Prepared by MerrillDirect





EXHIBIT 10.66


 


PRODUCT
SUPPLY AGREEMENT




between


LONZA
BIOLOGICS PLC


and


ABGENIX,
INC.

Relating to Product Supply from SWFH


THIS
AGREEMENT is made the                          
day of                                         
             2000




BETWEEN


LONZA
BIOLOGICS PLC of 228 Bath Road, Slough, Berkshire SL1 4DY, England, a company
incorporated under the laws of England and Wales, (hereinafter referred to as
"LB") and


ABGENIX,
INC. of 7601 Dumbarton Circle, Fremont CA 94555, USA, a Delaware Corporation,
(hereinafter referred to as "Abgenix").




WHEREAS


A.         LB and Abgenix have entered into the
Services Agreements and the Option Agreement (as herein defined);


B.          In consideration for the sums paid by
Abgenix pursuant to the Option Agreement, Abgenix has been granted the right
during the Option Period (as defined therein) to negotiate exclusively with LB
for the supply of Product (as defined herein) from the Facility (as defined
herein) the supply of which is intended to utilise one hundred percent (100%)
of the fermentation capacity of the Facility for producing such products; and


C.          Pursuant to Abgenix rights under the
Option Agreement, the parties hereto have negotiated terms upon which LB agrees
to supply and Abgenix agrees to purchase the Services (as herein defined) on
the terms and conditions set out herein.


NOW
THEREFORE it is hereby agreed by and between the parties as follows:


1.          In this Agreement, its recitals and
all the Schedules hereto, words and phrases defined in the Terms for
Manufacturing Services set out in Schedule 4 hereto shall have the meanings set
out therein.


2.          This Agreement shall take effect on
the Effective Date and, unless terminated in accordance with Clause 18 or
Clause 7.6 of Schedule 4 hereto, shall continue until its expiry pursuant to
Clause 4 of Schedule 4 hereto.


3.          Subject to the Terms for Manufacturing
Services set out in Schedule 4 hereto LB agrees to carry out the Services as
provided for herein and Abgenix agrees to pay the Price therefor as provided in
Schedule 3 together with any additional costs and expenses that fall due
hereunder.


4.          Any notice or other communication to
be given under this Agreement shall be delivered personally or sent by first
class pre-paid post or facsimile transmission addressed as follows:


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





If
to Abgenix to:

Abgenix Inc

7601 Dumbarton Circle

Fremont CA 94555

USA

For the attention of:   President

Facsimile:   +1 510 608 6511

Copy to:   Director of Legal Affairs


If
to LB to:

Lonza Biologics plc

228 Bath Road

Slough

Berkshire SL1 4DY

England

For the attention of:   Head of Legal
Services

Facsimile:   +44 (0)1753 777001


or
to such other destination as either party hereto may hereafter notify to the
other in accordance with the provisions of this clause.  All other such notices or other
communications shall be deemed to have been served as follows:


4.1        if delivered personally, at the time of
such delivery;


4.2        if sent by first class pre-paid post,
____ business days (Saturdays, Sundays and Bank or other public holidays
excluded) after being placed in the post:


4.3        if sent by facsimile, upon receipt of
the transmission confirmation slip showing completion of the transmission


4.4        if by express mail or by courier, within
____ days after being despatched.


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





AS
WITNESS the hands of the duly authorised representatives of the parties hereto
the day and year first before written.


 




	SIGNED
  BY	R.H.
  Rupp and LP Thomas
	For
  and in behalf of	 
	LONZA
  BIOLOGICS PLC
                 Title	President
  and VP Sales & Marketing, respectively

	 
	 	 
	November
  24, 2000 and November 30, 2000, respectively

	 
	                 Date	 
	 	 
	SIGNED
  BY	Kurt
  Leutzinger
	For
  and in behalf of	 
	ABGENIX
  INC	      Chief Financial Officer:

	 
	 	      Title	 
	 
	 	            November 10, 2000

	 
	                 Date	 
										






 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





SCHEDULE
1


SPECIFICATIONS




1.          Definitions


             For the purposes of this document:


"Abgenix
Materials" shall mean those materials supplied to LB by Abgenix pursuant
to this Agreement or the Services Agreements which materials are more
particularly set out in Part A of Schedule 2 hereto.


"Cell
Line" shall mean:

1.  ____________


2.  ____________


"Product"
shall mean:

1.  ____________


2.  ____________


New
cell lines and new products may be added to the above definitions pursuant
to____to this Agreement.


SECTION
A:  ____________


 


____________


 


SECTION
B:  ____________


 


____________


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





SCHEDULE
2


SERVICES




A.         SUPPLY OF ABGENIX MATERIALS AND ABGENIX
INFORMATION


B.          ACTIVITIES TO BE UNDERTAKEN BY LB

Stage 1 Operation and Use of the Facility

Stage 2 Production of GMP Product at _______litre scale.


A.         SUPPLY OF ABGENIX MATERIALS AND ABGENIX
INFORMATION


Abgenix
shall supply, have LB provide on terms to be agreed or cause to have supplied
to LB sufficient purified reference standard for the Product and ampoules of
the Cell Lines from an appropriate cell bank sufficient for LB to provide the
Services and for each product not previously produced by LB for Abgenix,
Abgenix shall in addition supply, have LB provide on terms to be agreed or
cause to have supplied to LB the following:


(i)          Information on the Cell Line or new
cell lines (where relevant) expressing the Product or the new products to allow
a safety assessment by  Biological
Safety Committee at LB.  This
information needs to be reviewed before the Cell Lines or new Cell Lines can be
sent to LB.


(ii)         Following compliance with (i) above,
sufficient ampoules of viable frozen cells of the Cell Line or new cell line
(where relevant) containing approximately ____ cells/ampoule.  The Cell Line or new cell line shall be
fully cloned and suitable for use in the performance of the Services.  Any disagreement as to the suitability of
the Cell Line(s) or new cell lines in question for use in the Service shall be
referred to the Steering Committee.


(iii)        Sufficient purified reference standard
for the new product (where relevant) or Product.  LB shall notify Abgenix of the quantities of reference standard
required.


(v)        Copies of the Abgenix test reports for
all virus testing carried out on the Cell Line or new cell line.  This information needs to be reviewed by the
Q.A. department at LB to determine acceptability. If unacceptable, the virus
testing will be repeated by LB at Abgenix cost.  Any dispute as to the suitability of any virus test result shall
be referred to the Steering Committee.


             LB's current requirement for tests
to be completed are set out in Appendix A to this Schedule 2.


(vi)       Full genealogy and history of the Cell
Line or new cell line (where relevant) to the date of transfer of the new cell
line(s) or Cell Line, along with culture, productivity and stability study data
on all linearly related stocks (if available).


(vii)      Appropriate and sufficient Process
information, to the extent the same is under Abgenix ownership or control for
LB to provide the Services.


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





B.          ACTIVITIES TO BE PERFORMED BY LB


1.0        Stage 1 - Operation and Use of the
Facility


Throughout
the term of the Agreement, LB will make available and maintain the Facility for
the manufacture of Product(s) at _______ in accordance with the principles and
requirements of cGMP.


2.0        Stage 2 - Production of GMP Product at
________ litre scale


2.1        Objective


             LB will manufacture Batches of
Product at ________ litre scale in accordance with the principles of cGMP using
the Facility provided under Stage 1 of this Agreement.


2.2        Activities


For
each Batch of Product ordered by Abgenix hereunder, LB shall;


2.2.1     recover ampoules of the cell bank for the
Cell Line and expand cultures to complete an airlift fermentation at ________
litre scale in the Facility using the Process for the Cell Line for that
Product.  Each Batch shall be produced
as one lot from one ampoule of the cell bank provided by Abgenix.


2.2.2     Clarify culture supernatant and
concentrate, and purify concentrate using the Process for that Product.


Note:    Additional Product and in Process samples
may be taken at Abgenix request for further analyses.  These additional tests may be performed by LB at a price and
under terms to be agreed.


2.2.3     Deliver Product to Abgenix.


Note:    During clinical trials it may be possible to
ship Product from LB to Abgenix in quarantine at the written request of
Abgenix.  In order to ship in quarantine
a letter will need to be provided by Abgenix stating that the Product will not
be used in human clinical studies until a Certificate of Analysis is issued by
LB.  Licensed Product for in market
supply shall not be shipped in quarantine.


2.2.4     Test Product against the draft
Specification or Specification (once this has been agreed pursuant to Clause 2
of Schedule 4 hereto).


2.2.5     Review requirements (if any) for Process
modifications in order to meet the draft Specification for manufacture of
subsequent Batches and notify Abgenix of such proposed modifications.  Any such Process modifications are subject
to agreement between LB and Abgenix in accordance with Schedule 4 hereto.


2.2.6     Undertake cGMP review of lot documentation
and define Product disposition.  Issue a
Certificate of Analysis (if appropriate).


The
following information will be provided to Abgenix:

* supernatant antibody concentration

* step yields for each chromatography step and buffer exchange operations

* copies of key test data

* outline of the manufacturing Process including the yield at manufacturing
scale

* summary listing of deviations

* listing of in-Process bioburden test results

*____________

*____________


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





2.3        Timescale


LB
shall schedule production of Batches as described in Schedule 4 hereto.


Stage
2 shall be complete for each Batch upon the later of delivery of Product or
completion of review of documentation.


It
is estimated that Stage 2 will be completed for each Batch approximately 5
months from the commencement of each Batch.


Where
appropriate (as outlined by activity 2.2.3) and where requested by Abgenix LB
shall use all reasonable efforts to deliver Product under quarantine
approximately nine (9) weeks from the commencement of each Batch.


APPENDIX
A TO SCHEDULE 2




____________


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





SCHEDULE
3


PRICE
AND TERMS OF PAYMENT




1.          Price


             In consideration for performance of
the Services, Abgenix shall pay LB the Price as determined by reference to the
following:


1.1        The Price for the Services shall consist
of:


1.1.1     the Suite Fee, which shall be the Price for
performance of the Services (excluding the Raw Materials Fee), calculated in
accordance with Clauses 1.2, 1.4 and 1.5 below; and


1.1.2     the Raw Materials Fee, namely the Price for
Stage 2 of the Services, calculated in accordance with Clauses 1.3, 1.5 and 1.6
below.


Save
as provided for by the terms and conditions of this Agreement, Abgenix shall
not be obliged to make further payment in respect of the Services set out in
Stages 1 and 2 of Schedule 2.


1.2        The Suite Fee for the calendar year 2001
shall be _______________.  The Suite Fee
shall be inflated in accordance with the provisions of Clauses 1.4 and 1.5
below.


1.3        The Raw Materials Fee shall be equal to
the costs to LB of acquiring the Raw Materials for use in the Processes plus a
handling charge of ____________ of such costs. 
LB shall use reasonable endeavours to purchase Raw Materials at a fair
market rate for same.  For Raw Materials
totally consumed by production of one Batch the costs to LB of Raw Materials
shall be demonstrated to the Steering Committee by LB by reference to the
costed bill of materials for the Process in question prepared by LB based on
its understanding of the cost of the Raw Materials in question projected for
the relevant accounting period.  For Raw
Materials totally consumed by production of one Batch or by reference to
purchase orders issued by LB in respect of Raw Materials purchased by LB
specifically for the purposes of performing the Services which Raw Materials
are to be used in more than one Batch, the costs to LB of such Raw Materials shall
be demonstrated to Abgenix by LB by reference to invoices received by LB.


LB
shall make the records pertaining to the calculation of the Raw Material Fee
available for audit, no more than once in any calendar year, within a
reasonable period of receiving a written request for such records, to
independent auditors, provided always such auditors have accepted the same
obligations of confidence as Abgenix hereunder (in respect of such records).


1.4
       The Price quoted in Clauses 1.2 and
1.3 above is applicable to Services performed during the calendar year
2001.  The Price may be increased no
more than once in any calendar year as follows:


1.4.1     For the calendar year ____, and each
subsequent calendar year during which the Agreement subsists ("the
calendar year in question"), LB may require by _____days notice to Abgenix
in writing, to be served no later than ________ of the year preceding the
calendar year in question, that the Suite Fee be increased for the calendar
year in question.


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





1.4.2     The Raw Materials Fee will vary in any
event in accordance with the costs incurred in respect of Raw Materials by LB
as provided by Clause 1.3 above, but will not otherwise be increased.


1.4.3     In the event of notification under Clause
1.4.1, the Suite Fee for each month of the calendar year in question shall
equal the Suite Fee for the year preceding the calendar year in question
adjusted by the ________.


1.4.4     Any Price alteration whether made pursuant
to this Clause 1.4 or otherwise shall apply to the Price falling due to LB
pursuant to any provision of this Agreement during the calendar year in
question irrespective of whether firm orders have been placed for Services
prior to the relevant Price alteration taking effect.


1.5        In addition to the Price alterations
which are applied pursuant to Clause 1.4 alterations shall be made to the
___________________.  These shall
include, but not be limited to changes in the Price caused by mutually agreed
alteration of the Process or the draft Specification or the Specification as
established at the Effective Date, provided Abgenix has received a written
estimate of the costs and a reasonable demonstration of the items of cost or
expense in question.  Such additional
Price alterations shall be considered for application at the time the Price for
supply of Product is fixed each year.


1.6        Abgenix shall pay LB the Price for the
Services against LB's invoices therefor, as follows:


1.6.1     subject to the provisions of Clause 7.4 of
Schedule 4 hereto relating to refunds of the Suite Fee, the Suite Fee shall be
payable quarterly in advance commencing with the month in which the Suite Fee
Commencement Date falls, irrespective of whether Product has been ordered for
delivery hereunder.  At the Effective
Date, this is estimated to be ___________. 
LB will keep Abgenix promptly informed, via the Steering Committee, of
changes in the estimated date for this activity and shall use reasonable
commercial endeavours to ensure the fitness of the Facility for the Services in
a timely fashion.  The Suite Fee shall
be payable in respect of each month during the time this Agreement subsists;
and


1.6.2     LB shall be entitled to issue the invoice
in respect of the Raw Materials Fee for the production of each Batch of Product
pursuant to Stage 2 of the Services, upon commencement of the Services relating
to the Batch of Product in question. 
For the avoidance of doubt, Services in respect of a Batch of Product
commence upon the removal of the first ampoule of cells from the relevant cell
bank stocks at LB's premises with the intent that such cells shall be used in
performance of the Services.  No Raw
Material Fee shall be levied in respect of Services performed under Stage 2 of
Schedule 2 which do not result in delivery of any Product.  Advance payment of a Raw Materials Fee in
respect of such Services shall be credited to Abgenix.


             Notwithstanding this Clause 1.6.2
above, the Raw Materials Fee in respect of components, including but not
limited to column matrices, which are purchased for use in performing the
Process to produce more than one production Batch will be payable by Abgenix at
such time as the Raw Materials in question are received by LB.


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





1.7        Regulatory Support and Quality Assurance


1.7.1     The Price has been calculated to include
regulatory support for two (2) audits (at mutually convenient times) by Abgenix
personnel of up to three (3) days each prior to commencement of the Services
and, thereafter, up to two (2) audits (at mutually convenient times) by Abgenix
personnel of up to three (3) days each in any one calendar year during the Term
of this Agreement.  Subject to Clause
1.7.2 of this Schedule 3 below, in the event LB is required by Abgenix to
provide any additional regulatory or quality assurance support or development
services (including but not limited to those process validation services listed
in Appendix 1 hereto) associated therewith to Abgenix in respect of Product or
the Services, whether pursuant to Clauses 7.9 or 12.1, or due to Abgenix own
requirements or those of any regulatory or other similar body, such support
will be provided on terms and conditions and at a price to be agreed.


1.7.2     In the event Abgenix conducts an audit of
the Facility pursuant to its rights under Clause 1.7.1 and, as a result of
default on the part of LB, Abgenix has just cause to conduct further audits of
LB's premises in order to satisfy itself as to the matters of default in
question, Abgenix shall be entitled, without additional payment to LB, to
conduct up to two (2) additional audits (at mutually convenient times) of LB's
premises in order to so satisfy itself of the matters in question.  Any requirement to conduct further audits
beyond this number shall be performed on terms and conditions and at a price to
be agreed.


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





SCHEDULE
4


TERMS
FOR MANUFACTURING SERVICES

FROM LB'S SOUTHWEST FERMENTER HALL FACILITY

FOR

ABGENIX, INC.


1.          Interpretation


1.1        In these Terms, unless the context requires
otherwise:


1.1.1     "Abgenix Information" means all
technical and other information known to, controlled or owned by Abgenix and
not known to LB prior to its disclosure by Abgenix to LB or otherwise
subsequently, independently, licensed to LB by a third party and not in the
public domain relating to the Abgenix Materials, the Process(es) and the
Product(s), from time to time supplied by Abgenix to LB.


1.1.2     "Abgenix Materials" means the
materials supplied by Abgenix to LB pursuant to this Agreement (if any) and
identified as such by Schedule 1 hereto or supplied pursuant to previous
Services Agreements between the parties. 
Abgenix Materials shall include the Cell Lines (subject to any residual
rights of LB including but not limited to the LB Patent Rights or the LB
Know-How).


1.1.3     "Abgenix Patent Rights" means all
Patent Rights of which Abgenix is from time to time the owner.


1.1.4     "Abgenix Tests" means the tests
(if any) to be carried out on the Product immediately following receipt of the
Product by Abgenix, particulars of which are set out in Schedule 1 as modified
from time to time by written agreement between the parties.


1.1.5     "Affiliate" means any company,
partnership or other entity, which directly or indirectly controls, is
controlled by or is under common control with the relevant party to this
Agreement.  "control" means
the ownership of fifty per cent (50%) or more of the issued share capital or
the legal power to direct or cause the direction of the general management and
policies of the party in question.


1.1.6     "Agreement" means this Product
Supply Agreement between LB and Abgenix.


1.1.7     "Batch" means the quantity of
total bulk purified Product (including samples) which is produced as a result
of the completion of one operation of the Process for the Product in question
in the Facility in accordance with cGMP.


1.1.8     "Binding Order" shall have the
meaning ascribed to it by Clause 5.4 of Schedule 4.


1.1.9     "Cell Line" means the cell line
or cell lines used in the manufacture of Product, particulars of which are set
out in the definition of Cell Line in Schedule 1 hereto, as the same may be
amended from time to time in accordance with the provisions of this Agreement.


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





1.1.10   "cGMP" means Good Manufacturing
Practices and General LB Products Standards as promulgated under the US Federal
Food Drug and Cosmetic Act at 21CFR (Chapters 210, 211, 600 and 610) and the
Guide to Good Manufacturing Practices for Medicinal Products as promulgated
under European Directive 91/356/EEC. 
LB's operational quality standards are defined in internal GMP policy
documents.  Additional product-specific
development documentation and validation work may be required to support
regulatory applications and to conduct clinical trials or market a product.


1.1.11   "Delivery Date" shall mean the date
determined  in accordance with Clause 5
below upon which, the later of either the date:


(i)          a given Batch of Product to be
produced pursuant to Stage 2 of the Services; or


(ii)         the Certificate of Analysis (or lot
review documentation in the case of Product being assessed against a draft
Specification) relating thereto;


is
to be ready for delivery to Abgenix ex works LB's premises (Incoterms 2000).


1.1.12   "Effective Date" shall mean the
date of signature of this Agreement by both parties.


1.1.13   "Facility" means the ______
fermenter train and associated ancillary equipment known as the South West
Fermenter Hall located at LB's premises in Slough, Berkshire and the
purification equipment from which Product will be produced hereunder.


1.1.14   "LB Know-How" means all technical
and other information known to, owned or controlled by LB from time to time
other than Abgenix Information and information in the public domain.


1.1.15   "LB Patent Rights" means all Patent
Rights of which LB is from time to time the owner.


1.1.16   "Minimum Requirement" shall have
the meaning ascribed to it by Clause 5.2 of this Schedule 4.


1.1.17   "Optimum Capacity" shall have the
meaning ascribed to it by Clause 5.2 of this Schedule 4.


1.1.18   "Option Agreement" means the
agreement between the parties hereto dated ________, pursuant to which LB is
undertaking certain engineering and validation works at the Facility and
Abgenix has been granted certain rights to negotiate the terms of this
Agreement.


1.1.19   "Patent Rights" means all patents
and patent applications of any kind throughout the world.


1.1.20   "Price" means the price for the
Services as specified in Schedule 3, consisting of the Suite Fee and the Raw
Materials Fee.


1.1.21   "Process" means the process(es) for
the production of the Product(s) from the Cell Line(s), agreed between the
parties and established first under the Services Agreements and including any
improvements thereto from time to time made by agreement between the parties
hereto.


1.1.22   "Product" means all or any part of
the product(s) (including any sample thereof), particulars of which are set out
under the definition of Product in Schedule 1 hereto (as amended from time to
time by agreement between the parties hereto).


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





1.1.23   "Producer Price Index" or
"PPI" means at the time of the relevant operation of Clause 1.4 of
Schedule 3 hereto, the percentage increase in the then most current published
United Kingdom Government statistics for the United Kingdom Retail Price Index
as measured against the later of the index most current at the Effective Date
or that last considered under this Agreement for the purposes of Clause 1.4 of
Schedule 3 hereto, plus ____________________ the Steering Committee shall meet
to decide whether operation of this Clause 1.1.23 is fair and reasonable,
having regard to the actual increases in the costs of operating the Facility
incurred by LB.  In such event the
Producer Price Index shall only be calculated to exceed _____________ to the
extent LB's cost increases exceed such percentage and to the extent required to
ensure that LB's percentage profit margin on revenues receivable by LB under
this Agreement is maintained and not increased or decreased by virtue of such
increase in the PPI..


1.1.24   "Raw Materials" means materials,
ingredients, additives, purification resins, reagents, and costs for virus
testing by Testing Laboratories which are purchased or used by LB in the
performance of the Services and which are consumed by performance of the
Services whether following their first use or otherwise.


1.1.25   "Raw Materials Fee" means that part
of the Price which is payable to LB by Abgenix in respect of the Raw Materials
utilised in the performance of the Services and calculated in accordance with
Clause 1.3 and 1.4 of Schedule 3 hereto.


1.1.26   "Services" means all or any part of
the services which are the subject of the Agreement particulars of which are
set out in Schedule 2 hereto.


1.1.27   "Services Agreements" means all or
any of the agreements between the parties dated _______________, pursuant to
which LB agreed to provide research and development services to Abgenix in
relation to certain cell lines for the manufacture of certain antibody
products, and such other agreements between the parties hereto as may be agreed
in writing by the parties shall be known as Services Agreements.


1.1.28   "Specification" means the
specification for Product(s) particulars of which are set out in Schedule 1
hereto and such modifications to the same as are agreed pursuant to Clause 2.1
or Clause 10.1 of this Schedule 4.


1.1.29   "Steering Committee" means the
committee established pursuant to this Agreement, the function and powers of
which are more particularly described by Clause 9 of this Schedule 4.


1.1.30   "Suite Fee" means that part of the
Price which is payable to LB in respect of the Services as determined by
sections 1.2, 1.4 and 1.5 of Schedule 3 hereto, which fee comprises:


(i)          storage of the cell banks of the Cell
Line


(ii)         preparation and maintenance of
manufacturing documents for the manufacture of bulk Product


(iii)        performance of the cell culture Process


(iv)       purification of Product


(v)        analysis of Product according to the
Specification for Product


(vi)       review of completed Batch records; and


(vii)      the costs of operating the Facility (including
but not limited to the supply of utilities).


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





1.1.31   "Suite Fee Commencement Date" means
the first day of the month in which LB notifies Abgenix in writing that the
Facility is fit for the Services to commence, and in which the Facility is in
fact fit for the Services to commence.


1.1.32   "Supply Deficiency" shall have the
meaning ascribed by Clause 7.3 of this Schedule 4.


1.1.33   "Supply Failure" shall have the
meaning ascribed by Clause 7.5 of this Schedule 4.


1.1.34   "Terms of Payment" means the terms
of payment specified in Schedule 3.  For
the avoidance of doubt all invoices and payments shall be in pounds sterling
unless otherwise agreed.


1.1.35   "Testing Laboratories" means any
third party instructed by LB to carry out tests on the Abgenix Materials or the
Product.


Unless
the context requires otherwise, words and phrases defined in any other part of
the Agreement shall bear the same meanings in these Terms, references to the
singular number include the plural and vice versa, references to Schedules are
references to schedules to the Agreement, and references to Clauses are
references to clauses of these Terms.


2.          Applicability of Terms


2.1        No variation of or addition to these
Terms shall be effective unless in writing and signed by an authorised
signatory on behalf of LB and Abgenix. 
For the avoidance of doubt, and subject always to the provisions of
Clause 10.1 relating to changes to the draft Specification or Specification,
amendments to the draft Specification or the Specification for Product(s) and
the decision to convert the draft Specification to Specification shall be
effective if reduced to writing and signed by the authorised representative for
such purpose of each party, which representative shall be designated from time
to time by the parties.


             It is intended that the decision to
convert the draft Specification to a Specification shall take place, in the
case of each Product, with the full knowledge of the Steering Committee, only
following the completion of five (5) Batches of the Product in question in
accordance with cGMP (e.g. two (2) Batches plus three (3) consistency Batches
and following the performance of services to complete consistency studies in
respect of the Product in question.


             For the avoidance of doubt, any
amendment to the scope of the Services set out herein (including but not
limited to the performance of consistency studies) shall be undertaken on terms
and conditions to be agreed.


3.          Supply by Abgenix


3.1        Pursuant to the Services Agreements
and/or Schedule 2 hereto Abgenix has supplied or shall supply to LB the Abgenix
Information and the Abgenix Materials together with full details of any known
hazards relating to the Abgenix Materials, their storage and use.  Abgenix shall be obliged to notify LB of any
changes in or additions to such information from time to time during the time
this Agreement subsists.  Property in
the Abgenix Materials supplied to LB shall remain vested in Abgenix.


             Abgenix shall ensure the adequate
and timely supply of further amounts of the Abgenix Materials in sufficient
quantity to facilitate LB's performance of the Services, provided LB shall
provide Abgenix timely notice of its requirements in this regard.


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





3.2        Abgenix hereby grants LB the
non-exclusive right to use the Abgenix Information, the Abgenix Patent Rights
and the Abgenix Materials solely for the purpose of LB performing its
obligations under this Agreement. 
Without prejudice to any pre-existing or future rights vested in LB
pursuant to pre-existing or future agreements between the parties, LB hereby
undertakes not to use the Abgenix Materials (or any part thereof) for any other
purpose without Abgenix specific written consent obtained in advance.  Save to the extent expressly granted by this
Clause 3.2 no licences are granted to LB to use the Abgenix Materials, the
Abgenix Patent Rights or the Abgenix Information, and no licences shall arise
or be deemed to have arisen by default estoppel or otherwise.


3.3        LB shall:


3.3.1     at all times use all reasonable endeavours
to keep the Abgenix Materials secure and safe from loss and damage in such
manner as LB stores its own material of similar nature;


3.3.2     not part with possession of the Abgenix
Materials or the Product, save for the purpose of tests at the Testing
Laboratories or as instructed by Abgenix;


3.3.3     procure that all Testing Laboratories are
subject to the obligations of confidence no less onerous than those obligations
of confidence imposed on LB under this Agreement; and


3.3.4     without prejudice to LB's entitlement to
receive payment hereunder and without prejudice to LB's own proprietary rights
in the Process, the LB Know-How and the LB Patent Rights, LB accepts that it
shall not by virtue  of this Agreement
acquire any right or title in, or to, the Abgenix Materials or the Product.


3.4        Abgenix warrants that:


3.4.1     Abgenix is and shall at all times
throughout the duration of the Agreement remain entitled to supply the Cell
Line(s), the other Abgenix Materials and Abgenix Information to LB.


3.4.2     to the best of Abgenix knowledge and belief
the use by LB of the Cell Line(s), other Abgenix Materials, Abgenix Information
and/or the Abgenix Patent Rights for the Services will not infringe any rights
(including, without limitation, any intellectual or industrial property rights)
vested in any third party in respect of which Abgenix is not properly licensed
to exploit for the purposes of LB performing the Services and;


3.4.3     that Abgenix will notify LB in writing,
promptly, in the event that it is no longer entitled to supply the Cell Line(s),
other Abgenix Materials, Abgenix Information and/or the Abgenix Patents for the
Services or use of the same or infringes or is alleged to infringe any rights
(including, without limitation, any intellectual or industrial property rights)
vested in third parties.


 


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Exchange Commission.





3.5        Abgenix undertakes to indemnify and to
maintain LB properly indemnified against any loss, damage, costs and expenses
of any nature (including reasonable court costs and legal fees incurred by LB
or ordered by a court of competent jurisdiction as payable by LB on a full
indemnity basis) (collectively "Costs"),  to the full extent that LB suffers such Costs out of any breach
of the warranties given in Clause 3.4 above or any claims alleging LB's use of
the Cell Line(s), other Abgenix Materials, the Abgenix Information, the Abgenix
Patent Rights or any Process steps or components which are or become part of
the Process by virtue of requests by Abgenix that they should be included in
the Process , in the course of the Services, infringes any rights (including
without limitation any intellectual or industrial property rights) vested in a
third party (whether or not Abgenix knows or ought to have known about the
same).


3.6        The obligations of Abgenix under Clause
3.4 and 3.5 shall survive the termination for whatever reason of the Agreement.


4.          Term


4.1        This Product Supply Agreement shall take
effect on its signature and shall unless terminated pursuant to Clause 18 or
Clause 7.6 of this Schedule 4, remain in effect until the _______ anniversary
of the delivery of the first Batch of Product produced hereunder pursuant to
Stage 2 of the Services.  The parties
may from time to time agree to extend the term of this Agreement by one or more
calendar years.  Extensions to the term
of the Agreement can be made annually by mutual agreement, which agreement
shall be reached not less than ________ calendar months before the date on which
the Agreement would otherwise expire.


5.          Capacity, Order Quantities and Order
Procedures


5.1        It is the intention of the parties that,
subject to the rights and obligations of the parties set out herein, Abgenix
shall, during the term of this Agreement, have available to it and be entitled
to utilise one hundred percent (100%) of the fermentation capacity of the
Facility and purification capacity reasonably acceptable to Abgenix for the
manufacture of Product.  The Minimum
Requirements and Optimum Capacity at the Effective Date are based upon LB's
estimates and representations as of the Effective Date regarding the capacity
of the Facility.  LB has based such
estimates and representations upon LB's current operating practices at the
Effective Date and upon its knowledge of the Products and Processes defined
herein at the Effective Date.


             From time to time, the Steering
Committee shall review and assess the capacity of the Facility.  In the event, as a result of such review, LB
reasonably believes that the operation of its then standard practices and
procedures for the same, unchanged, Processes relating to the same Products,
should result in a change to the Optimum Capacity of the Facility, LB shall
notify Abgenix of this fact.  In such
event, the parties shall negotiate in good faith a proportionate adjustment to
those provisions of this Agreement which relate to the Minimum Requirements and
Optimum Capacity of the Facility.


             For the avoidance of doubt any
changes to the capacity of the Facility which derive from alterations to the
Processes, Products or methods of operation of the Facility shall be governed
by Clauses 10 and/or 15 of this Schedule 4 (as applicable).


 


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Exchange Commission.





5.2        Product will be ordered by number of
Batches to be delivered to Abgenix in accordance with Clause 5.3 below.  During such time as the Process(es) being
performed hereunder remain(s) unchanged, up to ________ Batches may be ordered
for delivery in each calendar year during which this Agreement subsists
("Optimum Capacity").  The
actual number of Batches which can be delivered pursuant to this Agreement in
any one calendar year will depend on the sequence and combination of Products
requested by Abgenix and accepted by LB. 
Notwithstanding the provisions of this Clause 5.2 however, and subject
to Abgenix adhering to the ordering procedures set out herein, and the terms of
this Agreement, LB shall, if requested by Abgenix, be obliged to accept and
deliver to Abgenix orders placed for at least twelve (12) Batches of Product in
any one calendar year ("Minimum Requirement").


Notwithstanding
the acceptance of a Binding Order for supply of Product in 2001 or 2001, the
actual availability of Batches for delivery (if any) during 2001 and 2002 shall
depend on the Suite Fee Commencement Date.


Due
account shall be taken by the parties of the Suite Fee Commencement Date and
the effect its timing has on the available capacity of the Facility during 2001
and 2002.


Subject
to LB's obligations under Clause 1.6.1 of Schedule 3 hereto, it is accepted
that alterations in the Suite Fee Commencement Date may entitle LB to reduce
the number of Batches to be delivered in 2001 and/or 2002 without liability
under Clause 7.


5.3        Abgenix shall place its orders for
Batches of Product as follows:


5.3.1     within ______ days of the Effective Date
Abgenix shall provide LB with a written statement of the number and sequence of
Batches of Product it wishes to receive delivery of during the calendar year
2001 together with the preferred Delivery Dates therefor;


5.3.2     by __________ of each subsequent calendar
year during which the Agreement subsists, until and except for the last
calendar year during which this Agreement subsists, Abgenix shall provide LB
with a written statement of the number and sequence of Batches of Product it
wishes to receive delivery of between ________ of the calendar year following
that in which the statement is issued and during which this Agreement subsists
(the calendar year in question) together with its preferred Delivery Dates
therefor; and


5.3.3     by ________ of each subsequent calendar
year during which this Agreement subsists, until and except for the last
calendar year during which this Agreement subsists, Abgenix shall provide LB
with a written statement of the number and sequence of Batches of product it
wishes to receive delivery of between __________ of the calendar year following
that in which the statement is issued and during which this Agreement subsists
(the calendar year in question) together with its preferred Delivery Dates
therefor.


5.4        LB shall use all reasonable commercial
endeavours to meet the requirements of Abgenix and shall within _____ working
days of receipt by LB of a statement from Abgenix pursuant to Clause 5.3 above
confirm in writing whether it is able to accept an order for the Product
requested.  Subject always to Clause
1.6.1 of Schedule 3 and the fact LB is obliged to accept and deliver orders for
at least the Minimum Requirement then in force, if LB is unable to accept an
order as requested due to the requirements or operative procedures of Clause
5.1 or 5.2 (above), the provisions of Clause 13 or Clause 19 below, or due to
the need to satisfy LB's rights under Clause 10 below, the Steering Committee
shall determine the alterations to the request which are acceptable to both
parties, having regard to the Optimum Capacity then in force, the operational
requirements of the Facility (including but not limited to requirements for
maintenance) and the nature and combination of the Products requested for
delivery.  LB shall be responsible for
confirming, in writing, the decision of the Steering Committee within _______
of that decision.  If LB receives no dispute
over the interpretation of the said decision within a further _______ days such
decision shall be binding.  Any dispute
over the decision in question shall be determined by operation of Clause 20 of
this Schedule 4.


             Written confirmation by LB of its
acceptance of a statement or the decision of the Steering Committee shall also
confirm the Delivery Dates for the Batches of Product concerned.  Such written confirmation shall constitute a
firm commitment from Abgenix to purchase and pay the Price for, and LB to
supply the Services in question ("Binding Order").


 


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Exchange Commission.





5.5        Notwithstanding Clauses 5.2 and 5.4
above and subject to LB's obligations in respect of ensuring the fitness of the
Facility for the Services set out in Schedule 3 hereto, Abgenix accepts that in
the event the Suite Fee Commencement Date falls after ________, no
_________________, and LB may not be able to deliver the full Minimum
Requirement during the calendar year 2002. 
______________.


5.6        Subject always to LB's rights under
Clause 10 of this Schedule 4, Abgenix may request LB's consent to increase the
number of Batches in a Binding Order at any time.  LB shall not unreasonably withhold its consent to any such
request from Abgenix, but shall not be obliged to consent to an increase in the
number of Batches to be delivered to Abgenix during any order period above the
Minimum Requirement applicable to such period.  Additionally LB shall not be required to increase the number of
Batches in circumstances where Abgenix has provided LB with written
authorisation to offer capacity to third parties pursuant to Clause 13.1 and LB
has made a bona fide commitment (or plans in good faith imminently to conclude
such a commitment) to a third party to supply services from the Facility, and
such commitment would preclude the increase Abgenix requests.  Any such change to a Binding Order shall
only be undertaken on terms to be agreed between the parties.


5.7        Subject always to LB's rights under
Clause 10 of this Schedule 4, LB shall not unreasonably withhold its consent to
any request from Abgenix to change the sequence of Products to be supplied
pursuant to a Binding Order.  Abgenix
acknowledges that if such change results in an actual decrease in capacity of
the Facility, such change may result in a decrease in the number of Batches
which will be supplied pursuant to the Binding Order in question.  Any such change to a Binding Order shall
only be undertaken on terms to be agreed as set out in Clause 10 of this
Schedule 4.  LB shall only modify the
sequence of Products to be supplied pursuant to a Binding Order upon the
written request of Abgenix, or with the prior written consent of Abgenix.


5.8        Abgenix shall not be entitled to amend a
Binding Order in such a way as to affect Batches of Product in progress or
Batches of Product in respect of which perishable Raw Materials have been
committed by LB.  LB shall use
reasonable commercial endeavours to accommodate Abgenix requests for such
changes.  Any change to a Binding Order
shall however only be undertaken on terms to be agreed.


6.          Additional Capacity


6.1        Without any prejudice to LB's rights to
negotiate with any third parties or LB's obligations under Clause 7.3 below in
the event of a Supply Deficiency, in the event that capacity (other than
capacity in the Facility) becomes unexpectedly available during the term of
this Agreement LB will promptly notify Abgenix.  LB will consider favourably any request from Abgenix for
additional manufacturing capacity.


 


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Exchange Commission.





7.          Provision of the Services


7.1        LB shall diligently carry out the
Services as provided in Schedule 2 and as required pursuant to the terms of
this Agreement and shall use all reasonable commercial efforts to achieve the
estimated timescales therefor.


7.2        Subject to Abgenix rights set out in
Clauses 7.3, 7.4, 7.6 and 7.8 below, Abgenix shall not be entitled to cancel
any unfulfilled part of the Services or to refuse to accept the Services on
grounds of late performance, late delivery or failure to produce the estimated
quantities of Product for delivery.  LB
shall not otherwise than as set out in this Clause 7 be liable for any loss,
damage, costs or expenses of any nature, whether direct or consequential,
occasioned by:


7.2.1     any delay in performance or delivery
howsoever caused; or


7.2.2     any failure to produce the estimated
quantities or number of Batches of Product for delivery.


7.3        In the event Abgenix has, pursuant to a
current Binding Order under the terms of this Agreement, ordered for delivery
in a given calendar year, a number of Batches of Product (whether such Product
is to be released against a draft Specification or Specification) which is
equal to or greater then the then current Minimum Requirement and LB fails (due
solely to its own fault, negligence act or omission) within the calendar year in
question, to deliver a number of Batches which is at least equal to the then
current Minimum Requirement, the difference between the number of Batches
actually delivered during that calendar year and the then Minimum Requirement
shall constitute a "Supply Deficiency" for the purposes of this
Agreement.


             In the event of a Supply
Deficiency, LB shall take the following steps to remedy the Supply Deficiency:


7.3.1     utilise any capacity of the Facility which
is not, during the calendar year in question, allotted to the performance of
the Services or to performance of services for third parties pursuant to Clause
13 below; or


7.3.2     utilise suitable LB production capacity
(other than the Facility) not at the time in question committed to third party
customers; or


7.3.2     co-ordinate and co-operate with Abgenix,
via the Steering Committee, to re-schedule Batches of Product ordered hereunder
in order to maximise LB's opportunity to rectify the Supply Deficiency in
question whilst minimising the disruption to any Binding Order then in force.


7.4        In the event that, not withstanding the
steps in Clause 7.3 above having been undertaken the Supply Deficiency has not
been rectified within twelve (12) calendar months from its occurrence Abgenix
may elect at its discretion to require LB to:


7.4.1     pay to Abgenix a sum, or provide Abgenix a
credit against future payments, equal to the proportion of the Monthly Suite
Fee applicable to the manufacture of the number of Batches of Product which is
the subject of the Supply Deficiency ("the Failed Batch Credit"); or


 


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Exchange Commission.





7.4.2     continue to use all reasonable commercial
efforts to remedy the Supply Deficiency within the subsequent calendar year by
manufacturing extra replacement Batch(es) (which absent such Supply Deficiency
could otherwise be deemed a Batch delivered in excess of the Minimum
Requirement for such period).


             For the sake of illustration,
without limitation, if in a calendar year LB delivers ________ Batches of
Product and if during such calendar year Abgenix actually ordered the Minimum
Requirement of Product (for the sake of this illustration ___________ a Supply
Deficiency of  _______Batch would be deemed
to have occurred.  If Abgenix elected
the remedy provided in Clause 7.4.2 above, and if Abgenix orders the Minimum
Requirement of _______ Batches of Product during the following calendar year,
then in the following calendar year LB shall deliver to Abgenix ________
Batches of Product, with the understanding that Abgenix shall not be obliged to
pay LB any additional amount (other than the Raw Materials fee, to the extent
the same has not been previously paid to LB) for the 13th Batch that would
otherwise require payments set forth in this Clause 7.


7.5        In the event Abgenix has a Binding Order
for delivery of at least the Minimum Requirement then applying (provided the
Minimum Requirement is not less than ________ Batches) and a Supply Deficiency
arises or a situation of Force Majeure exists such that LB delivers zero
Batches of Product in the period specified in the then current Binding Order
for delivery of ___________ Batches of Product, such event shall constitute a
Supply Failure and shall entitle but not oblige Abgenix to the rights attaching
to a Supply Failure which are set out in Clause 7.6.


7.6        7.6.1     In
the event of a Supply Failure LB shall within _______ of the Supply Failure
arising notify Abgenix in writing of its understanding as to the cause of the
Supply Failure (in so far as this can be established in that time), the outline
measures necessary to rectify the cause and an estimate of the period (if any)
during which the Facility shall continue to be unfit for performance of the
Services as a result of the cause in question.


7.6.2     Following receipt by Abgenix of
notification under Clause 7.6.1 from LB Abgenix shall, within ______
thereafter, notify LB in writing whether Abgenix shall:


7.6.2.1  treat the Supply Failure as a Supply
Deficiency; or


7.6.2.2  elect to terminate the Agreement.


7.6.3     In the event Abgenix notifies LB under
Clause 7.6.2.1 that it wishes to treat the Supply Failure as a Supply
Deficiency, the provisions of Clauses 7.3 and 7.4 shall apply
__________________.


7.6.4     Alternatively, in the event Abgenix
notifies LB under Clause 7.6.2.2 that it wishes to terminate the Agreement:


7.6.4.1  the provisions of Clauses 18.1, 18.2, 18.3,
18.5 and 18.7 shall apply, save that (subject to Clause 7.6.5 below), in the
event that as a direct result of the Supply Failure Abgenix enters in to a
binding commitment with a third party pursuant to which Abgenix is obliged to
source all its requirements for Product from that third party, the Suite Fee
payable to LB under Clause 18.1 shall be reduced _______ of that which would
otherwise be payable to LB during such time as Abgenix continues to be bound to
the third party in question to source all its requirements for Product from the
third party in question; and


 


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Exchange Commission.





7.6.4.2  Abgenix may notify LB in writing of its wish
to take a licence from LB to utilise the Process or any part thereof for any
particular Product either at its own facility or that of a third party
co-marketing partner of Abgenix or contract manufacturer.  The parties shall negotiate in good faith
the terms upon which such a licence may be granted.  Such negotiations shall be based on LB's standard terms for the grant
of such licences and the transfer of such technology applying at the time in
question and in addition shall take account of the fact that the licence is to
be granted as a result of a Supply Failure. 
It is the intent of the parties to negotiate the terms of such licence
prior to the first delivery of Product by LB hereunder.  If, however, the Supply Failure occurs
before the parties finalise such terms, the parties shall proceed with all
reasonable speed using all commercially reasonable endeavours to conclude such
licence.


             For the avoidance of doubt this
provision shall not constitute the grant of any licence or the right to any
licence.  This provision is a statement
of intent to conduct good faith negotiations on a date to be established.


7.6.5     in the event of a Supply Failure,
notwithstanding the provisions of this Clause 7.6 above, the Suite Fee shall
not fall due during such period as in LB's reasonable opinion, the Facility is
not fit for the performance of the Services.


7.7        In the event pursuant to a Binding Order
(or an amendment to a Binding Order) LB delivers more than the Minimum
Requirement in any calendar year, LB shall be entitled payments in addition to
the Price for Services relation to such Batches from Abgenix as follows
("Performance Payments"):


7.7.1     for the first such Batch in excess of the
Minimum Requirement ______ of the Suite Fee applicable at the time the Batch in
question is delivered; plus


7.7.2     for the second such Batch in excess of the
Minimum Requirement _______ of the Suite Fee applicable at the time the Batch
in question is delivered; plus


7.7.3     for the third such Batch in excess of the
Minimum Requirement _______ of the Suite Fee applicable at the time the Batch
in question is delivered.


             For the sake of illustration, assuming
the Minimum Requirement were ________for a calendar year, and the Suite Fee
were __________, if LB were to deliver to Abgenix ______ Batches during the
calendar year in question, Abgenix would pay LB an additional
______________________ applicable to the period during which LB produced such
Batches.


7.8        Abgenix acknowledges that, due to the
unpredictable nature of biological processes, Product yield cannot be
guaranteed and may vary.  Subject to
LB's rights and obligations under Clause 16 however, in the event LB has
performed Services in relation to a Batch of Products (whether such Batch of
Product is to be assessed against a draft Specification or a Specification
therefor) and, due solely to the negligent act or default or the wilful
misconduct of LB, a significant deviation (as defined by LB standard operating
procedures) arises during the Process such that the amount of Product actually
delivered ex works (incoterms 2000) the Facility to Abgenix is less than
_______ of the amount which would, but for the negligent or wilful act in
question, have been so delivered to Abgenix, the Steering Committee shall agree
upon a commercially reasonable mechanism by which to compensate Abgenix in
respect of such loss.


             For the avoidance of doubt any
Batch to which this Clause 7.8 applies shall be disregarded for the purposes of
Clauses 7.3, 7.4, 7.5, 7.6 and 8.5.


 


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7.9        LB shall comply with the regulatory
requirements from time to time applicable to the Services as set out in
Schedule 2 hereto and in accordance with the other applicable legal
requirements of the jurisdiction in which the Facility is located.  If Abgenix requests LB to comply with any
other regulatory or similar legislative requirements LB shall use all
reasonable commercial endeavours to do so provided that:


7.9.1     Abgenix shall be responsible for informing
LB in writing of the precise foreign requirements which Abgenix is requesting
LB to observe;


7.9.2     such requirements do not conflict with any
mandatory requirements under the laws local to the location of the manufacture
of the Product concerned; and


7.9.3     all costs and expenses incurred by LB in
complying with the requirements referred to in Clause 7.9.1 shall be charged to
Abgenix in addition to the Price.


7.10      Delivery of Product shall be ex-works
(Incoterms 2000) the Facility.  Risk in
and title to Product shall pass on delivery ex works (Incoterms 2000).  Transportation of Product, whether or not
under any arrangements made by LB on behalf of Abgenix, shall be made at the
sole risk and expense of Abgenix.


7.11      Unless otherwise agreed, LB shall package
and label Product for delivery ex-works (Incoterms 2000).  It shall be the responsibility of Abgenix to
inform LB in writing in advance of any special packaging and labelling
requirements for Product.  It is also
the responsibility of Abgenix to obtain any necessary import or export permits
from the relevant authorities and to maintain such permits during the lifetime
of this Agreement.  All additional costs
and expenses of whatever nature incurred by LB in complying with such special
requirements shall be charged to Abgenix in addition to the Price.


7.12      The provisions of this Clause 7 shall be
Abgenix sole and exclusive remedy for delays to the delivery of Product or
lower than expected yields of Product.


8.          Transportation of Product and Abgenix
Tests


8.1        Product shall be supplied and delivered
ex works (Incoterms 2000) the Facility. At Abgenix request LB will (acting as
agent for Abgenix) arrange the further transportation of Product from LB's
premises to the single chosen destination indicated by Abgenix.  All additional costs and expenses of
whatever nature incurred by LB in arranging such additional transportation and
insurance shall be charged to Abgenix in addition to the Price otherwise
payable hereunder.


8.2        Where LB has made arrangements for the
transportation of Product, Abgenix shall diligently examine the Product as soon
as practicable after receipt.  Notice of
all claims (time being of the essence) arising out of:


8.2.1     readily ascertainable damage to or total or
partial loss of Product in transit shall be given in writing to LB and the
carrier within three (3) days of delivery; or


8.2.2     provided LB has supplied and Abgenix has
received a notice confirming the shipment of Product, if Abgenix has not
received the Product shipment within ______ after it was scheduled to arrive,
Abgenix shall notify LB of the failure of the Product to arrive.  Such notice shall be received by LB within
ten (10) days of the date notified to Abgenix as the date of despatch of the
Product in question, time being of the essence.


 


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8.3        Abgenix shall make damaged Product
available for inspection and shall comply with the requirements of any
insurance policy covering the Product notified by LB to Abgenix.  LB shall offer Abgenix all reasonable
assistance (at the cost and expense of Abgenix) in pursuing any claims arising
out of the transportation of Product.


8.4        In cases where Abgenix has not requested
LB to arrange for transportation of Product LB agrees to provide reasonable
co-operation to Abgenix transportation agents identified as such by Abgenix in
relation to co-ordinating the collection of Product by the relevant agent, from
the Facility.


8.5        Promptly following receipt of a Batch of
Product, or any sample intended to be representative thereof, Abgenix shall
carry out the Abgenix Tests:


8.5.1     subject to Clause 8.5.2 if the Abgenix
Tests show that the Product fails to meet the applicable Specification; or


8.5.2     in the case of Product which is being
tested against a draft Specification if the Abgenix Tests show the Product
fails to meet the relevant draft Specification and but for the negligent act or
default or  wilful misconduct of LB such
Product would have conformed to such draft Specification;


             Abgenix shall give LB written
notice thereof within __________ from the date of delivery of the Product
ex-works and shall, unless otherwise directed by LB, return such Product
including (if relevant) the remainder of the Batch from which the sample was
taken, to LB's premises for further testing. 
In the absence of such written notice Product shall be deemed to have
been accepted by Abgenix as meeting Specification (or draft Specification as
applicable).  If LB is satisfied or it
is determined pursuant to Clause 8.6 below that Product returned to LB would ,
but for the negligent act or default or wilful misconduct by LB in performance
of the Services, have met Specification (or draft Specification as applicable),
the Batch in question shall be regarded as not having been delivered and may
(subject always to the satisfaction of the provisions of Clause 7.3) constitute
or contribute towards a Supply Deficiency and entitle Abgenix to the rights
associated with a Supply Deficiency.  Abgenix
shall in any event become entitled to a credit in respect of any Raw Materials
Fee associated with such Batch, to the extent such Raw Materials Fee has fallen
due and been paid to LB.


             For the avoidance of doubt, during
such time as the draft Specification is applicable to the Product, LB shall be
obliged only to use its reasonable endeavours to produce Product that meets
Specification.


8.6        If there is any dispute concerning
whether Product returned to LB would , but for the negligent act or default or
wilful misconduct of LB in the performance of the Services, have met the
Specification (or, where applicable, the draft Specification) therefor, such
dispute shall be referred for decision to an independent expert (acting as an
expert and not as an arbitrator) to be appointed by agreement between LB and
Abgenix or, in the absence of agreement by operation of the provisions of
Clause 20 of this Schedule 4.  The costs
of such independent expert shall be borne equally between LB and Abgenix.  The decision of such independent expert
shall be in writing and, save for manifest error on the face of the decision,
shall be binding on both LB and Abgenix.


8.7        The provisions of Clauses 8.5 and 8.6
shall be the sole remedy available to Abgenix in respect of Product that fails
to meet Specification or draft Specification (as applicable) .


 


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9.          Steering Committee


9.1        Promptly following the Effective Date
the parties hereto shall establish a Steering Committee.  The Steering Committee shall comprise
_______ numbers of representatives of each party (not to exceed ____________
representatives of each party) to consider issues arising from and oversee the
progress of the Services.


9.2        Without limiting the functions of the
Steering Committee set out elsewhere in this Agreement, the role of the
Steering Committee shall be to:


9.2.1     assess the status of Process for
introduction into the Facility in connection with the Services and monitor the
status of the Facility;


9.2.2     determine appropriate modifications to the
requested schedule for delivery of Product, as provided in Clause 5.4 of
Schedule 4;


9.2.3     resolve disagreements regarding yield
deficiencies, pursuant to

Clause 7.8 above;


9.2.4     assess the impact of the new cell lines and
products requested to be manufactured by LB, pursuant to Clause 10.1;


9.2.5     resolve disputes arising between the
parties under this Agreement, as provided in Clause 20;


9.2.6     monitor the progress of the Services;


9.2.7     plan and assess needs for future supply of
Product (subject to the provisions set out elsewhere in this Agreement);


9.2.8     discuss and recommend any changes to the
Process(es);


9.2.9     acknowledge or agree to conversion of the
draft Specification to a Specification, in accordance with Clauses 2.1 and
10.1; and


9.2.10   review and assess the capacity of the
Facility, in accordance with Clause 5.1 above.


9.3        The Steering Committee shall meet at
such times as the Steering Committee determines necessary to resolve issues
arising under the Agreement and to perform its responsibilities under the
Agreement, provided that in no event shall the Steering Committee meet less
than ________ per calendar year (unless otherwise mutually agreed).  If any issue to be determined by the
Steering Committee is not resolved within __________ after submission of the
relevant issue to the Steering Committee, such issue shall be referred to the
Presidents (or other equivalent) at the time in question, of each party hereto
for dispute resolution pursuant to Clause 20 of this Schedule 4.


9.4        The Steering Committee meetings shall
alternate between Abgenix designated facility and a facility designated by LB,
provided that the Steering Committee may decide to meet at another location or
by teleconference as appropriate.  Each
party's members of the Steering Committee will alternate responsibility for the
generation of minutes setting forth discussions made at each Steering Committee
meeting within _________ of the meeting. 
The LB representatives shall prepare minutes for the first Steering
Committee meeting.  No Steering
Committee minutes will become official until agreed upon by the Steering
Committee.  If no issue is taken with
any set of minutes within ten (10) days of their issue then shall be deemed to
have been accepted.  Any dispute at to
the accuracy of the minutes shall be addressed under Clause 20 of this Schedule
4.


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





9.5        Decisions of the Steering Committee must
be unanimous.  In default of agreement
on any issue to be determined by the Steering Committee, such issue shall be
referred to the Presidents (or other equivalent), at the time in question, of each
party hereto for resolution pursuant to Clause 20 of this Schedule 4.


9.6        For the avoidance of doubt, the Steering
Committee shall not be empowered to amend the terms of this Agreement.


10.        Process Changes, New Products and Cell
Lines


10.1      The terms and conditions of the Agreement
are established to provide for the supply of the Products in accordance with
the Process(es) as established at the Effective Date.


             LB shall not unreasonably refuse
any written request from Abgenix to make changes to the Processes (for example
changes to the Process(es) which are required by applicable regulatory
authority or applicable laws), however no change to the Processes shall be made
other than by agreement in writing between authorised signatories of the
parties, which signatories shall be identified by the Steering Committee from
time to time.


             LB shall not unreasonably refuse
any written request from Abgenix to make changes to the Specifications or draft
Specifications (for example changes to the Specifications and or draft
Specifications which are required by an applicable regulatory authority or
applicable laws), however no change to the Specification or draft Specification
shall be made other than by agreement in writing between the authorised
signatories or appointed Regulatory representative of both parties.


             In default of either party
identifying its authorised representatives for the purpose of this Clause 10.1,
changes to the Process, the draft Specification or the Specification must be
approved in writing by an officer of the party in question.


             Any changes to the Process or to
the draft Specification or Specification shall be implemented on terms and
conditions to be agreed, which terms and conditions shall inter alia have
regard to LB's rights and obligations under Clause 1.7.1 of Schedule 3 hereto,
and Clauses 7.9 and 12.1 of this Schedule 4 and may include, but not be limited
to, additional programmes of development services (to be performed on terms to
be agreed), reasonable alterations in the Price payable for Services (which
Price increases shall have regard to LB's costs incurred in implementing such
changes and shall ensure that LB's percentage profit margin on revenues
receivable by LB under this Agreement shall be maintained and not increased or
decreased), and alteration of the Minimum Requirement or the Optimum Capacity.


10.2      Abgenix shall be entitled to request LB to
increase the number of or alter the combination of Products produced or Cell
Lines utilised under this Agreement. 
Any such increase or alteration will be subject to terms and conditions
to be agreed and shall have regard to LB's ability to perform its obligations
under any pre-existing commercial commitments of LB to Abgenix or any third
party.


             Introduction of new products or
cell lines, or alteration of the combination of the types of products provided
hereunder shall be undertaken on terms and conditions to be agreed, which terms
and conditions may include, but not be limited to additional programmes of
development services, alteration to the Price payable for the Services, and
alteration of the Minimum Requirement or the Optimum Capacity.


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





11.        Shared Manufacturing


11.1      The parties intend that any Product
produced pursuant to this Agreement which is approved by appropriate regulatory
body for marketing or sale shall be manufactured under a shared manufacturing
arrangement as defined in "Guidance for Industry - Co-operative
Manufacturing Arrangements for Licensed Biologicals, draft guidance.   US Department of Health and Human Services,
Food & Drug Administration, CBER, August 1999".  A list of the responsibilities of each party
(including but not limited to those for raw material procurement and
maintenance) under such an arrangement is given in Appendix 2 to this
Agreement.


11.2      During such time as LB is performing
operations which relate directly to Product, Abgenix shall be entitled to
maintain a presence at or adjacent to the Facility which presence shall consist
of up to three (3) Abgenix representatives in a single group in attendance for
up to three (3) days per calendar month. 
Abgenix representatives shall be employees of Abgenix or a consultant of
Abgenix which has received previous approval of LB in writing.  The role of the representatives shall be to
observe and comment upon LB's performance of the relevant operations.


             Any such attendance at the Facility
shall be on the understanding that the Abgenix representatives in question
shall at all times be required to adhere to the principles of LB Standard
Operating Procedure Number 60753C the principles of which are attached hereto
as Appendix 3 (or such procedure(s) as supersede(s) or replace(s) all or part
of 60753C).


             In the event the representatives of
Abgenix make an observation on a matter which is a responsibility of Abgenix
under Appendix 2 to this Agreement, LB shall be obliged to take note of such
observation(s) to the extent the same is (are) reasonable.  Otherwise LB shall, act upon such
observations of the employee or consultant in question as LB in its discretion
deems appropriate having regard to its obligations hereunder.


12.        Regulatory Support


12.1      LB shall provide regulatory support to
Abgenix pursuant to this Agreement to include annual updates to any Biologics
Licence for a Product held by LB and the preparation for and hosting of
inspections by FDA or Abgenix (in the case of Abgenix inspections, at mutually
convenient times).  If regulatory
support or ancillary development services is/are required by Abgenix over and
above that provided for in Clause 1.7 of Schedule 3 hereto in order to ensure
LB's compliance with its obligations under Clause 7.9, this Clause 12 or
otherwise,  an additional charge shall
be made to Abgenix at LB's standard rate for regulatory services and/or
ancillary development services plus disbursements at the time the regulatory
and/or ancillary development services are performed.


             LB shall inform Abgenix of such
charge and obtain Abgenix written consent to such charge before providing such
additional support.   LB shall not be
responsible for any failure to meet the requirements concerned which is caused
by Abgenix unreasonably withholding or delaying its consent to proceed with
such support.  In the event the
additional regulatory services provided by LB also pertain to products of other
LB customers, Abgenix shall not be obligated to pay for such services to the
extent they are attributable to such third party products.


12.2      Abgenix shall advise LB of any regulatory
submissions regarding Product, which may require responses from LB to questions
from the regulatory authorities in a timely fashion having regard to the input
which may be required from LB in relation to such regulatory submissions.


12.3      LB shall use all reasonable efforts in the
event that it is required to amend the way it manufactures or tests Product, as
a result of a change in any statutory or similar legislative requirement after
the Effective Date, to give effect to such requirement. In this event the
parties shall negotiate in good faith to reach agreement on any revision to the
Price and timescales for providing Product. LB shall not be required to amend
the Services in any way unless and until the parties have reached such
agreement.


13.        Excess Capacity


13.1      Following confirmation of a Binding Order,
Abgenix may inform LB in writing it wishes LB to initiate discussions with LB's
third party customers regarding the opportunity for such third party customers
to purchase services to be provided from any fermentation capacity of the
Facility which has not been reserved by Abgenix pursuant to any Binding Order
covering the time period in question. 
In the event LB elects to proceed with such discussions, prior to LB
entering into any commitment to a third party in respect of fermentation
services utilising the Facility, LB shall disclose to Abgenix (subject always
to its obligations of confidence to the third party in question) the nature of
any product which LB intends to introduce to the Facility and Abgenix shall
confirm the acceptability or otherwise of the product in question.  Abgenix shall not unreasonably delay its
response to such disclosure by LB and, having given authority to LB to offer
capacity to third parties, shall not unreasonably withhold its consent to allow
LB to use the Facility for third party products.  For the avoidance of doubt Abgenix shall be entitled to withhold
its consent to such third party products being produced in the Facility where
the manufacture of third party product in question may reasonably be expected
to compromise the yield, potency, specification or cGMP status of Abgenix
Product produced in the Facility, or in the event LB fails to provide
sufficient information to enable Abgenix to make a reasonable decision on such
matters.


             In the event LB is successful in
selling such excess capacity, Abgenix shall be entitled to a refund of the
Suite Fee paid by Abgenix for the month(s) or parts of months during which LB's
third party customer occupies the Facility. 
Such refund shall fall due upon completion of the Services purchased by
the third party in question.


 


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Exchange Commission.





14.        Increase of Optimum Capacity


14.1      In the event Abgenix requests LB to alter
its method of operation of the Facility with a view to increasing the Optimum
Capacity or the Minimum Requirement other than in the circumstances anticipated
by Clauses 5 or 10 of this Schedule 4 above, LB shall give consideration to
such request and shall make a written proposal to Abgenix within _______ days
of receipt of such request as to how (if at all) it is able to accommodate such
request and any alteration in the Price (taking account of, inter alia, LB's
loss of Performance Payments which may result) which will arise as a result of
such accommodation.  LB shall not
unreasonably refuse to accommodate Abgenix requests pursuant to this Clause 14,
nor shall LB insist upon unreasonable Price increases in response to such
requests.


15.        Price and Terms of Payment


15.1      Abgenix shall pay the Price and any other
sums due hereunder in accordance with the Terms of Payment referred to in
Schedule 3 and in accordance with the applicable terms of this Schedule 4.


15.2      Unless otherwise indicated in writing by
LB, all prices and charges are exclusive of Value Added Tax (which for the
avoidance of doubt is not levied upon transactions such as this Agreement
between UK and US entities at the Effective Date, but may become payable in the
future) or of any other applicable taxes, levies, imposts, duties and fees of
whatever nature imposed by or under the authority of any government or public
authority, which shall be paid by Abgenix (other than taxes on LB's
income).  All invoices are strictly net
and payment must be made within _______ days of date of invoice.  Payment shall be made without deduction,
deferment, set-off, lien or counterclaim of any nature.


15.3      In default of payment on due date interest
shall accrue on any amount overdue at the rate of _________ above the base
lending rate from time to time of HSBC bank, interest to accrue on a day to day
basis both before and after judgement.


16.        Warranty and Limitation of Liability


16.1      LB warrants that the Services shall be
performed in accordance with Clause 7.1 of this Schedule 4 and the Product
delivered to Abgenix pursuant to Services performed under Stage 2 of Schedule 2
shall meet Specification when delivered ex works LB's premises (Incoterms 2000)
, save in cases where the Specification is stated to be in draft form, when LB
shall be obliged only to use its reasonable endeavours to produce Product that
meets Specification.


             LB has and shall maintain during
the term of this Agreement all government permits, including but not limited to
health, safety and environmental permits necessary for the conduct of the
Services.


16.2      Clause 16.1 is in lieu of all conditions,
warranties and statements in respect of the Services and/or the Product whether
expressed or implied by statute, custom of the trade or otherwise (including
but without limitation any such condition, warranty or statement relating to
the description or quality of the Product, its fitness for a particular purpose
or use under any conditions whether or not known to LB) and any such condition,
warranty or statement is hereby excluded.


16.3      Without prejudice or modification to the
terms of Clauses 7.3, 7.4, 7.5, 7.6, 7.8, 8.7, 16.1, 16.2, 16.4 and 16.6, the
liability of LB to Abgenix, its permitted assigns and successors in interest,
for any loss suffered by Abgenix or its permitted assigns or successors in
interest arising as a direct result of a breach of this Agreement or of any
other liability (including without limitation misrepresentation (other than
fraudulent misrepresentation) and negligence) arising out of the Agreement and
Services provided thereunder (including without limitation the production
and/or supply of the Product) shall be limited to the payment of damages which
shall not exceed _____________ per event directly connected series of events
save in the event and to the extent such damages are caused by LB's fraudulent
misrepresentation, wilful or intentional breach of this Agreement or wilful,
intentional or grossly negligent misconduct in the performance of the Services


 


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Exchange Commission.





16.4      Subject to Clause 16.6, LB shall not be
liable for the following loss or damage howsoever caused (even if foreseeable
or in the contemplation of LB or Abgenix):


16.4.1   loss of profits, business or revenue whether
suffered by Abgenix of any other person;


16.4.2   special, indirect or consequential loss, whether
suffered by Abgenix or any other person; or


16.4.3   any loss arising from any claim made against
Abgenix by any other person (other than to the extent arising directly from the
negligent or wilful act or default and subject to the limitations of LB's liability
set out elsewhere in this Agreement).


16.5      Abgenix shall indemnify and maintain LB
promptly indemnified against all claims, actions, costs, expenses (including
court costs and legal fees on a full indemnity basis) or other liabilities
whatsoever in respect of:


16.5.1   any liability under the Consumer Protection
Act 1987, unless such liability is caused by the negligent act or omission of
LB in the production and/or supply of the Product; and


16.5.2   any product liability (other than that
referred to in Clause 16.5.1) in respect of Product, unless such liability is
caused by the negligent act or omission of LB in the production and/or supply
of Product; and


16.5.3   Any negligent or wilful act or omission of
Abgenix in relation to the use, processing, storage or sale of the Product.


16.6      Nothing contained in these Standard Terms
shall purport to exclude or restrict any liability for death or personal injury
resulting directly from negligence by LB in carrying out the Services or any
liability for breach of the implied undertakings of LB as to title.


16.7      LB shall obtain and maintain insurance
coverage which is customary and consistent with industry standard and is
sufficient to cover risks and losses which occur in the course of operating its
business.  Without limiting the
foregoing, LB shall obtain and maintain insurance which covers business
interruption, Abgenix shall obtain and maintain insurance coverage which is
customary and consistent with pharmaceutical industry standards.


16.8      Subject to Clause 16.9, in the event
Abgenix, in its discretion, recalls Product (voluntarily or by order of a
regulatory body) or is required to respond to enquiries of regulatory bodies
relating to the Services hereunder, LB agrees to provide reasonable
co-operation to Abgenix at Abgenix sole expense, in effecting matters flowing
from such recall or enquiries in so far as such recall relates to Product
produced by LB hereunder.  Any
assistance to be provided by LB in response to enquiries of regulatory
authorities shall be provided on terms to be agreed at LB's standard financial
rates for providing such assistance.


16.9      Subject always to the limitations of LB's
liability to Abgenix set out in this Agreement, LB agrees to reimburse Abgenix
for reasonable, direct, documented expenses incurred by Abgenix as a result of
recall of Product, but only to the extent such recall is mandated by law or by
an applicable regulatory body and only to the extent LB's negligence or wilful
misconduct in performing the Services has caused such recall to be required.


16.10    The obligations of LB and Abgenix under this
Clause 16 shall survive the termination for whatever reason of the Agreement.


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





17.        Abgenix Information, LB Know-How and
Patent Rights


17.1      Abgenix acknowledges that LB Know-How and
LB acknowledges that Abgenix Information with which it is supplied by the other
pursuant to the Agreement is supplied, subject to Clause 17.4, in circumstances
imparting an obligation of confidence and each agrees to keep such LB Know-How
or such Abgenix Information secret and confidential and to respect the other's
proprietary rights therein and not without the other party's prior written
consent at any time for any reason whatsoever to disclose or permit such LB
Know-How or such Abgenix Information to be disclosed to any third party save as
expressly provided herein.


17.2      Abgenix and LB shall each procure that all
their respective employees, consultants and contractors who are granted access
to confidential LB Know-How or confidential Abgenix Information by the
proprietor party shall be subject to the same obligations of confidence as the
principals pursuant to Clause 17.1 and shall enter into secrecy agreements in
support of such obligations.  Insofar as
this is not reasonably practicable, the principals shall take all reasonable
steps to ensure that any such employees, consultants and contractors are made
aware of such obligations.


17.3      LB and Abgenix each undertake not to
disclose or permit to be disclosed to any third party, or otherwise make use of
or permit to be made use of, any trade secrets or confidential information
relating to the technology, business affairs or finances of the other, any
subsidiary, holding company or subsidiary or any such holding company of the
other, or of any suppliers, agents, distributors, licensees or other customers
of the other which comes into its possession under this Agreement.


17.4      The obligations of confidence referred to
in this Clause 17 shall not extend to any information which:


17.4.1   is or becomes generally available to the
public otherwise than by reason of a breach by the recipient party of the
provisions of this Clause 17;


17.4.2   is known to the recipient party and is at its
free disposal prior to its receipt from the other;


17.4.3   is subsequently disclosed to the recipient
party without being made subject to an obligation of confidence by a third
party;


17.4.4   LB or Abgenix may be required to disclose
under any statutory, regulatory, stock exchange or similar legislative
requirement, subject to the imposition of obligations of secrecy wherever
possible in that relation; or


17.4.5   the receiving party can demonstrate by
competent evidence was independently discovered by the recipient party or its
employee without reference to any information received from the other party
hereto.


17.5      Abgenix acknowledges that:


17.5.1   LB represents that LB Know-How and the LB
Patent Rights are owned by LB or LB is otherwise entitled thereto and that LB
has the right to enter into this Agreement; and


 


The confidential portion represented by
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Exchange Commission.





17.5.2   Save as expressly provided herein or pursuant
to a separate agreement between the parties existing now or entered into on the
future Abgenix shall not by virtue of this Agreement at any time have any
right, title, licence or interest in or to LB Know-How, the LB Patent Rights or
any other intellectual property rights relating to the Process which are owned
by LB or to which LB is otherwise entitled.


17.6      LB acknowledges that:


17.6.1   Abgenix has undertaken that Abgenix
Information and the Abgenix Patent Rights are owned by Abgenix or Abgenix is
otherwise entitled thereto and that Abgenix has the right to enter into this
Agreement; and


17.6.2   save as expressly provided herein or pursuant
to separate agreement or separate rights granted to LB existing now or in the
future LB shall not at any time have any right, title, licence or interest in
or to Abgenix Information, the Abgenix Patent Rights or any other intellectual
property rights owned by Abgenix or to which Abgenix is otherwise entitled.


17.7      Without prejudice to any obligations of LB
in existence at the Effective Date, LB agrees that during the term of this
Agreement, it will not enter into any exclusive manufacturing arrangements
relating to manufacture of antibodies with any third party which would prevent
LB from giving full and fair consideration to requests from Abgenix under
Clause 10.2 to introduce new antibody products to the Facility.


17.8      The obligations of LB and Abgenix under
this Clause 17 shall survive the termination for whatever reason of the
Agreement.


18.        Termination


18.1      Abgenix shall be entitled to terminate the
Agreement by giving notice in writing for any reason, such notice to be for a
period of not less than the balance remaining of the then agreed Term of this
Agreement.  In the event Abgenix
terminates this Agreement pursuant to this clause, Abgenix shall (subject to
the operation of Clause 18.3 below) pay LB a termination fee as follows:


18.1.1   the Suite Fee, inflated or increased as set
out in Clauses 1.5 and 1.6 of Schedule 3 hereto, during the period from date of
issue of the notice to terminate this Agreement until expiry of the notice
period;


18.1.2   the Raw Materials Fee in respect of Raw
Materials irrecoverably committed to production of any Batches of Product in
Process or scheduled to be in production at the date of receipt of notice of
termination (to the extent the same has not been paid).


18.2      18.2.1   Payment
in respect of Clause 18.1.1 above shall continue to fall due in accordance with
the provisions of Clause 1.6.1 of Schedule 3.


18.2.2   Payment in respect of Clause 18.1.2 shall be
payable forthwith upon issue of notice of termination hereunder.


 


The confidential portion represented by
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Exchange Commission.





18.3      Upon service of notice to LB that Abgenix
wishes to terminate the Agreement pursuant to Clause 18.1, Abgenix shall be
entitled to request in writing that LB use reasonable endeavours to seek an
alternative customer or customers to purchase capacity which is reserved for
the Batches cancelled by Abgenix and in respect of which a termination fee will
accrue hereunder.


             LB shall use reasonable endeavours
to mitigate Abgenix obligations under Clause 18.1 above, which endeavours shall
comprise the following:


             If, by contacting in writing such
of its then current customer base or such other parties as LB believes might
wish to purchase such capacity or such other third parties as are recommended
by Abgenix, LB is able to sell such capacity at a price which is equivalent to that
which would otherwise have been paid by Abgenix had the capacity been fully
utilised by Abgenix requirements, and such capacity is acquired by the third
party customer in question in addition to capacity previously contracted for by
the customer in question (i.e. such capacity is not filled by rescheduling
existing commitments by that or any other customer), Abgenix shall not be
required to compensate LB in respect of capacity so purchased by such customer,
calculated on the same basis as the credit for Suite Fee anticipated by Clause
13.1.  In the event LB is only able to
sell such capacity to such third party(ies) at a price which is less than would
otherwise be paid by Abgenix (as referred to above) Abgenix obligation to make
payment to LB shall be reduced pro rata to account for the payments received
from such third party(ies), but shall not otherwise be reduced.


             LB shall not be obliged to
undertake any further endeavours in respect of mitigation of payments due as a
result of termination under Clause 18.1 above.


18.4      In addition to Abgenix rights under Clause
18.1 LB and Abgenix may each terminate the Agreement forthwith notice in
writing to the other upon the occurrence of any of the following events:


18.4.1   if the other commits a breach of the Agreement
which (in the case of a breach capable of remedy) is not remedied within thirty
(30) days of the receipt by the other of notice identifying the breach and
requiring its remedy; or


18.4.2   if the other ceases for any reason to carry
on business or compounds with or convenes a meeting of its creditors or has a
receiver or manager appointed in respect of all or any part of its assets or is
the subject of an application for an administration order or of any proposal
for a voluntary arrangement or enters into liquidation (whether compulsorily or
voluntarily) or undergoes any analogous act or proceedings under foreign law.


18.5      Upon the termination of the Agreement for
whatever reason:


18.5.1   LB shall promptly return all Abgenix
Information to Abgenix (to the extent legal or regulatory requirements allow)
and shall dispose of or return to Abgenix the Abgenix Materials and any
materials therefrom, as directed by Abgenix;


18.5.2   Abgenix shall promptly return to LB (to the
extent legal and regulatory requirements allow) all LB Know-How it has received
from LB;


18.5.3   Subject to any rights granted to Abgenix as a
result of Clauses 7.6 or 18.6 Abgenix shall not thereafter use or exploit the
LB Patent Rights or the LB Know-How in any way whatsoever.  No licences shall arise or be deemed to have
arisen hereunder either by default, estoppel or otherwise save for those
expressly set out herein;


18.5.4   LB may thereafter use or exploit the LB
Patent Rights or the LB Know-How in any way whatsoever without restriction; and


 


The confidential portion represented by
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Exchange Commission.





18.5.5   LB and Abgenix shall do all such acts and
things and shall sign and execute all such deeds and documents as the other may
reasonably require to evidence compliance with this Clause 18.5.


18.6      In the event that during the term of or
upon expiry of this Agreement, Abgenix notifies LB of its wish to take a
licence from LB to utilise the Process or any part thereof for any particular
Product either at its own facility or that of a third party co-marketing
partner of Abgenix which third party does not offer contract manufacturing
services in the ordinary course of its business, the parties shall negotiate in
good faith the terms upon which such a licence may be granted.  Such negotiations shall be based on LB's
standard terms for the grant of such licences and the transfer of such
technology applying at the time in question.


             For the avoidance of doubt this
provision shall not constitute the grant of any licence or the right to any
licence.  This provision is a statement
of intent to conduct good faith commercial negotiations at a date to be
decided.


18.7      Termination of the Agreement for whatever
reason shall not affect the accrued rights of either LB or Abgenix arising
under or out of this Agreement and all provisions which are expressed to
survive the Agreement shall remain in full force and effect.


19.        Force Majeure


19.1      If either party is prevented or delayed in
the performance of any of its obligations under the Agreement by Force Majeure
and shall give written notice thereof to the other specifying the matters
constituting Force Majeure together with such evidence as can reasonably be
given and specifying the period for which it is estimated that such prevention
or delay will continue, that party shall be excused from the performance or the
punctual performance of such obligations as the case may be from the date of
such notice for so long as such cause of prevention or delay shall continue.


19.2      For the purposes of this Agreement, Force
Majeure shall mean causes beyond the reasonable control of either party
including without limitation, acts of God (including but not limited to
earthquake), laws or regulations of any government or agency thereof, war,
civil commotion, damage to or destruction of production facilities or
materials, scientific or technical events, labour disturbances (whether or not
any such labour disturbance is within the power of the affected party to
settle), epidemic, and failure of suppliers, public utilities or common
carriers.


20.        Governing Law, Jurisdiction and
Enforceability


20.1      The construction, validity and performance
of the Agreement shall be governed by the laws of England, to the jurisdiction
of whose courts LB and Abgenix submit.


 


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Exchange Commission.





20.2      In the event of the failure on the part of
any required representative of the parties hereto or the Steering Committee to
resolve any matter required by this Agreement to be agreed, or in the event of
any other dispute or claim arising between the parties under this Agreement,
the parties shall attempt by good faith negotiations to resolve such dispute or
claim between them by reference to the President (or equivalent) of each party
at the time in question who shall negotiate in good faith during a period of
not less than sixty (60) days to resolve such matter, dispute or claim.  In the event the parties are unable to
resolve such dispute or claim within the required time, such claim or dispute
will be referred to Alternative Dispute Resolution by such recognised
organisation for Alternative Dispute Resolution as the parties agree and the parties
shall attempt in good faith to resolve such claim or dispute with the
assistance of such organisation.  During
the conduct of negotiations between the parties or Alternative Dispute
Resolution, the rights and obligations (subject to Clause 19) of the parties in
relation to all other matters hereunder shall continue.


             Both parties reserve their rights
in the event no agreed resolution can be reached in the Alternative Dispute
Resolution procedure and neither party shall be precluded from taking such interim
formal steps as may be considered necessary to protect such party's position
while the dispute resolution procedure is pending or continuing.


20.3      No failure or delay on the part of either
LB or Abgenix to exercise or enforce any rights conferred on it by the
Agreement shall be construed or operate as a waiver thereof nor shall any
single or partial exercise of any right, power or privilege or further exercise
thereof operate so as to bar the exercise or enforcement thereof at any time or
times thereafter.


20.4      The illegality or invalidity of any
provision (or any part thereof) of the Agreement or these Standard Terms shall
not affect the legality, validity or enforceability of the remainder of its
provisions or the other parts of such provision as the case may be.


21.        Miscellaneous


21.1      Neither party shall be entitled to assign,
transfer, charge or in any way make over the benefit and/or the burden of this
Agreement without the prior written consent of the other which consent shall
not be unreasonably withheld or delayed, save that both parties shall be
entitled without the prior written consent of the other to assign, transfer,
charge, sub-contract, deal with or in any other manner make over the benefit
and/or burden of this Agreement to an Affiliate or to any 50/50 joint venture
company of which that party is the beneficial owner or fifty per cent (50%) of
the issued share capital thereof or to any company with which that party may
merge or to any company to which that that party may transfer its assets and
undertakings.


21.2      The text of any press release or other
communication to be published by or in the media concerning the subject matter
of the Agreement shall require the prior written approval of LB and Abgenix.


21.3      The Agreement embodies the entire
understanding of LB and Abgenix relating to the Services and the subject matter
connected therewith and there are no promises, terms, conditions or
obligations, oral or written, expressed on implied, other than those contained
in the Agreement.  The terms of the
Agreement shall supersede all previous agreements (if any) which may exist or
have existed between LB and Abgenix relating to the Services.


 


The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.





21.4      Each party to this Agreement acts as an
independent contractor and nothing in this Agreement shall be construed to
create a relationship of partnership, principal and agent, or joint venture
between the parties.


21.5      It is expressly understood by Abgenix that
Abgenix rights of assignment apply solely in relation to the Services set out
in this Agreement and shall not apply in respect of any separate Services or to
any agreement relating to LB Know-How, Patent Rights or other technology vested
in or licensed to LB, unless otherwise agreed in writing.


21.6      This Agreement is personal to the parties
hereto and has not been entered into on behalf of or created any rights in
favour of any person pursuant to the Contracts (Rights of Third Parties) Act
1999.


APPENDIX
1 TO SCHEDULE 4


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APPENDIX
2 TO SCHEDULE 4


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APPENDIX
3 TO SCHEDULE 4


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The confidential portion represented by
"____" has been omitted and filed separately with the Securities and
Exchange Commission.