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EXHIBIT 10.22
  Confidential treatment requested 


 
 

COLLABORATION AGREEMENT    
  


    THIS COLLABORATION AGREEMENT ("Agreement") is made and entered
into effective as of February 2, 2001 (the "Effective Date"), by and between SEATTLE GENETICS, INC., having principal offices at 22215
26th Avenue S.E., Suite 3000, Bothell, WA 98021 ("Seattle Genetics") and MEDAREX, INC., having principal offices at 707 State Road, Suite 206,
Princeton, New Jersey 08540-1437, on behalf of itself and its wholly owned subsidiary, GENPHARM INTERNATIONAL, INC., with principal offices at 2350 Qume Drive, San Jose, California
95131 (collectively, "Medarex"). Seattle Genetics and Medarex each may be referred to herein individually as a
"Party," or collectively as the "Parties." 


    WHEREAS, Medarex and Seattle Genetics desire to enter into a definitive agreement to collaborate to produce fully human monoclonal
antibodies to antigen targets in order to develop and commercialize antibody-based products on the terms set forth below; 


    NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises and covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows: 


ARTICLE 1—

SCOPE OF COLLABORATION; COLLABORATION ACTIVITIES  


    Section 1.1  Scope of Collaboration.  The Parties have entered into this
collaboration (such collective enterprise, the "Collaboration") to jointly research, develop and commercialize Collaboration Products with respect to
Collaboration Targets throughout the Territory as set forth in this Agreement. Any capitalized term used in this Agreement not otherwise defined herein shall have the meaning set forth on  Appendix A. 


    Section 1.2  Research Activities.  



    1.2.1  General.  Under the direction and supervision of
the Steering Committee, the Parties shall use Commercially Reasonable Efforts to conduct their respective research activities in accordance with this Agreement, each Project Plan and each Project
Budget. 


    1.2.2  Identification of Collaboration Targets.  Seattle
Genetics shall use its Commercially Reasonable Efforts to identify and provide Collaboration Targets to the Collaboration. The list of Antigens attached hereto as  Appendix C sets forth the initial
list of Collaboration Targets. Such list may be amended pursuant to Section 1.8 or 5.1.2, by the express
written agreement of Medarex and Seattle Genetics or as follows: 



    (a) If, at any time prior to or during the Target Entry Period (as defined in Section 1.2.2(f)), Seattle Genetics
or any of its Affiliates identify, or otherwise obtain rights with respect to, Antigens (in addition to the Collaboration Targets listed on  Appendix C) that (x) Seattle Genetics [*] for the
development of antibody-based products (each, an  "Antibodiable Antigen") for use in the field of breast cancer, and (z) are Controlled by Seattle Genetics or its Affiliates, then, for at least
every [*] (e.g., [*], etc.) Antigen identified by Seattle Genetics pursuant to clauses (x) and (y) of this sentence (the  "Antigen Commitment"), Seattle Genetics shall promptly develop Antigen
Evaluation Materials for such Antigen and furnish such Antigen Evaluation
Materials to Medarex. Any Antigen identified or discovered by Seattle Genetics under [*] unless the Parties mutually agree otherwise. Seattle Genetics shall have the right, but
shall be under no obligation to, [*] to the Collaboration pursuant to this Section 1.2.2(a) that do not fall under clause (x) of the first sentence of this
Section 1.2.2(a). Seattle Genetics shall have the right, but shall be under no obligation to, offer the [*] molecule to the Collaboration pursuant to this
Section 1.2.2(a). In the event that 







 



a Third Party acquires Seattle Genetics by merger, consolidation or transfer of all or substantially all of Seattle Genetics' assets, any [*] shall not be subject to the
[*]. The "Antigen Evaluation Materials" shall include: 



     (i) a written description of the applicable Antigen, including [*], when available; 


    (ii) the [*] and/or [*] for such Antigen; 


   (iii) all data reasonably necessary for determining whether such [*]; 


    (iv) [*] data in the possession of Seattle Genetics or its Affiliates relating to such Antigen
that is reasonably relevant for [*]; 


    (v) all information regarding the [*] of such Antigen, the [*] by
Seattle Genetics and its Affiliates with respect to such Antigen, and any [*] ([*] or otherwise) that would [*] the Parties'
[*] any Collaboration Products with respect thereto; 



    (vi) existing and available [*] for [*]; 


   (vii) a list of [*] for Antibody Products against such Antigen, to the extent known by Seattle
Genetics; 


  (viii) [*] applicable to Antibody Products against such Antigen, to the extent known by Seattle
Genetics; 


    (ix) any [*] undertaken by or on behalf of Seattle Genetics or its Affiliates with respect to
the [*] of [*] against such Antigen; 


    (x) the [*] for [*] such Antigen is a [*] for
the development of antibody-based products; and 


    (xi) all other [*] in Seattle Genetics' or its Affiliates' possession with respect to such
Antigen. 




    (b) Each Antigen described in Section 1.2.2(a), including any portion thereof, shall automatically become a
Collaboration Target under this Agreement, and Appendix C shall be deemed to be amended accordingly, unless Medarex provides Seattle Genetics
with written notice within thirty (30) days following receipt of all Antigen Evaluation Material with respect to such Antigen, that it [*] on the basis described below,
whereupon such [*] to be a Collaboration Target and Medarex shall [*] with respect thereto under this Agreement and Seattle Genetics shall
[*] with respect thereto under this Agreement and shall be [*]. Medarex shall have the right to [*] identified by Seattle
Genetics pursuant to Section 1.2.2(a) if (i) as of the date of Medarex's receipt of the Antigen Evaluation Materials for such Antigen, (A) Medarex is [*],
either [*] or [*] with a Third Party, [*], (B) Medarex is [*] with respect to such
Antigen or Antibodies relating thereto, or (C) Medarex has [*] relating thereto, or (ii) Medarex makes a good faith determination that there is a
[*] of Antibodies against such Antigen. In the event Medarex receives Antigen Evaluation Materials for a given Antigen pursuant to Section 1.2.2(a), but does not believe
the materials provided pursuant to clauses (i), (ii), (iii), (v) or (x) of Section 1.2.2(a) are sufficiently complete to enable Medarex to reasonably determine whether to
[*], Medarex shall provide written notice to Seattle Genetics with respect thereto. If, within thirty (30) days of such notice, Seattle Genetics
[*] specified in such notice, Medarex shall have [*], provided that such [*]. Once an Antigen becomes a Collaboration Target
pursuant to this Section, the Collaboration shall have the right, in accordance with this Agreement, to Exploit Collaboration Products with respect to such Collaboration Target for all purposes,
whether inside or outside of the field of breast cancer. 




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    (c) Seattle Genetics shall have the right to enter into agreements with Third Parties with respect to the research,
development or commercialization of antibody-based products outside the field of breast cancer and, to the extent any product initially developed thereunder for one or more bona fide uses outside the
field of breast cancer is later discovered to have efficacy inside such field, Seattle Genetics may develop and commercialize such product for use in the field of breast cancer. Seattle Genetics
represents and warrants to Medarex that, as of the Effective Date, neither it nor any of its Affiliates has entered into any agreement granting rights to any Third Party to research, develop or
commercialize any Antibody Products in the field of breast cancer. 


    (d) Upon designation of an Antigen as a Collaboration Target pursuant to Section 1.2.2(b), the Parties shall use
good faith efforts to agree on a written description of such Antigen, which descriptions shall be included on Appendix C. 



    (e) As the Parties gain greater understanding of each Collaboration Target and the potential utility of Antibody
Products thereto, they shall update the description of such Collaboration Target on Appendix C to more accurately reflect what Antigens, or
portions thereof, are included in the Collaboration. 


    (f)  The "Target Entry Period" shall commence on the Effective Date and
shall continue until the third (3rd) anniversary thereof unless (i) earlier terminated by (A) the unanimous agreement of the Parties, or (B) either Party pursuant to
Article 8; or (ii) extended by unanimous agreement of the Parties. The termination or expiration of the Target Entry Period shall not constitute a termination of this Agreement. 


    (g) Seattle Genetics and Medarex agree to negotiate in good faith a separate agreement pursuant to which Medarex will
grant Seattle Genetics a license to Medarex's HuMAb technology to develop Antigens (other than Collaboration Targets) on its own (a "Direct License
Agreement"). If the Parties enter into a Direct License Agreement within ninety (90) days following the Effective Date, then Seattle Genetics agrees that during the
Target Entry Period, it shall [*] Controlled by Seattle Genetics that it [*] for use in the field of breast cancer either under this Agreement or the
Direct License Agreement. If the Parties do not enter into a Direct License Agreement within ninety (90) days following the Effective Date, then Seattle Genetics shall
[*], those Antibodiable Antigens Controlled by Seattle Genetics that it [*] for use in the field of breast cancer that are
(i) [*], or (ii) are declined as Collaboration Targets by Medarex under Section 1.2.2(b) of this Agreement. 




    1.2.3  Identification of Applicable Assays and Success
Criteria.  As part of the Project Plan for a given Collaboration Target, the Steering Committee will: 



    (a) identify the immunogen(s) (each, an "Immunogen") to be used to
enable Medarex to perform its activities pursuant to Section 1.2.5; 


    (b) determine which Party will be responsible for delivering the Immunogen(s) to Medarex; 



    (c) identify a set of assays (each, an "Assay") for screening Assay
Candidates against such Collaboration Target; 


    (d) determine which Party will be responsible for delivering the Assays to the Collaboration; and 


    (e) establish criteria (the "Assay Success Criteria") for determining,
subject to Section 1.2.6, whether an Assay Candidate should become a Collaboration Antibody. 




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The
Steering Committee may elect to use a Third Party to provide one or more Immunogen(s) to the Collaboration. In addition, the Steering Committee may elect to have a [*]. 



    1.2.4  Allocation of Costs.  [*]
associated with identifying Collaboration Targets, preparing and furnishing to Medarex complete Antigen Evaluation Materials with respect thereto, and creating and delivering the Immunogen(s) to
Medarex (the "Seattle Genetics Research Activities") shall be borne [*]% by [*].
[*] associated with immunizing the HuMAb Mice and raising a panel of different Antibodies to the applicable Collaboration Target pursuant to the last sentence of
Section 1.2.5 (the "Medarex Research Activities") shall be borne [*]% by [*].
[*] associated with developing and performing the Assays shall be borne [*]% by [*] and [*]% by
[*]. The Parties acknowledge and agree that the Seattle Genetics Research Activities and the Medarex Research Activities are deemed to be and are [*]
and neither Party shall have any right to [*] for the cost and expenses associated with such research activities. 


    1.2.5  Raising of Antibodies by Medarex.  The Party
designated under Section 1.2.3(b) shall provide to Medarex sufficient Immunogen for each Collaboration Target to enable Medarex to perform its activities pursuant to this Section 1.2.5.
Upon the delivery of such Immunogen, Medarex shall use Commercially Reasonable Efforts to immunize the HuMAb Mice and raise a panel of different Antibodies to the applicable Collaboration Target. 



    1.2.6  Selection of Assay Candidates; Assay Screening; Selection of Collaboration
Antibodies.  



    (a) Medarex shall [*] of the [*] to Section 1.2.5 to become
"Assay Candidates". As set forth under the applicable Project Plan, the Parties shall [*] the [*]. Upon
[*] for a given Assay Candidate, each Party will be provided with the results of such [*] (including [*] underlying such
results). The Steering Committee will then determine [*] has [*] the applicable [*]. Subject to Section 1.2.6(b), each
Assay Candidate that [*] the applicable [*] shall be deemed to be a "Collaboration Antibody";  provided, however, the Steering Committee may, [*] (i)
 decide that an [*] that
[*] the [*] shall nonetheless not be deemed to be a [*], or (ii) decide that an [*] that does not
meet the [*] shall nonetheless be deemed to be a [*]. 


    (b) Notwithstanding Section 1.2.6(a), if Medarex (i) is [*] or has
[*] with a Third Party, such [*], or (ii) has [*] a [*] with respect to such
[*], then such [*] shall [*] a [*], and all amounts of such [*] pursuant to this
Agreement will be [*]. 




    1.2.7  Effect of Designation of Collaboration
Antibodies.  Any Antibody that is designated a Collaboration Antibody in accordance with Section 1.2.6 shall be exclusive to the Collaboration. Except as
otherwise provided in this Agreement, once an Antibody is designated a Collaboration Antibody, [*] associated with the research, development and commercialization of such
Antibody shall be [*], as more fully described in Section 4.1. 


    1.2.8  Lead Collaboration Antibodies.  Out of the pool of
Collaboration Antibodies against a given Collaboration Target, the Steering Committee will select the Collaboration Antibody that [*] and it will then move such Collaboration
Antibody into [*]. Each Collaboration Antibody that is put into [*] shall be deemed to be a "Lead Collaboration
Antibody". It is understood that the Steering Committee may, over time, select more than one Lead Collaboration Antibody against a given Collaboration Target, or substitute one
Lead Collaboration Antibody for another. Upon designation of each Lead Collaboration Antibody, [*] shall commit to support [*] percent
([*]%) of the cost of [*] for such Lead Collaboration Antibody. If the Steering Committee [*], then such
[*] shall be performed at [*]. 


    1.2.9  Identification of Restrictions on Exploitation of Collaboration
Products.  Upon the designation of the first Collaboration Antibody with respect to a Collaboration Target, the Collaboration shall solicit a formal patent
review and opinion regarding such Collaboration Target 



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from an outside law firm selected by the Steering Committee. The costs of such formal opinion shall be [*]. 




    Section 1.3  Project Plan and Project Budget.  Upon designation of a given
Antigen as a Collaboration Target pursuant to Section 1.2.2, Medarex and Seattle Genetics shall jointly develop and implement a Project Plan (each a "Project
Plan") and Project Budget (each a "Project Budget") for the research, development, manufacture and commercialization of
Collaboration Antibodies against such Collaboration Target. It is understood that the components of each Project Plan and Project Budget will evolve as the applicable Collaboration Antibodies move
through the research, development, manufacture and commercialization life cycle. 


    Section 1.4  Performance Standards.  Each Party shall perform, or cause to
be performed, its respective activities hereunder in good scientific manner, and in compliance in all material respects with all Applicable Law and shall use Commercially Reasonable Efforts to
(a) research, develop, file for Regulatory Approval and commercialize one or more Collaboration Products with respect to each Lead Collaboration Antibody, and (b) achieve the objectives
of each Project Plan in accordance with each Project Budget, in each case, efficiently and expeditiously by allocating sufficient time, effort, equipment and skilled personnel to complete such
activities successfully and promptly. 


    Section 1.5  Product Trademarks.  The Parties shall develop Product
Trademarks for each Collaboration Product that will be commercialized. Such Product Trademarks shall not be confusingly similar to, misleading or deceptive with respect to, or dilute any of the
Trademarks owned or Controlled by either of the Parties, or any part of such Trademarks. No Party or any of its Affiliates or sublicensees shall commercialize a Collaboration Product under any
Trademark other than the Product Trademarks. No Party or any of its Affiliates or sublicensees shall use in its business any Trademark that is confusingly
similar to, misleading or deceptive with respect to, or dilutes any of the Product Trademarks or any other Trademarks used to identify or distinguish a Collaboration Product, or any part of the
foregoing. The Steering Committee shall oversee the filing, prosecution and maintenance of all Product Trademark registrations. The Parties shall [*]
([*]%) in the costs and expenses of such filing, prosecution and maintenance. Subject to Applicable Law, the label of any Collaboration Products shall include, at Seattle
Genetics' sole discretion, the name of Seattle Genetics and, at Medarex's sole discretion, the name of Medarex. 


    Section 1.6  Supply of Collaboration Products.  With respect to clinical
and commercial supplies of Collaboration Products, the Steering Committee shall solicit bids from suppliers to supply the Parties' requirements thereof. Each Party shall have the right to submit a bid
on such terms as it desires. The Steering Committee shall use its best efforts to enter into a supply agreement with the supplier that is best able to meet the Parties' requirements, taking into
consideration such factors as price, quality, capacity, quantity, reliability and reputation. In the event the Steering Committee selects a Party to produce clinical and/or commercial supplies
pursuant to this Section 1.6, the price and other terms and conditions of such supply shall be based on arm's length negotiations with the Steering Committee. 


    Section 1.7  Additional Technologies.  After the Effective Date at the
Steering Committee's request, the Parties shall negotiate in good faith a license agreement on reasonable terms based on [*] in [*] to provide for the
grant of rights to the Collaboration with respect to Seattle Genetics' single-chain immunotoxin, drug conjugate and ADEPT technologies. 


    Section 1.8  Reversion of Collaboration Targets.  If no Collaboration
Antibodies have been designated with respect to a Collaboration Target pursuant to Section 1.2.6(a) within [*] ([*]) [*],
or such other period as the Parties may agree, after the immunization of the HuMAb Mice with respect to such Collaboration Target pursuant to Section 1.2.5, then (a) such Antigen shall
cease to be a Collaboration Target (such Antigen, a "Reversion Target"), and Appendix C shall be
amended accordingly, (b) any Antibodies with respect thereto shall not become Collaboration Antibodies, (c) any 


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Antibody Products with respect thereto shall not become Collaboration Products, and (d) any licenses granted pursuant to Article 3, with respect to such Antigen, Antibody or Antibody
Product shall terminate. Promptly upon such designation, the Parties shall destroy all Antibody Products and other biological materials created under this Agreement with respect to such a Reversion
Target. 


 
 

ARTICLE 2—
  OPERATION OF THE COLLABORATION    
  


    Section 2.1  Steering Committee.  



    2.1.1  Formation of Steering Committee.  The Parties
shall establish a joint committee (the "Steering Committee"), which shall oversee the research, development and commercialization activities hereunder.
[*] shall appoint an [*] representatives with the requisite experience and seniority to enable them to make decisions on behalf of the Parties with
respect to the Collaboration. From time to time, Seattle Genetics and Medarex each may substitute any of its representatives to the Steering Committee. 


    2.1.2  Responsibilities.  The Steering Committee shall,
in addition to its other responsibilities described in this Agreement: (a) prioritize the research, development, manufacturing and commercialization activities with respect to Collaboration
Targets, Collaboration Antibodies and Collaboration Products; (b) subject to Section 1.3, allocate responsibility for such activities between Seattle Genetics and Medarex taking into
consideration their relevant expertise and available resources; (c) develop and implement a strategy for researching, developing, manufacturing, obtaining and maintaining Regulatory Approvals
for, and commercializing the Collaboration Products; (d) establish such subcommittees as deemed appropriate by the Steering Committee; and (e) take such other actions as are set forth in
this Article 2 or as the Parties may unanimously agree. The Steering Committee may evaluate additional technologies that may be necessary or beneficial to the Collaboration and may recommend
the acquisition or in-licensing of these technologies to the Parties. 


    2.1.3  Procedural Rules for the Steering Committee.  



    (a)  Generally.  Except as explicitly set forth in this
Section 2.1.3, the Steering Committee shall establish its own procedural rules for its operation. 


    (b)  Voting.  The Steering Committee shall take action by
[*], with each such Party having a [*] of representatives actually in attendance at a meeting, or by a
written resolution signed by the designated representatives of each of Seattle Genetics and Medarex. 





    Section 2.2  Progress Reports.  Within thirty (30) days after the
end of each calendar quarter during which research, development or commercialization activities with respect to Collaboration Products are performed by or on behalf of the Parties, each Party shall
provide to the other Party a written progress report, which shall (a) describe such activities and any other work relating to the Collaboration Products that it has performed, or caused to be
performed, to date, (b) evaluate the work performed in relation to the goals of the applicable Project Plan, and (c) provide such other information as may be required by the applicable
Project Plan or reasonably requested by the other Party relating to such activities. 


    Section 2.3  Disputes; Dispute Resolution.  



    2.3.1  Disputes.  Any dispute that may arise relating to
the terms of this Agreement or the activities of the Parties hereunder shall be brought to the attention of the Steering Committee, which shall attempt in good faith to achieve a resolution. Either
Party may convene a special meeting of the Steering Committee for the purpose of resolving disputes. If the Steering Committee is unable to resolve such a dispute within twenty (20) days of the
first presentation of 



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such dispute to the Steering Committee, and with respect to all other disputes, such dispute shall be referred to the Chief Executive Officers of each of the Parties (or their respective designees)
who shall use their good faith efforts to mutually agree upon the proper course of action to resolve the dispute. If any dispute is not resolved by the Chief Executive Officers of the Parties (or
their designees) within ten (10) days after such dispute is referred to them, then either Party shall have the right (x) if such dispute relates to the substance of a Project Plan or
Project Budget or the scope of the Parties' activities pursuant to Section 1.2, to refer such dispute to an Expert for expedited arbitration as set forth in subparagraphs (a) through
(c) below, or (y) with respect to any other dispute, including with respect to a Party's interpretation of, or performance under, this Agreement, to litigate such dispute in accordance
with Section 11.5 or to pursue such other dispute resolution mechanism as the Parties may agree. 



    (a) With respect to disputes under subparagraph (x) above that are not resolved by the Chief Executive Officers
of the Parties (or their designees) pursuant to Section 2.3.1, upon written request by either Party to the other Party, the Parties shall promptly negotiate in good faith to appoint a mutually
acceptable disinterested, conflict-free individual not affiliated with either Party, with scientific, technical and regulatory experience with respect to the development of antibody-based
products necessary to resolve such dispute (an "Expert"). If the Parties are not able to agree within five (5) days after the receipt by a Party
of the written request in the immediately preceding sentence, the CPR Institute for Dispute Resolution shall be responsible for selecting an Expert within seven (7) days of being approached by
a Party. The fees and costs of the Expert and the CPR Institute for Dispute Resolution shall be [*]. 


    (b) Within fifteen (15) days after the designation of the Expert, the Parties shall each simultaneously submit to
the Expert and one another a written statement of their respective positions on such disagreement. Each Party shall have five (5) days from receipt of the other Party's submission to submit a
written response thereto, which shall include any scientific and technical information in support thereof. The Expert shall have the right to meet with the Parties, either alone or together, as
necessary to make a determination. 


    (c) No later than thirty (30) days after the designation of the Expert, the Expert shall make a determination by
[*] of the [*] that [*] is the most [*] to the Parties in light of the [*] and
shall provide the Parties with a written statement setting forth the basis of the determination in connection therewith. The decision of the Expert shall be final and conclusive, absent manifest
error. 




ARTICLE 3—

GRANT OF RIGHTS  


    Section 3.1  License Grants for Collaboration Activities.  



    3.1.1  Medarex Grant.  Subject to Section 3.3 and
the other terms and conditions of this Agreement, Medarex hereby grants to Seattle Genetics and its Affiliates a co-exclusive (with Medarex and its Affiliates), fully-paid,
royalty-free license, with the right to sublicense solely as provided in Sections 3.3.5 and 3.4, under the Medarex Technology and the Joint Technology, in each case to (a) perform
Seattle Genetics' activities under Section 1.2, and (b) jointly Exploit the Collaboration Products in accordance with this Agreement. 


    3.1.2  Seattle Genetics Grant.  Subject to the terms and
conditions of this Agreement, Seattle Genetics hereby grants to Medarex and its Affiliates a co-exclusive (with Seattle Genetics and its Affiliates), fully-paid,
royalty-free license, with the right to sublicense solely as provided in Section 3.4, under the Seattle Genetics Technology and the Joint Technology, in each case to
(a) perform Medarex's activities under Section 1.2, and (b) jointly Exploit the Collaboration Products in accordance with this Agreement. 



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    Section 3.2  Product Trademarks for Collaboration Products.  



    3.2.1  Medarex Grant.  Subject to the terms and
conditions of this Agreement, Medarex hereby grants to Seattle Genetics and its Affiliates a co-exclusive (with Medarex and its Affiliates), fully-paid,
royalty-free license, with the right to sublicense solely as provided in Section 3.4, to use the Product Trademarks to Exploit the Collaboration Products in accordance with this
Agreement. 


    3.2.2  Seattle Genetics Grant.  Subject to the terms and
conditions of this Agreement, Seattle Genetics hereby grants to Medarex and its Affiliates a co-exclusive (with Seattle Genetics and its Affiliates), fully-paid,
royalty-free license, with the right to sublicense solely as provided in Section 3.4, to use the Product Trademarks to Exploit the Collaboration Products in accordance with this
Agreement. 




    Section 3.3  Exclusivity, Reserved Rights and Pre-Existing
Grants.  



    3.3.1  Antigen Exclusivity.  Subject to
Sections 3.3.2, 3.3.3 and 3.3.4, the Parties acknowledge and agree that this Collaboration shall be exclusive with respect to the Collaboration Targets and that no Party shall engage, directly
or indirectly, on behalf of itself or any other party, in the research, development, commercialization or other Exploitation of antibody-based products with respect to any Collaboration Target other
than the Collaboration Products and Unilateral Products as provided in this Agreement and any related agreements between the Parties. 


    3.3.2  Research and Commercialization
Agreements.  Medarex shall have the right to (a) grant licenses and other rights to other parties, under the Medarex Technology for such parties to
Exploit Antibody Products (but not Collaboration Products) with respect to Antigens, including [*], provided that such Antigens are [*] and
[*] of or [*] to any [*], (b) [*] to such parties in connection therewith, including
[*] with respect to the [*] and [*] with respect to the [*], (c) develop
[*], such Antibody Products, and (d) receive license fees, milestone payments, royalties and other remuneration in connection therewith, but, in connection with
clause (a), (b), (c) or (d) above, [*] (each agreement with respect to the foregoing, a "Research and Commercialization
Agreement"). 


    3.3.3  Retained Rights.  



    (a)  Other Antigens.  Notwithstanding anything in this
Agreement to the contrary, but subject to Section 1.2.2, each Party does hereby retain the right to (i) enter into collaborations with, and to grant licenses and other rights under its
respective Technology (other than Joint Technology, which shall be governed by Section 7.1.5) to, Third Parties to Exploit Antibody Products with respect to Antigens other than Collaboration
Targets, and/or (ii) independently Exploit Antibody Products with respect to Antigens other than Collaboration Targets. 


    (b)  Non-Antibody Products.  Notwithstanding
anything in this Agreement to the contrary, each Party does hereby retain the right to (i) enter into collaborations with, and to grant licenses and other rights under its respective Technology
(other than Joint Technology, which shall be governed by Section 7.1.5) to, Third Parties to Exploit products other than [*] with respect to Collaboration Targets,
and/or (ii) independently Exploit products other than [*] with respect to Collaboration Targets (without the use of or reference to the other Party's Technology). 




    3.3.4  Existing Grants.  The Parties further acknowledge
and agree that pursuant to the Cross-License Agreement, Medarex has granted a non-exclusive license under certain Medarex Patents to Exploit Antibody Products, including Collaboration
Products, with respect to Antigens, including the Collaboration Targets, in the Territory. 


    3.3.5  Cross License Agreement.  The Cross-License
Agreement prohibits Medarex from [*], whether by [*], under certain Medarex Technology to [*]. The Parties shall structure their 



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respective commercialization rights in each country in the Territory, in accordance with this Section 3.3.5, so as to comply with the requirements of the Cross-License Agreement and shall use
good faith efforts to ensure that any such structure preserves the intended economic benefits of the Collaboration to the Parties. 



    (a) So long as the Cross-License Agreement is in effect, if the Steering Committee desires to
[*] with respect to commercialization of a Collaboration Product pursuant to Section 3.4, then the Steering Committee shall provide Medarex with written notice thereof,
which shall set forth in reasonable detail the [*], the Medarex Technology and Collaboration Product involved, and the [*]. Upon receipt of such notice,
Medarex shall make a good faith determination as to whether such Medarex Technology is subject to the [*] contained in the Cross-License Agreement. 



    (b) To the extent that Medarex determines that such Medarex Technology is not subject [*]
contained in the Cross-License Agreement, Medarex shall so notify the Steering Committee in writing and the Collaboration thereafter shall have the right [*], subject to
Section 3.4. 


    (c) To the extent that Medarex determines that all or part of such Medarex Technology is subject to the
[*] contained in the Cross-License Agreement, Medarex shall so notify the Steering Committee in writing. The Parties shall then meet to discuss in good faith how to proceed in
order to optimize the commercialization of the applicable Collaboration Product hereunder while complying with the requirements of the Cross-License Agreement. 





    Section 3.4  Sublicenses.  Subject to Section 3.3.5, each Party
shall have the right to grant to Third Parties sublicenses under the licenses granted in Sections 3.1 and 3.2 only with the prior written consent of the Steering Committee, not to be unreasonably
withheld or delayed; provided, however, that the grant of any such sublicense shall not relieve the sublicensing Party of its obligations under this
Agreement. With respect to any proposed sublicense, the sublicensing Party shall provide the Steering Committee with written notice setting forth in reasonable detail the nature of such sublicense and
the identity of the sublicensee. 


    Section 3.5  License Limitations.  Each Party hereby covenants to the
other Party that neither such first Party nor any of its Affiliates, licensees or sublicensees shall use or practice the Technology of such other Party (other than the Joint Technology), directly or
indirectly, on behalf of itself or any other party, for any purpose other than as permitted under Section 3.1 and in particular, but without limiting the generality of the foregoing, for any
research, development, commercialization or other Exploitation of an Antibody Product or any other product or method, other than a Collaboration Product or a Unilateral Product as provided hereunder. 



    Section 3.6  No Other Rights.  For the avoidance of doubt, Medarex and its
Affiliates shall have no right, express or implied, with respect to the Seattle Genetics Technology and Seattle Genetics and its Affiliates shall have no right, express or implied, with respect to the
Medarex Technology, in each case except as expressly provided in Section 3.1. 


ARTICLE 4—

FINANCIAL PROVISIONS  


    Section 4.1  Profit and Expense Allocation with Respect To Collaboration
Products.  



    4.1.1  Net Profits and Net Losses.  Except as otherwise
provided in this Agreement, the [*] ([*]%) in the Net Profits and Net Losses, as applicable, with respect to the Collaboration Products, as set forth in
this Section. Within thirty (30) days after the end of each calendar quarter in which Net Profits or Net Losses are recognized with respect to a Collaboration Product, each Party shall provide
the other Party with a statement detailing its Net Profits or Net Losses for such 



9





 


Collaboration Product for such calendar quarter on a country-by-country basis, which statement shall set forth in reasonable detail any Net Sales by such Party or its
Affiliates, any Commercialization Expenses and any Other Operating (Income)/Expense, including a detailed breakdown of the components of the foregoing, with respect to such Collaboration Product,
provided that such Commercialization Expenses (including the components thereof) [*] set forth in the applicable Project Budget with respect to the commercialization activities
set forth in the applicable Project Plan by more than [*] percent ([*]%) without the approval of the Steering Committee
("Authorized Commercialization Expenses"). Within forty-five (45) days after the end of each calendar quarter, the Parties shall
[*] to [*] so that [*] ([*]%) in the Net Profits or Net Losses, as applicable, for such calendar quarter
for each Collaboration Product. 


    4.1.2  Research and Development Expenses.  Except as
otherwise provided in this Agreement, [*] and [*] shall [*] ([*]%) [*] the cost
and expense of all Authorized R&D Expenses (as defined below) incurred by or on behalf of the Parties in connection with their activities other than the Seattle Genetics Research Activities and the
Medarex Research Activities. Within thirty (30) days after the end of each calendar quarter, each Party shall furnish the Steering Committee with a statement (a) detailing the costs and
expenses actually incurred in connection with the research and development activities (including Phase IV and any other post-Regulatory Approval research and development activities)
performed by or on behalf of such Party during such calendar quarter, provided that such costs or expenses [*] set forth in the relevant Project Budget with respect to such
research and development activities by more than [*] ([*]%) without the approval of the Steering Committee (the "Authorized R&D
Expenses") and (b) comparing such expenses to date with the projections set forth in the Project Budget. Within forty-five (45) days after the end of
each calendar quarter, Medarex and Seattle Genetics shall [*] to [*] so that [*] ([*]%) of the total
Authorized R&D Expenses for such calendar quarter. 




    Section 4.2  Payment Method.  All amounts due by one Party hereunder shall
be paid in U.S. dollars by wire transfer in immediately available funds to an account designated by the receiving Party. Any payments or portions thereof due hereunder which are not paid on the date
such payments are due under this Agreement shall bear interest at a rate equal to the lesser of the prime rate as published in The Wall Street Journal,
Eastern Edition, on the first day of each calendar quarter in which such payments are overdue, plus two percent (2%), or the maximum rate permitted by law, calculated on the number of days such
payment is delinquent, compounded monthly. 


    Section 4.3  Currency; Foreign Payments.  If any currency conversion shall
be required in connection with any payment hereunder, such conversion shall be made by using the exchange rate for the purchase of U.S. dollars as published in The Wall Street
Journal, Eastern Edition, on the last business day of the calendar quarter to which such payments relate. If at any time legal restrictions prevent the prompt remittance of any
Net Profits with respect to Net Sales in any jurisdiction, the applicable Party may notify the other and make such payments by depositing the amount thereof in local currency in a bank account or
other depository in such country in the name of the receiving Party or its designee, and such Party shall have no further obligations under this Agreement with respect thereto. 


    Section 4.4  Taxes.  A Party may deduct from any amounts it is required to
pay pursuant to this Agreement an amount equal to that withheld for or due on account of any taxes (other than taxes imposed on or measured by net income) or similar governmental charge imposed by a
jurisdiction other than the United States ("Withholding Taxes"). At the receiving Party's request, the paying Party shall provide the receiving Party a
certificate evidencing payment of any Withholding Taxes hereunder and shall reasonably assist the receiving Party, at the receiving Party's expense, to obtain the benefit of any applicable tax treaty. 


10





 


    Section 4.5  Records Retention; Audit.  



    4.5.1  Record Retention.  Each Party shall maintain (and
shall ensure that its Affiliates and sublicensees shall maintain) complete and accurate books, records and accounts that fairly reflect their respective (a) Authorized R&D Expenses, Authorized
Commercialization Expenses, Other Operating (Income)/Expenses, any costs and expenses reimbursable under Article 7, and any other costs and expenses reimbursable or otherwise shared by the
Parties hereunder (collectively, the "Collaboration Expenses"), and (b) Net Sales of Collaboration Products and Net Profits and Net Losses with
respect to Collaboration Products, in each case in sufficient detail to confirm the accuracy of any payments required hereunder and in accordance with GAAP, which books, records and accounts shall be
retained by such party until the later of (i) three (3) years after the end of the period to which such books, records and accounts pertain, and (ii) the expiration of the
applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Applicable Law. 


    4.5.2  Audit.  Each Party shall have the right to have an
independent certified public accounting firm of nationally recognized standing, reasonably acceptable to the audited Party, to have access during normal business hours, and upon reasonable prior
written notice, to such of the records of the other Party (and its Affiliates and sublicensees) as may be reasonably necessary to verify the accuracy of such Collaboration Expenses, Net Sales, or Net
Profits or Net Losses, as applicable, for any calendar quarter
ending not more than thirty-six (36) months prior to the date of such request; provided, however, that neither Party shall have the
right to conduct more than one such audit in any twelve (12)-month period. The accounting firm shall disclose to each Party whether such Collaboration Expenses, Net Sales, or Net Profits or Net
Losses, as applicable, are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to the requesting Party. The requesting Party shall bear
the cost of such audit unless the audit reveals a variance of more than [*] percent ([*]%) from the reported results, in which case the audited Party
shall bear the cost of the audit. The results of such accounting firm shall be final, absent manifest error. 


    4.5.3  Payment of Additional Amounts.  If, based on the
results of such audit, additional payments are owed by a Party under this Agreement, such Party shall make such additional payments, with interest from the date originally due at the rate of
[*] percent ([*]%) per month, within sixty (60) days after the date on which such accounting firm's written report is delivered to such Party. 



    4.5.4  Confidentiality.  The auditing Party shall treat
all information subject to review under this Section 4.5 in accordance with the confidentiality provisions of Article 6 and shall cause its accounting firm to enter into a reasonably
acceptable confidentiality agreement with the audited Party obligating such firm to maintain all such financial information in confidence pursuant to such confidentiality agreement. 



ARTICLE 5—

UNILATERAL AND THIRD PARTY DEVELOPMENT

AND COMMERCIALIZATION  


    Section 5.1  Unilateral Development and Commercialization.  



    5.1.1  Opting-Out by a Party.  Each Party
(i.e., Medarex, on the one hand, and Seattle Genetics, on the other hand) (the "Opting-Out Party") shall have the right, on
[*] ([*]) [*]' written notice to the other (an "Opt-Out Notice"), to
elect not to proceed with the research, development and commercialization ("Opt-Out") of all Collaboration Products with respect to a given
Collaboration Target at any time up until [*] ([*]) [*] after [*] with respect to the first
Collaboration Product with respect to such Collaboration Target, provided that such Party shall be 



11





 


responsible for [*] associated with the research and development activities with respect to such Collaboration Product(s) that such Party has committed to in the applicable
Project Budget as
necessary to [*] that was [*] such Party Opted-Out. By way of clarification, if a Party Opts-Out of a Collaboration Product with
respect to a Collaboration Target, such Party will be deemed to have Opted-Out with respect to all Antibody Products with respect to the same Collaboration Target. 


    5.1.2  Rights and Obligations of Parties with Respect To Unilateral
Products.  Upon receipt by a Party of an Opt-Out Notice, the receiving Party shall have the right, on written notice to the Opting-Out
Party within [*] following receipt of the Opt-Out Notice (an "Election Notice"), to proceed unilaterally with the
research, development and commercialization of all Collaboration Antibodies to the applicable Collaboration Target (each, a "Unilateral Product")
pursuant to a separate agreement with the Opting-Out Party embodying the terms and conditions attached hereto as Appendix D (and
other terms as may be appropriate), which agreement shall be entered into by the Parties and attached hereto as Appendix D-1 or  Appendix D-2, as
applicable, within [*] ([*]) [*] of the
Effective Date (each, a "Unilateral Development and Commercialization Agreement"). Upon receipt by Medarex of an Election Notice from Seattle Genetics
with respect to a Collaboration Target, the Unilateral Development and Commercialization Agreement set forth in Appendix D-1 shall be
automatically amended to include such Collaboration Target and any Antibody Products with respect thereto. Upon receipt by Seattle Genetics of an Election Notice from Medarex with respect to a
Collaboration Target, the Unilateral Development and Commercialization Agreement set forth in Appendix D-2 shall be automatically
amended to include such Collaboration Target and any Antibody Products with respect thereto. Upon such amendment of a Unilateral Development and Commercialization Agreement pursuant to this
Section 5.1.2, the applicable Antigen shall cease to be a Collaboration Target and Appendix C shall be amended accordingly, and any
licenses granted pursuant to Article 3, with respect to such Antigen and any Antibodies and Antibody Products with respect thereto, shall terminate. Except for the payment obligations provided
for in Section 5.1.1, the Opting-Out Party shall have (x) [*] in respect of such Unilateral Product, and (y) [*], or
[*] regarding such [*] in respect of such Unilateral Product. In the event that neither Party elects to proceed with the research, development or
commercialization of any Collaboration Product with respect to a Collaboration Target, the rights and obligations of the Parties with respect to such Collaboration Target shall be governed by Sections
5.2 and 5.3. 




    Section 5.2  Third-Party Research, Development and Commercialization of Collaboration
Products.  The Parties shall have the right, at any time with respect to a Collaboration Product, to license to Third Parties rights with respect to the
research, development, manufacture or commercialization of such Collaboration Product on such terms and conditions as the Parties may mutually agree;  provided that (a) any such sublicense with
respect to the Medarex Technology shall be governed by the procedures set forth in Sections 3.3.5 and
3.4; and (b) any disputes between the Parties as to whether or not to grant such a license shall not be subject to any Third Party dispute resolution mechanism. 



    Section 5.3  Dormant Products.  If the Parties do not elect to proceed
with the research, development or commercialization of a particular Collaboration Product with respect to a Collaboration Target, and the Parties have not licensed rights to such Collaboration Product
to a Third Party pursuant to Section 5.2 that would be inconsistent therewith, (each, a "Dormant Product") either Party shall have the right at
any time, subject to Section 3.3, to bring such Collaboration Product to the Steering Committee to discuss whether to initiate or reinitiate the research, development or commercialization of
such
Dormant Product. The initiating Party shall specify the reasons for proposing to initiate or reinitiate such research, development or commercialization. If, within [*]
([*]) [*] after the receipt of such notice, the other Party fails to notify the interested Party in writing that it wishes to participate in the
research, development or commercialization of such Dormant Product, then the interested Party shall have the right to pursue research, development or commercialization of such Dormant Product as 


12





 


a Unilateral Product pursuant to Section 5.1, provided that no Collaboration Product with respect to the same Collaboration Target as such Dormant Product is being Exploited hereunder. 


ARTICLE 6—

CONFIDENTIALITY  


    Section 6.1  Definition.  "Confidential Information" of a Party shall mean
all information and know-how and any tangible embodiments thereof provided by or on behalf of such Party to the other Party either in connection with the discussions and negotiations
pertaining to this Agreement or in the course of performing this Agreement, including data; knowledge; practices; processes; ideas; research plans; engineering designs and drawings; research data;
manufacturing processes and techniques; scientific, manufacturing, marketing and business plans; and financial and personnel matters relating to the disclosing Party or to its present or future
products, sales, suppliers, customers, employees, investors or business. For purposes of this Agreement, notwithstanding the Party that disclosed such information or know-how, all Seattle
Genetics Know-How, and all information or know-how with respect thereto, shall be Confidential Information of Seattle Genetics and all Medarex Know-How, including
all Mice-Related Know-How, and all information and know-how with respect thereto, shall be Confidential Information of Medarex. 



    Section 6.2  Exclusions.  Notwithstanding the foregoing, information or
know-how of a Party shall not be deemed Confidential Information with respect to a receiving Party for purposes of this Agreement if such information or know-how: 




    (a) was already known to the receiving Party or its Affiliates, other than under an obligation of confidentiality or
non-use, at the time of disclosure to, or, with respect to Know-How, discovery or development by, such receiving Party; 


    (b) was generally available or known to parties reasonably skilled in the field to which such information or
know-how pertains, or was otherwise part of the public domain, at the time of its disclosure to, or, with respect to Know-How, discovery or development by, such receiving
Party; 


    (c) became generally available or known to parties reasonably skilled in the field to which such information or
know-how pertains, or otherwise became part of the public domain, after its disclosure to, or, with respect to Know-How, discovery or development by, such receiving Party
through no fault of a Party other than the Party that Controls such information and know-how; 


    (d) was disclosed to such receiving Party or its Affiliates, other than under an obligation of confidentiality or
non-use, by a third party who had no obligation to the Party that Controls such information and know-how not to disclose such information or know-how to others; or 


    (e) was independently discovered or developed by such receiving Party or its Affiliates, as evidenced by their written
records, without the use of Confidential Information belonging to the Party that Controls such information and know-how, except with respect to the Mice-Related
Know-How, which shall be and remain Confidential Information of Medarex. 





Specific
aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of a Party merely because the Confidential Information is embraced by
more general information in the public domain or in the possession of such Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession
of a Party merely because individual elements of such Confidential Information are in the public domain or in the possession of such Party unless the combination and its principles are in the public
domain or in the possession of such Party. 


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    Disclosure and Use Restriction.  Except as expressly provided herein, the Parties agree that, for the Term and for five
(5) years thereafter, each Party and its Affiliates and sublicensees shall keep completely confidential and shall not publish or otherwise disclose and shall not use for any purpose except for
the purposes contemplated by this Agreement any Confidential Information of the other Party, its Affiliates or sublicensees. 


    Section 6.3  Authorized Disclosure.  Each Party may disclose Confidential
Information of the other Party to the extent that such disclosure is: 



    6.3.1  Required by Governmental Order.  Made in response
to a valid order of a court of competent jurisdiction or other supra-national, federal, national, regional, state, provincial or local governmental or regulatory body of competent jurisdiction;  provided,
however, that such Party shall first have given notice to such other Party and given such other Party a reasonable opportunity to quash such
order and to obtain a protective order requiring that the Confidential Information and documents that are the subject of such order be held in confidence by such court or agency or, if disclosed, be
used only for the purposes for which the order was issued; and provided further that if a disclosure order is not quashed or a protective order is not
obtained, the Confidential Information disclosed in response to such court or governmental order shall be limited to that information which is legally required to be disclosed in response to such
court or governmental order; 


    6.3.2  Required by Law.  Otherwise required by law;
provided, however, that the disclosing Party shall provide such other Party with notice of such disclosure in advance thereof to the extent practicable; 


    6.3.3  Required by Regulatory Authority.  Made by such
Party to the Regulatory Authorities as required in connection with any filing, application or request for Regulatory Approval; provided, however, that
reasonable measures shall be taken to assure confidential treatment of such information; 


    6.3.4  Required by Agreement.  Made by such Party, in
connection with the performance of this Agreement, to Affiliates, permitted sublicensees, research Parties, employees, consultants, representatives or agents, each of whom prior to disclosure must be
bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Article 6; or 


    6.3.5  Required by Certain Third Parties.  Made by such
Party to existing or potential acquirers; existing or potential pharmaceutical collaborators (to the extent contemplated hereunder); investment bankers; existing or potential investors, merger
candidates, partners, venture capital firms or other financial institutions or investors for purposes of obtaining financing; bona fide strategic potential partners; or Affiliates, each of whom prior
to disclosure must be bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Article 6. 




    Section 6.4  Use of Name.  Each Party may use the name, insignia, symbol,
trademark, trade name or logotype of the other Party (a) in connection with announcements and other permitted disclosures relating to this Agreement and the activities contemplated hereby,
(b) as required by Applicable Law, and (c) otherwise as agreed in writing by such other Party. 


    Section 6.5  Press Releases.  Press releases or other similar public
communication by either Party relating to this Agreement, shall be approved in advance by the other Party, which approval shall not be unreasonably withheld or delayed, except for those communications
required by Applicable Law, disclosures of information for which consent has previously been obtained, and information of a similar nature to that which has been previously disclosed publicly with
respect to this Agreement, each of which shall not require advance approval, but shall be provided to the other Party as soon as practicable after the release or communication thereof. 


14







 
    Section 6.6  Publications.  The Parties acknowledge that scientific
lead-time is a key element of the value of the research and development activities under the Collaboration and further agree that scientific publications must be strictly monitored to
prevent any adverse effect from premature publication of results of the research or development activities hereunder. At least sixty (60) days prior to submission of any material related to the
research or development activities hereunder for publication or presentation, the submitting Party shall provide to the other Party a draft of such material for its review and comment. The receiving
Party shall provide any comments to the submitting Party within sixty (60) days of receipt of such materials. No publication or presentation with respect to the research or development
activities hereunder shall be made unless and until the other Party's comments on the proposed publication or presentation have been addressed and changes have been agreed upon and any information
determined by the other Party to be Confidential Information has been removed. If requested in writing by the other Party, the submitting Party shall withhold material from submission for publication
or presentation for an additional sixty (60) days to allow for the filing of a patent application or the taking of such measures to establish and preserve proprietary rights in the information
in the material being submitted for publication or presentation. 


ARTICLE 7—

INTELLECTUAL PROPERTY  


    Section 7.1  Intellectual Property Ownership.  



    7.1.1  Ownership of Medarex Technology.  Subject to the
license grants to Seattle Genetics under Article 3, as between the Parties, Medarex shall own and retain all right, title and interest in and to any and all: (a) Information and
Inventions that are conceived, discovered, developed or otherwise made, as necessary to establish authorship, inventorship or ownership under Applicable Law, by or on behalf of Medarex (or its
Affiliates or, to the extent permitted, its licensees or sublicensees (other than Seattle Genetics and its Affiliates)), whether or not patented or patentable, and any and all Patent and other
intellectual property rights with respect thereto, except to the extent that any such Information and Inventions, or any Patent or other intellectual property rights with respect thereto, are Joint
Technology or Collaboration Target Technology; (b) other Information and Inventions, and Patent and other intellectual property rights that are Controlled (other than pursuant to the license
grants set forth in Article 3) by Medarex, its Affiliates or, to the extent permitted, its licensees or sublicensees (other than Seattle Genetics); and (c) other Medarex Technology. 


    7.1.2  Ownership of Seattle Genetics Technology.  Subject
to Section 7.1.3 and the license grants to Medarex under Article 3, as between the Parties, Seattle Genetics shall own and retain all right, title and interest in and to any and all:
(a) Information and Inventions that are conceived, discovered, developed or otherwise made, as necessary to establish authorship, inventorship or ownership under Applicable Law, by or on behalf
of Seattle Genetics (or its Affiliates or, to the extent permitted, its licensees or sublicensees (other than Medarex and its Affiliates)), whether or not patented or patentable, and any and all
Patent and other intellectual property rights with respect thereto, except to the extent that any such Information and Inventions, or any Patent or other intellectual property rights with respect
thereto, are Joint Technology or Mice Materials or Mice-Related Technology; (b) other Information and Inventions, and Patent and other intellectual property rights that are
Controlled (other than pursuant to the license grants set forth in Article 3) by Seattle Genetics, its Affiliates or, to the extent permitted, its licensees or sublicensees (other than
Medarex); and (c) other Seattle Genetics Technology. 


    7.1.3  Ownership of Mice-Related
Technology.  Subject to the license grants to Seattle Genetics under Article 3, as between the Parties, Medarex shall own and retain all right, title and
interest in and to all Mice Materials and Mice-Related Technology, including any and all Information and Inventions with respect to the Mice Materials or the Mice-Related
Technology 



15





 


(including any Improvements thereto) that are conceived, discovered, developed or otherwise made, as necessary to establish authorship, inventorship or ownership under Applicable Law, by or on behalf
of Seattle Genetics, its Affiliates or, to the extent permitted, its licensees or sublicensees (other than Medarex and its Affiliates), whether or not patented or patentable, and any and all Patent
and other intellectual property rights with respect thereto. Seattle Genetics acknowledges and agrees that (a) the licenses granted to it pursuant to Article 3 permit Seattle Genetics to
use Mice Materials and Mice-Related Technology solely for the Exploitation of Collaboration Products as provided in this Agreement, (b) Seattle Genetics has no right to use the
HuMAb Mice or to discover, develop or otherwise make Improvements with respect to Mice Materials and Mice-Related Technology under such grants, and (c) neither it, nor any of its
Affiliates, licensees or sublicensees, will engage, directly or indirectly, in activities designed to, or otherwise undertake or attempt, either on behalf of itself or another, to discover, develop or
make any Information and Inventions that relate to the Mice Materials or the Mice-Related Technology. Accordingly, Seattle Genetics shall promptly disclose to Medarex in writing, the
conception or reduction to practice, or the discovery, development or making of any Mice Material or Mice-Related Technology and shall, and does hereby, assign, and shall cause its
Affiliates, licensees and sublicensees to so assign, to Medarex, without additional compensation, all of their respective rights, titles and interests in and to any Mice Material or
Mice-Related Technology. 


    7.1.4  Ownership of Production Technology.  Each Party
shall own and retain all right, title and interest in and to such Party's Production Technology, including any and all Information and Inventions with respect to such Production Technology (including
any Improvements thereto) that are conceived, discovered, developed or otherwise made, as necessary to establish authorship, inventorship or
ownership under Applicable Law, by or on behalf of such Party, its Affiliates or, to the extent permitted, its sublicensees, whether or not patented or patentable, and any and all Patent and other
intellectual property rights with respect thereto. Except as the Parties may otherwise expressly agree, neither Party shall have any rights, express or implied, under this Agreement with respect to
the other Party's Production Technology and nothing in this Agreement is intended to or shall be interpreted as granting a Party any license to any Production Technology of the other Party, whether
subordinate or dominant to any other Technology of such other Party. Each Party shall have the right to submit any of its Production Know-How with respect to a Collaboration Product
directly to the Regulatory Authorities using a drug master file, or any foreign equivalent that is designed to protect a Party's Confidential Information, which Know-How and filing shall,
notwithstanding Section 7.1.7 or any other provision of this Agreement, be and remain the sole and exclusive property of such Party. 


    7.1.5  Ownership of Joint Technology.  Subject to
Sections 7.1.3 and 7.1.4 and the license grants under Article 3, the Parties shall each own [*] in any Joint Technology; provided,
however, that, except as otherwise expressly provided in this Agreement, neither a Party nor any of its Affiliates, licensees or sublicensees shall, directly or indirectly,
Exploit any Joint Technology, or any intellectual property rights with respect thereto, without the consent of the other Party, not to be unreasonably withheld or delayed, except that each Party shall
have the right to Exploit such Joint Technology for research and discovery purposes (as opposed to the development, commercialization or other Exploitation of products or technology resulting
therefrom), and to license others to do so, without the consent of the other Party. Each Party shall promptly disclose to the other Party in writing, and shall cause its Affiliates, licensees and
sublicensees to so disclose, the development, making, conception or reduction to practice of any Joint Technology. 


    7.1.6  Ownership of Product Trademarks.  Subject to the
license grants in Article 3, the Parties shall [*] in each Product Trademark with respect to a Collaboration Product. In the event that a Party Opts-Out with
respect to a Collaboration Product, it shall, without any additional consideration, assign all of its right, title and interest in and to any Product Trademark with respect 



16





 


to such Collaboration Product or Unilateral Product to the non-Opting-Out Party; provided, however, that each Party shall retain
all of its right, title and interest in and to any Product Trademarks with respect to Dormant Products. 


    7.1.7  Ownership of Regulatory Documentation.  Subject to
the license grants in Article 3, all Regulatory Approvals with respect to a Collaboration Product shall be owned by [*],
with [*] on a [*] with respect to [*]. With respect to [*] and any other Collaboration Products with
respect to the same Collaboration Target, the Regulatory Approvals shall [*]. Subject to the license grants in Article 3,
[*], to the extent permitted by law, [*] other Regulatory Documentation, provided that Regulatory
Documentation containing or comprising Production Know-How of a Party shall be and remain the sole and exclusive property of such Party. With respect to [*] to
[*], and any other Collaboration Products with respect to the same
Collaboration Target, [*] shall be [*]. Each non-Opting-Out Party shall have the right to own all right, title and interest in
and to all Regulatory Approvals with respect to its Unilateral Products. In the event that a Party Opts-Out with respect to a Collaboration Product, it shall assign all of its right, title
and interest in and to all Regulatory Documentation with respect to such Collaboration Product, including any Regulatory Approvals and applications therefor, to the non-Opting Out Party
(or its designee); provided, however, that each Party shall retain any of its right, title and interest in and to any Regulatory Documentation with
respect to a Dormant Product. Notwithstanding the ownership of any Regulatory Approval or any other Regulatory Documentation, each Party shall have the right to use and reference any of the Regulatory
Documentation in connection with the Exploitation of Collaboration Products as provided in this Agreement. 




    Section 7.2  Prosecution of Patents and Trademarks.  



    7.2.1  Medarex Rights.  As between the Parties, Medarex
shall, subject to Section 7.2.5, have the sole right, at its cost and expense, to obtain, prosecute and maintain throughout the world the Medarex Patents, including the Mice-Related
Patents and its Production Patents. 


    7.2.2  Seattle Genetics Rights.  As between the Parties,
Seattle Genetics shall, subject to Section 7.2.5, have the sole right, at its cost and expense, to obtain, prosecute and maintain throughout the world the Seattle Genetics Patents, including
its Production Patents. 


    7.2.3  Joint Technology and Product Trademarks.  



    (a)  Filings of Patents.  Subject to
Section 7.2.6, the Parties shall, and shall cause their respective Affiliates, licensees and sublicensees, as applicable, to, cooperate with one another with respect to the filing, prosecution
and maintenance of all Joint Patents, including by selecting outside counsel, reasonably acceptable to the Parties, to handle such filing, prosecution and maintenance. The Parties shall
[*] associated with the filing, prosecution (including any interferences, reissue proceedings and reexaminations) and maintenance of all Joint Patents. 


    (b)  Filings of Collaboration Product Trademarks.  The
Steering Committee, with respect to a Collaboration Product, shall supervise and direct the filing, prosecution and maintenance of the registrations of the Product Trademarks for such Collaboration
Product. The Steering Committee shall provide each Party with (i) drafts of any new application to register a Product Trademark prior to filing that application, allowing adequate time for
review and comment by the Parties if possible; provided, however, the Steering Committee shall not be obligated to delay the filing of any application;
and (ii) copies of all correspondence from any and all Trademark offices concerning Product Trademark
registrations and an opportunity to comment on any proposed responses, voluntary amendments and submissions of any kind to be made to any and all such Trademark offices. Subject to
Section 7.2.6, the 




17





 



Parties shall [*] associated with the filing, prosecution and maintenance of such Product Trademark registrations. 




    7.2.4  Cooperation.  Each Party shall, and shall cause
its Affiliates, licensees and sublicensees, as applicable, to, cooperate fully in the preparation, filing, prosecution, and maintenance of the other Party's Patents and the Product Trademarks. Such
cooperation includes (a) promptly executing all papers and instruments and requiring employees to execute such papers and instruments as reasonable and appropriate so as to enable such other
Party or the Steering Committee, as applicable, to file, prosecute, and maintain its Patents in any country; and (b) promptly informing such other Party of matters that may affect the
preparation, filing, prosecution, or maintenance of any such Patents. 


    7.2.5  Patent Filings.  Seattle Genetics covenants not
to, and to cause its Affiliates, licensees and sublicensees, as applicable, not to, file any patent application disclosing or claiming any Information and Inventions comprising any Medarex Technology
or the Exploitation thereof, without Medarex's prior written consent, which consent shall not be unreasonably withheld or delayed. Medarex covenants not to, and to cause its Affiliates, licensees and
sublicensees, as applicable, not to, file any patent application disclosing or claiming any Information and Inventions comprising any Seattle Genetics Technology or the Exploitation thereof, without
Seattle Genetics' prior written consent, which consent shall not be unreasonably withheld or delayed. 


    7.2.6  Election not to Prosecute.  If a Party elects not
(a) to pursue the filing, prosecution or maintenance of a Joint Patent in a particular country, (b) to pursue the registration, prosecution or maintenance of a Product Trademark in a
particular country, or (c) to take any other action with respect to Joint Technology or a Product Trademark in a particular country that is necessary or reasonably useful to establish or
preserve rights thereto, then in each such case such Party shall so notify the other Party promptly in writing and in good time to enable such other Party to meet any deadlines by which an action must
be taken to establish or preserve any such rights in such Joint Technology or Product Trademark, as applicable, in such country. Upon receipt of each such notice by such other Party or if, at any
time, such Party fails to initiate any such action within thirty (30) days after a request by such other Party that it do so (and thereafter diligently pursue such action), such other Party
shall have the right, but not the obligation, to pursue the filing or registration, or support the continued prosecution or maintenance, of such Patent or Product Trademark, as applicable, at its
expense in such country. If such other Party elects to pursue such filing or registration, as the case may be, or continue such support, then such other Party shall notify such Party of such election
and such Party shall, and shall cause its Affiliates, licensees and sublicensees, as applicable, to, (x) reasonably cooperate with such other Party in this regard, and (y) subject to
Article 3, promptly release or assign to such other Party,
without compensation, all right, title and interest in and to such Patent or Product Trademark, as applicable, in such country. 




    Section 7.3  Enforcement of Patents and Trademarks.  



    7.3.1  Rights and Procedures.  If Medarex or Seattle
Genetics determines that any Technology or Product Trademark is being infringed by a Third Party's activities and that such infringement could affect the exercise by the Parties of their respective
rights and obligations under this Agreement, it shall promptly notify the other Party in writing and provide such other Party with any evidence of such infringement that is reasonably available. 



    (a)  Joint Technology and Product Trademarks.  With
respect to Joint Technology and Product Trademarks, the Steering Committee shall [*] including the filing of an infringement suit or taking other similar action.
[*]. In the event [*] of any such Joint Technology or Product Trademark within ninety (90) days following notice of such infringement, or earlier
notifies the Parties in writing of its intent not to take such steps, [*] shall have the right to do so at its expense; provided,
however, that if [*] has commenced negotiations with an alleged 




18





 



infringer for discontinuance of such infringement within such ninety (90) day period, [*] shall have an additional ninety (90) days to conclude its negotiations
before [*] may bring suit for such infringement. 


    (b)  Medarex and Seattle Genetics Technology.  With
respect to Medarex Technology or Seattle Genetics Technology that is not Mice-Related Technology or Production Technology, the owner of such Technology shall have the sole right, but not
the obligation, to remove such infringement; provided, however, that the other Party shall reimburse the owner of such Technology for
[*] percent ([*]%) of the [*] incurred by such owner with respect to the removal of any such infringement with respect to any
Collaboration Product. 


    (c)  Mice-Related Technology.  With respect
to Mice-Related Technology, Medarex shall have the sole right, but not the obligation, to remove such infringement at its sole cost and expense; provided,
however, that Seattle Genetics shall reimburse Medarex for [*] percent ([*]%) of the [*] incurred by
Medarex with respect to the removal of any such infringement with respect to any Collaboration Product (as distinguished from the general Exploitation of the HuMAb Mice). 


    (d)  Production Technology.  With respect to Production
Technology of a Party, such Party shall have the sole right, but not the obligation, to remove such infringement at its sole cost and expense; provided,
however, that the [*] for [*] percent ([*]%) of the reasonable out-of-pocket
costs incurred by such prosecuting Party with respect to the removal of any such infringement with respect to any Collaboration Product. 




    7.3.2  Cooperation.  The Party not enforcing the
applicable Technology or Product Trademark shall provide reasonable assistance to the other Party, including providing access to relevant documents and other evidence, making its employees available
at reasonable business hours, and joining the action to the extent necessary to allow the enforcing Party to maintain the action. 


    7.3.3  Recovery.  Any amounts recovered by a Party
pursuant to Section 7.3.1, whether by settlement or judgment, shall be used to reimburse the Parties for their reasonable costs and expenses in making such recovery (which amounts shall be
allocated pro rata if insufficient to cover the totality of such expenses), with any remainder being retained by the Party that has exercised its right to bring the enforcement action;  provided, however,
 that to the [*] that [*] is [*] to
[*] of a [*], the Parties shall negotiate in good faith [*] of such [*] to [*]
the [*] of the Parties under this Agreement with respect to such Collaboration Product. 




    Section 7.4  Potential Third Party Rights.  



    7.4.1  Third Party Licenses.  If (a) in the
Collective Opinion of Counsel, a Party, or any of its Affiliates, licensees or permitted sublicensees, cannot Exploit a Collaboration Product in a country in the Territory without infringing one or
more Patents that have issued to a Third Party in such country, or (b) as a result of any claim made against a Party, or any of its Affiliates, licensees or permitted sublicensees, alleging
that the Exploitation of a Collaboration Product infringes or misappropriates any Patent or any other intellectual property right of a Third Party in a country in the Territory, a judgment is entered
by a court of competent jurisdiction from which no appeal is taken within the time permitted for appeal, such that a Party cannot Exploit such Collaboration Product in such country without infringing
the Patent or other proprietary rights of such Third Party, then, in either case, the Parties shall use Commercially Reasonable Efforts to obtain a license in the names of the Parties from such Third
Party as necessary for the Exploitation of any Collaboration Products hereunder in such country; provided, however, that Medarex shall have the sole
right to seek any such license with respect to Mice-Related Technology or any of its Production Technology, and shall use Commercially Reasonable Efforts to obtain such a license in 



19





 


its own name from such Third Party in such country, under which Medarex shall, to the extent permissible under such license, grant a sublicense to Seattle Genetics as necessary for Seattle Genetics,
and any of its Affiliates and permitted sublicensees, to Exploit the Collaboration Products as provided
hereunder in such country; and provided further that Seattle Genetics shall have the sole right to seek any such license with respect to any of its
Production Technology, and shall use Commercially Reasonable Efforts to obtain such a license in its own name from such Third Party in such country, under which Seattle Genetics shall, to the extent
permissible under such license, grant a sublicense to Medarex as necessary for Medarex, and any of its Affiliates and permitted sublicensees, to Exploit the Collaboration Products as provided
hereunder in such country. The Parties shall [*] percent ([*]%) of any [*] under such
[*], except with respect to the Medarex Technology or the Seattle Genetics Technology, where Seattle Genetics and Medarex,
respectively, shall only be responsible for [*] percent ([*]%) of those [*] and other [*] with respect
to the [*] and the other activities of the Parties hereunder. For purposes of this Section 7.4.1, "Collective Opinion of
Counsel" shall mean the final joint opinion of patent counsel selected by Seattle Genetics and patent counsel selected by Medarex, after review of all data and information
reasonably available at the time such opinion is rendered. If patent counsel for the Parties cannot agree on a final joint opinion within twenty (20) days after submission of the matter to such
counsel, the patent counsel of the Parties shall agree on a third patent counsel who shall offer an independent opinion on the subject matter, which independent opinion shall be deemed the Collective
Opinion of Counsel. 


    7.4.2  Third Party Litigation.  In the event that a Third
Party institutes a Patent, Trademark or other infringement suit (including any suit alleging the invalidity or unenforceability of the Patents of a Party or its Affiliates, or claiming confusion,
deception or dilution of a Trademark by a Product Trademark) against either Party or its respective Affiliates, licensees or permitted sublicensees during the Term, alleging that the Exploitation of
the Collaboration Products in the Territory or any other activities hereunder, infringes one or more Patent, Trademark or other intellectual property rights held by such Third Party (an
"Infringement Suit"), the Parties shall cooperate with one another in defending such suit. Except with respect to the Medarex Technology or the Seattle
Genetics Technology, the Parties shall jointly direct and control any Infringement Suit with respect to Collaboration Products or any Joint Patents; provided,
however, that no Party shall cease to defend, settle or otherwise dispose of a suit with respect to any intellectual property of the other Party without the prior written
consent of such other Party. Each Party shall have the sole right to direct and control (including the right to cease to defend, settle or compromise) any Infringement Suit with respect to its
Technology. The Parties shall [*] percent ([*]%) of any costs and expenses of such defense, except with respect to the Medarex Technology or the Seattle
Genetics Technology, where Seattle Genetics and Medarex, respectively, shall only [*] percent ([*]%) of those costs and expenses with respect to the
Exploitation of Collaboration Products and the other activities of the Parties hereunder. 


    7.4.3  Retained Rights.  Nothing in this
Section 7.4 shall prevent either Party, at its own expense, from obtaining any license or other rights from Third Parties it deems appropriate in order to permit the full and unhindered
exercise of its rights under this Agreement. 




    Section 7.5  Exchange of Know-How.  



    7.5.1  Information Disclosure.  Each Party shall, and
shall cause its Affiliates, licensees and sublicensees, as applicable, to, without additional compensation and at such Party's sole expense, disclose and make available to the other Party, in whatever
form each such other Party may reasonably request, all Regulatory Documentation, all of its other Know-How, all Information and Inventions included in the Joint Technology and any other
Information and Inventions relating, directly or indirectly, to the Exploitation of any Collaboration Products immediately after the Effective Date and thereafter immediately upon the earlier of the
conception or reduction to 



20





 


practice, discovery, development or making of each such Regulatory Documentation, Know-How, or other Information and Inventions. 


    7.5.2  Cooperation.  With respect to the research,
development, commercialization or other Exploitation of the Collaboration Products, each Party, shall cooperate with any and all reasonable requests for assistance from the other Party, including by
making its employees, consultants and other scientific staff available upon reasonable notice during normal business hours at their respective places of employment to consult with such other Party, as
applicable, on issues arising during such research, development, commercialization or Exploitation. 


    7.5.3  Biological Materials.  For purposes of
facilitating the conduct of the research and development activities under this Agreement, Medarex and Seattle Genetics shall each provide to the other tissues, cells, cell lines, organisms, blood
samples, genetic material, and other biological substances and materials, including the Mice Materials, the Collaboration Targets and other Antigens (collectively, "Biological
Materials") specified from time to time in this Agreement or the applicable Project Plan. Each Party agrees to provide all such Biological Materials to the other in accordance
with the applicable Project Plan, and under the supervision of the Steering Committee. The Parties agree that: (a) all Biological Materials provided by one Party to the other Party and any
Biological Material (including Collaboration Products and other Mice Materials) produced against or with, or derived from, such Biological Materials shall be used solely for the research and
development activities as provided in the Project Plan, and in material compliance with all Applicable Law; (b) all such Biological Materials shall be provided without any warranties, express
or implied; (c) the Party providing such Biological Materials shall obtain (or cause its Third Party collaborators to obtain or certify that they have obtained) all appropriate and required
consents from the source of such Biological Materials; (d) Biological Materials provided by one Party to the other Party (other than Collaboration Products) shall not be made available by such
other Party to any Third Party except as expressly provided in the Project Plan, unless the prior written consent of the Party providing such Biological Materials is first obtained; and
(e) subject to the license grants in Article 3 and other provisions in this Agreement, all right, title and interest in and to (i) the Mice Materials and the
Mice-Related Technology shall be, and remain, vested in Medarex, and (ii) the Collaboration Targets shall be, and remain, vested in Seattle Genetics. 



    7.5.4  Regulatory Records.  With respect to the subject
matter of this Agreement, each Party shall maintain, or cause to be maintained, records of its respective research, development, manufacturing and commercialization activities, including all
Regulatory Documentation, in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall be complete and accurate and shall fully and properly reflect
all work done and results achieved in the performance of such activities, and which shall be retained during the term of this Agreement and for a period of five (5) years thereafter, or for
such longer period as may be required by Applicable Law. Each Party shall have the right, during normal business hours and upon reasonable notice, to inspect and copy any such records, except to the
extent that such records contain proprietary information with respect to the other Party's Production Technology or, with respect to Medarex's records, the HuMAb Mice. 


    7.5.5  Production Technology.  Notwithstanding anything
to the contrary in this Section 7.5 or elsewhere in this Agreement, neither Party shall be obligated to disclose or provide any of its Production Technology, including Biological Materials, to
the other Party or any Third Party; provided, however, that each Party shall provide such Production Know-How to the Regulatory Authorities
as is necessary to obtain and maintain Regulatory Approval for Collaboration Products supplied by it pursuant to Section 1.6. Each Party shall have the right to provide such
Know-How to the Regulatory Authorities in a drug master file, or any foreign equivalent that is designed to protect a Party's Confidential Information. 



21





 
ARTICLE 8—

TERM AND TERMINATION  


    Section 8.1  Term.  The term of this Agreement (the
"Term") shall commence upon the Effective Date and shall continue in effect until the later of (a) the [*] anniversary of
the completion of all of the activities in Section 1.2, or (b) such time as there is no longer any Collaboration Product being Exploited hereunder, unless terminated at an earlier date
in accordance with the terms and conditions set forth in this Article 8. 


    Section 8.2  Termination of Agreement for Material Breach.  Failure by a
Party to comply with any of its material obligations contained herein shall entitle the Party not in default to give to the Party in default notice specifying the nature of the default, requiring the
defaulting Party to make good or otherwise cure such default, and stating its intention to terminate if such default is not cured. If such default is not cured within thirty (30) days after the
receipt of such notice (or, if such default cannot be cured within such thirty (30)-day period, if the Party in default does not commence actions to cure such default within such period
and thereafter diligently continue such actions or if such default is not
otherwise cured within ninety (90) days after the receipt of such notice), the Party not in default shall be entitled, without prejudice to any of its other rights conferred on it by this
Agreement, and in addition to any other remedies available to it by law or in equity, to terminate this Agreement in its entirety. 


    Section 8.3  Termination of Rights with Respect to Collaboration Products Upon Material
Breach.  Failure by a Party to comply with any of its material obligations contained herein with respect to a Collaboration Product shall entitle the Party not
in default to give to the Party in default notice specifying the nature of the default, requiring the defaulting Party to make good or otherwise cure such default, and stating its intention to convert
such Collaboration Product to a Unilateral Product pursuant to Section 5.1 if such default is not cured. If such default is not cured within thirty (30) days after the receipt of such
notice (or, if such default cannot be cured within such thirty (30)-day period, if the Party in default does not commence actions to cure such default within such period and thereafter
diligently continue such actions or if such default is not otherwise cured within ninety (90) days after the receipt of such notice), the Party not in default shall be entitled, on written
notice to the other Party, to convert such Collaboration Product to a Unilateral Product pursuant to Section 5.1, whereupon the defaulting Party shall be deemed the Opting-Out Party
with respect to such Unilateral Product for all purposes hereunder and the notice provided under this provision shall be deemed equivalent to an Election Notice as provided in Section 5.1. 


    Section 8.4  Termination Upon Insolvency.  Either Party may terminate this
Agreement if, at any time, the other Party shall file in any court or agency pursuant to any statute or regulation of any state, country or jurisdiction, a petition in bankruptcy or insolvency or for
reorganization or for an arrangement or for the appointment of a receiver or trustee of that Party or of its assets, or if such other Party proposes a written agreement of composition or extension of
its debts, or if such other Party shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be dismissed within sixty (60) days
after the filing thereof, or if such other Party shall propose or be a party to any dissolution or liquidation, or if such other Party shall make an assignment for the benefit of its creditors. 



    Section 8.5  Rights in Bankruptcy.  All rights and licenses granted under
or pursuant to this Agreement by Medarex or Seattle Genetics are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code, licenses of rights to
"intellectual property" as defined under Section 101 of the United States Bankruptcy Code. The Parties agree that the Parties, as licensees of such rights under this Agreement, shall retain and
may fully exercise all of their rights and elections under the United States Bankruptcy Code. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against
a Party under the United States Bankruptcy 


22





 


Code, the Party hereto that is not a Party to such proceeding shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of
such
intellectual property, which, if not already in the non-subject Party's possession, shall be promptly delivered to it (a) upon any such commencement of a bankruptcy proceeding upon
the non-subject Party's written request therefor, unless the Party subject to such proceeding elects to continue to perform all of its obligations under this Agreement or (b) if not
delivered under clause (a) above, following the rejection of this Agreement by or on behalf of the Party subject to such proceeding upon written request therefor by the non-subject
Party. 


    Section 8.6  Consequences of Expiration or Termination.  



    8.6.1  Licenses.  Upon expiration of the full term of
this Agreement in accordance with Section 8.1 and payment of all amounts owed pursuant to Section 4.1, the licenses granted by Medarex to Seattle Genetics, and by Seattle Genetics to
Medarex, hereunder shall be deemed fully-paid up. 


    8.6.2  Return of Information and Materials.  Upon
expiration of this Agreement pursuant to Section 8.1 or upon termination of this Agreement in its entirety by either Party pursuant to this Article 8, each Party, at the request of the
other Party, shall return Biological Materials of such other Party and all data, files, records and other materials in its possession or control relating to such other Party's Technology, or
containing or comprising such other Party's Information and Inventions or other Confidential Information (as defined in Article 6) and, in each case, to which the returning Party does not
retain rights hereunder (except one copy of which may be retained solely for archival purposes). 




    Section 8.7  Accrued Rights; Surviving Obligations.  



    8.7.1  Accrued Rights.  Termination or expiration of this
Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration shall not
relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement. 


    8.7.2  Survival.  Articles 4, 6, 7 and 9, and Sections
2.3, 8.6, 11.5 and 11.6 of this Agreement and this Section 8.7 shall survive expiration or termination of this Agreement for any reason. 



ARTICLE 9—

INDEMNIFICATION AND INSURANCE  


    Section 9.1  Indemnification of Medarex.  Seattle Genetics shall indemnify
Medarex and its Affiliates, directors, officers, employees and agents, and defend and save each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses
(including reasonable attorneys' fees and expenses) in connection with any and all liability suits, investigations, claims or demands (collectively,
"Losses") arising from or occurring as a result of or in connection with (a) any breach by Seattle Genetics of this Agreement, or (b) the
gross negligence or willful misconduct on the part of Seattle Genetics or its Affiliates, licensees or sublicensees in performing any activity contemplated by this Agreement, except for those Losses
for which Medarex has an obligation to indemnify Seattle Genetics pursuant to Section 9.2, as to which Losses each Party shall indemnify the other to the extent of their respective liability
for the Losses. 


    Section 9.2  Indemnification of Seattle Genetics.  Medarex shall indemnify
Seattle Genetics, its Affiliates and their respective directors, officers, employees and agents, and defend and save each of them harmless, from and against any and all Losses arising from or
occurring as a result of or in connection with (a) any breach by Medarex of this Agreement, or (b) the gross negligence or willful misconduct on the part of Medarex or its Affiliates,
licensees or sublicensees in performing any activity contemplated by this Agreement, except for those Losses for which Seattle Genetics has an obligation to indemnify Medarex and its Affiliates
pursuant to Section 9.1, as to which Losses each Party shall indemnify the other to the extent of their respective liability for the Losses. 


23







 
    Section 9.3  Indemnification Procedure.  



    9.3.1  Notice of Claim.  The indemnified Party shall give
the indemnifying Party prompt written notice (an "Indemnification Claim Notice") of any Losses or discovery of fact upon which such indemnified Party
intends to base a request for indemnification under Section 9.1 or Section 9.2, but in no event shall the indemnifying Party be liable for any Losses that result from any delay in
providing such notice. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss are known
at such time). The indemnified Party shall furnish promptly to the indemnifying Party copies of all papers and official documents received in respect of any Losses. All indemnification claims in
respect of a Party, its Affiliates or their respective directors, officers, employees and agents (collectively, the "Indemnitees" and each an
"Indemnitee") shall be made solely by such Party to this Agreement (the "Indemnified Party"). 



    9.3.2  Third Party Claims.  The obligations of an
indemnifying Party under this Article 9 with respect to Losses arising from claims of any Third Party that are subject to indemnification as provided for in Section 9.1 or 9.2 (a
"Third Party Claim") shall be governed by and be contingent upon the following additional terms and conditions: 



    (a)  Control of Defense.  At its option, the indemnifying
Party may assume the defense of any Third Party Claim by giving written notice to the Indemnified Party within thirty (30) days after the indemnifying Party's receipt of an Indemnification
Claim Notice. The assumption of the defense of a Third Party Claim by the indemnifying Party shall not be construed as an acknowledgment that the indemnifying Party is liable to indemnify any
Indemnitee in respect of the Third Party Claim, nor shall it constitute a waiver by the indemnifying Party of any defenses it may assert against any Indemnitee's claim for indemnification. Upon
assuming the defense of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the indemnifying Party. In the
event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall immediately deliver to the indemnifying Party all original notices and documents (including court
papers) received by any Indemnitee in connection with the Third Party Claim. Should the indemnifying Party assume the defense of a Third Party Claim, the indemnifying Party shall not be liable to the
Indemnified Party or any other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection with the analysis, defense or settlement of the Third
Party Claim. In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless an Indemnitee from and against the Third Party Claim, the
Indemnified Party shall reimburse the indemnifying Party for any and all costs and expenses (including attorneys' fees and costs of suit) and any Losses incurred by the indemnifying Party in its
defense of the Third Party Claim with respect to such Indemnitee. 


    (b)  Right to Participate in Defense.  Without limiting
Section 9.3.2(a), any Indemnitee shall be entitled to participate in, but not control, the defense of such Third Party Claim and to employ counsel of its choice for such purpose;  provided, however,
that such employment shall be at the Indemnitee's own expense unless (i) the employment thereof has been specifically
authorized by the indemnifying Party in writing, or (ii) the indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 9.3.2(a) (in which case the
Indemnified Party shall control the defense). 


    (c)  Settlement.  With respect to any Losses relating
solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnitee's becoming subject to injunctive or other relief or otherwise adversely affect
the business of the Indemnitee in any manner, and as to which the indemnifying Party shall have acknowledged in 




24





 



writing the obligation to indemnify the Indemnitee hereunder, the indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose
of such Loss, on such terms as the indemnifying Party, in its sole discretion, shall deem appropriate. With respect to all other Losses in connection with Third Party Claims, where the indemnifying
Party has assumed the defense of the Third Party Claim in accordance with Section 9.3.2(a), the indemnifying Party shall have authority to consent to the entry of any judgment, enter into any
settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed). The indemnifying
Party shall not be liable for any settlement or other disposition of a Loss by an Indemnitee that is reached without the written consent of the indemnifying Party. Regardless of whether the
indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnitee shall admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without the
prior written consent of the indemnifying Party. 


    (d)  Cooperation.  Regardless of whether the indemnifying
Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each other Indemnitee to, cooperate in the defense or prosecution thereof and shall furnish
such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith.
Such cooperation shall include access during normal business hours afforded to the indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are
reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any
material provided hereunder, and the indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket expenses in connection therewith. 


    (e)  Expenses.  Except as provided above, the reasonable
and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any claim shall be reimbursed on a calendar quarter basis by the
indemnifying Party, without prejudice to the indemnifying Party's right to contest the Indemnified Party's right to indemnification and subject to refund in the event the indemnifying Party is
ultimately held not to be obligated to indemnify the Indemnified Party. 





    Section 9.4  Insurance.  Each Party shall have and maintain such types and
amounts of liability insurance as is normal and customary in the industry generally for parties similarly situated, and shall upon request provide the other Party with a copy of its policies of
insurance in that regard, along with any amendments and revisions thereto. 


ARTICLE 10—

REPRESENTATIONS AND WARRANTIES  


    Section 10.1  Representations, Warranties and Covenants.  Each Party
hereby represents, warrants and covenants to the other Party as of the Effective Date as follows: 



    10.1.1  Corporate Authority.  Such Party (a) has
the power and authority and the legal right to enter into this Agreement and perform its obligations hereunder, and (b) has taken all necessary action on its part required to authorize the
execution and delivery of this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such Party and constitutes a legal, valid
and binding obligation of such Party and is enforceable against it in accordance with its terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the
enforcement of creditor rights and 



25





 


judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability is considered a proceeding at law or equity. 


    10.1.2  Litigation.  Such Party is not aware of any
pending or threatened litigation (and has not received any communication) that alleges that such Party's activities related to this Agreement have violated, or that by conducting the activities as
contemplated herein such Party would violate, any of the intellectual property rights of any other party. 


    10.1.3  Consents, Approvals, etc.  All necessary
consents, approvals and authorizations of all Regulatory Authorities and other parties required to be obtained by such Party in connection with the execution and delivery of this Agreement and the
performance of its obligations hereunder have been obtained. 


    10.1.4  Conflicts.  The execution and delivery of this
Agreement and the performance of such Party's obligations hereunder (a) do not conflict with or violate any requirement of Applicable Law or any provision of the articles of incorporation,
bylaws or any similar instrument of such Party, as applicable, in any material way, and (b) do not conflict with, violate, or breach or constitute a default or require any consent under, any
contractual obligation or court or administrative order by which such Party is bound. 


    10.1.5  Debarment.  No such Party nor any of its
Affiliates has been debarred or is subject to debarment and neither such Party nor any of its Affiliates will use in any capacity, in connection with the services to be performed under this Agreement,
any party who has been debarred pursuant to Section 306 of the Federal Food, Drug, and Cosmetic Act, as amended, or who is the subject of a conviction described in such section. Each Party will
inform the other Party in writing immediately if it or any party who is performing services hereunder is debarred or is the subject of a conviction described in Section 306, or if any action,
suit, claim, investigation or legal or administrative proceeding is pending or, to such Party's knowledge, is threatened, relating to the debarment or conviction of such Party or any party performing
services hereunder. 




    Section 10.2  Additional Representations and Warranties of
Medarex.  Medarex represents and warrants to Seattle Genetics that Medarex is a corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as
it is contemplated to be conducted by this Agreement. 


    Section 10.3  Additional Representations and Warranties of Seattle
Genetics.  Seattle Genetics represents and warrants to Medarex that Seattle Genetics is a corporation duly organized, validly existing and in good standing under
the laws of Delaware, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as it is
contemplated to be conducted by this Agreement. 


    Section 10.4  DISCLAIMER OF WARRANTY.  EXCEPT FOR THE EXPRESS WARRANTIES
SET FORTH IN SECTIONS 10.1, 10.2 AND 10.3, SEATTLE GENETICS AND MEDAREX MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR
OTHERWISE, AND SEATTLE
GENETICS AND MEDAREX EACH SPECIFICALLY DISCLAIM ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE
OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. 


26





 
ARTICLE 11—

MISCELLANEOUS  


    Section 11.1  Force Majeure.  Neither Party shall be held liable or
responsible to the other Party or be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement when such failure or delay is
caused by or results from events beyond the reasonable control of the non-performing Party, including fires, floods, embargoes, shortages, epidemics, quarantines, war, acts of war (whether
war be declared or not), insurrections, riots, civil commotion, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority. The
non-performing Party shall notify the other Party of such force majeure within ten (10) days after such occurrence by giving written notice to the other Party stating the nature of
the event, its anticipated duration, and any action being taken to avoid or minimize its effect. The suspension of performance shall be of no greater scope and no longer duration than is necessary and
the non-performing Party shall use Commercially Reasonable Efforts to remedy its inability to perform; provided, however, that in the event
the suspension of performance continues for one-hundred and eighty (180) days after the date of the occurrence, the Parties shall meet to discuss in good faith how to proceed in
order to accomplish the goals of the Collaboration outlined in this Agreement. 


    Section 11.2  Subcontractors.  Each Party shall have the right, subject to
the prior written consent of the Steering Committee, such consent not to be unreasonably withheld or delayed, to subcontract any of its research, development, manufacture and/or commercialization
activities to a Third Party, provided that it furnishes the other Party with advanced written notice thereof, which notice shall specify the work to be subcontracted, and obtains a written undertaking
from the subcontractor that it shall be subject to the applicable terms and conditions of this Agreement, including the provisions of Article 6. If a Party wishes to subcontract any of its
research, development, manufacturing or commercialization activities to a Third Party and the Steering Committee consents, the other Party may submit a bid to the subcontracting Party to perform such
work. The subcontracting Party shall use Commercially Reasonable Efforts to enter into an agreement with the bidder that is best able to meet the Collaboration's requirements, taking into
consideration such factors as price, quality, capacity, quantity, reliability and reputation, provided that such bidder is reasonably acceptable to the Steering Committee. Unless the Project Plan
provides, or the Steering Committee agrees otherwise, the Parties
shall share equally (50%) in the costs and expenses associated with the use of a subcontractor to conduct research, development, manufacture and commercialization activities, but, unless the Parties
agree otherwise, the subcontracting Party shall remain solely liable for the performance of its research, development, manufacture or commercialization activities by its subcontractor;  provided, however,
 that Seattle Genetics and Medarex each shall remain solely responsible for all costs and expenses associated with its use of
subcontractor(s) with respect to the Seattle Genetics Research Activities and the Medarex Research Activities, respectively. 


    Section 11.3  Assignment.  Without the prior written consent of the other Party
hereto, neither Party shall sell, transfer, assign, delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights
or duties hereunder; provided, however, that either Party hereto may assign or transfer this Agreement or any of its rights or obligations hereunder
without the consent of the other Party (a) to any Affiliate of such Party; or (b) to any Third Party with which it may merge or consolidate, or to which it may transfer all or
substantially all of its assets to which this Agreement relates if in any such event (i) the assigning Party (provided that it is not the surviving entity) remains jointly and severally liable
with the relevant Seattle Genetics Affiliate, Medarex Affiliate or Third Party assignee under this Agreement, and (ii) the relevant Seattle Genetics Affiliate or Medarex Affiliate assignee,
Third Party assignee or surviving entity assumes in writing all of the assigning Party's obligations under this Agreement. Any purported assignment or transfer in violation of this Section shall be
void ab initio and of no force or effect. 


27





 


    Section 11.4  Severability.  If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of either Party under this Agreement will not be materially and adversely affected thereby,
(a) such provision shall be fully severable, (b) this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part,
(c) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom,
and (d) in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and reasonably acceptable to the Parties herein. To the fullest extent permitted by applicable law, each Party hereby waives any
provision of law that would render any provision prohibited or unenforceable in any respect. 


    Section 11.5  Governing Law, Jurisdiction, Venue and Service.  This Agreement
shall be governed by and construed in accordance with the laws of the State of New York, applicable to contracts made and wholly performed within such jurisdiction by residents of such jurisdiction. 


    Section 11.6  Notices.  All notices or other communications that are required or
permitted hereunder shall be in writing and delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier as provided herein),
sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: 




If
to Seattle Genetics, to: 



Seattle
Genetics, Inc.

22215 26th Avenue S.E., Suite 3000

Bothell, WA 98021

Attention: Chief Executive Officer

Facsimile: (425) 489-4798 


with
a copy to: 


Venture
Law Group

4750 Carillon Point

Kirkland, WA 98033

Attention: Sonya F. Erickson, Esq.

Facsimile: (425) 739-8750 




If
to Medarex, to: 



Medarex, Inc.

707 State Road, Suite 206

Princeton, New Jersey 08540-1437

Attention: President

Facsimile: (609) 430-2850 


with
copies to: 


Medarex, Inc.

707 State Road, Suite 206

Princeton, New Jersey 08540-1437

Attention: General Counsel

Facsimile: (609) 430-2850 





28





 




Covington & Burling

1201 Pennsylvania Ave., N.W.

Washington, D.C. 20004

Attention: John A. Hurvitz, Esq.

Facsimile: (202) 778-5319 






or
to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such communication shall be deemed to have been given
(i) when delivered, if personally delivered or sent by facsimile on a business day, (ii) on the business day after dispatch, if sent by nationally-recognized overnight courier, and
(iii) on the third business day following the date of mailing, if sent by mail. It is understood and agreed that this Section 11.6 is not intended to govern the
day-to-day business communications necessary between the Parties in performing their duties, in due course, under the terms of this Agreement. 


    Section 11.7  Entire Agreement; Modifications.  This Agreement sets forth and
constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and all prior agreements, understanding, promises and representations, whether written
or oral, with respect thereto are superseded hereby. Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically set forth herein. No
amendment, modification, release or discharge shall be binding upon the Parties unless in writing and duly executed by authorized representatives of both Parties. 


    Section 11.8  Relationship of the Parties.  It is expressly agreed that the
Parties shall be independent contractors of one another and that the relationship between the Parties shall not constitute a
partnership, joint venture or agency. Neither Party shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the
other, without the prior written consent of the other to do so. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by
reason of any such employment shall be for the account and expense of such Party. 


    Section 11.9  Waiver.  Any term or condition of this Agreement may be waived at
any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such
term or condition. The waiver by either Party hereto of any right hereunder or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or
of any other breach or failure by said other Party whether of a similar nature or otherwise. 


    Section 11.10  Counterparts.  This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 


    Section 11.11  No Benefit to Third Parties.  The representations,
warranties, covenants and agreements set forth in this Agreement are for the sole benefit of the Parties hereto and their successors and permitted assigns, and they shall not be construed as
conferring any rights on any other parties. 


    Section 11.12  Further Assurance.  Each Party shall duly execute and deliver, or
cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and
instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes, or to better assure and
confirm unto such other Party its rights and remedies under this Agreement. 


    Section 11.13  English Language.  This Agreement has been written and executed in
the English language. Any translation into any other language shall not be an official version thereof, and in the 


29





 


event of any conflict in interpretation between the English version and such translation, the English version shall control. 



    Section 11.14  References.  Unless otherwise specified, (a) references in
this Agreement to any Article, Section, Schedule or Exhibit shall mean references to such Article, Section, Schedule or Exhibit of this Agreement, (b) references in any section to any clause
are references to such clause of such section, and (c) references to any agreement, instrument or other document in this Agreement refer to such agreement, instrument or other document as
originally executed or, if subsequently varied, replaced or supplemented from time to time, as so varied, replaced or supplemented and in effect at the relevant time of reference thereto. 



    Section 11.15  Construction.  Except where the context otherwise requires,
wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word "or" is used in the inclusive sense (and/or). The
captions of this Agreement are for convenience of reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained in this
Agreement. The term "including" as used herein shall mean including, without limiting the generality of any description preceding such term. The language of this Agreement shall be deemed to be the
language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party hereto. 



    IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the
date first above written. 



	MEDAREX, INC.	 	SEATTLE GENETICS, INC.
	

By: /s/ RONALD A. PEPIN
	
 	

By: /s/ H. PERRY FELL

	

Name: Ronald A. Pepin
	
 	

Name: H. Perry Fell

	

Title: Vice President, Business Development
	
 	

Title: Chief Executive Officer





30






APPENDIX A
  Definitions  


    This Appendix to the COLLABORATION AGREEMENT ("Agreement") effective as of February 2, 2001, by and
between SEATTLE GENETICS, INC. ("Seattle Genetics") and MEDAREX, INC., on behalf of itself and its wholly owned subsidiary, GENPHARM
INTERNATIONAL, INC., (collectively, "Medarex") provides agreed upon definitions applicable to the Parties for purposes of the Agreement. All
capitalized terms used herein without definition shall have the meanings ascribed thereto in the Agreement, unless otherwise expressly provided herein. 


    The
contents of this Appendix A are hereby incorporated into the Agreement and are governed by the terms and conditions of the
Agreement, including the confidentiality provisions set forth therein. 


    "Affiliate" of a party shall mean any other party that, directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such first party. For purposes of this definition only, "control" and, with correlative meanings, the terms "controlled by" and "under common control
with" shall mean (a) the possession, directly or indirectly, of the power to direct the management or policies of a party, whether through the ownership of voting securities or by contract
relating to voting rights or corporate governance, or (b) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a
party; provided that, if local law restricts foreign ownership, control will be established by direct or indirect ownership of the maximum ownership percentage that may, under such local law, be owned
by foreign interests. 


    "Antibody" shall mean any fully human monoclonal antibody, or fragment thereof, with a unique amino acid sequence that has a
therapeutically meaningful binding affinity for an Antigen. References in the Agreement to an "Antibody" shall include (a) [*] or [*] such
Antibody or [*] (whether [*] or [*]) with respect to the [*] of such Antibody, and
(b) [*] (whether [*] or [*]) with respect to the [*] of such Antibody (or a
[*] of such [*] containing that [*] of such [*] for an [*]). By way of
clarification, Antibodies with [*] shall be deemed to be different Antibodies, irrespective of whether they bind to the same Antigen. 



    "Antibody Product" shall mean any composition or formulation containing or comprising one or more Antibodies, including, by way of
clarification, (a) [*] or [*] one or more of such Antibodies or [*] (whether [*] or
[*]) with respect to the [*] of such Antibodies, and (b) [*] (whether [*] or
[*]) with respect to the [*] of such Antibodies (or a [*] of such [*] containing that
[*] of such [*] for an [*]), for the diagnosis, prophylaxis or treatment of human diseases or conditions. 


    "Antigen" shall mean any protein (including any glyco- or lipo-protein), carbohydrate, compound or other composition, and
any fragment, peptide or epitope thereof, that stimulates the production of antibodies. 


    "Applicable Law" shall mean the applicable laws, rules, and regulations, including any rules, regulations, guidelines, or other
requirements of the Regulatory Authorities, that may be in effect from time to time in the Territory. 


    "Biosite Agreement" shall mean that certain Collaboration Agreement, dated as of June 1, 2000, between Medarex and Biosite
Diagnostics Incorporated, a Delaware corporation. 


    "BLA" or "Biologics License Application" shall mean a Biologics License Application, as
defined in the U.S. Federal Food, Drug, and Cosmetics Act, as amended, and the regulations promulgated thereunder, and any corresponding foreign or domestic marketing authorization application,
registration or certification, necessary or reasonably useful to market a Collaboration Product in the Territory, but not including pricing and reimbursement approvals. 


    "Collaboration Product" shall mean any Antibody Product that contains a Collaboration Antibody. 


    "Collaboration Target" shall mean any Antigen listed on Appendix C, as such
appendix may be amended pursuant to this Agreement. 





 


    "Collaboration Target Technology" shall mean the Collaboration Targets and any Patents that claim or cover any Collaboration Target or
any method for the discovery, identification or characterization of Collaboration Targets, but excluding any claims with respect to Collaboration Products or any Information and Inventions with
respect to the Exploitation of the Collaboration Products. 


    "Commercially Reasonable Efforts" shall mean, with respect to the research, development, manufacture or commercialization of a
Collaboration Target or a resulting Collaboration Product, efforts and resources commonly used in the biotechnology industry for an antibody of similar commercial potential at a similar stage in its
lifecycle, taking into consideration its safety and efficacy, its cost to develop, the competitiveness of alternative products, its proprietary position, the likelihood of regulatory approval,
its profitability, and all other relevant factors. Commercially Reasonable Efforts shall be determined on a market-by-market basis for each Collaboration Target and
Collaboration Product, as applicable. 


    "Control" shall mean, with respect to any Information and Invention, Patent or other intellectual property right, possession of the
right, whether directly or indirectly, and whether by ownership, license or otherwise, to assign, or grant a license, sublicense or other right to or under, such Information and Invention, Patent or
right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party. 


    "Cross-License Agreement" shall mean that certain Cross-License Agreement entered into by and among Abgenix, Inc., Cell
Genesys, Inc., Japan Tobacco Inc., Xenotech L.P., and GenPharm International, Inc., effective as of March 26, 1997, as amended from time to time. 


    "Exploit" or "Exploitation" shall mean to make, have made, import, use, sell, offer for
sale, or otherwise dispose of, including all discovery, research, development, registration, modification, enhancement, improvement, manufacture, storage, formulation, exportation, transportation,
distribution, promotion and marketing activities related thereto. 


    "FDA" shall mean the United States Food and Drug Administration and any successor agency thereto. 


    "GAAP" shall mean United States generally accepted accounting principles consistently applied. 


    "HuMAb Mice" shall mean any [*] containing [*] into [*], but
not containing any [*] or [*] thereof, that are Controlled by Medarex or its Affiliates as of the Effective Date or at any time during the term of this
Agreement, but excluding [*] of producing [*] that are [*] or otherwise [*] by Medarex or its Affiliates
after the Effective Date. 


    "Improvement" shall mean any modification to an antibody, compound, product or technology or any discovery, device, process or
formulation related to such antibody, compound, product or technology, whether or not patented or patentable, including any enhancement in the efficiency, operation, manufacture, ingredients,
preparation, presentation, formulation, means of delivery, packaging or dosage of an antibody, compound, product or technology, any discovery or development of any new or expanded indications or
applications for an antibody, compound, product or technology, or any discovery or development that improves the stability, safety or efficacy of an antibody, compound, product or technology. 


    "IND" shall mean an investigational new drug application filed with the FDA for authorization to commence human clinical trials, and
its equivalent in other countries or regulatory jurisdictions. 


    "Information and Inventions" shall mean all technical, scientific and other know-how and information, trade secrets,
knowledge, technology, means, methods, processes, practices, formulas, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures,
computer programs, apparatuses, specifications, data, results and other material, 


A-2





 


including high-throughput screening, gene expression, genomics, proteomics and other drug discovery and development technology, pre-clinical and clinical trial results,
manufacturing procedures, test procedures and purification and isolation techniques, (whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now
known or hereafter developed, and all Improvements, whether to the foregoing or otherwise, and other discoveries, developments, inventions and other intellectual property (whether or not confidential,
proprietary, patented or patentable). 


    "Joint Technology" shall mean any and all (a) Information and Inventions, conceived, discovered, developed or otherwise made, as
necessary to establish authorship, inventorship or ownership under Applicable Law, by or on behalf of a Party or its Affiliates or, to the extent permitted, its sublicensees (whether alone or
jointly), in connection with the work conducted under this Agreement, whether or not patented or patentable, but excluding any Mice Materials, Mice-Related Technology, Production
Technology and any Collaboration Target Technology; and (b) any Patents and other intellectual property rights with respect thereto (collectively, "Joint
Patents"). 


    "Kirin Agreement" shall mean that certain Agreement on Essential Terms for Collaboration between Kirin Brewery Co, Ltd.
("Kirin") and Medarex dated as of December 27, 1999, and any further agreement between Kirin and Medarex entered into pursuant thereto. 


    "Know-How" shall mean the Medarex Know-How (including the Mice-Related Know-How), the
Seattle Genetics Know-How and/or the Joint Know-How, as applicable. 


    "Lead Collaboration Antibody" shall have the meaning set forth in Section 1.2.8. For the avoidance of doubt, a Collaboration
Antibody that has been designated a Lead Collaboration Antibody shall continue to be a Collaboration Antibody for purposes of this Agreement. 


    "Medarex Know-How" shall mean all Information and Inventions in the Control of Medarex or its Affiliates as of the
Effective Date or at any time during the Term that are necessary or reasonably useful for the Exploitation of the Collaboration Products or for the exercise of the Medarex Patents, in each case that
are not generally known, but excluding (w) any Third Party Know-How, (x) any Information and Inventions included in the Joint Technology, (y) any Production
Know-How, and (z) any Information and Inventions to the extent covered or claimed by the Medarex Patents. Medarex Know-How shall include all: (a) biological,
chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, clinical and safety data and information related to the Collaboration Targets and the Collaboration Products, and
(b) data and information with respect to, and resulting from, assays and biological methodologies necessary or reasonably useful for the Exploitation of the Collaboration Targets and the
Collaboration Products. By way of clarification, Seattle Genetics shall not have any rights with respect to Third-Party Know-How under this Agreement unless the Parties enter into a
separate written agreement with respect thereto. 


    "Medarex Patents" shall mean all of the Patents that Medarex or its Affiliates Control as of the Effective Date and at any time during
the Term, that cover or claim any invention necessary or reasonably useful for the Exploitation of the Collaboration Products, but excluding any Third Party Patents, any Joint Patents, and any
Production Patents. By way of clarification, Seattle Genetics shall not have any rights with respect to any Third-Party Patents under this Agreement unless the Parties enter into a separate written
agreement with respect thereto. 


    "Medarex Technology" shall mean the Medarex Know-How and Medarex Patents, including all Mice-Related
Technology. 


    "Mice Materials" shall mean the HuMAb Mice, any [*] of the [*], including
[*] (including [*] (e.g., [*], and [*] and
[*] thereto, whether [*] or [*]) with respect to the [*] of an [*] or
[*] thereof, and any [*] or [*] thereof or [*] thereto (e.g., [*] or
[*] of [*] therein)) or other [*] derived directly or indirectly from the [*], but excluding any
[*]. 


A-3





 


    "Mice-Related Know-How" shall mean (a) any Information and Inventions with respect to any Mice Materials
or other biological materials derived directly or indirectly from the HuMAb Mice, but excluding any Collaboration Products and any Information and Inventions with respect to Exploitation of
Collaboration Products, and (b) any Information and Inventions with respect to the HuMAb Mice and the Exploitation thereof, but in each case excluding any Information and Inventions to the
extent covered or claimed by the Mice-Related Patents. 


    "Mice-Related Patents" shall mean any Patents that claim or cover (a) Mice Materials or other biological materials
derived directly or indirectly from the HuMAb Mice, and any Information and Inventions with respect to the foregoing, but excluding any claims with respect to Collaboration Products or any Information
and Inventions with respect to the Exploitation of the Collaboration Products, and (b) the HuMAb Mice and the Exploitation thereof. 


    "Mice-Related Technology" shall mean the Mice-Related Know-How and the Mice-Related
Patents. 


    "MRC Agreement" shall mean that certain License Agreement entered into by the Medical Research Council Institute of Animal Physiology
and Genetics Research of Babraham Hall and Marianne Bruggëmann and GenPharm International, Inc., effective October 1, 1993, as amended on August 12, 1994. 



    "Patents" shall mean (x) all patents and patent applications, (y) any substitutions, divisions, continuations,
continuations-in-part, reissues, renewals, registrations, confirmations, re-examinations, extensions, supplementary protection certificates and the like, and any
provisional applications, of any such patents or patent applications, and (z) any foreign or international equivalent of any of the foregoing. 


    "Phase III" shall mean a human clinical trial, the principal purpose of which is to establish safety and efficacy in patients with the
disease target being studied as required in 21 C.F.R. §312, or a similar clinical study prescribed by the Regulatory Authorities in a country other than the United States. A Phase III
study shall also include any other human clinical trial intended as a pivotal study, whether or not such study is a traditional Phase III study. 


    "Phase III Completion" shall mean the completion of a data package for a Phase III study with respect to a Collaboration Product, which
data package is sufficient to support the filing of an approvable BLA for such Collaboration Product in Japan, the United States, the United Kingdom, France, Germany or the European Union as a whole. 


    "Pre-Existing Agreement" shall mean, with respect to an Antigen, any agreement with a Third Party that would preclude such
Antigen from becoming a Collaboration Target hereunder that was entered into by Seattle Genetics or any of its Affiliates, as applicable, prior to the Effective Date. 


    "Product Trademarks" shall mean the trademarks developed for the Collaboration Products by the Steering Committee, all packaging
designs and other trade dress used in connection with the Collaboration Products and such other Trademarks relating thereto and any registrations thereof or any pending applications relating thereto. 


    "Production Know-How" shall mean any Information and Inventions with respect to the Production Process Development or the
production of Antibody Products, but excluding any Information and Inventions to the extent covered or claimed by the Production Patents. 



    "Production Patents" shall mean any Patents of a Party that claim or cover the Production Process Development or the production of
Antibody Products. 


    "Production Process Development" shall mean the development of processes and technology to facilitate  [production, purification, evaluation, characterization, stability assessment, vialing and
distribution, and release] of a
Collaboration Antibody. 


A-4





 


    "Production Technology" shall mean any Production Know-How and Production Patents. 


    "Regulatory Approval" shall mean any and all approvals (including pricing and reimbursement approvals), licenses, registrations or
authorizations of any Regulatory Authority, necessary for the Exploitation of a Collaboration Product in a country, including any (a) approval for a Collaboration Product (including any INDs,
BLAs and supplements and amendments thereto); (b) pre- and post-approval marketing authorizations (including any prerequisite manufacturing approval or authorization
related thereto); (c) labeling approval; and (d) technical, medical and scientific licenses. 


    "Regulatory Authority" shall mean any applicable government entities regulating or otherwise exercising authority with respect to the
Exploitation of the Collaboration Targets or the Collaboration Products in the Territory. 


    "Regulatory Documentation" shall mean all applications, registrations, licenses, authorizations and approvals (including all Regulatory
Approvals), all correspondence submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications
with any Regulatory Authority), all supporting documents and all clinical studies and tests, relating to any Collaboration Antibody, Collaboration Target or any Collaboration Products, and all data
contained in any of the foregoing, including all regulatory drug lists, advertising and promotion documents, adverse event files and complaint files. 


    "Seattle Genetics Know-How" shall mean all Information and Inventions in the Control of Seattle Genetics or its Affiliates
as of the Effective Date or at any time during the Term that are necessary or reasonably useful for the Exploitation of the Collaboration Products, including the discovery, identification or
characterization of Collaboration Targets, or for the exercise of the Seattle Genetics Patents, in each case that are not generally known, but excluding (w) any Information and Inventions
included in the Joint Technology, (x) any Information and Inventions to the extent covered or claimed by the Seattle Genetics Patents, (y) any Production Know-How, and
(z) any Information and Inventions solely related to Seattle Genetics single-chain immunotoxin, drug conjugate and ADEPT technologies. Seattle Genetics Know-How shall include all:
(a) biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, clinical and safety data and information related to the Collaboration Targets and the
Collaboration Products, and (b) data and information with respect to, and resulting from, assays and biological methodologies necessary or reasonably useful for the Exploitation of the
Collaboration Targets and the Collaboration Products. 


    "Seattle Genetics Patents" shall mean all of the Patents that Seattle Genetics and its Affiliates Control as of the Effective Date and
at any time during the Term, that claim or cover any invention necessary or reasonably useful for the Exploitation of the Collaboration Products and any Collaboration Target Technology, but excluding
(x) any Joint Patents, (y) any Production Patents, and (z) any Patents insofar as they relate to the single-chain immunotoxin, drug conjugate and ADEPT technologies owned by
Seattle Genetics. 


    "Seattle Genetics Technology" shall mean the Seattle Genetics Know-How and Seattle Genetics Patents. 


    "Technology" shall mean Medarex Technology, the Seattle Genetics Technology and/or the Joint Technology, as applicable. 


    "Territory" shall mean the entire world. 


    "Third Party" shall mean any party other than Medarex, Seattle Genetics or their respective Affiliates. 



    "Third-Party Know-How" shall mean any and all Information and Inventions that Medarex or any of its Affiliates Control
pursuant to the Biosite Agreement, the Kirin Agreement or any other 


A-5





 


agreement with a Third Party that is entered into after the Effective Date, but excluding any Information and Inventions that are claimed or covered by the Third-Party Patents. 



    "Third-Party Patent" shall mean any Patents that Medarex or any of its Affiliates Control pursuant to the Biosite Agreement, the Kirin
Agreement or any other agreement with a Third Party that is entered into after the Effective Date. 


    "Trademark" shall include any word, name, symbol, color, designation or device or any combination thereof, including any trademark,
trade dress, service mark, service name, brand mark, trade name, brand name, logo or business symbol. 



    Terms Defined Elsewhere in this Agreement.  The following terms are defined in the applicable Sections of this
Agreement: 



	Defined Term
 
	 	Section

	Antibodiable Antigen	 	Section 1.2.2(a)
	Antigen Evaluation Material	 	Section 1.2.2(a)
	Antigen Commitment	 	Section 1.2.2(a)
	Assay	 	Section 1.2.3(c)
	Assay Candidate	 	Section 1.2.6(a)
	Assay Success Criteria	 	Section 1.2.3(e)
	Authorized Commercialization Expenses	 	Section 4.1.1
	Authorized R&D Expenses	 	Section 4.1.2
	Biological Materials	 	Section 7.5.3
	Collaboration	 	Section 1.1
	Collaboration Antibody	 	Section 1.2.6(a)
	Collaboration Expenses	 	Section 4.5.1
	Collective Opinion of Counsel	 	Section 7.4.1
	Commercialization Expenses	 	Appendix B
	Confidential Information	 	Section 6.1
	Direct License Agreement	 	Section 1.2.2(g)
	Dormant Product	 	Section 5.3
	Effective Date	 	Preamble
	Election Notice	 	Section 5.1.2
	Expert	 	Section 2.3.1(a)
	Fully-Burdened Production Process Development Cost	 	Appendix B
	Immunogen	 	Section 1.2.3(a)
	Indemnification Claim Notice	 	Section 9.3.1
	Indemnified Party	 	Section 9.3.1
	Indemnitee	 	Section 9.3.1
	Infringement Suit	 	Section 7.4.2
	Losses	 	Section 9.1
	Medarex Research Activities	 	Section 1.2.4
	Net Profits, Net Losses	 	Appendix B
	Net Sales	 	Appendix B
	Opt-Out	 	Section 5.1.1
	Opt-Out Notice	 	Section 5.1.1
	Opting-Out Party	 	Section 5.1.1
	Other Operating (Income)/Expense	 	Appendix B
	Party	 	Preamble
	Project Budget	 	Section 1.3
	Project Plan	 	Section 1.3



A-6





 

	Research and Commercializationv Agreement	 	Section 3.3.2
	Reversion Target	 	Section 1.8
	Seattle Genetics Research Activities	 	Section 1.2.4
	Steering Committee	 	Section 2.1.1
	Target Entry Period	 	Section 1.2.2(f)
	Term	 	Section 8.1
	Third Party Claim	 	Section 9.3.2
	Third Party Payments	 	Appendix B
	Unilateral Development and Commercialization Agreement	 	Section 5.1.2
	Unilateral Product	 	Section 5.1.2
	Withholding Taxes	 	Section 4.4




A-7






APPENDIX B
  Financial Definitions  


    This Appendix to the COLLABORATION AGREEMENT ("Agreement") effective as of February 2, 2001, by and
between SEATTLE GENETICS, INC. ("Seattle Genetics") and MEDAREX, INC., on behalf of itself and its wholly owned subsidiary, GENPHARM
INTERNATIONAL, INC., (collectively, "Medarex") provides agreed upon definitions of financial terms applicable to the Parties for purposes of the
Agreement. All capitalized terms used herein without definition shall have the meanings ascribed thereto in the Agreement, unless otherwise expressly provided herein. 


    The
contents of this Appendix B are hereby incorporated into the Agreement and are governed by the terms and conditions of the
Agreement, including the confidentiality provisions set forth therein. 


    It
is the intention of the Parties that the interpretation of these definitions will be in accordance with GAAP. 



    1.  "Net Sales" shall mean, for any period, the gross amount invoiced by the Parties and their Affiliates and
sublicensees for the sale of Collaboration Product(s) to Third Parties, less deductions for: (a) normal and customary trade, quantity and cash discounts and sales returns and allowances (other
than allowances for doubtful accounts), including (i) those granted on account of price adjustments, billing errors, rejected goods, damaged goods, returns and rebates,
(ii) administrative and other fees and reimbursements and similar payments directly related to the sale or delivery of Collaboration Product(s) paid to wholesalers and other distributors,
buying groups, pharmacy benefit management organizations, health care insurance carriers and other institutions, (iii) allowances, rebates and fees directly related to the sale or delivery of
Collaboration Product(s) paid to distributors and (iv) chargebacks; (b) freight, postage, shipping and insurance costs to the extent that such items are included in the gross amount
invoiced; (c) customs and excise duties and other duties related to the sales to the extent that such items are included in the gross amount invoiced; (d) rebates and similar payments
made with respect to sales paid for or reimbursed by any governmental or regulatory authority such as, by way of illustration and not in limitation of the Parties' rights hereunder, Federal or state
Medicaid, Medicare or similar state program or equivalent foreign governmental program; (e) sales and other taxes and duties directly related to the sale or delivery of Collaboration Product(s)
(but not including taxes assessed against the income derived from such sale); (f) distribution costs and expenses to the extent that such items are included in the gross amount invoiced; and
(g) any such invoiced amounts that are not collected by the Parties or their Affiliates or sublicensees; provided, however, that an amount shall
be deducted only once regardless of how many categories may apply to it. Any of the deductions listed above that involves a payment by a Party or its Affiliates or sublicensees shall be taken as a
deduction in the calendar quarter in which the payment is accrued by such entity. Deductions pursuant to subsection (g) above shall be taken in the calendar quarter in which such sales are no
longer recorded as a receivable. For purposes of determining Net Sales, the Collaboration
Product(s) shall be deemed to be sold when invoiced and a "sale" shall not include transfers or dispositions for charitable, promotional, pre-clinical, clinical, regulatory or governmental
purposes. 




    For
purposes of calculating Net Sales of Collaboration Products, sales between or among the Parties or their Affiliates shall be excluded from the computation of Net Sales, but sales
by a Party or its Affiliates to sublicensees or Third Parties shall be included in the computation of Net Sales. 



    2.  "Net Profits" and, with correlative meaning, "Net Losses", shall
mean, with respect to a Collaboration Product, Net Sales of such Collaboration Product less Authorized Commercialization Expenses (to the extent not already deducted from Net Sales) and Other
Operating (Income)/Expense with respect to such Collaboration Product, all for a given period. 


    3.  "Commercialization Expenses" shall mean all Cost of Sales, Distribution Costs, Marketing Costs, Sales Costs, General
and Administrative Costs (in each case, to the extent not 






 


deducted from Net Sales under Section 1 hereof) of the Parties and their Affiliates with respect to the Collaboration Products. 



    3.1   "Cost of Sales" shall mean (a) the supply price, and any other direct costs and expense of
acquiring, including costs of transport, customs, clearance and storage of product (if necessary), freight, customs, duty, and insurance borne by the Parties (to the extent not included in such supply
price), with respect to Net Sales of a Collaboration Product, and (b) any Third Party Payments with respect to such Net Sales, to the extent not included in such supply price or reimbursed by a
Third Party. 



    3.1.1  "Third Party Payments" shall mean intellectual property and technology acquisition and license
costs and expenses (including royalties, license fees, milestone payments and other payment obligations) paid to Third Parties with respect to a Collaboration Product, including any payments made
pursuant to the MRC Agreement. 




    3.2   "Distribution Costs" shall mean the costs and expenses specifically identifiable to the
distribution of a Collaboration Product by a Party including customer services, collection of data about sales to hospitals and other end users, order entry, billing, shipping, credit and collection
and other such activities, but in any case, not including any costs or expenses which are reimbursed by any Third Party. 



    3.3   "Marketing Costs" shall mean, with respect to a Collaboration Product, the direct costs and
expenses of marketing, promotion, advertising, promotional materials, professional education, product-related public relations, relationships with opinion leaders and professional societies, market
research (before and after Regulatory Approval of a Collaboration Product), healthcare economics studies, post-marketing studies required to maintain or expand Regulatory Approvals of such
Collaboration Product (to the extent not included in Authorized R&D Expenses) and other similar activities related to such Collaboration Product and approved by the Steering Committee. Such costs and
expenses will include both internal costs (e.g., salaries, benefits, supplies and materials, etc.) and costs of outside services and expenses (e.g., consultants, agency fees, meeting costs, etc.).
Marketing Costs shall also include costs and expenses directly related to obtaining reimbursement from payers and the cost of obtaining sales and marketing data (to the extent not included in the
Distribution Costs). Notwithstanding anything to the contrary in the foregoing, Marketing Costs shall specifically exclude the cost and expense of activities that promote a Party's business as a whole
without being specific to a Collaboration Product (e.g., corporate image advertising). 


    3.4   "Sales Costs" shall mean, with respect to a Collaboration Product, costs and expenses approved by
the Steering Committee in the annual budget for the commercialization of such Collaboration Product, incurred by either Party or for its account and specifically identifiable to the sales efforts for
such Collaboration Product in all markets in the Territory including the managed care market. Sales Costs shall include costs and expenses associated with sales representatives for a Collaboration
Product, including the cost of compensation, benefits, travel, supervision, training, sales meetings, and other sales expenses for such sales representatives. Notwithstanding anything to the contrary
in the foregoing, Sales Costs shall exclude costs and expenses associated with the start-up of a Party's sales force, including recruiting, relocation and other similar costs and expenses. 


    3.5   "General and Administrative Costs" shall mean, with respect to a Collaboration Product, costs equal
to [*] percent ([*]%) of the sum of the Distribution Costs, Marketing Costs and Sales Costs related to such Collaboration Product in any country, of the
Parties, in the aggregate, but only to the extent these costs are chargeable under the Agreement. Each Party shall have the right to charge General and Administrative Costs with respect to its
Distribution Costs, Marketing Costs and Sales Costs chargeable under the Agreement. 




B-2





 




    4.    "Other Operating (Income)/Expense" shall mean (a) payments and other consideration received
from Third Parties with respect to the commercialization of a Collaboration Product, including any license fees, milestone payments, royalties or other payments (including the fair market value of any
consideration received) in connection with the license, sublicense, assignment or transfer of rights with respect to such Collaboration Product (to the extent not included in Net Sales), and
(b) any other operating income received from or expense owed to Third Parties in connection with an activity that is
not part of the primary business activity of a Party under the Agreement but is considered and approved by the Parties as income or expense for purposes of the Agreement, which may include:
(i) actual inventory write-offs of any Collaboration Product; (ii) the cost and expense of prosecuting, maintaining and enforcing patent, trademark and other intellectual
property rights and defending against claims of infringement; and (iii) product liability insurance to the extent the Parties obtain a joint policy. 


    5.  "Fully-Burdened Production Process Development Cost" shall mean, with respect to each Collaboration Antibody, One
Hundred Percent (100%) of the consolidated fully burdened cost of Production Process Development of such Collaboration Antibody, which shall include (a) direct labor and material costs,
(b) substrate and product quality assurance/control costs, (c) costs of any stability studies, (d) costs of losses or wastage in process development, to the extent not the result
of negligence or the use of non-standard operating procedures, (e) facility and equipment depreciation costs, (f) facility and equipment validation and control costs,
(g) costs associated with evaluation of safety profile, activity and quality of material in in vitro and in
vivo uses, (g) costs required for manufacturing material for in vitro and in
vivouses, (h) costs associated with submission and maintenance of regulatory documentation, (i) shipping costs, (j) costs related to subcontracted work,
(k) expenses with respect to each of the foregoing, and (l) applicable allocable overhead, as determined in accordance with GAAP as applied by Medarex;
(m) [*] percent ([*]%) of the sum of the components (a) through (l); (n) all of the manufacturer's allocable intellectual property
and technology acquisition and license costs and expenses (including royalties, license fees, milestone payments and other payment obligations) paid to Third Parties with respect to Production Process
Development of a Collaboration Antibody. 



B-3






APPENDIX C
  Collaboration Targets  


    This Appendix to the COLLABORATION AGREEMENT ("Agreement") effective as of February 2, 2001, by and
between SEATTLE GENETICS, INC. ("Seattle Genetics") and MEDAREX, INC., on behalf of itself and its wholly owned subsidiary, GENPHARM
INTERNATIONAL, INC., (collectively, "Medarex") sets forth the Collaboration Targets. 


    The
contents of this Appendix C are hereby incorporated into the Agreement and are governed by the terms and conditions of the
Agreement, including the confidentiality provisions set forth therein. 


    [*]






APPENDIX D
  Unilateral Development and Commercialization Agreement  


    This Appendix to the COLLABORATION AGREEMENT ("Agreement") effective as of February 2, 2001, by and
between SEATTLE GENETICS, INC. ("Seattle Genetics") and MEDAREX, INC., on behalf of itself and its wholly owned subsidiary, GENPHARM
INTERNATIONAL, INC., (collectively, "Medarex") sets forth certain terms for the Unilateral Development and Commercialization Agreements between
the Parties. All capitalized terms used herein without definition shall have the meanings ascribed thereto in the Agreement, unless otherwise expressly provided herein 


    The
contents of this Appendix D are hereby incorporated into the Agreement and are governed by the terms and conditions of the
Agreement, including the confidentiality provisions set forth therein. 


License Payments for Each Unilateral Product  



	Milestones
 
	 	1st Product
	 	2nd Product
	 	Each Additional

Product

	IND Filing	 	$	[*]	 	$	[*]	 	$	[*]
	Commencement of Phase II	 	 	[*]	 	 	[*]	 	 	[*]
	Commencement of Phase III	 	 	[*]	 	 	[*]	 	 	[*]
	BLA Filing or equivalent	 	 	[*]	 	 	[*]	 	 	[*]
	Upon approval of first BLA or equivalent	 	 	[*]	 	 	[*]	 	 	[*]
	Upon approval of BLA or equivalent in a second jurisdiction	 	 	[*]	 	 	[*]	 	 	[*]





 Royalties  




Annual
Worldwide Sales of all Unilateral Products 


$[*]million  [*]%



[*]million  [*]%



Over
[*] million  [*]% 









QuickLinks


COLLABORATION AGREEMENT

ARTICLE 2— OPERATION OF THE COLLABORATION