Exhibit 10.3

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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Execution Copy

LICENSE AND COLLABORATION AGREEMENT

by and between

Seattle Genetics, Inc.

and

Genmab A/S

Effective as of: October 7, 2011

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CONTENTS

 

ARTICLE 1    DEFINITIONS AND INTERPRETATION

     2  

1.1

   Definitions      2  

1.2

   Certain Rules of Interpretation in this Agreement and the Schedules      16  

ARTICLE 2    LICENSES

     17  

2.1

   Licenses to Genmab      17  

2.2

   Genmab’s Rights to Sublicense      17  

2.3

   Compliance with the BMS Agreement      18  

2.4

   Licenses to SGI      19  

2.5

   SGI’s Rights to Sublicense      19  

2.6

   Compliance with the Genmab In-Licenses      20  

ARTICLE 3    OPT-IN TO CO-DEVELOPMENT AND CO-COMMERCIALIZATION

     20  

3.1

   Opt-In      20  

3.2

   Joint Steering Committee      22  

3.3

   Alliance Manager      24  

3.4

   Exclusivity      25  

ARTICLE 4    DEVELOPMENT, COMMERCIALIZATION AND MANUFACTURING OF EXCLUSIVE
PRODUCTS

     25  

4.1

   Diligence      25  

4.2

   Funding and Progress Reports      26  

4.3

   Manufacturing      26  

4.4

   SGI Development Support and Regulatory Assistance      26  

4.5

   Adverse Events      28  

ARTICLE 5    CO-DEVELOPMENT OF COLLABORATION PRODUCTS

     28  

5.1

   Establishment of Joint Development Team      28  

5.2

   Annual Updates to the Joint Development Plan      30  

5.3

   Development Activities      31  

5.4

   Joint Development Costs      31  

5.5

   Financial Representatives      31  

5.6

   Development Records      32  

5.7

   Audit      32  

 

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AMENDED.

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5.8

   Liability      33  

5.9

   Use of Approved Subcontractors      33  

5.10

   Right to Opt-Out of Co-Development and Co-Commercialization      34  

5.11

   Third Party Collaboration Agreements      35  

ARTICLE 6    MANUFACTURE AND SUPPLY OF COLLABORATION PRODUCTS

     35  

6.1

   Commercial Supply      35  

6.2

   Supply Agreements      35  

ARTICLE 7    REGULATORY MATTERS FOR COLLABORATION PRODUCTS

     36  

7.1

   General      36  

7.2

   [ * ] of Regulatory Approvals      36  

7.3

   Regulatory Coordination      37  

7.4

   Assistance      37  

7.5

   Adverse Events relating to Licensed Products      37  

ARTICLE 8    COMMERCIALIZATION OF COLLABORATION PRODUCTS

     38  

8.1

   Objectives for Commercialization of Collaboration Products      38  

8.2

   Lead Commercialization Parties      38  

8.3

   Preparation of Commercialization Plan      38  

8.4

   Commercialization Team and Commercialization Agreement      38  

8.5

   Co-Promotion Agreement      39  

8.6

   Commercialization Activities      39  

ARTICLE 9    DEVELOPMENT, COMMERCIALIZATION AND MANUFACTURING OF UNILATERAL
PRODUCTS

     39  

9.1

   Diligence      39  

9.2

   Conduct      40  

9.3

   Funding and Progress Reports      40  

9.4

   Manufacturing      40  

9.5

   Regulatory      40  

ARTICLE 10    FEES, MILESTONES AND ROYALTIES FOR EXCLUSIVE PRODUCTS AND
UNILATERAL PRODUCTS

     40  

10.1

   FTE Fees for Exclusive Products      40  

10.2

   Annual Maintenance Fee      41  

10.3

   Royalties      41  

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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10.4

   Royalty Offsets      43  

10.5

   Milestone Payments      44  

10.6

   Royalty Reports, Exchange Rates      45  

ARTICLE 11    FINANCIAL PROVISIONS FOR COLLABORATION PRODUCTS

     45  

11.1

   Joint Development Costs      45  

11.2

   Reporting and Payment of Joint Development Costs      45  

11.3

   Audits      46  

11.4

   Reporting and Payment of Commercialization Expenses and Collaboration Product
Profit      46  

11.5

   Collaboration Product Profit Term      46  

11.6

   Other Research Expenses, Joint Development Costs and Commercialization
Expenses      47  

11.7

   Utilization of Internal Resources      47  

ARTICLE 12    PAYMENT TERMS; BOOKS AND RECORDS; TAX

     47  

12.1

   Payment Terms      47  

12.2

   Record Keeping      48  

12.3

   Tax Matters      48  

ARTICLE 13    CONFIDENTIALITY

     48  

13.1

   Non-Disclosure Obligations      48  

13.2

   Permitted Disclosures      49  

13.3

   Terms of the Agreement      50  

13.4

   Press Releases and Other Disclosures to Third Parties      50  

13.5

   Publications      50  

ARTICLE 14    INVENTIONS AND PATENTS

     51  

14.1

   Ownership of Inventions      51  

14.2

   Patent Prosecution and Maintenance      51  

14.3

   Enforcement of Patents      54  

14.4

   Prior SGI Patent Rights      55  

14.5

   Prior Genmab Patent Rights      55  

14.6

   Product Trademarks      55  

ARTICLE 15    INFRINGEMENT ACTIONS BROUGHT BY THIRD PARTIES

     55  

15.1

   Collaboration Product      55  

 

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15.2

   Defense Costs      56  

15.3

   Exclusive Product, Genmab Product      56  

15.4

   SGI Product      56  

ARTICLE 16    REPRESENTATIONS AND WARRANTIES

     56  

16.1

   Representations and Warranties      56  

16.2

   Disclaimer      58  

16.3

   Performance by Affiliates      58  

ARTICLE 17    TERM AND TERMINATION

     58  

17.1

   Term      58  

17.2

   Termination by Genmab      58  

17.3

   Termination for Cause      59  

17.4

   Termination if Genmab Challenges SGI Patents      59  

17.5

   Termination if SGI Challenges Genmab Patents      59  

17.6

   Termination Upon Insolvency      59  

17.7

   Termination of BMS Agreement      59  

17.8

   Termination of [ * ]      60  

17.9

   Effect of Expiration and Termination      60  

ARTICLE 18    INDEMNITY

     61  

18.1

   Direct Indemnity for Non-Collaboration Products      61  

18.2

   Collaboration Products      61  

18.3

   Procedure      62  

18.4

   Limitations on Liability      62  

ARTICLE 19    FORCE MAJEURE

     62  

ARTICLE 20    ASSIGNMENT

     63  

ARTICLE 21    SEVERABILITY

     63  

ARTICLE 22    INSURANCE

     64  

ARTICLE 23    MISCELLANEOUS

     64  

23.1

   Notices      64  

23.2

   Applicable Law      65  

23.3

   Dispute Resolution      65  

23.4

   Entire Agreement      66  

23.5

   Independent Contractors      66  

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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23.6

   Affiliates      66  

23.7

   Waiver      66  

23.8

   Counterparts      66  

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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LIST OF SCHEDULES

 

Schedule A    SGI PATENTS Schedule B    RESEARCH AND GLP GRADE SUPPLY FEE
PRICING LIST Schedule C    GENMAB IN LICENSES Schedule D    SGI RESEARCH AND
DEVELOPMENT SUPPORT PRIOR TO END OF PHASE I CLINICAL TRIAL Schedule E    GENMAB
DEVELOPMENT PLAN AND GENMAB BUDGET Schedule F    GENMAB PATENTS

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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LICENSE AND COLLABORATION AGREEMENT

This License and Collaboration Agreement is entered into as of October 7, 2011
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

GENMAB A/S, a Danish corporation with CVR no. 2102 3884, having a principal
place of business at Bredgade 34, P.O. Box 9068, DK-1260 Copenhagen K, Denmark
(hereinafter referred to as “Genmab”).

WITNESSETH

WHEREAS, SGI Controls (as defined below) intellectual property rights relating
to certain technology useful for linking certain proprietary cytotoxic compounds
to other molecules, such as antibodies capable of directing such cytotoxic
compounds to specific tissues and/or cells;

WHEREAS, Genmab is engaged in research and development of biopharmaceutical
products, including certain monoclonal antibodies and Controls intellectual
property rights relating to certain technology useful for generating monoclonal
antibodies and to the monoclonal antibodies so generated;

WHEREAS, SGI and Genmab are currently parties to the Prior Agreement (as defined
below) pursuant to which they are conducting a research and development program
relating to antibodies that bind specifically to Tissue Factor (as defined
below) together with SGI’s proprietary cytotoxic compound and linker technology;

WHEREAS, pursuant to the Prior Agreement, Genmab has the right to obtain an
exclusive (subject to SGI’s right to opt-in to co-development and
co-commercialization) worldwide license under SGI’s patent rights and know-how
related to SGI’s proprietary cytotoxic compound and linker technology to develop
and commercialize Licensed Products (as defined below);

WHEREAS, SGI wishes to grant to Genmab such license;

WHEREAS, SGI wishes to obtain a right to opt-in to co-develop and
co-commercialize with Genmab such Licensed Products; and

WHEREAS, Genmab wishes to grant to SGI such opt-in right.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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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

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

1.1.1    “AAA” has the meaning set forth in Section 23.3.1.

1.1.2    “Acknowledgement” has the meaning set forth in Section 3.1.2.

1.1.3    “ADC” or “Antibody-Drug Conjugate” means an Antibody that is linked to
a cytotoxic compound and that contains, uses, is made using or is otherwise
based on SGI Technology.

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

1.1.5    “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 herein, the term
“control” means the direct or indirect ownership of fifty percent (50%) or more
of the stock having the right to vote for directors thereof or the ability to
otherwise control the management thereof.

1.1.6    “Agreement” means this License and Collaboration Agreement, all
amendments and supplements hereto and all schedules hereto, including the
following:

Schedule A - SGI Patents. {Schedule to be further updated}

Schedule B - Research and GLP Grade Supply Fee Pricing List

Schedule C - Genmab In-Licenses

Schedule D - SGI research and development support prior to end of Phase I
Clinical Trial

Schedule E - Genmab Development Plan and Genmab Budget

Schedule F - Genmab Patents

1.1.7    “Alliance Manager” has the meaning set forth in Section 3.3.

1.1.8    “[ * ]” means the portion of the [ * ] costs [ * ] by a Party that are
attributable to that Party’s [ * ] and [ * ], [ * ], [ * ], or the equivalent of
the foregoing to support [ * ] of a Collaboration Product, and the occupancy,
facility and equipment (excluding [ * ] for [ * ]

 

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and [ * ]), [ * ] (to the extent not [ * ]) and its [ * ] and [ * ] necessary to
support such [ * ], and, in each case, which are [ * ] to such Party’s [ * ]
based on [ * ] or [ * ] or other [ * ] consistently applied by a Party. [ * ]
shall not include any [ * ] attributable to [ * ], including, by way of example,
[ * ], [ * ], [ * ], [ * ] and [ * ]. This definition of [ * ] will be further
elaborated in the commercialization agreement described in Section 8.4.

1.1.9    “Annual Maintenance Fee” has the meaning set forth in Section 10.2.

1.1.10    “Antibody” or “Antibodies” means a monoclonal antibody or a derivative
thereof identifiable by [ * ] with respect to Tissue Factor. For the purpose of
the licenses granted to Genmab by SGI hereunder any Antibody when combined with
[ * ] must specifically bind to Tissue Factor.

1.1.11    “Applicable Law” means any law or statute, any rule or regulation
issued by a government authority (including courts and Regulatory Authorities),
any GxP regulations or guidelines as well as 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.

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

1.1.13    “BMS” means Bristol-Myers Squibb Company.

1.1.14    “BMS Agreement” means the License Agreement between BMS and SGI dated
[ * ], as amended.

1.1.15    “Breaching Party” has the meaning set forth in Section 17.3.

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

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

1.1.18    “Claims” has the meaning set forth in Section 18.1.1.

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

1.1.20    “Collaboration Product” means an Exclusive Product as to which SGI has
exercised its Opt-In Right to the extent that neither Party subsequently issues
an Opt-Out Notice pursuant to Section 5.10. For clarity, a Collaboration Product
is considered a Licensed Product.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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1.1.21    “Collaboration Product Profit” means the profits or losses resulting
from the Commercialization of a Collaboration Product and shall be [ * ] to the
[ * ] of the Collaboration Product [ * ] the [ * ] to the [ * ]; provided,
however, that any costs that would otherwise be included as a [ * ] but which,
pursuant to the [ * ], are [ * ] from [ * ] to determine the [ * ] of a [ * ],
shall not also be [ * ] as a [ * ] and thereby [ * ]. Collaboration Product
Profit shall also include any [ * ] by a Party from a Third Party on [ * ] of,
or in connection with [ * ] with respect to, a [ * ].

1.1.22    “Collaboration Product Trademark” has the meaning set forth in
Section 14.6.

1.1.23    “Collaboration Program” means the collaborative Development,
manufacturing, Regulatory Approval and Commercialization activities undertaken
pursuant to any Joint Development Plan or Commercialization Plan.

1.1.24    “Commercialization” or “Commercialize” means, with respect to a
Collaboration Product, any and all activities to establish and maintain
commercial sales for such Collaboration Product that are undertaken pursuant to
a Commercialization Plan. These activities shall include: (a) the pre-launch
marketing and launch activities for the Collaboration Product, (b) the
marketing, promotion, distribution, offering for sale and selling of the
Collaboration Product, (c) importing and exporting the Collaboration Product for
commercial sale, and (d) manufacturing the 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.

1.1.25    “Commercialization Expenses” shall mean, with respect to a
Collaboration Product, (a) [ * ], (b) [ * ], (c) [ * ], (d) [ * ], (e) [ * ],
(g) [ * ], and (h) 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. This definition of
Commercialization Expenses will be further elaborated in the commercialization
agreement described in Section 8.4.

1.1.26    “Commercialization Plan” means the commercialization plan for a
Collaboration Product 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 the Collaboration
Product as well as each Party’s responsibilities in connection therewith.

1.1.27    “Commercially Reasonable Efforts” means, (a) with respect to the
efforts to be [ * ] by a Party to [ * ] a [ * ], the [ * ] and [ * ] that such
Party would [ * ] to [ * ] a [ * ] under [ * ], and (b) with respect to the [ *
] or [ * ] of a Licensed Product, the level of efforts and [ * ] substantially [
* ] to those efforts and [ * ] by a Party for a [ * ] of [ * ] and at a [ * ] in

 

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its [ * ], taking into account [ * ], [ * ], [ * ], [ * ] of [ * ], [ * ] ([ * ]
taking into account the [ * ] of this Agreement), [ * ] and [ * ] and other
relevant factors. Commercially Reasonable Efforts shall be determined on a [ * ]
and [ * ] basis for a particular Licensed Product. In addition, it is
anticipated that the [ * ] of [ * ] may be [ * ] for [ * ], and may [ * ],
reflecting [ * ] in the [ * ] of such Licensed Product and the
market(s) involved. Without limiting the forgoing, Commercially Reasonable
Efforts with respect to a Licensed Product requires that the relevant Party:
(i) [ * ] and consistently [ * ] to [ * ] for carrying out its obligations, and
(ii) consistently [ * ] and implement decisions and [ * ] for the [ * ] of [ * ]
with respect to such objectives.

1.1.28    “Competing Product” means: (a) at any time during the Term (i) when
SGI holds an Opt-In Right for the first Exclusive Product or (ii) following an
Opt-In Decision for such first Exclusive Product and prior to any applicable
Opt-Out Date, any product for the treatment, prevention or diagnosis of
conditions and diseases in humans containing a substance (such as a small
molecule, peptide, protein, antibody, fusion protein, conjugate, [ * ] or other
[ * ], as well as any [ * ] of the foregoing) that [ * ] to [ * ] and (b) at all
other times during the Term, any product for the treatment, prevention or
diagnosis of conditions and diseases in humans containing an [ * ] that [ * ] to
[ * ].

1.1.29    “Competing Program” means a program intended to develop a [ * ].

1.1.30    “Confidential Information” has the meaning set forth in Section 13.1.

1.1.31    “Continuing Party” has the meaning set forth in Section 5.10.1.

1.1.32    “Control” means, with respect to any information or intellectual
property right, possession by a Party or its Affiliate of the ability to grant
the right to access or use, or to grant a license or a sublicense to, or to use
such information or intellectual property right as provided for herein without
violating the terms of any agreement or other arrangement with any Third Party.

1.1.33    “Development” or “Develop” means, with respect to a Collaboration
Product, any and all clinical drug development activities and manufacturing
activities undertaken pursuant to the relevant Joint Development Plan in order
to 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, Phase III-B Studies, Phase IV Studies and other studies
(e.g., pharmacovigilance programs and outcome studies) that the JSC considers
necessary or economically justifiable) and other activities to obtain the
applicable Regulatory Approvals; in each case in accordance with the applicable
Joint Development Plan, as applicable. When used as a verb, “Develop” means to
engage in Development.

 

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1.1.34    “Development Support Fees” has the meaning set forth in Section 10.1.

1.1.35    “Development Support Fees Report” has the meaning set forth in
Section 10.1.

1.1.36    “[ * ]” shall mean the following costs incurred by a Party or its
Affiliates in the [ * ] of a [ * ], to be further elaborated in the
commercialization agreement described in Section 8.4: (a) [ * ] to be agreed
upon by the Parties [ * ], (b) [ * ] associated with [ * ], and (c) [ * ]. For
the avoidance of doubt, [ * ] shall not include [ * ] or [ * ].

1.1.37    “Drug Conjugation Materials” means (a) the [ * ] or [ * ] attached to
the linker [ * ] or [ * ], and (b) any related raw materials and reagents SGI
provided to Genmab pursuant to the Research Program or provides to Genmab
pursuant to Section 4.4 or the Collaboration Program, in each case to the extent
Controlled by SGI and included in or covered by the SGI Technology. Drug
Conjugation Materials shall also include reagents and other tangible materials
to the extent included in Program Inventions assigned to SGI pursuant to
Section 14.1.2.

1.1.38    “Drug Conjugation Technology” means (a) methods that are useful in
attaching the [ * ] or [ * ] to antibodies using the linker [ * ] or [ * ],
including the composition and methods of making and using such cytotoxic
compound [ * ] or [ * ] and (b) any related assays and methods SGI provided to
Genmab pursuant to the Research Program or provides to Genmab pursuant to
Section 4.4 or the Collaboration Program, in each case to the extent Controlled
by SGI.

1.1.39    “Drug Master File” or “DMF” means the file of information submitted to
the FDA as set out in Code of Federal Regulations, Food and Drug Administration
Part 314.420.

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

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

1.1.42    “Exclusive Product” means a Licensed Product as to which an Opt-In
Right has not arisen or, having arisen, has not been exercised within the Opt-In
Period.

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

1.1.44    “Field” means monoclonal antibody targeting applications for the
treatment and diagnosis of conditions and diseases in humans. The Parties
acknowledge that [ * ] is [ * ] to [ * ], including [ * ].

1.1.45    “Financial Representative” has the meaning set forth in Section 5.5.1.

 

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1.1.46    “First Commercial Sale” means, in each country of the Territory, the
first commercial sale of a Licensed Product by a Party, their respective
Affiliates or Sublicensees to a Third Party 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 Licensed Product in such country by the general public. For the avoidance
of doubt, any sale of Licensed Product by a Party for use in [ * ] shall be
considered a commercial sale and shall be included in Net Sales.

1.1.47    “FTE” means the equivalent of a full-time employee of the Parties
(including normal vacations, sick leave and other similar matters) in the
country where such employee is based. FTEs shall be calculated based on the time
an employee of the Parties spends working on a billable effort as recorded by
such Parties’ project time reporting system. An FTE is measured on the basis of
[ * ] of [ * ] and [ * ].

1.1.48    “FTE Fees” has the meaning set forth in Section 10.1.

1.1.49    “GAAP” means generally accepted accounting principles in the United
States.

1.1.50    “Genmab” has the meaning set forth in the introduction to this
Agreement.

1.1.51    “Genmab ADC Know-How” means all Program Inventions Controlled by
Genmab using SGI Technology to the extent not disclosed or claimed by a Genmab
Patent that are necessary for identifying, developing, making, using, offering
for sale or selling ADCs.

1.1.52    “Genmab ADC Patents” means all patent applications and patents that
are Controlled by Genmab that claim Genmab ADC Know-How as set forth in
Schedule F, which shall be amended from time to time to reflect any other
patents and patent applications.

1.1.53    “Genmab Budget” shall mean the budget attached to the Genmab
Development Plan under Schedule E.

1.1.54    “Genmab Development Plan” means the manufacturing and clinical
development plan for an Exclusive Product and related Genmab Budget. The initial
version of the Genmab Development Plan and related Genmab Budget is set forth in
Schedule E and may be amended at Genmab´s sole discretion prior to the beginning
of the Opt-In Period.

1.1.55    “Genmab In-Licenses” means the agreements between Genmab and Third
Parties as listed in Schedule C. Schedule C may be amended from time to time
pursuant to Section 2.6.1.

1.1.56    “Genmab Know-How” means all technical information, processes,
formulae, data, inventions, methods, chemical compounds, biological or physical
materials, know-how and other trade secrets, in each case, that relate to
(a) the composition, method of using or method of [ * ], or (b) the composition,
method of generating and making [ * ], including the [ * ], or (c) method of [ *
] and [ * ] technology, and that are Controlled by Genmab to the extent not
disclosed or claimed by a Genmab Patent, including [ * ].

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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1.1.57    “Genmab Patents” means:

(a)    all patent applications and patents Controlled by Genmab that claim
Genmab Know-How as set forth in Schedule F, which shall be amended from time to
time to reflect any other patents and patent applications;

(b)    any patents and patent applications covering Program Inventions that are
assigned to Genmab pursuant to Section 14.1.2(a) and Genmab’s interest in any
Joint Patents pursuant to Section 14.1.2(c);

(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 Genmab), 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 Genmab; 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 Genmab.

1.1.58    “Genmab Product” means a Unilateral Product as to which Genmab elects
to be the Continuing Party in accordance with Section 5.10.

1.1.59    “Genmab Technology” means the Genmab Patents (including Genmab ADC
Patents) and Genmab Know-How (including Genmab ADC Know-How).

1.1.60    “Good Clinical Practice” or “GCP” shall mean any and all laws, rules,
regulations, guidelines and generally accepted standards and requirements
regarding the ethical conduct of clinical trials, including without limitation
the U.S. Code of Federal Regulations (“CFR”) Title 21, ICH GCP Guidelines
E6(R1), current step 4 version, dated 10 June 1996, as amended from time to
time, national legislation implementing European Community Directive 2001/20/EC
of 4 April 2001 on the approximation of the laws, regulations and administrative
provisions of the Member States relating to the implementation of good clinical
practice in the conduct of clinical trials on medicinal products for human use,
European Community Directive 2005/28/EC of 8 April 2005 laying down principles
and detailed guidelines for good clinical practice as regards to investigational
medicinal products for human use.

1.1.61    “Good Laboratory Practice” or “GLP” shall mean any and all laws,
rules, regulations, guidelines and generally accepted standards and requirements
regarding quality control for laboratories to ensure the consistency and
reliability of results, including without limitation the CFR Title 21, national
legislation implementing European Community Directive 2004/9/EC of 11 February

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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2004 on the inspection and verification of good laboratory practice (GLP) as
amended and European Community Directive 2004/10/EC of 11 February 2004 on the
harmonization of laws, regulations and administrative provisions relating to the
application of the principles of good laboratory practice and the verification
of their applications for tests on chemical substances as amended, OECD Series
on Principles of Good Laboratory Practice and Compliance Monitoring.

1.1.62    “Good Manufacturing Practice” or “GMP” shall mean any and all laws,
rules, regulations, guidelines and generally accepted standards and requirements
regarding the quality control and manufacturing of pharmaceutical products,
including without limitation the CFR Title 21, ICH GMP Guidelines Q7, current
step 4 version, dated 10 November 2000, as amended from time to time, national
legislation implementing European Community Directive 91/356/EEC of 13 June 1991
laying down the principles and guidelines of good manufacturing practice for
medicinal products for human use as amended by European Community Directives
2003/94/EC, the Rules Governing Medicinal Products in the European Community,
Volume 4, including annexes.

1.1.63    “GxP” means GCP, GLP or GMP or any combination thereof, as applicable.

1.1.64    “IND” means (a) an Investigational New Drug Application, or successor
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 Licensed Product in
humans.

1.1.65    “Indemnified Party” shall have the meaning set forth in Section 18.3.

1.1.66    “Indemnitees” shall have the meaning set forth in Section 18.1.1.

1.1.67    “Indemnitor” shall have the meaning set forth in Section 18.3.

1.1.68    “[ * ]” means all [ * ] and [ * ] by the Parties or their Affiliates
for a Collaboration Product, which shall be calculated as a [ * ] of [ * ], such
[ * ] to be initially set during the calendar year of the [ * ] and any
subsequent calendar year thereafter and calculated based on that Party’s and its
Affiliates’ [ * ] in a [ * ] and [ * ] in such [ * ] during the calendar year in
which the [ * ] occurs (the “[ * ]”). Such [ * ] shall also be adjusted by the
Parties in the event that future [ * ] differs by [ * ] or more from the [ * ]
currently being used by the Parties. Examples of [ * ] included in the
calculation of the [ * ] include, but are not limited to, [ * ] and [ * ], [ * ]
of [ * ], [ * ] and [ * ].

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

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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1.1.70    “IP and Trademark Costs” means all costs relating to Joint Patents and
Collaboration Product Trademarks as well as other costs indicated to be IP and
Trademark Costs herein.

1.1.71    “Joint Budget” shall mean the budget attached to the Joint Development
Plan. The initial Joint Budget will be provided by Genmab pursuant to
Section 3.1.3.

1.1.72    “Joint Development Cost Report” shall have the meaning set forth in
Section 11.2.1(a).

1.1.73    “Joint Development Costs” means, with respect to a Collaboration
Product, the [ * ] and [ * ] costs [ * ] by a Party from the date of the
relevant [ * ] to conduct Development for a Collaboration Product calculated in
accordance with the Collaboration Accounting Policies, consistently applied. [ *
] will include [ * ] at the [ * ], [ * ] (including taxes and duties), and [ * ]
required to [ * ] related to the relevant [ * ].

1.1.74    “Joint Development Plan” means the manufacturing and clinical
development plan for a Collaboration Product. The initial Joint Development Plan
will be provided by Genmab pursuant to Section 3.1.3.

1.1.75    “Joint Development Team” or “JDT” has the meaning set forth in
Section 5.1.

1.1.76    “Joint Patents” has the meaning set forth in Section 14.2.4.

1.1.77    “Joint Steering Committee” or “JSC” has the meaning set forth in
Section 3.2.1.

1.1.78    “Lead Commercialization Party” means, with respect to a territory [ *
], the Party with responsibility for Commercialization activities in accordance
with Section 8.2.

1.1.79    “Lead Regulatory Party” means, with respect to a territory [ * ], the
Party with the main responsibility for carrying out regulatory activities in
accordance with Article 7.

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

1.1.81    “Licensed Product” means any and all products utilizing or
incorporating an ADC:

(a)    the manufacture, use, sale, offer for sale or import of which would
infringe a Valid Patent Claim of any SGI Patent, Joint Patent or Genmab Patent,
if not for a Party’s ownership interest or the licenses granted in this
Agreement; or

(b)    which otherwise utilize, incorporate, derive from, relate to, are made
using or are based on Genmab Technology or SGI Technology.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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For clarity, “Licensed Product” means an Exclusive Product, Collaboration
Product and/or a Unilateral Product (i.e., a Genmab Product or an SGI Product).

1.1.82    “[ * ]” means [ * ].

1.1.83    “Major Market Country” means any of the following: [ * ].

1.1.84    “[ * ]” means, collectively, [ * ], a [ * ], and its [ * ].

1.1.85    “[ * ]” has the meaning set forth in Schedule C.

1.1.86    “Net Sales” means, as to each Calendar Quarter, the gross invoiced
sales prices charged for all Licensed Products sold by or for a Party, including
any sale of Licensed Product by a Party for use in a compassionate use or named
patient program (the “Selling Party”), its Affiliates and Sublicensees to
independent Third Parties during such Calendar Quarter, after deduction (if not
already deducted in the amount invoiced) of the following items paid by the
Selling Party, its Affiliates and Sublicensees during such Calendar Quarter with
respect to sales of Licensed Products, provided and to the extent that such
items are incurred or allowed and do not exceed reasonable and customary amounts
in the market in which such sales occurred:

(a)    trade, quantity and/or cash discounts, other distribution fees,
allowances or rebates [ * ], including [ * ];

(b)    credits or allowances [ * ] with respect to Licensed Products by reason
of rejection, defects, recalls, returns, rebates, retroactive price reductions [
* ];

(c)    any tax, tariff, customs, duty or government charge (including any sales,
value added, excise or similar tax or government charge, but excluding any
income tax) levied on the sale, transportation or delivery of a Licensed Product
[ * ];

(d)    any charges for freight, postage, shipping or transportation, or for
insurance, [ * ]; and

(e)    such other deductions in accordance with GAAP.

All of the foregoing deductions from the gross invoiced sales prices of Licensed
Products shall be determined in accordance with GAAP and shall be deemed to be a
deduction from gross sales in the same period properly recorded as a sales
deduction in the Parties’ financial statements. In the event that the Selling
Party, its Affiliates or Sublicensees make any adjustments to such deductions
after the associated Net Sales have been reported pursuant to this Agreement,
the adjustments shall be reported and reconciled in the next report and payment
of any royalties due.

1.1.87    “Non-Continuing Party” has the meaning set forth in Section 5.10.

 

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1.1.88    “North America” means the United States of America (and its
territories and possessions, including the Commonwealth of Puerto Rico), Canada
and Mexico.

1.1.89    “Opt-In Period” has the meaning set forth in Section 3.1.4.

1.1.90    “Opt-In Right” has the meaning set forth in Section 3.1.4.

1.1.91    “Opt-In Decision” has the meaning set forth in Section 3.1.4.

1.1.92    “Opt-In Notice” has the meaning set forth in Section 3.1.5.

1.1.93    “Opt-Out Date” has the meaning set forth in Section 5.10.

1.1.94    “Opt-Out Notice” has the meaning set forth in Section 5.10.

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

1.1.96    “Paying Party” has the meaning set forth in Section 10.6.

1.1.97    “Phase I Clinical Trial” means a human clinical trial, the primary
objective of which is to determine preliminary safety in healthy individuals or
patients. Such trial may also have secondary objectives such as, but not limited
to, pharmacokinetic and preliminary efficacy parameters and may therefore be
deemed also a Phase I/II Clinical Trial.

1.1.98    “Phase II Clinical Trial” means a controlled dose human clinical trial
involving a sufficient number of patients with the disease or condition of
interest to obtain sufficient efficacy and safety data of a candidate drug in
the targeted patient population to support a Phase III Clinical Trial of a
candidate drug for its intended use, and to define the optimal dosing regimen,
such as trials referred to in 21 C.F.R.§312.21(b) and foreign equivalents.

1.1.99    “Phase III Clinical Trial” means a controlled, and usually
multi-center, clinical trial, involving patients with the disease or condition
of interest intended to obtain sufficient efficacy and safety data to support
Regulatory Approval of a candidate drug whether or not designated as “Phase
III”.

1.1.100    “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.

1.1.101    “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.

 

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1.1.102    “Preliminary Opt-In Notice” has the meaning set forth in
Section 3.1.2.

1.1.103    “Prior Agreement” means the Research and Collaboration Agreement,
effective as of [ * ], as amended, by and between the Parties.

1.1.104    “Program Inventions” has the meaning set forth in Section 14.1.1.

1.1.105    “Program Genmab Patents” has the meaning set forth in Section [ * ].

1.1.106    “Program Support Term” has the meaning set forth in Section 4.4.2.

1.1.107    “Publication” has the meaning set forth in Section 13.5.

1.1.108    “[ * ]” means a [ * ] with an [ * ], the primary [ * ] of which is to
determine [ * ] in [ * ]. Such [ * ] shall also have [ * ] such as, but not
limited to, establishing [ * ], [ * ] and [ * ]. Furthermore, such trial shall
also test for preliminary evidence of [ * ] of [ * ], in at least [ * ] with at
least [ * ], [ * ] and [ * ] that is envisaged to enable the [ * ] as outlined
in Genmab Development Plan. Patients will be treated with at least [ * ] of [ *
] or until [ * ] or [ * ]. The [ * ] for the [ * ] results meeting shall include
[ * ] and [ * ] after [ * ] of [ * ] or [ * ], whichever is greater.

1.1.109    “Regulatory Approval” means final regulatory approval in a country [
* ] required to market a Licensed Product for a disease or condition in
accordance with the Applicable Laws 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.

1.1.110    “Requesting Party” has the meaning set forth in Section 11.3.

1.1.111    “Research Program” means the research program conducted pursuant to
the Prior Agreement.

1.1.112    “Responding Party” has the meaning set forth in Section 11.3.

1.1.113    “ROW” means all the countries of the world except for those in North
America.

1.1.114    “Royalty Reports” has the meaning set forth in Section 10.6.1.

 

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1.1.115    “Royalty Term” means

(a)    on an Exclusive Product-by-Exclusive Product and country-by-country
basis, the period commencing on the First Commercial Sale of the relevant
Exclusive Product and ending upon the later to occur of:

(i)    the [ * ] anniversary of the date of First Commercial Sale of such
Exclusive Product in such country; or

(ii)    the expiration of the last to expire Valid Patent Claim of [ * ] that
would be infringed by the manufacture, use, sale, offer for sale or import of
the Exclusive Product in such country, if not for the licenses granted
hereunder; or

(b)    on a Genmab Product-by-Genmab Product and country-by-country basis, the
period commencing on the First Commercial Sale of the relevant Genmab Product
and ending on the later to occur of:

(i)    the [ * ] anniversary of the date of the First Commercial Sale of such
Genmab Product in such country; or

(ii)    the expiration of the last to expire Valid Patent Claim of [ * ] that
would be infringed by the manufacture, use, sale, offer for sale or import of
the Genmab Product in such country, if not for Genmab’s ownership interest or
the licenses granted hereunder; or

(c)    on an SGI Product-by-SGI Product and country-by-country basis, the period
commencing on the First Commercial Sale of the relevant SGI Product and ending
on the later to occur of:

(i)    the [ * ] anniversary of the date of the First Commercial Sale of such
SGI Product in such country; or

(ii)    the expiration of the last to expire Valid Patent Claim of [ * ] that
would be infringed by the manufacture, use, sale, offer for sale or import of
the SGI Product in such country if not for the assignment of the [ * ] hereunder
or the licenses granted hereunder.

1.1.116    “[ * ]” means a Party’s [ * ] specific to a Collaboration Product,
including without limitation the [ * ].

1.1.117    “Serious Adverse Events” means any Adverse Event occurring at any
dose in response to the administration of a Licensed 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.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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1.1.118    “SGI” has the meaning set forth in the introduction to this
Agreement.

1.1.119    “SGI Know-How” means any and all technical information, processes,
formulae, data, inventions, methods, chemical compounds, biological or physical
materials, know-how and other trade secrets, in each case that are not in the
public domain, that relate to or are useful to practice the Drug Conjugation
Technology and that have been, or hereafter are, Controlled by SGI. SGI Know-How
shall include Program Inventions assigned to SGI pursuant to Section 14.1.2 to
the extent not disclosed or claimed by an SGI Patent.

1.1.120    “SGI Patents” means:

(a)    any patents and patent applications listed in Schedule A to this
Agreement to the extent that they claim Drug Conjugation Materials or Drug
Conjugation Technology, which shall be amended from time to time to reflect any
other patents and patent applications;

(b)    any patents and patent applications covering Program Inventions that are
assigned to SGI pursuant to Section 14.1.2(b) and SGI’s interest in any Joint
Patents pursuant to Section 14.1.2(c);

(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.

1.1.121    “SGI Product” means a Unilateral Product as to which SGI elects to be
the Continuing Party in accordance with Section 5.10.

1.1.122    “SGI Technology” means the Drug Conjugation Materials, Drug
Conjugation Technology, SGI Patents and the SGI Know-How.

1.1.123    “Sublicensee” means any person or entity that is granted a sublicense
under (a) the SGI Technology by Genmab or its Affiliates or (b) the Genmab
Technology by SGI or its Affiliates in accordance with the terms of this
Agreement.

1.1.124    “Supply Fees” has the meaning set forth in Section 10.1.

1.1.125    “Team Leader” has the meaning set forth in Section 5.1.

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

1.1.127    “Territory” means North America and ROW.

 

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1.1.128    “Tissue Factor” means the antigen having the NCBI Entrez Gene Symbol
of F3 and an amino acid sequence corresponding to NCBI RefSeq accession number
NP-001984, [ * ].

1.1.129    “Third Party” means any person or entity other than Genmab, SGI and
their respective Affiliates.

1.1.130    “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 5.11.

1.1.131    “Unilateral Product” has the meaning set forth in Section 5.10. For
clarity, a Unilateral Product must be within the definition of Licensed Product.

1.1.132    “Valid Patent Claim” means (a) an unexpired claim of an issued patent
(including any extension thereof pursuant to patent term extension or a
supplementary protection certification) which has not been found to be
unpatentable, invalid or unenforceable by an unreversed and unappealable
decision (including a decision that was not appealed within the time allotted
for an appeal) of a court or other authority in the subject country; or (b) a
claim of an application for a patent that has been [ * ].

1.2    Certain Rules of Interpretation in this Agreement and the Schedules

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

1.2.2    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.

1.2.3    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.

1.2.4    The words “include” and “including” have the inclusive meaning of the
phrases “without limitation” and “but not limited to”.

1.2.5    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 either of the jurisdictions of the
Parties to make such payment or do such act.

 

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1.2.6    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 in
the United States of America or Denmark, 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    LICENSES

2.1    Licenses to Genmab

2.1.1    Exclusive Products. Subject to the terms of this Agreement (including
SGI’s Opt-In Right), SGI hereby grants to Genmab an exclusive (even as to SGI),
royalty-bearing license under the SGI Technology, with the right to sublicense
as permitted in Section 2.2, to develop, have developed, make, have made,
import, use, offer for sale, have sold and sell Exclusive Products within the
Field in the Territory. The license for an Exclusive Product shall continue for
the Royalty Term of such Exclusive Product, unless SGI exercises its Opt-In
Right for such Exclusive Product pursuant to Section 3.1 or it is earlier
terminated pursuant to Article 17.

2.1.2    Collaboration Products. Upon the date of an Opt-In Notice and subject
to the terms of this Agreement, SGI hereby grants Genmab a worldwide,
co-exclusive (with SGI), royalty-free license, including the right to sublicense
(as proposed by the JSC and approved by the written consent of the Parties and
in accordance with Section 5.11), under the SGI Technology to (a) perform its
obligations hereunder with respect to each Collaboration Product in accordance
with the relevant Joint Development Plan, and (b) to develop, have developed,
make, have made, import, use, offer for sale, have sold and sell such
Collaboration Product within the Field in the Territory in accordance with the
relevant Commercialization Plan. The license for a Collaboration Product shall
continue, on a country-by-country basis, for so long as there are Development or
Commercialization activities contemplated.

2.1.3    Unilateral Products. As of the Opt-Out Date following an Opt-Out Notice
from SGI and subject to the terms of this Agreement, SGI hereby grants to Genmab
an exclusive (even as to SGI), royalty-bearing license under the SGI Technology,
with the right to sublicense as permitted in Section 2.2, to develop, have
developed, make, have made, import, use, offer for sale, have sold and sell
Genmab Products (i.e., a Unilateral Product for which Genmab is the Continuing
Party) within the Field in the Territory. The license for a Genmab Product shall
continue for the Royalty Term of such Genmab Product, unless it is earlier
terminated pursuant to Article  17.

2.2    Genmab’s Rights to Sublicense

2.2.1    For so long as SGI holds an Opt-In Right for an Exclusive Product,
Genmab may not grant a sublicense of the license for such Exclusive Product
granted to Genmab pursuant to this Agreement to a Third Party without [ * ].

 

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2.2.2    Subject to Section 2.2.1, Genmab shall have the right to grant a
sublicense of the license for an Exclusive Product or Genmab Product granted to
Genmab pursuant to this Agreement to any Affiliate or other Third Party, subject
to the terms and conditions of the BMS Agreement. Genmab shall not have the
right to sublicense the SGI Technology outside the scope of the license granted
in Section 2.1.1 or 2.1.3, including no rights to develop further SGI Technology
on a stand-alone basis or make or use SGI Technology to create antibody-drug
conjugates that include or are based upon any antibodies that bind specifically
to an antigen other than Tissue Factor.

2.2.3    Genmab agrees to contractually obligate any Sublicensee of an Exclusive
Product or a Genmab Product to make all payments due to SGI pursuant to this
Agreement, as well as to comply with all terms of this Agreement applicable to
Genmab (including the BMS Agreement identified as applicable to Sublicensee).
For the sake of clarification, such payments shall be made to Genmab and not
directly to SGI. Genmab shall also require any such Sublicensee to agree in
writing to keep books and records and permit either Genmab or SGI or both to
audit the information concerning such books and records in accordance with the
terms of this Agreement (and in accordance with the terms of the BMS Agreement
as applicable). If one of the Parties conducts such an audit of the books and
records of a Sublicensee without the other Party’s participation, the Party
conducting the audit shall upon the other Party’s request share the results of
such audit. In addition, a sublicense to an Affiliate must provide that it will
automatically terminate if the relevant Sublicensee ceases to be an Affiliate of
Genmab.

2.2.4    For sublicenses permitted hereunder granted for a Genmab Product or an
Exclusive Product, Genmab shall (a) notify SGI of each sublicense granted (both
to Affiliates and Third Parties) hereunder, and (b) provide SGI with the name
and address of each Sublicensee (both Affiliates and Third Parties) and a
description of the rights granted and the territory covered by each Sublicensee.
Genmab hereby notifies SGI, and SGI hereby acknowledges that as of the Effective
Date Genmab has granted sublicenses to its Affiliates, Genmab B.V., the
Netherlands, and Genmab, Inc., New Jersey, USA, for the purposes of this
Agreement and further that Genmab has entered into an agreement with [ * ]
related to the [ * ] of [ * ].

2.3    Compliance with the BMS Agreement

2.3.1    To the extent SGI Technology includes technology sublicensed under the
BMS Agreement, Genmab, its Affiliates and Sublicensees shall comply with all
obligations, covenants and conditions of the BMS Agreement, and any amendments
thereto following written disclosure thereof to Genmab, that apply under the BMS
Agreement. The Parties agree that BMS is a Third Party beneficiary to this
Agreement to the extent SGI Technology includes technology sublicensed under the
BMS Agreement and limited to those rights and obligations of this Agreement
which SGI are obliged to impose on its sublicensees pursuant to the terms of the
BMS Agreement.

2.3.2    SGI will not enter into any amendment to the BMS Agreement that imposes
additional monetary or other obligations on Genmab or materially reduces the
scope of the licenses granted to Genmab hereunder without the prior written
consent of Genmab.

 

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2.4    Licenses to SGI

2.4.1    Development Support for Exclusive Products. Subject to the provisions
of this Agreement, Genmab hereby grants to SGI, during the Program Support Term,
a non-exclusive, royalty-free, sublicenseable license under the Genmab Patents
and Genmab Know-How in the Territory, to enable SGI solely to provide the
support contemplated by Section 4.4.

2.4.2    Collaboration Products. Upon the date of SGI’s Opt-In Notice and
subject to the terms of this Agreement, Genmab shall grant to SGI a worldwide,
co-exclusive (with Genmab), royalty-free license, including the right to
sublicense (as proposed by the JSC and approved by the written consent of the
Parties and in accordance with Section 5.11), under the Genmab Patents and
Genmab Know-How to (a) perform its obligations hereunder with respect to each
Collaboration Product in accordance with the relevant Joint Development Plan,
and (b) to develop, have developed, make, have made, import, use, offer for
sale, have sold and sell such Collaboration Product within the Field in the
Territory in accordance with the relevant Commercialization Plan. The license
for a Collaboration Product shall continue, on a country-by-country basis, for
so long as there are Development or Commercialization activities contemplated.

2.4.3    Unilateral Products. As of the Opt-Out Date following an Opt-Out Notice
from Genmab and subject to the terms of this Agreement, Genmab shall grant to
SGI an exclusive (even as to Genmab), royalty-bearing license under the Genmab
Patents and Genmab Know-How, with the right to sublicense as permitted in
Section 2.5, to develop, have developed, make, have made, import, use, offer for
sale, have sold and sell SGI Products (i.e., a Unilateral Product for which SGI
is the Continuing Party) within the Field in the Territory. The license for an
SGI Product shall continue for the Royalty Term of such SGI Product, unless it
is earlier terminated pursuant to Article 17.

2.5    SGI’s Rights to Sublicense

2.5.1    As of the Opt-Out Date following an Opt-Out Notice from Genmab, SGI
shall have the right to grant a sublicense of the license for an SGI Product
granted to SGI pursuant to this Agreement to any Affiliate or other Third Party,
subject to the terms and conditions of the Genmab In-Licenses listed in
Schedule C, as may be amended from time to time. SGI shall not have the right to
sublicense the Genmab Patents and Genmab Know-How outside the scope of the
license granted in Section 2.4.3.

2.5.2    SGI agrees to contractually obligate any Sublicensee to make all
payments due to Genmab pursuant to this Agreement, as well as to comply with all
terms of this Agreement applicable to SGI (including the Genmab In-Licenses
identified as applicable to Sublicensee), for an SGI Product. For the sake of
clarification, such payments shall be made to SGI and not directly to Genmab.
SGI shall also require any such Sublicensee to agree in writing to keep books
and records and permit either SGI or Genmab or both to audit the information
concerning such books and records in accordance with the terms of this Agreement
(and in accordance with the terms of any Genmab In-License as applicable). If
one of the Parties

 

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conducts such an audit of the books and records of a Sublicensee without the
other Party’s participation, the Party conducting the audit shall upon the other
Party’s request share the results of such audit. In addition, a sublicense to an
Affiliate must provide that it will automatically terminate if the relevant
Sublicensee ceases to be an Affiliate of SGI.

2.5.3    SGI shall for sublicenses permitted hereunder (a) notify Genmab of each
sublicense granted hereunder and (b) provide Genmab with [ * ].

2.6    Compliance with the Genmab In-Licenses

2.6.1    SGI, its Affiliates and Sublicensees shall comply with all obligations,
covenants and conditions of the Genmab In-Licenses listed in Schedule C, as
amended from time to time by Genmab following written disclosure thereof to SGI.
The Parties agree that [ * ] and [ * ] are [ * ] to this [ * ] as the [ * ] are
[ * ] to an [ * ] (as defined in the [ * ]).

2.6.2    Genmab will not enter into any amendment to a Genmab In-License that
imposes additional monetary or other obligations on SGI or materially reduces
the scope of the licenses granted to SGI hereunder without the prior written
consent of SGI.

ARTICLE 3    OPT-IN TO CO-DEVELOPMENT AND CO-COMMERCIALIZATION    

3.1    Opt-In

3.1.1    As soon as reasonably practicable after the database lock of the first
[ * ] of each Exclusive Product, Genmab will begin providing SGI with all
material information necessary or useful in making an Opt-In Decision as further
specified in this Section 3.1

3.1.2    [ * ] shall invite [ * ] to [ * ] meeting to be held within [ * ]. At
this meeting [ * ] will present (a) all relevant [ * ] to be included in the [ *
], (b) a package summarizing the [ * ] conducted on such Exclusive Product
(including providing [ * ] with [ * ] to the [ * ]), (c) a [ * ] and related [ *
] for such Exclusive Product (assuming for the purpose that it is a [ * ]) and a
[ * ] for [ * ] in the [ * ] and [ * ] (i.e., the [ * ]), (d) a written report
on the [ * ] for such [ * ], including the [ * ] with a form and content as
decided by [ * ], but no less detailed than the [ * ] that [ * ] has prepared
for its internal use and (e) information relating to [ * ] within the [ * ] of [
* ] and [ * ] to [ * ], any [ * ] listing [ * ] within the [ * ] of [ * ] and [
* ] to [ * ], and copies of [ * ] to and from the [ * ] for the [ * ]. SGI shall
provide [ * ] with [ * ] stating its preliminary decision as to whether it
wishes to opt-in (“Preliminary Opt-In Notice”) within [ * ] days [ * ] the [ *
], as such deadline may be extended in accordance with this Section 3.1.2. SGI
may identify further information it [ * ] is [ * ] to be provided by Genmab. The
[ * ] shall [ * ] this [ * ] until [ * ] is [ * ], however, in no event should
this [ * ] (including the provision of a [ * ]) extend beyond [ * ] days after
the [ * ] of the [ * ].

3.1.3    If SGI does not provide a Preliminary Opt-In Notice by the deadline
(the extended deadline in Section 3.1.2 shall apply if [ * ] has identified
further information and not yet received such information), Genmab shall then be
entitled to proceed with the development of such Exclusive Product, however, SGI
shall still be entitled to opt-in pursuant to

 

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Section 3.1.5. If SGI subsequently provides an Opt-In Notice with respect to
such Exclusive Product within the timeframe set forth in Section 3.1.5, then the
[ * ] to [ * ] the [ * ] incurred by [ * ] in the [ * ] after the [ * ] of the [
* ] and until the [ * ] as if they had been [ * ]. If SGI provides a Preliminary
Opt-In Notice by the deadline (the extended deadline in Section 3.1.2 shall
apply if SGI has identified further information and not yet received such
information), the Parties shall then proceed with the Development of such
Collaboration Product in accordance with the Joint Development Plan and related
Joint Budget and all parts of this Agreement pertaining to Collaboration
Products shall apply subject to a final [ * ]; provided that [ * ] shall not be
[ * ] to [ * ] for its [ * ] of the [ * ] incurred in the [ * ] in the event
that subsequently it does not provide an [ * ]. If [ * ] after having provided [
* ] does not provide an [ * ] with respect to such [ * ] within the [ * ] set
forth in Section 3.1.5, the [ * ] acknowledge that such a [ * ] shall not be
deemed an [ * ], but that the [ * ] in question shall go back to being [ * ] an
[ * ].

3.1.4    Genmab shall provide SGI with the [ * ], including the [ * ], [ * ], [
* ], [ * ] and [ * ] of [ * ] of the relevant Exclusive Product within [ * ]
days after [ * ]. Simultaneously with [ * ] submission of the [ * ], [ * ] shall
notify SGI of any [ * ] or [ * ] with any [ * ] that relates to the Exclusive
Product (other than a [ * ]) and shall to the extent possible provide [ * ] with
a copy of any such agreement, provided, that, [ * ] may [ * ] from such
agreement(s) any terms that are [ * ], so long as the [ * ], including, without
limitation, [ * ] relating to [ * ] by [ * ], scope of [ * ] and [ * ] terms,
remain [ * ]. [ * ] shall make available suitably [ * ] to answer questions
relating to any of the matters disclosed pursuant to this Section 3.1 prior to
and during the [ * ].

3.1.5    SGI shall have until [ * ] days after receipt of the [ * ] (the “Opt-In
Period”) to determine whether SGI will elect to opt-in (the “Opt-In Right”) to
co-fund the development and commercialization of the Exclusive Product (the
“Opt-In Decision]”).

3.1.6    If SGI exercises its Opt-In Right for an Exclusive Product, SGI shall
provide written notice to Genmab of its Opt-In Decision prior to the expiration
of the Opt-In Period for such Exclusive Product (the “Opt-In Notice”). Effective
as of the date of such Opt-In Notice, (a) the Exclusive Product will be deemed
to be a Collaboration Product, (b) Genmab’s license]for the relevant Exclusive
Product set forth in Section 2.1.1 will terminate and SGI will grant Genmab] a
co-exclusive license with respect to the Collaboration Product on the terms set
forth in Section 2.1.2, (c) Genmab will grant SGI a co-exclusive license with
respect to such Collaboration Product on the terms set forth in Section 2.4.2,
and (d) the Parties will [ * ] all Joint Development Costs, Commercialization
Expenses and Collaboration Product Profit for such Collaboration Product,
subject to the applicable terms of this Agreement and oversight of the JSC.

3.1.7    If [ * ] does not provide [ * ] with an [ * ] with respect to an
Exclusive Product during the relevant [ * ], then [ * ] shall have [ * ] to [ *
] with respect to such Exclusive Product and [ * ] shall [ * ] the [ * ] to [ *
] such Exclusive Product on its own granted pursuant to Section 2.1.1 and shall
be obligated to pay [ * ] the [ * ], [ * ] and [ * ] set forth in Article 10.

 

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3.1.8    [ * ] agrees that the [ * ] disclosed pursuant to Section 3.1 shall be
Confidential Information of [ * ] and to use such information solely for the
purpose of making the [ * ]. SGI shall return all information disclosed pursuant
to Section 3.1 to Genmab (and shall not keep any copies of such information) not
later than [ * ] days after the [ * ] of the [ * ] unless [ * ] exercised its [
* ].

3.2    Joint Steering Committee. The activities of the Parties with respect to
Development and Commercialization of all Collaboration Products shall be
overseen by a JSC as set forth in this Section 3.2.

3.2.1    Establishment of JSC. Promptly, but in no event later than [ * ],
following the Opt-In Notice, the Parties will establish a joint steering
committee (“Joint Steering Committee” or “JSC”), which will have overall
responsibility for overseeing the Development and Commercialization undertaken
pursuant to this Agreement for any and all Collaboration Products during the
Term. The JSC will be composed of [ * ] representatives from each Party. 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 ensure that the
representatives named by such Party for membership on the JSC have the requisite
seniority level and expertise to oversee the activities of the collaboration
during the Term. A chairman of the JSC shall be appointed for a one (1) year
term. The chairmanship of the JSC shall alternate annually between Genmab and
SGI, [ * ].

3.2.2    Responsibilities. The JSC shall perform the following functions:

(a)    Review and approve strategies for the Development of Collaboration
Product(s), and provide direction to the Joint Development Team as provided
herein.

(b)    Review and approve amendments to the Joint Development Plan and Joint
Budget, including in respect of further Development of the Collaboration
Product(s) such as for any new indication or formulation.

(c)    Review and approve the regulatory strategies for each Collaboration
Product in the Territory, including design of the pivotal studies that are
intended to support Regulatory Approval in such territories and ensuring that
such strategies are compatible.

(d)    Review and discuss the goals and strategy for the manufacture of each
Collaboration Product.

(e)    Approve protocols for, and prioritization of, clinical trials and
indications for each Collaboration Product.

(f)    Review and approve the goals and strategy for the Commercialization of
each Collaboration Product, including prepare and approve an initial
Commercialization Plan for each Collaboration Product.

 

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(g)    Oversee the Parties’ activities with respect to Program Genmab Patents,
Joint Patents, Genmab ADC Patents, Genmab ADC Know-How and Collaboration Product
Trademarks.

(h)    Establish subcommittees, as deemed necessary, and oversee such
subcommittees, including the Joint Development Team. For example, the Parties
anticipate that the JSC shall form a joint commercialization team in accordance
with Section 8.4.

(i)    Serve as the first forum for the settlement of disputes or disagreements
that are unresolved by the Joint Development Team and any other subcommittee.

(j)    Establish and implement out-licensing strategies to Third Parties as
applicable.

(k)    Approve the Collaboration Accounting Policies.

(l)    Approve strategy for assigning sponsorship of clinical studies and
related regulatory filings from one Party to the other Party or a Third Party.

(m)    Approve strategy for winding down activities for Dormant Product(s). Any
costs related thereto shall be considered Joint Development Costs and/or
Commercialization Expenses.

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

3.2.3    Meetings. The JSC shall meet [ * ] on such dates and at such times as
agreed to by SGI and Genmab, with all scheduled meetings to alternate between [
* ] and [ * ], or at such other locations as determined by the JSC. If one Party
requests the JSC to convene, then such meeting must be held within [ * ] of such
request. Upon the determination of the JSC, any such meeting may be conducted by
conference telephone or videoconference; provided, however, [ * ]. Meetings
shall be effective only if at least [ * ] representatives of each Party are in
attendance or participating in the meeting. Each Party may permit non-voting
observers to attend meetings of the JSC as the JSC determines. [ * ] shall be
responsible for [ * ] in connection with the meetings of the JSC. The then
current Party in the chair of the JSC shall appoint its Alliance Manager to
attend the meeting and record the minutes of the meeting in writing. Such
minutes shall be circulated to the other Party’s Alliance Manager no later than
[ * ] following the meeting for review, comment and approval of the other Party.
If no comments are received within [ * ] of the receipt of the minutes by a
Party, unless otherwise agreed, they shall be deemed to be approved by such
Party. Furthermore, if the Parties are unable to reach agreement on the minutes
within [ * ] of the applicable meeting, the sections of the minutes which have
been agreed between the Parties by that date shall be deemed approved and, in
addition, each Party shall record in the same document its own version of those
sections of the minutes on which the Parties were not able to agree.

 

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

3.2.5    Authority. It shall be conclusively presumed that each voting member of
the JSC has the authority and approval of such member’s respective senior
management in casting the vote described in Section 3.2.4 on matters as
described in this Article 3. Notwithstanding the creation of the JSC, each Party
to this Agreement shall retain the rights, powers and discretion granted to it
hereunder, and the JSC shall not be delegated or vested with any such rights,
powers or discretion unless such delegation or vesting is expressly provided for
herein. The JSC 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.

3.2.6    Subcommittees. The JSC may, from time to time, establish subcommittees
not already dealt with pursuant to this Agreement. The JSC shall determine the
charter, composition and other provisions relating to any such subcommittee in
its discretion.

3.2.7    Disputes; Final Decision Making Authority. Any disputes or
disagreements arising in the JSC that are unable to be resolved within [ * ]
after the matter is first referred to the JSC shall be referred to the [ * ] of
each Party for the current dispute 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 [ * ] in accordance with
Sections 23.3.1 to 23.3.3.

3.2.8    Dissolution. The JSC shall continue to operate after the end of the
Collaboration Program to the extent needed in order to deal with any of the
issues listed in Section 3.2.2. Following the end of the Collaboration Program,
the JSC shall however not be obliged to convene at the times set forth in
Section 3.2.3, but merely when needed in order to address the issues at hand.
Once the JSC [ * ] that its responsibilities have been exhausted, then the JSC
may dissolve itself.

3.3    Alliance Manager. No later than [ * ] calendar days following the
Effective Date, each Party shall nominate one (1) representative to act as a
central contact for that Party (“Alliance Manager”), to whom any relevant
queries and comments can be addressed by the other Party and who will ensure
that such queries and comments are further directed within his organization
appropriately and promptly to ensure efficient communication and cooperation
between the Parties. Either Party may replace its Alliance Manager at any time
upon written notice to the other Party. In addition to the responsibilities of
the Alliance Manager for Development and Commercialization of Collaboration
Products as described in this Article 3, during the period from the Effective
Date and until the end of the Opt-In Period the Alliance Managers shall
coordinate regular meetings of cross-functional working groups from each Party,
for the purpose of facilitating consultation by SGI on Genmab’s development of
Licensed Products. Each Party shall bear its own costs associated with such
coordination and participation in such regular meetings.

 

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3.4    Exclusivity

3.4.1    Except as expressly set forth in this Agreement, the [ * ] and their
Affiliates shall work [ * ] with each other to develop and commercialize
Exclusive Products (for which the [ * ] has not yet expired) and Collaboration
Products solely in accordance with the terms of this Agreement. Each Party [ * ]
to [ * ] or with Affiliates or Third Parties to [ * ], [ * ], and [ * ] any [ *
] that is not a Competing Product.

3.4.2    Except as expressly set forth in Section 3.4.3, neither Party nor any
of their respective Affiliates shall, [ * ] or [ * ], (a) [ * ], [ * ] or
otherwise [ * ] to any Competing Program or (b) [ * ] any Competing Product.

3.4.3    If either Party wishes, whether directly or indirectly, to (a) [ * ] or
otherwise [ * ] to any Competing Program or (b) [ * ] any Competing Product,
such Party shall notify the other Party in writing [ * ] describing the proposed
Competing Program and/or Competing Product, and the Parties shall consider in
good faith whether or not to [ * ] to [ * ] under which the Parties would [ * ]
on the Competing Program or [ * ] the Competing Product.

3.4.4    In the period either prior to [ * ] first [ * ] or after any relevant [
* ], [ * ] may use [ * ] to [ * ], including [ * ] in studies designed to [ * ],
[ * ], [ * ] or [ * ] an [ * ] with a [ * ] other than [ * ], provided that such
studies are [ * ] in nature. At any other time during the Term, neither Party [
* ] to [ * ] in such studies [ * ] the [ * ] of the other Party, such [ * ] not
to be [ * ]. The Parties agree that any ongoing activities initiated prior to [
* ] may be finalized according to the contemplated plan.

3.4.5    Notwithstanding anything to the contrary in this Agreement, Genmab
shall be [ * ] to [ * ] and [ * ], [ * ] or with a [ * ], a [ * ] (i.e. an [ * ]
to a [ * ]) with specificity against [ * ] for [ * ] purposes. [ * ] shall
ensure that any [ * ] with Third Parties pertaining to the [ * ], [ * ] or [ * ]
of such products contain provisions [ * ] the Parties to use such products to
support the [ * ] and [ * ] of Licensed Products, if appropriate. At any time
during the Term, [ * ] shall be permitted to use a [ * ] (i.e. an [ * ] to a [ *
]) with [ * ] for [ * ]. Following an [ * ] by [ * ] or if [ * ] does not
exercise its [ * ] for the first Exclusive Product, [ * ] shall be permitted to
[ * ], alone or with [ * ], a [ * ] (i.e. [ * ]) with [ * ] for any purpose.
Following an [ * ] by [ * ] or if [ * ] does not exercise its [ * ] for the
first Exclusive Product, [ * ] shall, [ * ] or with a [ * ], be permitted to [ *
] such [ * ] (i.e. an [ * ]) with [ * ] for any purpose after the [ * ]
anniversary of the date of [ * ] in a Major Market Country of an Exclusive
Product or Genmab Product.

ARTICLE 4    DEVELOPMENT, COMMERCIALIZATION AND MANUFACTURING OF EXCLUSIVE
PRODUCTS

4.1    Diligence. Genmab shall use Commercially Reasonable Efforts to develop,
commercialize and market one or more Exclusive Products. Without limiting the
foregoing, Genmab shall, as commercially prudent, (a) conduct [ * ],
(b) diligently obtain any necessary

 

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approvals to market such Licensed Products [ * ], and (c) market such Exclusive
Products [ * ]. Genmab shall comply with all Applicable Laws (including GLPs,
GCPs and GMPs) in the development and commercialization of such Exclusive
Products, and shall cause its Affiliates and Sublicensees to do the same.

4.2    Funding and Progress Reports. Except as expressly set forth herein, as
between SGI and Genmab, Genmab shall be solely responsible for funding all costs
of the research, development and commercialization of all Exclusive Products.
Genmab shall keep SGI informed in a timely manner as to the progress of the
development of each Exclusive Product. Beginning on January 30, 2012, and [ * ]
thereafter within [ * ] days following the end of each [ * ], Genmab shall
provide SGI with a written report summarizing Genmab’s significant activities
performed and planned related to research and development of each Exclusive
Product and status of clinical trials and applications for Regulatory Approval
necessary for marketing the Exclusive Product, including anticipated milestones
under Section 10.5.1. Such reports shall be deemed Genmab’s Confidential
Information for the purposes of Article 13.

4.3    Manufacturing. Except as otherwise expressly set forth in this Agreement,
Genmab shall be responsible for all manufacturing and supply of Exclusive
Products. Notwithstanding the foregoing, SGI shall upon request by Genmab
provide documents or other information that SGI has created or possesses (or
which are in the possession of a potential Third Party manufacturer contracted
by SGI) that is necessary to support Genmab’s (or any of its Affiliates’,
subcontractors’ or Sublicensees’) manufacturing or testing of Drug Conjugation
Materials or Exclusive Products or to support Genmab in establishing and/or
procuring Third Party arrangements for obtaining clinical and/or commercial
supplies of Exclusive Products. Genmab shall [ * ] SGI for [ * ]. In the event
Genmab requests SGI to provide any assistance beyond the limited activities
described above or to supply any materials directly to Genmab, the Parties shall
negotiate in good faith a separate agreement governing the terms of any such
assistance or supply by SGI, including relevant prices and other such terms as
may be appropriate and customary in agreements for providing such assistance or
for supplying similar products at similar volumes.

4.4    SGI Development Support and Regulatory Assistance

4.4.1    General Support and Assistance. During the period from the Effective
Date and until the end of the Opt-In Period, SGI shall use its Reasonable
Commercial Efforts to provide full and timely assistance with the matters set
forth in Schedule D, which are anticipated by the Parties to be the services
needed by Genmab to ensure a timely and value-optimizing process of the
development of the Exclusive Product up and until the expiry of the Opt-In
Period.

4.4.2    Delivery of Drug Conjugation Materials. For a period of [ * ] after the
Effective Date (the “Program Support Term”), SGI will (a) at Genmab’s request
and expense, deliver Drug Conjugation Materials and other relevant information
and SGI Know-How to Genmab or to a subcontractor of Genmab at mutually agreed
upon times and in mutually agreed upon quantities to enable Genmab or its
subcontractor to attach such materials to Antibodies to

 

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create ADCs; and (b) at Genmab’s request, provide Genmab with the chemical
structures for the Drug Conjugation Materials provided to Genmab to enable
Genmab (or any of its Affiliates, subcontractors or Sublicensees) to manufacture
Drug Conjugation Materials itself. In manufacturing and supplying Genmab with
the Drug Conjugation Materials, SGI shall comply with all Applicable Laws of the
jurisdiction in which manufacturing is performed (including GLPs, GCPs and GMPs,
as appropriate) as well as adhere to SGI’s standard technical specifications and
shall cause its Affiliates and subcontractors to do the same in order to ensure
the quality of the materials delivered. All Drug Conjugation Materials and other
information provided by SGI to Genmab hereunder will be deemed Confidential
Information of SGI pursuant to Article 13.

4.4.3    SGI Preparation of ADCs. At the request and expense of Genmab during
the Program Support Term, SGI will prepare mutually agreed upon quantities of
ADCs containing Drug Conjugation Materials using Antibodies supplied by Genmab
to SGI, and shall deliver the resulting ADCs to Genmab.

4.4.4    Payment. Genmab shall pay SGI the amounts set forth in Section 10.1 for
any assistance provided by SGI pursuant to this Section 4.4.

4.4.5    Disclosure of Drug Conjugation Technology. During the Program Support
Term, SGI shall (a) disclose to Genmab such SGI Know-How as is required and is
reasonably useful to enable Genmab to use the Drug Conjugation Materials and
Drug Conjugation Technology to practice the license for an Exclusive Product on
the terms, and subject to the conditions, of this Agreement and (b) upon
Genmab’s reasonable request and with adequate notice to SGI, make available to
Genmab at SGI’s facilities, SGI’s personnel to provide a reasonable amount of
technical assistance and training to Genmab’s personnel. Genmab shall [ * ] to
SGI for [ * ].

4.4.6    SGI Regulatory and other Assistance. Genmab shall be solely responsible
for, and shall solely own, all applications for Regulatory Approval with respect
to each Exclusive Product. Should Genmab desire to file an IND or an application
for Regulatory Approval, or equivalents of the foregoing, for an Exclusive
Product, SGI agrees to provide at Genmab’s request, any and all technical
information SGI has created or possesses that is reasonably required by Genmab,
including information relating to the chemical structure of the cytotoxic
compound, linker and chemistry used to create the Exclusive Product, as well as
documents related specifically to Drug Conjugation Technology that are necessary
to compile the Chemistry Manufacturing and Controls section of an application
for Regulatory Approval and any other relevant information SGI has created or
possesses as the Parties may mutually agree. If SGI has a Drug Master File (DMF)
with the FDA or equivalent that contains information useful to support an IND or
application for Regulatory Approval, SGI shall so notify Genmab and allow Genmab
the right of reference to the contents of such DMF. SGI shall have no obligation
to provide any information contained in the DMF and may require the applicable
Regulatory Authority to maintain such information as confidential. Prior to
Genmab’s Initiation of the [ * ], SGI agrees to share with Genmab useful
preclinical, clinical, CMC and regulatory experience and intelligence, that SGI
is at liberty to share. The sharing of such information can

 

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be by exchange of documents and/or through telephone or personal meetings.
Genmab shall [ * ] SGI for [ * ]. In the event SGI agrees to provide regulatory
assistance beyond the limited activities described above, the Parties shall
negotiate in good faith a separate agreement governing the terms of any such
regulatory assistance by SGI, including terms as may be appropriate and
customary in agreements for similar types of regulatory assistance.

4.5    Adverse Events. Notwithstanding that Genmab shall be solely responsible
for the clinical development and commercialization of each Exclusive Product,
Section 7.5 shall apply to the reporting of Adverse Events and Serious Adverse
Events relating to Exclusive Products.

ARTICLE 5    CO-DEVELOPMENT OF COLLABORATION PRODUCTS

5.1    Establishment of Joint Development Team. As soon as practicable, but in
no event later than [ * ] days, after the Opt-In Notice the Parties shall
establish a joint development team (“Joint Development Team” or “JDT”), to
coordinate and implement all activities in the Joint Development Plan within the
Joint Budget. One representative from each Party shall be designated as that
Party’s team leader (the “Team Leader”) to act as primary JDT contact for that
Party. The JDT shall consist of [ * ] representatives of each Party as are
reasonably necessary to accomplish the goals of the JDT hereunder and each such
representative may send a designate in his or her place as appropriate for a
particular meeting. Either Party may replace any or all of its representatives
at any time upon written notice to the other Party.

5.1.1    Responsibilities of the Joint Development Team. The JDT shall be
responsible for:

(a)    Preparing for approval by the JSC and thereafter implementing the annual
updates to the Joint Development Plan and Joint Budget.

(b)    Developing an overall strategy for the Development of the Collaboration
Product(s) for review and approval by the JSC.

(c)    Formulating any amendments to the Joint Development Plan (including
allocation of Development activities between the Parties) and the Joint Budget
for review and approval by the JSC.

(d)    Making recommendations to the JSC for further Development of the
Collaboration Product(s), including Development for new indications that are not
in the then current Joint Development Plan.

(e)    Making forecasts of clinical supplies requirements for Development of the
Collaboration Product and reviewing the supply of Collaboration Product.

(f)    Developing a strategy for approval by the JSC for assignment of
sponsorship of clinical studies and related regulatory filings from one Party to
the other Party or to a Third Party following an Opt-In Notice, Opt-Out Notice
or otherwise in each country

 

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where clinical studies may be planned. Such strategy to include a policies and
guidelines designed to enable an assignment, including in terms of agreements
(such as but not limited to agreements with clinical research organizations,
clinical trial agreements, pharmacy agreements), insurance and regulatory
documents, prior to initiation of such clinical studies. In addition, developing
a similar strategy for approval by the JSC for winding down activities for
Dormant Products.

(g)    Exchanging information regarding the conduct of ongoing Clinical Trials
and the Development of the Collaboration Product(s) and the exercise and meeting
of the Parties´ respective rights and obligations under the Joint Development
Plan and this Agreement.

(h)    Providing status updates to the JSC regarding Development activities.

(i)    Overseeing and monitoring the selection of any contract manufacturers and
negotiation of agreements with same.

(j)    Functioning as a forum under which SGI and Genmab would exchange
information to enable the Parties to manage the day-to-day aspects of the
manufacturing and supply chain for the Collaboration Product, defending
pre-approval inspections and establishing production capability at either
contract manufacturers´ or the Parties’ sites.

(k)    Discussing and facilitating technology transfer to establish process at
contract manufacturers´ sites, if necessary.

(l)    Discussing and facilitating pre-approval inspection readiness of the
manufacturing sites and ensuring adequate support of the inspections.

(m)    Discussing process improvements and the associated CMC regulatory
strategy including new formulations and process optimization.

(n)    Liaising with the JSC regarding manufacturing.

(o)    Performing such other functions as appropriate to further the purposes of
this Agreement as determined by the Parties.

The JDT may designate sub-teams as appropriate to facilitate coordination and
cooperation in key areas.

5.1.2    Procedures. For a one-year period beginning on the Opt-In Date, the
Team Leader of [ * ] shall serve as the chairperson of the JDT. For each
subsequent one-year period, the Team Leaders shall alternate as the chairperson
of the JDT. The Parties shall meet not less than [ * ] on such dates and at such
times as agreed to by the members of the JDT. The agenda for all JDT meetings
must be established by mutual consent and the Party in the then

 

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current chair shall send notice of such meetings, including the agenda
therefore, to all JDT members; provided, however, that either Party may request
that specific items be included in the agenda and may request that additional
meetings be scheduled as needed. Meetings may be held telephonically or by video
conference, [ * ]. [ * ] will [ * ] associated with holding and attending JDT
meetings. A quorum of at least half the JDT members appointed by each Party
shall be present at or shall otherwise participate in each JDT meeting. The
Party hosting the meeting (or arranging the conference or video call) shall
appoint one (1) person (who need not be a member of the JDT) to record the
minutes of the meeting in writing. Such minutes shall be circulated to the
Parties promptly following the meeting for review, comment and approval. If no
comments are received within [ * ] of the receipt of the minutes by a Party,
unless otherwise agreed, they shall be deemed to be approved by such Party. If
the Parties are unable to reach agreement on the minutes within [ * ] of the
applicable meeting, the sections of the minutes which have been agreed between
the Parties by that date shall be deemed approved and, in addition, each Party
shall record in the same document its own version of those sections of the
minutes on which the Parties were not able to agree.

5.1.3    The JDT will [ * ], with [ * ]. In the event that the JDT members do
not [ * ] with respect to a [ * ] that is [ * ] of the JDT as [ * ], but not [ *
] after they have met and [ * ], such matter shall be referred to the JSC for
resolution.

5.1.4    The JDT will cease operations and have no further function hereunder on
the date on which the Parties are no longer jointly Developing any Collaboration
Product.

5.2    Annual Updates to the Joint Development Plan. On [ * ], or more
frequently as necessary and agreed by the Parties, commencing no later than [ *
] after the date of an Opt-In Notice for an Exclusive Product (thereafter, a
Collaboration Product), and in the subsequent calendar years not later than [ *
] (in order for the Parties to prepare their respective budgets for the coming [
* ]), the JDT shall review the Joint Development Plan and the related Joint
Budget in order to make annual updates to the Joint Development Plan and Joint
Budget for the then current calendar year, if any, plus the following [ * ] both
to be approved by the JSC. In the event that the JDT cannot agree on an annual
update to the Joint Development Plan and Joint Budget, or the JSC does not
approve an amendment as proposed by the JDT, then the most recent version of the
Joint Development Plan and Joint Budget will be deemed the Joint Development
Plan and Joint Budget for the period, until the Parties are able to reach an
agreement on any update to the Joint Development Plan and Joint Budget.

5.2.1    Content of Joint Development Plan. Each update of the Joint Development
Plan for each Collaboration Product shall contain the specific Development
objectives to be achieved during the first applicable calendar year and a less
detailed description of objectives to be achieved in the second applicable
calendar year, the specific activities to be performed by each of the Parties in
connection with the Development of the Collaboration Product, the timelines for
performing such activities and a detailed budget for performing such activities
scheduled for the first applicable calendar year and a less detailed (i.e.,
“directional”) budget for performing such activities scheduled for the second
applicable calendar year. Each Joint Development Plan for each Collaboration
Product 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 a Collaboration Product shall be governed by
Article 7.

 

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5.3    Development Activities. Each Party shall use Commercially Reasonable
Efforts to perform its obligations with respect to the Development of each
Collaboration Product in accordance with the latest Joint Development Plan and
Joint Budget 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 latest Joint Development Plan. Neither SGI nor
Genmab 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.

5.4    Joint Development Costs

5.4.1    Unless otherwise provided in this Agreement, the Parties will share
equally all Joint Development Costs for all Collaboration Products (which have
been set forth in the Joint Development Plan and Joint Budget) with respect to
the Development activities hereunder in accordance with the provisions of
Article 11. The JDT shall review on a quarterly basis the Joint Development
Costs against the Joint Budget for such expenses in the applicable calendar
year. If in the course of such quarterly review the JDT determines that the
actual amounts incurred for Joint Development Costs are likely to be higher than
budgeted, the JDT shall refer such estimated overrun to the JSC for review and
approval and the JSC shall then review the reasons for such potential overrun
and determine whether such overrun is appropriate. The JSC may, if appropriate,
amend the Joint Development Plan for a Collaboration Product to permit such
overrun or to reduce such activities such that no overrun is expected. If any
costs for the Development activities result in a budget overrun of the
applicable and approved annual Joint Budget in excess of [ * ], the JSC shall
have the discretion to review such costs and designate them as Joint Development
Costs. Where the JSC does not so designate excess Joint Development Costs, any
such unapproved excess Joint Development Costs shall be borne by the Party
incurring them. However, if the budget overrun is due to a delay or an advance
in timing as to the planned activities, which activities are in accordance with
the Joint Development Plan, then such excess Joint Development Costs shall be
shared equally by the Parties regardless of which Party has incurred such costs.

5.4.2    The Parties agree that the mutual annual rate per FTE of either Party
who performs development, consultation or support work for Collaboration
Products as set forth in the then current Joint Development Plan and to be used
when calculating the Joint Development Costs is [ * ]. Commencing upon the first
(1st) anniversary of the Effective Date and upon every anniversary thereafter,
the fee will be adjusted in accordance with the [ * ].

5.5    Financial Representatives

5.5.1    Promptly, but in no event later than [ * ] days following the Opt-In
Notice, each Party will appoint a representative (a “Financial Representative”)
with expertise in the areas of accounting, cost allocation, budgeting and
financial reporting. Such Financial

 

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Representatives shall work under the direction of the JSC and provide services
to and consult with the JDT, in order to address the financial, budgetary and
accounting issues which arise in connection with the Joint Development Plan.

5.5.2    Each Financial Representative may be replaced at any time by the
represented Party by providing written notice thereof to the other Party. The
Financial Representatives will meet at least [ * ] or as they or the JSC may
agree. The Financial Representatives shall agree upon the timing and agenda for
all regular meetings. The location of regularly scheduled meetings shall
alternate between the offices of the Parties, unless otherwise agreed. The first
meeting shall be held at [ * ] offices. Meetings may be held telephonically or
by video conference. One of the Financial Representatives shall record (or cause
to have recorded) the minutes of the meeting in writing. Such minutes shall be
circulated to the other Financial Representative promptly following the meeting
for review, comment and approval. If no comments are received within [ * ] days
of the minutes’ receipt by the other Financial Representative, unless otherwise
agreed, they shall be deemed to be approved by such Financial Representative.
Following their approval, the minutes shall be provided to each Party’s Team
Leader.

5.5.3    Collaboration Accounting Policies. Promptly, but in no event later than
[ * ] after the appointment of the Financial Representatives, the Financial
Representative shall prepare the Collaboration Accounting Policies based on the
principles as outlined in this Agreement for approval by the JSC. Any subsequent
changes or deviations to the Collaboration Accounting Policies must be approved
by the JSC.

5.6    Development Records. All work conducted by either Party in connection
with the Development of a Collaboration Product under this Article 5 shall be
completely and accurately recorded in sufficient detail and in good scientific
manner. 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
jointly owned by the Parties.

5.7    Audit

5.7.1    Joint Development Cost Records. For so long as any Development
activities are conducted hereunder and for a period of [ * ] years thereafter,
each Party shall keep and maintain, and shall require its Affiliates to keep and
maintain, accurate and complete cost records of activities performed by each
such Party (including Joint Development Costs incurred and FTEs utilized) in
connection with its Development activities hereunder. Not more than once per
calendar year, each Party shall have the right to engage an independent
certified public accounting firm of internationally 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.

 

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5.7.2    Procedure. Such examination shall be conducted, and each Party shall
make its records available, during normal business hours, after at least [ * ]
days 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 [ * ] months prior to the date of
request; provided, that, no Party shall be permitted to audit the same period of
time [ * ]. 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 Genmab with a written report stating whether the reports submitted
by SGI or Genmab, 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 13.

5.7.3    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 Joint Development Plan, as
applicable, are lower than that reported by such Party by [ * ] percent ([ * ]%)
or more, in which case the other Party shall reimburse the initiating Party for
all costs incurred by the initiating Party in connection with such audit up to a
maximum amount of $[ * ]. Furthermore, the amount in excess of the actual
expenses shall be deducted from the Joint Development Costs reported by that
Party and reconciled between the Parties.

5.8    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.

5.9    Use of Approved Subcontractors. Either Party may perform some or all of
its obligations under the Joint Development Plan for a Collaboration Product
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 Joint Development Plan for a Collaboration
Product 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.

 

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5.10    Right to Opt-Out of Co-Development and Co-Commercialization

5.10.1    Either Party shall have the right to terminate its co-funding
obligation (the “Non-Continuing Party”) for one or more Collaboration Products
by providing irrevocable, written notice to the other Party (the “Continuing
Party”) of such election to terminate (the “Opt-Out Notice”). The effective date
of such notice (the “Opt-Out Date”) shall be the date [ * ] days after the date
of the Opt-Out Notice.

5.10.2    Within [ * ] days after receipt of an Opt-Out Notice for a
Collaboration Product, 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.

5.10.3    If the Continuing Party elects to assume sole responsibility for, and
all costs and obligations of, the continued development and commercialization of
the Collaboration Product, upon the election to continue: (a) such Collaboration
Product will be deemed a “Unilateral Product”; (b) the Non-Continuing Party’s
license for the relevant Collaboration Product set forth in Section 2.1.2 or
2.4.2 will terminate and the Non-Continuing Party will grant the Continuing
Party an exclusive license with respect to the Unilateral Product on the terms
set forth in Section 2.1.3 or 2.4.3; (c) the Non-Continuing Party will not have
any rights pursuant to Article 11, but instead will receive prospective
milestone payments for events that occur after the effective date of such
termination and royalties on Net Sales of such Unilateral Product pursuant to
Article 10, and (d) promptly after the Continuing Party’s election, the Parties
will work together to transfer and assign all regulatory documents, contracts,
materials and information that related to such former Collaboration 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 will not be
refunded or repaid any amounts it has paid for the Development of such former
Collaboration Product. In addition, the Non-Continuing Party will remain
responsible for its share of Joint Development Costs, as provided in
Section 5.4, incurred with respect to such former Collaboration Product through
[ * ] following the date of the Opt-Out Notice, to the extent such Joint
Development Costs were incurred pursuant to the Joint Development Plan and Joint
Budget and/or Commercialization Plan approved by the JSC prior to the date of
the Opt-Out Notice (even if the relevant activities were included in the less
detailed portion of such Joint Development Plan and Joint Budget addressing the
second applicable year) with respect to activities that were continuing as of
the date of the Opt-Out Notice. For [ * ] after the date of the Opt-Out Notice,
the Non-Continuing Party shall provide development, consultation or support work
for a Unilateral Product of the Continuing Party, as reasonably requested by the
Continuing Party, and the Continuing Party shall pay for such work at the [ * ]
as in force between the Parties at the Opt-Out Date.

5.10.4    If the Continuing Party does not elect to assume sole responsibility
for, subject to Section 5.10.3, all costs and obligations of, the continued
Development and Commercialization of the Collaboration Product with regards to
Development activities that are not ongoing as of the Opt-Out Date, the
provisions of Section 5.11 shall apply.

 

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5.11    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. All [ * ] received by the Parties [ * ]
shall be [ * ], provided that [ * ]. 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 [ * ] after the date
of the Opt-Out Notice, then such Collaboration Product will be referred to as a
“Dormant Product” and (a) notwithstanding anything to the contrary in
Section 17.9.3 neither Party will have any right to use, manufacture, develop,
sell, have sold or otherwise exploit for any purpose such Dormant Product and
(b) all rights granted by the Parties to each other with respect to such Dormant
Product shall revert to the granting Party except as set forth in
Section 17.9.3.

ARTICLE 6    MANUFACTURE AND SUPPLY OF COLLABORATION PRODUCTS

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

6.2    Supply Agreements

6.2.1    SGI or Genmab as Supplier. In the case where either SGI or Genmab
agrees to be responsible for manufacturing a Collaboration Product (or any
component thereof), the Parties shall enter into a supply agreement on customary
and reasonable terms and conditions. Each such supply agreement shall provide,
among other things, for a [ * ] for such Collaboration Product (or any component
thereof) at a rate to be agreed upon by the Parties in such supply agreement, [
* ].

6.2.2    Unilateral Products; Supply Cooperation. To the extent a Party
manufactured a Collaboration Product (thereafter a Unilateral Product) or any
component thereof prior to such Party’s Opt-Out Date, such Party shall, at the
request of the Continuing Party, continue to manufacture reasonable quantities
of such Unilateral Product or component(s) thereof for a period not to exceed [
* ] from the date of the Opt-Out Notice, and shall cooperate with the Continuing
Party to effectuate the smooth transition of such manufacture to the Continuing
Party or to a Third Party selected by the Continuing Party. The provisions of
this Section 6.2.2 are contingent on the Continuing Party paying the
Non-Continuing Party for such manufacture at the rate to be agreed between the
Parties in a separate supply agreement, which agreement shall also include other
customary and reasonable terms.

 

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6.2.3    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), the Parties shall enter into a supply agreement with
such Third Party on customary and reasonable terms and conditions. Each such
supply agreement shall provide, among other things, for [ * ]. The JSC shall
determine the strategy, timing and other matters relating to finding such Third
Party and entering into the supply 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 supply agreement 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 with [ * ].

ARTICLE 7    REGULATORY MATTERS FOR COLLABORATION PRODUCTS

7.1    General

7.1.1    The JSC shall be responsible for the overall regulatory strategy and
for overseeing, monitoring and coordinating the actions of the Lead Regulatory
Parties, in particular the design of any pivotal clinical trial intended to
support Regulatory Approval in both the United States and the major European
countries ([ * ]) shall be agreed by the JSC. [ * ] shall be [ * ] and [ * ]
shall be the [ * ]. Unless otherwise agreed by the JSC, a Lead Regulatory Party
shall be responsible for all regulatory actions, communications and filings and
submissions to, all applicable Regulatory Authorities with respect to a given
Collaboration Product in its respective territory. The Parties agree that if a
clinical trial is necessary for one market only (i.e., a confirmatory study),
then the Lead Regulatory Party with such market in its territory shall be
responsible for such clinical trial.

7.1.2    Unless otherwise agreed by the JSC, the Lead Regulatory Party for a
territory shall be named “Sponsor” of the regulatory filing as per 21 CFR 312.3
(Part B) and/or 21 CFR 312.50 or similar rules and regulations with respect to
such Collaboration Product in its respective territory. The Parties will work
together to transfer and assign all regulatory documents, contracts, materials
and Information that relates to a Collaboration Product to the Lead Regulatory
Party for a territory or its designees to the extent necessary for the Lead
Regulatory Party for a territory to assume such role.

7.2    [ * ] of Regulatory Approvals. Unless otherwise proposed by the JSC and
agreed to by the Parties, [ * ] shall [ * ] all INDs, BLAs and other Regulatory
Approvals for a Collaboration Product [ * ]. 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. Genmab may reference such section, but shall have no right, and SGI
shall have no obligation, to provide any information contained in such DMF to
Genmab and may require the applicable Regulatory Authority to maintain such
information as confidential.

 

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7.3    Regulatory Coordination

7.3.1    Responsibilities of Lead Regulatory Party. Subject to oversight by the
JSC, the Lead Regulatory Party shall oversee, monitor and coordinate all
regulatory actions, communications and filings with, and submissions to, all
applicable Regulatory Authorities in its territory with respect to a
Collaboration Product. The Lead Regulatory Party shall also be responsible for
interfacing, corresponding and meeting with the applicable Regulatory
Authorities in its territory with respect to a Collaboration Product. The Lead
Regulatory Party will use its Commercially Reasonable Efforts to include [ * ]
representatives of the other Party in all meetings and material telephone
discussions between representatives of the Lead Regulatory Party and such
Regulatory Authority related to a Collaboration Product.

7.3.2    Review of Correspondence. The Lead Regulatory Party shall provide the
other Party with drafts of any material documents and other material
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.

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 reasonably necessary to enable such Party to comply with any
regulatory requirements under Applicable Law with respect to each Collaboration
Product, including (a) obtaining and maintaining Regulatory Approvals,
(b) submitting annual reports, (c) performing pharmacovigilance activities and
(d) sharing any relevant regulatory intelligence. 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 the Collaboration Product,
(ii) indicates or suggests a potential material liability for either Party to
Third Parties arising in connection with the Collaboration Product or (iii) is
reasonably likely to lead to a recall or market withdrawal of the Collaboration
Product.

7.5    Adverse Events relating to Licensed Products

7.5.1    Reporting to Government Authorities. Each Party shall, and shall cause
its respective Affiliates to, furnish timely notice as required by Applicable
Law (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 Adverse
Events identified or suspected with respect to any Licensed Product
administered, distributed, marketed and sold under authority of any IND or
Regulatory Approval. Each Party shall provide the other Party with all necessary
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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 Serious Adverse Events relating to any
Licensed 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 Licensed 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 Serious
Adverse Events regarding any Licensed Product reported to such Party or its
Affiliates. Each Party shall also use its [ * ] to obtain, and to furnish to the
other Party hereto, such information reasonably sufficient to permit that other
Party to evaluate such Serious Adverse Events of the Licensed Product,
including, but not limited to, information about the affected patients, the
circumstances surrounding the Serious Adverse Events, the consequences thereof
and the sources of information. Each Party shall retain all documents, reports,
studies and other materials relating to any and all such 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 regarding
patient confidentiality, data protection and privacy.

7.5.3    Pharmacovigilance Agreement. Without limiting the generality of the
foregoing, within [ * ] after the Opt-In Notice the Parties shall enter into a
pharmacovigilance agreement detailing each Party’s pharmacovigilance
responsibilities in connection with the Collaboration Product. The first draft
of this pharmacovigilance agreement will be provided by Genmab.

ARTICLE 8    COMMERCIALIZATION OF COLLABORATION PRODUCTS

8.1    Objectives for Commercialization of Collaboration Products. The Parties
shall collaborate in Commercializing each Collaboration Product in accordance
with the relevant Commercialization Plan with the objective of achieving the
commercial potential of the Collaboration Product and sharing equally in (a) all
Joint Development Costs and Commercialization Expenses and (b)  any
Collaboration Product Profit.

8.2    Lead Commercialization Parties. Genmab shall be the Lead
Commercialization Party for the ROW and SGI shall be the Lead Commercialization
Party for North America.

8.3    Preparation of Commercialization Plan. Promptly, but in no event later
than [ * ] after the [ * ] of the first [ * ] with respect to each Collaboration
Product, the JSC shall prepare and approve an initial Commercialization Plan for
such Collaboration Product for the balance of the then current calendar year
plus the following [ * ].

8.4    Commercialization Team and Commercialization Agreement. The JSC shall, at
an appropriate (in the JSC’s discretion) time following an Opt-In Decision but
no later than [ * ] after [ * ] of the [ * ] with respect to a Collaboration
Product, establish a joint commercialization team to be responsible for the
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Collaboration Product. In addition, the Parties shall negotiate in good faith
and enter into a separate global commercialization agreement, at least, [ * ]
prior to the anticipated commercial launch of the Collaboration Product anywhere
in the Territory, which shall be consistent with the applicable provisions of
this Agreement, reflect any mechanism or structure agreed upon by the JSC
pursuant to Section 11.4 and shall include customary provisions relating to
joint commercialization, including, among others, the following matters:
amendment to and updates of the Commercialization Plan, report and audit rights,
promotional materials, recalls and medical inquiries, commercialization
expenses, labeling, public statements and other information concerning the
Collaboration Product, liability, indemnification, use of subcontractors and the
responsibilities and powers of the joint commercialization team.

8.5    Co-Promotion Agreement. Notwithstanding the existence of a Lead
Commercialization Party for a territory and in addition to the commercialization
agreement described in Section 8.4, the Parties may utilize sales
representatives employed by both of the Parties to co-promote Collaboration
Products in a territory pursuant to a co-promotion agreement the terms of which
shall be consistent with the applicable provisions of this Agreement and shall
include customary provisions relating to co-promotion, including, among others,
performance metrics, sales force compensation strategies, division of the
applicable territory between the Parties’ respective sales forces, sales force
training and compliance with Applicable Laws. In any event, the Lead
Commercialization Party in a territory shall be entitled to employ, at least, [
* ] of such co-promotion force in such territory. The Parties shall determine
whether they wish to co-promote in a particular territory and negotiate and
enter into a co-promotion agreement for such territory, at least, [ * ] prior to
the anticipated commercial launch of the Collaboration Product in such
territory.

8.6    Commercialization Activities. Each Party shall use Commercially
Reasonable Efforts to perform its obligations with respect to the
Commercialization of each Collaboration Product in accordance with the
applicable Commercialization Plan, commercialization agreement and, if any,
co-promotion agreement, and all such activities shall be conducted in accordance
with all Applicable Laws, including GxPs. As part of such efforts, each Party
shall commit the personnel and other resources necessary to carry out its
obligations under the Commercialization Plan. 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.

ARTICLE 9    DEVELOPMENT, COMMERCIALIZATION AND MANUFACTURING OF UNILATERAL
PRODUCTS

9.1    Diligence. The Continuing Party (assuming an election to continue with
sole development and commercialization) shall use Commercially Reasonable
Efforts to develop, manufacture and commercialize Unilateral Products. Genmab
shall have sole responsibility for making all decisions regarding the
development, manufacture and marketing of Genmab Products and SGI shall have
sole responsibility for making all decisions regarding the development,
manufacture and marketing of SGI Products.

 

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9.2    Conduct. The Continuing Party (assuming an election to continue with sole
development and commercialization) shall comply with all Applicable Laws
(including GxPs to the extent applicable) in the development and
commercialization of Unilateral Products, and shall cause its Affiliates and
Sublicensees to do the same.

9.3    Funding and Progress Reports. Except as expressly set forth herein, as
between SGI and Genmab, Genmab shall be solely responsible for funding all costs
of the development and commercialization of Genmab 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 and no later then [ * ] in the subsequent calendar year as to
the progress of the development of Unilateral Products in the previous calendar
year.

9.4    Manufacturing. Except as otherwise expressly set forth in this Agreement,
Genmab shall be responsible for all manufacturing and supply of Genmab Products
and SGI shall be responsible for all manufacturing and supply of SGI Products.

9.5    Regulatory

9.5.1    Genmab shall be solely responsible for, and shall solely own, all
applications for Regulatory Approval with respect to Genmab 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 5.10 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.

9.5.2    Should the Continuing Party desire to file an IND or an application for
Regulatory Approval, or equivalents of the foregoing, for a Genmab Product or
SGI Product (as the case may be), the Non-Continuing Party will provide
regulatory assistance as described in Section 4.4, mutatis, mutandis.

ARTICLE 10     FEES, MILESTONES AND ROYALTIES FOR EXCLUSIVE PRODUCTS AND
UNILATERAL PRODUCTS

10.1     FTE Fees for Exclusive Products. Genmab shall pay SGI at an annual rate
of [ * ] per FTE who performs development, consultation or support work for
Exclusive Products as requested by Genmab pursuant to this Agreement (the “FTE
Fees”). Commencing upon the first (1st) anniversary of the Effective Date and
upon every anniversary thereafter, the FTE Fees will be adjusted in accordance
with the [ * ]. Genmab shall also pay SGI for all Drug Conjugation Materials
supplied by SGI to Genmab hereunder for Exclusive Products at the rates set
forth in Schedule B, which rates may not be increased during the Program Support
Term (the “Supply Fees”). The FTE Fees and the Supply Fees are collectively
referred to herein as the “Development Support Fees”. Within [ * ] after the end
of each Calendar Quarter, SGI shall submit a report to Genmab supporting the
calculation of the Development Support Fees due for such Calendar Quarter (a
“Development Support Fees Report”). Genmab shall pay all Development Support
Fees to SGI within [ * ] of receipt of each Development Support Fees Report.

 

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10.2    Annual Maintenance Fee. Commencing upon the [ * ] of the Effective Date
following the expiration of the Opt-In Period without exercise of SGI’s Opt-In
Right for the first Exclusive Product and upon every [ * ] thereafter until
Genmab receives the [ * ] for an Exclusive Product in the Territory, Genmab
shall pay, within [ * ] days after having [ * ] an [ * ], an annual maintenance
fee to SGI in the sum of [ * ] by [ * ] of immediately [ * ] (the “Annual
Maintenance Fee”). Notwithstanding the foregoing, the Annual Maintenance Fee
will be [ * ] by the [ * ] of any [ * ] by [ * ] under [ * ] of this Agreement
during the [ * ] period preceding the date on which the Annual Maintenance Fee
is due. Annual Maintenance Fees shall not be [ * ] or [ * ] except as set forth
in this Section 10.2.

10.3    Royalties

10.3.1    Royalties Payable on Net Sales of Exclusive Products with Patent
Protection. In partial consideration for the license for Exclusive Products
granted to Genmab herein, during the Royalty Term and subject to Section 10.4,
Genmab shall pay to SGI royalties on the aggregate Net Sales of all Exclusive
Products the manufacture, use, sale, offer for sale or import of which would,
but for the licenses granted hereunder, infringe a Valid Patent Claim described
in Section 1.1.115(a)(ii) on a country-by-country basis. Such royalties shall be
paid at the following rates as set forth below:

[ * ]

10.3.2    Royalties Payable on Net Sales of Exclusive Products without Patent
Protection. In partial consideration for the license for Exclusive Products
granted to Genmab herein, during the Royalty Term and subject to Section 10.4,
Genmab shall pay to SGI royalties on the aggregate Net Sales of all Exclusive
Products the manufacture, use, sale, offer for sale or import of which would not
infringe a Valid Patent Claim described in Section 1.1.115(a)(ii) on a
country-by-country basis. For the avoidance of doubt such royalties shall only
be paid for the [ * ] period or for the remainder of the [ * ] period as
prescribed in Section 1.1.115(a)(i). Such royalties shall be paid at the
following rates as set forth below:

[ * ]

10.3.3    Royalties Payable on Net Sales of Unilateral Products with Patent
Protection. In partial consideration for the license for Unilateral Products
granted to the Continuing Party herein, during the Royalty Term and subject to
Section 10.4, the Continuing Party shall pay to the Non-Continuing Party
royalties on aggregate Net Sales of Unilateral Products the manufacture, use,
sale, offer for sale or import of which would (i) but for Genmab’s ownership
interest or for the licenses granted hereunder, infringe a Valid Patent Claim
described in Section 1.1.115(b)(ii) with respect to a Genmab Product on a
country-by-country basis or (ii) but for the assignment of the Genmab ADC
Patents hereunder or the licenses granted hereunder infringe a Valid Patent
Claim described in Section 1.1.115(c)(ii) with respect to a SGI Product on a
country-by-country basis. Such royalties shall be paid at the following rates as
set forth below:

(a)    If the Opt-Out Date is prior to or on the date of [ * ] of the [ * ] of
the Unilateral Product, [ * ] percent ([ * ]%); and

 

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(b)    If the Opt-Out Date is after the date of [ * ] of the [ * ] of the
Unilateral Product, [ * ] percent ([ * ]%).

10.3.4    Royalties Payable on Net Sales of Unilateral Products without Patent
Protection. In partial consideration for the license for Unilateral Products
granted to the Continuing Party herein, during the Royalty Term and subject to
Section 10.4, the Continuing Party shall pay to the Non-Continuing Party
royalties on the aggregate Net Sales of all Unilateral Products the manufacture,
use, sale, offer for sale or import of which would not infringe a Valid Patent
Claim described in Section 1.1.115(b)(ii) with respect to a Genmab Product on a
country-by country-basis or Section 1.1.115(c)(ii) with respect to a SGI Product
on a country-by-country basis. For the avoidance of doubt such royalties shall
only be paid for the [ * ] year period or for the remainder of the [ * ] year
period as prescribed in Section 1.1.115(b)(i) or Section 1.1.115(c)(i), as
applicable. Such royalties shall be paid at the following rates as set forth
below:

(a)    If the Opt-Out Date is prior to or on the date of [ * ] of the [ * ] of
the Unilateral Product, [ * ] percent ([ * ]%); and

(b)    If the Opt-Out Date is after the date of [ * ] of the [ * ] of the
Unilateral Product, [ * ] percent ([ * ]%).

10.3.5    No Cumulative Royalties; Aggregation and Allocation of Net Sales for
Determining Royalty Rate Breakpoints.

(a)    In no event shall royalties under more than one of Section 10.3.1 or
10.3.2 (for Exclusive Products) or Section 10.3.3 or 10.3.4 (for Unilateral
Products) be payable for the same Licensed Product in a country; however, the [
* ] of the applicable [ * ] shall be [ * ] but, for clarity such royalty rates
shall not be cumulative.

(b)    All Net Sales in the Territory whether covered by Section 10.3.1 or
10.3.2 (for Exclusive Products) or Section 10.3.3 or 10.3.4 (for Unilateral
Products) shall be aggregated for purposes of determining which royalty rate set
forth in Section 10.3.1 (for Exclusive Products) or Section 10.3.3 (for
Unilateral Products) is payable.

10.3.6    Acknowledgement Regarding Royalty Structure. In establishing the
royalty structure of this Section 10.3, the Parties recognize the substantial
value of the various actions and investments undertaken by SGI and Genmab,
respectively, prior to the Effective Date. Such value is significant and in
addition to the value of SGI’s grant to Genmab of the license for Licensed
Products pursuant to Section 2.1, and in addition to the value of Genmab’s grant
to SGI of the license for Licensed Products pursuant to Section 2.4,
respectively, as it enables the rapid and effective development and
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Territory. Further, the Parties acknowledge and agree that, for their mutual
convenience and after considering other alternatives, the payments to SGI and,
with respect to an SGI Product, Genmab set forth in this Agreement and the
timing of payments (including the duration of the Royalty Term) are an
appropriate and mutually convenient way of compensating SGI and, with respect to
an SGI Product, Genmab.

10.4    Royalty Offsets

(a)    Subject to Sections 10.4(b), (c) and (d), Genmab or, in the case of a
Unilateral Product (i.e., Genmab Products and SGI Products), the Continuing
Party (i.e., Genmab or SGI) shall be solely responsible for paying all amounts,
including any license fees, milestones and royalties owed to Third Parties by
either Genmab or SGI on account of developing and commercializing Exclusive
Products or Unilateral Products, including any royalties owed due to use of the
SGI Technology or Genmab Technology.

(b)    Notwithstanding Section 10.4(a), on a Calendar Quarter-by-Calendar
Quarter and country-by-country basis, Genmab shall be entitled to offset [ * ]
percent ([ * ]%) of any [ * ] for [ * ] that are [ * ] pursuant to
Section 10.3.1 or 10.3.2 for such Exclusive Product, excluding any royalties
owed under the BMS Agreement. SGI represents and warrants that all royalties
owed to BMS pursuant to the BMS Agreement are described in this Agreement.
Notwithstanding anything to the contrary in this Section 10.4, in no event shall
the royalty payments due and payable to SGI pursuant to Section 10.3.1 or 10.3.2
with respect to an Exclusive Product in any Calendar Quarter and country be
reduced by more than [ * ] percent ([ * ]%) (on a tier-by-tier basis) of the
royalty otherwise due to SGI if no royalties were payable to Third Parties.

(c)    Notwithstanding Section 10.4(a), on a Calendar Quarter-by-Calendar
Quarter and country-by-country basis, Genmab shall be entitled to offset [ * ]
percent ([ * ]%) of any royalties payable by Genmab to Third Parties for
intellectual property rights that are necessary with respect to a Genmab Product
against the royalties that would otherwise be payable to SGI pursuant to
Section 10.3.3 or 10.3.4 for such Genmab Product, excluding any royalties owed
under the BMS Agreement. Notwithstanding anything to the contrary in this
Section 10.4, in no event shall the royalty payments due and payable to SGI
pursuant to Section 10.3.3 or 10.3.4 with respect to a Genmab Product in any
Calendar Quarter and country be reduced by more than [ * ] percentage points on
any royalty tier. For the avoidance of doubt the minimum royalty rate payable to
SGI pursuant to Section 10.3.3(a) is [ * ] percent ([ * ]%), the minimum royalty
rate payable to SGI pursuant to Section 10.3.3(b) is [ * ] percent ([ * ]%), the
minimum royalty rate payable to SGI pursuant to Section 10.3.4(a) is [ * ]
percent ([ * ]%) and the minimum royalty rate payable to SGI pursuant to
Section 10.3.4(b) is [ * ] hundredths percent ([ * ]%).

(d)    Notwithstanding Section 10.4(a), on a Calendar Quarter-by-Calendar
Quarter and country-by-country basis, SGI shall be entitled to offset [ * ] of
any royalties payable by SGI to Third Parties for intellectual property rights
that are necessary with respect to a SGI Product against the royalties that
would otherwise be payable to Genmab pursuant to

 

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Section 10.3.2 for such SGI Product, excluding any royalties owed under the
Genmab In-Licenses and any other agreements disclosed to SGI pursuant to
Section 3.1 to the extent that the relevant royalty obligation was disclosed at
such time. Genmab represents and warrants that as of the Effective Date all
Third Party royalties owed pursuant to the Genmab In-Licenses are described in
Schedule C. It is contemplated that Genmab will [ * ] with [ * ] for the use of
[ * ] and [ * ] for [ * ]. Notwithstanding anything to the contrary in this
Section 10.4, in no event shall the royalty payments due and payable to Genmab
pursuant to Section 10.3.2 with respect to an SGI Product in any Calendar
Quarter and country be reduced by more than [ * ] percentage points on any
royalty tier. For the avoidance of doubt the minimum royalty rate payable to
Genmab pursuant to Section 10.3.3(a) is [ * ] percent ([ * ]%), the minimum
royalty rate payable to Genmab pursuant to Section 10.3.3(b) is [ * ] percent ([
* ]%), the minimum royalty rate payable to Genmab pursuant to Section 10.3.4(a)
is [ * ] percent ([ * ]%) and the minimum royalty rate payable to Genmab
pursuant to Section 10.3.4(b) is [ * ] percent ([ * ]%).

10.5    Milestone Payments

10.5.1    Milestone Payments by Genmab relating to Exclusive Products. As
partial consideration for the licenses, rights and privileges granted to it
hereunder, Genmab shall promptly inform SGI of the achievement of any of the
below milestones and pay to SGI the following milestone payments within [ * ] of
the first occurrence of each event set forth below with respect to the first
Exclusive Product to achieve such event, whether such events are achieved by
Genmab, its Affiliates or Sublicensees, as follows:

[ * ]

10.5.2    If any of the milestone events in [ * ] above is achieved before the
milestone event in (a) above, then payment for the milestone event in (a) shall
be deemed to become due within thirty (30) days after the achievement of either
of the milestone events in [ * ] above. For the avoidance of doubt if an
Exclusive Product is replaced by a back-up candidate only such milestones not
already paid for an Exclusive Product shall become payable for the back-up
candidate.

10.5.3    Milestone Payments by Continuing Party relating to Unilateral
Products. As partial consideration for the licenses, rights and privileges
granted to it hereunder, the Continuing Party shall promptly inform the
Non-Continuing Party of the achievement of any of the below milestones and pay
to the Non-Continuing Party the following milestone payments within [ * ] of the
first occurrence of each event set forth below with respect to the first
Unilateral Product to achieve such event, whether such events are achieved by
the Continuing Party, its Affiliates or Sublicensees, as follows:

[ * ]

10.5.4    If any of the milestone events in [ * ] above is achieved before the
milestone event in (a) above, then payment for the milestone event in (a) shall
be deemed to become due within [ * ] days after the achievement of either of the
milestone events in [ * ] above. No payment shall be due for any of the
milestone events above that occurred before the

 

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Opt-Out Date for the relevant Collaboration Product. For the avoidance of doubt
if a Unilateral Product is replaced by a back-up candidate only such milestones
not already paid for the Unilateral Product shall become payable for the back-up
candidate.

10.6    Royalty Reports, Exchange Rates

10.6.1    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 Exclusive Products or Unilateral 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 Exclusive Products or Unilateral
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
Exclusive Product or Unilateral 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 12.1.2) used in determining the royalty
amount expressed in U.S. dollars (collectively, “Royalty Reports”).

10.6.2    Report Due Date. Royalty Reports and royalty payments shall be due on
the [ * ] following the end of the Calendar Quarter 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.

10.6.3    Exchange Rates. With respect to sales of Exclusive Products or
Unilateral 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
Exclusive Products or Unilateral 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 as described in
Section 12.1.2.

ARTICLE 11    FINANCIAL PROVISIONS FOR COLLABORATION PRODUCTS

11.1    Joint Development Costs. Unless otherwise provided in this Agreement,
during the Term, SGI and Genmab shall share equally (50:50) all Joint
Development Costs.

11.2    Reporting and Payment of Joint Development Costs

11.2.1    Reports

(a)    Within [ * ] after the end of each Calendar Quarter during which any
Development activities are performed hereunder, each Party’s Financial
Representative shall prepare a report showing the actual Joint Development Costs
incurred or

 

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accrued for each Collaboration Product, including but not limited to all FTEs
utilized (with appropriate supporting information) during such Calendar Quarter
(the “Joint Development Cost Report”).

(b)    The Joint Development Cost Reports will be in such form as the JSC may
reasonably agree from time to time.

(c)    Within [ * ] of the receipt of both Parties’ Joint Development Cost
Reports, the JSC (or the Party appointed by the JSC) shall provide to each Party
one consolidated financial report for the Joint Development Costs consistent
with Collaboration Accounting Principles. The total costs incurred by both
Parties shall, subject always to Section 5.4.1, be divided equally, with a
subsequent balancing payment by one Party to the other to the extent necessary
so that each Party bears its appropriate share of such Joint Development Costs.
The Party that is due for reimbursement of Joint Development Costs in the
preceding Calendar Quarter shall invoice the other Party. Such balancing
payments by one Party to reimburse the other Party’s expenditures for Joint
Development Costs for the purposes of cost sharing under this Agreement shall be
paid within [ * ] following [ * ] of the [ * ]. In the event that Parties
disagree with the reported costs and any over/under spend, approval shall be
required by the JSC (or its delegates) following receipt of the report by the
JSC (or its delegates). A decision by the JSC or its delegates shall be required
within [ * ] following its receipt of the consolidated report. Based on the
JSC’s decision the Party due for reimbursement shall invoice the other Party and
payment shall be made within [ * ] of [ * ] of the [ * ]. Where the JSC does not
so agree with the reported costs or over/under spend, any such unapproved spend
shall be borne [ * ].

11.3    Audits. Upon the written request of a Party (the “Requesting Party”) and
not more than [ * ], 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 Article 11, for any year
ending not more than [ * ] prior to the date of such request. The provisions of
Section 5.7.2 and Section 5.7.3 shall apply with respect to such inspection and
the costs of such inspection, mutatis, mutandis.

11.4    Reporting and Payment of Commercialization Expenses and Collaboration
Product Profit. The Parties shall mutually agree, through the JSC, a mechanism
or structure under which they will share equally (50:50) in all Collaboration
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.

11.5    Collaboration Product Profit Term. Unless this Agreement is earlier
terminated pursuant to Article 17, the Parties shall share Collaboration 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.

 

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11.6    Other Research Expenses, Joint Development Costs and Commercialization
Expenses. For purposes of clarity, the Parties hereto agree and acknowledge that
all expenses attributable to a Collaboration Product that are not set forth in a
Joint Development Plan or a Commercialization Plan (as each may be amended by
the JSC from time to time) as Joint Development Costs or Commercialization
Expenses, or otherwise approved by the JSC pursuant to Section 5.4.1, shall be
borne [ * ].

11.7    Utilization of Internal Resources. The Parties agree and acknowledge
that, unless specifically agreed otherwise, it is intended that the activities
under each Joint Development Plan and each Commercialization Plan, when taken as
a whole for a given calendar year, shall 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, shall be substantially equal on an ongoing basis for such calendar year.
The JSC may propose amendments to the Joint Development Plan and the
Commercialization Plan for a Collaboration Product 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 12    PAYMENT TERMS; BOOKS AND RECORDS; TAX

12.1    Payment Terms

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

12.1.2    Exchange. All amounts accruing in a currency other than United States
dollars will be expressed in such currency and converted to United States
dollars using an exchange rate equal to the [ * ] of the [ * ] as [ * ] by [ * ]
or, if [ * ] is not available, another mutually agreed source of exchange rates
during the applicable Calendar Quarter for which payments are being made. The
conversion calculations will be provided in any statement reporting converted
amounts.

12.1.3    Late Fee. Any undisputed 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 [ * ] to the [ * ] of (a) [ * ] on the first day of each
Calendar Quarter in which such payments are overdue, plus [ * ], or (b) the [ *
], calculated on the number of days such payment is delinquent, compounded [ *
].

12.1.4    Legal Restrictions. If at any time legal restrictions prevent the
prompt remittance of any monies owed with respect to a Licensed Product in any
jurisdiction, payment shall be made through such lawful means or methods as the
Parties shall reasonably determine.

 

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12.2    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 each Licensed 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 this Agreement and
for any applicable tax period.

12.3    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 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.

12.4    This Article 12 shall be applicable to all Licensed Products.

ARTICLE 13    CONFIDENTIALITY

13.1    Non-Disclosure Obligations. Except as otherwise provided in this
Article 13, 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 or proprietary information,
data, documents or other materials supplied by the other Party under this
Agreement and marked or otherwise identified as “Confidential”. Confidential
Information of SGI shall include SGI Know-How, Drug Conjugation Technology,
SGI’s interest in any Program Inventions, whether or not marked “Confidential.”
Confidential Information of Genmab shall include Genmab Technology, the
contents, terms and conditions of Genmab’s In-Licenses, and Genmab’s interest in
any Program Inventions, whether or not marked “Confidential”. Notwithstanding
anything to the contrary in this Article 13 or this Agreement, Confidential
Information of SGI related to drug and linker manufacturing, including release
assay information, shall be maintained in confidence indefinitely unless
publicly disclosed by SGI or permitted to be disclosed by SGI pursuant to
Section 13.2(b). Confidential Information of a Party may also include
information relating to such Party’s research programs, development, marketing
and other business practices and finances. For purposes of this Agreement,
information and data described above together with all information and data
designated as Genmab Confidential Information or Seattle Genetics Confidential
Information under the Prior Agreement shall be hereinafter referred to as
“Confidential Information.” Each Party shall use at least 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

 

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of the other Party’s Confidential Information for purposes as expressly
authorized and contemplated by this Agreement and do not disclose or make any
unauthorized use of such Confidential Information.

13.2    Permitted Disclosures. Notwithstanding the foregoing, but subject to the
last sentence of this Section 13.2, the provisions of Section 13.1 shall not
apply to information, documents or materials that the receiving Party can
conclusively establish:

(a)    Have become published or otherwise entered the public domain other than
by breach of this Agreement by the receiving Party or its Affiliates.

(b)    Are permitted to be disclosed by prior written consent of the other
Party.

(c)    Have become known to the receiving Party by a Third Party, that is not
breaching any duty of confidentiality by disclosing the same and provided such
Confidential Information was not obtained by such Third Party directly or
indirectly from the other Party under this Agreement or the Prior Agreement on a
confidential basis.

(d)    Prior to disclosure under this Agreement, was already in the possession
of the receiving Party, its Affiliates or Sublicensees, as demonstrated by
written records provided such Confidential Information was not obtained directly
or indirectly from the other Party under this Agreement or the Prior Agreement.

(e)    Is independently developed by or for the receiving Party by its employees
or contractors without making use of the other Party’s Confidential Information
under this Agreement or the Prior Agreement.

(f)    Are required to be disclosed by the receiving Party to comply with any
Applicable Law, or are reasonably necessary to authorizations to conduct
clinical trials with, and to seek Regulatory Approval of, Licensed Product(s),
provided that the receiving Party shall wherever possible provide prior written
notice of such disclosure to the other Party and take reasonable and lawful
actions to avoid or minimize the degree of disclosure. The Parties agree that
nothing in this Section 13.2(f) is intended to require a Party to not comply
with any Applicable Law.

(g)    Subject to Section 14.2.1 and 14.2.2, are required solely to the extent
reasonably necessary in a patent application claiming Program Inventions made
hereunder to be filed with the United States Patent and Trademark Office and/or
any similar foreign agency, provided that the Party filing the patent shall
provide at least thirty (30) days prior written notice of such disclosure to the
other Party and take reasonable and lawful actions to avoid or minimize the
degree of disclosure.

(h)    Are disclosed to a Sublicensee as permitted hereunder, provided that such
Sublicensee is then subject to obligations of confidentiality and limitations on
use of such Confidential Information substantially similar to those contained
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(i)    Are disclosed to a bona fide collaborator or manufacturing, development
or sales contractor or partner or to another Third Party for purposes as
expressly authorized and contemplated by this Agreement, but only to the extent
directly relevant to the collaboration, partnership or contract and provided
that such collaborator, partner or contractor is then subject to obligations of
confidentiality and limitations on use of such Confidential Information
substantially similar to those contained herein.

Notwithstanding the disclosures permitted under subsections (f)-(i), if the
information, documents or materials covered by such subsection is otherwise
protected by obligations of confidentiality, then the confidentiality
obligations of Section 13.1 shall still apply.

13.3    Terms of the Agreement. Genmab and SGI shall not disclose any terms or
conditions of this Agreement to any Third Party without the prior consent of the
other Party, except as required by Applicable Law or to comply with rules of a
securities exchange or regulatory authority, in which case the disclosing Party
shall provide notice to the other Party and take reasonable and lawful actions
to avoid or minimize the degree of such disclosures. Notwithstanding the
foregoing, each Party may disclose the terms and conditions of this Agreement,
without such consent, to advisors, existing and potential investors, licensees,
assignees and/or acquirers on a need-to-know basis under circumstances that
reasonably ensure the confidentiality thereof.

13.4    Press Releases and Other Disclosures to Third Parties. Neither SGI nor
Genmab will, without the prior 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 (a) disclosures made in compliance with Sections 13.2 and 13.3, and
(b) disclosures made to attorneys, consultants, and accountants retained to
represent the Parties in connection with the transactions contemplated hereby.

13.5    Publications. Neither Party may publish, present or announce results of
ADCs or Collaboration Products developed hereunder either orally or in writing
(a “Publication”) without complying with the provisions of this Section 13.5.
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 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. For clarity,

 

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Section 13.2(f), but not this Section 13.5, is intended to apply to any
announcements required by either Party under Applicable Law, including but not
limited to notifications to the relevant stock exchanges.

ARTICLE 14    INVENTIONS AND PATENTS

14.1    Ownership of Inventions

14.1.1    Disclosure of Inventions. Each Party shall promptly disclose to the
other Party the making, conception or reduction to practice of any inventions
directly arising out of activities conducted under this Agreement (“Program
Inventions”). Program Inventions shall also comprise inventions relating to ADCs
and uses thereof described in the Genmab ADC Patents filed prior to the
Effective Date of this Agreement and as listed in Schedule F.

14.1.2    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 to this Agreement shall be owned as follows:

(a)    Genmab shall own all Program Inventions that (i) are invented solely by
one or more employees, agents or consultants of Genmab and [ * ] (ii) are
invented solely or jointly by employees, agents or consultants of Genmab and/or
SGI and [ * ]. To the extent that any such Program Inventions [ * ] shall have
been invented by SGI employees and/or are owned by SGI, SGI hereby assigns all
of its right, title and interest therein to Genmab. An “Improvement Invention to
Genmab Material” (as defined in the Prior Agreement) shall be deemed a Program
Invention owned by Genmab.

(b)    SGI shall own all Program Inventions that (i) are invented solely by one
or more employees, agents or consultants of SGI and [ * ] or (ii) are invented
solely or jointly by employees, agents or consultants of Genmab and/or SGI and [
* ]. To the extent that any Program Inventions [ * ] shall have been invented by
Genmab and are owned by Genmab, Genmab hereby assigns all of its right, title
and interest therein to SGI. An “Improvement Invention to Seattle Genetics
Material/Technology” (as defined in the Prior Agreement) shall be deemed a
Program Invention owned by SGI.

(c)    Except as set forth in Sections 14.1.2(a) and 14.1.2(b), Genmab and SGI
shall jointly own all other Program Inventions.

(d)    Inventorship, for purposes of this Agreement, shall be determined in
accordance with U.S. laws of inventorship.

14.2    Patent Prosecution and Maintenance

14.2.1    SGI shall be responsible for and shall control the preparation,
filing, prosecution, grant, maintenance and defense of all SGI Patents including
SGI Program Inventions but excluding SGI’s share in Joint Patents. SGI shall, at
its sole expense, prepare, file, prosecute and maintain such SGI Patents in good
faith consistent with its customary patent policy and its reasonable business
judgment, and shall consider in good faith the interests of Genmab in so doing.

 

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14.2.2    Genmab shall be responsible for and shall control the preparation,
filing, prosecution, grant, maintenance and defense of all Genmab Patents, but
excluding Genmab’s share in Joint Patents and further excluding Program Genmab
Patents, but only to the extent required in this Sections 14.2.3 to 14.2.5.
Genmab shall, at its sole expense, prepare, file, prosecute and maintain such
Genmab Patents in good faith consistent with its customary patent policy and its
reasonable business judgment, and shall consider in good faith the interests of
SGI in so doing.

14.2.3    Subject to the oversight of the JSC under Section 3.2.2(g),
Section 14.3 and Section 14.2.4 in the event SGI exercises its Opt-In Right,
each Party shall be responsible for and shall control the preparation, filing,
prosecution, grant, maintenance and defense, of any patents and patent
applications claiming Program Inventions owned solely by it in accordance with
Section 14.1.2 and shall, at its sole expense, prepare, file, prosecute and
maintain such patent rights in good faith consistent with its customary patent
policy and its reasonable business judgment.

14.2.4    If SGI exercises its Opt-In Right, the Parties agree that all Genmab
ADC Patents shall continue to be owned by Genmab, but shall be prepared, filed,
prosecuted and maintained by [ * ] at the shared cost of both Parties. Following
any Opt-Out Notice by Genmab and provided that SGI elects to continue with the
Development and Commercialization of the Collaboration Product (thereafter an
SGI Product), then such Genmab ADC Patents shall be assigned to SGI and subject
to any obligations pursuant to the Genmab In-Licenses with respect to such
Genmab ADC Patents. SGI may at its sole expense, prepare, file, prosecute and
maintain such patent rights in good faith consistent with its customary patent
policy and its reasonable business judgment. Following any Opt-Out Notice by SGI
and provided that Genmab elects to continue with the Development and
Commercialization of the Collaboration Product (thereafter a Genmab Product),
then Genmab shall, at its sole expense, prepare, file, prosecute and maintain
such patent rights in good faith consistent with its customary patent policy and
its reasonable business judgment.

14.2.5    In case of a Genmab ADC Patent assigned to SGI pursuant to
Section 14.2.4, if SGI decides not to continue prosecuting any such patent right
in whole or in part, then SGI shall promptly so notify Genmab (which notice
shall be at least [ * ] before any relevant deadline for such patent right).
Thereafter, Genmab shall have the right to prosecute or maintain such patent
right at its sole expense. If Genmab elects to prosecute or maintain such patent
right, [ * ]. Such patent shall [ * ].

14.2.6    Patents and patent applications claiming Program Inventions owned
jointly by both Parties in accordance with Section 14.1.2(c) (“Joint Patents”)
shall be prepared, filed, prosecuted and maintained by [ * ]. The cost [ * ]
shall be borne equally by the Parties in case of a Collaboration Product and
shall be deemed IP and Trademark Costs.

 

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14.2.7    If either Party decides not to continue prosecuting any Joint Patents
or not to maintain any Joint Patent, then such Party shall promptly so notify
the other Party (which notice shall be at least [ * ] before any relevant
deadline for such Joint Patent). Thereafter, the other Party shall have the
right to prosecute or maintain such Joint Patent, at such Party’s sole expense.
If the other Party elects to prosecute or maintain such Joint Patent, such Party
can request that the Joint Patent be transferred to the sole ownership of such
Party at such Party’s cost. Such Joint Patent that is only being prosecuted or
maintained by one Party [ * ].

14.2.8    The Parties shall at all times fully cooperate with each other in
order to reasonably implement the foregoing provisions of this Section 14.2 and
to handle any further activities under the Joint Patents outside the scope of
this Agreement, including without limitation licenses to Third Parties. Such
cooperation may include each Party’s 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 assistance of each Party’s relevant personnel. Without
limiting the foregoing, it is understood that even if a Party is permitted to
reference the other Party’s technology in a patent application pursuant to this
Agreement, the filing Party [ * ]. If the non-filing Party determines [ * ] the
Parties shall cooperate in accordance with this Section 14.2.8 to determine a
strategy that would protect each Party’s interests, including, without
limitation, delaying the filing or co-owning such patent application, as the
case may be. Except as otherwise expressly authorized in this Agreement, Genmab
shall not disclose and/or claim in any patent application, patent or publication
any [ * ] without SGI’s prior written consent. Except as otherwise expressly
authorized in this Agreement, SGI shall not disclose and/or claim in any patent
application, patent or publication any [ * ] without Genmab’s prior written
consent.

14.2.9    Common Interest Disclosures. With regard to any information or
opinions disclosed pursuant to this Agreement by one Party to the other
regarding intellectual property and/or technology owned by Third Parties, SGI or
Genmab (or their respective Affiliates), SGI and Genmab agree that they have a
common legal interest in coordinating prosecution of their respective patent
applications, as set forth in this Article 14, and in determining whether, and
to what extent, Third Party intellectual property rights may affect the conduct
of the development, manufacturing, marketing and/or sale of Licensed Products,
and have a further common legal interest in defending against any actual or
prospective Third Party claims based on allegations of misuse or infringement of
intellectual property rights relating to the development, manufacturing,
marketing and/or sale of Licensed Products. Accordingly, SGI and Genmab agree
that all such information and opinions obtained by SGI and Genmab from each
other will be used solely for purposes of the Parties’ common legal interests
with respect to the conduct of the Agreement. All information and opinions will
be treated as protected by the attorney-client privilege, the work product
privilege, and any other privilege or immunity that may otherwise be applicable.
By sharing any such information and opinions, neither Party intends to waive or
limit any privilege or immunity that may apply to the shared information and
opinions. Neither Party shall have the authority to waive any privilege or
immunity on behalf of the other Party without such other Party’s prior written
consent, nor shall the waiver of privilege or immunity resulting from the
conduct of one Party be deemed to apply against any other Party.

 

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14.3    Enforcement of Patents

14.3.1    [ * ] shall have the [ * ] to determine the appropriate course of
action to enforce the [ * ] or otherwise abate the infringement thereof, to take
(or refrain from taking) appropriate action to enforce such [ * ] to control any
litigation or other enforcement action and to enter into, or permit, the
settlement of any such litigation or other enforcement action with respect to
the [ * ] shall in good faith [ * ]. All monies recovered upon the final
judgment or settlement of any such suit to enforce any such [ * ] with respect
to the [ * ] shall be allocated first to [ * ], second to [ * ], and finally any
remaining amounts shall be [ * ]. [ * ] shall fully cooperate with [ * ] in any
such action [ * ], to enforce the [ * ].

14.3.2    If [ * ] fails to exercise its rights under Section 14.3.1 to take any
action to enforce the [ * ] or control any litigation with respect to such [ * ]
within a period of [ * ] days [ * ] after the Parties receive reasonable notice
of the infringement of the [ * ], then [ * ] shall have the [ * ] to bring and
control any such action by counsel of its own choice, [ * ], to enter into or
permit, the settlement of any such litigation or other enforcement action with
respect to the [ * ]. In such case, all monies recovered upon the final judgment
or settlement of any such suit to enforce any [ * ] shall be [ * ] allocated
first to [ * ], second to [ * ], and finally any remaining amounts shall be [ *
]. In such a case, [ * ] shall cooperate fully with [ * ], in its efforts to
enforce the [ * ]. In no event may [ * ] without [ * ] prior written consent.

14.3.3    [ * ] shall have the [ * ], to determine the appropriate course of
action to enforce [ * ], or otherwise to abate the infringement thereof, to take
(or refrain from taking) appropriate action to enforce the [ * ], to control any
litigation or other enforcement action and to enter into, or permit, the
settlement of any such litigation or other enforcement action with respect to
the [ * ]. All monies recovered upon the final judgment or settlement of any
such suit to enforce any [ * ] shall be [ * ]. [ * ] shall fully cooperate with
[ * ], in any action to enforce the [ * ]. In the case of a [ * ] rights under
this Section 14.3.3 shall be [ * ]. In the case of an [ * ], if [ * ] fails to
exercise its rights under this

 

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Section 14.3.3 to take any action to enforce the [ * ] or control any litigation
with respect to the [ * ] within a period of [ * ] days [ * ] after the Parties
receive reasonable notice of the infringement of the [ * ], then [ * ] shall
have the [ * ] to bring and control any such action by counsel of its own
choice, [ * ] and permit, the settlement of any such litigation or other
enforcement action with respect to the [ * ]. In such case, all monies recovered
upon the final judgment or settlement of any such suit to enforce any [ * ]
shall be [ * ], allocated first to [ * ], second to [ * ], and finally any
remaining amounts shall be [ * ]. In such a case, [ * ] shall cooperate fully
with [ * ], in its efforts to enforce the [ * ]. In no event may [ * ] without [
* ] prior written consent.

14.3.4    [ * ] shall have the [ * ], to determine the appropriate course of
action to enforce [ * ], or otherwise to abate the infringement thereof, to take
(or refrain from taking) appropriate action to enforce such [ * ], to control
any litigation or other enforcement action and to enter into, or permit, the
settlement of any such litigation or other enforcement action with respect to
such [ * ]. All monies recovered upon the final judgment or settlement of any
such suit to enforce such Genmab Patents shall be [ * ]. [ * ] shall fully
cooperate with [ * ], in any action to enforce the [ * ]. In the case of [ * ],
if [ * ] fails to exercise its rights under this Section 14.3.3 to take any
action to enforce such [ * ] or control any litigation with respect to [ * ]
within a period of [ * ] days [ * ] after the Parties receive reasonable notice
of the infringement of such [ * ], then [ * ] shall have the right to bring and
control any such action by counsel of its own choice, [ * ], to permit the
settlement of any such litigation or other enforcement action with respect to
such [ * ]. In such case, all monies recovered upon the final judgment or
settlement of any such suit to enforce such [ * ] shall be [ * ] allocated first
to [ * ], second to [ * ], and finally any remaining amounts shall be [ * ]. In
such a case, [ * ] shall cooperate fully with [ * ], in its efforts to enforce
such [ * ]. In no event may [ * ] without [ * ] prior written consent.

14.3.5    In the event either Party becomes aware of [ * ], it shall promptly
notify the other Party and the Parties shall determine a mutually agreeable
course of action. In no event shall [ * ] without [ * ] prior written consent.

14.4    Prior SGI Patent Rights. Notwithstanding anything to the contrary in
this Agreement, with respect to any [ * ] that are subject to the [ * ], the
rights and obligations of the Parties under Section 14.2 and 14.3 shall be [ *
].

14.5    Prior Genmab Patent Rights. Notwithstanding anything to the contrary in
this Agreement, with respect to any [ * ], the rights and obligations of the
Parties under Section 14.2 and 14.3 shall be [ * ].

14.6    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
as well as enforce such trademarks and registrations. The Parties shall jointly
own the trademarks which are specifically directed to 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
trademarks unless such joint ownership would not be practicable in any such
jurisdiction, in which case the Lead Commercialization Party shall have sole
ownership. Collaboration Product Trademarks shall be used only pursuant to the
terms of this Agreement and any applicable co-promotion 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. In case a Party Opts-Out it shall be obliged to assign its title
to and interest in the Collaboration Product Trademarks to the Continuing Party
free of charge, provided the Continuing Party pays the costs of assignment.

ARTICLE 15    INFRINGEMENT ACTIONS BROUGHT BY THIRD PARTIES

15.1    Collaboration Product.    If [ * ], is sued by [ * ] for infringement of
[ * ] in connection with activities relating to the manufacture, use, handling,
storage, Development, Commercialization or other disposition of a [ * ] shall
promptly notify [ * ] within [ * ] days of its receipt of notice of such suit.
The notice shall set forth [ * ]. The Parties shall then meet to discuss [ * ],
provided, that (a) if such infringement relates primarily to [ * ], then [ * ]
shall have the first right to control such suit in close consultation with [ * ]
and (b) if such infringement

 

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relates primarily to [ * ], then [ * ] shall have the first right to control
such suit in close consultation with [ * ]. In no event may [ * ] without the
express written consent of [ * ]. To the extent a claim is subject to [ * ] the
procedure in [ * ] must be followed. Each Party will [ * ] for its activities
which are outside the scope of this Agreement.

15.2    Defense Costs. If the alleged infringement relates to [ * ], all
reasonable costs associated with the defense of the action will [ * ], and any
payment due [ * ] as damages or in settlement [ * ] will be [ * ]. Any
settlement that requires [ * ] will require prior written approval of [ * ].

15.3    Exclusive Product, Genmab Product. If [ * ], is sued by [ * ] claiming
infringement of a Third Party’s patent in connection with activities relating to
the manufacture, use, handling, storage, development, commercialization or other
disposition of [ * ] shall be [ * ] for the defense [ * ]. To the extent such
claimed infringement or any part thereof relates to [ * ] shall have the first
right to control the defense against such claims of infringement [ * ], provided
that [ * ] shall be [ * ]. For clarity, [ * ] shall have the right to control
the defense against any claims of infringement not related to [ * ]. If [ * ]
chooses not to defend against claims of infringement related to [ * ], then [ *
] shall have the right to control such defense on its own.

15.4    SGI Product. If [ * ], is sued by [ * ] claiming infringement of a Third
Party’s patent in connection with activities relating to the manufacture, use,
handling, storage, development, commercialization or other disposition of [ * ]
shall be [ * ] for the defense [ * ]. To the extent such claimed infringement or
any part thereof relates to [ * ] shall have the first right to control the
defense against such claims of infringement [ * ], provided that [ * ] shall be
entitled to participate in such defense. For clarity, [ * ] shall have the right
to control the defense against any claims of infringement not relating to [ * ].
If [ * ] chooses not to defend against claims of infringement related to the [ *
], then [ * ] shall have the right to control such defense on its own.

ARTICLE 16    REPRESENTATIONS AND WARRANTIES

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
has been duly authorized by all necessary action on the part of each Party, its
officers and directors.

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.

 

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16.1.3    SGI represents and warrants that as of the Effective Date:

(a)    it has the right to grant the licenses granted herein;

(b)    the SGI Technology licensed hereunder is free and clear of any security
interests, claims, encumbrances or charges of any kind;

(c)    it has not assigned and/or granted licenses, nor shall it assign and/or
grant licenses, to the SGI Technology or a Licensed Product to any Third Party
that would restrict or impair the rights granted to Genmab hereunder;

(d)    to its [ * ], without [ * ], [ * ] of any Third Parties would be [ * ] by
[ * ] the Drug Conjugation Materials and Drug Conjugation Technology licensed
hereunder, furthermore, to its [ * ], [ * ], [ * ] of any Third Party exist with
[ * ] after [ * ] with claims covering Antibody-Drug Conjugates that incorporate
such Drug Conjugation Materials and Drug Conjugation Technology for the
treatment of cancer;

(e)    to its [ * ], no Third Party has [ * ] the SGI Technology using an
antibody drug conjugate that binds to Tissue Factor;

(f)    it shall not invoke any dominant patent or patent application owned or
controlled by, or licensed to, it or its Affiliates to in any way [ * ] the
rights and/or licenses granted hereunder; and

(g)    the SGI Technology licensed hereunder constitutes all of SGI’s
intellectual property rights necessary or useful to develop, have developed,
make, have made, import, use, offer for sale, have sold or sell the Drug
Conjugation Materials and Drug Conjugation Technology as contemplated to be used
in a Licensed Product.

16.1.4    Genmab represents and warrants that as of the Effective Date:

(a)    it has the right to grant the licenses granted herein;

(b)    the Genmab Technology licensed hereunder is free and clear of any
security interests, claims, encumbrances or charges of any kind;

(c)    it has not assigned and/or granted licenses, nor shall it assign and/or
grant licenses, to the Genmab Technology with regard to a Licensed Product to
any Third Party that would restrict or impair the rights granted to SGI
hereunder;

(d)    apart from the information previously disclosed in writing to SGI, it has
[ * ] of any [ * ] of any [ * ] by the [ * ] from [ * ] to [ * ]; furthermore,
to [ * ] no [ * ] of any [ * ] with [ * ] after [ * ] with [ * ] (i) the [ * ]
denoted [ * ] or [ * ] or (ii) a [ * ] the [ * ] denoted [ * ] or [ * ] for the
treatment of [ * ];

(e)    to its [ * ], no Third Party has [ * ] the Genmab Technology using an
antibody that binds to Tissue Factor;

 

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(f)    it has notified SGI in writing of all [ * ];

(g)    it shall not invoke any dominant patent or patent application owned or
controlled by, or licensed to, it or its Affiliates to in any way restrict the
rights and/or licenses granted hereunder; and

(h)    the Genmab Technology licensed hereunder constitutes all of Genmab’s
intellectual property rights necessary or useful to develop, have developed,
make, have made, import, use, offer for sale, have sold or sell an Antibody as
contemplated to be used in a Licensed Product.

16.2    Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE
KNOW-HOW, CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY RIGHTS PROVIDED BY
EACH PARTY ARE PROVIDED “AS IS” AND EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL
WARRANTIES OF ANY KIND EXPRESS OR IMPLIED, INCLUDING BY OPERATION OF LAW OR BY
STATUTE OR OTHERWISE, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, ARISING FROM A COURSE OF DEALING,
USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO.

16.2.1    EXCEPT AS MAY BE OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NONE
OF THE PARTIES MAKE ANY REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR
IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE,
REGARDING THE ANTIBODIES, DRUG CONJUGATION MATERIALS OR ANY ADCS, INCLUDING ANY
WARRANTY OF QUALITY, MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A
PARTICULAR USE OR PURPOSE.

16.3    Performance by Affiliates. The Parties recognize that each may perform
some or all of its obligations under this Agreement through Affiliates,
provided, however, that each Party shall remain responsible and be a guarantor
of the performance by its Affiliates and shall cause its Affiliates to comply
with the provisions of this Agreement in connection with such performance.

ARTICLE 17    TERM AND TERMINATION

17.1    Term. The term of this Agreement (the “Term”) shall commence on the
Effective Date and be valid and in force until terminated pursuant to the
Articles 17 or 19.

17.2    Termination by Genmab. Genmab shall have the right, at any time after
the first anniversary of the Effective Date other than the period (a) following
an Opt-In Decision and prior to any applicable Opt-Out Date or (b) during which
SGI is developing or commercializing an SGI Product, to terminate this Agreement
in its entirety by providing not less than [ * ] days’ prior written notice to
SGI of such termination. For clarity, as regards termination without cause
following an Opt-In Decision and prior to any applicable Opt-Out Date,
Section 5.10 will apply where a Party wishes to cease collaborating with the
other Party.

 

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17.3    Termination for Cause. Either Party may terminate this Agreement for
breach by the other Party (the “Breaching Party”) of any material provision of
the Agreement or in the case of a license, a breach of a [ * ] related to such
license, including diligence obligations, if, in the event that the breach is by
its nature capable of being cured, the Breaching Party has not cured such breach
within [ * ] after notice thereof (or in the event any breach is incapable of
being cured in such time period, if the Breaching Party commences a cure within
such [ * ] period and diligently pursues the cure to completion).

17.4    Termination if Genmab Challenges SGI Patents. SGI may terminate this
Agreement for cause at any time after [ * ] written notice to Genmab of its
intent to so terminate if Genmab, its Affiliates or Sublicensees, challenges the
validity, enforceability, patentability or scope of a claim of any SGI Patent.
Any such termination shall not become effective if Genmab has [ * ], provided
such [ * ].

17.5    Termination if SGI Challenges Genmab Patents. Genmab may terminate this
Agreement for cause at any time after [ * ] written notice to SGI of its intent
to so terminate if SGI, its Affiliates or Sublicensees, challenges the validity,
enforceability, patentability or scope of a claim of any Genmab Patent. Any such
termination shall not become effective if SGI has [ * ], provided such [ * ].

17.6    Termination Upon Insolvency. 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 or insolvency or for reorganization or for an arrangement or for
the appointment of a receiver or trustee of that Party or of its assets,
(b) such other Party proposes a written agreement of composition or extension of
its debts, (c) [ * ], (d) such other Party shall propose or be a party to any
dissolution or liquidation, or (e) such other Party shall make an assignment for
the benefit of its creditors. Notwithstanding the foregoing, the Parties intend
for this Agreement and the licenses granted herein to come within Section 365(a)
of the United States Bankruptcy Code, and notwithstanding the bankruptcy or
insolvency of SGI, this Agreement and the licenses granted herein shall remain
in full force and effect so long as Genmab shall remain in material compliance
with the terms and conditions hereof.

17.7    Termination of BMS Agreement. All rights and obligations under the BMS
Agreement sublicensed under this Agreement shall terminate upon forty-five
(45) days prior written notice by SGI if Genmab performs any action that would
constitute a breach of any material provision of the BMS Agreement and fails to
cure such breach within such forty-five (45) day period (or in the event any
breach is incapable of being cured in such time period, if Genmab commences a
cure within such forty-five (45) day period and diligently pursues the cure to
completion); provided, however, that such cure period may be extended by mutual
written consent of the Parties. All rights and obligations under the BMS
Agreement shall automatically terminate if Genmab fails to maintain the
insurance required under the BMS Agreement. SGI shall maintain the BMS Agreement
for the term of this Agreement.

 

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17.8    Termination of [ * ]. All [ * ] and [ * ] under a [ * ] under this
Agreement shall terminate upon [ * ] prior written notice by [ * ] if [ * ]
performs any action that would [ * ] a [ * ] of any [ * ] of such [ * ] and [ *
] to [ * ] such [ * ] within such [ * ] period (or in the event any [ * ] is [ *
] of [ * ] in such [ * ], if [ * ] a [ * ] within such [ * ]and [ * ] the [ * ]
to [ * ]); provided, however, that such [ * ] may be [ * ] by [ * ] of the
Parties. [ * ] shall [ * ] that the [ * ] for [ * ] with [ * ] is [ * ] for the
[ * ] of this [ * ].

17.9    Effect of Expiration and Termination

17.9.1    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, from the context thereof, are intended to survive termination
or expiration of this Agreement, including provisions of Articles 1, 13, 14, 15,
18 (as to actions arising during the term of this Agreement or in the course of
a Party practicing any licenses retained by such Party thereafter), 22 and 23,
Sections 5.7, 11.3 and 17.9 and any payment obligations pursuant to Article 10
and 11 incurred prior to termination.

17.9.2    Upon termination of this Agreement for any reason, all licenses
granted by one Party to the other hereunder, including all licenses for
Exclusive Products, Collaboration Products and Unilateral Products, and all
sublicenses granted to Affiliates or Third Parties by a Party hereunder will
immediately terminate.

17.9.3    Upon any termination of this Agreement by Genmab pursuant to
Section 17.2 or by SGI pursuant to Sections 17.3, 17.4, 17.6 or 17.7, or in the
case of a Dormant Product (provided that at the time of the Collaboration
Product becoming a Dormant Product no Licensed Products are in development or
are being commercialized by either Party), Genmab shall to the extent necessary
grant to [ * ] license in the Territory under the [ * ] to make, have made, use,
sell, offer to sell and import [ * ]. For the avoidance of doubt [ * ] shall not
[ * ].

17.9.4    Upon the expiration of the Royalty Term:

(a)    SGI shall grant, and shall by this provision be deemed to have granted,
to Genmab a royalty-free, perpetual, worldwide, nonexclusive license to use the
Joint Patents and SGI Technology to make, use, sell, offer for sale and import
Exclusive Products or Genmab Products, as applicable, with no further obligation
to SGI; and

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

 

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17.9.5    In the event that a Party is commercializing Licensed Products under
this Agreement, and in accordance with the foregoing provisions of this Article
a license is terminated then such Party shall be entitled to, and the licenses
shall be deemed to survive to the extent necessary for such Party to wind down
the activities in an orderly manner, including the right to sell off inventory,
but in no event for a period longer than [ * ] from the effective date of
termination.

ARTICLE 18    INDEMNITY

18.1    Direct Indemnity for Non-Collaboration Products

18.1.1    With respect to Genmab Products, SGI Products and Exclusive Products,
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, terminations or demands (collectively, the “Claims”) that are incurred,
relate to or arise out of (a) the [ * ] of any [ * ] of this Agreement by the
indemnifying Party, including a [ * ] of any representation or warranty made by
such Party in this Agreement, or (b) the [ * ] of the indemnifying Party in
connection with the performance of its obligations hereunder.

18.1.2    Genmab shall defend, indemnify and hold harmless the SGI Indemnitees
from and against all Liabilities resulting from all Claims that are incurred,
relate to or arise out of the development, manufacture or commercialization of
Exclusive Products or Genmab Products by SGI for Genmab or by Genmab, its
Affiliates or Sublicensees, including any failure to test for or provide
adequate warnings of adverse side effects, or any manufacturing defect in any
Exclusive Product or Genmab Product; except to the extent such Liabilities must
be indemnified by SGI pursuant to Sections 18.1.1.

18.1.3    SGI shall defend, indemnify and hold harmless the Genmab Indemnitees
from and against all Liabilities resulting from all Claims that are incurred,
relate to or arise out of the development, manufacture or commercialization of
SGI Products by Genmab 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; except to the extent
such Liabilities must be indemnified by Genmab pursuant to Sections 18.1.1

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,
Development, 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: (a) the [ * ] of the
indemnifying Party, its Affiliates, employees, agents or Sublicensees; or
(b) any [ * ] by the indemnifying Party of any [ * ] of this Agreement,
including a [ * ] of any representation or warranty made by such Party in this
Agreement; except, in each case, to the comparative extent of any such Claim
resulting from the [ * ] of the Indemnitees.

 

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18.2.2    Except for those Claims subject to Section 18.2.1, the Parties shall
share equally any Liabilities in connection with: (a) any Claim brought against
either Party by a Third Party resulting directly or indirectly from the
manufacture, use, handling, storage, Development, Commercialization or other
disposition of any given Collaboration Product (in the same manner as the
Parties share Product Profit); and (b) the defense or settlement of claims of
infringement of Third Party patent rights in accordance with the procedures set
forth in Article 15.

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.

18.3    Procedure. A Party (the “Indemnified Party”) that intends to claim
indemnification under this Article 18 shall promptly provide notice to the other
Party (the “Indemnitor”) of any Liability or action in respect of which the
Indemnified Party intends to claim such indemnification, which notice shall
include a reasonable identification of the alleged facts giving rise to such
Liability, and the Indemnitor shall have the right to participate in, and, to
the extent the Indemnitor so desires, jointly with any other Indemnitor
similarly noticed, to assume the defense thereof with counsel selected by the
Indemnitor. However, notwithstanding the foregoing, the Indemnified Party shall
have the right to retain its own counsel, [ * ], unless the [ * ], in which case
[ * ]. The Indemnified Party cannot settle any Liability for which it intends to
claim indemnification by the Indemnitor without the prior consent of the
Indemnitor. Any settlement of a Liability for which any Indemnified Party seeks
to be indemnified, defended or held harmless under this Article 18 that could
adversely affect the Indemnified Party shall be subject to prior consent of such
Indemnified Party, provided that such consent shall not be withheld
unreasonably.

18.4    Limitations on Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER PARTY OR TO ANY THIRD PARTY FOR ANY INDIRECT, SPECIAL, PUNITIVE,
EXEMPLARY, OR CONSEQUENTIAL DAMAGES ARISING FROM THIS AGREEMENT OR FOR ANY
AMOUNTS REPRESENTING LOSS OF PROFITS OR LOSS OF BUSINESS, WHETHER THE BASIS OF
THE LIABILITY IS BREACH OF CONTRACT, TORT, STATUTES, OR ANY OTHER LEGAL THEORY,
AND WHETHER SUCH FIRST PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES
OR NOT.

ARTICLE 19    FORCE MAJEURE

19.1    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

 

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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 promptly
advise the other Party of the existence of such Event of Force Majeure and shall
exert all Commercially Reasonable Efforts to eliminate, cure or overcome any
such Event of Force Majeure and to resume performance of its obligations
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 continued 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. If a solution under subsection (a)-(d) has
not been reached after four (4) months of the other Party’s receipt of such
notice, then the Party not affected shall be entitled to give notice to the
affected Party to terminate this Agreement, specifying the date (which shall not
be less than [ * ] after the date on which the notice of termination is given)
on which termination will take effect. Such a termination notice shall be
irrevocable, except with the consent of both Parties, and upon termination the
provisions of Section 17.9 shall apply.

ARTICLE 20    ASSIGNMENT

20.1    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 consent
of the other Party, such consent not to be unreasonably withheld; provided,
however, that [ * ]. Any permitted assignee shall assume all rights and
obligations of its assignor under this Agreement; provided, however, that [ * ]
shall not be [ * ]. Any attempted assignment of this Agreement not in accordance
with this Article 20 shall be void and of no effect.

ARTICLE 21    SEVERABILITY

21.1    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, that 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.

 

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ARTICLE 22    INSURANCE

22.1    During the Term and thereafter for the period of time required below,
each Party shall maintain on an ongoing basis comprehensive general liability
insurance in the minimum amount of [ * ] Dollars ($[ * ]) per occurrence and [ *
] Dollars ($[ * ]) annual aggregate combined single limit for bodily injury and
property damage liability. Commencing not later than [ * ] days prior to the
first use in humans of any Collaboration Product, Exclusive Product or Genmab
Product and thereafter for the period of time required below, Genmab shall
obtain and maintain on an ongoing basis products liability insurance (including
contractual liability coverage on Genmab’s indemnification obligation under this
Agreement) in the amount of at least [ * ] Dollars ($[ * ]) per and in an annual
aggregate combined single limit for bodily injury and property damage liability.
Commencing not later than [ * ] days prior to the first use in humans of any
Collaboration Product or SGI Product, and thereafter for the period of time
required below, SGI shall obtain and maintain on an ongoing basis products
liability insurance (including contractual liability coverage on SGI’s
indemnification obligations under this Agreement) in the amount of at least [ *
] Dollars ($[ * ]) per occurrence and in an annual aggregate combined single
limit for bodily injury and property damage liability. All of such insurance
coverage shall be maintained with an insurance company or companies having an
A.M. Best rating of “A-” or better and an aggregate deductible not to exceed [ *
] Dollars ($[ * ]) per occurrence. Upon the Effective Date and not later than [
* ] prior to the first use in humans of the first Collaboration Product,
Exclusive Product, Genmab 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 least [ * ] thereafter. Each
Party’s insurance shall name [ * ] on the products liability insurance required
hereunder. Each Party shall provide the other Party at least forty [ * ]’ 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 the
Collaboration Product shall be treated as a Joint Development Cost or an “other
cost” for the purposes of calculating Commercialization Expenses, as applicable.

ARTICLE 23    MISCELLANEOUS

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. Notices shall be deemed to have been
received (a) on the date delivered if delivered personally; (b) on the date
received if sent by certified or registered mail, return receipt requested,
postage prepaid; (c) on the first business day after the date sent if sent by
recognized overnight courier (or two-day courier, if next-day service is
unavailable); or (d) on the date transmitted if sent via facsimile (with
confirmation of receipt generated by the transmitting machine).

 

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If to SGI:

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

Invoices to SGI:    [ * ]

If to Genmab:

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

With a copy to:

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

Invoices to Genmab:    [ * ]

23.2    Applicable Law. The Agreement shall be governed by and construed in
accordance with the laws of the [ * ], without regard to the conflict of law
principles thereof that may dictate application of the laws of any other [ * ],
or the [ * ] as applicable.

23.3    Dispute Resolution. The Parties agree that they shall seek to resolve
any dispute or disagreement that arises between Genmab on the one hand and SGI
on the other in respect of this Agreement that is not resolved by the JSC
pursuant to the procedure set forth in Section 3.2.7.

23.3.1    Any dispute not resolved by the procedure set forth in Section 3.2.7
shall be submitted by the Parties for resolution by [ * ] in [ * ] except as
otherwise provided herein. The Parties shall [ * ] within [ * ] of [ * ]. The [
* ] shall be [ * ]. If [ * ], the [ * ] shall [ * ] within [ * ] of [ * ]. The [
* ] shall [ * ]. 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 [ * ], any [ * ] shall [ * ].

 

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23.3.2    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 with interest in
accordance with Section 12.1.3.

23.3.3    Notwithstanding the foregoing, any disputes relating to inventorship
or the validity, enforceability or scope of any patent or trademark rights
(except for a dispute relating to the remedy under Section 17.4 or 17.5) shall
be submitted for resolution by a court of competent jurisdiction.

23.4    Entire Agreement. This Agreement and the Prior 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, including the Prior Agreement, 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.

23.5    Independent Contractors. SGI and Genmab 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 Genmab 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.

23.6    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.

23.7    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.

23.8    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.

 

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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 GENMAB A/S By:  

/s/ Jan van de Winkel

Name:   Jan van de Winkel Title:   President & CEO

 

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Schedule A

SGI PATENTS

[ * ]

 

Schedule A

1

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AMENDED.

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Schedule B

Research and GLP Grade Supply Fee Pricing List

[ * ]

 

Schedule B

1

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Schedule C

GENMAB IN-LICENSES

[ * ]

 

Schedule C

1

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Schedule D

SGI RESEARCH AND DEVELOPMENT SUPPORT PRIOR TO END OF PHASE I CLINICAL TRIAL

[ * ]

{2 pages omitted}

 

Schedule D

1

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AMENDED.

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Schedule E

GENMAB DEVELOPMENT PLAN AND GENMAB BUDGET

[ * ]

 

Schedule E

1

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Schedule F

GENMAB PATENTS

[ * ]

{9 pages omitted}

 

Schedule F

1

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AMENDED.