Exhibit 10.1

 

LICENSE AGREEMENT

 

This License Agreement (the “Agreement”) is entered into as of this 12th day of
April 2005 (the “Effective Date”) by and between Seattle Genetics, Inc., a
Delaware corporation with its principal office at 21823 30th Drive SE, Bothell,
WA 98021 (“SG”), and Protein Design Labs, Inc., a Delaware corporation with its
principal office at 34801 Campus Drive, Fremont, CA 94555 (“PDL”). PDL and SG
are sometimes referred to herein individually as a “Party” and together as the
“Parties”.

 

RECITALS

 

WHEREAS, PDL has certain rights to a humanized antibody directed against the
CD33 antigen and has developed a CD33 Antibody Program (as defined below);

 

WHEREAS, PDL owns certain intellectual property rights related to humanized
antibodies and antibody humanization technology;

 

WHEREAS, PDL wishes to license certain components of the CD33 Antibody Program
to SG, along with associated nonexclusive rights under certain of PDL’s
intellectual property rights relating to humanized antibodies and antibody
humanization technology, and SG wishes to continue development of anti-CD33
antibodies and antibody-drug conjugates under the terms and conditions of this
Agreement; and

 

WHEREAS, the Parties now wish to enter into a license and technology transfer
with respect to the CD33 Antibody Program, including certain related
intellectual property, to SG in accordance with the terms and conditions set
forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in exchange for the mutual promises contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree as follows:

 

1. Definitions

 

“Abandoned Product” has the meaning set forth in Section 5.2.

 

“[***]” has the meaning set forth in Section 6.3.

 

“[***]” has the meaning set forth in Section 6.3.

 

“ADC” means a CD33 Antibody linked to, conjugated or chemically fused with, or
otherwise combined together in a single solution with, a drug, toxin, label or
any other moiety. Notwithstanding the foregoing, an ADC shall not include any
CD33 Antibodies (or products containing CD33 Antibodies) bound to, linked to or
conjugated with a radioisotope or radiolabel.

 

“ADC Licensed Product” means a Licensed Product that consists of or contains an
ADC.

 

“ADC Collaboration Agreement” means the Collaboration Agreement dated as of June
4, 2001 by and between SG and Eos Biotechnology, Inc. (“Eos”) as assumed by PDL
pursuant to PDL’s

 

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

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acquisition of Eos and subsequently amended on August 8, 2001 and January 9,
2004, and as such may be amended from time to time.

 

“Affiliate(s)” of a Party means any corporation or other business entity that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with a Party. As used solely in this
definition, the term “control” means the direct or indirect ownership of fifty
percent (50%) or more of the stock having the right to vote for directors
thereof or the ability to otherwise control the management thereof.

 

“Agreement” has the meaning set forth in the introductory paragraph hereof.

 

“Antibody” or “Antibodies” means any molecule comprising or containing one or
more immunoglobulin variable domains or parts of such domains, or fragments,
variants, modifications or derivatives thereof, including any antibody
monospecific and bispecific antibodies, less than full-length antibody forms
(such as Fv, Fab, and F(ab’)2), single-chain antibodies, and antibodies linked
to a drug, toxin, label or any other moiety.

 

“Associated Diagnostic Product” means a diagnostic Licensed Product.

 

“[***]” has the meaning set forth in Section 2.3.

 

“[***]” means certain [***].

 

“CD33 Antibody” means any Antibody that binds to the CD33 Antigen.

 

“CD33 Antigen” means the CD33 antigen, which antigen is also known as Myeloid
Differentiation Antigen CD33, gp67, SIGLEC-3, Sialic Acid–Binding
Immunoglobulin-like Lectin 3, and FLJ00391.

 

“CD33 Antibody Program” means all research and development of CD33 Antibodies,
[***] conducted by PDL prior to the Effective Date.

 

“CD33 Improvement” means any CD33 Antibody that differs from each PDL CD33
Antibody by [***], whether or not incorporated into an ADC.

 

“CD33 IND” has the meaning set forth in Section 6.3.

 

“CD33 Inventions” has the meaning set forth in Section 8.4.

 

“CD33 Know-How” means any and all materials, data, results, formulae, designs,
specifications, methods, processes, techniques, ideas, discoveries, technical
information, process information, pharmacological data, toxicological data,
analytical and quality control data, manufacturing data, clinical information,
regulatory information and submissions, and any other information, developed by
PDL in the course of its efforts under the CD33 Antibody Program and as to which
PDL has the right to disclose or provide and grant licenses or sublicenses (as
provided for herein), to the extent that any of the foregoing pertains
specifically to and is necessary or useful for SG to develop and commercialize
Licensed Products. For the avoidance of doubt, [***].

 

“CD33 Patents” means (a) those existing patents and patent applications listed
on Exhibit B, (b)

 

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

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any future patents or patent applications owned or Controlled by PDL directed to
CD33 Antibodies or uses thereof and (c) any reissues, reexaminations,
confirmations, renewals, registrations, substitutions, extensions, counterparts,
divisions, continuations, or continuations-in-part of or claiming priority back
to any of the foregoing patents which are owned or Controlled by PDL. For the
avoidance of doubt [***].

 

“CD33 Technology” means the Cell Lines, PDL CD33 Antibodies, CD33 Patents, CD33
Know-How and CD33 Inventions.

 

“Cell Lines” means all cell lines developed as of the Effective Date by PDL to
produce anti-CD33 Antibodies and anti-IDs to anti-CD33 Antibodies and identified
in Exhibit A.

 

“cGMP” means the FDA’s current good manufacturing practices, as first published
in the Federal Register and then specified in the Code of Federal Regulations
and FDA’s published guidance documents, and all successor regulations and
guidance documents thereto, as well as the comparable practices, regulations and
documents of any other comparable regulatory authorities in countries outside
the United States, as in effect from time to time.

 

“cGMP Materials” has the meaning set forth in Section 7.1(k).

 

“Combination Product” means any Licensed Product that contains one or more other
ingredients (other than a CD33 Antibody, ADC or any Antibody-drug conjugate
technology) that have independent biologic or chemical activity as a therapeutic
agent when present alone.

 

“Confidential Information” has the meaning set forth in Section 10.1.

 

“Control” means possession of the right and ability to grant access to and/or a
license or sublicense as provided for herein without violating the terms of any
agreement or other arrangement with a Third Party and without having to pay
royalties, license fees or other payments to such Third Party on account of the
grant of access, license or sublicense (or the exercise thereof by the grantee).

 

“Developing Party” has the meaning set forth in Section 5.

 

“Documentation” means the documents set forth in Exhibit A. For clarity, [***].

 

“Effective Date” has the meaning set forth in the introductory paragraph of this
Agreement.

 

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

 

“Field” means the prevention, treatment and/or diagnosis of conditions and
diseases in humans, excluding any of the following: (a) Antibody-radionuclide
conjugates or any CD33 Antibodies (or products containing CD33 Antibodies) bound
to, linked to or conjugated with a radioisotope or radiolabel; and (b) human in
vitro diagnostics.

 

“First Commercial Sale” means the first commercial sale of a Licensed Product in
any country after all Regulatory Approvals required for such sale have been
granted, or otherwise permitted, by the governing health authority of such
country (or in the case of permitted commercial pre-approval sales in certain
jurisdictions, upon the initiation of such commercial pre-approval sales. “First
Commercial Sale” shall not include the sale of any Licensed Product for use in
clinical trials.

 

[***] is the antigen that is also known as [***] and referenced as the [***]
antigen in Schedule C

 

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

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to the ADC Collaboration Agreement, as may be updated from time to time.

 

“IND” means an Investigational New Drug Application filed or to be filed with
the FDA.

 

“Indemnified Party” has the meaning set forth in Section 9.3.

 

“Indemnifying Party” has the meaning set forth in Section 9.3.

 

“Indemnitees” has the meaning set forth in Section 9.1.

 

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

 

“Inventions” means patentable or unpatentable inventions, original works of
authorship, developments, concepts, know-how, improvements or trade secrets.

 

“[***]” has the meaning set forth in Section 4.5.1.

 

“[***]” has the meaning set forth in Section 4.5.1.

 

“Joint Inventions” has the meaning set forth in Section 8.1.

 

“Licensed Patents” means the CD33 Patents and the Queen Patents.

 

“Licensed Product” means any product, including any Combination Product,
incorporating or utilizing a PDL CD33 Antibody or CD33 Improvement, excluding,
however, [***], any products comprising, incorporating or utilizing: (a) [***];
or (b) [***]. Except to the extent expressly provided otherwise herein, Licensed
Products shall include Associated Diagnostic Products. For clarity, Licensed
Products do not include any products incorporating or utilizing CD33 Antibodies
in-licensed by SG from a Third Party or independently developed by or for SG
that are not covered by CD33 Technology, and SG shall have no rights or license
hereunder nor owe PDL any fees, milestones or royalties hereunder with respect
to such products.

 

“Licensed Technology” means the CD33 Technology and the Queen Patents.

 

“[***]” is the antigen that is also known as [***] and referenced as the [***]
antigen in Schedule C to the ADC Collaboration Agreement, as may be updated from
time to time.

 

“Losses” has the meaning set forth in Section 9.1.

 

“Materials” means the Cell Lines, supplies of CD33 Antibodies and other
materials, in all such cases as set forth on Exhibit A.

 

“[***]” means the [***].

 

“[***]” means [***] as each is defined in the [***].

 

“Net Sales” means, as to each calendar quarter, the gross invoiced sales prices
(or, in the absence of such invoices, the amount) charged for all Licensed
Products sold or otherwise disposed of by or for

 

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

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SG, its Affiliates and/or sublicensees to independent Third Parties in arm’s
length transactions exclusively for money or, where the transaction is not at
arm’s length or not exclusively for money, the price that would have been so
invoiced if it had been at arm’s length, during such calendar quarter, after
deduction (if not already deducted in the amount invoiced) of the following
items paid by SG, its Affiliates and sublicensees during such calendar quarter
with respect to sales of Licensed Products regardless of the calendar quarter in
which such sales were made, provided and to the extent that such items are
incurred:

 

(a) reasonable and customary [***];

 

(b) reasonable and customary [***];

 

(c) any [***] and borne by the seller thereof without reimbursement from any
Third Party; and

 

(d) any [***] and to the extent borne by the seller without reimbursement from
any Third Party.

 

All of the foregoing deductions from the gross invoiced sales prices of Licensed
Products shall be determined in accordance with GAAP. In the event that SG, its
Affiliates or sublicensees make any adjustments to such deductions after the
associated Net Sales have been reported pursuant to this Agreement, the
adjustments shall be reported and reconciled with the next report and payment of
any royalties due. Net Sales shall not include transfer of Licensed Products by
or on behalf of SG, its Affiliates or sublicensees in connection with clinical
trials at or below the costs of goods thereof.

 

In the event a Licensed Product is sold as part of a Combination Product, the
Net Sales from the Combination Product, for the purposes of determining royalty
payments, shall be determined by multiplying the Net Sales of the Combination
Product (as defined in the standard Net Sales definition above), during the
applicable royalty reporting period, by the fraction, A/A+B, where A is the
average per unit sale price of the CD33 Antibody contained in the Licensed
Product, when sold separately in finished form in the country in which the
Combination Product is sold and B is the average per unit sale price of the
other active ingredient(s) included in the Combination Product when sold
separately in finished form in the country in which the Combination Product is
sold, in each case during the applicable royalty reporting period or, if sales
of the CD33 Antibody contained in the Licensed Product alone did not occur in
such period or country, then in the most recent royalty reporting period in
which arms length fair market sales of such CD33 Antibody contained in the
Licensed Product occurred in such country or if no such sales have occurred in
such country, the average per unit sale price in all countries the CD33 Antibody
contained in the Licensed Product is sold alone during the applicable royalty
period. In the event that such average sale price cannot be determined for the
CD33 Antibody contained in the Licensed Product, on the one hand, and all other
active ingredients included in the Combination Product, on the other, Net Sales
for the purposes of determining royalty payments shall be mutually agreed upon
by the Parties based on the relative value contributed by each component, such
agreement to be negotiated in good faith.

 

“Opt-In Right” has the meaning set forth in Section 5.

 

“Opt-In Notice” has the meaning set forth in Section 5.

 

“Party” or “Parties” have the meanings set forth in the introductory paragraph
of this Agreement.

 

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

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“PDL CD33 Antibody(ies)” means the CD33 Antibodies owned or Controlled by PDL
and specifically known as Zamyl (also known as HuM195) and M195.

 

“PDL Inventions” has the meaning set forth in Section 8.1.

 

“Phase I Clinical Trial” means a clinical trial designed to evaluate the
pharmacokinetic and pharmacodynamic properties, maximum tolerated dose, dosing
interval, and absorption, distribution, metabolism and excretion of a candidate
drug, generally consistent with 21 CFR §312.21(a) or the comparable applicable
rules and regulations of the jurisdiction in which the clinical trial is
conducted.

 

“Phase II Clinical Trial” means a controlled dose clinical trial prospectively
designed to evaluate the efficacy and safety of a candidate drug in the targeted
patient population generally consistent with 21 CFR §312.21(b) or the
comparable, applicable rules and regulations of the jurisdiction in which the
clinical trial is conducted.

 

“Phase III Clinical Trial” means a controlled, multi-center, clinical trial,
involving patients with the disease or condition of interest to obtain
sufficient efficacy and safety data to support regulatory submissions and
labeling of a candidate drug generally consistent with 21 CFR §312.21(c) or the
comparable, applicable rules and regulations of the jurisdiction in which the
clinical trial is conducted.

 

[***] is the antigen referred to as [***] referenced in Schedule C to the ADC
Collaboration Agreement, as may be updated from time to time.

 

“Queen Patents” means all patents or patent applications owned or Controlled by
PDL to the extent directly related to the humanization of antibodies and
identified on Exhibit C, which are filed prior to or during the Term of this
Agreement, and any addition, continuation, continuation-in-part or division
thereof or any substitute application therefor, any patent issued with respect
to such patent application, any reissue, extension or patent term extension of
any such patent, and any confirmation patent or registration patent or patent of
addition based on any such patent, including any supplementary protection
certificates. Upon request, PDL shall provide SG with an updated Exhibit C from
time to time during the Term but not more frequently than once per quarter to
reflect the current status of the Queen Patents.

 

“Receiving Party” has the meaning set forth in Section 5.

 

“Regulatory Approval” means regulatory approval (including, where applicable,
supplements, pre-or post-approvals or pricing approval in the event that actual
sales do not take place before such approval(s) are obtained) 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 a Biologics License
Application, New Drug Application or the equivalent by the FDA.

 

“Royalty Term” means the period beginning upon First Commercial Sale of the
first Licensed Product in each country and ending upon the later of: (a) the
expiration of the last of the Valid Claims under the Licensed Patents in such
country; or (b) [***] years after the First Commercial Sale of such Licensed
Product in such country.

 

“Second Generation CD33 Products” means any product incorporating or utilizing a
Second Generation CD33 Improvement (which such product, for the avoidance of
doubt, could be an Unconjugated Antibody Licensed Product, an ADC Licensed
Product, an Associated Diagnostic Product or not a Licensed Product at all).

 

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

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“Second Generation CD33 Improvement” means any CD33 Improvement that results in
either: [***]; provided that Second Generation CD33 Improvements shall not
include any CD33 Improvements necessary or useful to (a) [***] or (b) [***]. For
clarity, a [***] may not be [***] after the [***].

 

“[***]” means the [***], beginning as of the Effective Date, during which [***].

 

“SG Inventions” has the meaning set forth in Section 8.1.

 

“SG Patents” means (a) any patents or patent applications anywhere in the world
directed to SG Inventions; and (b) any reissues, reexaminations, confirmations,
renewals, registrations, substitutions, extensions, counterparts, divisions,
continuations, or continuations-in-part of or claiming priority back to any of
the foregoing patents.

 

“SG CD33 Patents” means: (a) any patents or patent applications anywhere in the
world owned or controlled by SG directed to inventions made solely by employees,
agents or consultants of SG during the Term of this Agreement relating
specifically to SG’s research or development of Licensed Products hereunder; and
(b) any reissues, reexaminations, confirmations, renewals, registrations,
substitutions, extensions, counterparts, divisions, continuations, or
continuations-in-part of or claiming priority back to any of the foregoing
patents or patent applications. For the sake of clarity, SG CD33 Patents do not
include any patents or patent applications specifically covering SG’s ADC
technology or other platform or enabling technologies not specifically related
to CD33 Antibodies, or reissues, reexaminations, confirmations, renewals,
registrations, substitutions, extensions, counterparts, divisions,
continuations, or continuations-in-part of or claiming priority back to any of
the foregoing patents or patent applications.

 

“Term” has the meaning set forth in Section 11.1.

 

“Territory” means worldwide.

 

“Third Party” means any person, corporation or entity other than PDL or SG.

 

“Unconjugated Antibody” means a CD33 Antibody that is not an ADC or otherwise
linked to or conjugated or combined with a drug, toxin, label or any other
moiety.

 

“Unconjugated Antibody Licensed Product” means a Licensed Product that consists
of, contains or uses an Unconjugated Antibody (and no ADC), but in any event
excluding Associated Diagnostic Products.

 

“Valid Claim” means: (i) a claim of an issued and unexpired patent that (a) has
not been held permanently revoked, unenforceable or invalid by a decision of a
court or other governmental agency of competent jurisdiction, unappealable or
unappealed within the time allowed for appeal and (b) has not been admitted to
be invalid or unenforceable through reissue or disclaimer or similar binding and
official action; and/or (ii) a claim of a patent application that has been
pending for less than [***] or (but not until) that is allowed after such [***]
period.

 

2. License Grants.

 

2.1 Exclusive License Grant. Subject to the terms and conditions of this
Agreement,

 

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

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PDL hereby grants to SG an exclusive license, with right to sublicense (solely
in accordance with Section 2.7), under the CD33 Technology to research, develop,
make, have made, use, import, export, sell or offer for sale ADC Licensed
Products and Unconjugated Antibody Licensed Products [***] in the Field in the
Territory. The license grant under this Section 2.1 excludes any rights for
[***].

 

2.2 Exclusive Sublicense under [***]. Subject to the terms of this Agreement and
the [***], PDL hereby grants to SG an exclusive (except with respect to
Associated Diagnostics for which the sublicense shall be nonexclusive and except
with respect to Licensed Products that are Second Generation CD33 Products for
which the sublicense shall be co-exclusive to the same extent as provided for in
Section 2.4) sublicense, with right to sublicense (to the extent authorized
under the [***] and otherwise solely in accordance with Section 2.7), under the
[***] to the [***] to research, develop, make, have made, use, import, export,
sell or offer for sale Licensed Products in the Field in the Territory, with
such sublicense further limited to the field of human therapy and human in vivo
diagnostics (excluding any human in vitro diagnostics). SG, its Affiliates
and/or sublicensees agree to comply with all applicable obligations, covenants
and conditions of the [***], and any amendments thereto (including, without
limitation, those relating to record keeping, reporting and audits,
indemnification, publications, and use of [***]). PDL will not [***] without the
prior written consent of SG.

 

2.3 [***]. Subject to the terms of this Agreement and [***], PDL hereby grants
to SG a worldwide, nonexclusive sublicense to the [***] to make, use, sell and
otherwise distribute Licensed Products in the Field in the Territory. SG agrees
to [***]. To the extent permissible [***], SG shall have the right to [***]
solely in connection with [***].

 

2.4 Co-Exclusive License Grant. Subject to the terms of this Agreement,
including, but not limited to, Section 5, and [***], PDL hereby grants to SG and
its Affiliates a co-exclusive license with PDL, with right to sublicense solely
as provided in this Section 2.4 and otherwise in accordance with Section 2.7, to
the CD33 Technology to research, develop, make, have made, use, import, export,
sell or offer for sale Licensed Products that are Second Generation CD33
Products in the Field in the Territory. Each Party shall have the right to
sublicense its rights pursuant to this Section 2.3 solely with respect to [***]
for which the other Party has failed to exercise its Opt-In Right pursuant to
the terms of Section 5 following the full opportunity of such other Party to
exercise such Opt-In Right in accordance with Section 5.

 

2.5 Associated Diagnostic Products License Grant. Subject to the terms and
conditions of this Agreement, PDL hereby grants to SG a worldwide, nonexclusive
license, with right to sublicense (solely in accordance with Section 2.7), under
the CD33 Technology to research, develop, make, have made, use, import, export,
sell or offer for sale Associated Diagnostic Products together with Licensed
Products in the Field in the Territory.

 

2.6 Nonexclusive License Grant under Queen Patents. Subject to the terms of this
Agreement, PDL hereby grants to SG a nonexclusive, worldwide license, with right
of sublicense (solely in accordance with Section 2.7), under the Queen Patents
to research, develop, make (or have made), use, import, export, sell or offer
for sale Licensed Products in the Field in the Territory.

 

2.7 Sublicensing. SG shall have the right to grant sublicenses of its rights
under this Agreement, provided, however, that: (a) SG shall be responsible for
the operations of any sublicensee relevant to this Agreement as if such
operations were carried out by SG itself, including, without limitation, the
payment of any royalties or other payments provided for hereunder, regardless of
whether the terms of any sublicense provides for such amount to be paid by the
sublicensee directly to PDL, (b)

 

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

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any such sublicense shall bind the sublicensee in writing to all the applicable
terms and conditions of this Agreement for the benefit of PDL, including,
without limitation Articles 9 and 10 and a provision granting to SG audit rights
similar to PDL’s audit rights under Section 4.9 of this Agreement, which rights
SG agrees to exercise for PDL at PDL’s request and expense, (c) SG shall remain
primarily responsible for all acts and obligations hereunder, including
transferring CD33 Technology and associated materials to sublicensees, (d) SG
shall notify PDL in writing promptly after the grant of any such sublicense
including in such notice the name and address of the sublicensee and the
identity of the Licensed Product(s) and field(s) that are covered by the
sublicense and SG shall provide PDL with a copy of such sublicense together with
such notice, and (e) [***]; provided, that SG shall not be required to pay PDL
any [***]. SG shall [***] within [***] after SG [***] together with a written
report specifying the [***] thereof. SG further agrees to contractually obligate
[***] to comply with [***] (as the case may be) applicable to SG.

 

2.8 Reservation of Rights. For the avoidance of doubt, all exclusive (but not
co-exclusive) licenses granted by PDL to SG hereunder are exclusive even as to
PDL (to the extent of the license grant); provided, however, that, for the
avoidance of doubt, PDL retains the right to research, develop, manufacture and
commercialize (including the rights to make, have made, use, sell, offer to
sell, import and export) Second Generation CD33 Products, subject to Article 5.
PDL and its licensors shall retain ownership of the Licensed Technology and
[***], subject to the rights and licenses expressly granted herein. Except as
expressly provided for herein, no right, license, title, or interest is granted
by PDL to SG, implied or otherwise, in, to or under the Licensed Technology or
the [***].

 

2.9 Expiration of Royalty Term. Upon expiration of the Royalty Term in each
country, the licenses granted in this Section 2 with respect to the Licensed
Technology in such country shall become nonexclusive, royalty-free, fully
paid-up and perpetual, subject to termination, if any, under Article 11.

 

2.10 [***]

 

3. Materials, Documentation and Technology Transfer. Promptly following the
Effective Date, PDL shall make available to SG the Materials and Documentation
as set forth in Exhibit A and shall, for a period not to exceed [***] after the
Effective Date make appropriate PDL personnel and consultants reasonably
available to address questions associated with the transferred material and
documentation set forth in Exhibit A. The Materials, to be transferred within
[***] of the Effective Date, shall be deemed “delivered” hereunder upon PDL’s
tender of the Materials to a carrier reasonably designated by SG [***]. Subject
to reasonable availability, PDL will make its employees and relevant consultants
reasonably available during [***] to consult with qualified SG personnel on
issues and questions related to development and manufacturing of Licensed
Products, provided that in no event shall PDL be obligated to provide more than
[***] during the [***] and more than [***] thereafter in performing such
activities. SG shall pay PDL at an annual rate of [***], for up to [***], for
research, development, manufacturing, technology transfer or other assistance to
SG hereunder, in [***] from the Effective Date, and as reasonably requested by
SG for PDL time allocated to such activities beyond [***], provided that such
PDL resources are available. For technology transfer purposes, SG will make any
and all requests through [***] who will coordinate all access to PDL personnel
and consultants (the latter within [***] of the Effective Date only). After
[***] from the Effective Date, SG shall coordinate the activities of consultants
and shall pay associated consulting fees.

 

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

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4. Compensation to PDL.

 

4.1 Upfront Credits. As of the Effective Date, SG agrees to provide [***] of
non-cancelable, non-refundable credits to PDL against payments otherwise owed by
PDL to SG pursuant to the ADC Collaboration Agreement to be applied as follows:

 

(a) [***] for a [***] extension of the Option Period (as defined in the ADC
Collaboration Agreement) with respect to the [***], such that the Option Period
expires on [***]; and

 

(b) [***] for the annual maintenance fee due [***] pursuant to Section 7.1 of
the ADC Collaboration Agreement with respect to the [***]; and

 

(c) [***] to be applied to any future payments owed by PDL to SG pursuant to the
ADC Collaboration Agreement.

 

4.2 Material Supply Fee. SG agrees to pay PDL [***] within ten (10) days after
PDL’s delivery of the Materials pursuant to Section 3. The foregoing payment
shall be non-cancelable and non-refundable.

 

4.3 ADC Royalty Reduction. As of the Effective Date, the ADC Collaboration
Agreement is hereby amended such that the royalty rate payable by PDL to SG
pursuant to Section 7 thereof is reduced to [***] solely with respect to
Licensed Products (as defined in the ADC Collaboration Agreement) targeting:
[***] (as such term is defined in the ADC Collaboration Agreement) to be [***]
by PDL (in its sole discretion) by written notice to SG [***]. Such reduced
royalty rate shall not be subject to [***] of the ADC Collaboration Agreement
and shall not [***] of the ADC Collaboration Agreement (but shall not, in any
event, be subject to [***] in the event of [***] with respect to [***]).

 

4.4 Royalties.

 

4.4.1 During the Royalty Term, SG shall pay PDL royalties on Net Sales of
Licensed Products as follows:

 

(a) For [***]):

 

(i) a royalty of [***] of [***] of aggregate Net Sales in each calendar year;
and

 

(ii) a royalty of [***] of Net Sales [***] in each calendar year.

 

(b) For [***], a royalty of [***] of Net Sales.

 

(c) For [***], a royalty equal to the [***] of: (i) [***] of Net Sales; or (ii)
[***] of the [***] that SG receives from a Third Party sublicensee that is
developing, manufacturing and/or selling Associates Diagnostic Products pursuant
to a license agreement with SG.

 

4.4.2 For purposes of clarity, SG shall not be required to pay any royalties to
PDL hereunder for [***] for which: (a) [***]; or (b) [***] and for which an
agreement between the Parties therefore (as provided in [***]) has been entered
into.

 

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with the Securities and Exchange Commission. Confidential treatment has been
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4.5 Third Party Royalties; Adjustments to Royalties.

 

4.5.1 SG shall be responsible for paying all license fees, milestones, royalties
and other payments owed to Third Parties on account of the research,
development, manufacture, use or sale of Licensed Products by or for SG, its
Affiliates and/or sublicensees (or any customers), including fees, milestones
and royalties owed pursuant to the [***] (but excluding [***]. For royalties
owed under license agreements, including the [***], SG shall pay all amounts due
to the applicable Third Party (such as [***] and/or [***]) to the extent
provided in the previous sentence at least [***] before such amounts are due
under the [***] or other applicable agreement, indicating in a notice sent with
such payment (and without limiting any other reporting obligations hereunder or
thereunder) that such payment is being made on PDL’s behalf (and referencing
this Agreement and the [***]). SG shall provide a copy of all such notices (and
any other notices or reports sent to such Third Parties, including [***]) to PDL
at the same time such notices are sent by SG to such Third Parties. SG shall be
entitled to any royalty offsets, credits, most favored nation clauses or other
reductions in royalties to which PDL would be entitled pursuant to the [***]. SG
shall be responsible for [***].

 

4.5.2 For [***], if the sum of the royalties payable by SG, its Affiliates
and/or sublicensees to PDL under Section 4.4.1(b) plus any other royalties SG is
required to pay to any Third Party for a license to patent rights covering such
[***] exceeds [***] of Net Sales of such [***] in any calendar year, then for
each [***] by which the total royalties otherwise due and payable by SG with
respect to such [***] to PDL and the Third Parties described above exceeds [***]
of Net Sales, the rate of royalties due to PDL under Section 4.4.1(b) shall be
reduced by [***]; provided, however, that in no event shall any adjustment
pursuant to this Section 4.5.2 reduce the royalty payments due and payable by SG
to PDL pursuant to Section 4.4.1(b) with respect to a Licensed Product in any
country to less than [***] of Net Sales, exclusive of royalties payable to Third
Parties or payable (directly or on behalf of PDL) to [***].

 

4.6 Mode of Payments. For purposes of determining when a sale of any Licensed
Product occurs under this Agreement, the sale shall be deemed to occur on the
earlier of: (i) the date of the invoice to the purchaser of the Licensed
Product; or (ii) the date the applicable Net Sales are received or recognized on
the books of the applicable entity. After the First Commercial Sale, all royalty
payments shall be made within [***] after the end of each calendar quarter in
which such sales were deemed to occur. Such royalty payments shall be
accompanied by a detailed statement for each country in which sales of Licensed
Products occurred in the calendar quarter covered by such statement, specifying:
the gross sales (if available) and Net Sales in each country’s currency; the
type and number of units of Licensed Product sold in each country, the
applicable royalty rate under this Agreement; the royalties payable in each
country’s currency, including an accounting of deductions taken in the
calculation of Net Sales; the applicable exchange rate to convert from each
country’s currency to U.S. Dollars under Section 4.7; and the royalties payable
in U.S. Dollars. All payments hereunder shall be made free and clear of any
taxes, duties, levies, fees or charges, except for withholding taxes (to the
extent required under applicable law). SG shall make any withholding payments
required under applicable law and due on behalf of PDL and shall promptly
provide PDL with written documentation of any such payment sufficient to satisfy
the requirements of the United States Internal Revenue Service related to an
application by PDL for a foreign tax credit for such payment. SG shall
reasonably cooperate with PDL in connection with seeking any reduction or
exemption from withholding available under applicable law. All royalty payments
hereunder shall be made to PDL in U.S. Dollars by bank wire transfer in
immediately available funds to the account designated by PDL in writing to SG
from time to time.

 

4.7 Foreign Currency Conversion. For sales of any Licensed Product that occur in
a

 

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with the Securities and Exchange Commission. Confidential treatment has been
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currency other than U.S. Dollars, the quarterly royalty payment shall be
calculated as follows:

 

    (A/B) x C = U.S. Dollars royalty payment on foreign currency sales, where  
  A =   foreign currency “Net Sales” per quarter;     B =   foreign exchange
conversion rate, expressed in local currency per U.S. Dollar (using as the
applicable foreign exchange conversion rate published in the western edition of
the Wall Street Journal, or any other mutually agreed-upon source, for the last
business day of the applicable calendar quarter); and     C =   the royalty rate
applicable to such Net Sales under this Agreement.

 

4.8 Restrictions on Payment. If by law, regulations or fiscal policy of a
particular country, remittance of royalties in U.S. Dollars is restricted or
forbidden, written notice thereof shall promptly be given to PDL, and payment of
the royalty shall be made by the deposit thereof in local currency to the credit
of PDL in a recognized banking institution designated by PDL in writing. When
the laws or regulations of any country prohibit both the transmittal and deposit
of royalties on sales in such country, royalty payments shall be suspended for
as long as such prohibition is in effect and as soon as such prohibition ceases
to be in effect, all royalties that SG would have been under an obligation to
transmit or deposit but for the prohibition shall forthwith be deposited or
transmitted to the extent allowable.

 

4.9 Financial Record Keeping and Review.

 

(a) SG Records. After the First Commercial Sale, SG shall retain (and shall
obligate all sublicensees to retain) for at least [***] following the end of the
calendar year to which they pertain (including following expiration or
termination of this Agreement) records of all sales of Licensed Products and
related information, in reasonably sufficient detail to permit PDL to confirm
the accuracy of SG’s royalty calculations, reports and payments hereunder.

 

(b) Review. Subject to the other terms of this Section 4.9(b), at the request of
PDL, upon at least [***] prior written notice from PDL to SG, and at the expense
of PDL (except as otherwise provided below), SG shall permit an independent
certified public accountant selected by PDL and reasonably acceptable to SG to
inspect (during regular business hours) the records required to be maintained by
SG under this Section 4.9 as provided herein. At PDL’s request hereunder (which
shall not be made more frequently than [***] per year during the Royalty Term
after First Commercial Sale and for [***] following expiration or termination of
the Royalty Term), the accountant shall be entitled to review, the
then-preceding [***] of SG’s records for purposes of verifying SG’s royalty
calculations, payments and reports hereunder. In every case the accountant must
have previously entered into a confidentiality agreement with both Parties
substantially similar to the confidentiality provisions of Section 10 and
limiting the disclosure and use of such information to authorized
representatives of the Parties and the purposes germane to this Section 4.9.
Results of any such review shall be made available to both Parties. If any
review reveals a deficiency in the calculation of royalties resulting in any
underpayment by SG, SG shall promptly pay PDL the amount remaining to be paid
(plus interest thereon as provided in Section 4.12), and if such underpayment is
by [***] or more, SG shall pay all costs and expenses of the review.

 

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

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4.10 Milestones.

 

4.10.1 [***] Licensed Products. As additional consideration for the licenses and
rights granted to it hereunder, SG shall pay to PDL the following milestone
payments within [***] days of the first occurrence of each event set forth below
with respect to the first [***] (regardless of how many of such [***] are
developed), whether such events are achieved by SG, its Affiliates or
sublicensees, as follows:

 

(a) Upon [***];

 

(b) Upon [***];

 

(c) Upon [***]; and

 

(d) Upon [***].

 

If any of (a) through (d) above is achieved before one or more preceding
milestone payments has become due, then such preceding milestone payments shall
be deemed to become due within [***] of the achievement of the subsequent
milestone. For example, if the first [***] directly, then both the [***]
milestones will also become due at the [***].

 

4.10.2 [***] Licensed Products. As additional consideration for the licenses and
rights granted to it hereunder, SG shall pay to PDL the following milestone
payments within [***] of the first occurrence of each event set forth below with
respect to the first [***] (regardless of how many [***] are developed), whether
such events are achieved by SG, its Affiliates or sublicensees, as follows:

 

(a) Upon [***];

 

(b) Upon [***];

 

(c) Upon [***]; and

 

(d) Upon [***].

 

If any of (a) through (d) above is achieved before one or more preceding
milestone payments has become due, then such preceding milestone payments shall
be deemed to become due within [***] of the achievement of the subsequent
milestone. For example, if the first [***] directly, then both the [***]
milestones will also become due at the [***].

 

4.10.3 [***] Products. As additional consideration for the licenses and rights
granted to it hereunder, SG shall pay to PDL the following milestone payments
within [***] of the first occurrence of each event set forth below with respect
to the first [***], including any [***] or [***] that [***] (regardless of how
many such [***] are developed), whether such events are achieved by SG, its
Affiliates or sublicensees, as follows; provided that the following milestone
payments shall not be applicable to [***] for which: (a) [***] and [***]; or (b)
[***] and [***] hereof and for which an agreement between the Parties (as
provided in [***]) has been entered into:

 

(a) Upon [***];

 

(b) Upon [***];

 

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(c) Upon [***]; and

 

(d) Upon [***].

 

If any of (a) through (d) above is achieved before one or more preceding
milestone payments has become due, then such preceding milestone payments shall
be deemed to become due within [***] of the achievement of the subsequent
milestone. For example, if the first [***] directly, then both the [***]
milestones will also become due at the [***].

 

For purposes of clarification, if a [***] or an [***], SG shall be obligated to
pay milestones with respect to such [***] solely pursuant to this Section 4.10.3
and not Section 4.10.1 or 4.10.2.

 

4.10.4 No Associated Diagnostic Product Milestones. SG shall not be obligated to
make any milestone payments to PDL with respect to any Associated Diagnostic
Product.

 

4.11 Annual License Maintenance Fees. Commencing on [***] and continuing until
the date of [***] for a Licensed Product and subject to the terms and conditions
of the Agreement, SG shall pay to PDL an annual license maintenance fee, in the
amount of [***]. Such amount is [***]. The first payment of the annual license
maintenance fee is due on [***] and each subsequent payment shall be made on
each anniversary thereafter.

 

4.12 Interest. If SG fails to pay any amount specified under this Agreement
after the date such payment is due, the amount owed shall bear interest,
calculated from the due date until actually received by PDL, at the lesser of:
(a) a rate equal to [***] from time to time on each date such payment was due;
or (b) the maximum rate permitted by applicable law.

 

5. Second Generation CD33 Products.

 

5.1 Co-Development Option. In accordance with Section 2.4, [***]. Following the
[***], each Party shall have a co-exclusive right during the Term hereof [***].
Within [***], and upon each anniversary thereafter, each Party shall provide the
other Party with a written report describing the status, total costs incurred to
date and any patent applications filed with respect to such Party’s [***]. In
addition, each Party shall provide the other Party at least [***] prior written
notice of any [***] for each [***], which notice shall include [***] (an “Opt-In
Notice”). The Party receiving the Opt-In Notice (the “Receiving Party”) shall
have a right exercisable upon written notice to the Party sending such Opt-In
Notice (the “Developing Party”) within [***] following receipt of such Opt-In
Notice to opt into a [***] co-development and co-funding program for such [***]
(an “Opt-In Right”). If the Receiving Party elects to exercise the Opt-In Right,
the Parties shall negotiate in good faith a Co-Development Agreement on
commercially reasonable, industry standard terms. Such Co-Development Agreement
shall include: (a) a requirement that the Receiving Party reimburse the
Developing Party for fifty percent [***] of the Developing Party’s costs
incurred for such [***]; (b) provisions stipulating that the Developing Party
shall have [***]; and (c) a decision-making mechanism that includes (i) a joint
steering committee made up of equal numbers of representatives from each Party,
(ii) a dispute resolution process providing for escalation of disputes to each
Party’s Chief Executive Officer, with the Chief Executive Officer of the
Developing Party with third party alternative dispute resolution having the
final decision to resolve any deadlocks. If the Receiving Party does not
exercise its Opt-In Right within the [***] period, then the Opt-in Right shall
expire and the Developing Party shall have the sole right to [***] without any
involvement from the Receiving Party; provided that if the Developing Party does
not [***] within [***] after the Opt-In Right expires, then the Opt-in Right
shall be reinstated on the terms provided herein prior to the

 

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with the Securities and Exchange Commission. Confidential treatment has been
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date that the Developing Party does [***] for [***]; and provided further that
if [***] and [***], then SG shall [***] and the [***]. Notwithstanding anything
to the contrary in this Agreement, [***].

 

5.2 Right of First Refusal. If, at any time during the [***] period following
the Effective Date, PDL ceases to develop a [***] (an “Abandoned Product”) that
it had commenced developing (excluding [***]), PDL shall provide written notice
thereof to SG and SG shall have a right of first refusal to license such
Abandoned Product as follows. PDL shall notify SG at least [***]: (a) before
licensing such Abandoned Product to Third Parties or (b) after PDL makes a final
determination to cease development of such Abandoned Product. Upon delivery of
either such notice, the parties shall meet and discuss in good faith the
negotiation of a license agreement for such Abandoned Product under mutually
agreeable terms and conditions. If the Parties fail to reach agreement on such a
license within [***] after the first notice described above or SG gives written
notice that it is not interested in licensing such Abandoned Product during the
[***] period, PDL shall have the right to license such Abandoned Product to a
Third Party; provided that if the terms of such license are more favorable to
the Third Party than the terms last offered to SG, PDL shall notify SG in
writing and SG shall have a period of [***] to exercise the right to enter into
a license agreement with PDL on such terms for such Abandoned Product.

 

6. Development and Commercialization.

 

6.1 Manufacturing. SG, its Affiliates and/or sublicensees shall be solely
responsible for all aspects of development and manufacturing of Licensed
Products; provided that upon SG’s request, PDL will consider (without obligation
hereunder), subject to availability of manufacturing capacity and other
considerations in PDL’s sole discretion, to manufacture additional quantities of
cGMP CD33 Antibody to supply additional clinical trials [***]. In addition, if
SG requests that PDL manufacture commercial CD33 Antibody, and at that time PDL
has the ability, available capacity and desire to do so (in its sole
discretion), then the parties agree to negotiate in good faith towards a
commercial manufacturing agreement (provided that PDL shall have no obligation
hereunder to so manufacture CD33 Antibody).

 

6.2 Clinical Trials and Clinical Trial Data. PDL shall transfer all available
clinical documents for the Licensed Product, including but not limited to, the
clinical documents listed in Exhibit A. SG, its Affiliates and/or sublicensees
shall be responsible for conducting all clinical trials of Licensed Products,
subject, to the extent applicable, to [***]. All data produced as a result of
clinical trials on Licensed Products conducted by SG or its Affiliates and/or
sublicensees under this Agreement shall be owned by SG, its Affiliates and/or
sublicensees, and all such data shall be considered Confidential Information of
SG, its Affiliates and/or sublicensees.

 

6.3 Regulatory. PDL is transferring to SG all IND responsibility and regulatory
oversight and reporting for safety and other regulatory matters. PDL shall take
all actions specified in Exhibit A with respect to regulatory matters for
Licensed Products, including without limitation transferring to SG ownership of
the existing IND for PDL CD33 Antibodies (the “CD33 IND”). SG, its Affiliates
and/or sublicensees shall be responsible for obtaining all necessary
governmental applications and approvals for the development, testing,
production, distribution, sale and use of Licensed Products, as applicable, in
any country where Licensed Products shall be manufactured or sold or otherwise
distributed. SG or any Affiliate and/or sublicensee it shall designate shall be
named as the sponsor in any filing for any regulatory approval made for Licensed
Products hereunder, and shall be the holder of all such regulatory approvals and
shall be compliant per mandated laws and regulations. SG shall itself, and shall
require its Affiliates and any sublicensees and transferees who obtain any
rights or interests in (or control over) the CD33 IND, to agree in writing to,
[***]

 

[***]     Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
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6.4 Commercialization. SG, its Affiliates and/or sublicensees shall have the
sole responsibility for, and right to make all decisions regarding, all
commercialization activities, including without limitation sales, marketing and
product launch activities and tactical execution of marketing and sales
promotional programs for all Licensed Products. All marketing and promotional
materials related shall be prepared by SG, its Affiliates or sublicensees for
all Licensed Products. SG, its Affiliates or sublicensees shall bear all costs
related to the commercialization of Licensed Products.

 

6.5 Diligence. SG agrees to use commercially reasonable efforts to research,
develop and commercialize Licensed Products and to obtain such approvals as may
be necessary in connection therewith. Upon request by PDL [***], at year end, SG
shall deliver to PDL a written report setting forth in reasonable detail (a)
[***], (b) [***], and (c) [***].

 

6.6 Compliance With Laws. SG agrees (and shall cause its sublicensees,
Affiliates and contractors to agree) to comply with all applicable laws, rules
and regulations in the research, development, manufacture, commercialization and
use of Licensed Products.

 

6.7 Opt-In Development and Commercialization. The rights and obligations set
forth in this Article 6 with respect to [***] shall be subject to Section 5.1
and any agreements entered into between the parties if either Party exercises
its Opt-In Right pursuant to Article 5. For the avoidance of doubt, [***].

 

7. Representations and Warranties.

 

7.1 Representations and Warranties of PDL. PDL hereby represents and warrants
that:

 

(a) the execution and delivery of this Agreement and the performance of the
transactions contemplated hereby have been duly authorized by all appropriate
PDL corporate action;

 

(b) this Agreement is a legal and valid obligation, binding upon PDL and
enforceable in accordance with its terms, except to the extent that enforcement
of rights and remedies are subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general application
related to creditors’ rights and to general equity principles;

 

(c) the execution, delivery and performance of the Agreement by PDL does not
conflict with any agreement, instrument or binding understanding, oral or
written, to which it is a party or by which it is bound, nor violate in any
material respect any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it;

 

(d) [***];

 

(e) PDL has the right to grant the licenses granted herein;

 

(f) as of the Effective Date, there are no claims, judgments or settlements
against PDL pending or to PDL’s knowledge, threatened in writing, seeking to
invalidate any CD33 Patents;

 

(g) PDL has provided SG with accurate and complete copies of the [***] as of the
Effective Date;

 

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(h) as of the Effective Date, the [***] are in full force and effect and PDL has
not received notice regarding any actual or alleged breach of, or issued any
notice of breach with respect to, the [***];

 

(i) PDL’s licenses to the [***], the [***] and the [***] are the [***];

 

(j) as of the Effective Date, the Queen Patents include all Patents owned or
Controlled by PDL relating directly to the humanization of antibodies; and

 

(k) as of the date delivered by PDL to SG, PDL warrants that the [***] specified
on Exhibit A (the “cGMP Materials”) were manufactured in accordance with cGMP
and conformed to release specifications set forth in Exhibit D and were released
by PDL’s Quality Assurance as clinical-grade drug product. Furthermore, PDL
warrants as of the date delivered by PDL that the cGMP Materials have continued
to conform to the stability specifications set forth in Exhibit D as
demonstrated by the [***] time-point set forth in Exhibit D. Conformance with
the release specifications and stability specifications shall be measured solely
by the conformance tests specified therefore in Exhibit D as applied to retained
samples (thus excluding any failures to conform caused by actions or inactions
of SG). SG’s sole and exclusive remedy and PDL’s sole liability for any breach
of this representation and warranty shall be, at PDL’s option, the [***].

 

(l) PDL has provided SG with accurate and complete copies of all material
transfer agreements and sponsored research agreements entered into by PDL with
Third Parties relating to PDL CD33 Antibodies. Other than [***], no Third Party
has any [***] with respect to the [***] or any other [***] for PDL CD33
Antibodies.

 

7.2 Representations and Warranties of SG. SG hereby represents and warrants
that:

 

(a) the execution and delivery of this Agreement and the performance of the
transactions contemplated hereby have been duly authorized by all appropriate SG
corporate action; and

 

(b) this Agreement is a legal and valid obligation binding upon SG and
enforceable in accordance with its terms, except to the extent that enforcement
of rights and remedies are subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general application
related to creditors’ rights and to general equity principles;

 

(c) The execution, delivery and performance of the Agreement by SG does not
conflict with any agreement, instrument or binding understanding, oral or
written, to which it is a party or by which it is bound, nor violate in any
material respect any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it.

 

7.3 Disclaimer. EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS AGREEMENT, NEITHER
PARTY MAKES, AND EACH PARTY HEREBY DISCLAIMS, ANY AND ALL REPRESENTATIONS AND
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT MATTER
OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT AND ANY WARRANTY ARISING
OUT OF PRIOR COURSE OF DEALING AND USAGE OF TRADE.

 

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

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8. Intellectual Property Rights.

 

8.1 Ownership of Inventions. SG shall own all Inventions made solely by
employees of or agents of or others obligated to assign Inventions to SG
(collectively, “SG Inventions”). PDL shall own all Inventions made solely by
employees of or agents of or others obligated to assign Inventions to PDL
(collectively, “PDL Inventions”). Any Inventions made during the course of and
pursuant to activities carried out under this Agreement jointly by, on the one
hand, employees of or agents of or others obligated to assign Inventions to PDL
and, on the other hand, employees of or agents of or others obligated to assign
Inventions to SG (collectively, “Joint Inventions”) shall be jointly owned by
PDL and SG in accordance with U.S. laws of inventorship.

 

8.2 Prosecution of CD33 Patents. PDL shall have the first right at its sole
expense, using counsel selected at PDL’s sole discretion, to prepare, file,
prosecute, maintain and obtain extensions of the CD33 Patents in countries of
PDL’s choice. PDL shall solicit SG’s prior advice and review of material
prosecution matters related to the preparation, filing, prosecution and
maintenance of the CD33 Patents with reasonable advance notice to allow SG to
comment thereon, and PDL shall consider in good faith SG’s reasonable comments
related thereto. If PDL elects not to prosecute or maintain any patent or patent
application within the CD33 Patents for any reason, PDL shall give SG notice
thereof at least [***] prior to allowing such patent or patent application to
lapse or become abandoned or unenforceable, and SG shall thereafter have the
right, at its sole expense, to prosecute and maintain such patent or patent
application, provided that, with respect to any CD33 Patents in-licensed from
third parties, if any, PDL has the authority to allow SG to prosecute and
maintain such patents and, if so, subject to the applicable terms and conditions
of the applicable in-license agreement.

 

8.3 Prosecution of [***] Patents. The [***] Patents shall be filed, prosecuted
and maintained in a manner consistent with the terms and conditions of the
[***]. PDL will use reasonable efforts to provide to SG the following under the
[***] as they are received from [***]: (i) [***]; (ii) [***]; and (iii) [***].
SG will pay PDL on a quarterly basis [***] and subject to SG’s receipt of
appropriate documentation supporting such expenses.

 

8.4 New CD33 Patents. PDL shall disclose to SG all inventions conceived and
reduced to practice by PDL prior to, on or after the Effective Date that relate
specifically to CD33 Antibodies and which do not constitute Second Generation
CD33 Improvements (collectively, “CD33 Inventions”) and as to which PDL intends
to file patent applications that would meet the definition of CD33 Patents. Any
such patent applications shall be included in the CD33 Patents (to the extent
they meet the definition thereof), subject to the terms of this Agreement, and
shall be listed in Exhibit B hereof, which shall be updated by PDL from time to
time during the Term.

 

8.5 Infringement of CD33 Patents.

 

(a) Notice. If either Party learns that a Third Party is infringing or allegedly
infringing any CD33 Patents within the Field, it shall promptly notify the other
Party thereof and shall include in such notice the details of the infringement
and any available evidence pertaining thereto. The Parties shall cooperate and
use reasonable efforts to stop such alleged infringement without litigation.

 

(b) Enforcement Actions. PDL shall have the first right (but not the
obligation), at its sole expense, to enforce CD33 Patents within the Field. If
PDL fails to bring an action or proceeding within [***] of the later of (i)
notifying SG of the alleged infringement pursuant to Section 8.5(a), (ii) being
notified by SG of the alleged infringement pursuant to Section 8.5(a) or (iii)
receiving a written request from SG requesting that PDL take such an action, SG
shall have the right (but not the obligation) to bring any such action or
proceeding relating to CD33 Patents. Each Party shall assist the

 

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

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other Party, upon request and at the enforcing Party’s sole expense, and to the
extent commercially reasonable, in taking any action to enforce the CD33
Patents. Neither Party shall settle a suit to enforce any CD33 Patents without
the consent of the other Party, which consent shall not be unreasonably
withheld, except that neither party shall be restricted in granting any licenses
or sublicenses under the CD33 Patents to third parties that it otherwise has the
right to grant. All monies recovered upon the final judgment or settlement of
any suit to enforce any CD33 Patents shall be allocated first to the Party
taking the enforcement action to the extent necessary to compensate it for its
expenses incurred in its enforcement, second to the other Party to the extent
necessary to compensate it for its expenses in cooperating with the Party taking
the enforcement action, and finally prorated in accordance with the damages for
which such judgment or settlement is reasonably intended to compensate (taking
into account the royalties and other payments that would have been payable to
PDL hereunder in the absence of such infringement).

 

8.6 Prosecution and Enforcement of Queen Patents. PDL shall be solely
responsible, at its sole discretion and expense, for the prosecution, defense,
and maintenance of the Queen Patents, and for enforcing Queen Patents against
actual or suspected Third Party infringers.

 

8.7 Prosecution and Enforcement of SG Patents. SG shall be solely responsible,
at its sole discretion and expense, for the prosecution, defense, and
maintenance of any SG Patents, and for enforcing SG Patents against actual or
suspected Third Party infringers.

 

8.8 Prosecution and Enforcement of Joint Patents. The Parties shall cooperate
and jointly agree on the prosecution, defense, and maintenance of any Joint
Patents, and for enforcing Joint Patents against actual or suspected Third Party
infringers.

 

8.9 Trademarks. All Licensed Products shall be sold under trademarks selected
and owned or controlled by SG or its Affiliates and/or sublicensees worldwide.
SG or its Affiliates and/or sublicensees shall control the preparation,
prosecution and maintenance of applications related to such trademarks, and
shall be responsible for the costs of the foregoing. SG or its Affiliates and/or
sublicensees shall also be responsible for all costs, expenses, legal fees and
recoveries associated with bringing, maintaining and prosecuting any action to
maintain, protect or defend any trademark applicable to a Licensed Product,
including claims for actual, alleged or threatened infringement, unfair trade
practices, trade dress imitation, passing off of counterfeit goods, or like
offenses.

 

8.10 USAN Name. Promptly after the Effective Date, PDL shall transfer ownership
of the USAN name “lintuzumab” to SG for use with respect to Licensed Products
developed hereunder.

 

9. Indemnification.

 

9.1 Indemnification by SG. SG and its Affiliates hereby agrees (and SG shall
cause its sublicensees to agree) to indemnify, defend and hold PDL, its
licensors (including [***]), directors, trustees, officers, employees, agents
and their respective successors, heirs and assigns (the “Indemnitees”) harmless
from and against all suits, claims, actions, demands, liabilities, damages,
expenses and/or loss, including reasonable legal expense and attorneys’ fees
(“Losses”) resulting from: (a) SG’s or its Affiliates’ or sublicensees’
research, development, manufacturing, testing, labeling, marketing or sale of
Licensed Products; or (b) SG’s breach of any of its representations or
warranties set forth in Section 7.2 or breach of its other obligations under
this Agreement.

 

9.2 Indemnification by PDL. PDL hereby agrees to indemnify, defend and hold SG

 

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

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and its Indemnitees harmless from and against all Losses resulting from PDL’s
breach of any of its representations or warranties set forth in Section 7.1 or
breach of its other obligations under this Agreement.

 

9.3 Notice. In the event that one Party is seeking indemnification under this
Section 9 (the “Indemnified Party”), it shall inform the other Party (the
“Indemnifying Party”) of a claim giving rise to a right of indemnification
hereunder as soon as reasonably practicable after the Indemnified Party receives
notice of the claim, shall permit the Indemnifying Party to assume direction and
control of the defense of the claim (including the right to settle the claim
solely for monetary consideration), and shall cooperate as requested (at the
expense of the Indemnifying Party) in the defense of the claim.

 

9.4 Insurance. Beginning at the time any Licensed Product is being clinically
tested in human subjects by SG, its Affiliates and/or sublicensees and
continuing throughout the Term (and for a period of [***] thereafter), SG shall
have and maintain such type and amounts of liability insurance covering the
development, manufacture, use, and sale of Licensed Products as is normal and
customary in the pharmaceutical industry generally for parties similarly
situated, including without limitation products liability insurance with a
minimum combined single limit per occurrence of [***]. This insurance shall also
include contractual liability, and shall be carried with insurance companies
with a Best rating of [***] or better. If carried under a claims made form, this
insurance shall be carried by SG for a minimum of [***] following the
termination of this Agreement. Upon request, SG shall provide PDL with a copy of
its policies of insurance, or a certificate of insurance in that regard, along
with any material amendments and revisions thereto. SG shall [***] discussed in
this Section 9.4.

 

10. Confidentiality.

 

10.1 Confidential Information. In the course of performance of this Agreement,
one Party may disclose to the other or receive written information from the
other relating to the subject matter of this Agreement which information, if so
identified in writing either pursuant to this Section 10.1 or otherwise upon
disclosure, shall be considered to be the disclosing Party’s “Confidential
Information”. In any event, all Licensed Technology and Materials shall be
deemed Confidential Information of PDL for purposes of this Agreement (subject
to the exceptions listed below and Section 10.2). Each Party agrees that it
shall take the same steps to protect the confidentiality of the other Party’s
Confidential Information as it takes to protect its own proprietary and
confidential information. Each Party shall protect and keep confidential and
shall not use, publish or otherwise disclose to any Third Party, except as
contemplated by this Agreement or with the other Party’s prior written consent,
the other Party’s Confidential Information for a period of [***] from the date
of termination or expiration of this Agreement. For purposes of this Agreement,
Confidential Information shall not include such information that:

 

(a) was known to the receiving Party at the time of first disclosure of it to
the receiving Party by the disclosing Party hereunder;

 

(b) was generally available to the public or was otherwise part of the public
domain at the time of disclosure or became generally available to the public or
otherwise part of the public domain after disclosure other than through any act
or omission of the receiving Party in breach of this Agreement;

 

(c) became known to the receiving Party after disclosure from a source that had
a lawful right to disclose such information to others without restrictions on
confidentiality; or

 

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

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(d) was independently developed by the receiving Party without use of or
reference to the other Party’s Confidential Information where such independent
development can be established by written documentation.

 

10.2 Permitted Disclosure. Each Party shall be entitled (i) to disclose
Confidential Information of the other Party to consultants, sublicensees and
contractors for any purpose provided for in this Agreement and, (ii) to disclose
Confidential Information (including the terms of this Agreement) to Third
Parties in connection with financing or M&A discussions or with corporate
partnering opportunities limited to CD33; provided in all cases that any such
Third Party has first agreed in writing to confidentiality restrictions and
obligations at least as protective as this Section 10. Either Party shall
consult with the other Party prior to the submission of any manuscript for
publication if the publication shall contain any Confidential Information of the
other Party. Such consultation shall include providing a copy of the proposed
manuscript to the other Party at least [***] prior to the proposed date of
submission to a publisher, incorporating appropriate changes proposed by the
other Party as to its Confidential Information into the manuscript submission
and limiting disclosure of Confidential Information of the other Party as it may
reasonably request. Notwithstanding the foregoing, Confidential Information of a
Party may be disclosed by the other Party (i) as a part of a patent application
filed on inventions made under this Agreement, (ii) to the extent reasonably
required to comply with any applicable governmental law or regulation, including
the rules or regulations of any relevant stock exchange, and (iii) to its
accountants, attorneys, and other professional advisors, provided that such
persons referred to in this subparagraph (iii) are obligated to keep such terms
confidential to the same extent as such other Party. With respect to (i) and
(ii) above, the disclosing Party shall first notify the other Party of the
proposed disclosure (and provide copies thereof) reasonably in advance of the
disclosure so as to provide the other Party with a reasonable opportunity to
comment upon such disclosure and suggest ways to minimize the disclosure of
Confidential Information.

 

11. Term and Termination.

 

11.1 Term. This Agreement shall commence as of the Effective Date and shall
continue in effect until terminated in accordance with Section 11.2, 11.3 or
11.4 (the “Term”).

 

11.2 Termination by SG. SG may terminate this Agreement at any time upon [***]
prior written notice.

 

11.3 Termination for Breach. Either Party may terminate this Agreement in the
event of a material breach of the Agreement by the other Party upon [***]
written notice to the other Party. The termination shall become effective at the
end of the [***] period unless the other Party cures such breach within such
period; provided that such [***] period will be extended for up to an additional
[***] if the nature of the material breach is such that it is not curable within
[***] and the breaching Party is diligently pursuing cure thereof; and provided
further that if the breaching Party reasonably disputes the basis for any
termination of this Agreement, such Party shall have the right to institute
dispute resolution proceedings to determine whether there exists a material,
uncured breach justifying such termination, and the termination shall not become
effective until there is a final, binding determination thereof. by the
arbitrator under Section 12.12. Each Party’s right to so terminate shall be in
addition to any remedies available for breach of contract.

 

11.4 Termination Upon Insolvency. Either Party may terminate this Agreement if,
at any time, (a) the other Party shall file in any court or agency pursuant to
any statute or regulation of any

 

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

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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 all 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.

 

11.5 Effect of Expiration or Termination.

 

(a) Termination or expiration of this Agreement for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of either Party
prior to such termination or expiration and shall not release either party from
any obligation that has accrued prior to such expiration or termination,
including without limitation any obligation to pay any amount which accrued or
became due and payable under the terms and conditions of this Agreement prior to
such expiration or termination. Sections 1, 2.10, 4.1, 4.2, 4.3, 4.9 (to extent
provided therein), 7.3, 8.1, 9, 10 (to the extent provided therein), 11.5 and 12
of this Agreement shall survive any expiration or termination of this Agreement.

 

(b) Upon any termination of this Agreement by any party for any reason, the
licenses granted by PDL to SG in Section 2 shall terminate and SG shall
discontinue all further research and development of Licensed Products.
Furthermore, SG shall promptly return to PDL (or at PDL’s request destroy) all
Confidential Information of PDL and all Cell Lines, PDL CD33 Antibodies and
Materials in SG’s possession or control.

 

(c) Any sublicense permitted under this Agreement, to the extent it is
consistent with the rights and obligations due PDL hereunder, shall, at such
sublicensee’s option in its sole discretion, survive termination of this
Agreement and be deemed a direct license from PDL provided that: (i) the
sublicensee is not in material breach of the terms of its sublicense at the time
of such termination; (ii) upon termination of this Agreement, such sublicensee
agrees in writing to be bound by all terms of this Agreement applicable to SG,
and can reasonably show the capacity to comply with such terms to the same
extent as if such sublicensee were an original Party hereto; (iii) the
obligations of PDL under such direct license shall not be greater than the
obligations of PDL under this Agreement; and (iv) the scope of such direct
license shall not be broader than the rights sublicensed by SG to such
sublicense.

 

(d) In the event of any termination of this Agreement, other than termination by
SG pursuant to Section 11.3 or 11.4, at PDL’s option, in its sole discretion
upon written notice to SG within [***] after the effective date of termination,
SG shall negotiate in good faith with PDL for an exclusive license (solely for
the purpose of developing, manufacturing and commercializing Licensed Products)
to any SG CD33 Patents and related know-how and intellectual property owned and
controlled by SG that covers or is used in Licensed Products (or their
development, manufacture or commercialization) under reasonable terms and
conditions. If the Parties mutually agree on such terms and enter into such an
exclusive license agreement, then SG shall transfer to PDL all of SG’s research,
development, manufacturing and commercialization program for all Licensed
Products (including all Second Generation CD33 Products and Second Generation
CD33 Improvements). Subject to reasonable availability, SG shall also make its
employees and relevant consultants reasonably available during the first year
following termination to consult with qualified PDL personnel on issues and
questions related to development and manufacturing of Licensed Products,
provided that in no event shall SG be obligated to provide more than [***] and
[***] per week thereafter in performing such activities. PDL shall pay SG at an
annual rate of [***], for research, development, manufacturing, technology
transfer or other

 

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

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assistance to PDL hereunder, in [***] from the date of termination, and as
reasonably requested by PDL for SG time allocated to such activities beyond
[***], provided that such SG resources are available. Such FTE rate shall be
increased by [***] of the Effective Date and upon every [***] thereafter during
the Term. Such cooperation and assistance, as reasonably requested by PDL (or
its designee), shall continue with as little disruption and delay as reasonably
possible to the development, manufacture, and commercialization of Licensed
Products (including, if applicable, by providing technology (including know-how)
transfer, training and consultation and by transferring manufacturing processes
and related technology). SG shall also transfer to PDL all applicable regulatory
filings and approvals for Licensed Products together with all clinical data and
similar information for Licensed Products. SG shall use commercially reasonable
efforts to effect a transfer substantially in accordance with the foregoing from
all of its applicable sublicensees, affiliates and contractors.

 

12. General Provisions.

 

12.1 No Partnership. Nothing in this Agreement is intended or shall be deemed to
constitute a partnership, agency, fiduciary, distributorship, employer-employee
or joint venture relationship between the Parties. Neither Party shall have the
authority to incur any debts or make any commitments for the other, except to
the extent, if at all, specifically provided herein.

 

12.2 Assignments. Neither Party shall (nor have the right to) assign this
Agreement or any of its rights or obligations hereunder except: (a) as incident
to the merger, consolidation, reorganization or acquisition of stock or assets
affecting substantially all of the assets or voting control of the assigning
Party; (b) to any wholly owned subsidiary if the assigning Party remains liable
and responsible for the performance and observance of all of the subsidiary’s
duties and obligations hereunder; or (c) with the prior written consent of the
other Party, which consent shall not be unreasonably delayed or withheld,
provided, however, that assignment in the context of insolvency or bankruptcy of
SG shall require prior written consent of PDL. This Agreement shall be binding
upon the successors and permitted assigns of the Parties, and the name of a
Party appearing herein shall be deemed to include the names of such Party’s
successor’s and permitted assigns to the extent necessary to carry out the
intent of this Agreement. Any assignment not in accordance with this Section
12.2 shall be null and void.

 

12.3 Further Actions. Each Party agrees to execute, acknowledge and deliver such
further instruments, and to do all such other acts, as may be necessary in order
to carry out the purposes and intent of this Agreement.

 

12.4 Use of Names. Except as otherwise provided herein, no right, express or
implied, is granted by this Agreement to use in any manner the names “Seattle
Genetics” or “Protein Design Labs” or any other trade name or trademark of SG or
PDL in connection with the performance of this Agreement.

 

12.5 Public Announcements. Except as may otherwise be required by law or
regulation, neither Party shall make any public announcement concerning this
Agreement or the subject matter hereof without the prior consent of the other
Party unless the nature of the information has been previously approved for
disclosure. If the nature of the information has been approved, this Section
12.5 shall no longer apply to that information.

 

12.6 Entire Agreement; Amendments. This Agreement constitutes and contains the
entire understanding and agreement of the Parties and cancels and supersedes all
prior negotiations,

 

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

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correspondence, understandings and agreements, whether verbal or written,
between the Parties respecting the subject matter hereof, including, without
limitation, the MTA (without limiting the effectiveness or enforceability of the
MTA with respect to the period prior to the Effective Date). No waiver,
modification or amendment of any provision of this Agreement shall be valid or
effective unless made in writing and signed by a duly authorized representative
of each of the Parties.

 

12.7 Severability. In the event any one or more of the provisions of this
Agreement should for any reason be held by any court or authority having
jurisdiction over this Agreement or either of the parties to be invalid, illegal
or unenforceable, such provision or provisions shall be validly reformed to as
nearly as possible approximate the intent of the Parties and, if unreformable,
shall be divisible and deleted in such jurisdiction; elsewhere, this Agreement
shall not be affected so long as the Parties are still able to realize the
principal benefits bargained for in this Agreement.

 

12.8 Captions. The captions to this Agreement are for convenience only, and are
to be of no force or effect in construing or interpreting any of the provisions
of this Agreement.

 

12.9 Applicable Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California applicable to contracts
entered into and to be performed entirely within the State of California,
without giving effect to principles of conflicts of law.

 

12.10 Notices and Deliveries. Any notice, requests, delivery, approval or
consent required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been sufficiently given if delivered in
person, overnight courier or transmitted by telecopy with a confirming copy sent
by overnight courier or registered mail to the Party to whom it is directed at
its address shown below or such other address as such Party shall have last
given by notice to the other Party. Any such notice, requests, delivery,
approval or consent shall be deemed received on the date of telecopy or hand
delivery, one business day after deposit with an overnight courier, or three (3)
days after deposit of the registered mail with the U. S. postal service.

 

If to SG:

  

SEATTLE GENETICS, INC.

    

21823 30th Drive SE

    

Bothell, Washington 98021

    

Attention: Chief Executive Officer

    

Telephone: (425) 527-4000

    

Telecopy: (425) 527-4109

    

With a copy to: General Counsel

If to PDL:

  

PROTEIN DESIGN LABS, INC.

    

34801 Campus Drive

    

Fremont, CA 94555

    

Attention: Chief Executive Officer

    

Telephone: (510) 574-1677

    

Telecopy: (510) 574-1666

    

With a copy to: General Counsel

 

12.11 Force Majeure. Neither Party shall be in breach of this Agreement on
account of failure of performance by the defaulting Party (excluding any failure
to pay amounts owed hereunder) to the extent the failure is occasioned by
government action, war, earthquake, fire, explosion, flood, strike, lockout,
embargo, act of God, or any other cause beyond the control of the defaulting
Party, provided that the Party claiming force majeure has notified the other
Party thereof and has exerted all reasonable

 

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

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efforts to avoid or remedy such force majeure; provided, however, that in no
event shall a Party be required to settle any labor dispute or disturbance.

 

12.12 Dispute Resolution. Any dispute or claim arising out of or in connection
with this Agreement shall be resolved as follows: (a) for a period of [***]
after notice of a dispute is given by one Party to the other Party the
respective appropriate officers of the parties shall negotiate in good faith in
an effort to resolve the dispute; and (b) if the dispute has not been resolved
at the close of such [***] period, the matter shall be finally settled by
binding arbitration under the Commercial Arbitration Rules of the American
Arbitration Association, by one arbitrator appointed in accordance with said
rules; provided, that if the parties cannot agree on the arbitrator, the dispute
shall be resolved by a panel of three arbitrators, wherein each Party shall
appoint one arbitrator and those arbitrators shall in turn jointly appoint the
third arbitrator. Judgment on an award rendered by an arbitrator or arbitrators
may be entered in any court having jurisdiction. Notwithstanding the foregoing,
the parties may apply to any court of competent jurisdiction for preliminary or
interim equitable relief without breach of this arbitration provision. Such
arbitration shall be held in San Francisco, California.

 

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

 

12.14 Waiver and Delay. Any delay in enforcing a Party’s rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of a Party’s right to the future enforcement of its rights
under this Agreement.

 

12.15 Limitation of Liability. EXCEPT WITH RESPECT TO EACH PARTY’S INDEMNITY
OBLIGATIONS UNDER ARTICLE 9 AND CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 10, IN
NO EVENT SHALL EITHER PARTY BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT,
PUNITIVE OR SPECIAL DAMAGES OF THE OTHER PARTY ARISING OUT OF OR RELATED TO THIS
AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

 

[Signature page follows]

 

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

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

SEATTLE GENETICS, INC.

     

PROTEIN DESIGN LABS, INC.

By:

 

/s/ Clay B. Siegall

     

By:

 

/s/ Mark McDade

Name:

 

Clay B. Siegall

     

Name:

 

Mark McDade

Title:

 

President and Chief Executive Officer

     

Title:

 

Chief Executive Officer

 

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

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EXHIBIT A

 

Material Supplies, Technology Transfer and Technology Transfer Responsibilities

 

Except where otherwise noted, all Technology Transfer will be completed within
[***] of the Effective Date.

 

I. [***]

 

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

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EXHIBIT B

 

CD33 Patents

 

[***]

 

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

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EXHIBIT C

 

Queen Patents

 

[***]

 

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

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EXHIBIT D

 

[***]

 

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