Exhibit 10.1

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as [***].

 

COLLABORATION AND LICENSE AGREEMENT

 

This Agreement is entered into as of September 27, 2004 among:

 

• 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 “Licensor”); and

 

• BAYER PHARMACEUTICALS CORPORATION, a Delaware corporation, having its
principal place of business at 400 Morgan Lane, West Haven, Connecticut,
06516-4175 (hereinafter referred to as “Licensee”).

 

WITNESSETH

 

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

 

WHEREAS, Licensee owns or Controls (as defined below) intellectual property
rights relating to antibodies to the Designated Antigen (as defined below), and
is currently conducting research and development programs to incorporate such
antibodies into pharmaceutical compounds that may have activity in certain
disease-related pathways, and to develop antibodies that bind to the Designated
Antigen;

 

WHEREAS, Licensor and Licensee’s Affiliate (as defined below), [***] (the
“Research Collaboration Agreement”), whereby Licensor and Licensee’s Affiliate
agreed to produce, purify and test certain antibodies conjugated to one or more
[***];

 

WHEREAS, Licensee now wishes to acquire from Licensor an exclusive worldwide
license under Licensor’s patent rights and know-how related to Licensor’s
proprietary [***] for use in conjunction with Licensee’s development,
commercialization, manufacture, marketing and sale of Licensee’s antibodies that
bind to the Designated Antigen; and

 

WHEREAS, Licensor wishes to grant to Licensee an exclusive worldwide license to
Licensor’s [***] for use in conjunction with Licensee’s development,
commercialization, manufacture, marketing and sale of Licensed Products (as
defined below);

 

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:

 

“ADC” or “Antibody-Drug Conjugate” means an Antibody [***] or [***] and that
contains, uses or is made using Drug Conjugation Technology.

 

CONFIDENTIAL

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“ADC Access Fee” has the meaning set forth in Section 6.1.1.

 

“ADC Data” has the meaning set forth in Section 2.6.

 

“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 specified party. For such
purposes (and for purposes of Article 16 hereof), “control,” “controlled by” and
“under common control with” shall mean the possession of the power to direct or
cause the direction of the management and policies of a specified party, whether
through the ownership of voting equity, voting member or partnership interests,
control of a majority of the board of directors or other similar body, by
contract or otherwise. In the case of a corporation, the direct or indirect
ownership of more than [***] of its outstanding voting shares or the ability
otherwise to elect a majority of the board of directors or other managing
authority of the entity shall in any event be presumptively deemed to confer
control, it being understood that the direct or indirect ownership of a lesser
percentage of such shares shall not necessarily preclude the existence of
control.

 

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

 

  Schedule A - Research Plan.

 

  Schedule B - Licensor Patents.

 

  Schedule C - Licensor In-Licenses.

 

  Schedule D - Sample Royalty Reduction Calculation.

 

“Antibody” or “Antibodies” means any antibody, or [***], that binds to an
Antigen.

 

“Antigen” means any [***].

 

“Applicable Laws” means all applicable laws, rules, and regulations, including,
without limitation, any rules, regulations, guidelines or other requirements of
the Regulatory Authorities, that may be in effect from time to time in any
portion of the Territory.

 

“ASU Acknowledgement” shall mean [***] to the [***].

 

“BLA” means a Biologics License Application, as defined in the FD&C Act and the
regulations promulgated thereunder from time to time, and any corresponding
foreign application, registration or certification, approval or grant of which
by the relevant Regulatory Authorities is necessary or reasonably useful to
market a Licensed Product in any portion of the Territory, but not including
pricing and reimbursement approvals.

 

“BMS Consent” shall mean the consent of BMS to the sublicense of rights under
Section 4.2(a) of the BMS Agreement.

 

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

 

“Breaching Party” has the meaning set forth in Section 13.3.

 

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

 

“Change of Control” has the meaning set forth in Article 16.

 

“Claims” has the meaning set forth in Section 14.1.1.

 

“CMC Data” means any and all information contained in, as well as data
supporting, the Chemistry, Manufacturing and Control and facilities sections (or
sections corresponding thereto) of an application for Regulatory Approval.

 

“Combination Product” has the meaning set forth in Section 6.4.4.

 

“Commencement of Clinical Trials” means the date of first visit of the first
patient for a subject indication to a physician or equivalent licensed health
care practitioner for a clinical trial.

 

“Commercial Launch” means the first commercial sale of a Licensed Product to a
Third Party following Regulatory Approval in a relevant country in the
Territory.

 

“Commercially Reasonable Efforts” means with respect to the development of the
Licensed Product, [***].

 

“Confidential Disclosure Agreement” has the meaning set forth in Section 8.1.

 

“Confidential Information” has the meaning set forth in Section 8.1.

 

“Control” means possession by a Party of the right, whether by ownership,
license, or otherwise, to grant the right to access or use, or to grant a
license or a sublicense to, such information or intellectual property right as
provided for herein, to the fullest extent authorized by such ownership, license
or otherwise.

 

“Cost of Goods” shall mean, with respect to Drug Conjugation Materials supplied
to Licensee, the Fully Burdened Cost of providing such materials.

 

“Designated Antigen” means the [***], having a GenBank accession number of
[***].

 

“Development Pipeline Approval” means the internal approvals required by
Licensee for a drug candidate to enter Licensee’s product development pipeline,
or an equivalent approval by an Affiliate or Sublicensee, which in any event
shall occur [***]; provided that Development Pipeline Approval must occur [***].

 

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“Drug Conjugation Materials” means the [***], and [***] and [***] thereof, as
well as compounds that are useful in attaching such compounds to [***], in each
case to the extent included in or covered by the Licensor Technology. Drug
Conjugation Materials shall also include Improvements to Drug Conjugation
Materials, to the extent set forth in Section 3.3.1, and any additional [***]
compounds that are included in New Technologies and that the Parties agree to
include under this Agreement pursuant to Section 3.3.2.

 

“Drug Conjugation Technology” means chemical compositions and methods that are
useful to attach [***] compounds to Antibodies, including without limitation the
composition and methods of making and using [***] compounds such as [***] and
[***] and [***] thereof, as well as compositions and methods useful for
attaching [***] or [***] to [***].

 

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

 

“Events of Force Majeure” has the meaning set forth in Article 15.

 

“Exclusive License” has the meaning set forth in Section 3.1.

 

“Exclusive License Renewal Fee” has the meaning set forth in Section 6.2.

 

“Existing Third Party Royalties” has the meaning set forth in Section 6.4.1.

 

“Exploit” means to make, have made, import, use, sell, offer for sale, or
otherwise dispose of, a product or process, including, without limitation, to
discover, research, develop, register, modify, enhance, improve, manufacture,
store, formulate, export, import, optimize, transport, distribute, promote and
engage in marketing activities related thereto.

 

“Exploitation” means the making, having made, importing, use, sale, offering for
sale, or other disposition of, a product or process, including, without
limitation, all discovery, research, development, registration, modification,
enhancement, improvement, manufacturing, storage, formulation, exportation,
importation, optimization, transportation, distribution, promotion and marketing
activities related thereto.

 

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

 

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

 

“Field” means [***].

 

“First Commercial Sale” means, in each country of the Territory, the first
commercial sale of a Licensed Product by Licensee, its 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.

 

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Confidential   4.    

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“FTE” shall mean a full-time equivalent year, consisting of a total of [***] of
work by one or more employees of Licensor on or directly related to and in
support of the Research Plan.

 

“FTE Fees” has the meaning set forth in Section 6.1.2.

 

“Fully Burdened Cost” shall mean, as applicable to Licensor’s costs, the sum of
the following costs incurred by Licensor to the extent directly allocable to the
manufacture and supply of Drug Conjugate Materials or ADCs, as applicable:
[***], including without limitation [***]. Fully Burdened Cost shall be
calculated in a [***], but shall not include any of the foregoing costs if and
to the extent such costs are (1) [***]; or (2) [***].

 

“GAAP” means United States generally accepted accounting principles applied on a
consistent basis.

 

“Generic Product” means, on a country-by-country basis, an ADC using or
incorporating Licensor Technology that binds specifically to the Designated
Antigen: (i) the manufacture, use or sale of which is [***]; and (ii) that is
[***] in such country in the most recent [***] consecutive [***].

 

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

 

“ICC” has the meaning set forth in Section 19.3.4.

 

“Improvements” means all patentable or non-patentable inventions, discoveries,
modifications, variations, revisions or other know-how Controlled by either
party after the Effective Date that (a) utilize, incorporate, derive from,
relate to, are made using or are based on the Licensor Technology existing as of
the Effective Date and/or during the Term or (b) are otherwise useful in the
practice or use of the Drug Conjugation Technology; provided that Improvements
shall not include [***] or [***] covered by Section [***].

 

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

 

“Indemnitee” has the meaning set forth in Section 14.2.

 

“Indemnitor” has the meaning set forth in Section 14.2.

 

“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.

 

“Joint Patents” has the meaning set forth in Section 9.2.3.

 

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Confidential   5.    

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“Liabilities” has the meaning set forth in Section 14.1.1.

 

“Licensed Product” means any and all products containing an ADC comprised of an
Antibody that binds specifically to the Designated Antigen and that is attached
to a [***] agent included in the Drug Conjugation Materials, the manufacture,
use, sale, offer for sale or import of which (a) [***]; or (b) [***].

 

“Licensee” has the meaning set forth in the preamble to this Agreement.

 

“Licensee ADC Know-How” means all technical information, processes, formulae,
data, inventions, methods, chemical compounds, biological or physical materials,
know-how and trade secrets Controlled by Licensee, in each case that are not in
the public domain and are developed by Licensee using Licensor Technology, and
that are necessary for identifying, developing, making, using or selling [***].

 

“Licensee ADC Patents” means all patent applications and patents that are
Controlled by Licensee claiming inventions made using Licensor Technology, and
that claim inventions that are necessary for identifying, developing, making,
using or selling [***].

 

“Licensee Know-How” means all technical information, processes, formulae, data,
inventions, methods, chemical compounds, biological or physical materials,
know-how and trade secrets that are Controlled by Licensee, in each case that
are not in the public domain, that relate to (a) [***] or (b) [***].

 

“Licensee Patents” means all patent applications and patents Controlled by
Licensee that claim (a) [***], or (b) [***].

 

“Licensor” has the meaning set forth in the preamble to this Agreement.

 

“Licensor In-Licenses” means the following agreements between Licensor and the
indicated Third Parties: (a) [***].

 

“Licensor Know-How” means any and all technical, scientific and other
information, processes, formulae, data, inventions, methods, chemical compounds,
biological or physical materials Controlled by Licensor, in each case that are
not in the public domain, and that relate to or are useful to practice the Drug
Conjugation Technology. Licensor Know-How shall include Improvements Controlled
by Licensor but shall exclude [***] unless [***].

 

“Licensor Patents” means:

 

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

 

(b) any patents and patent applications covering Improvements and, to the extent
[***], [***], in each case that are Controlled by Licensor;

 

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Confidential   6.    

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(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 Licensor), 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 Licensor; 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 Licensor.

 

“Licensor Technology” means Licensor Patents and the Licensor Know-How,
including Improvements and New Technology to the extent agreed pursuant to
Section 3.3.2.

 

“Major Market” means each of the [***].

 

“NDA” means a New Drug Application, as defined in the FD&C Act, as amended, and
the regulations promulgated thereunder from time to time, and any corresponding
foreign application, registration or certification, approval or grant of which
by the relevant Regulatory Authorities is necessary or reasonably useful to
market and sell commercially a Licensed Product in the Territory, but not
including pricing and reimbursement approvals.

 

“Net Sales” means, as to each Calendar Quarter, the gross amount billed by
Licensee, its Affiliates or Sublicensees to Third Parties (and not to
Affiliates) throughout the Territory for sales of the Licensed Product, [***]:
(a) [***], (b) [***], (c) [***], (d) [***], and (e) [***], to the extent stated
on the invoice as a separate item. All of the [***] from the gross amount billed
of Licensed Products shall be determined in accordance with GAAP. In the event
that Licensee, its Affiliates or Sublicensees make any adjustments to [***]
after the associated Net Sales have been reported pursuant to this Agreement,
the adjustments shall be reported and reconciled with respect to the period in
which the adjustment is made and will be reflected in an appropriate adjustment
to the payment of any royalties that were or will become due for that period. In
addition, Net Sales by Licensee hereunder are subject to the following:

 

(a) In the case of [***];

 

(b) In the case of any sale or other disposal of a Licensed Product by Licensee
to an Affiliate, [***];

 

(c) In the event of [***] as to the Licensed Product, Net Sales will be
calculated with respect to sales of the Licensed Product by the [***];

 

(d) If Licensee or its Affiliates or Sublicensees make a sale or other disposal
of a Licensed Product to a customer in a [***] or as [***], the Net Sales of
that Licensed Product shall be deemed to be [***]; and

 

(e) [***].

 

“[***]” means any and all [***] or other [***], excluding Improvements, that
either: (a) are first developed by Licensor after the Effective Date and that
are [***] or (b) are in-

 

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Confidential   7.    

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licensed by Licensor after the Effective Date, and that in each case either (x)
[***], or (y) [***]. [***] shall include without limitation [***] or [***] other
than those included in the Drug Conjugation Materials as of the Effective Date
that Licensor Controls during the Term.

 

“Notice of Dispute” has the meaning set forth in Section 19.3.1.

 

“Parties” means Licensee (collectively) and Licensor, and “Party” means either
of them.

 

“Phase II Clinical Trial” means a controlled dose clinical trial required by the
FDA, pursuant to regulations, guideline or otherwise, from time to time,
prospectively designed to evaluate the efficacy and safety of a candidate drug
in the targeted patient population and to define the optimal dosing regimen to
permit initiation of Phase III Clinical Trials, including, without limitation,
the trials referred to in 21 C.F.R. § 312.21(b), as amended.

 

“Phase III Clinical Trial” means a controlled, and usually multi-center,
clinical trial, involving patients with the disease or condition of interest to
obtain sufficient efficacy and safety data to support Regulatory Approval of a
candidate drug, including, without limitation, all tests and studies that are
required by the FDA from time to time, pursuant to regulations, guidelines or
otherwise, for a candidate drug, including, without limitation, the trials
referred to in 21 C.F.R. § 312.21(c), as amended.

 

“Program Inventions” has the meaning set forth in Section 9.1.1.

 

“Publication” has the meaning set forth in Section 8.5.

 

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

 

“Regulatory Authority” means any applicable supra-national, federal, national,
regional, state, provincial or local regulatory agencies, departments, bureaus,
commissions, councils or other government entities, including, without
limitation, the FDA, regulating or otherwise exercising authority with respect
to the development and commercialization of the Licensed Product in any portion
of the Territory.

 

“Reports” has the meaning set forth in Section 7.1.1.

 

“Research Collaboration Agreement” has the meaning set forth in the preamble to
this Agreement.

 

“Research Fees” has the meaning set forth in Section 6.1.2.

 

“Research Fees Report” has the meaning set forth in Section 6.1.2.

 

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Confidential   8.    

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“Research Plan” means the plan for the Research Program to be definitively
established by [***]. [***]. A preliminary draft of the Research Plan is
attached hereto as Schedule A.

 

“Research Program” means the research program conducted pursuant to Article 2.

 

“Research Program Term” means the term of the Research Program set forth in
Section 2.2.

 

“Royalty Term” means, on a Licensed Product-by-Licensed Product and
country-by-country basis, the term commencing on the date of the First
Commercial Sale until the later to occur of: (a) [***] of the date of First
Commercial Sale of the Licensed Product in such country; or (b) the date on
which there are no [***].

 

“Second Anniversary Date” has the meaning set forth in Section 6.1.2.

 

“Sublicensees” means any person or entity that is granted a sublicense under the
Licensor Technology by Licensee or its Affiliates in accordance with the terms
of this Agreement.

 

“Supply Fees” has the meaning set forth in Section 6.1.2.

 

“Term” has the meaning set forth in Section 13.1.

 

“Territory” means all [***].

 

“Third Party” means any person or entity other than Licensee, Licensor or an
Affiliate of either of them.

 

“Tier 1 Sales” has the meaning set forth in Section 6.3(a) hereof.

 

“Tier 2 Sales” has the meaning set forth in Section 6.3(b) hereof.

 

“Triggering Event” means, if after the Effective Date, (i) a Party becomes aware
of (whether by written notice of infringement or otherwise) and in good faith
believes that, as a result of the incorporation of Licensor Technology and/or
Improvements into the Licensed Products, there exists a substantial risk of
infringement involving one or more patents of Third Party(ies) in a country or
country(ies), (ii) such Party shall promptly notify the other Party of such
fact, and (iii) the Parties shall meet and confer and, either:

 

(a) the Parties will agree that there is a substantial risk of infringement of
one or more patents of Third Party(ies) in such country(ies) as a result of the
incorporation of Licensor Technology and/or Improvements into the Licensed
Products, whereupon the Triggering Event is the agreement by authorized
representatives of each Party, and the steps outlined in Article 10 should be
taken; or

 

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Confidential   9.    

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(b) the Parties do not agree within [***] of (ii) that there is a substantial
risk of infringement of one or more patents of Third Party(ies) in such
country(ies) as a result of the incorporation of Licensor Technology and/or
Improvements into the Licensed Products, in which case the President of Licensor
and the head of Bayer HealthCare LLC or his designee shall meet at a [***] for
the purpose of resolving such dispute. If, within [***] after such meeting
occurs, the Parties have not reached agreement, then a Triggering Event shall
occur and the steps outlined in Article 10 shall be taken.

 

“UNCITRAL” has the meaning set forth in Section 19.3.4.

 

“Valid Patent Claim” means with respect to a particular Licensed Product and a
particular country, (a) in the case of an issued and unexpired patent, a claim
that (i) has not been revoked or held unenforceable or invalid by a decision of
a court (or other competent legal authority having proper jurisdiction over the
matter in the subject country) from which no appeal can be taken or has been
taken within the time allowed for appeal; and (ii) has not been abandoned,
disclaimed, denied or admitted to be invalid or unenforceable through reissue or
disclaimer or otherwise in such country; and (b) in the case of a pending patent
application, a pending claim that was filed not more than [***] prior to the
relevant date of inquiry, that has been prosecuted in good faith and has not
been cancelled, withdrawn, abandoned or finally disallowed without the
possibility of appeal or refiling.

 

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 frequently
identified with the phrases “without limitation” and “but not limited to”; and

 

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 the jurisdiction of the Party obligated
to make such payment or do such act.

 

ARTICLE 2 - RESEARCH PROGRAM

 

2.1 Objective and Conduct of the Research Program. Licensee intends to conduct a
Research Program, with Licensor’s collaboration, assistance and support, to
evaluate ADCs for preclinical, clinical and commercial development under this
Agreement. Licensor and Licensee

 

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Confidential   10.    

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shall each use Commercially Reasonable Efforts to perform, or cause to be
performed, the activities to be designated for such Party in the Research Plan.
Licensee acknowledges that, as part of the licenses to the Licensor Technology
granted hereunder, the Licensor Know-How transferred to Licensee under this
Agreement contains valuable information that is critical to Licensee’s
development of ADCs hereunder. All research work performed by Licensee and
Licensor hereunder shall be performed in a good scientific manner and in
compliance with all Applicable Laws.

 

2.2 Term of the Research Program. The term of the Research Program shall
initially be for a period of [***] after the Effective Date (the “Research
Program Term”), unless terminated earlier in accordance with Article 13.
Licensee shall have the one-time right to extend the Research Program Term for
an additional [***] by providing written notice to Licensor and paying a fee of
[***] to the expiration of the initial Research Program Term.

 

2.3 Delivery of Drug Conjugation Materials. In support of the Research Program,
Licensor will use Commercially Reasonable Efforts to deliver Drug Conjugation
Materials to Licensee, at the times and in the quantities set forth in the
Research Plan, to enable Licensee to attach such materials to Licensee’s
Antibodies to create ADCs. At Licensee’s request, Licensor will also provide
Licensee with the [***] provided to the Licensee to [***]. All such Drug
Conjugation Materials and other information provided by Licensor to Licensee
hereunder (and all such Drug Conjugation Materials provided under Section 4 of
the Research Collaboration Agreement) will be deemed Confidential Information of
Licensor pursuant to Article 8.

 

2.4 Licensor Preparation of ADCs. As directed by the Research Plan, Licensor
will prepare the quantities of ADCs as set forth in the Research Program using
Antibodies supplied by Licensee to Licensor and the Drug Conjugation Materials,
and shall deliver the resulting ADCs to Licensee.

 

2.5 Payment. Licensee shall pay Licensor the amounts set forth in Section 6.1.2
for any research efforts or other assistance provided by Licensor at the request
of Licensee in accordance with this Article 2; provided, however, [***] Licensor
if and to the extent such amounts are (1) [***]; or (2) [***].

 

2.6 Ownership of Data. Licensee shall own all right, title and interest in and
to the data, research and results related specifically to ADCs arising out of
activities conducted pursuant to the Research Program (“ADC Data”). Licensor
shall disclose to Licensee, and shall cause its Affiliates to disclose to
Licensee, any ADC Data that are developed, conceived, or otherwise made, solely
or jointly, by or on behalf of Licensor and/or its Affiliates in the course of,
as a result of, or in connection with the Research Program, promptly after the
same is developed, conceived or otherwise made. ADC Data [***], and all [***]
related thereto, the ownership and control of which, and rights with respect to
which, are separately provided for in [***]. Licensor hereby assigns to
Licensee, and shall cause its Affiliates to assign to Licensee, any and all
right, title, and interest Licensor and its Affiliates may have in, to and under
ADC Data; provided that Licensor may retain copies of, and use (subject to the
requirements of Section 3.6 hereof), all ADC Data it obtained, jointly or
solely, [***].

 

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Confidential   11.    

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ARTICLE 3 - EXCLUSIVE LICENSE

 

3.1 Exclusive License Grant. Subject to the terms and conditions of this
Agreement, Licensor hereby grants to Licensee a worldwide, exclusive (even as to
Licensor), royalty-bearing license under the Licensor Technology, with the right
to sublicense as permitted in Section 3.2, to discover, develop, make, have
made, import and export, use, offer for sale and sell Licensed Products within
the Field (the “Exclusive License”).

 

3.2 Rights to Sublicense.

 

3.2.1 Licensee shall have the right, in its sole and absolute discretion and
subject only to notice to Licensor (under Section 3.2.3) and the terms and
conditions of the Licensor In-Licenses listed on Schedule C, to grant
sublicenses of the rights granted to Licensee pursuant to this Agreement from
time to time to any Affiliate or any Third Party. Licensee shall not have the
right to sublicense the Licensor Technology outside the scope of the license
granted in Section 3.1, including to develop further Drug Conjugation Technology
on a stand-alone basis or to create ADCs that include, or are based, upon any
Antibodies that bind specifically to an Antigen other than the Designated
Antigen. Notwithstanding the foregoing, nothing contained in this Section 3.2.1
shall be construed as a requirement that Licensee enter into a sublicense
agreement in order to permit its local Affiliates to market and sell Licensed
Product under and pursuant to this Agreement.

 

3.2.2 Licensee shall, if and to the extent that Licensee will (subject to
Licensor’s consent) no longer be directly responsible to Licensor for royalties
and milestone payments under Article 6 hereof, contractually obligate any
Sublicensee to make its pro rata portion of all payments due to Licensor
pursuant to this Agreement by reason of achievement of any milestones set forth
in Section 6.5 or owed on Net Sales of any Licensed Products by any such
Sublicensee pursuant to Section 6.3. In addition, Licensee shall contractually
obligate any Sublicensee to comply with all terms of this Agreement applicable
to Licensee (including all terms of this Agreement identified as applicable to
Sublicensee). Licensee shall require any such Sublicensee to agree in writing to
keep books and records and permit Licensor to review the information concerning
such books and records in accordance with the terms of this Agreement.

 

3.2.3 Licensee shall notify Licensor of each sublicense granted to Affiliates or
Third Parties and shall provide Licensor with the name and address of each
Sublicensee and a description of the rights granted and the territory covered by
each Sublicensee.

 

3.3 Improvements and New Technologies.

 

3.3.1 Improvements. In the event that, during the Research Program Term, either
Party conceives, develops or reduces to practice an Improvement, such Party
shall promptly notify the other Party of the discovery of such Improvement.
Licensor shall own all Improvements and, to the extent that any Improvements
shall have been conceived, developed or reduced to practice by Licensee,
Licensee hereby assigns all of its right, title and interest therein to
Licensor. Licensor’s interest in any such Improvements that it Controls shall be
included in the Licensor Technology and made available to Licensee via the
Exclusive License provided in Section 3.1.

 

12.

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3.3.2 [***].

 

(a) Licensee shall have the right to practice any New Technologies pursuant to
the Exclusive License granted under Article 3 as follows: Licensor shall [***]
of any [***] which it develops or to which it obtains rights (with the right to
grant sublicenses thereunder) during the Term by providing to Licensee a [***]
of the [***], including all [***] under which Licensee would be able to access
such [***]. Licensor shall provide to Licensee a copy of any relevant license
agreements, patents and patent applications governing or pertaining to the [***]
to enable Licensee to decide whether it desires to obtain a sublicense under
such [***].

 

(b) If Licensee is interested in practicing any [***] which relate to the
development of compounds incorporating ADCs based on Antibodies that bind
specifically to the Designated Antigen in the Field, the Parties shall discuss
in good faith modifications to this Agreement to reflect the terms governing
Licensee’s access to any [***] pursuant to this Agreement, which shall include
without limitation Licensee’s agreement to [***]; provided that the [***] shall
be deemed to include [***] and Licensor Patents (as applicable) relating to or
covering such [***] only after the Parties execute an amendment to this
Agreement specifying such modified terms.

 

3.3.3 [***]. [***] shall be amended from time to time to [***] Controlled by
Licensor [***] in accordance with Section 3.3.2.

 

3.4 Compliance with the Licensor In-Licenses.

 

3.4.1 Licensee, its Affiliates and Sublicensees shall comply with all
obligations, covenants and conditions of the Licensor In-Licenses listed in
Schedule C, and any amendments thereto following written disclosure thereof to
Licensee (and, if required, consent of Licensee in conformity with Section
3.4.2), that apply under each of the Licensor In-Licenses. The Parties agree
that in the event of a breach by Licensee of the terms of the BMS Agreement, BMS
shall be deemed a third party beneficiary to this Agreement to the extent
Licensor Technology includes technology sublicensed under the BMS Agreement, and
BMS shall be entitled to enforce its rights directly against Licensee and its
Affiliates and Sublicensees.

 

3.4.2 Licensor will not [***] any [***] to a [***] that (a) [***], (b) [***] or
(c) [***]. In addition, Licensor will not enter into [***] to the [***] that
[***] on Licensee with respect to Licensed Products [***].

 

3.5 License to Licensor. Subject to the provisions and terms of this Agreement,
Licensee hereby grants to Licensor a non-exclusive, royalty-free, sublicenseable
license under the Licensee Patents and Licensee Know-How in the Territory,
solely to the extent necessary to enable Licensor to perform or have performed
its responsibilities under this Agreement.

 

3.6 Strategic Commitment. Licensor agrees that during the Term and, in the event
of any termination of this Agreement by Licensee under [***] hereof, for a [***]
after the effective date of any such termination, it [***] any of its Affiliates
to, [***], in any country in the Territory, any [***]. The Parties acknowledge
that all restrictions contained in this Section are reasonable, valid and
necessary for the adequate protection of the business associated with the
Licensed Product.

 

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Confidential   13.    

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ARTICLE 4 - TECHNOLOGY DISCLOSURE

 

4.1 Disclosure of Drug Conjugation Technology. During the Term, Licensor shall
(a) disclose to Licensee such Licensor Know-How as is reasonably useful to
enable Licensee to use the Drug Conjugation Materials and Drug Conjugation
Technology as provided in the Research Plan or to practice the Exclusive License
on the terms, and subject to the conditions, of this Agreement and (b) upon
Licensee’s reasonable request and with adequate notice to Licensor, make
available to Licensee at Licensor’s facilities, Licensor’s personnel to provide
a reasonable amount of technical assistance and training to Licensee’s
personnel. Licensee shall pay to Licensor for such assistance an amount equal to
the [***] in accordance with [***] for Licensor employees providing such
assistance.

 

ARTICLE 5 - DEVELOPMENT AND COMMERCIALIZATION; MANUFACTURING

 

5.1 Diligence Obligations of Licensee. Subject to Licensee’s termination rights
under Sections 13.2.1 and 13.2.2, Licensee shall use Commercially Reasonable
Efforts to develop, commercialize and market Licensed Products. Without limiting
the foregoing, Licensee shall exercise Commercially Reasonable Efforts to (a)
[***], (b) [***], (c) [***] and (d) [***].

 

5.2 Diligence Obligations of Licensor. Licensor shall use Commercially
Reasonable Efforts to perform all of the tasks and duties assigned to it under
this Agreement and the Research Plan and shall cooperate and support Licensee in
Licensee’s performance of the tasks and duties assigned to it under this
Agreement. Without limiting the generality of the foregoing, Licensor shall use
Commercially Reasonable Efforts to (i) [***] to Licensee at the [***] by the
Parties and (ii) [***] using Antibodies supplied by Licensee, [***]. Licensor
shall comply with all Applicable Laws (including good laboratory, clinical and
manufacturing practices) in performance of its obligations hereunder.

 

5.3 Funding and Progress Reports. Except as expressly set forth in this
Agreement, as between Licensor and Licensee, [***]. Licensee shall keep Licensor
reasonably informed in a timely manner as to the progress of the development of
Licensed Products. Beginning on [***], and annually thereafter within [***]
following the [***], Licensee shall provide Licensor with a written report
summarizing Licensee’s material activities related to research and development
of Licensed Products and status of clinical trials and applications for
Regulatory Approval necessary for marketing Licensed Products. Such reports
shall be deemed Licensee’s Confidential Information for the purposes of Article
8.

 

5.4 Manufacturing. Except as otherwise set forth in this Agreement, Licensee
shall be responsible for all manufacturing and supply of the Licensed Products.
Notwithstanding the foregoing, Licensor shall [***]. In the event Licensor
[***], the Parties shall [***], including [***] and other such terms as may be
appropriate and customary in [***].

 

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Confidential   14.    

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ARTICLE 6 - FEES, ROYALTIES, AND PAYMENTS.

 

6.1 Research Fees. Licensee shall pay to Licensor the following amounts in
consideration of the Research Program:

 

6.1.1 Licensor acknowledges that Licensee has paid to Licensor the sum of [***]
by wire transfer of immediately available funds pursuant to [***] by and between
Licensee and Licensor, for the purposes and on the terms and conditions
described therein (the “ADC Access Fee”).

 

6.1.2 Licensee shall pay Licensor at an annual rate of [***] per FTE for
research work as requested by Licensee and actually performed by Licensor
pursuant to the Research Plan or as provided in this Agreement in each of the
[***] of the Term (the “FTE Fees”). Commencing upon the [***] of the Effective
Date (the “[***]”) and upon every [***] thereafter, the rate applicable to
calculating the FTE Fees will [***] by [***] per FTE. Licensee shall also pay
Licensor for all Drug Conjugation Materials supplied by Licensor to Licensee
hereunder at the rate of [***] of Licensor’s Cost of Goods therefor (the “Supply
Fees”); provided, however, that such Supply Fees for [***] shall not exceed
[***] per milligram. The FTE Fees and the Supply Fees are collectively referred
to herein as the “Research Fees”. Within [***] after the end of each [***],
Licensor shall submit a report to Licensee in form and substance satisfactory to
Licensee and accompanied by such documentation and verification as Licensee may
reasonably request supporting the calculation of the Research Fees due for such
[***] (a “Research Fees Report”). Licensee shall pay all Research Fees to
Licensor within [***] of receipt of each Research Fees Report.

 

6.2 License Maintenance Fees. Until Licensee [***] in respect of the Licensed
Product, Licensee shall be [***] to Licensor in the sum of [***] by wire
transfer of immediately available funds (the “Exclusive License Renewal Fee”) on
[***] following the [***]; provided, however, that Licensee shall not be [***].

 

6.3 Royalties Payable by Licensee. In consideration for the Exclusive License
granted to Licensee herein, during the Royalty Term, and subject to Sections
6.4.2 through 6.4.4, Licensee shall pay to Licensor incremental royalties on Net
Sales of Licensed Products. Such incremental royalties shall be paid at the
following rates, determined on a Licensed Product-by-Licensed Product basis as
set forth below:

 

(a) For the first [***] of aggregate [***] of the [***] in any [***] (“Tier 1
Sales”):

 

(i) [***] of aggregate [***] of [***] in any country in the Territory during any
period in which there is a [***] of the Licensed Product; and

 

(ii) [***] of aggregate [***] in any country in the Territory during any period
in which there is [***] of the Licensed Product;

 

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Confidential   15.    

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(b) For aggregate [***] of the [***] in any [***] in excess of [***] (“Tier 2
Sales”):

 

(i) [***] of aggregate [***] in any country in the Territory during any period
in which there is a [***] of the Licensed Product; and

 

(ii) [***] of aggregate [***] in any country in the Territory during any period
in which there is [***] of the Licensed Product.

 

(c) The ratio of (1) aggregate [***] in the Territory with a [***] and (2)
aggregate [***] in the Territory with [***], will be applied to Tier 1 and Tier
2 Sales as shown in Schedule D.

 

(d) If and for so long as there is a [***], then [***] with respect to [***] of
Licensed Products during the time period that such [***].

 

(e) In establishing the royalty structure of this Section 6.3, the Parties
recognize, and Licensee acknowledges, the substantial value of the various
actions and investments undertaken by Licensor prior to the Effective Date. Such
value is significant and in addition to the value of Licensor’s grant to
Licensee of the Exclusive License pursuant to Section 3.1, as it enables the
rapid and effective development and commercialization of the Licensed Products
in the Territory. Therefore, the Parties agree that the royalty payments
calculated as a percentage of [***] (plus the license fee, milestone payments
and other payment provided for elsewhere herein) provide fair compensation to
Licensor for these additional benefits.

 

6.4 Third Party Royalties.

 

6.4.1 Licensee shall be solely responsible for paying all royalties owed to
Third Parties by either Licensee or Licensor on account of sales of Licensed
Products, including royalties owed due to use of the Licensor Technology; [***].
Licensor represents and warrants [***]; provided, however, that the [***].

 

6.4.2 If the sum of (a) the royalties payable by Licensee, its Affiliates or
Sublicensees to Licensor under [***] and (b) all other Third Party royalties
payable by Licensee in order to permit Licensee, its Affiliates or Sublicensees
to exploit the Drug Conjugation Technology in the manner licensed under this
Agreement [***] of [***] of a [***] in any [***], then (subject to the proviso
set forth below in this Section 6.4.2) the royalties otherwise due and payable
by Licensee under Section 6.3 shall be [***] of any royalties due by Licensee
with respect to [***] of a [***] in such year that [***] of such Net Sales;
provided, however, that in no event shall the royalty payments due and payable
to Licensor pursuant to Section 6.3 with respect to a Licensed Product in any
calendar year be [***] of the royalty payments that would otherwise be owed to
Licensor [***]. A sample royalty reduction calculation is attached hereto as
Schedule D.

 

6.4.3 If by reason of an amendment negotiated by Licensor and [***] the Third
Party Royalties payable to [***] by Licensee, its Affiliates or Sublicensees are
[***] of a [***] in any [***], then the royalties otherwise due and payable by
Licensee under Section 6.3 [***] of the amount by which the royalties payable to
[***].

 

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[***] Confidential treatment has been requested with respect to the omitted
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Confidential   16.    

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6.4.4 In the event that Licensee desires to formulate a Licensed Product in
combination with one or more additional therapeutically active ingredients
(each, a “Combination Product”), the Parties shall negotiate in good faith one
or more appropriate amendments to this Agreement to equitably adjust the
relevant royalty rates applicable to such Combination Products to [***]. If the
Parties are able to agree to such adjustment, they shall enter into an
appropriate amendment reflecting the adjustments to the applicable royalty
rate(s).

 

6.5 Milestone Payments. As additional consideration for the licenses, rights and
privileges granted to it hereunder, Licensee shall pay to Licensor the following
[***] of the first occurrence of each event set forth below with respect to the
first [***], whether such events are achieved by Licensee, its Affiliates or
Sublicensees, as follows:

 

(a) Upon [***];

 

(b) Upon [***];

 

(c) Upon[***];

 

(d) Upon [***];

 

(e) Upon [***];

 

(f) Upon [***];

 

(g) At the end of the [***] in which [***] of [***]; and

 

(h) At the end of the [***] in which [***] of [***].

 

If any milestone described in (a) through (e) above is achieved before a
preceding milestone has been achieved and the associated milestone payment has
become due, then the milestone payment associated with such preceding milestone
shall be deemed to become due and payable following achievement of the next
milestone.

 

6.6 Payment Terms. Royalties shown to have accrued in each Report provided for
under Article 7 of this Agreement shall be due on the date such Report is due
pursuant to Section 7.1.3.

 

6.7 Payment Method. All payments by Licensee to Licensor under this Agreement
shall be paid in U.S. dollars, and all such payments shall be made by bank wire
transfer in immediately available funds to the bank account designated by
Licensor in writing.

 

6.8 Exchange Control. If at any time legal restrictions prevent the prompt
remittance of part or all royalties with respect to any country in the Territory
where Licensed Product is sold, payment shall be made through such lawful means
or method as the Parties shall reasonably determine.

 

6.9 Withholding Taxes. Except as otherwise provided below, all amounts due from
Licensee to Licensor under this Agreement are gross amounts. Licensee shall be
entitled to

 

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[***] Confidential treatment has been requested with respect to the omitted
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Confidential   17.    

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deduct the amount of any withholding taxes payable or required to be withheld by
Licensee, its Affiliates or Sublicensees, to the extent Licensee, its Affiliates
or Sublicensees pay such withheld amounts to the appropriate governmental
authority on behalf of Licensor. Licensee shall use Commercially Reasonable
Efforts to minimize any such taxes, levies or charges required to be withheld on
behalf of Licensor by Licensee, its Affiliates or Sublicensees. Licensee
promptly shall deliver to Licensor 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 Licensor
in seeking any related tax credits that may be available to Licensor with
respect thereto.

 

ARTICLE 7 - ROYALTY REPORTS AND ACCOUNTING

 

7.1 Reports, Exchange Rates.

 

7.1.1 During the Royalty Term, Licensee shall furnish to Licensor, with respect
to each [***], a written report showing, on a consolidated basis in reasonably
specific detail and on a country-by-country basis, (a) the gross sales of
Licensed Products sold by Licensee, its Affiliates and its Sublicensees in the
Territory during the [***] and the calculation of Net Sales from such gross
sales; (b) the royalties payable in U.S. dollars, if any, which shall have
accrued hereunder based upon such Net Sales of Licensed 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 Licensed Product
in each country in the Territory, if it has occurred during the corresponding
[***]; and (e) the exchange rates (as determined pursuant to Section 7.1.4
herein) used in determining the royalty amount expressed in U.S. dollars
(collectively, “Reports”).

 

7.1.2 Licensee shall include in each permitted sublicense granted by it pursuant
to this Agreement a provision requiring its Affiliates and Sublicensees to make
Reports to Licensee after the close of each [***] and to keep and maintain
records of sales made pursuant to such sublicense as if such sales were by
Licensee for the purpose of Section 7.1.1.

 

7.1.3 Reports shall be due on the [***] following the end of the [***] to which
such Report relates. Licensee 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.

 

7.1.4 With respect to sales of Licensed 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 Licensed Products invoiced in a currency other
than U.S. dollars, the gross sales, Net Sales and royalties payable shall be
converted into U.S. Dollars using the [***] for each of the [***] included in
the [***] in which such Net Sales were made. All such converted Net Sales and
cost items shall be consolidated with U.S. Net Sales for each [***] and the
applicable payments determined therefrom.

 

7.2 Audits.

 

7.2.1 Upon the written request of Licensor and with at least [***] prior written
notice, but not more than [***] in any [***] (and not more than once with
respect to any [***]),

 

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Confidential   18.    

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Licensee shall permit an independent certified public accounting firm of
internationally recognized standing, selected by Licensor and reasonably
acceptable to Licensee, at [***], to have access during normal business hours to
such of the records of Licensee as required to be maintained under this
Agreement to verify the accuracy of the Reports due hereunder. Such accountants
may audit records relating to Reports made for any year ending not more than
[***] prior to the date of such request. The accounting firm shall disclose to
Licensor only whether the Reports were correct or not, and the specific details
concerning any discrepancies. No other information obtained by such accountants
shall be shared with Licensor.

 

7.2.2 If such accounting firm concludes that any royalties were owed but not
paid to Licensor, Licensee shall pay the additional royalties within [***] of
the date Licensor delivers to Licensee such accounting firm’s written report so
concluding. The fees charged by such accounting firm shall be [***]; provided,
however, if the audit discloses that the royalties payable by Licensee for the
audited period [***] of the royalties actually paid for such period, then [***]
charged by such accounting firm. If such accounting firm concludes that the
royalties paid were more than what was owed during such period, Licensor shall
refund the overpayments within [***] of the date Licensor receives such
accounting firm’s written report so concluding.

 

7.2.3 The accounting firm’s determinations under Section 7.2.1 and 7.2.2 shall
be subject to the dispute resolution procedures established by Article 19
hereof.

 

7.3 Confidential Financial Information. Licensor shall treat all financial
information subject to review under this Article 7 or under any sublicense
agreement as Confidential Information of Licensee as set forth in Article 8, and
shall cause its accounting firm to retain all such financial information in
confidence under terms substantially similar to those set forth in Article 8.

 

ARTICLE 8 - CONFIDENTIALITY

 

8.1 Non-Disclosure Obligations. Except as otherwise provided in this Article 8,
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: (a) ADC Data, and (b) confidential or
proprietary information, data, documents or other materials supplied by the
other Party under this Agreement and marked or otherwise identified as
“Confidential,” including without limitation any such information previously
provided by either Party or Licensee’s Affiliate, [***], under and pursuant to
Article 8 of the Research Collaboration Agreement or pursuant to the
Confidential Disclosure Agreement between Bayer Corporation and Licensor dated
[***] (the “Confidential Disclosure Agreement”). Confidential Information of
Licensor shall include Licensor Know-How, Drug Conjugation Technology that is
Controlled by Licensor and disclosed to Licensee, Licensor’s interest in any
Improvements and [***]. Confidential Information of Licensee shall include ADC
Data and Licensee ADC Know-How disclosed to Licensor that is Controlled by
Licensee. 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 shall be hereinafter referred to as “Confidential
Information.” Each Party shall ensure that its and its Affiliates’ employees,
agents, consultants and clinical investigators only make use of the other
Party’s Confidential Information for purposes as expressly authorized and
contemplated by this Agreement and do not disclose or make any unauthorized use
of such Confidential Information.

 

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[***] Confidential treatment has been requested with respect to the omitted
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Confidential   19.    

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8.2 Permitted Disclosures. Notwithstanding the foregoing, but subject to the
last sentence of this Section 8.2, the provisions of Section 8.1 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 consent of the other Party;

 

(c) have become known to the disclosing Party by a Third Party, provided such
Confidential Information was not obtained by such Third Party directly or
indirectly from the other Party under this Agreement on a confidential basis;

 

(d) prior to disclosure under the Agreement, was already in the possession of
the receiving Party, its Affiliates or Sublicensees, provided such Confidential
Information was not obtained directly or indirectly from the other Party under
this Agreement;

 

(e) are required to be disclosed by the receiving Party to comply with any
Applicable Law, regulation or court order, or are reasonably necessary to obtain
patents, copyrights or authorizations to conduct clinical trials with, and to
commercially market, Licensed Product(s), provided that the receiving Party
shall provide prior notice of such disclosure to the other Party and take
reasonable and lawful actions to avoid or minimize the degree of disclosure;

 

(f) to the extent reasonably needed 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 prior notice of such disclosure to the other
Party and take reasonable and lawful actions to avoid or minimize the degree of
disclosure; and

 

(g) 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 herein.

 

Notwithstanding the foregoing, as to disclosures permitted under subsections
(e)-(g), if the information, documents or materials covered by such subsection
is otherwise protected by obligations of confidentiality, then the
confidentiality obligations of Section 8.1 shall still apply.

 

8.3 Terms of the Agreement. Licensee and Licensor 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 Laws, regulations or a court
order or to comply with rules of a securities exchange, 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.

 

8.4 Press Releases and Other Disclosures to Third Parties. Neither Licensor nor
Licensee will, without the prior consent of the other, issue any press release
or make any other

 

20.

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public announcement or furnish any statement to any person or entity (other than
either Parties’ respective Affiliates) concerning the existence of this
Agreement, its terms and the transactions contemplated hereby, except for (i) an
initial press release mutually agreed upon by the Parties, (ii) disclosures made
in compliance with Sections 8.2 and 8.3 and (iii) attorneys, consultants, and
accountants retained to represent the Parties.

 

8.5 Publications Regarding Results of the Research Program. Neither Party may
publish, present or announce results of the Research Program either orally or in
writing, or use the other Party’s name or trademarks in any publication,
research report or study (each, a “Publication”) without complying with the
provisions of this Section 8.5. Any Party wishing to make a Publication shall
send notice to the other Party. No Publication shall contain any Confidential
Information of the other Party without the consent and approval of the other
Party, which may be granted or withheld in the sole discretion of a Party. 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 [***] 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. In the event of any disagreement under
this Section 8.5, any dispute shall be resolved in the manner specified in
Section 19.3.

 

8.6 Use of Name. Neither Party shall mention or otherwise use the name,
insignia, symbol, trademark, trade name or logotype of the other Party (or any
abbreviation or adaptation thereof) in any publication, press release,
promotional material or other form of publicity without the prior written
approval of such other Party in each instance. The restrictions imposed by this
Section shall not prohibit either Party from making any disclosure identifying
the other Party that is required by Applicable Law.

 

8.7 Notification. Each Party shall notify the other Party immediately, and
cooperate with the other Party as the other Party may reasonably request, upon
each Party’s discovery of any loss or compromise of the other Party’s
Confidential Information.

 

8.8 Remedies. Each Party agrees that the unauthorized use or disclosure of any
material Confidential Information by the other Party in violation of this
Agreement will cause severe and irreparable damage to each of the Parties, for
which legal damages would not be a sufficient remedy. In the event of any
violation of this Article 8, each Party agrees that the other Party shall be
authorized and entitled to obtain from any court of competent jurisdiction
injunctive relief, whether preliminary or permanent, as well as any other relief
permitted by Applicable Law.

 

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ARTICLE 9 - INVENTIONS AND PATENTS

 

9.1 Ownership of Inventions.

 

9.1.1 Disclosure of Inventions. Each Party shall promptly disclose to the other
Party the conception and/or discovery of any inventions directly arising out of
activities conducted under this Agreement (“Program Inventions”).

 

9.1.2 Ownership of Program Inventions. All right, title and interest in all
Program Inventions that are discovered or conceived pursuant to Section 9.1.1
shall be owned as follows:

 

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

 

(b) [***] shall own all Program Inventions that are invented solely or jointly
by employees, agents or consultants of [***] and/or [***] and primarily relate
to the [***]. To the extent that any Program Inventions relating primarily to
[***] shall have been invented by [***],[***] hereby assigns all of its right,
title and interest therein to [***]; and

 

(c) [***] shall solely own all Program Inventions that (i) are invented solely
by employees, agents or consultants of [***], (ii) are not covered by Sections
9.1.2(a) or (b) and (iii) relate primarily to [***], including without
limitation [***].

 

(d) Except as set forth in Sections 9.1.2(a), (b) and (c), ownership of any
Program Invention to the extent it falls outside of Sections 9.1.2 (a), (b) and
(c) shall be determined according to applicable U.S. laws of inventorship.

 

9.2 Patent Prosecution and Maintenance.

 

9.2.1 Subject to Section 9.2.2, Licensor shall be responsible for and shall
control the preparation, filing, prosecution, grant and maintenance of all
Licensor Patents in all countries in the Territory as Licensor may elect.
Licensor shall, at its sole expense, prepare, file, prosecute and maintain such
Licensor Patents in good faith consistent with its customary patent policy and
its reasonable business judgment, and shall consider in good faith the interests
of Licensee in so doing. Upon request, Licensor shall consult with and keep
Licensee reasonably informed as to the status and progress of filing,
prosecution, grant and maintenance of Licensor Patents.

 

9.2.2 Each Party shall be responsible for and shall control the preparation,
filing, prosecution, grant and maintenance, of any patents and patent
applications claiming Program Inventions owned [***] by it in accordance with
[***] and shall, [***] in good faith consistent with [***]. If either Party
decides not to file or continue prosecuting such Party’s interest in or not to
maintain any patent or a patent application claiming a Program Invention [***]
owned by such Party hereunder, then such Party shall promptly so notify the
other Party (which notice shall be at least [***] before any relevant deadline
for such patent application or patent). Thereafter, at the other Party’s
discretion, the relevant patent application or patent [***].

 

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9.2.3 Patents and patent applications claiming Program Inventions owned [***]
pursuant to [***] (“[***]”) shall be controlled, prepared, filed, prosecuted and
maintained by [***].

 

9.2.4 The Parties shall at all times fully cooperate in order to reasonably
implement the foregoing provisions, such cooperation may include the execution
of necessary legal documents and the provision of the assistance of its relevant
personnel.

 

9.3 Enforcement of Licensor Patents.

 

9.3.1 Licensor shall have the first right, at its sole expense, but not the
obligation, to determine the appropriate course of action to enforce the
Licensor Patents or otherwise abate the infringement thereof, to take (or
refrain from taking) appropriate action to enforce the Licensor Patents, 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 Licensor Patents. Licensor shall in good faith consider the interests of
Licensee in conducting the foregoing activities. All monies recovered upon the
final judgment or settlement of any such suit to enforce any Licensor Patents
with respect to the manufacture, use or sale by Third Parties of products
competitive with Licensed Products or technologies competitive with Drug
Conjugation Technology shall be [***]. In the event Third Parties have rights in
the Licensor Patents under other license agreements between Licensor and such
Third Parties, such recoveries shall be [***]. Licensee shall fully cooperate
with Licensor in any such action at Licensor’s expense, to enforce the Licensor
Patents, including being joined as a party to such action if necessary.

 

9.3.2 If Licensor fails to take any action to enforce the Licensor Patents or
control any litigation with respect to the Licensor Patents with respect to the
manufacture, use or sale by Third Parties of products competitive with Licensed
Products or technologies competitive with Drug Conjugation Technology within a
period of [***] after the Parties receive reasonable notice of the infringement
of the Licensor Patents, then Licensee shall have the right to bring and control
any such action by counsel of its own choice, [***]. Licensee shall consider in
good faith the interest of Licensor in the conduct of the forgoing activities.
In such case, all monies recovered upon the final judgment or settlement of any
such suit to enforce any Licensor Patents shall be [***]. In the event Third
Parties have rights in the Licensor Patents under other license agreements
between Licensor and such Third Parties, such recoveries shall be [***]. In such
a case, Licensor shall cooperate fully with Licensee, at [***], in its efforts
to enforce the Licensor Patents, including being joined as a party to such
action if necessary. In no event may Licensee assert an argument or settle a
suit in a manner which would render a claim in the Licensor Patents invalid or
unenforceable without Licensor’s prior written consent.

 

9.3.3 Each Party shall have the right, [***], to determine the appropriate
course of action to enforce patents or patent applications claiming Program
Inventions owned [***] in accordance with [***], or otherwise to abate the
infringement thereof, to take (or refrain from taking) appropriate action to
enforce such patents or patent applications, to control any litigation

 

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or other enforcement action and to enter into, or permit, the settlement of any
such litigation or other enforcement action with respect to such patents or
patent applications. The party taking action shall consider in good faith the
interests of the other Party in the conduct of such activities. All monies
recovered upon the final judgment or settlement of any such suit to enforce any
patents or patent applications claiming Program Inventions owned [***] hereunder
shall be retained [***] (and, in the event of any joint ownership of any Program
Invention under Section 9.1.2(d) hereof, the net recoveries shall be [***]).
Each Party shall fully cooperate with the other Party, at the owning Party’s
expense, in any action to enforce the patents or patent applications claiming
Program Inventions owned solely by one Party hereunder.

 

9.3.4 In the event either Party becomes aware of infringement by a Third Party
of a Joint Patent(s), it shall promptly notify the other Party and the Parties
shall determine a mutually agreeable course of action

 

9.3.5 In the event of any infringement by a Third Party of both a Licensor
Patent(s) and a Joint Patent(s), which infringement is likely to affect the
exercise by Licensee of its rights with respect to Licensed Products, the
Parties shall meet to discuss how to proceed with respect to such infringement.
In the event that the Parties determine that one or the other of the Parties
should bring an infringement action against the Third Party, the Party not
enforcing such patents shall provide reasonable assistance to the other Party,
including, without limitation, providing access to relevant documents and other
evidence, making its employees available at reasonable business hours, and
joining the action to the extent necessary to allow the enforcing party to
maintain the action. The party taking action shall consider in good faith the
interests of the other Party in the conduct of such activities. The Party that
files an infringement suit shall have the right to settle such suit in its
discretion; provided, however, that such Party may not enter into any settlement
that would result in injunctive or other relief being imposed against the other
Party or would have a material adverse effect on the other Party’s business
without the prior written consent of such other Party.

 

9.4 Prior Patent Rights. Notwithstanding anything to the contrary in this
Agreement, with respect to any Licensor Patents that are subject to the Licensor
In-Licenses, the rights and obligations of the Parties under Sections 9.2 and
9.3 shall be subject to Licensor’s rights to participate in and control
prosecution, maintenance and enforcement of such Licensor Patents, and to
receive a share of damages recovered in such action, in accordance with the
terms and conditions of the applicable Licensor In-License.

 

ARTICLE 10 - INFRINGEMENT OF THIRD PARTY RIGHTS

 

10.1 Third Party Licenses. Upon the occurrence of a Triggering Event, Licensor
shall have the first right (but not the obligation) to negotiate and obtain a
license from the relevant Third Party(ies), as necessary for Licensee and its
Affiliates and Sublicensees to Exploit the Licensed Product (as required in
connection with the incorporation of Licensor Technology therein) in the
particular country or countries, as the case may be. In the event that Licensor
elects not to obtain, or is unsuccessful in obtaining a license from such Third
Party, then Licensee shall have the right (but not the obligation) to negotiate
and obtain a license from such Third Party as necessary for Licensee and its
Affiliates and Sublicensees to Exploit the Licensed Product (as required in
connection with the incorporation of Licensor Technology therein) in

 

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such country or countries, as the case may be; provided that Licensee shall not
have the right to commence or proceed with any such negotiations if Licensor
reasonably determines, [***]. Any such determination by Licensor shall be made
not more than [***] following the Triggering Event or shall be deemed
automatically made by Licensor in [***]. The expense of any lump sum payments
pursuant to a Third Party license negotiated hereunder shall be [***]; provided,
however, that if any of [***], then such lump sum expenses incurred by Licensor
in connection with such Third Party license shall be [***]. Licensor shall [***]
of any associated royalty payments under such Third Party license through [***]
pursuant to [***]. If Licensor has determined, [***], as provided above, that a
[***] after the earliest Triggering Event concerning any Third Party’s patents,
then Licensee [***]; provided, however, that Licensee may [***].

 

ARTICLE 11 - REGULATORY ASSISTANCE

 

Should Licensee desire to file an IND or an application for Regulatory Approval,
or equivalents of the foregoing, for a Licensed Product, Licensor will provide
at Licensee’s request, technical information reasonably required for Licensee,
including information relating to the [***], as well as documents necessary to
compile the CMC Data section of an application for Regulatory Approval, or to
provide other toxicity and safety data for such filings, and any other relevant
information as the Parties may mutually agree (to the extent not provided to
Licensee pursuant to Section 5.2). Licensee shall reimburse Licensor for any
reasonable out-of-pocket costs incurred by Licensor in providing any such
information plus an amount equal to Licensor’s then current FTE Fee for
Licensor’s personnel engaged in such activities, as set forth in Section 6.1.2;
provided, however, that Licensee shall not be required to reimburse Licensor
under this Section if and to the extent such costs are (1) [***]; or (2) [***].
If Licensor has a drug master file with the FDA or equivalent that contains
information useful to support an IND or application for Regulatory Approval,
Licensor [***] Licensee a right of reference (with right to grant further rights
of reference) to such drug master file to the extent necessary for, and solely
for the purposes of, preparing, filing or maintaining INDs, NDAs and other
regulatory filings relating to the Licensed Product in the Territory. Licensor
shall [***] with Licensee relevant (and if deemed necessary in Licensor’s
option, redacted) [***].

 

ARTICLE 12 - REPRESENTATIONS AND WARRANTIES

 

12.1 Representations and Warranties.

 

12.1.1 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.

 

12.1.2 The execution, delivery and performance of the Agreement by each Party
(i) does not conflict with or violate any requirement of Applicable Law or
regulation or any provision of the articles of incorporation, bylaws, limited
partnership agreement or any similar instrument of such Party, as applicable,
and (ii) does not conflict with, violate, or breach or constitute a default or
require any consent under any contractual obligation or court or administrative
order by which such Party is bound.

 

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12.1.3 Licensor represents and warrants that it has the right to grant the
licenses granted herein and that as of the Effective Date it has [***] of the
Licensor Patents or other Licensor Technology in connection with activities to
be conducted hereunder. Licensee represents and warrants that it has the right
to grant the licenses granted to Licensor herein and that as of the Effective
Date it has [***] activities to be conducted by the Parties hereunder.

 

12.2 Additional Representations and Warranties of Licensee(s). Each Licensee
hereby severally represents and warrants to Licensor, as of the Effective Date,
that such Licensee (i) is a corporation or an Aktiengesellschaft duly organized
and in good standing under the laws of its jurisdiction of organization, and
(ii) has full power and authority and the legal right to own and operate its
property and assets and to carry on its business as it is now being conducted
and as it is contemplated to be conducted by this Agreement.

 

12.3 Additional Representations and Warranties of Licensor. Licensor hereby
represents and warrants to Licensee, as of the Effective Date, as set forth
below:

 

12.3.1 Licensor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has full power and
authority and the legal right to own and operate its property and assets and to
carry on its business as it is now being conducted and as is contemplated to be
conducted by this Agreement.

 

12.3.2 To the knowledge of Licensor, the Licensor Patents existing as of the
Effective Date are [***]. To the knowledge of Licensor, the conception,
development and reduction to practice of the subject matter claimed and/or
disclosed in Licensor Patents and the information embodied in the Licensor
Know-How existing as of the Effective Date have not [***] of any Third Party.
There are no judgments or settlements against Licensor or amounts owed by
Licensor (other than amounts owed in the ordinary course of business and/or
pursuant to the Licensor In-Licenses) with respect to the Licensor Patents or
the Licensor Know-How. No litigation has been commenced or threatened, and
Licensor is not aware of any claim, by any Third Party or Regulatory Authority
alleging that the Licensor Patents are invalid or unenforceable.

 

12.3.3 Except for the license grants in Section 3.1, neither Licensor nor any of
its Affiliates has, directly or indirectly, expressly or by implication, by
action or omission or otherwise (i) [***]; (ii) [***], or (iii) [***].

 

12.3.4 To the knowledge of Licensor, no Third Party has infringed or threatened
in writing to infringe the Licensor Patents.

 

12.3.5 The Licensor In-Licenses are in full force and effect and, to the
knowledge of Licensor, there is no basis upon which termination could occur.
Licensor has [***]. The copies of the Licensor In-Licenses provided to Licensee
by Licensor are true, complete and correct. Licensor shall promptly provide
Licensee with notice of any alleged, threatened, or actual breach of any
In-License Agreement. To the extent permitted by the In-License Agreements,
Licensor agrees that Licensee [***] by Licensor under the [***].

 

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12.3.6 Neither Licensor nor any of its Affiliates has been debarred or is
subject to debarment and neither Licensor nor any of its Affiliates will
knowingly use in any capacity, in connection with the services to be performed
under this Agreement, any Third Party who has been debarred pursuant to Section
306 of the Federal Food, Drug, and Cosmetic Act, or who is the subject of a
conviction described in such section. Licensor agrees to inform Licensee in
writing immediately if it or any Third Party who is performing services
hereunder is debarred or is the subject of a conviction described in Section
306, or if any action, suit, claim, investigation or legal or administrative
proceeding is pending or, to the best of Licensor’ knowledge, is threatened,
relating to the debarment or conviction of Licensor or any Third Party
performing services hereunder.

 

12.4 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.

 

12.5 Disclaimer. EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS ARTICLE, NEITHER
PARTY MAKES ANY REPRESENTATIONS OR GRANTS ANY WARRANTIES, EXPRESS OR IMPLIED,
EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, REGARDING THE
LICENSED PRODUCT, THE DRUG CONJUGATION MATERIALS OR ANY ADCs PREPARED BY
LICENSOR, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, NON-INFRINGEMENT
OR FITNESS FOR A PARTICULAR USE OR PURPOSE.

 

ARTICLE 13 - TERM AND TERMINATION

 

13.1 Term. Unless earlier terminated pursuant to this Article 13, the term of
this Agreement (the “Term”) shall commence on the Effective Date and shall
remain in full force and effect until the expiration of the last to expire
Royalty Term.

 

13.2 Termination by Licensee.

 

13.2.1 Licensee shall have the right, effective at any time after the first
anniversary of the Effective Date, to terminate this Agreement in its entirety
by providing not less than [***] prior written notice to Licensor of such
termination.

 

13.2.2 At any time prior to [***], Licensee shall have the right to terminate
this Agreement on a country-by-country basis, upon [***] prior written notice to
Licensor, in the event that Licensee [***].

 

13.2.3 Licensee shall have the right in its sole discretion to terminate this
Agreement at any time on a country-by-country basis pursuant to Article 10 upon
[***] prior written notice.

 

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13.3 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, if the Breaching Party has not cured such breach within [***] after
notice thereof. Such [***] shall be extended in the case of a breach not capable
of being remedied in such [***], so long as the Breaching Party uses diligent
efforts to remedy such breach and is pursuing a course of action that, if
successful, will effect such a remedy. If such alleged breach is not remedied in
the time period set forth above, the nonbreaching Party shall be entitled,
without prejudice to any of its other rights conferred on it by this Agreement,
and in addition to any other remedies available to it by law or in equity, to
terminate this Agreement in its entirety or selectively, at its option, on a
country-by-country basis. In the event of a dispute regarding royalties owing
hereunder, all undisputed amounts shall be paid when due and the balance, if
any, shall be paid promptly after settlement of the dispute including any
accrued interest thereon.

 

13.4 Termination Upon Insolvency. A 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) such other Party shall be served with an involuntary petition against
it, filed in any insolvency proceeding, and such petition shall not be dismissed
within [***] after the filing thereof, (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.

 

13.5 Termination of Licensor In-Licenses.

 

13.5.1 All rights and obligations under a Licensor In-License sublicensed under
this Agreement shall terminate upon [***] prior written notice by Licensor if
Licensee performs any action that would constitute a breach of any material
provision of such Licensor In-License Agreement and fails to cure such breach
within such [***] period; provided, however, such cure period may be extended by
mutual written consent of the Parties. Licensor covenants that it will (a) use
Commercially Reasonable Efforts to maintain all Licensor In-Licenses in good
standing for the duration of this Agreement; and (b) promptly notify Licensee of
any notice of alleged breach or default delivered to Licensor under the Licensor
In-Licenses. Licensee shall have the right to cure any monetary default or
breach by Licensor under the Licensor In-Licenses and to offset any amounts paid
to cure such default against amounts payable to Licensor hereunder. In the
event, despite such efforts, any Licensor In-License(s) terminates, (a) [***]
and (b) [***].

 

13.5.2 All rights sublicensed to Licensee and relevant obligations under the BMS
Agreement shall automatically terminate if [***].

 

13.6 Effect of Expiration and Termination.

 

13.6.1 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
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Articles 1, 3, 8, 9, 10, 14 (as to actions arising during the Term or in the
course of a Party practicing any licenses retained by such Party thereafter), 18
and 19, Sections 7.2, 7.3 and 13.6 and any payment obligations pursuant to
Section 6 incurred prior to termination. Notwithstanding the foregoing, all
licenses granted by Licensor to Licensee hereunder, including all Exclusive
Licenses, and all sublicenses granted by Licensee hereunder, will immediately
terminate upon termination of this Agreement pursuant to Sections 13.2.1,
13.2.2, 13.3 (pursuant to a breach by Licensee), 13.4 (subject to Section 13.7)
or 13.5; provided that upon any termination pursuant to Section 13.2.3, such
licenses and sub-licenses shall terminate only with respect to the relevant
country or countries.

 

13.6.2 License to Licensee. Upon (i) the expiration of the Royalty Term or (ii)
Licensee’s termination of this Agreement pursuant to Section 13.3 (pursuant to a
breach by Licensor), Licensor shall grant, and shall by this provision be deemed
to have granted, to Licensee a perpetual, worldwide, nonexclusive license to use
the Licensor Technology to make, use, sell, offer for sale and import Licensed
Products that bind specifically to the Designated Antigen, with no further
obligation to Licensor. Notwithstanding the foregoing, or any other provision of
this Agreement: (a) any of Licensee’s milestone, royalty and other payment and
reimbursement obligations accruing under this Agreement prior to termination or
expiration and during the Royalty Term shall not be affected by, and shall
survive, such termination or expiration; (b) any of Licensee’s milestone payment
obligations and other payment and reimbursement obligations to Licensor (other
than royalty payment obligations) not yet matured as of the date of termination
or expiration shall be eliminated; and (c) any of Licensee’s royalty payment
obligations accruing under this Agreement either before or after the date of
termination or expiration shall survive such termination or expiration [***].

 

13.6.3 License to Licensor. Upon any termination of the Exclusive License,
except pursuant to Section 13.2.2 or 13.2.3 or pursuant to Licensee’s
termination of this Agreement pursuant to Section 13.3 (pursuant to a breach by
Licensor), Licensee shall be automatically deemed to grant to Licensor a
worldwide, nonexclusive, irrevocable, royalty-free, sublicensable license in the
Territory under the Licensee ADC Know-How and Licensee ADC Patents to identify,
develop and commercialize products that contain an ADC consisting of an Antibody
that binds specifically to the Designated Antigen.

 

13.7 Rights in Bankruptcy. All rights and licenses granted under or pursuant to
this Agreement by Licensor or Licensee are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the United States Bankruptcy Code, licenses of
right to “intellectual property” as defined under Section 101 of the United
States Bankruptcy Code. The Parties agree that the Parties, as licensees of such
rights under this Agreement, shall retain and may fully exercise all of their
rights and elections under the United States Bankruptcy Code. The Parties
further agree that, in the event of the commencement of a bankruptcy proceeding
by or against either Party under the United States Bankruptcy Code, the Party
hereto that is not a party to such proceeding shall be entitled to a complete
duplicate of (or complete access to, as appropriate) any such intellectual
property and all embodiments of such intellectual property, which, if not
already in the non-subject Party’s possession, shall be promptly delivered to it
(a) upon any such commencement of a bankruptcy proceeding upon the non-subject
Party’s written request therefor, unless the Party subject to such proceeding
elects to continue to perform all of its obligations under this Agreement or (b)
if not delivered under clause (a) above, following the rejection of this
Agreement by or on behalf of the Party subject to such proceeding upon written
request therefor by the non-subject Party.

 

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ARTICLE 14 - INDEMNITY

 

14.1 Direct Indemnity.

 

14.1.1 Each Party shall defend, indemnify and hold harmless the other Party and
its respective successors, assigns, directors, officers, employees and agents,
from and against all liabilities, losses, damages, and expenses, including
reasonable attorneys’ fees and court 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 breach of any material provision of this Agreement by the indemnifying Party
(or the inaccuracy of any representation or warranty made by such Party in this
Agreement), or (b) the gross negligence, recklessness or willful misconduct of
the indemnifying Party in connection with the performance of its obligations
hereunder. In addition, Licensee hereby agrees to defend, indemnify and hold
Licensor harmless from Liabilities resulting from the use, handling and/or
storage of Drug Conjugation Materials and/or ADCs by Licensee and/or from
Licensee’s conduct of Research Plan B under the Research Collaboration
Agreement, in each case prior to the Effective Date, except insofar as such
Liabilities arise out of the gross negligence, recklessness or willful
misconduct of Licensor. Licensor hereby agrees to defend, indemnify and hold
Licensee harmless from Liabilities resulting from the use, handling and/or
storage of Antibodies provided by Licensee and/or ADCs by Licensor and/or from
Licensor’s conduct of Research Plan A under the Research Collaboration
Agreement, in each case prior to the Effective Date, except insofar as such
Liabilities arise out of the gross negligence, recklessness or willful
misconduct of Licensee.

 

14.1.2 Licensee shall defend, indemnify and hold harmless Licensor and its
successors, assigns, directors, officers, employees and agents, from and against
all Liabilities resulting from all Claims that are incurred, relate to or arise
out of the development, manufacture or commercialization of Licensed Products by
Licensor for Licensee or by Licensee, its Affiliates or Sublicensees, including
without limitation (a) any failure to test for or provide adequate warnings of
adverse side effects, or any manufacturing defect in any Licensed Product and
(b) any failure by Licensee or its Affiliates to pay any Existing Third Party
Royalties or royalties owed for Improvements or New Technologies with respect to
any Licensed Product; except in each case to the extent such Liabilities
resulted from the gross negligence, recklessness or willful misconduct by
Licensor or the inaccuracy of any representation or warranty made by Licensor in
this Agreement or from any other action for which Licensor must indemnify
Licensee under Section 14.1.3.

 

14.1.3 Licensor shall defend, indemnify and hold harmless Licensee and its
successors, assigns, directors, officers, employees and agents, from and against
all Liabilities resulting from all Claims that are incurred, relate to or arise
out of any claims of infringement of Third Party rights arising out of the use
of Licensor Technology to make ADCs that bind specifically to the Designated
Antigen or to make a Licensed Product (but not any other technology, including
the composition or methods of making or using Antibodies or technology not
relating to Drug Conjugation Technology), except to the extent such Liabilities
resulted from the gross negligence, recklessness or willful misconduct by
Licensee or the inaccuracy of any representation or warranty made by Licensee in
this Agreement or any other action for which Licensee must indemnify Licensor
hereunder.

 

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14.2 Procedure. A Party (the “Indemnitee”) that intends to claim indemnification
under this Article 14 shall promptly provide notice to the other Party (the
“Indemnitor”) of any Liability or action in respect of which the Indemnitee
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 Indemnitee shall have the right to retain its
own counsel, with the reasonable fees and expenses thereof to be paid by the
Indemnitor, if representation of such Indemnitee by the counsel retained by the
Indemnitor would be inappropriate due to actual or potential differing interests
between such Indemnitee and any other Party represented by such counsel in such
proceedings. Any settlement of a Liability for which any Indemnitee seeks to be
indemnified, defended or held harmless under this Article 14 that could
adversely affect the Indemnitee shall be subject to prior consent of such
Indemnitee, provided that such consent shall not be unreasonably withheld or
delayed.

 

ARTICLE 15 - FORCE MAJEURE

 

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

 

ARTICLE 16 - ASSIGNMENT

 

Except as expressly provided herein, neither Party may, without the prior
written consent of the other Party, assign or otherwise transfer any of its
rights and interests or delegate any of its obligations hereunder; provided,
however, that (a) the assignment of this Agreement by

 

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operation of law pursuant to a merger or consolidation of either Party with or
into any Third Party shall, regardless of the identity of the surviving entity
to such merger or consolidation, not be deemed an assignment in violation of
this Section 16, (b) either Party, without such consent, may assign its rights
and delegate its duties hereunder to an Affiliate thereof without obtaining such
consent, provided that the assigning Party agrees to remain primarily (and not
secondarily or derivatively) liable for the full and timely performance by such
Affiliate of all its obligations hereunder, and (c) either Party, without such
consent, may assign its rights and delegate its duties hereunder to a successor
entity or acquirer, provided that the assigning Party agrees to remain primarily
(and not secondarily or derivatively) liable for the full and timely performance
by such assignee of all its obligations hereunder. Notwithstanding the
foregoing, [***]. Any attempted assignment of this Agreement not in accordance
with this Article 16 shall be void and of no effect. A “Change of Control” means
any of the following transaction or series of transactions: (a) any merger,
consolidation, share exchange, business combination, issuance of securities,
acquisition of securities, tender offer, exchange offer or other similar
transaction in which (i) a “person” or “group” (as defined in the Securities
Exchange Act of 1934, as amended, and the rules promulgated thereunder) of
persons directly or indirectly acquires beneficial or record ownership or voting
power of securities representing more than [***] of the outstanding voting
securities of the Licensor or the receives the ability otherwise to elect a
majority of the board of directors or other managing authority of Licensor,
which in any event shall be presumptively deemed to confer control over Licensor
or (ii) Licensor issues securities representing more than [***] of the
outstanding voting securities of Licensor or the ability otherwise to elect a
majority of the board of directors or other managing authority of Licensor,
which in any event shall be presumptively deemed to confer control over
Licensor; or (b) any sale, lease, exchange, transfer, license, acquisition or
disposition of any business or businesses or assets of the Licensor that
constitute or account for [***] or more of the consolidated net revenues, net
income or assets of the Licensor (including, without limitation, an exclusive
license of all or substantially all of the Licensor’s intellectual property
rights).

 

ARTICLE 17 - SEVERABILITY

 

Each Party hereby agrees that it does not intend to violate any public policy,
statutory or common laws, rules, regulations, treaty or decision of any
government agency or executive body thereof of any country or community or
association of countries. Should one or more provisions of this Agreement be or
become invalid, the Parties hereto shall substitute, by mutual consent, valid
provisions for such invalid provisions, 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.

 

ARTICLE 18 - INSURANCE

 

18.1 During the Term and for [***] thereafter, Licensee shall maintain, at its
sole expense, clinical trial and product liability insurance relating to the
Licensed Product that is comparable in type and amount to the insurance
customarily maintained by pharmaceutical companies with respect to similar
prescription pharmaceutical products that are marketed, distributed and sold in
the Territory.

 

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18.2 During the Term and for [***] thereafter, Licensor shall maintain, at its
sole expense, such types and amounts of insurance coverage as is appropriate and
customary in the pharmaceutical industry in light of the nature of the
activities to be performed by Licensor hereunder, and which names Licensee as an
insured party.

 

18.3 Licensee shall maintain (and shall require its Affiliates and Sublicensees
to agree in writing to maintain) insurance or self-insurance that complies with
the applicable requirements of Sections 4.2(b) and 11.5 of the BMS Agreement;
provided, however, that under the terms of the BMS Consent the following
requirements of Section 11.5 of the BMS Agreement shall not apply to Licensee:
(a) the aggregate deductible requirements of such policies, and (b) the duration
of the applicable coverage.

 

ARTICLE 19 - MISCELLANEOUS

 

19.1 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
19.1 and (except as otherwise provided in this Agreement) shall be effective
upon receipt by the addressee.

 

If to Licensor:

 

Seattle Genetics, Inc.

21823 30th Drive S.E.

Bothell, WA 98021

Attention: General Counsel

Telephone: (425) 527-4000

Facsimile: (425) 527-4109

 

If to Licensee:

 

Bayer Pharmaceuticals Corporation

400 Morgan Lane

West Haven, CT 06516

Attention: Senior Vice President, Global Licensing

Telephone: (203) 812-2000

Facsimile: (203) 812-6311

 

With a copy to:

 

Bayer Pharmaceuticals Corporation

400 Morgan Lane

West Haven, CT 06516

Attention: Vice President and General Counsel

Telephone: (203) 812-6081

Facsimile: (203) 812-2795

 

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

 

19.3 Dispute Resolution. The Parties agree that if any dispute or disagreement
arises between Licensee on the one hand and Licensor on the other in respect of
this Agreement (including without limitation a dispute under Articles 6 or 7
hereof, but excluding any dispute arising under Section 13.3 hereof), they shall
follow the following procedure in an attempt to resolve the dispute or
disagreement.

 

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

 

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

 

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

 

19.3.4 If, within a further period of [***], the dispute has not been resolved
or if, for any reason, the required meeting has not been held, then upon either
Party’s request the same shall be referred to compulsory arbitration in
accordance with the Arbitration Rules of the United Nations Commission on
International Trade Law (“UNCITRAL”) as in effect on the Effective Date, except
as provided in Sections 19.3.8 or 19.3.11. The Parties consent to a single,
consolidated arbitration for all disputes for which arbitration is permitted. It
is the intent of the Parties that the provisions of this Section shall govern
the arbitration of any dispute, notwithstanding anything to the contrary set out
in the applicable rules. The arbitral body shall be composed of [***] neutral
arbitrators selected by agreement of the Parties or, in the absence of such
agreement within [***] after either Party first proposes an arbitrator, by the
International Chamber of Commerce (the “ICC”). The arbitration proceedings shall
be conducted in the English language, and all documents not in English submitted
by any Party must be accompanied by an English translation. The arbitration
shall be conducted in [***]. All discovery shall be completed within [***] after
selection of the arbitrators. Each Party shall be permitted single depositions
of no more than [***] who have information directly relevant to the dispute and
[***] requesting directly relevant documents. Any hearing that may be held shall
be held in the presence of both Parties and shall take place within [***]
following completion of the discovery period, and each of the Parties shall
present its case, witnesses and evidence, if any, within not more than [***] for
each Party’s case. A written transcript of the proceedings shall be made, at the
joint expense of the Parties, and furnished to the Parties. The arbitrators
shall set limits on the length of the Parties’ written submissions based on the
nature of the dispute, which shall be delivered to the other Party
simultaneously with their submission to the arbitrators. The arbitrators shall
determine the dispute, within [***] after completion of the hearing, in

 

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accordance with the internal laws of the State of New York and applicable U.S.
federal law, without giving effect to any conflict of law rules or other rules
that might render such law inapplicable or unavailable. All arbitration
proceedings hereunder shall be governed by U.S. Rules of Evidence. The
arbitrators shall render a written statement to the Parties setting forth the
basis of his/her determination.

 

19.3.5 The Parties irrevocably consent and agree to be bound by any award or
order resulting from any arbitration conducted hereunder and further agree that:
this Agreement and the resulting obligations and relationships are commercial,
and that the United Nations Convention on the Recognition and Enforcement of
Foreign Arbitral Awards applies to this Agreement and to any award or order
resulting from any arbitration conducted hereunder. Any monetary award shall be
payable in such currency and through such bank as the recipient of such award
shall direct, free of any withholding tax or other deduction, together with
interest thereon at the [***], from the date the award is granted to the date it
is paid in full. The Parties hereby agree that both factual findings and legal
rulings in any award by the arbitrators shall be res judicata as to all Parties
hereto. In the context of an attempt by either Party to enforce an arbitral
award or order, any defenses relating to the Parties’ capacity or the validity
of this Agreement under any law are hereby waived. The Parties hereby
acknowledge that set aside proceedings may be available, but hereby expressly
renounce any right to set aside any award issued by the arbitrators, except for
the grounds set forth in the U.S. Federal Arbitration Act. Judgment on any award
or order resulting from an arbitration conducted under this Section may be
entered and enforced in any court, in any country, having jurisdiction thereof
or having jurisdiction over any of the Parties or any of their assets.

 

19.3.6 In addition to the authority otherwise conferred on the arbitral body, it
shall have the authority to make such orders for interim relief, including
injunctive relief, as it may deem just and equitable. Upon appointment of the
arbitrators following any grant of interim relief by a court, the arbitrators
may affirm or disaffirm such relief, and the Parties will seek modification or
rescission of the court action as necessary to accord with the arbitrators’
decision.

 

19.3.7 Any fees and expenses (except for attorney’s fees and expenses) payable
with respect to an arbitration under this Section shall be borne by the Party
losing the case. All arbitration rulings and awards shall be final and binding
on the Parties.

 

19.3.8 Notwithstanding anything herein to the contrary, nothing in this
Agreement, including, without limitation this Section, shall preclude either
Party from seeking interim or provisional relief, including a temporary
restraining order, preliminary injunction or other interim equitable relief
concerning a dispute with the other Party, either prior to or during the dispute
resolution procedures set forth herein, if necessary to protect the interests of
such Party.

 

19.3.9 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.

 

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

 

19.3.11 No Party will commence or voluntarily participate in any court action or
proceeding relating to any dispute concerning or arising under this Agreement,
except (i) for enforcement of arbitral awards or orders as contemplated herein,
(ii) to restrict or vacate an arbitral decision based on the grounds set forth
in the U.S. Federal Arbitration Act, (iii) in the case of any dispute arising
under Section 13.3 hereof, or (iv) for interim relief. For purposes of the
foregoing or enforcement of any undisputed obligation, the Parties hereto submit
to the non-exclusive jurisdiction of the appropriate state or federal court
sitting in the Southern District of the State of New York.

 

19.4 Entire Agreement. This Agreement, together with all Schedules hereto,
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 but not limited to the
Research Collaboration Agreement, are expressly superceded by this Agreement.
This Agreement may be amended, or any term hereof modified, only by a written
instrument duly executed by both Parties hereto.

 

19.5 Independent Contractors. Licensor and Licensee each acknowledge that they
shall be independent contractors and that the relationship(s) among the Parties
shall not constitute a partnership, joint venture, agency or any type of
fiduciary relationship. Neither Licensor nor Licensee 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(ies), without the prior
consent of the other Party(ies) to do so.

 

19.6 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.

 

19.7 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.

 

19.8 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.

 

36.

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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

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Name:

 

Clay B. Siegall, Ph.D.

Title:

 

President & CEO

BAYER PHARMACEUTICALS CORPORATION

By:

 

/s/ Joseph J. Catino

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Name:

 

Joseph J. Catino

Title:

 

Sr. V.P. Research

 

37.