

(e) is deemed necessary by the receiving Party to be disclosed to accredited
investors, lenders or potential acquirers or merger candidates in the context of
due diligence investigations of such Party solely for the purpose of evaluating
a potential business relationship, on the condition that such Third Parties are
bound by confidentiality and non-use obligations (i) customary for the type of
recipient in the case of all recipients who are not potential acquirers or
merger candidates, and (ii) contained in this Agreement, in the case of
potential acquirers or merger candidates, but in no event pursuant to (i) or
(ii) for a term of less than [***], and are advised that the information being
disclosed is confidential;

(f) is deemed necessary by the receiving Party to be disclosed to such potential
Sublicensees as permitted hereunder, provided that any such potential
Sublicensee is bound by obligations of confidentiality and limitations on use of
such Confidential Information contained herein; and

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(g) are disclosed to a potential or bona fide collaborator or manufacturing,
development or sales contractor or partner, or Approved Subcontractor but only
to the extent directly relevant to the collaboration, partnership or contract
and provided that such collaborator, partner or contractor is bound by
obligations of confidentiality and limitations on use of such Confidential
Information contained herein.

Notwithstanding the disclosures permitted under subsections (a)-(g), such
Confidential Information shall remain otherwise subject to the non-disclosure
and non-use provisions of this Article 14.

Section 14.4 Compelled Disclosure. If a Party is required by law or judicial or
administrative process to disclose Confidential Information of the other Party,
the Party being compelled shall (if not prohibited from doing so) promptly
inform the other Party of the disclosure that is being sought in order to
provide the other Party an opportunity to challenge or limit the disclosure
obligations. Confidential Information that is disclosed by law or judicial or
administrative process shall remain otherwise subject to the non-disclosure and
non-use provisions of this Article 14, and the Party disclosing Confidential
Information pursuant to law or court order shall take all steps reasonably
necessary, including without limitation seeking an order of confidentiality, to
ensure the continued confidential treatment of such Confidential Information.
Each Party agrees that it shall cooperate fully and in a timely manner with the
other with respect to all disclosures to the Securities and Exchange Commission
and any other governmental or regulatory agencies, including requests for
confidential treatment of Confidential Information of either Party included in
any such disclosure.

Section 14.5 Press Releases. Neither SGI nor Agensys will, without the prior
written consent of the other, issue any press release or make any other public
announcement or furnish any statement to any person or entity (other than either
Parties’ respective Affiliates) concerning the existence of this Agreement, its
terms and the transactions contemplated hereby, except for (i) an initial press
release mutually agreed upon by the Parties and (ii) disclosures made in
compliance with Sections 14.3, 14.4 or 14.6.

Section 14.6 Publications Regarding Results of the ADC Research Program or the
Collaboration Program. Neither Party may publish, present or announce results of
the ADC Research Program or the Collaboration Program either orally or in
writing (a “Publication”) without complying with the provisions of this
Section 14.6. The other Party shall have [***] from receipt of a proposed
Publication to provide comments and/or proposed changes to the publishing Party.
The publishing Party shall take into account the comments and/or proposed
changes made by the other Party on any Publication and shall agree to designate
employees or others acting on behalf of the other Party as co-authors on any
Publication describing results to which such persons have contributed in
accordance with standards applicable to authorship of scientific publications.
If the

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other Party reasonably determines that the Publication would entail the public
disclosure of such Party’s Confidential Information and/or of a patentable
invention upon which a patent application should be filed prior to any such
disclosure, submission of the concerned Publication to Third Parties shall be
delayed for such period as may be reasonably necessary for deleting any such
Confidential Information of the other Party (if the other Party has requested
deletion thereof from the proposed Publication), and/or the drafting and filing
of a patent application covering such invention, provided such additional period
shall not exceed [***] from the date the publishing Party first provided the
proposed Publication to the other Party. Any disputes between the Parties
regarding a publication shall be referred to the JSC, to the extent it is in
existence at the time of such dispute.

Section 14.7 Existing Confidentiality Agreement. The Parties acknowledge having
entered into a Non-Disclosure Agreement made as of [***], and confirm that such
Non-Disclosure Agreement shall remain in full force and effect and the
confidentiality provisions in this Agreement shall be in addition to, and are
not intended to supersede, such Non-Disclosure Agreement. Notwithstanding the
foregoing, in the event of any conflict between the terms of the Non-Disclosure
Agreement and the terms of this Agreement, the terms of this Agreement shall
control with respect to the matters addressed by this Agreement.

Article 15

INVENTIONS AND PATENTS

Section 15.1 Ownership of Inventions and Technology; Use of Data.

15.1.1 Disclosure of Inventions. Each Party shall promptly disclose to the other
Party the making, conception or reduction to practice of any Program Inventions,
Collaboration Inventions or Improvements.

15.1.2 Ownership of Program Inventions. All right, title and interest in all
Program Inventions that are discovered, made or conceived as part of the
activities conducted pursuant solely to (x) the ADC Research Program, or
(y) development or commercialization of Unilateral Products outside the
Collaboration Program and in accordance with the rights and licenses set forth
herein shall be owned as follows:

(a) Agensys shall own all Program Inventions that (i) are invented solely by one
or more employees, agents or consultants of Agensys and do not primarily relate
to the SGI Technology or SGI Products or (ii) are invented solely or jointly by
employees, agents or consultants of Agensys and/or SGI and primarily relate to
an [***]. To the extent that any such Program Inventions referred to in this
Section 15.1.2 shall have been invented by SGI and are owned by SGI, SGI hereby
assigns all of its right, title and interest therein to Agensys.

(b) SGI shall own all Program Inventions that (i) are invented solely by one or
more employees, agents or consultants of SGI and do not primarily relate to an
[***], or (ii) are invented solely or jointly by employees, agents or
consultants of Agensys and/or SGI and primarily relate to the [***]. To the
extent that any Program Inventions referred to in this Section 15.1.2 shall have
been invented by Agensys and are owned by Agensys, Agensys hereby assigns all of
its right, title and interest therein to SGI.

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(c) Except as set forth in Sections 15.1.2(a) and 15.1.2(b), Agensys and SGI
shall jointly own all other Program Inventions.

15.1.3 Ownership of Collaboration Inventions. All right, title and interest in
all Collaboration Inventions that are discovered, made or conceived as part of
the activities conducted pursuant to the Collaboration Program shall be owned as
follows:

(a) [***] own all Collaboration Inventions that are invented solely or jointly
by employees, agents or consultants of [***] and/or [***] primarily relate to a
[***]. To the extent that any such Collaboration Inventions referred to in this
Section 15.1.3(a) shall have been invented by [***] are owned by [***] hereby
assigns all of its right, title and interest therein to [***].

(b) [***] shall own all Collaboration Inventions that are invented solely or
jointly by employees, agents or consultants of [***] and/or [***] primarily
relate to the [***], but [***]. To the extent that any Collaboration Inventions
referred to in this Section 15.1.3(b) shall have been invented by [***] and are
owned by [***] hereby assigns all of its right, title and interest therein
[***].

(c) Except as set forth in Sections 15.1.3(a) and 15.1.3(b), [***] and [***]
shall [***] own all other Collaboration Inventions, including, without
limitation, all [***]. In the event [***].

15.1.4 Inventorship. Inventorship, for the purposes of this Agreement, shall be
determined in accordance with U.S. laws of inventorship.

15.1.5 Ownership of Technology.

(a) Agensys shall own all right, title and interest in and to all Agensys
Independent Know-How, Agensys Independent Patents, Agensys Materials, [***],
Agensys ADC Know-How, Agensys ADC Patents and Agensys Licensed Products.

(b) SGI shall own all right, title and interest in and to all SGI Technology,
Drug Conjugation Materials and Drug Conjugation Technology.

(c) Agensys and SGI will jointly own all right, title and interest in and to all
Joint Patents and Joint Know-How and, subject to the terms and conditions of
this Agreement, during the term of this Agreement, neither Party nor its
Affiliates will have the right to exploit any Joint Patents or Joint Know How
without accounting to, or consent from, the other Party.

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Section 15.2 Employee Assignment and Disclosure. To the extent permissible under
Applicable Law, each Party will cause each employee and contractor conducting
work on such Party’s behalf under this Agreement to be subject to a contract
that (a) compels prompt disclosure to the Party of all inventions and other
intellectual property conceived, created or reduced to practice by such employee
or contractor during any performance under the ADC Research Program or the
Collaboration Program and (b) automatically assigns to the Party all right,
title and interest in and to all such inventions and other intellectual property
and all related Patents. Each Party will require each employee and contractor
conducting work on such Party’s behalf under this Agreement to maintain records
in sufficient detail and in a good scientific manner appropriate for patent
purposes to properly reflect all work done. Each Party shall maintain separate
books and records for performance of the ADC Research Program and performance of
the Collaboration Program for patent purposes and to insure compliance by each
Party with the intellectual property and other terms of this Agreement.

Section 15.3 Transfer of Agensys Technology. Agensys will use Commercially
Reasonable Efforts to make available to SGI all Agensys Independent Technology
and Agensys Collaboration Technology that is necessary for SGI to perform its
obligations under this Agreement or is required to be provided pursuant to any
Development Plan or Commercialization Plan. Without the prior written consent of
Agensys, neither SGI nor its Affiliates may use any Agensys Independent
Technology or Agensys Collaboration Technology that is Agensys Confidential
Information for any purpose not expressly authorized by the terms of this
Agreement. For the avoidance of doubt, any Agensys Technology to be transferred
under the ADC Research Program is set forth in Section 3.8 and nothing in this
Section 15.3 shall require Agensys to transfer any Technology for the ADC
Research Program, except as expressly set forth in Section 3.8.

Section 15.4 Transfer of SGI Technology. SGI will use Commercially Reasonable
Efforts to make available to Agensys all SGI Independent Technology and SGI
Collaboration Technology that is necessary for Agensys to perform its
obligations under this Agreement or is required to be provided pursuant to any
Development Plan or Commercialization Plan. Without the prior written consent of
SGI, neither Agensys nor its Affiliates may use any SGI Independent Technology
or SGI Collaboration Technology that is SGI Confidential Information for any
purpose not expressly authorized by the terms of this Agreement. For the
avoidance of doubt, any SGI Technology to be transferred under the ADC Research
Program is set forth in Section 3.9 and nothing in this Section 15.4 shall
require SGI to transfer any Technology for the ADC Research Program, except as
expressly set forth in Section 3.9.

Section 15.5 No Title Transfer. The transfer to a Party of any physical item
that embodies any Independent Technology or Collaboration Technology owned by
the transferring Party will not be, and will not be construed to be: (a) a sale,
lease, offer to sell or lease or other transfer of title or ownership to the
receiving Party of such Independent Technology or Collaboration Technology; or
(b) a license to the receiving Party (except as expressly provided in this
Agreement) under such Independent Technology or Collaboration Technology.

 

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Section 15.6 Patent Prosecution Maintenance and Enforcement of Independent
Patents.

15.6.1 Prosecution. Each Party will have the exclusive right, but not the
obligation, at its sole expense, to prepare, file, prosecute, maintain and
abandon all of its Independent Patents. Expenses associated with preparation,
filing, prosecution and maintenance of Independent Patents will not be IP and
Trademark Costs. Each Party shall, at its sole expense, prepare, file, prosecute
and maintain such Independent Patents in good faith consistent with its
customary patent policy and its reasonable business judgment, and shall consider
in good faith the interests of the other Party in so doing. If, during the term
of this Agreement, either Party intends to allow any patent in that Party’s
Independent Patents that may effect the development or commercialization of a
Product hereunder to expire or intends to otherwise abandon any such patent,
such Party shall notify the other Party of such intention at least [***] prior
to the date upon which such patent shall expire or be abandoned, and the
non-Controlling Party shall thereupon have the right, but not the obligation, to
assume responsibility for the preparation, filing, prosecution or maintenance
thereof, at its sole costs and expense.

15.6.2. Enforcement. Each Party (the “Controlling Party”) will have the first
right (but not the obligation) to take the appropriate steps to enforce or
defend any Patent within its Independent Patents against an infringement by a
Third Party. The Controlling Party may take steps including the initiation,
prosecution and control any suit, proceeding or other legal action by counsel of
its own choice. The Controlling Party will bear the costs of such enforcement or
defense. Notwithstanding the foregoing, the non-Controlling Party will have the
right, at its own expense, to be represented in any such action by counsel of
its own choice. If the Controlling Party fails to take the appropriate steps to
enforce or defend any Patent within its Independent Patents against an
infringement by a Third Party with respect to any product that competes with an
existing Collaboration Product or Unilateral Product, as the case may be, (an
“Infringing Product”) within [***] after a request by the non-Controlling Party
to do so, then the non-Controlling Party will have the right (but not the
obligation), at its own expense, to bring any such suit, action or proceeding by
counsel of its own choice and the Controlling Party will have the right, at its
own expense, to be represented in any such action by counsel of its own choice.

15.6.2 Recoveries Relating to SGI Independent Patents. All monies recovered upon
the final judgment or settlement of any such suit to enforce any SGI Independent
Patents with respect to the manufacture, use or sale by Third Parties of an
Infringing Product shall be allocated first to any Third Party from which SGI
obtained a license with respect to such SGI Independent Patents, to the extent
required under the relevant SGI In-License and to the extent SGI Independent
Patents were the subject of the enforcement; second to the Party controlling the
enforcement action to the extent necessary to compensate it for its expenses in
its enforcement and to the other Party to the extent necessary to compensate it
for its expenses in cooperating with the enforcement; and finally prorated in
accordance with the damages for which such judgment or settlement is reasonably
intended to compensate.

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15.6.2 Recoveries Relating to Agensys Independent Patents. All monies recovered
upon the final judgment or settlement of any such suit to enforce any Agensys
Independent Patents with respect to the manufacture, use or sale by Third
Parties of an Infringing Product shall be allocated first to any Third Party
from which Agensys obtained a license with respect to such Agensys Independent
Patents, to the extent required under the relevant Agensys In-License and to the
extent Agensys Independent Patents were the subject of the enforcement; second
to the Party controlling the enforcement action to the extent necessary to
compensate it for its expenses in its enforcement and to the other Party to the
extent necessary to compensate it for its expenses in cooperating with the
enforcement; and finally prorated in accordance with the damages for which such
judgment or settlement is reasonably intended to compensate.

Section 15.7 Patent Prosecution and Maintenance of Collaboration Patents.

15.7.1 Independent Collaboration Patents. Each Party will have the exclusive
right, but not the obligation, at its sole expense (subject to reimbursement
under Section 12.2), to prepare, file, prosecute and maintain all of its
Collaboration Patents. All reasonable costs and fees incurred by a Party in
connection with preparation, filing, prosecution and maintenance of
Collaboration Patents in a Major Market Country will be included as an element
of IP and Trademark Costs. To the extent any Collaboration Patent is or becomes
necessary for or important to performance by either Party of any aspect of the
Collaboration Program or necessary for or important to manufacture or
Commercialization of a Collaboration Product or SGI Product or Agensys Product,
as the case may be, the Party owning such Collaboration Patent will exercise
Commercially Reasonable Efforts consistent with good faith business practices to
maintain Control of such Collaboration Patents.

(a) To the extent a Party elects not to file for a Collaboration Patent in a
Major Market Country or elects to abandon any Collaboration Patent already filed
in any country, that Party will notify the other Party in writing not less than
[***] prior to the date such election is irrevocable without additional cost,
and will offer the other Party the opportunity to assume, [***], the right to
file for, prosecute and maintain such Collaboration Patent in such country. If
the other Party accepts the offer by written notice to the first Party, the
first Party will assign such Collaboration Patent to the other Party and will
reasonably assist the other Party in assuming the filing, prosecution and
maintenance of such Collaboration Patent in such country. Such Collaboration
Patent thereafter will be the other Party’s Independent Patent.

(b) With respect to each United States Patent that is a Collaboration Patent,
not less than [***] before filing any application for corresponding patent
protection in foreign countries, the Party owning the Collaboration Patent will
give to the JSC a copy of the priority application and written notice of the
foreign countries selected for filing. The JSC, in writing within [***] after
such notice, may reject any selected country outside the Major Market Countries
and may request filing of applications in additional foreign countries. The
Party will file in such additional countries and may file in the rejected
countries. All reasonable costs associated with filing, prosecution and
maintenance of Patents in Major Market Countries and in any such additional
countries requested by the JSC will be included as an element of IP and
Trademark Costs (as applicable).

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(c) Pursuant to schedules determined by the JSC, each Party will provide to the
other Party a written report of the status of each pending and issued
Collaboration Patent.

15.7.2 Joint Collaboration Patents.

(a) The JSC will select mutually-acceptable outside counsel (to be agreed upon
by the JSC within [***] of the Effective Date) to conduct the preparation,
filing, prosecution and maintenance of each Joint Collaboration Patent under the
joint control of both Parties. The outside counsel will prepare, file, prosecute
and maintain all Joint Collaboration Patents in each of the Major Market
Countries and such other countries as the JSC approves, and the reasonable
expenses thereof will be IP and Trademark Costs (as applicable).

(b) If a Party elects not to share the cost of a Joint Collaboration Patent in
any country (other than a Major Market Country or such other countries as the
JSC approves) or elects to discontinue sharing expenses for any Joint
Collaboration Patent already filed in any country, such Party will notify the
other Party in writing of such election and will offer the other Party the
opportunity to assume, at the other Party’s sole expense, the right to file for,
prosecute and maintain such Joint Collaboration Patent in such country. If the
other Party accepts the offer by written notice to the one Party within [***]
after the notice, the one Party will assign its interest in such Joint
Collaboration Patent to the other Party and will reasonably assist the other
Party in assuming the filing, prosecution and maintenance of such Joint
Collaboration Patent in such country. Such Joint Collaboration Patent thereafter
will be the other Party’s Independent Patent.

(c) With respect to filing, prosecution and maintenance of each Joint
Collaboration Patent, the outside counsel will provide to each Party: (i) a copy
of the patent application sufficiently prior to filing to permit each Party
reasonable opportunity to review and make reasonable comments thereon; (ii) a
copy of the patent application promptly after such filing; (iii) copies of all
substantive communications received from patent office(s) with respect to such
filings; and (iv) copies of all substantive communications to be sent to the
patent office(s) with respect to such filings sufficiently before a due date to
permit each Party to review and make reasonable comments thereon.

(d) Each Party, when requested by the outside counsel, will use commercially
reasonable efforts to assist the counsel in preparing, filing or maintaining the
patent applications and patents within the Joint Collaboration Patents. The
reasonable expenses associated with providing such assistance will be IP and
Trademark Costs.

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Section 15.8 Independent Collaboration Patents Enforcement. Each Party will
promptly notify the other Party in writing if it learns of any actual, alleged
or threatened infringement of any Collaboration Patent by a Third Party. The
Party Controlling the affected Collaboration Patent will have the first right,
but not the obligation, at its own expense, to bring suit (or take other
appropriate legal action) against any actual, alleged or threatened infringement
of the Collaboration Patent by a Third Party, including the defense and
settlement. If the Controlling Party does not initiate an infringement action or
otherwise take affirmative measures to abate any such actual, alleged or
threatened Third Party infringement of the Collaboration Patent within [***] of
the later of: (a) receiving notification from the other Party under this
Section 15.8 of such infringement; (b) sending notice to the other Party under
this Section 15.8 of such infringement; or (c) receiving a written request from
the other Party to take action with respect to such infringement, then the other
Party will have the right, but not the obligation, [***], to bring suit (or take
other appropriate legal action) against any such actual, alleged or threatened
infringement of the Collaboration Patent by a Third Party, including the defense
and settlement thereof. In the event either Party brings an infringement action
in accordance with this Section 15.8, such Party will notify the other Party in
writing at least [***] prior to filing such action and the other Party will
provide reasonable assistance and authority to file and bring the action,
including, if required to bring such action, being joined as a party plaintiff;
provided, however, that neither Party will be required to transfer any right,
title or interest in or to any of its Collaboration Patents to the other Party
or a Third Party to confer standing on a Party hereunder. In addition, if either
Party brings an infringement action hereunder, the other Party will have the
right to be represented separately in such action by counsel of its own choice,
[***]. Any recovery realized as a result of such suit, claim or action or
related settlement will first be applied [***]. Reasonable expenses not offset
will be IP and Trademark Costs; provided, however, that the Party not bringing
the infringement action may, by written notice to the other Party within [***]
from receipt of the notice of intent to file such action, [***], in which event
[***] and the Party electing [***].

Section 15.9 Joint Collaboration Patents Enforcement. A Party wishing to enforce
a Joint Collaboration Patent against infringement will notify the JSC in writing
and identify the accused infringer(s). If both Parties approve of the action
through the JSC, any monetary recovery will be considered Product Profit and all
reasonable expenses incurred in the enforcement action will be IP and Trademark
Costs. If the enforcement action for infringement is not approved by both
Parties through the JSC, the Party wishing to enforce a Joint Collaboration
Patent may still bring the action, but such Party will be solely responsible for
all expenses incurred in the enforcement action and will be solely entitled to
retain any monetary recovery. In either case, the other Party will cooperate in
any such action by (i) agreeing to be named as party to the action solely to the
extent necessary to maintain the action, and (ii) not granting any license under
the Joint Collaboration Patent to the identified accused infringer(s) until
after such action is finally resolved. Neither Party will settle the action
without the other Party’s prior written consent, which consent will not be
unreasonably withheld or delayed, if the terms of settlement would deprive the
other Party of its rights in the asserted Joint Collaboration Patents.

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Section 15.10 Patent Prosecution, Maintenance and Enforcement of Joint Program
Improvement Patents.

15.10.1 Patent Prosecution and Maintenance. Patents claiming Program Inventions
owned jointly by both Parties in accordance with Section 15.1.2(c) (“Joint
Program Invention Patents”) shall be controlled, prepared, filed, prosecuted and
maintained by an outside legal firm mutually agreed to between the Parties,
under the direction and control (a) of SGI, if primarily related to [***],
(b) of Agensys, if primarily related to an [***] or (c) of both Parties, if such
Joint Patents are not covered under (a) or (b) above. The Party responsible for
filing and controlling patent prosecution and maintenance for Program
Inventions, as the case may be, shall provide to the other Party copies of any
response, document or communication with patent authorities that could
materially affect the scope of any Patent covering Program Inventions or
detrimentally effect the rights of the Parties in such inventions in any way, at
least [***] prior to the planned submission or communication. Such other Party
shall have the opportunity to comment on the response or document within such
[***] period, which comments shall be reasonably considered by the Party
primarily responsible for the prosecution. If either Party decides not to
continue prosecuting Patent or not to maintain a Patent claiming an invention
assigned to such Party pursuant to Section 15.1.2 in whole or in part, then such
Party shall promptly so notify the other Party (which notice shall be at least
[***] before any relevant deadline for such Patent). Thereafter, the other Party
shall have the right to prosecute or maintain such Patent, at such Party’s sole
expense.

15.10.2 Enforcement of Joint Program Improvement Patents. In the event either
Party becomes aware of an infringement by a Third Party of a Joint Program
Improvement Patent, it shall promptly notify the other Party and the Parties
shall determine a mutually agreeable course of action, prior to any action being
taken by either Party.

15.10.3 Recoveries. All monies recovered upon the final judgment or settlement
of any such suit to enforce any Joint Patents shall be allocated (i) first to
the costs and expenses of the Party taking such action, (ii) second to the costs
and expenses (if any) of the other Party, and (iii) any remaining amounts shall
be shall be shared equally between the Parties.

Section 15.11 Defense of Third Party Infringement Actions. If Agensys, SGI or
any of their respective Affiliates, or Sublicensees, is sued by a Third Party
for infringement of a Third Party’s patent because of the use of the SGI
Technology or the Agensys Technology in connection with activities conducted
pursuant to this Agreement, the Party that has been sued shall promptly notify
the other Party within [***] of its receipt of notice of such suit. The notice
shall set forth the facts of such infringement available to the relevant Party.
The Parties shall then meet to discuss each Party’s commercial interests in the
defense of the suit, a plan for the defense of the suit, how the costs of the
suit should be allocated, and which Party should have primary control of the
suit, provided that if such infringement relates previously to (i) SGI
Technology, then SGI shall have the first right to control such suit and
(ii) Agensys Technology, then Agensys shall have the first right to control such
suit. In no event may the Party controlling the suit settle or otherwise consent
to an adverse judgment in such suit that diminishes the rights or interests of
the non-controlling Party without the express written consent of the
non-controlling Party. If the alleged infringement relates to a Collaboration
Product, all reasonable costs associated with the defense of the action will be
IP and Trademark Costs, and any payment due to such Third Party as damages or in
settlement

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allocated to sales of Collaboration Products during the term of this Agreement
will be IP and Trademark Costs if approved in advance in writing by both
Parties. Any settlement that requires payment to the Third Party for the
prospective right to Commercialize the Collaboration Product will require prior
written approval of both Parties. Each Party will individually bear the risks
and costs of infringing Third Party Patents for its activities which are outside
the scope of this Agreement.

Section 15.12 Cooperation. The Parties shall at all times fully cooperate in
order to reasonably implement the foregoing provisions, such cooperation may
include the execution of necessary legal documents, coordinating filing and/or
prosecution of applications to avoid potential issues during prosecution
including novelty, enablement, estoppel and double patenting, execution of
amendments and documents for reliance on the CREATE Act (if needed), and the
provision of the assistance of its relevant personnel. Without limiting the
forgoing, it is understood that even if a Party is permitted to reference the
other Party’s Technology in a Patent pursuant to this Article 15, it shall not
file any such Patent without first confirming with the non-filing Party in
writing that any such filing could not reasonably be expected to adversely
affect such Party’s patent strategy. If the non-filing Party determines that any
such filing could adversely affect its filing strategy, the filing Party shall
not file any such Patent and the Parties shall cooperate in accordance with this
Section 15.12 to determine a strategy forward that would protect each Party’s
interests, including, without limitation, delaying the filing or co-owning such
Patent, as the case may be. Except as otherwise provided in this Agreement,
Agensys shall not disclose and/or claim in any patent application, patent or
publication any Confidential Information within any SGI Technology, Drug
Conjugation Technology or Drug Conjugation Materials without SGI’s prior written
consent. Except as otherwise provided in this Agreement, SGI shall not disclose
and/or claim in any patent application, patent or publication any Confidential
Information within any Agensys Technology without Agensys’ prior written
consent.

Section 15.13 Prior Patents. Notwithstanding anything to the contrary in this
Agreement, with respect to any SGI Patents that are subject to the SGI
In-Licenses or Agensys Independent Patents, Agensys Collaboration Patents and
Agensys ADC Patents that are subject to the Agensys In-Licenses, the rights and
obligations of the Parties under this Article 15 shall be subject to such
Party’s licensors’ rights to participate in and control prosecution, maintenance
and enforcement of such Party’s Patents, and to receive a share of damages
recovered in such action, in accordance with the terms and conditions of the
applicable Party’s In-License.

Article 16

REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS

Section 16.1 Representations and Warranties.

16.1.1 This Agreement has been duly executed and delivered by each Party and
constitutes the valid and binding obligation of each Party, enforceable against
such Party in accordance with its terms, except as enforceability may be limited
by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
other laws relating to or affecting creditors’ rights generally and by general
equitable principals. The execution, delivery and performance of this Agreement
have been duly authorized by all necessary action on the part of each Party, its
officers and directors.

 

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16.1.2 The execution, delivery and performance of the Agreement by each Party
does not conflict with any agreement, instrument or understanding, oral or
written, to which it is a party or by which it is bound, nor violate any law or
regulation of any court, governmental body or administrative or other agency
having jurisdiction over it.

16.1.3 SGI represents and warrants that: (a) the [***]; (b) it has the right to
grant the licenses granted herein and that as of the Effective Date [***];
(c) as of the Effective Date, [***]; (d) [***]; (e) [***]; and (f) as of the
Effective Date, (i) [***], (ii) [***].

16.1.4 Agensys represents and warrants that: (a) [***]; (b) as of the Effective
Date, [***]; (c) [***]; (d) [***]; and (f) as of the Effective Date, (i) [***],
(ii) [***], and (iii) [***]. Agensys represents and warrants, as of the
Effective Date, [***].

Section 16.2 Represented by Counsel. Each Party represents that it has been
represented by legal counsel in connection with this Agreement and acknowledges
that it has participated in the drafting hereof. In interpreting and applying
the terms and provisions of this Agreement, the Parties agree that no
presumption will apply against the Party which drafted such terms and
provisions.

Section 16.3 Debarment. Each Party represents and warrants to the other Party
that neither it, nor any of its Affiliates, has been debarred or is subject to
debarment. Each Party covenants to the other Party that neither such Party nor
any of its Affiliates will use in any capacity, in connection with the services
to be performed under this Agreement, any Party who has been debarred pursuant
to Section 306 of the Federal Food, Drug, and Cosmetic Act, as amended, or who
is the subject of a conviction described in such section. Each Party will inform
the other Party in writing immediately if it or any Third Party who is
performing services under this Agreement is debarred or is the subject of a
conviction described in Section 306, or if any action, suit, claim,
investigation or legal or administrative proceeding is pending or, to such
Party’s knowledge, is threatened, relating to the debarment or conviction of
such Party or any Third Party performing services hereunder.

Section 16.4 Maintenance of In-Licenses.

16.4.1 SGI In-Licenses. SGI covenants that (a) it will use Commercially
Reasonable Efforts to maintain all SGI In-Licenses for the duration of this
Agreement, (b) it shall not [***] and (c) it shall provide Agensys with prompt
written notice if it receives or issues any notice of breach or alleged breach
under the SGI In-Licenses. Without the prior written approval of Agensys, SGI
will not consent to any modifications to the SGI In-Licenses or take any other
action or fail to take any action that would have the effect of imposing any
greater financial or other obligations on, or impairing the exercise of or
reduce the rights granted hereunder to, Agensys, its Affiliates or Sublicensees.

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16.4.2 Agensys In-Licenses. Agensys covenants that (a) it will use Commercial
Reasonable Efforts to maintain all Agensys In-Licenses for the duration of this
Agreement and (b) it shall provide SGI with prompt written notice if it receives
or issues any notice of breach or alleged breach under the Agensys In-Licenses.
Without the prior written approval of SGI, Agensys will not consent to any
modifications to the Agensys In-Licenses or take any other action or fail to
take any action that would have the effect of imposing any greater financial or
other obligations on, or impairing the exercise of or reduce the rights granted
hereunder to, SGI, its Affiliates or Sublicensees.

Section 16.5 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
ARTICLE 16 AND SECTION 11.7.1, NEITHER PARTY MAKES ANY REPRESENTATIONS OR
WARRANTIES WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO ANY PRODUCTS, COLLABORATION
TECHNOLOGY, COLLABORATION PATENTS, OR ANY OF ITS INDEPENDENT TECHNOLOGY OR
INDEPENDENT PATENTS, OR THAT THE MANUFACTURE, USE, SALE, OFFER FOR SALE, IMPORT,
COPYING OR DISTRIBUTION OF ANY PRODUCT OR METHOD SUBJECT TO THIS AGREEMENT WILL
NOT INFRINGE OR MISAPPROPRIATE THE INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD
PARTY. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 16, ALL TECHNOLOGY PROVIDED
BY ONE PARTY TO THE OTHER PARTY PURSUANT TO THIS AGREEMENT IS PROVIDED “AS IS.”

Article 17

TERM AND TERMINATION

Section 17.1 Term. Unless earlier terminated pursuant to this Article 17, the
term of this Agreement (the “Term”) shall commence on the Effective Date and
shall remain in full force and effect until the later of: (a) the expiration of
all payment obligations under this Agreement, or the (b) day upon which the
Parties cease all Development and Commercialization of Collaboration Products.

Section 17.2 Termination for Convenience by Agensys. Agensys shall have the
right to terminate any Research License(s), any Exclusive License(s) or any
license granted under Section 10.1.5 to Agensys Products and/or Agensys Licensed
Products under this Agreement by providing not less than [***] prior written
notice to SGI of such termination. Any such termination by Agensys under this
Section 17.2 shall not affect the other Research Licenses, Exclusive Licenses,
Agensys Product, Agensys Licensed Product, or Collaboration Product licenses or
any sublicense agreement then in effect with respect to the non-terminated
licenses. The foregoing notwithstanding, [***]. [***] shall terminate and any
[***]. In addition, [***], immediately upon notice from SGI that SGI intends to
[***].

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Section 17.3 Termination for Convenience by SGI. SGI shall have the right to
terminate any license granted under Section 10.2.3 to SGI Products by providing
not less than [***] prior written notice to Agensys of such termination. Any
such termination under this Section 17.3 shall not affect the other SGI Product
or Collaboration Product licenses or any sublicense agreement then in effect
with respect to the non-terminated licenses.

Section 17.4 Termination by Mutual Agreement. The Parties may agree to terminate
the Agreement at any time on mutually agreed upon terms.

Section 17.5 Termination for Cause. Either Party may terminate this Agreement
for material breach by the other Party (the “Breaching Party”) of any material
provision of the Agreement, if the Breaching Party has not cured such breach
within [***] after written notice thereof. Following receipt of a notice of
breach, the Breaching Party may (i) cure such asserted material breach within
[***] after actual receipt of such written notice (or such longer period as may
be agreed by the Parties) or (ii) if the Breaching Party disagrees that it is in
material breach, initiate dispute resolution pursuant to Section 23.3, whereupon
the cure period shall be tolled until the dispute is resolved.

Section 17.6 Termination Upon Bankruptcy. Either Party may terminate this
Agreement if, at any time, (a) the other Party shall file in any court or agency
pursuant to any statute or regulation of any state, country or jurisdiction, a
petition in bankruptcy under Chapter 7 of the U.S. Bankruptcy Code, (b) such
other Party shall be served with an involuntary petition in bankruptcy under
Chapter 7 of the U.S. Bankruptcy Code against it, and such petition shall not be
dismissed within sixty (60) days after the filing thereof, (c) such other Party
shall propose or be a party to any dissolution or liquidation, other than a
dissolution or liquidation for the purpose of completing a reorganization,
consolidation or merger with another entity, or (d) such other Party shall make
an assignment for the benefit of its creditors. All rights and licenses granted
under this Agreement are, and shall be deemed to be, for purposes of
Section 365(n) of the United States Bankruptcy Code, licenses of rights to
“intellectual property” as defined under Section 101(56) of the United States
Bankruptcy Code. The Parties agree that in the event of the commencement of a
bankruptcy proceeding by or against one Party hereunder under the United States
Bankruptcy Code, the other Party shall be entitled to complete access to any
such intellectual property, and all embodiments of such intellectual property,
pertaining to the rights granted in the licenses hereunder of the Party by or
against whom a bankruptcy proceeding has been commenced, subject, however, to
payment of the fees, milestone payments and royalties set forth in this
Agreement through the effective date of any termination hereunder.

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Section 17.7 Termination of In-Licenses. All rights and obligations under an
Agensys In-License sublicensed under this Agreement shall terminate upon [***]
prior written notice by Agensys to SGI if SGI performs any action that would
constitute a material breach of any material provision of such Agensys
In-License Agreement and fails to cure such breach within such [***] period;
provided, however, such cure period may be extended by mutual written consent of
the Parties. All rights and obligations under an SGI In-License sublicensed
under this Agreement shall terminate upon [***] prior written notice by SGI to
Agensys if Agensys performs any action that would constitute a material breach
of any material provision of such SGI In-License Agreement and fails to cure
such breach within such [***] period; provided, however, such cure period may be
extended by mutual written consent of the Parties. All rights and obligations
under the [***] shall automatically terminate if Agensys fails to maintain the
insurance required under Article 22 of this Agreement.

Section 17.8 Effect of Termination of Entire Agreement or Rights to a Particular
Product.

17.8.1 Termination of Entire Agreement. Upon termination of this Agreement in
its entirety for any reason and except as otherwise set forth in Section 17.9,
all rights and licenses granted to a Party hereunder shall immediately terminate
and be of no further force and effect and each Party, its Affiliates and
Sublicensees will immediately cease all research, development, commercialization
and selling of Collaboration Products and Unilateral Products, and all SGI
Technology shall revert to SGI and all Agensys Technology shall revert to
Agensys, and each Party shall immediately, at its sole cost and expense, return
all material tangible manifestations of such intellectual property to the other
Party, including, all data, Information and materials.

17.8.2 Termination of Rights with respect to a Unilateral Product. Upon
termination of this Agreement with respect to a particular Unilateral Product
pursuant to Section 17.2 or 17.3, all rights and licenses granted to a Party
hereunder shall immediately terminate and be of no further force and effect with
respect to such Unilateral Product and each Party, its Affiliates and
Sublicensees will immediately cease all research, development, commercialization
and selling of such Unilateral Product, and all SGI Technology shall revert to
SGI and all Agensys Technology shall revert to Agensys, as applicable, with
respect to such Unilateral Product and each Party shall immediately, at its sole
cost and expense, return all material tangible manifestations of such
intellectual property to the other Party with respect to such Unilateral
Product, including, all data, Information and materials.

Section 17.9 Termination by Agensys.

17.9.1 General. In the event that this Agreement is terminated by Agensys
pursuant to [***] or by either Party pursuant to [***], Agensys shall
(i) continue to have all Exclusive Licenses then in effect, subject to its
continued payment of the applicable fees, milestone payments and royalties with
respect thereto as set forth in Article 11, (ii) any Sublicense agreement in
effect as of the date of such termination that is not the subject of the
material breach shall not terminate but instead, at the election of Agensys in
its sole discretion, shall become a direct license between Agensys and the
Sublicensee and shall otherwise continue in full force and effect in accordance
with its terms, subject to each such Sublicensee signing a written
acknowledgement with

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Agensys agreeing to be bound by all of the terms and conditions of this
Agreement applicable to such Sublicensee and (iii) Agensys may elect to continue
to Develop and Commercialize any Collaboration Product hereunder, subject to its
continued payment of the applicable fees, milestone payments and royalties with
respect thereto as set forth in Article 11, in which case the license granted
under Section 10.1.5 shall survive termination of the Agreement and any such
Collaboration Product shall be an Agensys Product hereunder.

17.9.2 Grant Back. Upon any termination by [***] and in the case of any
Designated Antigens for which the Option Period has expired, [***]. For the
avoidance of doubt: (a) the purpose of this Section 17.9.2 is to allow [***].

Section 17.10 Termination by SGI. In the event that this Agreement is terminated
by SGI pursuant to [***] or [***] all licenses granted by SGI to Agensys
hereunder, including all Exclusive Licenses, will immediately terminate and
(b) any Sublicense agreement in effect as of the date of such termination that
is not the subject of the material breach shall not terminate but instead, shall
become a direct license between SGI and the Sublicensee and shall otherwise
continue in full force and effect in accordance with its terms, subject to each
such Sublicensee signing a written acknowledgement with SGI agreeing to be bound
by all of the terms and conditions of this Agreement applicable to such
Sublicensee and (c) SGI may elect to continue to Develop and Commercialize any
Collaboration Product hereunder, subject to its continued payment of the
applicable fees, milestone payments and royalties with respect thereto as set
forth in Article 11, in which case the license granted under Section 10.2.3
shall survive termination of the Agreement and any such Collaboration Product
shall be an SGI Product hereunder.

Section 17.11 Rights and Obligations Not Extinguished. Except where explicitly
provided within this Agreement, termination of this Agreement for any reason, or
expiration of this Agreement, will not affect any: (a) obligations, including
payment of any royalties or other sums which have accrued as of the date of
termination or expiration, and (b) rights and obligations which, explicitly
survive pursuant to this Article 17, or from the context thereof, are intended
to survive termination or expiration of this Agreement, including provisions of
Articles 1 (to the extent necessary in interpreting the other provisions which
survive hereunder), 13, 14, 15 and 18 through 23 and Sections 5.5, 6.3.2 (to the
extent applicable to effectuate the purposes thereof), 7.5, 8.7, 8.10, 8.13,
16.5, 17.8, 17.9, 17.10 and 17.11, and any payment obligations pursuant to
Section 4.5 and Articles 11 and 12 incurred prior to termination or incurred as
the result of a Party exercising licenses retained by such Party after
termination of this Agreement.

Section 17.12 Expiration of Royalty Term. Upon the expiration of the Royalty
Term:

17.12.1 SGI shall grant, and shall by this provision be deemed to have granted,
to Agensys a royalty-free, perpetual, worldwide, nonexclusive license to use the
SGI Technology to make, use, sell, offer for sale and import Agensys Licensed
Products and Agensys Products with no further obligation to SGI; and

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17.2.2 Agensys shall grant, and shall by this provision be deemed to have
granted, to SGI a royalty-free, perpetual, worldwide, nonexclusive license to
use the Agensys Technology to make, use, sell, offer for sale and import SGI
Products, with no further obligation to Agensys.

Article 18

INDEMNITY

Section 18.1 Direct Indemnity for Unilateral Products.

18.1.1 Each Party shall defend, indemnify and hold harmless the other Party, its
Affiliates and their respective directors, officers, employees and agents
(collectively, the “Indemnitees”) from and against all liabilities, losses,
damages, and expenses, including reasonable attorneys’ fees and costs,
(collectively, the “Liabilities”) resulting from all Third Party claims, suits,
actions, or demands (collectively, the “Claims”) that are incurred, relate to or
arise out of (a) the material breach of any material provision of this Agreement
by the indemnifying Party (or the inaccuracy of any representation or warranty
made by such Party in this Agreement), or (b) the gross negligence, recklessness
or willful misconduct of the indemnifying Party in connection with the
performance of its obligations hereunder.

18.1.2 Agensys shall defend, indemnify and hold harmless SGI Indemnitees from
and against all Liabilities resulting from all Claims that are incurred, relate
to or arise out of (a) the development, manufacture or commercialization of
Agensys Licensed Products or Agensys Products by SGI for Agensys or by Agensys,
its Affiliates or Sublicensees, including any failure to test for or provide
adequate warnings of adverse side effects, or any manufacturing defect in any
Agensys Licensed Product or Agensys Product; (b) any claims of infringement of
Third Party rights arising out of the use of Agensys Technology to research,
develop, manufacture or commercialize an SGI Product; and (c) any [***], except
in each case to the extent such Liabilities resulted from the gross negligence,
recklessness or willful misconduct by SGI or the inaccuracy of any
representation or warranty made by SGI in this Agreement or from any other
action for which SGI must indemnify Agensys under Section 18.1.3.

18.1.3 SGI shall defend, indemnify and hold harmless Agensys Indemnitees from
and against all Liabilities resulting from all Claims that are incurred, relate
to or arise out of (a) the development, manufacture or commercialization of SGI
Products by Agensys for SGI or by SGI, its Affiliates or Sublicensees, including
any failure to test for or provide adequate warnings of adverse side effects, or
any manufacturing defect in any SGI Product; and (b) any claims of infringement
of Third Party rights arising out of the use of SGI Technology to research,
develop, manufacture or commercialize an Agensys Licensed Product or Agensys
Product, except to the extent such Liabilities resulted from the gross
negligence, recklessness or willful misconduct by Agensys or the inaccuracy of
any representation or warranty made by Agensys in this Agreement or any other
action for which Agensys must indemnify SGI under Section 18.1.2.

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Section 18.2 Collaboration Products.

18.2.1 Each Party hereby agrees to indemnify, defend, and hold harmless the
other Party’ Indemnitees from and against any and all Liabilities, incurred as a
result of any Claims relating to the manufacture, use, handling, storage,
Commercialization or other disposition of any Collaboration Product by the
indemnifying Party, its Affiliates, employees, agents or Sublicensees, but only
to the extent such Claims result from: (i) the negligence, recklessness or
willful misconduct of the indemnifying Party, its Affiliates, employees, agents
or sublicensees; or (ii) any breach by the indemnifying Party of any of its
representations, warranties, covenants or obligations pursuant to this
Agreement; except, in each case, to the comparative extent of any such Claim
resulting from the negligence or willful misconduct of the Indemnitees.

18.2.2 Except for those Claims subject to Section 18.2.1, the Parties shall
[***] in connection with: (i) any Claim brought against either Party by a Third
Party resulting directly or indirectly from the manufacture, use, handling,
storage, Commercialization or other disposition of any given Collaboration
Product (in same manner as the Parties share Product Profit); and (ii) the
defense or settlement of claims of infringement of Third Party patent rights in
accordance with the procedures set forth in Section 15.11.

18.2.3 If either Party receives notice of a Claim with respect to any
Collaboration Product, such Party shall inform the other Party in writing as
soon as reasonably practicable. The Parties shall confer through the JSC how to
respond to the Claim and how to handle the Claim in an efficient manner. In the
absence of such an agreement, each Party shall have the right to take such
action as it deems appropriate, subject to Section 18.3.

Section 18.3 Procedure. If a Party (the “Indemnified Party”) intends to claim
indemnification under this Article 18 it will promptly notify the other Party
(the “Indemnitor”) in writing of any Claim for which the Indemnified Party
intends to claim such indemnification, and the Indemnitor may participate in,
and, to the extent the Indemnitor so desires, assume the defense of such Claim
with counsel selected by the Indemnitor and reasonably satisfactory to the
Indemnified Party; provided, however, that an Indemnified Party will have the
right to retain its own counsel, with the fees and expenses to be paid by the
Indemnitor, if representation of such Indemnified Party by the counsel retained
by the Indemnitor would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other Party represented by such
counsel in such proceeding. The obligations of this Article 18 will not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the consent of the Indemnitor, which consent will not be unreasonably withheld
or delayed. The failure to deliver written notice to the Indemnitor within a
reasonable time after the commencement of any such action, if prejudicial to its
ability to defend such action, will relieve the Indemnitor of any obligation to
the Indemnitee under this Article 18 to the extent of such prejudice. The
Indemnified Party will reasonably cooperate with the Indemnitor and its legal
representatives in the investigation of any Claim covered by this Article 18.

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Article 19

FORCE MAJEURE

No Party (or any of its Affiliates) shall be held liable or responsible to the
other Party (or any of its Affiliates), or be deemed to have defaulted under or
breached the Agreement, for failure or delay by such Party in fulfilling or
performing any term of the Agreement when such failure or delay is caused by or
results from causes beyond the reasonable control of the affected Party (or any
of its Affiliates), including fire, floods, embargoes, war, acts of war (whether
war be declared or not), insurrections, riots, civil commotions, acts of God,
earthquakes, or omissions or delays in acting by any governmental authority
(collectively, “Events of Force Majeure”); provided, however, that the affected
Party shall exert all reasonable efforts to eliminate, cure or overcome any such
Event of Force Majeure and to resume performance of its covenants promptly.
Notwithstanding the foregoing, to the extent that an Event of Force Majeure
continues for a period in excess of [***], the affected Party shall promptly
notify in writing the other Party of such Event of Force Majeure and within
[***] of the other Party’s receipt of such notice, the Parties shall negotiate
in good faith either (a) a resolution of the Event of Force Majeure, if
possible, (b) an extension by mutual agreement of the time period to resolve,
eliminate, cure or overcome such Event of Force Majeure, (c) an amendment of
this Agreement to the extent reasonably possible, or (d) an early termination of
this Agreement.

Article 20

ASSIGNMENT

This Agreement may not be assigned or otherwise transferred, nor, except as
expressly provided hereunder, may any right or obligations hereunder be assigned
or transferred to any Third Party by either Party without the written consent of
the other Party, such consent not to be unreasonably withheld; provided,
however, that either Party may, without such consent but with notification,
assign this Agreement and its rights and obligations hereunder to any of its
Affiliates or in connection with the transfer or sale of all or substantially
all of its business, or in the event of its merger or consolidation of such
Party (such merger or consolidation shall be hereinafter referred to as a
“Change in Control”). Any permitted assignee shall assume all rights and
obligations of its assignor under this Agreement; provided, however, that an
acquirer of SGI in connection with a Change of Control shall not be obligated,
but shall have the right, to disclose or offer to Agensys pursuant to
Section 10.4 any Improvements or New Technologies Controlled by such acquirer
prior to the Change of Control, or any Improvements or New Technologies
Controlled by such acquirer after a Change of Control. Any attempted assignment
of this Agreement not in accordance with this Article 20 shall be void and of no
effect.

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Article 21

SEVERABILITY

Each Party hereby agrees that it does not intend to violate any public policy,
statutory or common laws, rules, regulations, treaty or decision of any
government agency or executive body thereof of any country or community or
association of countries. Should one or more provisions of this Agreement be or
become invalid, the Parties hereto shall substitute, by mutual consent, valid
provisions for such invalid provisions, in their economic effect, are
sufficiently similar to the invalid provisions that it can be reasonably assumed
that the Parties would have entered into this Agreement based on such valid
provisions. In case such alternative provisions cannot be agreed upon, the
invalidity of one or several provisions of this Agreement shall not affect the
validity of this Agreement as a whole, unless the invalid provisions are of such
essential importance to this Agreement that it is to be reasonably assumed that
the Parties would not have entered into this Agreement without the invalid
provisions.

Article 22

INSURANCE

During the Term and thereafter for the period of time required below, each Party
shall maintain an [***]. Commencing not later than [***] prior to the first use
in humans of any Collaboration Product, Agensys Licensed Product or Agensys
Product utilizing [***] and thereafter for the period of time required below,
Agensys shall obtain and maintain on an [***]. Commencing not later than [***]
prior to the first use in humans of any Collaboration Product or SGI Product,
and thereafter for the period of time required below, SGI shall obtain and
maintain on an [***]. All of such insurance coverage shall be maintained with an
insurance company or companies having an [***] or better and an aggregate
deductible not to [***]. Upon the Effective Date and not later than [***] prior
to the [***] of the first Collaboration Product, Agensys Licensed Product,
Agensys Product or SGI Product, as the case may be, each Party shall provide to
other Party a certificate(s) evidencing all required coverage hereunder. Each
Party shall maintain such insurance coverage without interruption during the
Term and for a period of at [***] thereafter. Each Party’s insurance shall name
the other Party and (if any Collaboration Product, Agensys Licensed Product or
Agensys Product utilizes [***]) [***] as additional insureds on the products
liability insurance required hereunder and shall state that the other Party
shall be provided at least [***] prior written notice of any cancellation or
material change in the insurance policy. The cost of insurance required by this
Article 22 with respect to Collaboration Products shall be treated as an “other
cost” for the purposes of calculating Product Profit.

Article 23

MISCELLANEOUS

Section 23.1 Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the Parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery, first class air mail or courier), first class
air mail or courier, postage prepaid (where applicable), addressed to such other
Party at its address indicated below, or to such other address as the addressee
shall have last furnished in writing to the address or in accordance with this
Section 23.1 and (except as otherwise provided in this Agreement) shall be
effective upon receipt by the addressee.

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If to SGI:

Seattle Genetics, Inc.

21823 30th Drive S.E.

Bothell, WA 98021

Attention: General Counsel

Telephone: (425) 527-4000

Facsimile: (425) 527-4109

If to Agensys:

Agensys, Inc.

1545 17th Street

Santa Monica, California 90404

Attention: CEO, President

Telephone: (310) 820-8029

Facsimile: (310) 820-8489

Section 23.2 Applicable Law. The Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to the
conflict of law principles thereof that may dictate application of the laws of
any other state.

Section 23.3 Dispute Resolution. The Parties agree that if any dispute or
disagreement arises between Agensys on the one hand and SGI on the other in
respect of this Agreement (other than disputes or disagreements arising in the
JSC, which shall be resolved in accordance with Section 4.3.6), they shall
follow the following procedure in an attempt to resolve the dispute or
disagreement.

23.3.1 The Party claiming that such a dispute exists shall give notice in
writing (“Notice of Dispute”) to the other Party of the nature of the dispute;

23.3.2 Within [***] of receipt of a Notice of Dispute, a nominee or nominees of
Agensys and a nominee or nominees of SGI shall meet in person and exchange
written summaries reflecting, in reasonable detail, the nature and extent of the
dispute, and at this meeting they shall use their reasonable endeavors to
resolve the dispute.

23.3.3 If, within a further period of [***], the dispute has not been resolved,
the [***] shall meet at a mutually agreed upon time and location for the purpose
of resolving such dispute.

23.3.4 Except as set forth in Section 23.4 below, if, within a further period of
[***], the dispute has not been resolved or if, for any reason, the required
meeting has not been held, then the same shall be submitted by the Parties for
resolution by binding arbitration before an arbitral body in San Francisco,
California in accordance with the then-current commercial arbitration rules

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of the American Arbitration Association (“AAA”) except as otherwise provided
herein. The Parties shall choose, by mutual agreement, [***] within [***] of
receipt of notice of the intent to arbitrate. If no arbitrator is appointed
within the times herein provided or any extension of time that is mutually
agreed upon, the AAA shall make such appointment within [***] of such failure.
The judgment rendered by the arbitrator shall include costs of arbitration,
reasonable attorneys’ fees and reasonable costs for expert and other witnesses.
Nothing in this Agreement shall be deemed as preventing either Party from
seeking injunctive relief (or any other equitable or provisional remedy). If the
issues in dispute involve scientific, technical or commercial matters, any
arbitrator chosen hereunder shall have educational training and/or industry
experience sufficient to demonstrate a reasonable level of relevant scientific,
medical and industry knowledge.

23.3.5 In the event of a dispute regarding any payments owing under this
Agreement, all undisputed amounts shall be paid promptly when due and the
balance, if any, promptly after resolution of the dispute.

23.3.6 Notwithstanding the foregoing, any disputes relating to inventorship,
ownership or the validity, enforceability or scope of any patent, copyright or
trademark rights shall be submitted for resolution by a court of competent
jurisdiction.

Section 23.4 Short Form Arbitration. Matters relating to JSC deadlocks and
expressly identified in this Agreement for resolution using short form
arbitration pursuant to this Section 23.4 as well as other matters as the
Parties agree in writing shall be subject to resolution under this Section 23.4,
shall be finally determined by binding arbitration in accordance with this
Section 23.4 by a single arbitrator. In such arbitration, the arbitrator shall
be an independent expert relating to the subject matter of such dispute who is
mutually acceptable to the Parties. If the Parties are unable to agree on an
arbitrator, the arbitrator shall be an independent expert as described in the
preceding sentence selected by the AAA. Each Party to the arbitration shall
prepare a written proposal setting forth its position with respect to the
substance of the dispute. Without delaying the arbitration procedures, for a
period not to exceed [***] commencing no later than [***] after the arbitrator
has been selected, the Parties shall exchange and discuss the respective written
proposal in good faith in an effort to resolve the matter. The arbitrator shall
select one of the requested positions as her/his decision, and shall not have
authority to render any substantive decision other than to so select the
position of one of the Parties. If one Party does not submit to the arbitrator a
written proposal setting forth its position within the time period established
by the arbitrator therefor, the arbitrator shall select the other Party’s
position. The costs of such arbitration shall be shared equally by the Parties,
and each Party shall bear its own expenses in connection with the arbitration.
The parties shall use good faith efforts to complete arbitration under this
Section 23.4 within [***] following a request by any Party for such arbitration.
Likewise, the arbitrator shall limit discovery as reasonably practicable to
complete the arbitration in the foregoing timeframes. Nothing in this Agreement
shall limit the right of either Party to seek to obtain in any court of
competent jurisdiction any equitable or interim relief or provisional remedy,
including injunctive relief. Seeking or obtaining such equitable or interim
relief or provisional remedy in a court shall not be deemed a waiver of this
Agreement to arbitrate. For clarity, any such equitable remedies shall be
cumulative and not exclusive and are in addition to any other remedies that
either Party may have under this Agreement or Applicable Law.

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Section 23.5 Entire Agreement. This Agreement, together with the Non-Disclosure
Agreement, contains the entire understanding of the Parties with respect to the
specific subject matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made are expressly superseded
by this Agreement. This Agreement may be amended, or any term hereof modified,
only by a written instrument duly executed by both Parties hereto.

Section 23.6 Independent Contractors. SGI and Agensys each acknowledge that they
shall be independent contractors and that the relationship between the two
Parties shall not constitute a partnership, joint venture, agency or any type of
fiduciary relationship. Neither SGI nor Agensys shall have the authority to make
any statements, representations or commitments of any kind, or to take any
action, which shall be binding on the other Party, without the prior consent of
the other Party to do so.

Section 23.7 Affiliates. Each Party shall cause its respective Affiliates to
comply fully with the provisions of this Agreement to the extent such provisions
specifically relate to, or are intended to specifically relate to, such
Affiliates, as though such Affiliates were expressly named as joint obligors
hereunder.

Section 23.8 Waiver. The waiver by either Party hereto of any right hereunder or
the failure to perform or of a breach by the other Party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.

Section 23.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

[Signature page follows]

 

-74-

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

 

SEATTLE GENETICS, INC. By:   /s/ Clay B. Siegall Name:   Clay B. Siegall Title:
  President & CEO AGENSYS, INC. By:   /s/ Donald B. Rice Name:   Donald B. Rice
Title:   Chairman, President & CEO

SIGNATURE PAGE

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SCHEDULE A

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[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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SCHEDULE B

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[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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SCHEDULE C

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[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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SCHEDULE D

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[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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SCHEDULE E

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[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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SCHEDULE F

[***]

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[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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SCHEDULE G

[***]

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[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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SCHEDULE H

[***]

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[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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SCHEDULE I

[***]

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[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.