Exhibit 10.3

 

MULTI-TARGET AGREEMENT

 

This Multi-Target Agreement (this “Agreement”) is made effective as of the date
of the last signature below (the “Effective Date”) by and between
ImmunoGen, Inc., a Massachusetts corporation (“ImmunoGen”), with its principal
place of business at 830 Winter Street, Waltham, Massachusetts 02451, and Eli
Lilly and Company, an Indiana corporation (“Lilly”), with its principal place of
business at Lilly Corporate Center, Indianapolis, Indiana 46285.  ImmunoGen and
Lilly are sometimes each hereinafter referred to individually as a “Party” and
collectively as the “Parties.”

 

WHEREAS, Lilly is the owner of or otherwise controls certain rights in
proprietary technology and know-how relating to certain Antibodies; and

 

WHEREAS, ImmunoGen is the owner of or otherwise controls certain rights in
proprietary technology and know-how relating to or otherwise useful in the
conjugation of MAY Compounds to Antibodies; and

 

WHEREAS, pursuant to the terms and conditions set forth herein, Lilly desires to
have access to ImmunoGen’s proprietary technology and know-how for research,
discovery and development of Ab-MAY Products, and ImmunoGen desires to give
Lilly such access;

 

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

 

1.                                      DEFINITIONS

 

Whenever used in this Agreement with an initial capital letter, the terms
defined in this Section 1 shall have the meanings specified.

 

1.1                               “Ab-MAY Product” means any compound that
incorporates, is comprised of, or is otherwise derived from, a conjugate of an
Antibody with a MAY Compound.

 

1.2                               “Affiliate” means, with respect to any Person,
any other Person that, directly or indirectly through one or more Affiliates,
controls or is controlled by or is under common control with such Person.  For
purposes of this Section 1.2, “control” means (a) ownership of fifty
percent (50%) or more of the shares of stock entitled to vote for the election
of directors, in the case of a corporation, or fifty percent (50%) or more of
the equity interests in the case of any

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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other type of legal entity, (b) status as a general partner in the case of any
partnership, or (c) any other arrangement whereby a Person controls or has the
right to control the board of directors or equivalent governing body or
management of another Person.  A Person shall be deemed an Affiliate only so
long as it satisfies the foregoing definition.

 

1.3                               “Antibody” means an antibody, whether
polyclonal or monoclonal, multiple or single chain, recombinant or naturally
occurring, whole or fragment, and any variants, derivatives or constructs
thereof, including but not limited to, antigen binding portions including Fab,
Fab’, F(ab’)2, Fv, dAb and CDR fragments, single chain antibodies (scFv),
chimeric antibodies, diabodies and polypeptides (including humanized versions
thereof) that contain at least a portion of an immunoglobulin that is sufficient
to confer specific antigen binding to the polypeptide.

 

1.4                               “Applicable Laws” means all federal, state,
local, national and supra-national laws, statutes, rules and regulations,
including any rules, regulations, guidelines or requirements of Regulatory
Authorities, securities regulatory authorities, national securities exchanges or
securities listing organizations that may be in effect from time to time during
the Term and applicable to a particular activity hereunder.

 

1.5                               “Business Day” means any day other than a
Saturday, Sunday or other day on which banking institutions in Boston,
Massachusetts or Indianapolis, Indiana are required to be closed or are actually
closed with legal authorization.

 

1.6                               “Calendar Quarter” means, with respect to the
first such Calendar Quarter during the Term, the period beginning on the
Effective Date and ending on the last day of the calendar quarter within which
the Effective Date falls, and thereafter each successive period of
three (3) consecutive months during the Term ending on March 31, June 30,
September 30 and December 31; except that the last Calendar Quarter during the
Term shall end upon the expiration of the Term in accordance with Section 8
hereof.

 

1.7                               “Calendar Year” means, with respect to the
first such Calendar Year during the Term, the period beginning on the Effective
Date and ending on December 31 of the calendar year within which the Effective
Date falls, and thereafter each successive period of twelve (12) consecutive
months during the Term commencing on January 1 and ending on December 31; except
that the last Calendar Year during the Term shall end upon the expiration of the
Term in accordance with Section 8 hereof.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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1.8                               [***].

 

1.9                               [***].

 

1.10                        “Confidential Information” means (a) with respect to
ImmunoGen, the identification by ImmunoGen of any Proposed Target as an Excluded
Target; (b) with respect to Lilly, the identification by Lilly of a Proposed
Target and the grant by ImmunoGen of any Holding Option or Reserve Option
hereunder; and (c) with respect to each Party, all information and Technology
which is disclosed by or on behalf of such Party (in such capacity, the
“Disclosing Party”) to the other Party (in such capacity, the “Receiving Party”)
hereunder or to any of the Receiving Party’s or its Affiliates; employees,
consultants or subcontractors (collectively, “Representatives”), except to the
extent that the Receiving Party can demonstrate by written record or other
suitable evidence that such information, (i) as of the date of disclosure is
known to the Receiving Party or its Affiliates other than by virtue of a prior
confidential disclosure by or on behalf of the Disclosing Party to the Receiving
Party or its Affiliates; (ii) as of the date of disclosure is in, or
subsequently enters, the public domain through no fault or omission of the
Receiving Party or its Affiliates or their respective employees, consultants or
subcontractors; (iii) is obtained by the Receiving Party or its Affiliates from
a Third Party without breach of any duty and without restriction on disclosure
to or from the Disclosing Party; or (iv) is independently developed by or for
the Receiving Party without reference to or reliance upon any Confidential
Information of the Disclosing Party.

 

1.11                        “Confidentiality Agreement” means that certain
Mutual Confidential Disclosure Agreement effective April 26, 2011 by and between
ImmunoGen and Lilly.

 

1.12                        “Control” or “Controlled” means, with respect to any
Patent Rights, Technology or Proprietary Materials, the possession by a Party of
the ability to grant a license or sublicense of such Patent Rights or Technology
and the rights thereto or to supply such Proprietary Materials as contemplated
in this Agreement without violating the terms of any arrangement or agreement
between such Party or its Affiliates and any Third Party.

 

1.13                        “Disclosure Letter” has the meaning ascribed to such
term, with respect to each Exclusive License, as set forth in the applicable
License Agreement.

 

1.14                        [***] means [***] published from time to time by
[***].

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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1.15                        “Excluded Target” means any Target as to which
(a) ImmunoGen or an Affiliate of ImmunoGen is [***], (b) ImmunoGen has [***], or
is [***], an [***] to a [***] under any [***] that are necessary or useful for
the development, manufacture, use or sale of any compound or product that is
[***] (a [***]), (c) ImmunoGen has [***] with a [***] that is in effect as of
[***], that [***] ImmunoGen from [***] on the terms and conditions of this
Agreement, or (d) [***] has retained any [***] under the terms of the [***]. 
For purposes of clarity, an Excluded Target as defined in clause (b) above shall
include any [***], even if the scope of such [***] is [***].  A Target shall be
deemed an Excluded Target [***].

 

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

 

1.17                        “FDCA” means the United States Food, Drug and
Cosmetic Act (21 U.S.C. § 301 et seq.), as amended.

 

1.18                        “Field” means all uses including, without
limitation, pharmaceutical, therapeutic, prophylactic and diagnostic uses for
humans and animals.

 

1.19                        “FTE” means a full time equivalent person year
(consisting of a total of [***] per year) of scientific, technical or managerial
work on or directly related to the provision of the ImmunoGen Activities.

 

1.20                        “FTE Cost” means, for any period during the Term,
the FTE Rate multiplied by the number of FTEs expended over such period.

 

1.21                        “FTE Rate” means, for the [***]; and for [***], the
result obtained by [***] by the sum of [***] where [***] is a [***], the [***]
of which is the [***] the [***] for the [***] of the [***] and the [***] for the
[***], and the [***] of which is the [***] for the [***]; provided, however,
that in no event shall the FTE Rate for any [***] be [***].  For the avoidance
of doubt, such rate includes all travel expenses.  The reported actual time
spent shall be substantiated by a time tracking system consistently applied.

 

1.22                        “GLP” means all good laboratory practices under
Title 21 of the United States Code of Federal Regulations, as amended from time
to time.

 

1.23                        “Holding Option Grant Date” means, with respect to a
Proposed Target that is not an Excluded Target, the date of receipt by ImmunoGen
of the Holding Option Request with

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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respect to the Target that becomes the subject of a Holding Option granted by
ImmunoGen pursuant to Section 3.1(a) hereof.

 

1.24                        “Holding Option Target” means any Proposed Target
that becomes the subject of a Holding Option granted by ImmunoGen pursuant to
Section 3.1(a) hereof.  A Target ceases to be a Holding Option Target once
(a) it has been designated as a Reserve Option Target in accordance with
Section 3.1(b) hereof, or (b) the applicable Holding Option Period has expired
without the Holding Option Target having been designated as a Reserve Option
Target.

 

1.25                        “ImmunoGen Activities” means those activities
associated with the Research Program as described in the Research Plan that are
to be undertaken by ImmunoGen or its Affiliates.

 

1.26                        “ImmunoGen Internal Product Candidate” means a
cell-binding agent (which may or may not be an Antibody), which may be
unconjugated or conjugated to a cell-killing or cell-modulating agent (which may
or may not be a MAY Compound).

 

1.27                        [***].

 

1.28                        “ImmunoGen Proprietary Antibody Rights” means all
Technology (and associated Patent Rights) owned or Controlled by ImmunoGen
during the Term constituting or claiming (a) the [***] (an “ImmunoGen
Proprietary Antibody”), or (b) the [***], but only, in the case of
clauses (a) and (b) above, to the extent such Technology (and associated Patent
Rights) [***], and not to the extent such Technology (and associated Patent
Rights) [***].  For purposes of clarity, “ImmunoGen Proprietary Antibody Rights”
does not include any Program Technology that relates to Antibodies specifically
binding to Program Targets or any Patent Rights claiming such Program
Technology.

 

1.29                        “Improvements” means [***] any enhancement,
improvement or modification to the Licensed Intellectual Property that is [***].

 

1.30                        “IND” means (a) an Investigational New Drug
Application (as defined in the FDCA and regulations promulgated thereunder) or
any successor application or procedure required to initiate clinical testing of
an Ab-MAY Product in humans in the United States; (b) a counterpart to an
Investigational New Drug Application that is required in any other country or
region in the Territory before beginning clinical testing of an Ab-MAY Product
in humans in such country or region; and (c) all supplements and amendments to
any of the foregoing.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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1.31                        “Joint Improvements” means Improvements the
inventors of which are jointly (a) employees of, or others obligated to assign
inventions to, ImmunoGen or any Affiliate of ImmunoGen, and (b) employees of, or
others obligated to assign inventions to, Lilly or any Affiliate of Lilly.

 

1.32                        “Joint Program Technology” means any Program
Technology (other than Joint Improvements) the inventors of which are jointly
(a) employees of, or other persons obligated to assign inventions to, ImmunoGen
or any Affiliate of ImmunoGen, and (b) employees of, or other persons obligated
to assign inventions to, Lilly or any Affiliate of Lilly.  Anything contained in
this Agreement to the contrary notwithstanding, Joint Program Technology shall
also include any Program Technology (excluding Improvements) constituting [***]
where employees of [***], or others obligated to assign inventions to, [***] or
any Affiliate of [***] are [***], as inventorship is determined in accordance
with United States patent law.

 

1.33                        “License Agreement” means a written license
agreement executed by the Parties pursuant to Section 3.2(a) hereof in the form
set forth in Schedule A attached hereto.

 

1.34                        “Licensed Intellectual Property” means the Licensed
Patent Rights and the Licensed Technology.

 

1.35                        “Licensed Patent Rights” means any Patent Rights
that are owned or Controlled by ImmunoGen as of the Effective Date or become
owned or Controlled by ImmunoGen during the Term (including, without
limitation, ImmunoGen’s interest in any Patent Rights claiming Improvements,
Joint Program Technology or Joint Improvements) that include one or more claims
that cover Licensed Technology (including, without limitation, any Licensed
Technology covering MAY Compounds, Ab-MAY Product or Licensed Product);
provided, however, that Licensed Patent Rights shall expressly exclude [***].

 

1.36                        “Licensed Product” has the meaning ascribed to it in
the License Agreement with respect to any particular Licensed Target.

 

1.37                        “Licensed Target” means a Target that has become the
subject of an Exclusive License.

 

1.38                        “Licensed Technology” means any and all Technology
that is owned or Controlled by ImmunoGen as of the Effective Date or becomes
owned or Controlled by ImmunoGen during the Term (including, without
limitation, ImmunoGen’s interest in any

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Program Technology, Joint Program Technology, Improvements and Joint
Improvements) that is necessary or useful for Lilly to exercise the license
granted to it pursuant to Section 2.1 hereof; provided, however, that Licensed
Technology shall expressly exclude any ImmunoGen Proprietary Antibody Rights.

 

1.39                        “Lilly Activities” means those activities associated
with the Research Program as described in the Research Plan that are to be
undertaken by Lilly or its Affiliates or by Permitted Third Party Service
Providers.

 

1.40                        “Lilly Antibody” means any Antibody owned or
Controlled by Lilly or its Affiliates.

 

1.41                        “Lilly Improvements” means Improvements (other than
Joint Improvements) the inventors of which (alone or with others) are employees
of or others obligated to assign inventions to Lilly or any of its Affiliates
[***] in the conduct of [***].

 

1.42                        “MAY Compound” means any and all maytansinoid
compounds (including, without limitation, maytansinol, ansamitocins, DM1 and
DM4), whether produced by a botanical source, natural fermentation, chemical
synthesis or otherwise, and shall include, without limitation, all variants,
fragments or derivatives of any of the foregoing, in each case owned or
Controlled by ImmunoGen.

 

1.43                        “Patent Rights” means the rights and interests in
and to any and all Patents.  For purposes of this Agreement the term “Patents”
shall mean: (a) all national, regional and international patent applications
(including provisional applications and applications for certificates of
invention); (b) any patents issuing from such patent applications (including
certificates of invention); (c) all patent applications claiming priority from
of any of the foregoing ((a) or (b)), including divisionals, continuations,
continuations-in-part, converted provisionals and continued prosecution
applications; (d) any and all patents that have issued or in the future issue
from the foregoing patent applications; (e) any and all extensions or
restorations by existing or future extension or restoration mechanisms,
including any reissues, revalidations, re-examinations, extensions (including
any supplementary protection certificates and the like) of the foregoing patents
or patent applications ((a), (b), (c) and (d)); and (f) any similar rights,
including so-called pipeline protection or any importation, revalidation,
confirmation or introduction patent

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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or registration patent or patent of additions to any of such foregoing patent
applications and patents.

 

1.44                        “Person” means an individual, sole proprietorship,
partnership, limited partnership, limited liability partnership, corporation,
limited liability company, business trust, joint stock company, trust,
incorporated association, joint venture or similar entity or organization,
including a government or political subdivision, department or agency of a
government.

 

1.45                        “Program Targets” means, collectively, Holding
Option Targets, Reserve Option Targets and Licensed Targets.

 

1.46                        “Program Technology” means any Technology conceived
or first actually reduced to practice in the conduct of the Research Program.

 

1.47                        “Proposed Target” means each single Target specified
in any Holding Option Request.

 

1.48                        “Proprietary Antigen Identification Information” has
the meaning ascribed to such term in the Third Party Expert Services Agreement.

 

1.49                        “Proprietary Materials” means any tangible chemical,
biological or physical research materials that are furnished by or on behalf of
one Party to the other Party in connection with this Agreement, regardless of
whether such materials are specifically designated as proprietary by the
transferring Party.  [***].  Without limiting the generality of the foregoing,
any [***] furnished by ImmunoGen to Lilly or any of its Affiliates or Permitted
Third Party Service Providers, including, without limitation [***], shall be
deemed to be ImmunoGen’s Proprietary Materials.  Without prejudice to any of
ImmunoGen’s intellectual property rights in and to MAY Compounds, any tangible
MAY Compounds manufactured by or for Lilly or any of its Affiliates or Permitted
Third Party Service Providers using [***] as [***] in connection with the
Research Program are not included within the meaning of the defined term
“Proprietary Materials” for purposes of this Agreement.

 

1.50                        “Regulatory Authority” means the FDA or any
counterpart to the FDA outside the United States, or other national,
supra-national, regional, state or local regulatory agency, department, bureau,
commission, council or other governmental entity with authority over the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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distribution, importation, exportation, manufacture, production, use, storage,
transport, clinical testing or sale of an Ab-MAY Product.

 

1.51                        “Research Materials” means any MAY Compound, linker,
Ab-MAY Product or other Proprietary Materials supplied by ImmunoGen to Lilly for
the purpose of conducting research activities under the Research Program.

 

1.52                        “Research Plan” means the written plan describing
the research activities to be carried out by each Party during each Calendar
Year during the Term in conducting the Research Program pursuant to this
Agreement, as such written plan may be amended, modified or updated.  Such
Research Plan, and any modification, amendment or update thereto, shall set
forth, inter alia, (a) the specific objectives, projected achievement
milestones, resource allocation requirements and activities to be performed over
such period; (b) the Party responsible for such activities; (c) a timeline for
such activities; and (d) the estimated FTE Cost for the ImmunoGen Activities to
be performed over such period.

 

1.53                        “Research Program” means, subject to the limitations
set forth in Section 2.1 hereof, any and all [***] of any [***] directed to
Holding Option Targets and/or Reserve Option Targets and the manufacture of
Ab-MAY Product solely for use in such [***].  Notwithstanding the foregoing, the
Research Program shall not include [***] as to the particular [***] contemplated
hereunder.

 

1.54                        “Reserve Option” means an exclusive option granted
by ImmunoGen to obtain an Exclusive License in the Territory under the Licensed
Intellectual Property with respect to the applicable Reserve Option Target in
accordance with Section 3.2 hereof.

 

1.55                        “Reserve Option Target” means a Target that becomes
the subject of a Reserve Option in accordance with Section 3.1(b) hereof.  A
Target ceases to be a Reserve Option Target once (a) it has become the subject
of an Exclusive License in accordance with Section 3.2(a) hereof, or (b) the
applicable Reserve Option has been terminated in accordance with
Section 3.2(c) hereof.

 

1.56                        “Sanofi Collaboration Agreement” means that certain
Collaboration and License Agreement dated as of July 30, 2003 by and between
ImmunoGen and sanofi-aventis U.S. LLC (“Sanofi”), as successor-in-interest to
Aventis Pharmaceuticals, Inc., as the same may have been amended prior to the
Effective Date.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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1.57                        “Target” means a protein described by [***] that is
bound by an Antibody used to create an Ab-MAY Product.

 

1.58                        “Technical Transfer Materials” means ImmunoGen
information (including, without limitation, technical transfer reports) as
consistently provided by ImmunoGen to its licensees of Technology and Patent
Rights for the purpose of [***] with respect to [***], as applicable, including:
[***].

 

1.59                        “Technology” means, collectively, all inventions,
discoveries, improvements, trade secrets and proprietary methods or materials,
whether or not patentable, including, without limitation, macromolecular
sequences, data, formulations, processes, techniques, know-how and results
(including negative results).

 

1.60                        “Territory” means all countries and jurisdictions of
the world.

 

1.61                        “Third Party” means any Person other than ImmunoGen,
Lilly and their respective Affiliates.

 

1.62                        “Third Party Expert Services Agreement” means that
certain Services Agreement effective as of September 8, 2011 by and among
ImmunoGen, Lilly and Hoxie & Associates LLC, as the same may be amended from
time to time.

 

1.63                        “Total Voting Power” means, at any time, the total
combined voting power in the general election of directors of ImmunoGen of all
the Voting Securities then outstanding.

 

1.64                        “Voting Securities” means, at any time, shares of
any class of capital stock of ImmunoGen which are then entitled to vote
generally in the election of directors of ImmunoGen.

 

Additional Definitions.  In addition, each of the following definitions shall
have the respective meanings set forth in the section of the Agreement indicated
below:

 

Definition

 

Section

Agreement

 

Recitals

Alliance Managers

 

4.1(a)

[***]

 

[***]

[***]

 

[***]

Covered Results

 

6.3

Disclosing Party

 

1.10

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Dispute

 

11.12

Effective Date

 

Recitals

Exclusive License

 

3.2(a)

Exclusive License Effective Date

 

3.2(a)

Expired Holding Option

 

3.1(d)

Good Research Practices

 

4.3(c)(i)

Government or Public Official

 

11.18(d)

Holding Option

 

3.1(a)

Holding Option Exercise Notice

 

3.1(b)

Holding Option Period

 

3.1(b)

Holding Option Request

 

3.1(a)

Holding Option Response

 

3.1(a)

HSR Act

 

11.19

ImmunoGen

 

Recitals

ImmunoGen Indemnitees

 

10.1(a)

ImmunoGen Proprietary Antibody

 

1.28

Indemnified Party

 

10.2

Indemnifying Party

 

10.2

JRC

 

4.2(a)

Lilly

 

Recitals

Lilly Indemnitees

 

10.1(b)

Losses

 

10.1(a)

Material Breach

 

8.2(b)

Notified Party

 

11.18(b)

Notifying Party

 

11.18(b)

Party/Parties

 

Recitals

Patent Committee

 

7.2(c)(i)

Permitted Third Party Service Providers

 

2.1

[***]

 

[***]

Receiving Party

 

1.10

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Representatives

 

1.10

Reserve Option Grant Date

 

3.1(b)

Reserve Option Period

 

3.2(a)

Rolling Forecast

 

4.3(b)

Sanofi

 

1.56

[***]

 

[***]

Term

 

8.1

Terminated Reserve Option

 

3.2(c)

Third Party Claims

 

10.1(a)

[***]

 

[***]

Upfront Fee

 

5.1

 

2.                                      GRANT OF RIGHTS

 

2.1                               Non-Exclusive Research License.  Subject to
the terms and conditions of this Agreement, during the Term, ImmunoGen hereby
grants to Lilly a fully paid-up, non-exclusive, non-transferable (except as
expressly permitted in this Agreement), royalty-free, worldwide license, without
the right to grant sublicenses (except to Affiliates and Permitted Third Party
Service Providers), under the Licensed Intellectual Property for the sole
purpose of conducting the Research Program.  Lilly shall have the right, without
ImmunoGen’s permission or consent but subject to the conditions set forth
herein, to engage one or more Affiliates or Third Parties (the latter being
referred to herein as “Permitted Third Party Service Providers”) as
subcontractors to perform designated functions in connection with the Research
Program (including transferring Licensed Technology as may be necessary for such
Affiliate or Permitted Third Party Service Provider to perform such designated
functions); provided that (a) Lilly shall [***] and (b) Lilly shall [***]. 
Anything contained in this Agreement to the contrary notwithstanding, Lilly
shall have no right under this Agreement to [***], either directly or through a
Permitted Third Party Service Provider, [***] for which Lilly [***].

 

2.2                               Use of Licensed Technology.  In connection
with any Licensed Technology transferred to Lilly pursuant to this Agreement and
except as provided in any outstanding Exclusive License, Lilly hereby agrees
that (a) it shall not use such Licensed Technology for any

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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purpose other than the Research Program; (b) it shall use such Licensed
Technology only in compliance with all Applicable Laws; (c) it shall not
transfer any such Licensed Technology to any Third Party without the prior
written consent of ImmunoGen, except as expressly permitted hereby; and
(d) except for the rights expressly set forth herein, Lilly shall not acquire
any other rights, title or interest in or to such Licensed Technology as a
result of such transfer by ImmunoGen.

 

2.3                               Improvement License to ImmunoGen.  Lilly
hereby grants to ImmunoGen a non-exclusive, fully paid, irrevocable,
royalty-free, worldwide license[***] under Lilly’s interest in any Lilly
Improvements and Joint Improvements, including, without limitation, any Patent
Rights claiming such Improvements: (a) to manufacture Ab-MAY Products and
MAY Compounds solely in connection with the conduct of the ImmunoGen Activities;
(b) [***] that [***] (i) either a Holding Option Target or a Reserve Option
Target while the applicable Holding Option or Reserve Option is outstanding
and/or (ii) a Licensed Target while the exclusive license granted under the
applicable License Agreement remains in effect; and (c) to otherwise exploit
such Improvement for any and all uses [***].  [***] shall be effective in any
given case only if [***].  For purposes of clarity, the license granted under
this Section 2.3 excludes any right to [***] for any use in [***] while the
[***].

 

3.                                      HOLDING OPTIONS; RESERVE OPTIONS;
EXCLUSIVE LICENSES

 

3.1                               Holding Options.

 

(a)                                   Holding Option Request and Grant.  Subject
to the limitations set forth in Section 3.1(c) hereof, Lilly may from time to
time during the Term provide written notice to ImmunoGen requesting the grant by
ImmunoGen of an exclusive option (each such option, a “Holding Option”) to
obtain a Reserve Option, with respect to a single Target specified in such
written notice (the “Holding Option Request”), which Target shall be identified
by its common designation(s) and unique UniProtKB/Swiss Prot accession number. 
ImmunoGen shall provide a written response (the “Holding Option Response”) to
Lilly within [***] of ImmunoGen’s receipt of the Holding Option Request
indicating whether or not, as of the date of ImmunoGen’s receipt of the Holding
Option Request, the Proposed Target specified in the Holding Option Request is
an Excluded Target.  If ImmunoGen timely provides a Holding Option Response to

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

13

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Lilly indicating that the Proposed Target specified in the Holding Option
Request is not an Excluded Target, or if ImmunoGen fails to timely provide a
Holding Option Response, then: (i) such Holding Option shall be deemed to have
been automatically granted to Lilly; (ii) the Proposed Target shall be deemed to
be a Holding Option Target for purposes of this Agreement; and (iii) for the
duration of the Holding Option Period, ImmunoGen shall not [***].  If any
Excluded Target with respect to which Lilly has delivered a Holding Option
Request ceases to be an Excluded Target during the Term, then ImmunoGen will
promptly notify Lilly thereof and subject to notice, availability and the
limitations pursuant to this Section 3.1, Lilly shall have the right to submit a
Holding Option Request with respect to such Target.

 

(b)                                  Exercise of Holding Options; Grant of
Reserve Options.  Subject to the limitations set forth in Section 3.2(b) hereof,
Lilly shall have the right to exercise a Holding Option at any time during the
period commencing on the Holding Option Grant Date and continuing for a period
of [***] thereafter (the “Holding Option Period”); provided, however that no
Holding Option Period shall extend beyond the expiration of the Term.  Lilly
shall exercise a Holding Option by delivering written notice of exercise thereof
(the “Holding Option Exercise Notice”), which notice shall specify the Holding
Option Target.  Upon ImmunoGen’s receipt of a Holding Option Exercise Notice
(the “Reserve Option Grant Date”), (i) a Reserve Option shall be deemed to have
been automatically granted, (ii) the applicable Holding Option Target shall be
deemed to be a Reserve Option Target for purposes of this Agreement and
(iii) for the duration of the Reserve Option Period, ImmunoGen shall not [***].

 

(c)                                   Number of Holding Options.  Lilly may take
up to a total of [***] Holding Options during the Term.  If a Holding Option
expires without being exercised for any reason, such Expired Holding Option
shall nevertheless continue to count against the aggregate number of Holding
Options available to Lilly under this Section 3.1.

 

(d)                                  Expiration of Holding Options.  If Lilly
fails to exercise any Holding Option prior to the expiration of the applicable
Holding Option Period (each, an “Expired Holding Option”), then ImmunoGen shall
have the right to [***] with respect to a [***]; provided, however, that Lilly
may submit another Holding Option Request with respect to the Target covered by
such Expired Holding Option subject to notice, availability and the limitations
pursuant to this Section 3.1 hereof.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

14

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3.2                               Reserve Options; Grant of Exclusive Licenses.

 

(a)                                   Exercise of Reserve Options.  Subject to
the limitations set forth in Section 3.3 hereof, Lilly shall have the right to
exercise a Reserve Option at any time during the period commencing on the
Reserve Option Grant Date and continuing until [***], subject to earlier
termination in accordance with Section 3.2(c) hereof (the “Reserve Option
Period”).  Lilly shall exercise a Reserve Option by delivering written notice of
exercise thereof to ImmunoGen, which notice shall specify the Reserve Option
Target.  Upon delivery of the written notice of exercise of a Reserve Option as
provided in this Section 3.2(a), (i) the Licensed Intellectual Property (as
defined in the License Agreement) shall be exclusively licensed with respect to
such single Reserve Option Target specified in such notice to Lilly on the terms
and subject to the conditions set forth in the relevant License Agreement (each
an “Exclusive License”), and (ii) such Exclusive License shall be effective as
of the date of ImmunoGen’s receipt of Lilly’s notice of exercise of the Reserve
Option with respect to the Reserve Option Target that is the subject of the
Exclusive License (the “Exclusive License Effective Date”).  ImmunoGen shall
deliver to Lilly, within [***] following ImmunoGen’s receipt of Lilly’s notice
of exercise of a Reserve Option, a License Agreement executed on behalf of
ImmunoGen in which ImmunoGen has (A) inserted the name and unique
UniProtKB/Swiss Prot accession number of the applicable Licensed Target in
Schedule A of the License Agreement; and (B) inserted the Exclusive License
Effective Date into the License Agreement as the effective date of the Exclusive
License.  Subject to Section 3.4 hereof, Lilly’s failure to return a copy of
such License Agreement that has been executed on behalf of Lilly, within [***]
after the receipt of the executed License Agreement from ImmunoGen shall be
deemed to be a Material Breach by Lilly.  In the event of any failure by
ImmunoGen to deliver a copy of the License Agreement as described
above, ImmunoGen shall be deemed to have granted to Lilly the rights with
respect to the Exclusive License consistent with the License Agreement.

 

(b)                                  Number of Reserve Options.  Lilly shall
have the right to [***] outstanding, unexercised Reserve Options [***] during
the Term; provided, that Lilly may not exercise a Holding Option if, at the time
of such intended exercise, the number of then outstanding, unexercised Reserve
Options equals or exceeds [***].

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

15

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(c)                                   Termination of Reserve Options.  Lilly may
terminate any outstanding Reserve Option at any time during the Reserve Option
Period, effective immediately upon Lilly’s providing written notice of
termination to ImmunoGen, which notice shall identify the Reserve Option Target
to be terminated (each, a “Terminated Reserve Option”).  Upon termination of a
Reserve Option as provided in this Section 3.2(c), the Parties shall have the
same rights set forth in Section 3.1(d) hereof with respect to the Target
subject to such Terminated Reserve Option as if the Terminated Reserve Option
were an Expired Holding Option.

 

3.3                               Number of Exclusive Licenses; Upfront Fees. 
Anything contained in this Agreement to the contrary notwithstanding, Lilly may
take Exclusive Licenses to up to a total of [***] Reserve Option Targets during
the Term.  Except as set forth below, each Exclusive License shall provide for
an upfront fee, payable by Lilly to ImmunoGen within [***] following the
effective date of such Exclusive License.  No upfront fee is due for the first
Exclusive License taken hereunder; however, with respect to subsequent Exclusive
Licenses, if any, the upfront fee for each of the remaining Exclusive Licenses
shall be Two Million United States Dollars ($2,000,000).  Subject to Section 3.4
hereof, if an Exclusive License is terminated at any time for any reason, such
terminated Exclusive License shall nevertheless continue to be counted against
the aggregate number of Exclusive Licenses available to Lilly under this
Section 3.3.

 

3.4                               Rescission of Exercise of Reserve Option. 
Anything contained this Agreement to the contrary notwithstanding, if, in
connection with Lilly’s exercise of any Reserve Option, ImmunoGen delivers a
Disclosure Letter in connection with the execution and delivery of the
applicable License Agreement [***] of ImmunoGen’s receipt of the applicable
Reserve Option exercise notice, then Lilly shall be entitled to rescind the
exercise of such Reserve Option by delivering written notice of such rescission
within [***] of Lilly’s receipt of the Disclosure Letter.  Any failure by
ImmunoGen to deliver a Disclosure Letter to Lilly within the applicable [***]
period described above shall be deemed a waiver of ImmunoGen’s right to qualify
its representations and warranties in the applicable License Agreement by any
information that ImmunoGen may have intended to include in such Disclosure
Letter.  If ImmunoGen delivers a Disclosure Letter on a timely basis, then any
failure by Lilly to deliver a rescission notice to ImmunoGen within the
applicable [***] period described above shall be deemed a waiver of

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

16

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Lilly’s right to rescind the exercise of such Reserve Option pursuant to this
Section 3.4, and ImmunoGen’s representations and warranties in the applicable
License Agreement shall be qualified by any information contained in such
Disclosure Letter.  If a Reserve Option is rescinded pursuant to this
Section 3.4, (a) the Exclusive License relating to such Reserve Option shall not
be counted against the aggregate number of Exclusive Licenses available to Lilly
under Section 3.3 hereof, and (b) the Reserve Option shall remain outstanding in
accordance with its original terms; provided, however, that if the Reserve
Option Period would have expired at any time within the period beginning on the
date that Lilly exercises the Reserve Option and ending on the [***] after
Lilly’s delivery of the rescission notice to ImmunoGen, Lilly shall have the
right to exercise a Reserve Option for the same or a different Reserve Option
Target within [***] (or such longer period as may be mutually agreed to in
writing by the Parties) after Lilly’s delivery of the rescission notice to
ImmunoGen.

 

3.5                               Excluded Target Verification.  Subject to the
other terms of this Section 3.5, at the request of Lilly (which request may not
be given more than [***] after a Proposed Target has been identified by
ImmunoGen as an Excluded Target in a Holding Option Response), at any time
during normal business hours within [***] of ImmunoGen’s delivery to Lilly of
written acknowledgement of ImmunoGen’s receipt of such request, ImmunoGen shall
permit an independent law firm [***] to inspect (during regular business hours)
the relevant records upon which ImmunoGen based its determination that such
Proposed Target was an Excluded Target at the time of ImmunoGen’s receipt of the
Holding Option Request.  Before permitting such law firm to have access to such
records, ImmunoGen may require such law firm to enter into a confidentiality
agreement (in form and substance reasonably acceptable to both Parties) as to
any confidential information that is to be provided to such law firm while
conducting the verification contemplated hereby.  The law firm shall be
instructed to provide both Parties with a written report stating its conclusion
as to whether ImmunoGen’s determination that a Proposed Target was an Excluded
Target was correct within [***] after the completion of its inspection.  Such
law firm may not reveal to Lilly any other information learned in the course of
such examination, including, without limitation, the basis for ImmunoGen’s
determination.  Lilly agrees to treat all information disclosed to it in
accordance with this Section 3.5 as ImmunoGen’s Confidential Information, except
to the extent necessary for Lilly to enforce its rights under this Agreement. 
If

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

17

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the law firm’s report concludes that ImmunoGen’s determination was correct,
Lilly shall be responsible for paying all fees and expenses invoiced by the law
firm.  If the law firm’s report concludes that ImmunoGen’s determination was
incorrect, (a) Lilly shall automatically be deemed to have delivered another
Holding Option Request for such Proposed Target as of the date of such
determination and (b) ImmunoGen shall be responsible for paying all reasonable
fees and expenses invoiced by the law firm.

 

4.                                      RESEARCH PROGRAM

 

4.1                               Alliance Management.

 

(a)                                   Appointment of Alliance Managers. 
Promptly after the Effective Date, the Parties shall each appoint an individual
who shall oversee contact between the Parties for all matters related to this
Agreement and the Parties’ respective activities hereunder (the “Alliance
Managers”).  The Alliance Managers may, but are not required to be, members of
the JRC, but in all events the Alliance Managers shall have the right to attend
all meetings of the JRC and may bring to the attention of the JRC any matters or
issues either of them reasonably believes should be discussed by such
committee.  Each Party may replace its Alliance Manager at any time by written
notice to the other Party.

 

(b)                                  Responsibilities.  The Alliance Managers
shall have the responsibility of creating and maintaining a constructive work
environment between the Parties for all matters related to this Agreement and
the Parties’ respective activities hereunder.  Without limiting the generality
of the foregoing, the Alliance Managers shall:

 

(i)                                     identify and bring to the attention of
their respective managements any disputes arising between the Parties related to
this Agreement or the Parties’ respective activities hereunder in a timely
manner, including, without limitation, any asserted occurrence of a Material
Breach by a Party, and function as the point of first referral in the resolution
of each dispute;

 

(ii)                                  provide a single point of communication
between the Parties with respect to this Agreement and the Parties’ respective
activities hereunder;

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

18

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(iii)                               plan and coordinate efforts and external
communications by or between the Parties with respect to this Agreement and the
Parties’ respective activities hereunder;

 

(iv)                              take such steps as may be required to ensure
that meetings of the JRC occur as set forth in this Agreement, that procedures
are followed with respect to such meetings (including, without limitation, the
giving of proper notice and the preparation and approval of minutes) and that
relevant action items resulting from such meetings are appropriately carried out
or otherwise addressed; and

 

(v)                                 undertake such other responsibilities as the
Parties may mutually agree in writing.

 

4.2                               Joint Research Committee.

 

(a)                                   Mandate and Establishment of Committee. 
Promptly after the Effective Date, the Parties shall form a joint research
committee (the “JRC”) to serve as a forum for coordination and communication
between the Parties with respect to the Research Program.  Within [***] after
the Effective Date, the Parties shall each nominate an equal number of
representatives (which shall be no less than two (2) or more than five (5) each)
for membership on the JRC.  Each Party may change its representative(s) as it
deems appropriate by written notice to the other Party.  From time to time the
JRC may establish one or more sub-teams comprised of an equal number of
representatives of both Parties to undertake specific responsibilities of the
JRC, which sub-teams shall be governed in the same manner and subject to the
relevant requirements set forth herein for the JRC.

 

(b)                                  Chair of Committee; Meetings.  The chair of
the JRC shall be one of the Lilly representatives (or at Lilly’s sole
discretion, co-chaired by two Lilly representatives) on the JRC, as designated
by Lilly.  The JRC shall meet on a quarterly basis or other schedule agreed upon
by the Parties, unless the Parties mutually agree in advance of any scheduled
meeting that there is no need for such meeting.  In such instance, the next JRC
meeting shall also be scheduled as agreed upon by the Parties.  The location of
meetings of the JRC shall alternate between ImmunoGen’s offices and Lilly’s
offices, unless otherwise agreed by the Parties.  As agreed upon by the Parties,
JRC meetings may be face-to-face or may be conducted through teleconferences or
videoconferences, provided that at least two (2) JRC meetings during any

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

19

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Calendar Year shall be conducted face-to-face, unless otherwise agreed to by the
Parties.  In addition to its JRC representatives, each Party shall be entitled
to have other employees attend such meetings to present and participate, though
not in a decision-making capacity.  Each Party shall bear its own costs and
expenses, including travel and lodging expense, that may be incurred by JRC
representatives or other attendees at JRC meetings, as a result of such meetings
hereunder.  Minutes of each JRC meeting will be transcribed and issued to
members of the JRC by the Alliance Manager (or his or her designee) of one of
the Parties on an alternating basis within [***] after each meeting, and such
minutes shall be reviewed and modified as mutually required to obtain approval
of such minutes promptly thereafter.

 

(c)                                   Decision Making.  Each Party shall have
one (1) vote on the JRC.  Both Parties must vote in the affirmative for the JRC
to take any action that requires the vote of the JRC.  If the JRC is unable to
reach unanimous agreement on any matter within thirty (30) days following the
date such matter was first put to a vote, then the Parties shall make a good
faith effort to resolve such Dispute in accordance with Section 11.12 hereof. 
If the Parties are unable to resolve the Dispute in accordance with
Section 11.12 hereof, then Lilly shall have the right to cast the deciding vote,
but shall only exercise such right in good faith after full consideration of
[***]; provided, however, that following the decision-making procedures
described above, the JRC may [***] or [***] or any [***] under circumstances
where such [***] is [***] with [***] of [***].

 

(d)                                  Responsibilities.  The JRC shall be
responsible for the following:

 

(i)                                     overseeing the Research Program;

 

(ii)                                  providing a forum for consensual decision
making with respect to the Research Program;

 

(iii)                               preparing and approving the Research Plan
for each Program Target by Calendar Quarter for each Calendar Year including
annual budget broken down by Calendar Quarter;

 

(iv)                              monitoring the Parties’ compliance with their
respective obligations under the Research Plan, including the accomplishment of
key objectives, reviewing actual Calendar Quarter spending versus plan, or
creating specific technical teams to monitor and report the same to the JRC;

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

20

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(v)                                 reviewing and circulating to the Parties
data, reports or other information submitted by either Party with respect to
work conducted under the Research Program;

 

(vi)                              reviewing and approving any amendments to the
Research Plan and evaluating any substantive departures by either Party from the
Research Plan; and

 

(vii)                           making such other decisions as may be delegated
to the JRC pursuant to this Agreement or by mutual written agreement of the
Parties after the Effective Date.

 

4.3                               Research Program.

 

(a)                                   Objectives of the Research Program.  The
objectives of the Research Program shall be the identification of
Ab-MAY Products directed to one or more Holding Option Targets and Reserve
Option Targets that (i) consist of one or more Lilly Antibodies conjugated to
one or more MAY Compounds and (ii) are suitable for further development and
commercialization as Licensed Products under an Exclusive License.

 

(b)                                  Research Plan.  The JRC shall create a
Research Plan describing activities for each Holding Option Target and Research
Option Target that is reasonably designed to achieve the objectives of the
Research Program and is consistent with the terms of this Agreement.  An initial
Research Plan template is attached hereto as Schedule B, which summary template
serves as baseline guidance on a per Program Target basis.  Deviations from the
Research Plan summary attached hereto as Schedule B shall be made on a Program
Target-by-Program Target basis as determined by the JRC in accordance with
Section 4.2(c) hereof.  Each amendment, modification and update of the Research
Plan shall be set forth in a written document prepared by, or at the direction
of, the JRC and approved by the JRC, and shall specifically state that it is an
amendment, modification or update to the Research Plan and shall be attached to
the minutes of the meeting of the JRC at which such amendment, modification or
update was approved by the JRC.  Without limiting the nature or frequency of any
other amendments, modifications or updates of the Research Plan that may be
approved by the JRC, the Research Plan shall be updated at least once prior to
the end of each Calendar Quarter to describe the research activities to be
carried out by each Party during the next two (2) Calendar Quarters during the
Term in conducting the Research Program.  Anything contained in this

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

21

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Agreement to the contrary notwithstanding, the Research Plan, as the same may be
amended, modified or updated, shall not require ImmunoGen to devote [***] (on an
annualized basis) at any given time during the Term to the conduct of the
ImmunoGen Activities, without ImmunoGen’s prior written consent, which consent
ImmunoGen may withhold in its sole discretion.  Prior to the end of each
Calendar Quarter during the Term, the JRC shall determine the number of FTEs to
be devoted to the conduct of the ImmunoGen Activities in each of the next
two (2) following Calendar Quarters (each a “Rolling Forecast”).  ImmunoGen
shall not be required to devote more than [***] (on an annualized basis) during
the second Calendar Quarter of each Rolling Forecast over the maximum number of
FTEs set forth for the second Calendar Quarter of the immediately preceding
Rolling Forecast [***] without ImmunoGen’s prior written consent, which consent
ImmunoGen may withhold in its sole discretion.  Notwithstanding the
foregoing, ImmunoGen shall not be required to devote more than (x) [***] FTEs
(on an annualized basis) during each of the [***] during the Term (appropriately
pro-rated for the first Calendar Quarter during the Term), and (y) [***] FTEs
(on an annualized basis) during the [***] during the Term, in each case without
ImmunoGen’s prior written consent, which consent ImmunoGen may withhold in its
sole discretion.

 

(c)                                   Conduct of the Research Program.  In
consultation with the JRC and in accordance with the objectives of the Research
Program, each Party shall be primarily responsible for those tasks and
obligations in connection with the Research Program that are assigned to it
pursuant to this Section 4.3 and the Research Plan.  Without limiting the
foregoing, the Parties agree as follows:

 

(i)                                     Lilly Activities Under the Research
Program.  Subject to ImmunoGen’s conduct of the ImmunoGen Activities, Lilly
shall have the sole right and responsibility for all aspects related to the
research and early stage development of Ab-MAY Products directed to Holding
Option Targets and Reserve Option Targets under the Research Program, including,
without limitation, (A) making all strategic and tactical decisions with respect
thereto, (B) assessing alternative product designs, (C) the final selection of
the Lilly Antibodies, MAY Compounds and linkers to be used in such
Ab-MAY Products and the selection of Ab-MAY Products to be further developed as
Licensed Products under an Exclusive License and (D) the conduct of, at its sole
cost and expense, all preclinical studies (including

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

22

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dose range finding and safety studies in animals, [***] with respect to the
Ab-MAY Products so selected.

 

(ii)                                  ImmunoGen Activities Under the Research
Program.  Subject to payment by Lilly of the consideration set forth in
Section 5.2 hereof, ImmunoGen will use commercially reasonable efforts to
perform the ImmunoGen Activities as set forth in the Research Plan; provided,
however, that the ImmunoGen Activities shall [***].  If, at any time during the
performance of the ImmunoGen Activities, ImmunoGen determines that the actual
FTE Cost for all ImmunoGen Activities to be performed during a particular
Calendar Quarter is expected to exceed the number set forth in the Research Plan
for such Calendar Quarter by [***], ImmunoGen shall notify Lilly.  The Parties
shall promptly thereafter discuss in good faith whether to incur such additional
FTE Cost or whether to decrease the activities to be performed, such that such
increased FTE Cost is not incurred.  The JRC shall be the forum for discussions
about an extension of ImmunoGen Activities not covered by the budget as laid
down in the Research Plan, provided that the JRC may not propose the use of
[***] during a Calendar Quarter as set forth in Section 4.3(b) hereof without
the prior written consent of ImmunoGen.  To the extent that the Research Plan
calls for ImmunoGen to create Ab-MAY Products, Lilly shall supply ImmunoGen with
quantities of Lilly Antibodies directed to the applicable Holding Option Target
or Reserve Option Target, as the case may be, in sufficient quantity to enable
ImmunoGen to produce such Ab-MAY Products.  Furthermore, ImmunoGen agrees that
it will carry out and/or perform all the ImmunoGen Activities [***] and such
activities shall be [***].

 

(d)                                  Diligence.  During the Term, each Party
shall use [***] to perform its respective obligations under the Research Program
in accordance with the Research Plan and shall commit such resources as are
specified in the Research Plan as may be [***] to conduct its activities as set
forth therein [***].  Without limiting the foregoing, the Parties shall commit
such scientific resources, including, but not limited to, consultants,
facilities, equipment and Proprietary Materials, as are [***] to achieve the
objectives of the Research Program.  [***]

 

(e)                                   Compliance.  Each Party shall perform its
obligations under the Research Plan in good scientific manner and in compliance
in all material respects with all Applicable Laws.  With respect to all Research
Materials that ImmunoGen supplies to Lilly in connection with the Research
Program, Lilly hereby agrees that (i) it shall not use such materials in any

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

23

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human subject, (ii) it shall use such materials in compliance with all
Applicable Laws and (iii) it shall use such materials solely in connection with
the Research Program or an Exclusive License.  Furthermore, each Party, to the
extent applicable, will comply with Lilly’s animal use policy as set forth in
Schedule C attached hereto in carrying out any animal research, if any, under
the Research Program.

 

(f)                                     Cooperation.  The Parties shall
cooperate in the performance of the Research Program and, subject to the terms
of this Agreement and any confidentiality obligations to Third Parties, shall
exchange such data, information and materials as are reasonably required for the
other Party to perform its obligations under the Research Program.  For purposes
of clarity, once Lilly has taken an Exclusive License, all subsequent
preclinical and clinical development activities with respect to the applicable
Licensed Products shall be conducted in accordance with the terms of such
Exclusive License, and not pursuant to the Research Program.

 

4.4                               Supply of Materials.  Except as set forth
below, Lilly shall be responsible, at its sole cost, for manufacturing or having
manufactured through Affiliates and/or Permitted Third Party Service Providers,
all materials (including, without limitation, all Antibodies, MAY Compounds and
Ab-MAY Products) to enable it to conduct the Research Program.  Unless otherwise
agreed to by the Parties, ImmunoGen’s cost of making Ab-MAY Product (excluding
the cost of the Antibody of any such Ab-MAY Product) in batches consisting of
[***] in connection with the conduct of the ImmunoGen Activities is [***] being
charged for such ImmunoGen Activities.  ImmunoGen will also provide relevant
free MAY Compound and anti-maytansine Antibody to Lilly for biological and
analytical research directly related to the development of Ab-MAY Products
directed to Program Targets; provided that ImmunoGen will provide [***] and
[***] at [***] with respect to the overall Research Program, with additional
amounts of the foregoing to be provided at ImmunoGen’s established standard
pricing as consistently applied by ImmunoGen, as reasonably determined to be
necessary by the JRC for Lilly to complete such biological research and
analytical research directly related to the development of Ab-MAY Products
directed to Program Targets.  If, during the Term, Lilly requests that ImmunoGen
conduct (a) process development, (b) analytical method development, or
(c) manufacturing and/or supply of Ab-MAY Product in bulk drug substance form
for any GLP toxicology studies, clinical studies, or commercial scale-up, but
excluding pivotal studies

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

24

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and commercial supply, then the Parties shall negotiate in good faith the terms
of separate written agreements with respect to such activities [***].  In the
event Lilly elects to manufacture or have manufactured by a Permitted Third
Party Service Provider Ab-MAY Products, or linkers or MAY Compounds therefor,
then ImmunoGen shall (i) provide the Technical Transfer Materials to Lilly for
the purpose of enabling Lilly to exercise its rights under this Agreement with
respect to a specific Ab-MAY Product[***].

 

5.                                      FINANCIAL TERMS

 

5.1                               Upfront Fee.  In consideration of the rights
granted to Lilly under this Agreement, Lilly hereby agrees to pay ImmunoGen an
upfront fee (the “Upfront Fee”) in the amount of Twenty Million United States
Dollars ($20,000,000) payable in accordance with Section 5.3 hereof within [***]
after the Effective Date, which Upfront Fee shall be non-refundable and
non-creditable.

 

5.2                               Research Program Funding.  During the period
commencing on the Effective Date and continuing until the expiration of the
Term, Lilly shall pay ImmunoGen the FTE Cost for the conduct of ImmunoGen
Activities on a quarterly basis in arrears.  Within [***] following the last day
of each Calendar Quarter during the Term, ImmunoGen shall provide a report and
invoice setting forth the aggregate number of hours devoted by ImmunoGen
employees in performing ImmunoGen Activities during such Calendar Quarter[***]. 
Within [***] from the date of its receipt of each such invoice, Lilly will pay
to ImmunoGen the invoice amount due as reimbursement for the ImmunoGen
Activities in accordance with Section 5.3 hereof.  If Lilly disputes any charge
contained in an invoice, it will pay any undisputed amount in accordance with
the preceding sentence, and the disputed amount will be addressed under the
dispute resolution provisions of Section 11.12 hereof.

 

5.3                               Payment Terms.

 

(a)                                   No-Set-Off; Tax Withholding.  All payments
made by Lilly to ImmunoGen hereunder shall be made without set-off or
counterclaim and free and clear of any taxes, duties, levies, fees or charges,
except for withholding taxes, if any.  Lilly shall make any applicable
withholding payments due on behalf of ImmunoGen and shall provide ImmunoGen with
reasonable proof of payment of such withholding taxes, together with an
accounting of the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

25

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calculations of such taxes, within [***] after such payment is remitted to the
proper authority.  Any withheld tax remitted by Lilly to the proper authority
shall be treated as having been paid by Lilly to ImmunoGen for all purposes of
this Agreement.  The Parties will cooperate reasonably in completing and filing
documents required under the provisions of any Applicable Laws in connection
with the making of any required withholding tax payment, or in connection with
any claim to a refund of or credit for any such payment.

 

(b)                                  Wire Transfers.  All payments hereunder
shall be made to ImmunoGen in U.S. Dollars by bank wire transfer in immediately
available funds to the account designated by ImmunoGen by written notice from
time to time.

 

5.4                               Overdue Payments.   Subject to the other terms
of this Agreement, any payments hereunder not paid within the applicable time
period set forth herein shall bear interest from the due date until paid in
full, at a rate per annum equal to the lesser of (a) [***], or (b) the maximum
interest rate permitted by Applicable Law in regard to such payments, calculated
in each case from the date such payment was due through to the date on which
payment is actually made; provided, that with respect to any disputed payments,
no interest payment shall be due until such dispute is resolved and the interest
that shall be payable thereon shall be based on the finally-resolved amount of
such payment, calculated from the original date on which the disputed payment
was due through the date on which payment is actually made.  Such payment when
made shall be accompanied by all interest so accrued.  Such interest and the
payment and acceptance thereof shall not negate or waive the right of ImmunoGen
to any other remedy, legal or equitable, to which it may be entitled because of
the delinquency of the payment.

 

5.5                               Records Retention; Audit.

 

(a)                                   Records Retention.  ImmunoGen shall keep
for at least [***] from [***] complete and accurate records of the FTE Cost for
ImmunoGen Activities performed hereunder in sufficient detail to allow the
accuracy of the amounts charged to Lilly to be confirmed.

 

(b)                                  Audit.  Subject to the other terms of this
Section 5.5(b), at the request of Lilly, upon at least [***] prior written
notice, but no more often than [***] and not [***] with respect to records
covering any specific period of time, and at its sole expense (except as
otherwise provided herein), ImmunoGen shall permit an internationally recognized
independent accounting firm reasonably selected by Lilly and reasonably
acceptable to ImmunoGen to

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

26

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inspect (during regular business hours) at such place or places where such
records are customarily kept the relevant records required to be maintained by
ImmunoGen under Section 5.5(a) hereof.  At Lilly’s request, the independent
accounting firm shall be entitled to audit the [***] of ImmunoGen’s records
solely for purposes of verifying ImmunoGen’s calculation of FTE Cost for
ImmunoGen Activities performed during the period subject to review.  Before
beginning the audit the independent accounting firm shall enter into a
confidentiality agreement with both Parties substantially similar to the
provisions of Section 6 hereof limiting the disclosure and use of such
information by such independent accounting firm to authorized representatives of
the Parties and the purposes germane to this Section 5.5.  The independent
accounting firm shall provide its audit report and basis for any determination
to ImmunoGen at the time such report is provided to Lilly.  ImmunoGen and Lilly
shall each have the right to request a further determination by such independent
accounting firm as to matters which such Party disputes within [***] following
receipt of such report.  The Party initiating a dispute will provide the other
Party and the independent accounting firm with a reasonably detailed statement
of the grounds upon which it disputes any findings in the audit report and the
independent accounting firm shall undertake to complete such further
determination within [***] after the dispute notice is provided, which
determination shall be limited to the disputed matters and provided to both
Parties.  The Parties shall use reasonable efforts, through the participation of
finance representatives of both Parties, to resolve any dispute arising in
relation to the audit by good faith discussion.  The results of any such audit,
reflecting the independent accounting firm’s determination of any disputed
matters, shall be binding on both Parties.  Lilly agrees to treat the results of
any such independent accounting firm’s review of ImmunoGen’s records under this
Section 5.5(b) as Confidential Information of ImmunoGen subject to the terms of
Section 6 hereof.  If any such audit reveals an inaccuracy in the calculation of
FTE Cost for the ImmunoGen Activities performed during the period covered by the
review resulting in any overpayment by Lilly, ImmunoGen shall refund the amount
of any such overpayment, and if such overpayment is by [***] of the amount due
and also is [***], ImmunoGen shall pay the reasonable costs and expenses of the
audit.  If any audit reveals an inaccuracy in the calculation of FTE Cost for
the ImmunoGen Activities performed during the period covered by the review
resulting in an underpayment by Lilly, ImmunoGen may invoice Lilly for such
underpayment,

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

27

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and Lilly will pay such invoice within [***] from the date of its receipt of
such invoice, in accordance with Section 5.3 hereof.

 

6.                                      TREATMENT OF CONFIDENTIAL INFORMATION

 

6.1                               Confidentiality.

 

(a)                                   Confidentiality Obligations.  ImmunoGen
and Lilly each recognizes that the other Party’s Confidential Information
constitutes highly valuable assets of such other Party.  ImmunoGen and Lilly
each agrees that, subject to Section 6.1(b) hereof, during the Term and for an
additional [***] thereafter, (i) it will not disclose, and will cause its
Affiliates (and, in the case of Lilly, its Permitted Third Party Service
Providers) not to disclose, any Confidential Information of the other Party and
(ii) it will not use, and will cause its Affiliates (and, in the case of Lilly,
its Permitted Third Party Service Providers) not to use, any Confidential
Information of the other Party, in either case, except as expressly permitted
hereunder.  Without limiting the generality of the foregoing, each Party shall
take such action, and shall cause its Affiliates (and, in the case of Lilly, its
Permitted Third Party Service Providers) to take such action, to preserve the
confidentiality of the other Party’s Confidential Information as such Party
would customarily take to preserve the confidentiality of its own Confidential
Information and shall, in any event, use at least reasonable care to preserve
the confidentiality of the other Party’s Confidential Information.

 

(b)                                  Limited Disclosure.  Each Receiving Party
shall be entitled to disclose the Disclosing Party’s Confidential Information to
employees, consultants, subcontractors and Affiliates of the Receiving Party to
enable the Receiving Party to exercise its rights or to carry out its
responsibilities under this Agreement, provided that such disclosure shall only
be made to persons who are bound by written obligations as described in
Section 6.1(c) hereof.  In addition, the Receiving Party may disclose the
Disclosing Party’s Confidential Information to the extent such disclosure (i) is
reasonably necessary to file, prosecute or maintain patents or patent
applications, or to file, prosecute or defend litigation related to patents or
patent applications[***] and in accordance with this Agreement, or (ii) as
required by Applicable Laws, provided that in the case of any disclosure under
this clause (ii), the Receiving Party shall (A) if practicable, provide the
Disclosing Party with reasonable advance notice of and an opportunity to

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

28

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comment on any such required disclosure, (B) if requested by the Disclosing
Party, cooperate in all reasonable respects with the Disclosing Party’s efforts
to obtain confidential treatment or a protective order with respect to any such
disclosure, at the Disclosing Party’s expense, and (C) use good faith efforts to
incorporate the comments of the Disclosing Party in any such disclosure or
request for confidential treatment or a protective order.

 

(c)                                   Employees, Consultants and
Subcontractors.  ImmunoGen and Lilly each hereby represents and warrants that
all of its and its Affiliates’ Representatives who participate in the activities
contemplated by this Agreement or who otherwise have access to Confidential
Information of the other Party are or will, prior to their participation or
access, be bound by written obligations to maintain such Confidential
Information in confidence and not to use such information except as expressly
permitted hereunder.  Each Party agrees to use, and to cause its Affiliates
(and, in the case of Lilly, its Permitted Third Party Service Providers) to use,
reasonable efforts to enforce such obligations.

 

6.2                               Publicity.  The Parties acknowledge that the
terms of this Agreement constitute the Confidential Information of each Party
and may not be disclosed except as permitted by Section 6.1(b) hereof.  In
addition, either Party may disclose the terms of this Agreement (a) on a
need-to-know basis to such Party’s legal, accounting and financial advisors and
(b) as reasonably necessary in connection with any actual or potential (i) debt
or equity financing of such Party or (ii) purchase by any Third Party of all the
outstanding capital stock or all or substantially all of the assets of such
Party or any merger or consolidation involving such Party; provided that
ImmunoGen shall not disclose the identity of any Program Targets, the form of
Research Plan, and any specific Research Plans under this clause (b); and
provided further that in each case the Person to whom the terms of this
Agreement is to be disclosed agrees in writing to maintain the confidentiality
of such information with terms at least as protective as those contained in
Section 6.1(a) hereof.  Anything contained in this Agreement to the contrary
notwithstanding, upon the execution of this Agreement ImmunoGen may issue a
press release with respect to this Agreement (the final form of which shall have
been reviewed and approved by Lilly prior to the Effective Date, which approval
shall not be unreasonably withheld, conditioned or delayed) and either Party may
make subsequent and repeated public disclosure of the contents thereof without
further approval of the other Party.  After issuance of such press release,
neither Party shall

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

29

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publish, present or otherwise disclose publicly any material related to events
arising under this Agreement without the prior written consent of the other
Party, which consent shall not be unreasonably withheld, conditioned or delayed;
provided that notwithstanding the foregoing, (A) neither Party will be prevented
from complying with any duty of disclosure it may have pursuant to Applicable
Laws; and (B) either Party shall be permitted to publish such material in
scientific journals or present such material at scientific conferences in
accordance with Section 6.3 hereof.  Either Party may make subsequent and
repeated public disclosure of the contents of any disclosures permitted by the
preceding sentence without the prior written consent of the other Party.

 

6.3                               Publications and Presentations.  The Parties
acknowledge that scientific publications and presentations must be strictly
monitored to prevent any adverse effect from premature publication or
dissemination of results of the activities hereunder.  Each Party agrees that,
except as required by Applicable Laws, it shall not publish or present, or
permit to be published or presented, the results of the Research Program to the
extent such results refer to, derive from or otherwise relate to the Licensed
Intellectual Property (the “Covered Results”) without the prior review by and
approval of the other Party; provided, that it shall not be deemed unreasonable
for Lilly to withhold its consent to any request by ImmunoGen to publish or
present any Covered Results prior to the planned publication or dissemination of
such Covered Results by Lilly.  Each Party shall provide to the other Party the
opportunity to review each of the submitting Party’s proposed abstracts,
manuscripts or presentations (including, without limitation, information to be
presented verbally) that relate to the Covered Results at least [***] prior to
its intended presentation or submission for publication, and such submitting
Party agrees, upon written request from the other Party given within such [***]
period, not to submit such abstract or manuscript for publication or to make
such presentation until the other Party is given up to [***] from the date of
such written request to seek appropriate patent protection for any Covered
Rights in such publication or presentation that it reasonably believes may be
patentable.  Once such abstracts, manuscripts or presentations have been
reviewed and approved by each Party, the same abstracts, manuscripts or
presentations do not have to be provided again to the other Party for review for
a later submission for publication.  Each Party also shall have the right to
require that any of its Confidential Information that is disclosed in any such
proposed

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

30

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publication or presentation be deleted prior to such publication or
presentation.  In any permitted publication or presentation by a Party, the
other Party’s contribution shall be duly recognized, and co-authorship shall be
determined in accordance with customary industry standards.

 

6.4                               Integration.  As to the subject matter of this
Agreement, this Section 6 supersedes any confidential disclosure agreements
between the Parties, including, without limitation, the Confidentiality
Agreement.  Any confidential information of a Party under any such agreement
relating to the subject matter of this Agreement shall be treated as
Confidential Information of such Party hereunder, subject to the terms of this
Section 6.

 

7.                                      PROVISIONS CONCERNING THE FILING,
PROSECUTION AND
MAINTENANCE OF PATENT RIGHTS

 

7.1                               Ownership of Intellectual Property;
Disclosure.  Except as otherwise expressly provided herein, all inventions and
discoveries governed by this Agreement shall be owned based on inventorship, as
inventorship is determined in accordance with United States patent law.

 

(a)                                   Solely-Owned Technology.  Anything
contained in this Agreement to the contrary notwithstanding, as between the
Parties (i) ImmunoGen shall be the sole owner of the Licensed Intellectual
Property (other than the Joint Program Technology and Joint Improvements
included therein), and (ii) subject to Section 7.3(b) hereof, Lilly shall be the
sole owner of Lilly Improvements and any Patent Rights claiming Lilly
Improvements and/or Lilly Antibodies.

 

(b)                                  Jointly-Owned Technology.  All Joint
Program Technology and Joint Improvements shall be jointly owned by ImmunoGen
and Lilly.  The Parties shall also jointly own any Patent Rights claiming such
Joint Program Technology and Joint Improvements.

 

(c)                                   Disclosure.  Each Party shall provide to
the other Party any invention disclosure related to any Joint Program Technology
or Joint Improvements within [***] after such Party receives such disclosure
from its employees or others obligated to assign or license inventions to such
Party or any Affiliate of such Party.

 

7.2                               Patent Filing, Prosecution and Maintenance.

 

(a)                                   Licensed Patent Rights.  ImmunoGen, acting
through patent counsel or agents of its choice, shall be responsible, at its
sole cost and expense and in its sole discretion,

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

31

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for the preparation, filing, prosecution and maintenance of all Licensed Patent
Rights (other than Licensed Patent Rights claiming Joint Program Technology or
Joint Improvements).

 

(b)                                  Lilly Improvements.  Lilly, acting through
patent counsel or agents of its choice, shall be responsible, at its sole cost
and expense and in its sole discretion, for the preparation, filing, prosecution
and maintenance of all Patent Rights claiming Lilly Improvements.  Lilly will
keep ImmunoGen reasonably informed of the status of the filing, prosecution and
maintenance of any such Patent Rights, including, without limitation, by using
commercially reasonable efforts to provide ImmunoGen a reasonable time prior to
taking or failing to take any action that would affect the scope or validity of
any such filing (including the substantial narrowing, cancellation or
abandonment of any claim(s) without retaining the right to pursue such subject
matter in a separate application, or the failure to file or perfect the filing
of any claim(s) in any country), with prior written notice of such proposed
action or inaction so that ImmunoGen has a reasonable opportunity to review and
comment.

 

(c)                                   Joint Program Technology and Joint
Improvements.

 

(i)                                     Prior to either Party filing any patent
application disclosing Joint Program Technology or Joint Improvements, the
Parties shall establish a committee (the “Patent Committee”) comprised of at
least one (1) representative of each Party for the purpose of facilitating the
preparation, filing, prosecution, maintenance and defense of Patent Rights
claiming Joint Program Technology and/or Joint Improvements.  As agreed upon by
the Parties, meetings of the Patent Committee may be face-to-face or may be
conducted by teleconferences or videoconferences, from time to time as needed. 
The Patent Committee will be the forum through which the Parties coordinate
their respective obligations to each other described in this Section 7.

 

(ii)                                  Subject to the terms contained herein,
Lilly shall be responsible, at its sole cost and expense and in its sole
discretion, for the preparation, filing, prosecution and maintenance of all
Patent Rights claiming Joint Program Technology, using patent counsel and agents
selected by Lilly and approved by ImmunoGen, which approval shall not be
unreasonably withheld, conditioned or delayed.

 

(iii)                               Subject to the terms contained
herein, ImmunoGen shall be responsible, at its sole cost and expense and in its
sole discretion, for the preparation, filing,

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

32

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prosecution and maintenance of all Patent Rights claiming Joint Improvements,
using patent counsel and agents selected by ImmunoGen and approved by Lilly,
which approval shall not be unreasonably withheld, conditioned or delayed.

 

(iv)                              The Party undertaking the responsibility for
the filing, prosecution and maintenance of any Patent Rights claiming Joint
Program Technology or Joint Improvements (A) will provide the other Party with a
copy of any proposed patent application claiming Joint Program Technology or
Joint Improvements for review and comment reasonably in advance (but at least
[***] in advance) of filing, and (B) will otherwise keep the other Party
reasonably informed of the status of such filing, prosecution and maintenance,
including, without limitation, by using commercially reasonable efforts to
provide the other Party a reasonable time prior to taking or failing to take any
action that would affect the scope or validity of any such filing (including the
substantial narrowing, cancellation or abandonment of any claim(s) without
retaining the right to pursue such subject matter in a separate application, or
the failure to file or perfect the filing of any claim(s) in any country), with
prior written notice of such proposed action or inaction so that the other Party
has a reasonable opportunity to review and comment.

 

(d)                                  Cooperation.  Each Party agrees to
cooperate reasonably with the other Party in the preparation, filing,
prosecution and maintenance of any Patent Rights pursuant to this Section 7.2. 
Such cooperation includes, but is not limited to, executing all papers and
instruments, or requiring employees or others to execute such papers or
instruments, so as to effectuate the ownership of such Patent Rights and to
enable the filing, prosecution, maintenance and extension thereof in any country
or region.  In addition, the Parties shall reasonably cooperate with each other
in obtaining patent term restoration or supplemental protection certificates or
their equivalents in any country in the Territory where applicable to the
Licensed Patent Rights.

 

(e)                                   [***].

 

7.3                               Abandonment.

 

(a)                                   Licensed Patent Rights; Joint
Improvements.  If ImmunoGen decides to abandon or allow to lapse, or otherwise
determines to not prosecute or defend, any of the Licensed Patent Rights or
Patent Rights claiming Joint Improvements for which it is the filing party under
Sections 7.2(a) and 7.2(c)(iii) hereof in any country or region in the
Territory,

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

33

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ImmunoGen shall inform Lilly of such decision promptly and, in any event, so as
to provide Lilly a reasonable amount of time to meet any applicable deadline to
establish or preserve such Patent Rights in such country or region.  Lilly shall
have the right to assume responsibility for continuing the prosecution,
maintenance or defense of such Patent Rights in such country or region and
paying any required fees to maintain such Patent Rights in such country or
region or defending such Patent Rights, in each case at Lilly’s sole expense and
through patent counsel or agents of its choice.  Lilly shall not become an
assignee of such Licensed Patent Rights or of ImmunoGen’s interest in such
Patent Rights claiming Joint Improvements as a result of its assumption of such
responsibility.  Upon transfer of ImmunoGen’s responsibility for prosecuting,
maintaining and defending any of the Licensed Patent Rights or Patent Rights
claiming Joint Improvements under this Section 7.3(a) hereof, ImmunoGen shall
promptly deliver to Lilly copies of all necessary files related to such Patent
Rights with respect to which responsibility has been transferred and shall take
all actions and execute all documents reasonably necessary for Lilly to assume
such prosecution, maintenance and defense.

 

(b)                                  Lilly Improvements; Joint Program
Technology.  If Lilly decides to abandon or allow to lapse, or otherwise
determines to not prosecute or defend, any of the Patent Rights claiming Lilly
Improvements or Patent Rights claiming Joint Program Technology for which Lilly
is the filing party under Sections 7.2(b) and 7.2(c)(ii) hereof in any country
or region in the Territory, Lilly shall inform ImmunoGen of such decision
promptly and, in any event, so as to provide ImmunoGen a reasonable amount of
time to meet any applicable deadline to establish or preserve such Patent Rights
in such country or region.  ImmunoGen shall have the right to assume
responsibility for continuing the prosecution, maintenance or defense of such
Patent Rights in such country or region and paying any required fees to maintain
such Patent Rights in such country or region or defending such Patent Rights, in
each case at ImmunoGen’s sole expense and through patent counsel or agents of
its choice.  ImmunoGen shall not become an assignee of Lilly’s interest in such
Patent Rights claiming Lilly Improvements or Joint Program Technology as a
result of its assumption of such responsibility.  Upon transfer of Lilly’s
responsibility for prosecuting, maintaining and defending any of the Patent
Rights claiming Lilly Improvements or Joint Program Technology under this
Section 7.3(b), Lilly shall promptly deliver to ImmunoGen copies of all
necessary files related to such Patent Rights with respect to

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

34

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which responsibility has been transferred and shall take all actions and execute
all documents reasonably necessary for ImmunoGen to assume such prosecution,
maintenance and defense and to assign ownership of such Lilly Improvements to
ImmunoGen.

 

7.4                               Third Party Infringement.

 

(a)                                   Licensed Patent Rights.  ImmunoGen shall
have all rights, at its own expense, to bring suit (or other appropriate legal
action) against any and all actual or suspected infringement of the Licensed
Patent Rights (other than Patent Rights claiming Joint Program Technology).

 

(b)                                  Lilly Improvements; Joint Program
Technology.  Lilly shall have all rights, at its own expense, to bring suit (or
other appropriate legal action) against any and all actual or suspected
infringement of Patent Rights claiming Lilly Improvements or Joint Program
Technology.

 

7.5                               Cooperation.  Each Party shall give notice to
the other Party of any actual or suspected infringement by a Third Party of any
Licensed Patent Rights and shall execute all papers and perform such other acts
(other than monetary) as may be reasonably required to maintain any infringement
suit brought in accordance with Section 7.4 hereof (including giving legal
consent for bringing such suit, and agreeing to be named as a plaintiff in such
suit or otherwise joining such suit), and at its option and expense, may be
represented in such suit by counsel of its choice.

 

7.6                               No Obligation.  Neither Party shall have any
obligation to the other Party under this Agreement to pay any fees or costs:
(a) for the other Party’s bringing of a lawsuit or other action to enforce any
Licensed Patent Rights or Patent Rights claiming Lilly Improvements, or any
other patent owned by a Party against actual or suspected infringement or
(b) for the other Party to obtain for its own benefit independent business or
legal advice concerning any of the Patent Rights set forth in clause (a) above.

 

8.                                      TERM AND TERMINATION

 

8.1                               Term.  The term of this Agreement shall
commence on the Effective Date and shall continue until the third (3rd)
anniversary of the Effective Date, subject to earlier termination in accordance
with Section 8.2 hereof (the “Term”).

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

35

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8.2                               Termination.  Subject to the other terms of
this Agreement:

 

(a)                                   Voluntary Termination by Lilly.  Lilly
shall have the right to terminate this Agreement at any time upon not less than
[***] prior written notice to ImmunoGen.

 

(b)                                  Termination for Breach.  Either Party may
terminate this Agreement, effective upon written notice to the other Party, upon
any breach by the other Party of any material obligation or condition of this
Agreement (a “Material Breach”) that remains uncured [***] ([***] if the breach
is a failure by [***] to [***]) after the non-breaching Party first gives
written notice of such breach to the other Party describing such Material Breach
in reasonable detail; provided, however, that if the nature of the asserted
breach (other than a breach for non-payment) is such that more than [***] are
reasonably required to cure, then the cure period shall be extended for a period
not to exceed [***] so long as the Party seeking to cure the asserted breach is
diligently pursuing such cure to completion.  Anything contained in this
Agreement to the contrary notwithstanding and subject to the proviso of this
sentence, if the allegedly breaching Party (i) disputes either (A) whether a
Material Breach has occurred or (B) whether the Material Beach has been timely
cured, and (ii) provides written notice of that Dispute to the other Party
within the above time periods, then the matter will be addressed under the
dispute resolution provisions of Section 11.12, and the Party asserting the
breach may not terminate this Agreement until it has been determined under
Section 11.12 that the allegedly breaching Party is in Material Breach of this
Agreement, and such breaching Party further fails to cure such breach within
[***] (or such [***] period as determined by [***]) after the conclusion of the
dispute resolution procedure; provided, however, that the foregoing shall not
apply to any breach for [***].  Anything contained in this Agreement to the
contrary notwithstanding, if the asserted Material Breach is cured or shown to
be non-existent within the applicable cure period, the first notice of breach
hereunder shall be deemed automatically withdrawn and of no effect.

 

(c)                                   Termination for Insolvency.  To the extent
allowed by Applicable Law, if either Party files for protection under bankruptcy
laws, makes an assignment for the benefit of creditors, appoints or suffers the
appointment of a receiver or trustee over its property, files a petition under
any bankruptcy or insolvency act or has any such petition filed against it which
is not discharged within [***] of the filing thereof, then the other Party may
terminate this Agreement effective immediately upon written notice to such
Party.  In connection therewith, all

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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rights and licenses granted under this Agreement are, and shall be deemed to be,
for purposes of Section 365(n) of the United States Bankruptcy Code, licenses of
rights to “intellectual property” as defined under Section 101(56) of the United
States Bankruptcy Code.  If either Party undergoes a voluntary dissolution or
winding-up of its affairs, then the other Party may terminate this Agreement
effective immediately upon written notice to such Party.

 

(d)                                  [***].

 

(e)                                   [***].

 

8.3                               Consequences of Expiration or Termination. 
Upon expiration or earlier termination of this Agreement by either Party under
Section 8.2 hereof, the following provisions shall apply:

 

(a)                                   Expiration or Earlier Termination by
ImmunoGen under Section 8.2(b), 8.2(c) [***] or by Lilly under Section 8.2(a). 
If this Agreement expires in accordance with its terms or is earlier terminated
by ImmunoGen under Section 8.2(b), 8.2(c) [***] hereof or by Lilly under
Section 8.2(a) hereof, then: (i) the license granted by ImmunoGen to Lilly
pursuant to Section 2.1 hereof shall immediately terminate, and Lilly shall
discontinue the use of any Licensed Technology except to the extent expressly
permitted in any outstanding Exclusive License [***]; (ii) all unexercised
Holding Options and Reserve Options granted by ImmunoGen pursuant to
Sections 3.1(a) and 3.1(b) hereof shall immediately terminate; and (iii) each
Party shall promptly return or destroy all Confidential Information of the other
Party, provided that each Party may retain, subject to Section 6 hereof,
(A) one (1) copy of the Confidential Information of the other Party in its
archives solely for the purpose of establishing the contents thereof and
ensuring compliance with its obligations hereunder, (B) any Confidential
Information of the other Party contained in its laboratory notebooks or
databases and (C) any Confidential Information of the other Party to the extent
reasonably required to exercise its rights and perform its obligations under any
outstanding Exclusive License.  Notwithstanding the foregoing, no Exclusive
License granted or related License Agreement executed as of the date of
termination shall be affected by any termination of this Agreement.

 

(b)                                  Termination by Lilly under Section 8.2(b),
8.2(c) [***].  If this Agreement is terminated by Lilly under Section 8.2(b),
8.2(c) [***] hereof, then: (i) the license granted by ImmunoGen to Lilly
pursuant to Section 2.1 hereof shall survive until [***]  the date on which

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Lilly shall have taken the maximum number of Exclusive Licenses available to
Lilly pursuant to Section 3.3 hereof; (ii) such license shall be expanded to
permit Lilly and its Affiliates to perform any and all activities in connection
with the Research Program that would otherwise have been performed by ImmunoGen
to carry out the purpose of this Agreement; (iii) Lilly’s right to take Holding
Options, Reserve Options and Exclusive Licenses, subject to the terms and
conditions of Section 3 hereof, shall survive until the [***], provided that no
Holding Option Period or Reserve Option Period shall extend beyond the [***];
(iv) ImmunoGen shall provide the Technical Transfer Materials to Lilly for the
purpose of assisting Lilly to exercise its rights set forth in clauses (i),
(ii) and (iii) of this Section 8.3(b); and (v) each Party shall promptly return
or destroy all Confidential Information of the other Party, provided that each
Party may retain, subject to Section 6 hereof, (A) one (1) copy of the
Confidential Information of the other Party in its archives for the purpose of
establishing the contents thereof and ensuring compliance with its obligations
hereunder, (B) any Confidential Information of the other Party contained in its
laboratory notebooks or databases and (C) any Confidential Information of the
other Party to the extent reasonably required to exercise its rights and perform
its obligations under any outstanding Exclusive License.  Notwithstanding the
foregoing, and subject to Section 6 hereof, Lilly may retain and use ImmunoGen’s
Confidential Information in connection with the exercise of its rights set forth
in clauses (i), (ii) and (iii) of this Section 8.3(b) or necessary or useful to
exercise other rights under this Agreement that survive such termination.

 

8.4                               Remedies.  Except as otherwise expressly set
forth in this Agreement, the termination provisions of this Section 8 are in
addition to any other relief and remedies available to either Party at law or in
equity.

 

8.5                               Surviving Provisions.  Notwithstanding any
provision herein to the contrary, the rights and obligations of the Parties set
forth in Sections 2.3, 3.3, 3.4, 5.2, 5.3, 5.5, 6, 7, 8.3, 8.4, 8.5, 9.3, 10 and
11 as well as any rights or obligations otherwise accrued hereunder (including
any accrued payment obligations), shall survive the expiration or termination of
the Term of this Agreement.  Without limiting the generality of the foregoing,
Lilly shall remain liable for all payment obligations accruing hereunder prior
to the effective date of termination.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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9.                                      REPRESENTATIONS AND WARRANTIES

 

9.1                               ImmunoGen Representations.  ImmunoGen
represents and warrants to Lilly that:

 

(a)                                   it is duly incorporated, validly existing
and in good standing under the Applicable Laws of the jurisdiction of its
incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof;

 

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

 

(c)                                   this Agreement is a legal and valid
obligation binding upon ImmunoGen and enforceable in accordance with its terms,
and the execution, delivery and performance of this Agreement by the Parties
does not conflict with or result in any default under any agreement, instrument
or understanding to which ImmunoGen is a party or by which it is bound;

 

(d)                                  to ImmunoGen’s knowledge, as of the
Effective Date none of the issued patents within the Licensed Patent Rights is
invalid or unenforceable;

 

(e)                                   as of the Effective Date, ImmunoGen has
received no written notice from a Third Party claiming that the use of the
Licensed Intellectual Property pursuant to the license granted hereunder to
Lilly will infringe the issued patents of any such Third Party; and

 

(f)                                     as of the Effective Date, there is no
pending or, to ImmunoGen’s knowledge (without having conducted, or having any
duty to conduct, any inquiry), threatened, litigation that alleges that the use
of the Licensed Intellectual Property pursuant to the license granted hereunder
to Lilly would infringe or misappropriate any intellectual property rights of
any Third Party.

 

9.2                               Lilly Representations.  Lilly represents and
warrants to ImmunoGen that:

 

(a)                                   it is duly incorporated, validly existing
and in good standing under the Applicable Laws of the jurisdiction of its
incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof;

 

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

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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(c)                                   this Agreement is a legal and valid
obligation binding upon Lilly and enforceable in accordance with its terms, and
the execution, delivery and performance of this Agreement by the Parties does
not conflict with or result in a default under any agreement, instrument or
understanding to which Lilly is a party or by which it is bound.

 

9.3                               Warranty Disclaimers.

 

(a)                                   Except as expressly set forth in
Section 9.1 hereof, nothing in this Agreement is or shall be construed as a
warranty or representation by ImmunoGen (i) as to the validity or scope of any
patent application or patent within the Licensed Patent Rights or (ii) that
anything made, used, sold or otherwise disposed of under any license granted in
this Agreement is or will be free from infringement of patents, copyrights, and
other rights of Third Parties.

 

(b)                                  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY
OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO ANY TECHNOLOGY, GOODS,
SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT, AND EACH PARTY
HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NON-INFRINGEMENT.

 

10.                               INDEMNIFICATION; LIABILITY

 

10.1                        Indemnification.

 

(a)                                   Lilly Indemnity.  Lilly shall indemnify,
defend and hold harmless ImmunoGen, its Affiliates, their respective directors,
officers, employees, consultants and agents, and their respective successors,
heirs and assigns (the “ImmunoGen Indemnitees”), from and against all
liabilities, damages, losses and expenses (including, without limitation,
reasonable attorneys’ fees and expenses of litigation) (collectively, “Losses”)
incurred by or imposed upon the ImmunoGen Indemnitees, or any of them, as a
direct result of any Third Party claims, suits, actions, demands or judgments,
including, without limitation, personal injury and product liability matters
(collectively, “Third Party Claims”), arising out of (i) a Material Breach of
this Agreement by Lilly; (ii) the conduct of the Research Program by Lilly or
any of its Affiliates or

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

40

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subcontractors; or (iii) the gross negligence, recklessness or willful
misconduct of Lilly or any of its Affiliates or subcontractors; except in each
case to the extent any such Third Party Claim or Losses result from a Material
Breach of this Agreement by ImmunoGen, or the negligence, recklessness or
willful misconduct of ImmunoGen or any of its Affiliates, or the conduct of the
Research Program by ImmunoGen or any of its Affiliates or subcontractors;
provided that with respect to any such Third Party Claim for which ImmunoGen
also has an obligation to any Lilly Indemnitee pursuant to
Section 10.1(b) hereof, Lilly shall indemnify each ImmunoGen Indemnitee for its
Losses to the extent of Lilly’s responsibility, relative to ImmunoGen (or to
Persons for whom the ImmunoGen is legally responsible), for the facts underlying
the Third Party Claim.

 

(b)           ImmunoGen Indemnity.  ImmunoGen shall indemnify, defend and hold
harmless Lilly, its Affiliates, their respective directors, officers, employees,
consultants and agents, and their respective successors, heirs and assigns (the
“Lilly Indemnitees”), from and against any Losses incurred by or imposed upon
the Lilly Indemnitees, or any of them, as a direct result of any Third Party
Claims arising out of (i) the Material Breach of this Agreement by ImmunoGen;
(ii) the conduct of the Research Program by ImmunoGen or any of its Affiliates
or subcontractors; or (iii) the gross negligence, recklessness or willful
misconduct of ImmunoGen or any of its Affiliates or subcontractors; except in
each case to the extent any such Third Party Claim or Losses result from a
Material Breach of this Agreement by Lilly, or the negligence, recklessness or
willful misconduct of, Lilly or any of its Affiliates or subcontractors, or the
conduct of the Research Program by Lilly or any of its Affiliates or
subcontractors; provided that with respect to any such Third Party Claim for
which Lilly also has an obligation to any ImmunoGen Indemnitee pursuant to
Section 10.1(a) hereof, ImmunoGen shall indemnify each Lilly Indemnitee for its
Losses to the extent of ImmunoGen’s responsibility, relative to Lilly (or to
Persons for whom Lilly is legally responsible), for the facts underlying the
Third Party Claim.

 

10.2        Conditions to Indemnification.  A Person seeking indemnification
under Section 10.1 hereof (the “Indemnified Party”) in respect of a Third Party
Claim shall give prompt notice of such Third Party Claim to the Party from which
recovery is sought (the “Indemnifying Party”) and shall permit the Indemnifying
Party to assume direction and control

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

41

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of the defense of the Third Party Claim, provided that the Indemnifying Party
shall (a) act reasonably and in good faith with respect to all matters relating
to the defense or settlement of such Third Party Claim as the defense or
settlement relates to the Indemnified Party, and (b) shall not settle or
otherwise resolve such Third Party Claim without the Indemnified Party’s prior
written consent (which consent shall not be unreasonably withheld, conditioned
or delayed); provided that the Indemnifying Party may, without the Indemnified
Party’s prior written consent, agree or consent to any settlement or other
resolution of such Third Party Claim which requires solely money damages paid by
the Indemnifying Party, and which includes as an unconditional term thereof the
giving by such claimant or plaintiff to the Indemnified Party of a release from
all liability in respect of such Third Party Claim.

 

10.3        Insurance Proceeds.  Any indemnification payment hereunder shall be
made net of any insurance proceeds which the Indemnified Party is entitled to
recover; provided, however, that if, following the payment to the Indemnified
Party of any amount under this Section 10, such Indemnified Party becomes
entitled to recover any insurance proceeds in respect of the claim for which
such indemnification payment was made, the Indemnified Party shall promptly pay
an amount equal to the amount of such proceeds (but not exceeding the amount of
such indemnification payment) to the Indemnifying Party.

 

10.4        Limited Liability.  [***] NEITHER PARTY WILL BE LIABLE WITH RESPECT
TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (a) ANY
SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
(INCLUDING, WITHOUT LIMITATION, ANY DAMAGES RESULTING FROM LOSS OF PROFITS OR
LOSS OF BUSINESS), OR (b) COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR
SERVICES, EVEN IF EITHER PARTY IS INFORMED IN ADVANCE OF THE POSSIBILITY OF SUCH
DAMAGES AND EVEN IF THE REMEDIES PROVIDED FOR IN THIS AGREEMENT FAIL OF THEIR
ESSENTIAL PURPOSE.  For purposes of clarity, a Party’s monetary liability under
a Third Party Claim for such Third Party’s special, incidental, indirect or
consequential damages, or for any exemplary or punitive damages payable to such
Third Party in connection with such Third

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Party Claim, shall be deemed to be the direct damages of such Party for purposes
of this Section 10.

 

11.          MISCELLANEOUS

 

11.1        Notices.  All notices and communications shall be in writing and
delivered personally or by courier or mailed via certified mail, return receipt
requested, postage prepaid, addressed as follows:

 

If to ImmunoGen:                                                ImmunoGen, Inc.

830 Winter Street

Waltham, MA 02451

Attn:  Vice President, Business Development

Fax: [***]

 

with a copy to:                                                            
ImmunoGen, Inc.

830 Winter Street

Waltham, MA 02451

Attn:  Alliance Management

Fax: [***]

 

If to
Lilly:                                                                                        
Eli Lilly and Company

Lilly Corporate Center

Indianapolis, IN 46285

Attn: General Counsel

Fax: [***]

 

Except as otherwise expressly provided in this Agreement or mutually agreed in
writing, any notice, communication or document (excluding payment) required to
be given or made shall be deemed given or made and effective upon actual receipt
or, if earlier, (a) one (1) Business Day after deposit with a nationally
recognized overnight express courier with charges prepaid, or
(b) five (5) Business Days after mailed by certified mail, postage prepaid, in
each case addressed to the receiving Party at its address stated above or to
such other address as such Party may designate by written notice given in
accordance with this Section 11.1.

 

11.2        Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to any choice
of law principle that would dictate the application of the law of another
jurisdiction.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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11.3        Entire Agreement.  This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof and supersedes any
prior or contemporaneous agreements, understandings, negotiations or
correspondence between the Parties, written or oral (including, without
limitation, the Confidentiality Agreement) concerning the subject matter hereof.

 

11.4        Amendment and Waiver.  This Agreement may be amended, modified or
changed only by a written instrument executed by the Party to be bound.  No term
of this Agreement will be deemed to have been waived and no breach excused,
unless such waiver or consent shall be in writing and signed by the Party
claiming to have waived or consented.  Any consent by any Party to, or waiver
of, a breach by the other, whether express or implied, shall not constitute
consent to, or waiver of, or excuse for, any other different or subsequent
breach.

 

11.5        Binding Effect.  This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and permitted
assigns.  Except as set forth in Section 10 hereof, no Third Party (including,
without limitation, employees of either Party) shall have or acquire any rights
by reason of this Agreement.

 

11.6        Purpose and Scope.  The Parties hereto understand and agree that
this Agreement is limited to the activities, rights and obligations as expressly
set forth herein.  Nothing in this Agreement shall be construed to establish any
agency, employment, partnership, joint venture, franchise or similar or special
relationship between the Parties.  Neither Party shall have the right or
authority to assume or create any obligations or to make any representations,
warranties or commitments on behalf of the other Party, whether express or
implied, or to bind the other Party in any respect whatsoever.  Except as
expressly set forth elsewhere in this Agreement, neither Party grants to the
other Party any right or license to any of its intellectual property.

 

11.7        Headings.  Section and subsection headings are inserted for
convenience of reference only and do not form part of this Agreement.

 

11.8        Assignment.  Neither Party may assign this Agreement without the
prior written consent of the other Party, which consent shall not be
unreasonably withheld, conditioned or delayed, except that such consent shall
not be required in connection with any assignment to an Affiliate of the
assigning Party, or to a Third Party in connection with a sale or transfer of
the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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business to which this Agreement relates, or to any successor Person resulting
from any merger or consolidation of such Party with or into such Person,
provided that the assignee shall have agreed in writing to assume all of the
assignor’s obligations hereunder, and provided, further, that the other Party
shall be notified promptly after such assignment has been effected.  Any such
assignment shall not relieve the assigning Party of any liabilities or
obligations owed to the other Party hereunder, including, without limitation, in
the case of Lilly, the payment of any amounts described in Section  5 hereof.

 

11.9        Force Majeure.  Neither Party shall be liable for failure of or
delay in performing obligations set forth in this Agreement, and neither shall
be deemed in breach of its obligations, if such failure or delay is due to
natural disasters or any causes beyond the reasonable control of such Party,
provided that financial inability in and of itself shall not be considered to be
a force majeure event.  In event of such force majeure, the Party affected
thereby shall use reasonable efforts to cure or overcome the same and resume
performance of its obligations hereunder.

 

11.10      Interpretation.  The Parties hereto acknowledge and agree that:
(a) each Party and its counsel reviewed and negotiated the terms and provisions
of this Agreement and have contributed to its revision; (b) the rule of
construction to the effect that any ambiguities are resolved against the
drafting Party shall not be employed in the interpretation of this Agreement;
and (c) the terms and provisions of this Agreement shall be construed fairly as
to each Party hereto and not in a favor of or against any Party, regardless of
which Party was generally responsible for the preparation of this Agreement.  In
addition, unless the context otherwise requires, wherever used in this
Agreement: (i) the singular shall include the plural, the plural the singular;
(ii) the use of any gender shall be applicable to all genders; (iii) the word
“or” is used in the inclusive sense (and/or); (iv) the words “include” or
“including” shall be construed as incorporating, also, “but not limited to” or
“without limitation;” (v) the words “hereof,” “herein,” “hereby” and derivative
or similar words refer to this Agreement; and (vi) all references to “will” are
interchangeable with the word “shall” and shall be understood to be imperative
or mandatory in nature.

 

11.11      Severability.  If any provision of this Agreement shall be held by a
court of competent jurisdiction, or declared under any law, rule or regulation
of any government having jurisdiction over the Parties hereto, to be illegal,
invalid or unenforceable, then such provision

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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will, to the extent permitted by the court or government, not be voided, but
will instead be construed to give effect to the intentions of the Parties to the
maximum extent permissible under applicable law, and the remainder of this
Agreement will remain in full force and effect in accordance with its terms.

 

11.12      Dispute Resolution.  The Parties recognize that a bona fide dispute
as to certain matters may from time to time arise during the Term relating to
the conduct of the Research Program, either Party’s rights or obligations
hereunder or otherwise relating to the validity, enforceability or performance
of this Agreement, including disputes relating to alleged breach or termination
of this Agreement but excluding any determination of the validity, scope,
infringement, enforceability, inventorship or ownership of the Parties’
respective Patent Rights (hereinafter, a “Dispute”).  In the event of the
occurrence of any such Dispute, the Parties shall, by written notice to the
other Party, have such Dispute referred to their respective senior officers
designated below, for attempted resolution by good faith negotiations commencing
promptly after such notice is received.  Said designated senior officials of the
Parties are as follows:

 

For Lilly:                                Designated officer with full
settlement authority; and

 

For ImmunoGen:                   Chief Executive Officer.

 

In the event the designated senior officials are not able to resolve such
Dispute, the Parties may seek to mediate their Dispute, on terms and with a
mediator mutually agreeable to the Parties, or may seek to arbitrate their
Dispute, on mutually agreed upon terms and conditions, but neither Party shall
be required or obligated to mediate or arbitrate and the dispute resolution
provisions of this Section 11.12 are in addition to any other relief or remedies
available to either Party at law or equity.  This Dispute resolution process
shall be deemed a settlement negotiation for the purpose of all federal and
state rules protecting disclosures made during settlement negotiations from
later discovery and/or use in evidence.

 

11.13      Patent Disputes.  Anything contained in this Agreement to the
contrary notwithstanding, with respect to any dispute, controversy or claim
between the Parties that involves the validity, scope, infringement,
enforceability, inventorship or ownership of the Parties’ respective Patent
Rights (a) that are issued in the United States shall be subject to actions
before the United States Patent and Trademark Office and/or submitted
exclusively to the federal court located in [***]; and (b) that are issued in
any other country (or region) shall be brought

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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before an appropriate regulatory or administrative body or court in that country
(or region), and the Parties hereby consent to the jurisdiction and venue of
such courts and bodies.

 

11.14      Interim Equitable Relief.  Anything contained in this Agreement to
the contrary notwithstanding, if a Party reasonably requires relief on a more
expedited basis than would be possible pursuant to the procedures set forth in
Section 11.12 hereof, such Party may seek a temporary injunction or other
interim equitable relief in a court of competent jurisdiction pending the
resolution of the Dispute in accordance with Section 11.12 hereof.  Any such
remedies will be in addition to all other remedies available by law or at equity
to the injured Party.

 

11.15      Prohibition on Solicitation.  During the Research Program, neither
Party nor its Affiliates shall, directly or indirectly, actively recruit, or
solicit any employee of the other Party or its Affiliates with whom such Party
or its Affiliates have come into contact or interacted for the purposes of
performing this Agreement, without the prior consent of the other Party.  For
purposes of this Section 11.15, “solicit” shall be deemed not to include
(a) circumstances where an employee of one Party or any of its Affiliates
initially contacts the other Party or any of such Party’s Affiliates seeking
employment or (b) general solicitations of employment not specifically targeted
at such employees.

 

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

 

11.17      Execution.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each Party and delivered to the other Party, it being understood that both
Parties need not sign the same counterpart.  If any signature is delivered by
facsimile transmission or by e-mail delivery of a “pdf” format data file, such
signature shall create a valid and binding obligation of the Party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “pdf” signature page were an original thereof.

 

11.18      Compliance with Law.

 

(a)            Mutual Covenant.  Each Party shall insure that it and its
activities under this Agreement at all times comply in all material respects
with all Applicable Laws.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

47

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(b)           Notice of Inspections.  Each Party (“Notifying Party”) shall
provide the other Party as promptly as practicable (“Notified Party”) with
notice of any governmental or regulatory review, audit or inspection of its
facility, processes, or products that might reasonably be believed to relate to
the Research Program.  If permitted by the authority conducting such review, the
Notifying Party shall provide the Notified Party with the results of any such
review, audit or inspection to the extent they are relevant to the Research
Program.  If permitted by the authority conducting the review, the Notified
Party shall be given the opportunity to provide assistance to the Notifying
Party in responding to any such review, audit or inspection relating to the
Research Program.

 

(c)            Books and Records.

 

(i)            Records Retention.  During the Term and for an additional
five (5) years thereafter, ImmunoGen shall maintain records of the ImmunoGen
Activities performed hereunder that verify ImmunoGen’s material compliance with
Applicable Laws in its performance of the ImmunoGen Activities hereunder.

 

(ii)           Inspection.  Subject to the other terms of this Section 11.18(c),
at the request of Lilly, upon at least [***] prior written notice, but no more
often than once per Calendar Year and not more frequently than once with respect
to records covering any specific period of time, ImmunoGen shall select a law
firm reasonably acceptable to Lilly (which acceptance shall not be unreasonably
withheld, conditioned or delayed) to inspect the relevant records required to be
maintained by ImmunoGen under Section 11.18(c)(i) hereof for the sole purpose of
verifying ImmunoGen’s compliance with Applicable Laws in its performance of the
ImmunoGen Activities hereunder.  [***] in connection with the conduct the law
firm’s activities as contemplated hereby[***].  Before beginning the inspection
the law firm shall enter into a confidentiality agreement with ImmunoGen
substantially similar to the provisions of Section 6 hereof limiting the
disclosure of such information by such law firm to authorized representatives of
ImmunoGen.  ImmunoGen reserves the right to dispute any determination by the law
firm that it was not in material compliance with Applicable Laws in its
performance of the ImmunoGen Activities hereunder.  [***].

 

(d)           Prohibition of Corrupt Payments.  In connection with the research
other efforts/services ImmunoGen will provide under this Agreement and in
connection with any other

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

48

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business involving Lilly, ImmunoGen confirms that ImmunoGen has not given or
promised to give, and will not make, offer, agree to make or authorize any
payment or transfer anything of value, directly or indirectly, (i) to any
Government or Public Official, as defined herein; (ii) any political party,
party official or candidate for public or political office; (iii) any person
while knowing or having reason to know that all or a portion of the value will
be offered, given, or promised, directly or indirectly, to anyone described in
clauses (i) or (ii) above; or (iv) any healthcare professional, owner, director,
employee, representative or agent of any actual or potential customer of Lilly
to obtain or retain business or secure an improper advantage.    For purposes of
this Agreement, “Government or Public Official” is any officer or employee or
anyone acting in an official capacity on behalf of: a government or any
department or agency thereof; a public international organization (such as the
United Nations, the International Monetary Fund, the International Red Cross,
and the World Health Organization), or any department, agency or institution
thereof; or a government-owned or controlled company, institution, or other
entity, including a government-owned hospital or university.

 

11.19      HSR Filing.  Notwithstanding anything to the contrary this Agreement
(including Section 3.2 of this Agreement) in the event that either Party makes a
filing under the Hart-Scott-Rodino Antitrust Improvement Act (“HSR Act”) with
respect to an Exclusive License as contemplated herein, then the Exclusive
License Effective Date as defined in Section 3.2 of this Agreement shall be
modified to mean the later of (a) the Exclusive License Effective Date as
defined in Section 3.2 of this Agreement or (b) the second (2nd) Business Day
immediately following the earlier of: (i) the date upon which the waiting period
under the HSR Act expires or terminates early or (ii) the date upon which a
closing letter is received from the Federal Trade Commission or the Justice
Department, as the case may be, with regard to the transaction contemplated by
this Agreement indicating that all requests have been satisfactorily met and no
objection on the part of the Federal Trade Commission or the Justice Department
remains.  Furthermore, in the event a filing under the HSR Act is made as
described above, the Parties will, in good faith, cooperate with each other and
take reasonable actions to attempt to resolve all enforcement agency concerns
about the transaction under investigation.

 

[Remainder of page intentionally left blank.]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

49

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives.

 

 

IMMUNOGEN, INC.

 

ELI LILLY AND COMPANY

 

 

 

 

 

 

 

 

 

 

By:

/s/ Peter Williams

 

By:

/s/ Jan M. Lundberg

Name:

Peter Williams

 

Name:

Jan M. Lundberg

Title:

Vice President

 

Title:

Exec. VP Sci & Tech and Pres. LRL

Date:

December 19, 2011

 

Date:

12/19/11

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

50

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SCHEDULE A

 

FORM OF LICENSE AGREEMENT

 

LICENSE AGREEMENT

 

This License Agreement (this “Agreement”) is made effective as of
                            (1) (subject to the provisions below in this
paragraph) by and between ImmunoGen, Inc., a Massachusetts corporation
(“ImmunoGen”), with its principal place of business at 830 Winter Street,
Waltham, Massachusetts 02451, and Eli Lilly and Company, an Indiana corporation
(“Lilly”), with its principal place of business at Lilly Corporate
Center, Indianapolis, Indiana 46285.  ImmunoGen and Lilly are sometimes each
hereinafter referred to individually as a “Party” and collectively as the
“Parties.”  For purposes of this Agreement  “Effective Date” means the date
referenced above unless either Party makes a filing under the Hart-Scott-Rodino
Antitrust Improvement Act, in which case it will be the later of (a) the date
referenced above or (b) the second (2nd) Business Day immediately following the
earlier of: (i) the date upon which the waiting period under the
Hart-Scott-Rodino Antitrust Improvement Act expires or terminates early or
(ii) the date upon which a closing letter is received from the Federal Trade
Commission or the Justice Department, as the case may be, with regard to the
transaction contemplated by this Agreement indicating that all requests have
been satisfactorily met and no objection on the part of the Federal Trade
Commission or the Justice Department remains.

 

WHEREAS, the Parties have entered into a Multi-Target Agreement, pursuant to
which ImmunoGen granted Lilly the right to obtain licenses to certain Technology
and associated Patent Rights Controlled by ImmunoGen on an exclusive basis with
respect to Licensed Product ; and

 

WHEREAS, pursuant to the Multi-Target Agreement, Lilly has exercised a Reserve
Option (as defined in the Multi-Target Agreement), pursuant to which the Parties
have agreed to enter into this Agreement setting forth the terms and conditions
of an exclusive license from ImmunoGen to Lilly with respect to the Licensed
Product;

 

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(1)  Insert date of receipt by ImmunoGen of a Reserve Option exercise notice
with respect to the Licensed Target.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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

 

1.             DEFINITIONS

 

Whenever used in this Agreement with an initial capital letter, the terms
defined in this Section 1 shall have the meanings specified.

 

1.1          “Ab-MAY Product” means any compound that incorporates, is comprised
of, or is otherwise derived from, a conjugate of an Antibody with a
MAY Compound.

 

1.2          “Affiliate” means, with respect to any Person, any other Person
that, directly or indirectly through one or more Affiliates, controls or is
controlled by or is under common control with such Person.  For purposes of this
Section 1.2, “control” means (a) ownership of fifty percent (50%) or more of the
shares of stock entitled to vote for the election of directors, in the case of a
corporation, or fifty percent (50%) or more of the equity interests in the case
of any other type of legal entity, (b) status as a general partner in the case
of any partnership, or (c) any other arrangement whereby a Person controls or
has the right to control the board of directors or equivalent governing body or
management of another Person.  A Person shall be deemed an Affiliate only so
long as it satisfies the foregoing definition.

 

1.3          “Antibody” means an antibody, whether polyclonal or monoclonal,
multiple or single chain, recombinant or naturally occurring, whole or fragment,
and any variants, derivatives or constructs thereof, including but not limited
to, antigen binding portions including Fab, Fab’, F(ab’)2, Fv, dAb and CDR
fragments, single chain antibodies (scFv), chimeric antibodies, diabodies and
polypeptides (including humanized versions thereof) that contain at least a
portion of an immunoglobulin that is sufficient to confer specific antigen
binding to the polypeptide.

 

1.4          “Applicable Laws” means all federal, state, local, national and
supra-national laws, statutes, rules and regulations, including any rules,
regulations, guidelines or requirements of Regulatory Authorities, securities
regulatory authorities, national securities exchanges or securities listing
organizations that may be in effect from time to time during the Term and
applicable to a particular activity hereunder.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

2

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1.5          “BLA” means a biologics license application (within the meaning of
21 C.F.R. 601.2) filed with the FDA seeking Regulatory Approval to market and
sell any Licensed Product as a biologic in the United States for a particular
Indication within the Field.

 

1.6          “Business Day” means any day other than a Saturday, Sunday or other
day on which banking institutions in Boston, Massachusetts or
Indianapolis, Indiana are required to be closed or are actually closed with
legal authorization.

 

1.7          “Calendar Quarter” means, with respect to the first such Calendar
Quarter, the period beginning on the Effective Date and ending on the last day
of the calendar quarter within which the Effective Date falls, and thereafter
each successive period of three (3) consecutive months ending on March 31,
June 30, September 30 and December 31.

 

1.8          “Calendar Year” means, with respect to the first such Calendar
Year, the period beginning on the Effective Date and ending on December 31 of
the calendar year within which the Effective Date falls, and thereafter each
successive period of twelve (12) consecutive months commencing on January 1 and
ending on December 31.

 

1.9          [***].

 

1.10        “Commercialization” or “Commercialize” means, with respect to any
Licensed Product, any and all activities during Term with respect to such
Licensed Product relating to commercialization in the Field in the Territory,
including pre-launch and launch activities, pricing and reimbursement
activities, marketing, manufacturing for commercial sale, promoting, detailing,
distributing, offering for sale and selling such Licensed Product, importing or
exporting such Licensed Product for sale, conducting post-marketing human
clinical trials, reporting of adverse events in patients and interacting with
Regulatory Authorities regarding any of the foregoing.  When used as a verb,
“Commercialize” means to engage in Commercialization and “Commercialized” has a
corresponding meaning.

 

1.11        [***].

 

1.12        “Confidential Information” means (a) with respect to Lilly, the
identity of the Licensed Target; and (b) with respect to each Party, all
information and Technology which is disclosed by or on behalf of such Party (in
such capacity, the “Disclosing Party”) or its Affiliates to the other Party (in
such capacity, the “Receiving Party”) or its Affiliates hereunder or to any of
the Receiving Party’s or its Affiliates’ employees, consultants or
subcontractors

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

3

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(collectively, “Representatives”), except to the extent that the Receiving Party
can demonstrate by contemporaneous written record or other suitable physical
evidence that such information, (i) as of the date of disclosure is known to the
Receiving Party or its Affiliates other than by virtue of a prior confidential
disclosure by or on behalf of the Disclosing Party to the Receiving Party or its
Affiliates; (ii) as of the date of disclosure is in, or subsequently enters, the
public domain through no fault or omission of the Receiving Party or its
Affiliates or their respective Representatives; (iii) is obtained by the
Receiving Party or its Affiliates from a Third Party without breach of any duty
and without restriction on disclosure to or from the Disclosing Party; or
(iv) is independently developed by or for the Receiving Party or its Affiliates
without benefit of, reference to or reliance upon any Confidential Information
of the Disclosing Party.

 

1.13        “Confidentiality Agreement” means that certain Mutual Confidential
Disclosure Agreement effective April 26, 2011 by and between ImmunoGen and
Lilly.

 

1.14        “Control” or “Controlled” means, with respect to any Patent Rights,
Technology or Proprietary Materials, the possession by a Party of the ability to
grant a license or sublicense of such Patent Rights or Technology and the rights
thereto or to supply such Proprietary Materials as contemplated in this
Agreement without violating the terms of any arrangement or agreement between
such Party or its Affiliates and any Third Party.

 

1.15        “Development” and “Develop” means, with respect to any Licensed
Product, all activities during Term with respect to such Licensed Product
relating to research and development in connection with seeking, obtaining or
maintaining any Regulatory Approval for such Licensed Product in the Field in
the Territory, including without limitation, all pre-clinical research and
development activities, all pre-marketing human clinical studies (including,
without limitation, clinical trial design and operations), test method
development and stability testing, regulatory toxicology studies, formulation,
all activities relating to developing the ability to manufacture any Licensed
Product or any component thereof (including, without limitation, process
development, manufacturing scale-up, development-stage manufacturing and quality
assurance/quality control development), statistical analysis and report writing,
preparing and filing Drug Approval Applications, reporting of adverse events in
clinical study subjects, and all regulatory affairs related to the foregoing. 
When used as a verb, “Developing” means to engage in Development and “Developed”
has a corresponding meaning.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

4

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1.16        “Drug Approval Application” means, with respect to a Licensed
Product in a particular country or region, an application for Regulatory
Approval to market and sell such Licensed Product in such country or region
including, without limitation: (a) an NDA or sNDA; (b) a BLA or supplement BLA;
(c) a counterpart of an NDA, sNDA, BLA or supplement BLA, including any MAA, in
any country or region in the Territory outside the U.S.; and (d) all supplements
and amendments to any of the foregoing.

 

1.17        “Exclusive License” has the meaning ascribed to it in the
Multi-Target Agreement.

 

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

 

1.19        “FDCA” means the United States Food, Drug and Cosmetic Act
(21 U.S.C. § 301 et seq.), as amended.

 

1.20        “Field” means all uses including, without limitation,
pharmaceutical, therapeutic, prophylactic and diagnostic uses for humans and
animals.

 

1.21        “First Commercial Sale” means the first sale of a Licensed Product,
by or under the authority of Lilly, an Affiliate of Lilly, or their Sublicensees
to a Third Party in a country following Regulatory Approval of such Licensed
Product in that country or, if no such Regulatory Approval or similar approval
is required, the date on which such Licensed Product is first commercially
launched in such country; provided that “First Commercial Sale” shall not
include: [***].

 

1.22        [***].

 

1.23        “GLP” means all good laboratory practices under Title 21 of the
United States Code of Federal Regulations, as amended from time to time.

 

1.24        “GMP” means all good manufacturing practices under Title 21 of the
United States Code of Federal Regulations, as amended from time to time.

 

1.25        “ImmunoGen Proprietary Antibody Rights” means all Technology (and
associated Patent Rights) owned or Controlled by ImmunoGen during the Term
constituting or claiming (a) the [***] (an “ImmunoGen Proprietary Antibody”), or
(b) the [***], and not to the extent such Technology (and associated Patent
Rights) [***].  For purposes of clarity, “ImmunoGen Proprietary Antibody Rights”
does not include any Program Technology (as

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

5

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defined herein and in the Multi-Target Agreement) that relates to Antibodies
specifically binding to the Licensed Target or any Patent Rights claiming such
Program Technology.

 

1.26        “Improvements” means [***] any enhancement, improvement or
modification to the Licensed Intellectual Property that is [***].

 

1.27        “IND” means (a) an Investigational New Drug Application (as defined
in the FDCA and regulations promulgated thereunder) or any successor application
or procedure required to initiate clinical testing of a Licensed Product in
humans in the United States; (b) a counterpart to an Investigational New Drug
Application that is required in any other country or region in the Territory
before beginning clinical testing of a Licensed Product in humans in such
country or region; and (c) all supplements and amendments to any of the
foregoing.

 

1.28        “Indication” means any indication, disease or condition which can be
treated, prevented, cured or the progression of which can be delayed.  For
purposes of clarity and not limitation, [***].

 

1.29        “Initiation” means, with respect to any clinical study, the first
date that a human subject is dosed in such clinical study.

 

1.30        “Joint Improvements” means Improvements the inventors of which are
jointly (a) one or more employees of, or others obligated to assign inventions
to, ImmunoGen or any Affiliate of ImmunoGen, and (b) one or more employees of,
or others obligated to assign inventions to, Lilly or any Affiliate of Lilly.

 

1.31        “Joint Program Technology” means any Program Technology (other than
Joint Improvements) the inventors of which are jointly (a) employees of, or
other persons obligated to assign inventions to, ImmunoGen or any Affiliate of
ImmunoGen, and (b) employees of, or other persons obligated to assign inventions
to, Lilly or any Affiliate of Lilly.  Anything contained in this Agreement to
the contrary notwithstanding, Joint Program Technology shall also include any
Program Technology (excluding Improvements) [***] where employees of [***], or
others obligated to assign inventions to, [***] or any of its Affiliates are
[***], as inventorship is determined in accordance with United States patent
law.

 

1.32        “Licensed Intellectual Property” means the Licensed Patent Rights
and the Licensed Technology.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

6

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1.33        “Licensed Patent Rights” means any Patent Rights that are owned or
Controlled by ImmunoGen as of the Effective Date or become owned or Controlled
by ImmunoGen during the Term (including, without limitation, ImmunoGen’s
interest in any Patent Rights claiming Improvements, Joint Program Technology
and Joint Improvements) that include one or more claims that cover Licensed
Technology (including, without limitation, any Licensed Technology covering
MAY Compounds, Ab-MAY Product or Licensed Product); provided, however, that
Licensed Patent Rights shall expressly exclude [***].  For purposes of
convenience, [***],[***] shall [***] a [***] that [***] which shall be [***] by
[***] and provided to [***] and in any event [***] upon [***].  Such [***] shall
be [***].

 

1.34        “Licensed Product” means any product that incorporates, is comprised
of, or is otherwise derived from, a conjugate of a Target-Binding Antibody owned
or Controlled by Lilly with a MAY Compound.

 

1.35        “Licensed Target” means the Target set forth in Schedule A attached
hereto and incorporated herein by reference.

 

1.36        “Licensed Technology” means any and all Technology that is owned or
Controlled by ImmunoGen as of the Effective Date or becomes owned or Controlled
by ImmunoGen during the Term (including, without limitation, ImmunoGen’s
interest in any Program Technology, Joint Program Technology, Improvements and
Joint Improvements) that is necessary or useful for Lilly to exercise the
license granted to it pursuant to Section 2.1(a) hereof; provided, however, that
Licensed Technology shall expressly exclude any ImmunoGen Proprietary Antibody
Rights.

 

1.37        “Lilly Accounting Standards” means US GAAP (United States Generally
Accepted Accounting Principles), as generally and consistently applied
throughout Lilly’s organization.

 

1.38        “Lilly Antibody” means any Antibody owned or Controlled by Lilly or
its Affiliates.

 

1.39        “Lilly Improvements” means Improvements (other than Joint
Improvements) the inventors of which (alone or with others) are employees of or
others obligated to assign inventions to, Lilly or any of its Affiliates or
Permitted Third Party Service Providers in connection with the [***].

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

7

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1.40        “Lilly Standard Exchange Rate Methodology” means, with respect to
amounts invoiced in U.S. Dollars, all such amounts shall be expressed in
U.S. Dollars.  The U.S. Dollar equivalent of amounts invoiced in a currency
other than U.S. Dollars shall be calculated using Lilly’s then-current standard
exchange rate methodology, which is in accordance with the Lilly Accounting
Standards applied in its external reporting for the conversion of foreign
currency sales into U.S. Dollars or, in the case of sublicensees, such similar
methodology, consistently applied.

 

1.41        [***].

 

1.42        “MAA” means an application filed with the relevant Regulatory
Authorities in Europe seeking Regulatory Approval to market and sell any
Licensed Product in Europe or any country or territory therein for a particular
Indication within the Field.

 

1.43        “Major Country” means [***].

 

1.44        “Major EU Countries” means [***].

 

1.45        “MAY Compound” means any and all maytansinoid compounds (including,
without limitation, maytansinol, ansamitocins, DM1 and DM4), whether produced by
a botanical source, natural fermentation, chemical synthesis or otherwise, and
shall include, without limitation, all variants, fragments or derivatives of any
of the foregoing, in each case owned or Controlled by ImmunoGen.

 

1.46        “Multi-Target Agreement” means that certain Multi-Target Agreement
effective as of [insert date] by and between ImmunoGen and Lilly, as the same
may be amended from time to time.

 

1.47        “NDA” means a new drug application (as defined in Title 21 of the
United States Code of Federal Regulations, as amended from time to time) filed
with the FDA seeking Regulatory Approval to market and sell any Licensed Product
in the United States for a particular Indication within the Field.

 

1.48        “Net Sales” means the [***] sales prices charged for all Licensed
Products sold by Licensee or its Affiliates or Sublicensees to Third Parties
throughout the Territory [***], as determined in accordance with the Lilly
Accounting Standards, less the following amounts incurred or paid by Lilly or
its Affiliates or Sublicensees with respect to sales of Licensed Products:

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

8

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(a)            [***] and [***] allowed or taken;

 

(b)           [***] and any other [***] allowed or given which effectively
reduce the net selling price;

 

(c)            [***] or [***] given or made for [***] Licensed Products;

 

(d)           the [***] of [***] used for [***] the Licensed Product, or the
[***] if such [***] are not [***] from the Licensed Products which are [***] the
Licensed Product and included in the [***] sales price;

 

(e)            any [***] imposed on the [***] or [***] of the Licensed Product,
including, without limitation, [***] and [***] thereof, other than [***], or the
portion of the [***];

 

(f)            [***];

 

(g)           [***] for [***] expenses; and

 

(h)           other reductions or specifically identifiable amounts deducted for
reasons similar to those listed above in accordance with the Lilly Accounting
Standards.

 

Net Sales shall not include sales or transfers among Lilly and its Affiliates
and Sublicensees where the Licensed Product is intended for subsequent sale to
the end user.  All the foregoing elements of Net Sales calculations shall be
determined from the books and records of Lilly and its Sublicensees, maintained
in accordance with the Lilly Accounting Standards or[***], consistently applied.

 

In the event a Licensed Product is sold as a [***] that consists of a Licensed
Product together with another [***], or [***], for the [***] (a “Combination”),
the Net Sales from the Combination, for the purposes of determining royalty
payments hereunder, shall be determined by multiplying the Net Sales of the
Combination (as defined in the standard Net Sales definition above) by the
fraction A/(A+B), where A is the [***] of the Licensed Product when sold
separately [***] in the country in which the Combination is sold in [***], and B
is the [***] of the other product(s) included in the Combination when sold
separately [***] in the country in which the Combination is sold in [***].

 

In the event that the [***] of the Licensed Product can be determined but the
[***] of the other product(s) included in the Combination cannot be determined,
Net Sales for purposes of determining royalty payments shall be calculated by
multiplying the Net Sales of the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

9

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Combination (as defined in the standard Net Sales definition above) by the
fraction A/C, where A is the [***] of the Licensed Product when sold separately
[***] in the country in which the Combination is sold [***], and C is the [***]
of the Combination.

 

In the event that the [***] of the other product(s) included in the Combination
can be determined but the [***] of the Licensed Product [***] as in the
Combination cannot be determined, Net Sales for purposes of determining royalty
payments shall be calculated by the following formula: one (1) minus (B/C) where
B is the [***] of the other product(s) included in the Combination when sold
separately [***] in the country in which the Combination is sold [***] and C is
the [***] of the Combination.

 

In the event that such [***] cannot be determined for the Licensed Product, on
the one hand, and all other product(s) included in the Combination, on the
other, Net Sales for the purposes of determining royalty payments shall [***].

 

The [***] for both the Licensed Product, on the one hand, and all other
product(s) included in the Combination, on the other, shall be calculated [***]
and such price shall be used [***].  When determining the [***] of a Licensed
Product, other product(s), or Combination, the [***] shall be calculated by
dividing sales dollars (translated into U.S. Dollars using the Lilly Standard
Exchange Rate Methodology) by the units sold during the [***] (or the number of
[***] in which sales occurred in a [***]) of the preceding [***] for the
respective Licensed Product, other product(s), or Combination.  In the initial
[***], a [***] will be used for the Licensed Product, other product(s), or
Combination.  Any over- or under-payment due to a difference between the
forecasted and actual [***] will be paid or credited in the first royalty
payment of the following [***].

 

1.49        “Non-Major Country” means any country in the Territory that is not a
Major Country.

 

1.50        “Patent Rights” means the rights and interests in and to any and
Patents.  For purposes of this Agreement the term “Patents” shall mean: (a) all
national, regional and international patent applications (including provisional
applications and applications for certificates of invention); (b) any patents
issuing from such patent applications (including certificates of invention);
(c) all patent applications claiming priority from of any of the foregoing
((a) or (b)), including divisionals, continuations, continuations-in-part,
converted provisionals

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

10

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and continued prosecution applications; (d) any and all patents that have issued
or in the future issue from the foregoing patent applications; (e) any and all
extensions or restorations by existing or future extension or restoration
mechanisms, including any reissues, revalidations, re-examinations, extensions
(including any supplementary protection certificates and the like) of the
foregoing patents or patent applications ((a), (b), (c) and (d)); and (f) any
similar rights, including so-called pipeline protection or any importation,
revalidation, confirmation or introduction patent or registration patent or
patent of additions to any of such foregoing patent applications and patents.

 

1.51        “Person” means an individual, sole proprietorship, partnership,
limited partnership, limited liability partnership, corporation, limited
liability company, business trust, joint stock company, trust, incorporated
association, joint venture or similar entity or organization, including a
government or political subdivision, department or agency of a government.

 

1.52        “Phase I Clinical Study” means, as to a particular Licensed Product,
an initial clinical study in humans with the purpose of preliminarily assessing
the Licensed Product’s safety, tolerability, toxicity, pharmacokinetics or other
pharmacological properties.

 

1.53        “Phase II Clinical Study” means, as to a particular Licensed Product
(a) for an oncology product, a clinical study in humans that is intended to
obtain information on the Licensed Product’s activity for an Indication at a
prescribed (or otherwise limited) dose and administration schedule, as well as
additional information on the Licensed Product’s safety and toxicity, or (b) for
a non-oncology product, a dose ranging clinical study in humans to evaluate
further the efficacy and safety of the Licensed Product in the targeted patient
population and to define the optimal dosing regimen.  Without limiting the
generality of the foregoing, a clinical study shall be deemed to be a “Phase II
Clinical Study” hereunder if such study has been designated by the sponsor as a
Phase II clinical trial on www.clinicaltrials.gov (or any successor website
maintained by the U.S. National Institutes of Health (or any successor agency of
the U.S. Government)).

 

1.54        “Phase III Clinical Study” means, as to a particular Licensed
Product, a clinical study in humans that is prospectively designed to assess the
safety and effectiveness of such Licensed Product in a manner sufficient to file
a Drug Approval Application for the Indication

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

11

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under investigation in the study.  Without limiting the generality of the
foregoing, a clinical study shall be deemed to be a “Phase III Clinical Study”
hereunder if such study has been designated by the sponsor as a Phase III
clinical trial on www.clinicaltrials.gov (or any successor website maintained by
the U.S. National Institutes of Health (or any successor agency of the U.S.
Government)).

 

1.55        “PHSA” means the Public Health Service Act
(42 U.S.C. § 201 et seq.), as amended.

 

1.56        “Program Technology” means any Technology conceived or first
actually reduced to practice in connection with the Development or
Commercialization of any Licensed Product.

 

1.57        “Proprietary Materials” means any tangible chemical, biological or
physical research materials that are furnished by or on behalf of one Party to
the other Party in connection with this Agreement, regardless of whether such
materials are specifically designated as proprietary by the transferring Party. 
Any [***] of a Party’s Proprietary Materials shall be considered to be that
Party’s Proprietary Materials.  Without limiting the generality of the
foregoing, any [***] furnished by ImmunoGen to Lilly or any of its Affiliates,
Sublicensees or Permitted Third Party Service Providers, including, without
limitation any [***], shall be deemed to be ImmunoGen’s Proprietary Materials. 
Without prejudice to any of ImmunoGen’s intellectual property rights in and to
MAY Compounds, any tangible MAY Compounds manufactured by or for Lilly or any of
its Affiliates, Sublicensees or Permitted Third Party Service Providers using
[***] as [***] in connection with the Development and Commercialization of
Licensed Products are not included within the meaning of the defined term
“Proprietary Materials” for purposes of this Agreement.

 

1.58        “Regulatory Approval” means any and all approvals (including pricing
and reimbursement approvals), product and establishment licenses, registrations
and authorizations of any kind of any Regulatory Authority necessary for the
Development, manufacture, use or Commercialization of a Licensed Product (or any
component thereof) for use in the Field in any country or other jurisdiction in
the Territory.  The term “Regulatory Approval” shall include, without
limitation, any approval by a Regulatory Authority of any NDA, BLA, MAA or other
Drug Approval Application.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

12

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1.59        “Regulatory Authority” means the FDA or any counterpart to the FDA
outside the United States, or other national, supra-national, regional, state or
local regulatory agency, department, bureau, commission, council or other
governmental entity with authority over the Development, manufacture, use or
Commercialization of a Licensed Product.

 

1.60        “Regulatory Filings” means, collectively: (a) all INDs, NDAs, BLAs,
establishment license applications, drug master files, applications for
designation as an “Orphan Product” under the Orphan Drug Act, for “Fast Track”
status under Section 506 of the FDCA (21 U.S.C. § 356) or for a Special Protocol
Assessment under Section 505(b)(5)(B) and (C) of the FDCA
(21 U.S.C. § 355(b)(5)(B) and (C)) or all other similar filings (including MAAs
and counterparts to any of the foregoing in any country or region in the
Territory) as may be required by any Regulatory Authority for the Development,
manufacture, use or Commercialization of a Licensed Product in the Territory;
(b) all supplements and amendments to any of the foregoing; and (c) all data and
other information contained in, and correspondence relating to, any of the
foregoing.

 

1.61        “Restricted Period” means the period commencing on the Effective
Date and ending on [***].

 

1.62        “Sublicensee” means any Third Party to which Lilly or one of its
Affiliates grants a sublicense of the rights granted to Lilly and its Affiliates
pursuant to this Agreement.

 

1.63        “Target” means a protein described by [***] that is bound by an
Antibody used to create an Ab-MAY Product.

 

1.64        “Target-Binding Antibody” means an Antibody that specifically binds
to the Licensed Target.  For purposes of clarity, “Target-Binding Antibody” does
[***].

 

1.65        “Technology” means, collectively, all inventions, discoveries,
improvements, trade secrets and proprietary methods or materials, whether or not
patentable, including, without limitation, macromolecular sequences, data,
formulations, processes, techniques, know-how and results (including negative
results).

 

1.66        “Technical Transfer Materials” has the meaning ascribed to such term
in the Multi-Target Agreement.

 

1.67        “Territory” means all countries and jurisdictions of the world.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

13

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1.68        “Third Party” means any Person other than ImmunoGen, Lilly and their
respective Affiliates.

 

1.69        “Valid Claim” means any claim (including, without limitation, a
process, use or composition of matter claim) (a) in an issued and unexpired
patent within the Licensed Patent Rights that (i) has not been finally
cancelled, withdrawn, abandoned or rejected by any administrative agency or
other body of competent jurisdiction, and (ii) has not been revoked, held
invalid, or declared unpatentable or unenforceable in a decision of a court or
other body of competent jurisdiction that is unappealable or unappealed within
the time allowed for appeal, and (iii) has not been rendered unenforceable
through reissue, disclaimer or otherwise, and (iv) has not been disclaimed or
otherwise dedicated to the public by ImmunoGen, and (v) is not lost through an
interference proceeding and any appeals therefrom; or (b) in [***] within the
Licensed Patent Rights that [***].  Anything contained in this Agreement to the
contrary notwithstanding, a claim [***] within the Licensed Patent Rights shall
remain a Valid Claim for all purposes under this Agreement, notwithstanding
[***].

 

Additional Definitions.  In addition, each of the following definitions shall
have the respective meanings set forth in the section of the Agreement indicated
below:

 

Definition

 

Section

Agreement

 

Recitals

Alliance Managers

 

3.1(a)

Applicant

 

7.5(b)

Applicant Response

 

7.5(c)(ii)

[***]

 

[***]

Biosimilar Application

 

7.5(a)

BPCIA

 

7.5(a)

[***]

 

[***]

[***]

 

[***]

[***]

 

[***]

[***]

 

[***]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

14

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Combination

 

1.48

Covered Results

 

6.3

Covers

 

5.3(c)(iii)

[***]

 

[***]

Disclosing Party

 

1.12

Disclosure Letter

 

9.1(c)

Dispute

 

11.12

Effective Date

 

Recitals

Immediate Patent Infringement Action

 

7.5(c)(v)

ImmunoGen

 

Recitals

ImmunoGen Indemnitees

 

10.1(a)

ImmunoGen Proprietary Antibody

 

1.25

Indemnified Party

 

10.2

Indemnifying Party

 

10.2

Infringed Patent List

 

7.5(c)(v)

Infringement

 

7.4(a)

Infringement Notice

 

7.4(a)

JDC

 

3.2(a)

Lilly

 

Recitals

Lilly Indemnitees

 

10.1(b)

Lilly Response

 

7.5(c)(iii)

Losses

 

10.1(a)

Material Breach

 

8.2(b)

Monies

 

7.4(g)

Negotiation Period

 

7.5(c)(v)

Patent Committee

 

7.2(c)(i)

[***]

 

[***]

Party/Parties

 

Recitals

Permitted Third Party Service Providers

 

2.1(a)

[***]

 

[***]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

15

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Pre-Market Notice

 

7.5(d)(ii)

Proposed Biosimilar Product

 

7.5(a)

Proposed Patent List

 

7.5(c)(i)

Receiving Party

 

1.12

[***]

 

[***]

[***]

 

[***]

Representatives

 

1.12

[***]

 

[***]

Royalty Term

 

5.5

Safety Data Exchange Agreement

 

3.4

[***]

 

[***]

Term

 

8.1(a)

Third Party Claims

 

10.1(a)

Third Party Payments

 

5.3(b)

Upfront Fee

 

5.1

Wind-Down Period

 

8.3(a)

 

2.             GRANT OF RIGHTS

 

2.1          License Grants.

 

(a)            License to Lilly.  Subject to the terms and conditions of this
Agreement, ImmunoGen hereby grants to Lilly and its Affiliates an exclusive,
non-transferable (except as expressly permitted in this Agreement),
royalty-bearing license, including the right to grant sublicenses as described
in Section 2.1(b) hereof, under the Licensed Intellectual Property to Develop,
make, have made, use, sell, offer for sale, import, export and otherwise
Commercialize Licensed Products in the Field in the Territory.  Lilly and its
Affiliates shall have the right, without ImmunoGen’s permission or consent but
subject to the conditions set forth herein, to engage one or more Third Parties
(“Permitted Third Party Service Providers”) as subcontractors to perform
designated functions in connection with its activities under this Agreement
(including transferring Licensed Technology as may be necessary for such
Affiliate

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

16

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or Permitted Third Party Service Provider to perform such designated functions),
provided that (a) Lilly shall [***] and (b) Lilly shall [***].

 

(b)           Right to Sublicense.  Lilly and its Affiliates shall have the
right to grant sublicenses under the license rights granted to it under
Section 2.1(a) hereof with respect to any Licensed Product to any Sublicensee,
provided, that: (i) each such sublicense shall be consistent with the terms and
conditions of this Agreement; (ii) Lilly shall [***]; and (iii) Lilly shall
[***].

 

2.2          Retained Rights and Covenants.

 

(a)            Retained Rights.  Subject to the other terms of this Agreement
(including, without limitation, Section 2.2(b) hereof), ImmunoGen retains the
right to use the Licensed Technology and practice the Licensed Patent Rights
(i) to perform its responsibilities under this Agreement; and (ii)  to develop,
make, have made, use, sell, offer for sale, import, export or otherwise
commercialize [***] that [***] the Licensed Target while [***] (and to grant
licenses to Third Parties to do the same).  For the avoidance of doubt, this
Section 2.2 shall not confer on ImmunoGen any right to Develop, make, have made,
use, sell, offer for sale, import, export or otherwise Commercialize [***] or
[***] that [***] of [***] that [***] to the [***] while the [***] under
Section [***] hereof [***].

 

(b)           Covenants.  Notwithstanding anything to the contrary contained in
Section 2.2(a) or 2.4 hereof, ImmunoGen hereby agrees that, during the period
that the exclusive license granted under Section 2.1(a) hereof remains in
effect, it shall not (i) except as necessary to perform its responsibilities
under this Agreement, [***], or (ii) [***]; provided that the foregoing shall
not restrict ImmunoGen’s right to [***] provided further that under no
circumstance shall such [***] include any grant/conveyance of any rights to
[***].

 

2.3          Use of Licensed Technology.  In connection with any Licensed
Technology transferred to Lilly pursuant to this Agreement and except as
otherwise provided in a separate written agreement between ImmunoGen and Lilly,
Lilly hereby agrees that (a) it shall not use such Licensed Technology for any
purpose other than exercising its rights and performing its obligations
hereunder; (b) it shall use such Licensed Technology only in compliance with all
Applicable Laws; (c) it shall not transfer any such Licensed Technology to any
Third Party (other than Sublicensees) without the prior written consent of
ImmunoGen, except as expressly permitted hereby; and

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

17

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(d) except for the rights expressly set forth herein, Lilly is not granted any
other rights, title or interest in or to such Licensed Technology as a result of
such transfer by ImmunoGen.

 

2.4          Improvement License to ImmunoGen.  Lilly hereby grants to ImmunoGen
a non-exclusive, fully paid, irrevocable, royalty-free, worldwide license[***],
under Lilly’s interest in any Lilly Improvements and Joint Improvements,
including, without limitation, any Patent Rights claiming such Improvements:
(a) [***] ([***] during the period that the exclusive license granted under
Section 2.1(a) hereof remains in effect, any [***] and any [***] that [***]);
and (b) to otherwise exploit such Improvement for any and all uses [***]. 
ImmunoGen’s ability to grant sublicenses to Lilly’s interest in any Lilly
Improvements and Joint Improvements shall be effective in any given case only if
[***].  For purposes of clarity, the license granted under this Section 2.4
excludes any right [***] any [***] or other [***] that [***] to the [***] for
any use [***] while the exclusive license granted under Section 2.1(a) hereof
remains in effect.

 

3.             DEVELOPMENT AND COMMERCIALIZATION OF LICENSED PRODUCTS

 

3.1          Alliance Management.

 

(a)            Appointment of Alliance Managers.  Promptly after the Effective
Date, the Parties shall each appoint an individual who shall oversee contact
between the Parties for all matters related to this Agreement and the Parties’
respective activities hereunder (the “Alliance Managers”).  The Alliance
Managers may, but are not required to be, members of the JDC, but in all events
the Alliance Managers shall have the right to attend all meetings of the JDC and
may bring to the attention of the JDC, any matters or issues either of them
reasonably believes should be discussed by such committee.  Each Party may
replace its Alliance Manager at any time by notice to the other Party.

 

(b)           Responsibilities.  The Alliance Managers shall have the
responsibility of creating and maintaining a constructive work environment
between the Parties for all matters related to this Agreement and the Parties’
respective activities hereunder.  Without limiting the generality of the
foregoing, the Alliance Managers shall:

 

(i)            identify and bring to the attention of their respective
managements any disputes arising between the Parties related to this Agreement
or the Parties’ respective activities hereunder in a timely manner, including,
without limitation, any asserted occurrence of

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

18

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a Material Breach by a Party, and function as the point of first referral in the
resolution of each dispute;

 

(ii)           provide a single, continuous point of communication between the
Parties with respect to this Agreement and the Parties’ respective activities
hereunder;

 

(iii)          plan and coordinate efforts and external communications by or
between the Parties with respect to this Agreement and the Parties’ respective
activities hereunder;

 

(iv)          take such steps as may be required to ensure that meetings of the
JDC occur as set forth in this Agreement, that procedures are followed with
respect to such meetings (including, without limitation, the giving of proper
notice and the preparation and approval of minutes) and that relevant action
items resulting from such meetings are appropriately carried out or otherwise
addressed; and

 

(v)           undertake such other responsibilities as the Parties may mutually
agree in writing.

 

3.2          Joint Development Committee.

 

(a)            Mandate and Establishment of Committee.  Promptly after the
Effective Date, the Parties shall form a joint development committee (the “JDC”)
to serve as a forum for coordination and communication between the Parties with
respect to the Development of Licensed Products, the exchange of safety data (as
further described in Section 3.4 hereof) relating to Licensed Products and other
products containing MAY Compounds, and to assist Lilly in its exercise of its
rights to make or have made Licensed Products under this Agreement.  Within
[***] after the Effective Date, the Parties shall each nominate an equal number
of representatives (which shall be no less than two (2) or more than
five (5) each) for membership on the JDC.  Each Party may change its
representative(s) as it deems appropriate by written notice to the other Party. 
From time to time the JDC may establish one or more sub-teams comprised of an
equal number of representatives from both Parties to undertake specific
responsibilities of the JDC, which sub-teams shall be governed in the same
manner and subject to the relevant requirements set forth herein for the JDC. 
Lilly may dissolve the JDC upon achievement of the first approval of a Drug
Approval Application by the applicable Regulatory Authority for any Licensed
Product.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

19

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(b)           Chair of Committee; Meetings.  The chair of the JDC shall be one
of the Lilly representatives (or at Lilly’s sole discretion, co-chaired by two
Lilly representatives) on the JDC, as designated by Lilly.  The JDC shall meet
on a semi-annual basis or other schedule agreed upon by the Parties, unless the
Parties mutually agree in advance of any scheduled meeting that there is no need
for such meeting.  In such instance, the next JDC meeting shall also be
scheduled as agreed upon by the Parties.  The location of meetings of the JDC
shall alternate between ImmunoGen’s offices and Lilly’s offices, unless
otherwise agreed by the Parties.  As agreed upon by the Parties, JDC meetings
may be face-to-face or may be conducted through teleconferences or
videoconferences, provided that at least two (2) JDC meetings during any
Calendar Year shall be conducted face-to-face, unless otherwise agreed to by the
Parties.  In addition to its JDC representatives, each Party shall be entitled
to have other employees attend such meetings to present and participate, though
not in a decision-making capacity.  Each Party shall bear its own costs and
expenses, including travel and lodging expense, that may be incurred by JDC
representatives or other attendees at JDC meetings, as a result of such meetings
hereunder.  Minutes of each JDC meeting will be transcribed and issued to
members of the JDC by the Alliance Manager (or his or her designee) of one of
the Parties on an alternating basis within [***] after each meeting, and such
minutes shall be reviewed and modified as mutually required to obtain approval
of such minutes promptly thereafter.

 

3.3          Development and Commercialization.

 

(a)            Responsibility and Authority.  On and after the Effective Date,
Lilly shall have sole authority and responsibility (notwithstanding the
formation of the JDC or its decisions and/or disputes among the membership of
the JDC) for the Development, manufacture, use and Commercialization of Licensed
Products in the Field in the Territory, including, without limitation: (i) the
conduct of all research and pre-clinical Development activities (including,
without limitation, the assessment of alternative designs for the Licensed
Products, the selection of the final Target-Binding Antibodies, MAY Compounds
and linkers to be used in the Licensed Products and the selection of the
Licensed Products to be Developed, all pre-clinical and IND-enabling studies
(including, without limitation, toxicology testing), any pharmaceutical
development work on formulations and process development relating to any such
Licensed Products); (ii) all activities related to human clinical trials;
(iii) all activities relating to the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

20

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manufacture and supply of Target-Binding Antibodies, MAY Compounds, linkers and
Licensed Products, to the extent such activities relate to the Development,
manufacture, use and Commercialization of Licensed Products (including, without
limitation, all required process development and scale up work with respect
thereto); and (iv) all Commercialization activities relating to any Licensed
Product (including, without limitation, marketing, promotion, sales,
distribution, import and export activities and any post-marketing trials and
safety surveillance).  Without limiting the generality of the foregoing, Lilly
shall have full control and authority and sole responsibility for (A) making all
Regulatory Filings for Licensed Products and filing all Drug Approval
Applications and otherwise seeking all Regulatory Approvals regarding such
matters and (B) reporting of all adverse events to Regulatory Authorities if and
to the extent required by Applicable Laws.  All activities relating to
Development, manufacture, use and Commercialization of Licensed Products under
this Agreement shall be undertaken at Lilly’s sole cost and expense, except as
otherwise expressly provided in this Agreement.

 

(b)                                  Due Diligence.  Lilly will use, and will
cause any Sublicensee to use, [***] to Develop Licensed Products and to
undertake investigations and actions required to obtain appropriate Regulatory
Approvals necessary to market Licensed Products, in the Field and in the
Territory and, if approved, to Commercialize Licensed Products[***].  Anything
contained in this Agreement to the contrary notwithstanding, the obligations
under this Section 3.3(b) shall [***] by the applicable [***] for any [***] in
[***].

 

(c)                                   Compliance.  Each Party shall perform its
obligations under this Agreement in compliance in all material respects with all
Applicable Laws, provided that, with respect to each activity so performed that
will or would reasonably be expected to be submitted to a Regulatory Authority
in support of an Regulatory Filing, Lilly shall comply in all material respects
with the regulations and guidance of the FDA that constitute GLP or GMP (or, if
and as appropriate under the circumstances, other comparable regulation and
guidance of any applicable Regulatory Authority in any country or region in the
Territory).  Furthermore, each Party, to the extent applicable, will comply with
Lilly’s animal use policy as set forth in Schedule C attached hereto in carrying
out any animal research, if any, in connection with the Development of Licensed
Products hereunder.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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3.4                               Safety; Adverse Event Reporting.  At least
[***] prior to [***], the Parties, through the JDC, will determine the
desirability of entering into a separate, related safety data exchange agreement
(the “Safety Data Exchange Agreement”) providing details related to managing
adverse events that occur during clinical trials, safety issues arising from
pre-clinical research and other safety and reporting practices and procedures
(including all activities outlined in Section 3.3 hereof) in compliance with all
Applicable Laws.  If the Parties determine that a separate, written Safety Data
Exchange Agreement is desirable, they agree to negotiate the terms of such
agreement in good faith.  Any breach of the Safety Data Exchange Agreement by
either Party shall not, in and of itself, be deemed to be a breach of this
Agreement.

 

3.5                               Updates and Reports; Notification of
Milestones; Product Recalls.

 

(a)                                   Updates and Reports.  [***], Lilly shall
provide ImmunoGen with brief written reports, which ImmunoGen may request no
more frequently than once per Calendar Year until satisfaction of Lilly’s
obligations under Section 3.3(b) hereof, that shall summarize Lilly’s efforts to
Develop the Licensed Products in the Field in the Territory, identify the Drug
Approval Applications that Lilly or its Affiliates or Sublicensees have filed,
sought or obtained in the prior [***] period, and any they reasonably expect to
make, seek or attempt to obtain in the following [***] period.  The Parties
agree that the minutes of the JDC meetings may serve as reports hereunder, to
the extent such minutes adequately address the above subject matter.

 

(b)                                  Notification of Milestone Achievement. 
Lilly shall provide ImmunoGen with prompt written notice of the occurrence of
any event giving rise to an obligation to make a milestone payment to ImmunoGen
under Section 5.2 hereof, which shall in any event be no later than [***] after
the occurrence of such event, and shall provide ImmunoGen with prompt written
notice of the occurrence of the First Commercial Sale of any Licensed Product in
any country.  In the event that, notwithstanding the fact that Lilly has not
given any such notice, ImmunoGen believes any such milestone event has occurred,
it shall so notify Lilly in writing, and shall provide to Lilly the data and
information demonstrating that the conditions for payment have been achieved. 
Within [***] of its receipt of such notice, the Parties shall confer to review
the data and information and shall agree in good faith whether or not the
conditions for payment have been achieved.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

22

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(c)                                   Correspondence for Licensed Products.  To
the extent reasonably practicable and subject to any Third Party confidentiality
obligations, Lilly shall provide ImmunoGen with copies of any material documents
or correspondence pertaining to ImmunoGen’s manufacture or supply of
MAY Compound or Licensed Product in drug substance form and prepared for
submission to any Regulatory Authority and any material documents or other
correspondence received from any Regulatory Authority pertaining to ImmunoGen’s
manufacture or supply of MAY Compound or Licensed Product in drug substance
form.  ImmunoGen shall complete its review within [***] after receipt of the
proposed submission.  When requested in writing, ImmunoGen shall use
commercially reasonable efforts to provide assistance to Lilly in obtaining
Regulatory Approvals for Licensed Products.  Notwithstanding the foregoing,
Lilly shall have the sole responsibility for, and ImmunoGen agrees that Lilly
shall be the sole owner of, any Regulatory Approval for the Licensed Products.

 

(d)                                  Product Recalls.  In the event any
Regulatory Authority issues or requests a recall or takes similar action with
respect to a Licensed Product that Lilly reasonably believes is or may be
attributable to or otherwise relates to the Licensed Intellectual Property, or
in the event either Party reasonably believes that an event, incident or
circumstance has occurred that may result in the need for such a recall, such
Party shall promptly notify the other Party thereof by telephone, facsimile or
email.  Following such notification, Lilly shall decide and have control of
whether to conduct a recall or market withdrawal (except in the event of a
recall or market withdrawal mandated by a Regulatory Authority, in which case it
shall be required) or take such other corrective action in any country and the
manner in which any such recall, market withdrawal or corrective action shall be
conducted, provided that Lilly shall keep ImmunoGen informed regarding any such
recall, market withdrawal or corrective action as ImmunoGen from time to time
may reasonably request, but only to the extent Lilly is legally permitted to do
so.  Lilly shall bear all expenses of any such recall, market withdrawal or
corrective action, including, without limitation, expenses of notification,
destruction and return of the affected Licensed Product and any refund to
customers of the amounts paid for such Licensed Product.

 

(e)                                   Confidential Information.  All reports,
updates, product complaints and other information provided by the Disclosing
Party to the Receiving Party under this Agreement

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

23

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(including under this Section 3.5), shall be considered Confidential Information
of the Disclosing Party, subject to the terms of Section 6 hereof.

 

4.                                      SUPPLY AND MANUFACTURING OBLIGATIONS;
SERVICES

 

4.1                               Supply of Materials.  Lilly shall be
responsible, at its sole cost, for manufacturing or having manufactured, all
materials (including without limitation, all Target-Binding Antibodies, linkers,
MAY Compounds and Licensed Products) to enable it to Develop and Commercialize
Licensed Products (including as required for any pre-clinical, clinical and
commercial use of Licensed Products, including process development and
scale-up).  In the event Lilly elects to manufacture or have manufactured by a
Permitted Third Party Service Provider Licensed Products, or linkers or
MAY Compounds therefor, then ImmunoGen shall (a) provide the Technical Transfer
Materials to Lilly for the purpose of enabling Lilly to exercise its rights
under this Agreement with respect to the Licensed Product, to the extent such
Technical Transfer Materials have not already been provided by ImmunoGen to
Lilly pursuant to the Multi-Target Agreement[***].  Notwithstanding the
foregoing, Lilly shall promptly notify ImmunoGen whenever Lilly has, directly or
indirectly, engaged any Permitted Third Party Service Provider to provide any
MAY Compound for use, or potential use, in the manufacture of any Licensed
Product or any of its components.  Such notice shall set forth  such Permitted
Third Party Service Provider’s name, address and contact information (e.g.,
telephone number(s) and/or email address(es)).

 

4.2                               Supply of MAY Compound by ImmunoGen for
Non-Clinical Development.  Notwithstanding anything to the contrary in Section
4.1 hereof, during the Term, Lilly may request ImmunoGen to supply Lilly with
such quantities of MAY Compound as may be reasonably requested by Lilly in order
to conduct all pre-clinical Development activities relating to Licensed
Products.  Lilly shall order all amounts of MAY Compound, and ImmunoGen shall
use commercially reasonable efforts to deliver all such ordered amounts, in
accordance with forecasting parameters, advance ordering timeframes and delivery
timeframes and specifications to be agreed upon by the Parties.  ImmunoGen shall
charge, and Lilly agrees to pay, [***] for such MAY Compound.  In connection
with such supply pursuant to this Section 4.2, Lilly hereby agrees that (a) it
shall not use the MAY Compound in any human subject; and (b) it shall use the
MAY Compound in compliance with all Applicable Laws.  Lilly shall be entitled to
transfer MAY

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

24

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Compound to any Affiliate, Sublicensee or Permitted Third Party Service Provider
under terms obligating such Affiliate, Sublicensee or Permitted Third Party
Service Provider not to transfer or use such MAY Compound except in compliance
with the preceding sentence.

 

4.3                               Services; Supply of Drug Substance.  If,
during the Term, Lilly requests that ImmunoGen conduct [***], then the Parties
shall negotiate in good faith the terms of separate written agreements (which
may include, without limitation, master agreements, supply agreements, service
agreements and quality agreements) for each of the activities to be performed
thereunder.

 

5.                                      FINANCIAL TERMS

 

5.1                               Upfront Fee.  In consideration of the grant of
the license described in Section 2.1 hereof, Lilly hereby agrees to pay
ImmunoGen an upfront fee (the “Upfront Fee”) in the amount of [Zero United
States Dollars ($0.00)/Two Million United States
Dollars ($2,000,000)](2) payable in accordance with Section 5.6(d) hereof within
[***] after the Effective Date, which Upfront Fee shall be non-refundable and
non-creditable.

 

5.2                               Milestone Payments for Licensed Products.  In
further consideration of the grant of the license by ImmunoGen hereunder, and
subject to the other terms of this Agreement, Lilly will make the following
payments to ImmunoGen in accordance with Section 5.6(d) hereof within [***]
after Lilly’s receipt of an invoice from ImmunoGen reflecting the first
occurrence of each of the milestones set forth below:

 

Clinical Milestones

 

Milestone Payment

 

(a)     Initiation of first Phase I Clinical Study for a Licensed Product

 

$

5.0

 

[***]

 

[***]

(3)

 

--------------------------------------------------------------------------------

(2)            Insert Zero U.S. Dollars ($0.00) in the first Exclusive License
taken under the Multi-Target Agreement.  Insert Two Million U.S. Dollars
($2,000,000) in each of the [***] remaining Exclusive Licenses taken under the
Multi-Target Agreement.

 

(3)            Insert $[***] in the first Exclusive License taken under the
Multi-Target Agreement.  Insert $[***] in each of the [***] remaining Exclusive
Licenses taken under the Multi-Target Agreement.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

25

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Regulatory Milestones

 

 

 

[***]

 

[***]

 

 

Sales Milestones

 

 

 

[***]

 

[***]

 

 

If the milestone described in [***] above occurs before milestone described in
[***] above, the milestone payment payable upon the occurrence of the milestone
described in [***] above shall be increased from $[***] to [$[***]](4), and no
milestone payment will be payable with respect to any [***].  It is hereby
acknowledged and agreed that any milestone payment shall be [***], with respect
to the [***], regardless of how many times [***].  All milestone payments shall
be nonrefundable and noncreditable.  Lilly shall notify ImmunoGen of the
achievement of each milestone hereunder as provided in Section 3.5(b) hereof.

 

5.3                               Payment of Royalties; Royalty Rates;
Accounting for Royalties and Records.

 

(a)                                   Royalty Payments.  For each Licensed
Product, commencing on the first date of First Commercial Sale of such Licensed
Product in any country or jurisdiction in the Territory, Lilly shall pay to
ImmunoGen the following royalties based on Net Sales of such Licensed Product
sold by Lilly, its Affiliates and its Sublicensees, on an incremental basis in
each Calendar Year during the Royalty Term, at the following rates:

 

For Calendar Year Worldwide

 

Royalty Rate

 

Net Sales of Licensed Products

 

(% of Calendar Year Net Sales)

 

[***]

 

[***]

 

 

(b)                                  Third Party Royalty Offset.  Subject to
Section 5.3(f) hereof, if, with respect to a Calendar Quarter, Lilly [***] to
one or more Third Parties in consideration for a [***] owned by such Third Party
in any country (collectively, “Third Party Payments”), as evidenced, to the
extent requested by ImmunoGen, by [***] and approved by [***] (which approval
shall not be unreasonably withheld), then Lilly shall have the right to reduce
the

 

--------------------------------------------------------------------------------

(4)            Insert $[***] in the first Exclusive License taken under the
Multi-Target Agreement.  Insert $[***] in each of the [***] remaining Exclusive
Licenses taken under the Multi-Target Agreement.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

26

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royalties otherwise due to ImmunoGen pursuant to Section 5.3(a) [***] hereof
(but not the royalties otherwise due to ImmunoGen pursuant to
Section 5.3(c) hereof) with respect to Net Sales in such country of such
Licensed Products in such Calendar Quarter by an amount equal to [***] the
amount of such Third Party Payments.  For purposes of clarity, the term “Third
Party Payments” includes only [***] payable on the same basis as required by
this Section 5.3, and does not include [***] in excess of [***], any amounts
paid for [***] or any amount paid for [***] included in the Licensed
Intellectual Property in any country.

 

(c)                                   Valid Claim Coverage.

 

(i)                                     No Patent Coverage.  Subject to
Section 5.3(f) hereof, the royalty rates set forth in Sections 5.3(a), [***]
hereof shall apply, on a country-by-country basis and Licensed
Product-by-Licensed Product basis, to Net Sales of Licensed Products only where
(A) such Licensed Product (or its manufacture, use, sale, offer for sale or
importation) in such country is Covered by a Valid Claim within the Licensed
Patent Rights or (B) the manufacture of such Licensed Product (or of any
component of such Licensed Product), at the time of its manufacture, was Covered
by a Valid Claim within the Licensed Patent Rights in the country of
manufacture.  Subject to the other terms of this Agreement (except for
Section 5.3(b) hereof, which shall not apply), on a country-by-country and
Licensed Product-by-Licensed Product basis where and as of and when the royalty
rates under Sections 5.3(a), [***] hereof do not apply as a result of this
Section 5.3(c)(i), the royalties payable with respect to Net Sales of such
Licensed Product sold by Lilly, its Affiliates and its Sublicensees in such
country shall be [***], as applicable, without giving effect to any [***]
provided in Section [***] hereof, using the methodology outlined in Schedule B
attached hereto.  The Parties hereby acknowledge and agree that such royalties
shall be in consideration of the commercial advantage, know-how and background
information gained from the unpatented Licensed Technology.

 

(ii)                                  Applicability of Royalty Rates.  For
purposes of clarity, (A) if a Licensed Product (or its manufacture, use, sale,
offer for sale or importation) is Covered by a Valid Claim in a country within
the Territory such that royalties are paid by Lilly pursuant to Section 5.3(a),
[***] hereof and, prior to the expiration of the Royalty Term for such Licensed
Product in such country, the Licensed Product (and its manufacture, use, sale,
offer for sale or importation) is no longer Covered by a Valid Claim in such
country, Lilly shall pay ImmunoGen

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

27

--------------------------------------------------------------------------------

 

a royalty at the rate set forth in Section 5.3(c)(i) hereof for the portion of
the Royalty Term during which no such Valid Claim Covers such Licensed Product
(or its manufacture, use, sale, offer for sale or importation) in such country;
and (B) if a Licensed Product (or its manufacture, use, sale, offer for sale or
importation) is not Covered by a Valid Claim in a country within the Territory
such that royalties are paid by Lilly pursuant to Section 5.3(c)(i) hereof and,
prior to the expiration of the Royalty Term for such Licensed Product in such
country, the Licensed Product (or its manufacture, use, sale, offer for sale or
importation) becomes Covered by a Valid Claim within the Licensed Patent Rights
in such country, Lilly shall pay ImmunoGen a royalty at the rates set forth in
Section 5.3(a), [***] hereof, as applicable, for that portion of the Royalty
Term during which such Valid Claim Covers such Licensed Product (or its
manufacture, use, sale, offer for sale or importation) in such country.

 

(iii)                               Definition of “Cover”.  For the sole
purposes of this Section 5.3 (and for no other purpose under this Agreement), a
Valid Claim within the Licensed Patent Rights “Covers” the Licensed Product (or
its manufacture, use, sale, offer for sale or importation) in a country if,
[***] the manufacture, use, sale, offer for sale or importation of the Licensed
Product by Lilly or any of its Affiliates or Sublicensees in such country would
[***]; provided, however, that in determining whether a Valid Claim within such
Licensed Patent Rights “Covers” (as defined above) the Licensed Product (or its
manufacture, use, sale, offer for sale or importation), (A) any Valid Claim
within the Licensed Patent Rights that is [***] shall be deemed to be [***] and
(B) any Valid Claim contained in [***] within the Licensed Patent Rights that
has not been [***] shall be deemed to [***].

 

(d)                                  [***].

 

(i)                                     [***].

 

(ii)                                  [***].

 

(e)                                   [***].

 

(f)                                     [***] Royalty Rate.  Anything contained
in this Agreement to the contrary notwithstanding, none of the [***] provided in
Sections 5.3(b), 5.3(c) [***] hereof, shall, individually or in the aggregate,
[***] the royalties payable with respect to Net Sales of any Licensed Product
sold by Lilly, its Affiliates and its Sublicensees in any country during the
Royalty Term [***].

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

28

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5.4                               One Royalty.  For purposes of clarity, only
one royalty, calculated at the applicable royalty rate under this Section 5
(after taking into account all the applicable provisions of this Section 5),
shall be payable to ImmunoGen hereunder for each sale of a Licensed Product.

 

5.5                               Royalty Term.

 

(a)                                   Determination of Royalty Term.  [***],
Lilly shall pay royalties with respect to Net Sales of each Licensed Product on
a country-by-country and Licensed Product-by-Licensed Product basis until the
later of (i) [***] from the date of First Commercial Sale of such Licensed
Product in such country or (ii) the expiration of the last to expire Valid Claim
within the Licensed Patent Rights that would be infringed by the manufacture,
use, sale, offer for sale or importation of the Licensed Product by Lilly or any
of its Affiliates or Sublicensees in such country in the absence of the license
granted under Section 2.1(a) hereof (the “Royalty Term”).  For the sole purposes
of determining infringement of Valid Claims under this Section 5.5(a) (and for
no other purpose), (A) any Valid Claim within the Licensed Patent Rights that is
[***] shall be deemed to be [***], and (B) subject to Section 5.5(b) hereof,
claims contained in [***] that have [***] in a country will not be considered
Valid Claims and, therefore, will be disregarded for purposes of determining the
expiration of the Royalty Term for a Licensed Product in such country under this
Section 5.5(a).

 

(b)                                  [***].

 

5.6                               Payment Terms.

 

(a)                                   Payment of Milestones; Payment of
Royalties; Royalty Reports.  Lilly shall make any milestone payments owed to
ImmunoGen hereunder in U.S. Dollars, using the wire transfer provisions of
Section 5.6(d) hereof within [***] of the occurrence of the applicable event
giving rise to the obligation and receipt by Lilly of an invoice from ImmunoGen
to make such payment.  Lilly shall make any royalty payments owed to ImmunoGen
in U.S. Dollars, quarterly within [***] following the end of each Calendar
Quarter for which such royalties are deemed to occur (as provided in the next
sentence), using the wire transfer provisions of Section 5.6(d) hereof. 
Determination of when a sale of any Licensed Product occurs for purposes of this
Agreement shall be made when the revenue from such sale is recognized by Lilly
in accordance with Lilly Accounting Standards or, in the case of Sublicensees,
in accordance with such Sublicensees’ respective revenue recognition accounting
standards,

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

29

--------------------------------------------------------------------------------

 

consistently applied.  Each royalty payment shall be accompanied by a report in
which sales of Licensed Products occurred in the Calendar Quarter covered by
such statement, specifying each of: (A) the Net Sales in U.S. Dollars of each
Licensed Product on a country-by-country basis in the Territory during the
Calendar Quarter by Lilly and its Affiliates and Sublicensees; (B) the
applicable  royalty rate(s) under this Agreement [***]; and (C) the royalties
payable, in U.S. Dollars, which shall have accrued hereunder with respect to
such Net Sales.

 

(b)                                  Accounting.  All payments hereunder shall
be made in U.S. dollars.  Royalties shall be calculated based on Net Sales in
U.S. Dollars, with the conversion of Net Sales in each country to U.S. Dollars
according the Lilly Standard Exchange Rate Methodology.

 

(c)                                   No Set-Off; Tax Withholding.  All payments
made by Lilly to ImmunoGen hereunder shall be made without set-off or
counterclaim and free and clear of any taxes, duties, levies, fees or charges,
except for withholding taxes, if any.  Lilly shall make any applicable
withholding payments due on behalf of ImmunoGen and shall provide ImmunoGen with
reasonable proof of payment of such withholding taxes, together with an
accounting of the calculations of such taxes, within [***] after such payment is
remitted to the proper authority.  Any withheld tax remitted by Lilly to the
proper authority shall be treated as having been paid by Lilly to ImmunoGen for
all purposes of this Agreement.  The Parties will cooperate reasonably in
completing and filing documents required under the provisions of any Applicable
Laws in connection with the making of any required withholding tax payment, or
in connection with any claim to a refund of or credit for any such payment.

 

(d)                                  Wire Transfers.  All payments hereunder
shall be made to ImmunoGen in U.S. Dollars by bank wire transfer in immediately
available funds to the account designated by ImmunoGen by written notice to
Lilly from time to time.

 

5.7                               Overdue Payments.  Subject to the other terms
of this Agreement, any payments hereunder not paid within the applicable time
period set forth herein shall bear interest from the due date until paid in
full, at a rate per annum equal to the lesser of (a) [***], or (b) the maximum
interest rate permitted by Applicable Law in regard to such payments, calculated
in each case from the date such payment was due through to the date on which
payment is actually made; provided, however, that with respect to any disputed
payments, no interest shall be due until such dispute is resolved and the
interest that shall be payable thereon shall be based on the finally-resolved
amount

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

30

--------------------------------------------------------------------------------

 

 

of such payment, calculated from the original date on which the disputed payment
was due through the date on which payment is actually made.  Such payments when
made shall be accompanied by all interest so accrued.  Such interest and the
payment and acceptance thereof shall not negate or waive the right of ImmunoGen
to any other remedy, legal or equitable, to which it may be entitled because of
the delinquency of the payment.

 

5.8                               Records Retention; Audit.

 

(a)                                   Records Retention.  Commencing as of the
date of First Commercial Sale of the first Licensed Product, Lilly and its
Affiliates and Sublicensees shall keep for at least [***] from [***] complete
and accurate records of sales by Lilly or its Affiliates or Sublicensees, as the
case may be, of each Licensed Product, in sufficient detail to allow the
accuracy of the royalty payments to be confirmed.

 

(b)                                  Audit.  Subject to the other terms of this
Section 5.8(b), at the request of ImmunoGen, upon at least [***] prior written
notice, but no more often than [***] and not [***] with respect to records
covering any specific period of time, and at its sole expense (except as
otherwise provided herein), Lilly shall permit an internationally recognized
independent accounting firm reasonably selected by ImmunoGen and reasonably
acceptable to Lilly to inspect (during regular business hours) at such place or
places where such records are customarily kept the relevant records required to
be maintained by Lilly and its Affiliates and Sublicensees under Section 5.8(a)
hereof.  At ImmunoGen’s request, the independent accounting firm shall be
entitled to audit the [***] of Lilly’s records solely for purposes of verifying
the items set forth in Section 5.8(a) hereof.  Before beginning the audit the
independent accounting firm shall enter into a confidentiality agreement with
both Parties substantially similar to the provisions of Section 6 hereof
limiting the disclosure and use of such information by such independent
accounting firm to authorized representatives of the Parties and the purposes
germane to this Section 5.8.  The independent accounting firm shall provide its
audit report and basis for any determination to Lilly at the time such report is
provided to ImmunoGen.  Lilly and ImmunoGen shall each have the right to request
a further determination by such independent accounting firm as to matters which
such Party disputes within [***] following receipt of such report.  The Party
initiating a dispute will provide the other Party and the independent accounting
firm with a reasonably detailed statement of the grounds upon which it disputes
any findings in

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

31

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the audit report and the independent accounting firm shall undertake to complete
such further determination within [***] after the dispute notice is provided,
which determination shall be limited to the disputed matters and provided to
both Parties.  The Parties shall use reasonable efforts, through the
participation of finance representatives of both Parties, to resolve any dispute
arising in relation to the audit by good faith discussion.  The results of any
such audit, reflecting the independent accounting firm’s determination of any
disputed matters, shall be binding on both Parties.  ImmunoGen agrees to treat
the results of any such independent accounting firm’s review of Lilly’s records
under this Section 5.8(b) as Confidential Information of Lilly subject to the
terms of Section 6 hereof.  If any such audit reveals a deficiency in the
calculation of royalties resulting in any underpayment by Lilly, Lilly shall
[***] pay ImmunoGen the amount remaining to be paid [***], and if such
underpayment is by [***], Lilly shall pay the reasonable costs and expenses of
the audit.  If any audit reveals an excess in the calculation of royalties
resulting in an overpayment by Lilly, Lilly may invoice ImmunoGen for such
overpayment, and ImmunoGen will pay such invoice within [***] from the date of
its receipt of such invoice.

 

6.                                      TREATMENT OF CONFIDENTIAL INFORMATION

 

6.1                               Confidentiality.

 

(a)                                   Confidentiality Obligations.  ImmunoGen
and Lilly each recognizes that the other Party’s Confidential Information
constitutes highly valuable assets of such other Party.  ImmunoGen and Lilly
each agrees that, subject to Section 6.1(b) hereof, during the Term and for an
additional [***] thereafter, (i) it will not disclose, and will cause its
Affiliates (and, in the case of Lilly, its Sublicensees and Permitted Third
Party Service Providers) not to disclose, any Confidential Information of the
other Party and (ii) it will not use, and will cause its Affiliates (and, in the
case of Lilly, its Sublicensees and Permitted Third Party Service Providers) not
to use, any Confidential Information of the other Party, in either case, except
as expressly permitted hereunder.  Without limiting the generality of the
foregoing, each Party shall take such action, and shall cause its Affiliates
(and, in the case of Lilly, its Sublicensees and Permitted Third Party Service
Providers) to take such action, to preserve the confidentiality of the other
Party’s Confidential Information as such Party would customarily take to
preserve the confidentiality of

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

32

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its own Confidential Information and shall, in any event, use at least
reasonable care to preserve the confidentiality of the other Party’s
Confidential Information.

 

(b)                                  Limited Disclosure.  Each Receiving Party
shall be entitled to disclose the Disclosing Party’s Confidential Information to
its Affiliates and their respective Representatives (and, in the case of Lilly,
its Sublicensees and Permitted Third Party Service Providers) to enable the
Receiving Party to exercise its rights or to carry out its responsibilities
under this Agreement, provided that such disclosure shall only be made to
persons who are bound by written obligations as described in Section 6.1(c)
hereof.  In addition, the Receiving Party may disclose the Disclosing Party’s
Confidential Information to the extent such disclosure (i) is reasonably
necessary to file, prosecute or maintain patents or patent applications, or to
file, prosecute or defend litigation related to patents or patent applications,
subject to the restriction set forth in Section 7.2(e) hereof and otherwise in
accordance with this Agreement, or (ii) as required by Applicable Laws, provided
that in the case of any disclosure under this clause (ii), the Receiving Party
shall (A) if practicable, provide the Disclosing Party with reasonable advance
notice of and an opportunity to comment on any such required disclosure, (B) if
requested by the Disclosing Party, cooperate in all reasonable respects with the
Disclosing Party’s efforts to obtain confidential treatment or a protective
order with respect to any such disclosure, at the Disclosing Party’s expense,
and (C) use good faith efforts to incorporate the comments of the Disclosing
Party in any such disclosure or request for confidential treatment or a
protective order.

 

(c)                                   Employees, Consultants and
Subcontractors.  ImmunoGen and Lilly each hereby represents and warrants that
all of its and its Affiliates’ Representatives who participate in the activities
contemplated by this Agreement or who otherwise have access to Confidential
Information of the other Party are or will, prior to their participation or
access, be bound by written obligations to maintain such Confidential
Information in confidence and not to use such information except as expressly
permitted hereunder.  Each Party agrees to use, and to cause its Affiliates
(and, in the case of Lilly, its Sublicensees and Permitted Third Party Service
Providers) to use, reasonable efforts to enforce such obligations.

 

6.2                               Publicity.  The Parties acknowledge that the
terms of this Agreement constitute the Confidential Information of each Party
and may not be disclosed except as permitted by Section 6.1(b) hereof.  In
addition, either Party may disclose the terms of this Agreement (a) on a

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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need-to-know basis to such Party’s legal, accounting and financial advisors and
(b) as reasonably necessary in connection with any actual or potential (i) debt
or equity financing of such Party or (ii) purchase by any Third Party of all the
outstanding capital stock or all or substantially all of the assets of such
Party or any merger or consolidation involving such Party (except that ImmunoGen
shall not disclose the identity of the Licensed Target under this clause (b));
provided that in each case the Person to whom the terms of this Agreement is to
be disclosed agrees in writing to maintain the confidentiality of such
information with terms at least as protective as those contained in
Section 6.1(a) hereof.  Anything contained in this Agreement to the contrary
notwithstanding, upon the execution of this Agreement ImmunoGen may issue a
press release with respect to this Agreement (the final form of which shall have
been reviewed and approved by Lilly prior to the Effective Date, which approval
shall not be unreasonably withheld, conditioned or delayed) and either Party may
make subsequent and repeated public disclosure of the contents thereof without
further approval of the other Party.  After issuance of such press release,
neither Party shall publish, present or otherwise disclose publicly any material
related to events arising under this Agreement without the prior written consent
of the other Party; provided that notwithstanding the foregoing, (A) neither
Party will be prevented from complying with any duty of disclosure it may have
pursuant to Applicable Laws; and (B) either Party shall be permitted to publish
such material in scientific journals or present such material at scientific
conferences in accordance with Section 6.3 hereof.  Either Party may make
subsequent and repeated disclosure of the contents of any disclosures permitted
by the preceding sentence without the prior written consent of the other Party.

 

6.3                               Publications and Presentations.  The Parties
acknowledge that scientific publications and presentations must be strictly
monitored to prevent any adverse effect from premature publication or
dissemination of results of the activities hereunder.  Each Party agrees that,
except as required by Applicable Laws, it shall not publish or present, or
permit to be published or presented, the results of the Development,
manufacture, use and Commercialization of a Licensed Product to the extent such
results refer to, derive from or otherwise relate to the Licensed Intellectual
Property (the “Covered Results”) without the prior review by and approval of the
other Party; provided, that it shall not be deemed unreasonable for Lilly to
withhold its consent to any request by ImmunoGen to publish or present any
Covered Results prior to the planned publication or dissemination of such
Covered Results by Lilly.  Each Party shall provide to the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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other Party the opportunity to review each of the submitting Party’s proposed
abstracts, manuscripts or presentations (including, without limitation,
information to be presented verbally) that relate to the Covered Results at
least [***] prior to its intended presentation or submission for publication,
and such submitting Party agrees, upon written request from the other Party
given within such [***], not to submit such abstract or manuscript for
publication or to make such presentation until the other Party is given up to
[***] (or such other period as the Parties may mutually agree) from the date of
such written request to seek appropriate patent protection for any unpatented
Technology disclosed in such publication or presentation that it reasonably
believes may be patentable.  Once such abstracts, manuscripts or presentations
have been reviewed and approved by each Party, the same abstracts, manuscripts
or presentations do not have to be provided again to the other Party for review
for a later submission for publication.  Each Party also shall have the right to
require that any of its Confidential Information that is disclosed in any such
proposed publication or presentation be deleted prior to such publication or
presentation.  In any permitted publication or presentation by a Party, the
other Party’s contribution shall be duly recognized, and co-authorship shall be
determined in accordance with customary industry standards.  Notwithstanding the
foregoing or anything to the contrary herein, ImmunoGen acknowledges and agrees
that Lilly may publish the registration of the initiation of and results of
clinical trials that it conducts with respect to an Ab-May Product or Licensed
Product on Lilly’s Clinical Trial Register to the extent required by Lilly
policies and/or Applicable Laws and that such publication will not be a breach
of the confidentiality obligations this Agreement.

 

6.4                               Integration.  As to the subject matter of this
Agreement, this Section 6 supersedes any confidential disclosure agreements
between the Parties, including, without limitation, the Confidentiality
Agreement and the confidentiality provisions of the Multi-Target Agreement.  Any
confidential information of a Party disclosed under the Confidentiality
Agreement or the Multi-Target Agreement relating to the subject matter of this
Agreement shall be treated as Confidential Information of such Party hereunder,
subject to the terms of this Section 6.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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7.                                      PROVISIONS CONCERNING THE FILING,
PROSECUTION AND
MAINTENANCE OF PATENT RIGHTS

 

7.1                               Ownership of Intellectual Property
Disclosure.  Except as otherwise expressly provided herein, all inventions and
discoveries governed by this Agreement shall be owned based on inventorship, as
inventorship is determined in accordance with United States patent law.

 

(a)                                   Solely-Owned Technology.  Anything
contained in this Agreement to the contrary notwithstanding, as between the
Parties (i) ImmunoGen shall be the sole owner of the Licensed Intellectual
Property (other than the Joint Program Technology and Joint Improvements
included therein), and (ii) subject to Section 7.3(b) hereof, Lilly shall be the
sole owner of Lilly Improvements and any Patent Rights claiming such Lilly
Improvements and/or Lilly  Antibodies.

 

(b)                                  Jointly-Owned Technology.  All Joint
Program Technology and Joint Improvements shall be jointly owned by ImmunoGen
and Lilly.  The Parties shall also jointly own any Patent Rights claiming such
Joint Program Technology and Joint Improvements.

 

(c)                                   Disclosure.  Each Party shall provide to
the other Party any invention disclosure related to any Joint Program Technology
or Joint Improvements within [***] after such Party receives such disclosure
from its employees or others obligated to assign inventions to such Party or any
Affiliate of such Party.

 

7.2                               Patent Filing, Prosecution and Maintenance.

 

(a)                                   Licensed Patent Rights.  ImmunoGen, acting
through patent counsel or agents of its choice, shall be responsible, at its
sole cost and expense and in its sole discretion, for the preparation, filing,
prosecution and maintenance of all Licensed Patent Rights (other than Licensed
Patent Rights claiming Joint Program Technology or Joint Improvements).

 

(b)                                  Lilly Improvements.  Lilly, acting through
patent counsel or agents of its choice, shall be responsible, at its sole cost
and expense and in its sole discretion, for the preparation, filing, prosecution
and maintenance of all Patent Rights claiming Lilly Improvements.

 

(c)                                   Joint Program Technology and Joint
Improvements.

 

(i)                                     If not already established under the
Multi-Target Agreement, prior to either Party filing any patent application
disclosing Joint Program Technology or Joint

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Improvements, the Parties shall establish a committee (the “Patent Committee”)
comprised of at least one (1) representative of each Party for the purpose of
facilitating the preparation, filing, prosecution, maintenance and defense of
Patent Rights claiming Joint Program Technology and/or Joint Improvements.  As
agreed upon by the Parties, meetings of the Patent Committee may be face-to-face
or may be conducted by teleconferences or videoconferences, from time to time as
needed.  The Patent Committee will be the forum through which the Parties
coordinate their respective obligations to each other described in this
Section 7.

 

(ii)                                  Subject to the terms contained herein,
Lilly shall be responsible, at its sole cost and expense and in its sole
discretion, for the preparation, filing, prosecution and maintenance of all
Patent Rights claiming Joint Program Technology, using patent counsel and agents
selected by Lilly and approved by ImmunoGen, which approval shall not be
unreasonably withheld, conditioned or delayed.

 

(iii)                               Subject to the terms contained herein,
ImmunoGen shall be responsible, at its sole cost and expense and in its sole
discretion, for the preparation, filing, prosecution and maintenance of all
Patent Rights claiming Joint Improvements, using patent counsel and agents
selected by ImmunoGen and approved by Lilly, which approval shall not be
unreasonably withheld, conditioned or delayed.

 

(iv)                              The Party undertaking the responsibility for
the filing, prosecution and maintenance of any Patent Rights claiming Joint
Program Technology or Joint Improvements (A) will provide the other Party with a
copy of any proposed patent application claiming Joint Program Technology or
Joint Improvements for review and comment reasonably in advance (but at least
thirty (30) days in advance) of filing, and (B) will otherwise keep the other
Party reasonably informed of the status of such filing, prosecution and
maintenance, including, without limitation, by using commercially reasonable
efforts to provide the other Party a reasonable time prior to taking or failing
to take any action that would affect the scope or validity of any such filing
(including the substantial narrowing, cancellation or abandonment of any
claim(s) without retaining the right to pursue such subject matter in a separate
application, or the failure to file or perfect the filing of any claim(s) in any
country), with prior written notice of such proposed action or inaction so that
the other Party has a reasonable opportunity to review and comment.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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(d)                                  Cooperation.  Each Party agrees to
cooperate reasonably with the other Party in the preparation, filing,
prosecution and maintenance of any Patent Rights pursuant to this Section 7.2. 
Such cooperation includes, but is not limited to, executing all papers and
instruments, or requiring employees or others to execute such papers or
instruments, so as to effectuate the ownership of such Patent Rights and to
enable the filing, prosecution, maintenance and extension thereof in any country
or region.  In addition, the Parties shall reasonably cooperate with each other
in obtaining patent term restoration or supplemental protection certificates or
their equivalents in any country in the Territory where applicable to the
Licensed Patent Rights.

 

(e)                                   [***].

 

7.3                               Abandonment.

 

(a)                                   Licensed Patent Rights; Joint
Improvements.  If ImmunoGen decides to abandon or allow to lapse, or otherwise
determines to not prosecute or defend, any of the Licensed Patent Rights or
Patent Rights claiming Joint Improvements for which it is the filing party under
Sections 7.2(a) and 7.2(c)(iii) hereof in any country or region in the
Territory, ImmunoGen shall inform Lilly of such decision promptly and, in any
event, so as to provide Lilly a reasonable amount of time to meet any applicable
deadline to establish or preserve such Patent Rights in such country or region. 
Lilly shall have the right to assume responsibility for continuing the
prosecution, maintenance or defense of such Patent Rights in such country or
region and paying any required fees to maintain such Patent Rights in such
country or region or defending such Patent Rights, in each case at Lilly’s sole
expense and through patent counsel or agents of its choice.  Lilly shall not
become an assignee of such Licensed Patent Rights or of ImmunoGen’s interest in
such Patent Rights claiming Joint Improvements as a result of its assumption of
such responsibility.  Upon transfer of ImmunoGen’s responsibility for
prosecuting, maintaining and defending any of the Licensed Patent Rights or
Patent Rights claiming Joint Improvements under this Section 7.3(a) hereof,
ImmunoGen shall promptly deliver to Lilly copies of all necessary files related
to such Patent Rights with respect to which responsibility has been transferred
and shall take all actions and execute all documents reasonably necessary for
Lilly to assume such prosecution, maintenance and defense.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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(b)                                  Lilly Improvements; Joint Program
Technology.  If Lilly decides to abandon or allow to lapse, or otherwise
determines to not prosecute or defend, any of the Patent Rights claiming Lilly
Improvements or Patent Rights claiming Joint Program Technology for which Lilly
is the filing party under Sections 7.2(b) and 7.2(c)(ii) hereof in any country
or region in the Territory, Lilly shall inform ImmunoGen of such decision
promptly and, in any event, so as to provide ImmunoGen a reasonable amount of
time to meet any applicable deadline to establish or preserve such Patent Rights
in such country or region.  ImmunoGen shall have the right to assume
responsibility for continuing the prosecution, maintenance or defense of such
Patent Rights in such country or region and paying any required fees to maintain
such Patent Rights in such country or region or defending such Patent Rights, in
each case at ImmunoGen’s sole expense and through patent counsel or agents of
its choice.  ImmunoGen shall not become an assignee of Lilly’s interest in such
Patent Rights claiming Lilly Improvements, Joint Program Technology as a result
of its assumption of such responsibility.  Upon transfer of Lilly’s
responsibility for prosecuting, maintaining and defending any of the Patent
Rights claiming Lilly Improvements or Joint Program Technology under this
Section 7.2(b), Lilly shall promptly deliver to ImmunoGen copies of all
necessary files related to such Patent Rights with respect to which
responsibility has been transferred and shall take all actions and execute all
documents reasonably necessary for ImmunoGen to assume such prosecution,
maintenance and defense and to assign ownership of such Lilly Improvements to
ImmunoGen.

 

7.4                               Third Party Infringement.

 

(a)                                   If either Party becomes aware of any
possible infringement of, or submission by any Third Party of an abbreviated new
drug application under the Hatch-Waxman Act that is covered by, any Licensed
Patent Rights that cover a Licensed Product or any Lilly Improvement (an
“Infringement”), that Party shall promptly notify the other Party and provide it
with all details of such Infringement of which it is aware (each, an
“Infringement Notice”).

 

(b)                                  ImmunoGen shall have the first right and
option, but not the obligation, to eliminate such Infringement with respect to
Licensed Patent Rights (other than Patent Rights claiming Joint Program
Technology) that cover Licensed Products by reasonable steps, which may include
the institution of legal proceedings or other action.  All costs, including,
without limitation, attorneys’ fees, relating to such legal proceedings or other
action shall be borne by

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

39

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ImmunoGen.  If ImmunoGen does not take commercially reasonable steps to
eliminate the Infringement within [***] from any Infringement Notice (or [***]
in the case of an Infringement under the Hatch-Waxman Act), then Lilly shall
have the right and option to do so at its expense, provided that if ImmunoGen
has commenced negotiations with an alleged infringer for elimination of such
Infringement within such [***] (or, if applicable, such [***]) period, then
ImmunoGen shall have an additional [***] (or in the case of an infringement
under the Hatch-Waxman Act, [***]) to conclude its negotiations before Lilly may
take steps to eliminate such Infringement.

 

(c)                                   Lilly shall have the first right and
option, but not the obligation, to eliminate such Infringement with respect to
Patent Rights claiming Lilly Improvements or Joint Program Technology by
reasonable steps, which may include the institution of legal proceedings or
other action.  All costs, including, without limitation, attorneys’ fees,
relating to such legal proceedings or other action shall be borne by Lilly.  If
Lilly does not take commercially reasonable steps to eliminate the Infringement
within [***] from any Infringement Notice (or [***] in the case of an
Infringement under the Hatch-Waxman Act), then ImmunoGen shall have the right
and option to do so at its expense, provided that if Lilly has commenced
negotiations with an alleged infringer for elimination of such Infringement
within such [***] (or, if applicable, such [***]) period, then Lilly shall have
an additional [***] (or in the case of an infringement under the Hatch-Waxman
Act, [***]) to conclude its negotiations before ImmunoGen may take steps to
eliminate such Infringement.

 

(d)                                  ImmunoGen shall not consent to the entry of
judgment or enter into any settlement with respect to any Infringement claim or
proceeding under this Section 7.4 involving Lilly Improvements, Joint
Improvements or Joint Program Technology without the prior written consent of
Lilly, which consent shall not be unreasonably withheld, conditioned or
delayed.  Lilly shall not consent to the entry of judgment or enter into any
settlement with respect to any Infringement claim or proceeding under this
Section 7.4 involving Joint Improvements, Joint Program Technology or any other
Licensed Patent Rights without the prior written consent of ImmunoGen, which
consent shall not be unreasonably withheld, conditioned or delayed.

 

(e)                                   Each Party shall have the right to
participate, and be represented by counsel that it selects, in any legal
proceedings or other action instituted under this Section 7.4

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

40

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by the other Party.  If a Party with the right to initiate legal proceedings
under this Section 7.4 to eliminate Infringement lacks standing to do so and the
other Party has standing to initiate such legal proceedings, such Party with
standing shall initiate such legal proceedings at the request and expense of the
other Party.

 

(f)                                     In any action, suit or proceeding
instituted under this Section 7.4, the Parties shall cooperate with and assist
each other in all reasonable respects.  Upon the reasonable request of the Party
initiating such action, suit or proceeding, the other Party shall join such
action, suit or proceeding and shall be represented using counsel of its own
choice, at the requesting Party’s expense.

 

(g)                                  Unless otherwise mutually agreed by the
Parties, any damages, amounts received in settlement, judgment or other monetary
awards recovered by either Party pursuant to Section 7.4(b) or 7.4(c) hereof,
whether by settlement or judgment (“Monies”), shall be allocated in the
following order:

 

(i)                                     the Monies will be distributed first to
[***] for its costs and expenses incurred under Section 7.4(b) 7.4(c) or
7.4(f) hereof, as applicable;

 

(ii)                                  the Monies will then be distributed to
[***] for its costs and expenses incurred under Section 7.4(e) hereof; then

 

(iii)                               to the extent the remaining Monies recovered
represent such Third Party’s infringing sales with respect to Licensed Products,
(A) ImmunoGen will receive an amount out of such remaining Monies equal to
[***], and (B) Lilly will receive the amount of such remaining Monies [***]; or

 

(iv)                              to the extent the remaining Monies recovered
represent [***], the amount of such Monies shall [***] and (A) ImmunoGen will
[***], and (B) Lilly will receive the amount of such remaining Monies
representing [***]; or

 

(v)                                 to the extent the remaining Monies recovered
represent [***], and the applicable decision-making authority in the action,
suit or proceeding has not [***], then the Parties shall agree, in good faith,
to an allocation of such Monies based on the relevant contributions of [***] and
[***]; provided that if the Parties are unable to agree in good faith as to the
allocation of such Monies on such basis, then the Parties shall submit such
matter for determination to a mutually agreed upon independent patent counsel
who (and whose firm) is not

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

41

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at the time of the dispute, was  not at any time during the [***] prior to such
dispute, performing services for either Party or their respective Affiliates
(or, in the case of Lilly, its Sublicensees); provided that the determination of
such independent patent counsel shall be final and binding upon the Parties;
then

 

(vi)                              if Lilly is the controlling Party, then Lilly
will retain all Monies remaining after [***], including, without limitation,
those for [***], which are applicable to the Licensed Products; or

 

(vii)                           If ImmunoGen is the controlling Party, then
ImmunoGen will retain all Monies remaining after the [***], including, without
limitation, those [***]

 

7.5                               Response to Biosimilar Applicants.

 

(a)                                   Notice.  In the event that either Party
(i) receives a copy of an application submitted to the FDA under
subsection (k) of Section 351 of the PHSA (a “Biosimilar Application”), whether
or not  such notice or copy is provided under any Applicable Laws (including
under the Biologics Price Competition and Innovation Act of 2009 (the “BPCIA”),
the United States Patient Protection and Affordable Care Act or implementing FDA
regulations and guidance) applicable to the approval or manufacture of any
biosimilar or  interchangeable biological product (a “Proposed Biosimilar
Product”) for which a Licensed Product is a “reference product,” as such term is
used in the BPCIA, or (ii) otherwise becomes aware that such a Biosimilar
Application has been filed (such as in an instance described in
Section 351(l)(9)(C) of the PHSA), then such Party shall promptly provide the
other Party with written notice.

 

(b)                                  Access to Confidential Information.  Upon
written request from ImmunoGen and to the extent permitted by Applicable Laws,
Lilly shall provide ImmunoGen with confidential access to the Biosimilar
Application and such other information that describes the process used to
manufacture the Proposed Biosimilar Product, in each case, to the extent
provided to Lilly by the Third Party that submitted the Biosimilar Application
(the “Applicant”); provided, however, that prior to receiving the Biosimilar
Application and such confidential information, ImmunoGen shall provide notice to
Lilly and the Applicant confirming its agreement to be subject to the
confidentiality provisions in Section 351(l)(1)(B)(iii) of the PHSA.  For
purposes of clarity, the Parties acknowledge and agree that ImmunoGen has
retained

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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a right to assert any patent within the Licensed Patent Rights and participate
in litigation concerning any such patent.

 

(c)                                   Proposed Patent List.

 

(i)                                     Preparation of Proposed Patent List. 
Not later than [***] from the date of receipt by Lilly of a copy of a Biosimilar
Application and related manufacturing information, Lilly, with cooperation from
ImmunoGen shall prepare and provide ImmunoGen with a list (the “Proposed Patent
List”) of (A) those patents within the Licensed Patent Rights that Lilly
reasonably believes would be infringed by the manufacture and/or sale of the
Proposed Biosimilar Product and (B) those patents within the Licensed Patent
Rights, if any, that Lilly would be willing to sublicense to such Applicant in
accordance with the terms of this Agreement.  As soon as practicable following
the date of receipt by ImmunoGen of the Proposed Patent List, ImmunoGen and
Lilly shall discuss in good faith the patents within the Licensed Patent Rights
to be included on the Proposed Patent List and Lilly shall consider in good
faith ImmunoGen’s proposals for changes to the Proposed Patent List with respect
to the patents within the Licensed Patent Rights.  Not later than [***]
following Lilly’s receipt of the Biosimilar Application and related
manufacturing information, Lilly shall provide the Applicant with a copy of the
Proposed Patent List; provided, however, that Lilly shall incorporate certain
ImmunoGen requests in accordance with Section 7.5(c)(iv) hereof. Notwithstanding
the enforcement rights with respect to the Licensed Patent Rights set forth in
Section 7.4(b) hereof, Lilly shall have the right to include any of the patents
within the Licensed Patent Rights on the Proposed Patent List to the extent that
Lilly reasonably believes that a claim of patent infringement for such patent
could be asserted by either ImmunoGen or Lilly; provided, however, that the
right to control any suit or proceeding in which such a claim is asserted shall
be as set forth in Section 7.5(d) hereof.

 

(ii)                                  Disclosure of Applicant’s Response. 
Provided that ImmunoGen has agreed to comply with the confidentiality provisions
in Section 351(l)(1)(B)(iii) of the PHSA and to the extent permitted by
Applicable Laws Lilly shall provide to ImmunoGen the Applicant Response (as
defined below) no later than [***] from the date of receipt by Lilly of a
response from the Applicant with regard to any patent within the Licensed Patent
Rights included on the Proposed Patent List, including any response required by
the BPCIA (the “Applicant Response”).

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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(iii)                               Preparation of Lilly Response. Not later
than [***] from the date of receipt by Lilly of the Applicant Response, Lilly,
with cooperation and assistance from ImmunoGen, shall prepare and provide
ImmunoGen with a proposed response (the “Lilly Response”) that (A) describes on
a claim-by-claim basis, how each patent within the Licensed Patent Rights on the
Proposed Patent List would be infringed by the commercial marketing of the
Proposed Biosimilar Product, and (B) responds to Applicant’s claims, if any,
that the patents within the Licensed Patent Rights on the Proposed Patent List
are invalid or unenforceable.  The Lilly Response shall include only the
foregoing and shall not be construed to include any proposed response to the
Applicant relating to any patents other than the Licensed Patent Rights;
further, any actual response to the Applicant under the BPCIA and all decisions
relating to subsequent procedures under the BPCIA with regard to any patent
other than those included within the Licensed Patent Rights shall be within the
sole discretion of Lilly.  As soon as practicable following the date of receipt
by ImmunoGen of the proposed Lilly Response, the Parties shall discuss in good
faith the statements in the proposed Lilly Response and Lilly shall consider in
good faith ImmunoGen’s proposals for changes to the Lilly Response.  Not later
than [***] following Lilly’s receipt of the Applicant Response, Lilly shall
provide the Applicant with a copy of the Lilly Response; provided, however, that
Lilly shall incorporate certain ImmunoGen requests in accordance with
Section 7.5(c)(iv) hereof.

 

(iv)                              Inclusion of Licensed Patent Rights or
Responsive Information.  Provided that Lilly is legally able under Applicable
Law to provide ImmunoGen with a copy of the Biosimilar Application (and related
manufacturing agreement) and ImmunoGen has provided notice to Lilly and
Applicant confirming its agreement to be subject to the confidentiality
provisions of Section 351(l)(1)(B)(iii) of the PHSA, if ImmunoGen requests in
writing to either (A) include a patent in the Proposed Patent List that was not
included in Lilly’s initial Proposed Patent List provided to ImmunoGen by Lilly
pursuant to Section 7.5(c)(i) hereof or (B) include responsive information with
respect to any patent within the Licensed Patent Rights in the Lilly Response
that was not included in Lilly’s initial Lilly Response provided to ImmunoGen
pursuant to Section 7.5(c)(iii) hereof, then, absent manifest error, Lilly shall
include such patent in the Proposed Patent List and such responsive information
in the Lilly Response provided to Applicant, as applicable; provided, however,
that ImmunoGen shall indemnify Lilly in

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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accordance with Section 10.1(b) hereof to the extent any submissions requested
by ImmunoGen are determined to have been made negligently or in bad faith.

 

(v)                                 Negotiation; ImmunoGen Rights. As soon as
possible following the date on which Lilly provides Applicant with a copy of the
Lilly Response, Lilly shall commence good faith negotiations with Applicant for
a period of not more than [***] (the “Negotiation Period”) in an effort to reach
agreement on the patents on the Proposed Patent List (the “Infringed Patent
List”) that will be the subject of an immediate patent infringement litigation
pursuant to Section 351(l)(6) of the PHSA (an “Immediate Patent Infringement
Action”); provided, however, that if the Proposed Patent List includes both
patents within the Licensed Patent Rights and patents that are not within the
Licensed Patent Rights, then Lilly shall not agree to the inclusion in the
Infringed Patent List of any patents within the Licensed Patent Rights without
the prior written consent of ImmunoGen, which consent shall not be unreasonably
withheld, conditioned or delayed.  If Lilly and Applicant fail to reach
agreement under Section 351(l)(4)(A) of the PHSA on the Infringed Patent List,
Lilly shall have the sole right to determine under Section 351(l)(5)(B) of the
PHSA which patents of those on the Proposed Patent List should be the subject of
an Immediate Patent Infringement Action; provided, however, that if the Proposed
Patent List [***], then Lilly shall [***].  Within [***] following the exchange
of such lists by Lilly and the Applicant, Lilly shall, to the extent legally
permissible, provide ImmunoGen with a copy of the combined Infringed Patent List
that will be the subject of an Immediate Patent Infringement Action.

 

(vi)                              Supplements to Proposed Patent List. 
ImmunoGen shall provide Lilly with a copy of any U.S. patent within the Licensed
Patent Rights that is issued after Lilly has provided the Proposed Patent List
to the Applicant within [***] after such issuance.  As soon as practicable
following the date of receipt by Lilly of any such patent, ImmunoGen and Lilly
shall discuss in good faith whether such patent would be infringed by the
manufacture and/or sale of the Proposed Biosimilar Product.  Lilly shall provide
the Applicant with a supplement to the Proposed Patent List to include such
patent not later than [***] after the issuance of such patent if Lilly
reasonably believes that a claim of patent infringement for such patent could be
asserted by either ImmunoGen or Lilly or if ImmunoGen, absent manifest error,
requests that Lilly supplement the Proposed Patent List to include such patent
provided, however, that

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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ImmunoGen shall indemnify Lilly in accordance with Section 10.1(b) hereof to the
extent any supplement submissions requested by ImmunoGen are determined to have
been made negligently or in bad faith.

 

(d)                                  Claims, Suits and Proceedings.

 

(i)                                     Immediate Patent Infringement Action. 
With respect to any patents within the Licensed Patent Rights or any Patent
Rights covering the Lilly Improvements, Joint Improvements or Joint Program
Technology  that are to be the subject of an Immediate Patent Infringement
Action, the Parties’ respective rights and obligations with respect to the
litigation of such patents (including rights to initiate, step in, participate
in, settle and share amounts recovered pursuant to such Immediate Patent
Infringement Action, and obligations to pay legal costs and expenses with
respect to such Immediate Patent Infringement Action) shall be as set forth in
Sections 7.4(b) through 7.4(g) hereof, except that the Party having the first
right to file a claim for Infringement against the Applicant with respect to any
such patent subject to an Immediate Patent Infringement Action shall file such
claim within [***] after agreement is reached as to the Infringed Patent List
under Section 351(l)(4) or the exchange of the lists under
Section 351(l)(5)(B) of the PHSA, as applicable.

 

(ii)                                  Pre-Marketing Litigation.  Either Party
shall, within [***] of receiving any notice of commercial marketing provided by
the Applicant pursuant to Section 351(l)(8)(A) of the PHSA (the “Premarket
Notice”), notify the other Party.  Thereafter, the Parties’ respective rights
and obligations with respect to any litigation pursuant to
Section 351(l)(8)(B) of the PHSA (including rights to initiate, step in,
participate in, settle and share amounts recovered pursuant to such action, and
obligations to pay legal costs and expenses with respect to such action) shall
be as set forth in Sections 7.4(b) through 7.4(g) hereof.

 

(iii)                               Cooperation; Standing.  Without limitation
of Section 7.4(e) hereof, if a Party with the right to initiate legal
proceedings under this Section 7.5(d) lacks standing to do so (or lacks the
right under the BPCIA to do so) and the other Party has standing (or the sole
right under the BPCIA) to initiate such legal proceedings, such Party with
standing shall initiate such legal proceedings at the request and expense of the
other Party.

 

(e)                                   Invalidity or Unenforceability Defenses or
Actions.  In the event that the Applicant asserts, as a defense or as a
counterclaim in any infringement action under

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Section 7.5(d) hereof, that any of the Licensed Patent Rights or any Patent
Rights covering the Lilly Improvements, Joint Improvements or Joint Program
Technology is invalid or unenforceable, then the Parties’ respective rights and
obligations with respect to the response to such defense or the defense against
such counterclaim, as applicable, (including rights to initiate, step in,
participate in, settle and share amounts recovered pursuant to such action, and
obligations to pay legal costs and expenses with respect to such action) shall
be as set forth in Sections 7.4(b) through 7.4(g) hereof; provided that for
these purposes any such defense or counterclaim shall be deemed to be an
Infringement. In all other cases, including any declaratory judgment action or
similar action or claim filed by an Applicant asserting that any of the Licensed
Patent Rights or any Patent Rights covering the Lilly Improvements, Joint
Improvements or Joint Program Technology is invalid or unenforceable (as in a
declaratory judgment action brought by the Applicant following the Premarket
Notice), then the Parties’ respective rights and obligations with respect to
such action (including rights to initiate, step in, participate in, settle and
share amounts recovered pursuant to such action, and obligations to pay legal
costs and expenses with respect to such action) shall be as set forth in
Sections 7.4(b) through 7.4(g) hereof; provided that for these purposes any such
case shall be deemed to be an Infringement.

 

(f)                                     Changes in Applicable Law.  The Parties
have agreed to the provisions of this Section 7.5 on the basis of the BPCIA and
other applicable laws and regulations in effect as of the Effective Date.  If
there are any material changes to the BPCIA or other Applicable Laws that would
affect these provisions, the Parties will discuss amendments to this Section 7.5
in good faith.

 

7.6                               Defense of Claims.  If any action, suit or
proceeding is brought or threatened against either Party or an Affiliate or
Sublicensee alleging infringement of the Technology or Patent Rights of a Third
Party by reason of use by Lilly or an Affiliate or Sublicensee of the Licensed
Intellectual Property in the Development, manufacture, use or Commercialization
of any Licensed Product, the Party first receiving notice of such actual or
threatened action, suit or proceeding shall notify the other Party promptly, and
the Parties shall as soon as practicable thereafter confer in good faith
regarding the best response.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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7.7                               Trademarks.  All Licensed Products shall be
sold under one or more trademarks and trade names selected and owned by Lilly or
its Affiliates or Sublicensees in the Territory.  As between the Parties, Lilly
shall control the preparation, prosecution and maintenance of applications
related to all such trademarks and trade names in the Territory, at its sole
cost and expense and at its sole discretion.  ImmunoGen shall notify Lilly
promptly upon learning of any actual, alleged or threatened infringement of a
trademark or trade name applicable to a Licensed Product in the Territory, or of
any unfair trade practices, trade dress imitation, passing off of counterfeit
goods, or like offenses in the Territory.  As between the Parties, all of the
costs, expenses and legal fees in bringing, maintaining and prosecuting any
action to maintain, protect or defend any trademark owned by Lilly or its
Sublicensee hereunder, and any damages or other recovery, shall be Lilly’s sole
responsibility, and taken in its sole discretion.

 

8.                                      TERM AND TERMINATION

 

8.1                               Term; Paid-Up Licenses.

 

(a)                                   Term.  The term of this Agreement shall
commence on the Effective Date and shall expire on a Licensed
Product-by-Licensed Product and a country-by-country basis upon the expiration
of the Royalty Term or the Reinstated Royalty Term, as the case may be,
applicable to a Licensed Product in each such country, subject to earlier
termination in accordance with Section 8.2 hereof and reinstatement in
accordance with Section 5.5(b) hereof (the “Term”).

 

(b)                                  Royalty Term Expiration — Paid-Up License. 
Upon the expiration of the Royalty Term, provided this Agreement has not been
terminated prior thereto [***] by ImmunoGen under Section 8.2(b) hereof for a
Lilly Material Breach or 8.2(c) hereof as the result of a Lilly insolvency or by
Lilly for a voluntary termination under Section 8.2(a) hereof, Lilly and its
Affiliates shall thereafter have a fully paid-up, irrevocable, freely
transferable and sublicensable license under the relevant Licensed Intellectual
Property (specifically excluding any Post-Royalty Term Issued Patents) to make,
have made, use, have used, sell, have sold, offer for sale, import and have
imported such Licensed Product in such country.

 

(c)                                   [***].

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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8.2                               Termination.  Subject to the other terms of
this Agreement:

 

(a)                                   Voluntary Termination by Lilly.  Lilly
shall have the right to terminate this Agreement at any time upon not less than
[***] prior written notice to ImmunoGen.

 

(b)                                  Termination for Breach.  Either Party may
terminate this Agreement, effective upon written notice to the other Party, upon
any breach by the other Party of any material obligation or condition of this
Agreement (a “Material Breach”) that remains uncured [***] ([***] if the breach
is a failure by [***] to [***]) after the non-breaching Party first gives
written notice of such breach to the other Party describing such Material Breach
in reasonable detail; provided, however, that if the nature of the asserted
breach (other than a breach for non-payment) is such that more than [***] are
reasonably required to cure, then the cure period shall be extended for a period
not to exceed [***] so long as the Party seeking to cure the asserted breach is
diligently pursuing such cure to completion.  Anything contained in this
Agreement to the contrary notwithstanding and subject to the proviso of this
sentence, if the allegedly breaching Party (i) disputes either (A) whether a
Material Breach has occurred or (B) whether the Material Beach has been timely
cured, and (ii) provides written notice of that Dispute to the other Party
within the above time periods, then the matter will be addressed under the
dispute resolution provisions of Section 11.12, and the Party asserting the
breach may not terminate this Agreement until it has been determined under
Section 11.12 that the allegedly breaching Party is in Material Breach of this
Agreement, and such breaching Party further fails to cure such breach within
[***] (or such [***] period as determined by [***]) after the conclusion of the
dispute resolution procedure; provided, however, that the foregoing shall not
apply to any breach [***].  Anything contained in this Agreement to the contrary
notwithstanding, if the asserted Material Breach is cured or shown to be
non-existent within the applicable cure period, the first notice of breach
hereunder shall be deemed automatically withdrawn and of no effect.

 

(c)                                   Termination for Insolvency.  To the extent
permitted by Applicable Law, if either Party files for protection under
bankruptcy laws, makes an assignment for the benefit of creditors, appoints or
suffers the appointment of a receiver or trustee over its property, files a
petition under any bankruptcy or insolvency act or has any such petition filed
against it which is not discharged within [***] of the filing thereof, then the
other Party may terminate this Agreement effective immediately upon written
notice to such Party.  In connection therewith, all

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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rights and licenses granted under this Agreement are, and shall be deemed to be,
for purposes of Section 365(n) of the United States Bankruptcy Code, licenses of
rights to “intellectual property” as defined under Section 101(56) of the United
States Bankruptcy Code.  If either Party undergoes a voluntary dissolution or
winding-up of its affairs, then the other Party may terminate this Agreement
effective immediately upon written notice to such Party.

 

(d)                                  [***].

 

8.3                               Consequences of Termination.  Upon termination
of this Agreement by either Party under Section 8.2 hereof, the following
provisions shall apply:

 

(a)                                   Termination by ImmunoGen under
Section 8.2(b), (8.2(c) [***] or by Lilly under Section 8.2(a).  If this
Agreement is terminated by ImmunoGen under Section 8.2(b), 8.2(c) [***] hereof
or by Lilly under Section 8.2(a) hereof, then: (i) the license granted by
ImmunoGen to Lilly and its Affiliates pursuant to Section 2.1 hereof shall
immediately terminate, and Lilly shall discontinue the use of any Licensed
Technology except to the extent expressly permitted in any other written
agreement between the Parties [***]; (ii) Lilly shall immediately cease, and
shall cause its Affiliates and Sublicensees (subject to the next sentence)
immediately to cease, any and all Development and Commercialization of Licensed
Products in the Territory; and (iii) each Party shall promptly return or destroy
all Confidential Information of the other Party, provided that each Party may
retain, subject to Section 6 hereof, (A) one (1) copy of the Confidential
Information of the other Party in its archives solely for the purpose of
establishing the contents thereof and ensuring compliance with its obligations
hereunder, (B) any Confidential Information of the other Party contained in
laboratory notebooks or databases and (C) any Confidential Information of the
other Party to the extent reasonably required to exercise its rights and perform
its obligations under any other outstanding Exclusive Licenses.  Notwithstanding
the foregoing, (1) unless ImmunoGen specifies in writing to the contrary, no
such termination of this Agreement shall be construed as a termination of any
valid sublicense to any Third Party Sublicensee hereunder, and thereafter each
such Sublicensee shall be considered a direct licensee of ImmunoGen, provided
that (x) such Sublicensee is then in full compliance with all terms and
conditions of its sublicense, (y) all accrued payment obligations to ImmunoGen
have been paid, and (z) such Sublicensee agrees no later than [***] after the
effective date of such termination to assume all obligations of Lilly under this
Agreement, and

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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(2) Lilly and its Affiliates and Sublicensees shall have the right, for [***]
following the effective date of such termination, or such longer period (if any)
to which the Parties mutually agree in writing (the “Wind-Down Period”), to sell
or otherwise dispose of all Licensed Products then on hand, subject to the
payment of royalties and the other terms of this Agreement.  After the Wind-Down
Period, Lilly shall immediately cease, and shall cause its Affiliates and
Sublicensees (subject to the preceding sentence) to cease, any and all
Development and Commercialization of Licensed Products in the Territory.

 

(b)                                 Termination by Lilly under Section 8.2(b) or
8.2(c).  If this Agreement is terminated by Lilly under Section 8.2(b) or
8.2(c) hereof, then: (i) the license granted by ImmunoGen to Lilly pursuant to
Section 2.1 hereof shall survive on a country-by-country and Licensed
Product-by-Licensed Product basis until the expiration of the Royalty Term for
each such Licensed Product in each such country, subject [***], provided,
however, that Lilly shall [***] be obligated to pay to ImmunoGen [***] each
milestone and royalty payment otherwise due from and after the date of
termination (and that upon the expiration of the Royalty Term applicable to a
Licensed Product in a country in accordance with Section 5.5 hereof and provided
Lilly shall have paid to ImmunoGen all royalty amounts due to ImmunoGen with
respect to Net Sales in such country, Lilly and its Affiliates shall thereafter
have a fully paid-up, irrevocable, freely transferable and sublicensable license
under the relevant Licensed Intellectual Property, to make, have made, use, have
used, sell, have sold, offer for sale, import and have imported such Licensed
Product in such country, provided that the foregoing license shall not alter
Lilly’s obligations to make milestone payments (as reduced as provided in this
Section 8.3(b)) in accordance with the terms of this Agreement); and (ii) each
Party shall promptly return or destroy all Confidential Information of the other
Party, provided that each Party may retain, subject to Section 6 hereof,
(A) one (1) copy of the Confidential Information of the other Party in its
archives for the purpose of establishing the contents thereof and ensuring
compliance with its obligations hereunder, (B) any Confidential Information of
the other Party contained in its laboratory notebooks or databases and (C) any
Confidential Information of the other Party to the extent reasonably required to
exercise its rights and perform its obligations under any other outstanding
Exclusive License.  Notwithstanding the foregoing and subject to Section 6
hereof, Lilly may retain and use ImmunoGen’s Confidential Information solely in
connection with the

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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exercise of its rights set forth in clause (i) of the preceding sentence or
necessary or useful to exercise any other rights under this Agreement that
survive such termination.  Moreover, upon Lilly’s written request following the
effective date of such termination as described under this
Section 8.3(b), ImmunoGen, to the extent that it has not already done so, will
provide Lilly with the Technical Transfer Materials promptly following
ImmunoGen’s receipt of such written request for the purpose of assisting Lilly
to exercise its rights set forth in clause (i) of the second preceding sentence.

 

8.4                               Remedies.  Except as otherwise expressly set
forth in this Agreement, the termination provisions of this Section 8 are in
addition to any other relief and remedies available to either Party at law.

 

8.5                               Surviving Provisions.  Notwithstanding any
provision herein to the contrary, the rights and obligations of the Parties set
forth in Sections 2.4, 3.5(b) — (e), 5.6, 5.7, 5.8, 6, 7.1, 7.2(b), 7.2(c),
7.2(d), 7.2(e), 7.3, 7.4, 7.5, 8.1, 8.3, 8.4, 8.5, 9.3, 10 and 11 hereof as well
as any rights or obligations otherwise accrued hereunder (including any accrued
payment obligations), shall survive the expiration or termination of the Term of
this Agreement.  Without limiting the generality of the foregoing, Lilly shall
remain liable for all payment obligations accruing hereunder prior to the
effective date of termination.

 

9.                                      REPRESENTATIONS AND WARRANTIES

 

9.1                               ImmunoGen Representations.  ImmunoGen
represents and warrants to Lilly that:

 

(a)                                   it is duly incorporated, validly existing
and in good standing under the Applicable Laws of the jurisdiction of its
incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof;

 

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

 

(c)                                   this Agreement is a legal and valid
obligation binding upon ImmunoGen and enforceable in accordance with its terms,
and the execution, delivery and performance of this

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Agreement by the Parties does not conflict with or result in any default under
any agreement, instrument or understanding to which ImmunoGen is a party or by
which it is bound;

 

Except as set forth in a written disclosure letter (the “Disclosure Letter”)
delivered by ImmunoGen to Lilly within [***] after the Effective Date (which
shall be deemed Confidential Information of ImmunoGen), ImmunoGen represents and
warrants to Lilly that:

 

(d)                                  to ImmunoGen’s knowledge, as of the
Effective Date, none of the issued patents within the Licensed Patent Rights is
invalid or unenforceable;

 

(e)                                   as of the Effective Date, ImmunoGen has
received no written notice from a Third Party claiming that the use of the
Licensed Intellectual Property pursuant to the license granted hereunder to
Lilly will infringe the issued patents of any such Third Party; and

 

(f)                                     as of the Effective Date, there is no
pending or, to ImmunoGen’s knowledge (without having conducted, or having any
duty to conduct, any inquiry), threatened, litigation that alleges that the use
of the Licensed Intellectual Property pursuant to the license granted hereunder
to Lilly would infringe or misappropriate any intellectual property rights of
any Third Party.

 

9.2                               Lilly Representations.  Lilly represents and
warrants to ImmunoGen that:

 

(a)                                   it is duly incorporated, validly existing
and in good standing under the Applicable Laws of the jurisdiction of its
incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof;

 

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

 

(c)                                   this Agreement is a legal and valid
obligation binding upon Lilly and enforceable in accordance with its terms, and
the execution, delivery and performance of this Agreement by the Parties does
not conflict with or result in any default under any agreement, instrument or
understanding to which Lilly is a party or by which it is bound.

 

9.3                               Warranty Disclaimers.

 

(a)                                   Except as expressly set forth in
Section 9.1 hereof, nothing in this Agreement is or shall be construed as a
warranty or representation by ImmunoGen (i) as to the validity or scope of any
patent application or patent within the Licensed Patent Rights or (ii) that

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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anything made, used, sold or otherwise disposed of under any license granted in
this Agreement is or will be free from infringement of patents, copyrights, and
other rights of Third Parties.

 

(b)                                  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY
OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO ANY TECHNOLOGY, GOODS,
SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT, AND EACH PARTY
HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NON-INFRINGEMENT.

 

10.                               INDEMNIFICATION; LIABILITY

 

10.1                        Indemnification.

 

(a)                                  Lilly Indemnity.  Lilly shall indemnify,
defend and hold harmless ImmunoGen, its Affiliates, their respective directors,
officers, employees, consultants and agents, and their respective successors,
heirs and assigns (the “ImmunoGen Indemnitees”), from and against all
liabilities, damages, losses and expenses (including, without limitation,
reasonable attorneys’ fees and expenses of litigation) (collectively, “Losses”)
incurred by or imposed upon the ImmunoGen Indemnitees, or any of them, as a
direct result of any Third Party claims, suits, actions, demands or judgments,
including, without limitation, personal injury and product liability matters
(collectively, “Third Party Claims”), arising out of (i) a Material Breach of
this Agreement by Lilly; (ii) the Development or Commercialization (including,
without limitation, the production, manufacture, promotion, import, sale or use
by any Person but excluding to the extent the Parties may agree otherwise
pursuant to a separate agreement between the Parties, if any, such as pursuant
to a manufacturing agreement involving Licensed Product) of any Licensed Product
by Lilly or any of its Affiliates, Sublicensees, subcontractors, distributors or
agents; or (iii) the gross negligence, recklessness or willful misconduct of
Lilly or any of its Affiliates, Sublicensees, subcontractors, distributors or
agents; except in each case to the extent any such Third Party Claim or Losses
result from a Material Breach of this Agreement (or another agreement between
the Parties such as a manufacturing agreement, if any) by

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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ImmunoGen, or the negligence, recklessness or willful misconduct of, ImmunoGen
or any of its Affiliates or subcontractors; provided that with respect to any
such Third Party Claim for which ImmunoGen also has an obligation to any Lilly
Indemnitee pursuant to Section 10.1(b) hereof, Lilly shall indemnify each
ImmunoGen Indemnitee for its Losses to the extent of Lilly’s responsibility,
relative to ImmunoGen (or to Persons for whom ImmunoGen is legally responsible),
for the facts underlying the Third Party Claim.

 

(b)                                  ImmunoGen Indemnity.  ImmunoGen shall
indemnify, defend and hold harmless Lilly, its Affiliates, their respective
directors, officers, employees, consultants and agents, and their respective
successors, heirs and assigns (the “Lilly Indemnitees”), from and against all
Losses incurred by or imposed upon the Lilly Indemnitees, or any of them, as a
direct result of any Third Party Claims arising out of (i)  a Material Breach of
this Agreement by ImmunoGen; or (ii) the gross negligence, recklessness or
willful misconduct of ImmunoGen or any of its Affiliates or subcontractors;
except in each case to the extent any such Third Party Claim or Losses result
from a Material Breach of this Agreement by Lilly, or the negligence,
recklessness or willful misconduct of Lilly or any of its Affiliates,
Sublicensees subcontractors, distributors or agents, or the Development or
Commercialization (including, without limitation, the production, manufacture,
promotion, import, sale or use by any Person but excluding to the extent the
Parties may agree otherwise pursuant to a separate agreement between the
Parties, if any, such as pursuant to a manufacturing agreement involving
Licensed Product) of any Licensed Product by Lilly or any of its Affiliates,
Sublicensees, subcontractors, distributors or agents; provided that with respect
to any such Third Party Claim for which Lilly also has an obligation to any
ImmunoGen Indemnitee pursuant to Section 10.1(a) hereof, ImmunoGen shall
indemnify each Lilly Indemnitee for its Losses to the extent of ImmunoGen’s
responsibility, relative to Lilly (or to Persons for whom Lilly is legally
responsible), for the facts underlying the Third Party Claim.

 

10.2                        Conditions to Indemnification.  A Person seeking
indemnification under Section 10.1 hereof (the “Indemnified Party”) in respect
of a Third Party Claim shall give prompt notice of such Third Party Claim to the
Party from which recovery is sought (the “Indemnifying Party”) and shall permit
the Indemnifying Party to assume direction and control of the defense of the
Third Party Claim, provided that the Indemnifying Party shall (a) act reasonably
and in good

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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faith with respect to all matters relating to the defense or settlement of such
Third Party Claim as the defense or settlement relates to the Indemnified Party,
and (b) shall not settle or otherwise resolve such Third Party Claim without the
Indemnified Party’s prior written consent (which consent shall not be
unreasonably withheld, conditioned or delayed); provided that the Indemnifying
Party may, without the Indemnified Party’s prior written consent, agree or
consent to any settlement or other resolution of such Third Party Claim which
requires solely money damages paid by the Indemnifying Party, and which includes
as an unconditional term thereof the giving by such claimant or plaintiff to the
Indemnified Party of a release from all liability in respect of such Third Party
Claim.

 

10.3                        Insurance Proceeds.  Any indemnification payment
hereunder shall be made net of any insurance proceeds which the Indemnified
Party is entitled to recover; provided, however, that if, following the payment
to the Indemnified Party of any amount under this Section 10, such Indemnified
Party becomes entitled to recover any insurance proceeds in respect of the claim
for which such indemnification payment was made, the Indemnified Party shall
promptly pay an amount equal to the amount of such proceeds (but not exceeding
the amount of such indemnification payment) to the Indemnifying Party.

 

10.4                        Limited Liability.  [***] NEITHER PARTY WILL BE
LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (a) ANY
SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
(INCLUDING, WITHOUT LIMITATION, ANY DAMAGES RESULTING FROM LOSS OF PROFITS OR
LOSS OF BUSINESS), OR (b) COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR
SERVICES, EVEN IF EITHER PARTY IS INFORMED IN ADVANCE OF THE POSSIBILITY OF SUCH
DAMAGES AND EVEN IF THE REMEDIES PROVIDED FOR IN THIS AGREEMENT FAIL OF THEIR
ESSENTIAL PURPOSE.  For purposes of clarity, a Party’s monetary liability under
a Third Party Claim for such Third Party’s special, incidental, indirect or
consequential damages, or for any exemplary or punitive damages payable to such
Third Party in connection with such Third Party Claim, shall be deemed to be the
direct damages of such Party for purposes of this Section 10.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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11.                               MISCELLANEOUS

 

11.1                        Notices.  All notices and communications shall be in
writing and delivered personally or by courier or mailed via certified mail,
return receipt requested, postage prepaid, addressed as follows:

 

If to ImmunoGen:

ImmunoGen, Inc.

 

830 Winter Street

 

Waltham, MA 02451

 

Attn: Vice President, Business Development

 

Fax: [***]

 

 

with a copy to:

ImmunoGen, Inc.

 

830 Winter Street

 

Waltham, MA 02451

 

Attn: Alliance Management

 

Fax: [***]

 

 

If to Lilly:

Eli Lilly and Company

 

Lilly Corporate Center

 

Indianapolis, IN 46285

 

Attn: General Counsel

 

Fax: [***]

 

Except as otherwise expressly provided in this Agreement or mutually agreed in
writing, any notice, communication or document (excluding payment) required to
be given or made shall be deemed given or made and effective upon actual receipt
or, if earlier, (a) one (1) Business Day after deposit with a nationally
recognized overnight express courier with charges prepaid, or
(b) five (5) Business Days after mailed by certified mail, return receipt
requested, postage prepaid, in each case addressed to the receiving Party at its
address stated above or to such other address as such Party may designate by
written notice given in accordance with this Section 11.1.

 

11.2                        Governing Law.  This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to any choice of law principle that would dictate the application of the
law of another jurisdiction.

 

11.3                        Entire Agreement.  This Agreement constitutes the
entire agreement between the Parties with respect to the subject matter hereof
and supersedes any prior or contemporaneous

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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agreements or understandings, negotiations or correspondence between the
Parties, written or oral (including, without limitation, the Confidentiality
Agreement) concerning the subject matter hereof.

 

11.4                        Amendment and Waiver.  This Agreement may be
amended, modified or changed only by a written instrument executed by the Party
to be bound.  No term of this Agreement will be deemed to have been waived and
no breach excused, unless such waiver or consent shall be in writing and signed
by the Party claiming to have waived or consented.  Any consent by any Party to,
or waiver of, a breach by the other, whether express or implied, shall not
constitute consent to, or waiver of, or excuse for, any other different or
subsequent breach.

 

11.5                        Binding Effect.  This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
permitted assigns.  Except as set forth in Section 10 hereof, no Third Party
(including, without limitation, employees of either Party) shall have or acquire
any rights by reason of this Agreement.

 

11.6                        Purpose and Scope.  The Parties hereto understand
and agree that this Agreement is limited to the activities, rights and
obligations as expressly set forth herein.  Nothing in this Agreement shall be
construed to establish any agency, employment, partnership, joint venture,
franchise or similar or special relationship between the Parties.  Neither Party
shall have the right or authority to assume or create any obligations or to make
any representations, warranties or commitments on behalf of the other Party,
whether express or implied, or to bind the other Party in any respect
whatsoever.  Except as expressly set forth elsewhere in this Agreement, neither
Party grants to the other Party any right or license to any of its intellectual
property.

 

11.7                        Headings.  Section and subsection headings are
inserted for convenience of reference only and do not form part of this
Agreement.

 

11.8                        Assignment.  Neither Party may assign this Agreement
without the prior written consent of the other Party, which consent shall not be
unreasonably withheld, conditioned or delayed, except that such consent shall
not be required in connection with any assignment to an Affiliate of the
assigning Party, or to a Third Party in connection with a sale or transfer of
the business to which this Agreement relates, or to any successor Person
resulting from any merger or consolidation of such Party with or into such
Person, provided that the assignee shall have agreed in writing to assume all of
the assignor’s obligations hereunder, and provided, further, that the other
Party shall be notified promptly after such assignment has been effected.  Any
such assignment

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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shall not relieve the assigning Party of any liabilities or obligations owed to
the other Party hereunder, including, without limitation, in the case of Lilly,
the payment of any amounts described in Section 5 hereof, if any.

 

11.9                        Force Majeure.  Neither Party shall be liable for
failure of or delay in performing obligations set forth in this Agreement, and
neither shall be deemed in breach of its obligations, if such failure or delay
is due to natural disasters or any causes beyond the reasonable control of such
Party, provided that financial inability in and of itself shall not be
considered to be a force majeure event.  In event of such force majeure, the
Party affected thereby shall use commercially reasonable efforts to cure or
overcome the same and resume performance of its obligations hereunder.

 

11.10                 Interpretation.  The Parties hereto acknowledge and agree
that: (a) each Party and its counsel reviewed and negotiated the terms and
provisions of this Agreement and have contributed to its revision; (b) the
rule of construction to the effect that any ambiguities are resolved against the
drafting Party shall not be employed in the interpretation of this Agreement;
and (c) the terms and provisions of this Agreement shall be construed fairly as
to each Party hereto and not in a favor of or against any Party, regardless of
which Party was generally responsible for the preparation of this Agreement.  In
addition, unless the context otherwise requires, wherever used in this
Agreement: (i) the singular shall include the plural, the plural the singular;
(ii) the use of any gender shall be applicable to all genders; (iii) the word
“or” is used in the inclusive sense (and/or); (iv) the words “include” or
“including” shall be construed as incorporating, also, “but not limited to” or
“without limitation” (irrespective of whether such words are used in the
applicable instance); (v) the words “hereof,” “herein,” “hereby” and derivative
or similar words refer to this Agreement; and (vi) all references to “will” are
interchangeable with the word “shall” and shall be understood to be imperative
or mandatory in nature.

 

11.11                 Severability.  If any provision of this Agreement shall be
held by a court of competent jurisdiction, or declared under any law, rule or
regulation of any government having jurisdiction over the Parties hereto, to be
illegal, invalid or unenforceable, then such provision will, to the extent
permitted by the court or government, not be voided, but will instead be
construed to give effect to the intentions of the Parties to the maximum extent
permissible under Applicable Law, and the remainder of this Agreement will
remain in full force and effect in accordance with its terms.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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11.12      Dispute Resolution.  The Parties recognize that a bona fide dispute
as to certain matters may from time to time arise during the Term relating to
the Development or Commercialization of Licensed Products, either Party’s rights
or obligations hereunder or otherwise relating to the validity, enforceability
or performance of this Agreement, including disputes relating to alleged breach
or termination of this Agreement but excluding any determination of the
validity, scope, infringement, enforceability, inventorship or ownership of the
Parties’ respective Patent Rights (hereinafter, a “Dispute”).  In the event of
the occurrence of any such Dispute, the Parties shall, by written notice to the
other Party, have such Dispute referred to their respective senior officers
designated below, for attempted resolution by good faith negotiations commencing
promptly after such notice is received.  Said designated senior officials of the
Parties are as follows:

 

For Lilly:          Designated officer with full settlement authority; and

 

For ImmunoGen:            Chief Executive Officer.

 

In the event the designated senior officials are not able to resolve such
Dispute, the Parties may seek to mediate their Dispute, on terms and with a
mediator mutually agreeable to the Parties, or may seek to arbitrate their
Dispute, on mutually agreed upon terms and conditions, but neither Party shall
be required or obligated to mediate or arbitrate and the dispute resolution
provisions of this Section 11.12 are in addition to any other relief or remedies
available to either Party at law or equity.  This Dispute resolution process
shall be deemed a settlement negotiation for the purpose of all federal and
state rules protecting disclosures made during settlement negotiations from
later discovery and/or use in evidence.

 

11.13      Patent Dispute.  Anything contained in this Agreement to the contrary
notwithstanding, with respect to any dispute, controversy or claim between the
Parties that involves the validity, scope, infringement, enforceability,
inventorship or ownership of the Parties’ respective Patent Rights (a) that are
issued in the United States shall be subject to actions before the United States
Patent and Trademark Office and/or submitted exclusively to the federal court
located in [***], and (b) that are issued in any other country (or region) shall
be brought before an appropriate regulatory or administrative body or court in
that country (or region), and the Parties hereby consent to the jurisdiction and
venue of such courts and bodies.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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11.14      Equitable Relief.  Anything contained in this Agreement to the
contrary notwithstanding, if a Party reasonably requires relief on a more
expedited basis than would be possible pursuant to the procedures set forth in
Section 11.12 hereof, such Party may seek a temporary injunction or other
equitable relief in a court of competent jurisdiction, without posting a bond,
pending the resolution of the Dispute in accordance with Section 11.12 hereof. 
Any such remedies will be in addition to all other remedies available by law or
at equity to the injured Party.

 

11.15      Prohibition on Solicitation.  During the Restricted Period, neither
Party nor its Affiliates shall, directly or indirectly, actively recruit, or
solicit any employee of the other Party or its Affiliates with whom such Party
or its Affiliates have come into contact or interacted for the purposes of
performing this Agreement, without the prior consent of the other Party.  For
purposes of this Section 11.15, “solicit” shall be deemed not to include
(a) circumstances where an employee of one Party or any of its Affiliates
initially contacts the other Party or any of such Party’s Affiliates seeking
employment or (b) general solicitations of employment not specifically targeted
at such employees.

 

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

 

11.17      Execution.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each Party and delivered to the other Party, it being understood that both
Parties need not sign the same counterpart.  If any signature is delivered by
facsimile transmission or by e-mail delivery of a “pdf” format data file, such
signature shall create a valid and binding obligation of the Party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “pdf” signature page were an original thereof.

 

11.18      Compliance with Law.  Each Party shall insure that it and its
activities under this Agreement shall at all times comply in all material
respects with all Applicable Laws.

 

[Signature page follows]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives.

 

 

IMMUNOGEN, INC.

 

ELI LILLY AND COMPANY

 

 

 

 

 

 

 

 

By:

 

 

By:

 

 

 

 

 

 

Name:

 

 

Name:

 

 

 

 

 

 

Title:

 

 

Title:

 

 

 

 

 

 

Date:

 

 

Date:

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

62

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SCHEDULE A

 

LICENSED TARGET

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

1

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