Document:

EX-10.16

 Exhibit 10.16 

CONFIDENTIAL 
 CONFIDENTIAL
TREATMENT REQUESTED UNDER RULE 406 UNDER THE SECURITIES ACT 
 OF 1933, AS AMENDED. [...***...] INDICATES OMITTED MATERIAL THAT IS THE
SUBJECT OF A 
 CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE 

OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION. 

AMENDED AND RESTATED RESEARCH AND LICENSE AGREEMENT 

Between 
 ZYMEWORKS INC.

 and 
 MERCK
SHARP & DOHME RESEARCH GMBH 
 December 3, 2014 

  
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 CONFIDENTIAL 
  

 TABLE OF CONTENTS 

 

					
	 	  	Page	 
		
	 1. DEFINITIONS AND INTERPRETATIONS
	  	 	2	 
		
	 2. GRANT OF LICENSES
	  	 	14	 
	 2.1 Licenses to Merck
	  	 	14	 
	 2.2 License to Zymeworks
	  	 	15	 
	 2.3 Third Party Rights in Zymeworks Scaffolds
	  	 	16	 
	 2.4 No Implied Licenses
	  	 	16	 
	 2.5 Termination for Patent Challenge
	  	 	16	 
		
	 3. RESEARCH PROGRAM AND DEVELOPMENT AND COMMERCIALIZATION OF PRODUCTS
	  	 	17	 
	 3.1 General; Term
	  	 	17	 
	 3.2 Validation Phase; Initial Disclosure of Zymeworks Scaffolds
	  	 	19	 
	 3.3 Remaining Activities after Achievement of Validation Phase Success
	  	 	20	 
	 3.4 Activities with Selected Scaffolds
	  	 	21	 
	 3.5 Modifications to Program Antibodies
	  	 	21	 
	 3.6 Update of Scaffold Package Information
	  	 	21	 
	 3.7 Affiliates, Licensees and Third Party Contractors
	  	 	22	 
	 3.8 Research Expenses
	  	 	22	 
	 3.9 Records and Reports
	  	 	23	 
	 3.10 Regulatory
	  	 	23	 
	 3.11 Relationship Liaison
	  	 	23	 
	 3.12 Scientific Coordination Committee
	  	 	23	 
	 3.13 Development and Commercialization by Merck
	  	 	25	 
		
	 4. TARGET AND SEQUENCE PAIR SELECTION AND PRODUCT LIMITATIONS
	  	 	26	 
	 4.1 Merck Sequence Pairs; Definitions
	  	 	26	 
	 4.2 Initial Targets and Sequence Pairs
	  	 	26	 
	 4.3 Target and Sequence Selection Limitations
	  	 	27	 
		
	 5. EXCLUSIVITY
	  	 	28	 
	 5.1 General
	  	 	28	 
	 5.2 Sequence Pair Exclusivity
	  	 	29	 
	 5.3 Additional Exclusivity Exception
	  	 	29	 
	 5.4 Initial Target Exclusivity
	  	 	30	 
		
	 6. FINANCIAL PROVISIONS
	  	 	30	 
	 6.1 Upfront Payment
	  	 	30	 
	 6.2 Milestone Payments
	  	 	31	 
	 6.3 Royalties
	  	 	33	 
	 6.4 Payment for Additional Work by Zymeworks
	  	 	34	 
	 6.5 Milestone Payments and Royalties Associated with Zymeworks Scaffolds
	  	 	34	 

  
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(Continued) 
  

					
	 	  	Page	 
		
	 7. REPORTS AND PAYMENT TERMS FOR MILESTONES AND ROYALTIES
	  	 	35	 
	 7.1 Payment Terms for Milestone and Royalties
	  	 	35	 
	 7.2 Royalty Term
	  	 	35	 
	 7.3 Payment Exchange Rate
	  	 	35	 
	 7.4 Taxes
	  	 	35	 
	 7.5 Records and Audit Rights
	  	 	36	 
	 7.6 Other
	  	 	37	 
		
	 8. INTELLECTUAL PROPERTY RIGHTS
	  	 	37	 
	 8.1 Ownership of Inventions
	  	 	37	 
	 8.2 Patent Prosecution and Maintenance
	  	 	37	 
	 8.3 Enforcement and Defense
	  	 	39	 
	 8.4 Infringement of Third Party Rights in the Territory
	  	 	41	 
	 8.5 Cooperation; Drug Price Competition and Patent Term Restoration Act
	  	 	42	 
		
	 9. CONFIDENTIALITY
	  	 	43	 
	 9.1 Duty of Confidence
	  	 	43	 
	 9.2 Exceptions
	  	 	43	 
	 9.3 Authorized Disclosures
	  	 	43	 
	 9.4 Nondisclosure by Zymeworks
	  	 	45	 
	 9.5 Joint Defense/Common Interest Agreement
	  	 	45	 
		
	 10. PUBLICATIONS AND PUBLICITY
	  	 	45	 
	 10.1 Publications
	  	 	45	 
	 10.2 Publicity
	  	 	46	 
		
	 11. TERM AND TERMINATION
	  	 	46	 
	 11.1 Term
	  	 	46	 
	 11.2 Termination by Merck
	  	 	47	 
	 11.3 Termination for Cause
	  	 	48	 
	 11.4 Termination for Material Breach by Zymeworks after Insolvency
	  	 	48	 
		
	 12. EFFECTS OF TERMINATION
	  	 	48	 
	 12.1 Termination of Agreement Pursuant to Section 11.1
	  	 	48	 
	 12.2 Termination by Merck under Section 11.2 or Termination by Zymeworks under
Section 11.3
	  	 	49	 
	 12.3 Termination by Merck under Section 11.3 or Section 11.4
	  	 	49	 
	 12.4 Survival
	  	 	50	 
	 12.5 Damages; Relief
	  	 	50	 
	 12.6 Bankruptcy Code
	  	 	50	 
		
	 13. REPRESENTATIONS AND WARRANTIES
	  	 	51	 
	 13.1 Representations and Warranties by Each Party
	  	 	51	 
	 13.2 Representations, Warranties and Covenants by Zymeworks
	  	 	51	 
	 13.3 Limitation
	  	 	53	 
	 13.4 No Other Warranties
	  	 	53	 

  
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	 14. INDEMNIFICATION AND LIABILITY
	  	 	53	 
	 14.1 Indemnification by Zymeworks
	  	 	53	 
	 14.2 Indemnification by Merck
	  	 	54	 
	 14.3 Indemnification Procedure
	  	 	54	 
	 14.4 Special, Indirect and Other Losses
	  	 	55	 
	 14.5 Insurance
	  	 	55	 
		
	 15. GENERAL PROVISIONS
	  	 	55	 
	 15.1 Change of Control
	  	 	55	 
	 15.2 Assignment
	  	 	56	 
	 15.3 Extension to Affiliates
	  	 	56	 
	 15.4 Severability
	  	 	56	 
	 15.5 Governing Law; English Language
	  	 	57	 
	 15.6 Dispute Resolution
	  	 	57	 
	 15.7 Force Majeure
	  	 	59	 
	 15.8 Waivers and Amendments
	  	 	59	 
	 15.9 Relationship of the Parties
	  	 	59	 
	 15.10 Notices
	  	 	59	 
	 15.11 Further Assurances
	  	 	60	 
	 15.12 Compliance with Law
	  	 	60	 
	 15.13 No Third Party Beneficiary Rights
	  	 	61	 
	 15.14 Entire Agreement
	  	 	61	 
	 15.15 Counterparts
	  	 	61	 
	 15.16 Expenses
	  	 	61	 
	 15.17 Effect of Laws
	  	 	61	 
	 15.18 Binding Effect
	  	 	61	 
	 15.19 Interpretation
	  	 	61	 
	 15.20 Cumulative Remedies
	  	 	62	 
	 15.21 Notification of Possible Sale
	  	 	62	 
	 15.22 Export
	  	 	62	 
	 15.23 Notification and Approval
	  	 	62	 
		
	 ATTACHMENT 1.58 SCAFFOLD PACKAGE
	  			
	 ATTACHMENT 1.68 ZYMEWORKS PATENT RIGHTS
	  			
	 ATTACHMENT 1.70 ZYMEWORKS PLATFORM
	  			
	 ATTACHMENT 3.1(a) WORK PLAN
	  			
	 ATTACHMENT 3.1(b) ANTIBODY DEVELOPMENT WORK PLAN
	  			
	 ATTACHMENT 3.1.1(c) LIST OF THIRD PARTY SERVICE PROVIDERS
	  			
	 ATTACHMENT 3.2.2 INITIAL SCAFFOLDS
	  			
	 ATTACHMENT 10.2(a) ORIGINAL AGREEMENT PRESS RELEASE
	  			
	 ATTACHMENT 10.2(b) AMENDED AGREEMENT PRESS RELEASE
	  			

  
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 AMENDED AND RESTATED RESEARCH AND LICENSE AGREEMENT 

THIS AMENDED AND RESTATED RESEARCH AND LICENSE AGREEMENT (the “Agreement”), effective as of December
    , 2014 (the “Restatement Effective Date”), by and between Merck Sharp & Dohme Research GmbH, a corporation organized and existing under the laws of Switzerland, with its
principal business office located at Weystrasse 20, 6000 Lucerne 6, Switzerland (“Merck”) and ZYMEWORKS INC., a corporation organized and existing under the laws of Canada, and extraprovincially in British Columbia, having an
address at 540-1385 West 8th Avenue, Vancouver, BC, Canada V6H 3V9 (“Zymeworks”). Zymeworks and Merck are each referred to individually as a “Party” and together as the
“Parties”. 
 BACKGROUND 

Whereas, Zymeworks controls certain proprietary molecular simulation software with high-performance computing predictive protein engineering
and design, which enables the systematic research and design of Fc Heterodimer Scaffolds (as defined below) that may be incorporated into antibodies resulting in a protein optimized for a specific need; 

Whereas, Merck Sharp & Dohme Research Ltd. (predecessor in interest to Merck) and Zymeworks entered into that certain Research and
License Agreement, dated August 22, 2011 (the “Effective Date”), as amended on August 23, 2012 (pursuant to the “First Amendment”) and May 13, 2013 (pursuant to the “Second
Amendment”) (such Research and License Agreement, as amended, the “Original Agreement”), under which Merck and Zymeworks desired to enter into an agreement under which Zymeworks disclosed to Merck certain Fc Heterodimer
Scaffolds which Zymeworks generated using the Zymeworks Platform and other Zymeworks’ proprietary technology. Merck desired to undertake activities with one or more Zymeworks Scaffolds in order to validate the Zymeworks Platform in conjunction
with Merck’s antibodies and, dependent upon the success of such validation, Merck and/or Zymeworks further intended to develop one or more Zymeworks Scaffolds and Merck intended to research, develop and commercialize one or more Program
Antibodies (incorporating one or more Zymeworks Scaffolds) and Products (each, as defined below); 
 Whereas, pursuant to the Original
Agreement, Merck selected certain Targets, and the Parties conducted certain development work pursuant to the Work Plan (each, as defined below); and 

Whereas, Merck and Zymeworks now desire to amend and restate in its entirety the Original Agreement to set forth the terms under which, after
the Restatement Effective Date, Zymeworks and/or Merck will research and generate certain Program Antibodies (each incorporating a Zymeworks Scaffold) and, dependent upon the success of such research, Merck will develop and commercialize up to three
(3) Products, each incorporating one such Program Antibody (each, as defined below); 

  
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 NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the sufficiency which is acknowledged by both Parties, the Parties agree as follows: 
 1. DEFINITIONS AND INTERPRETATIONS

 Whenever used in this Agreement with an initial capital letter, the terms defined in this Article 1, whether used in the singular or
plural, shall have the meanings specified. 
 1.1 “Acquiring Entity” means a Third Party that mergers or
consolidates with or acquires Zymeworks, or to which Zymeworks transfers all or substantially all of its assets to which this Agreement pertains. 

1.2 “Act” means, as applicable, the United States Federal Food, Drug and Cosmetic Act, 21 U.S.C. §§ 301 et
seq., and/or the Public Health Service Act, 42 U.S.C. §§ 262 et seq., as such may be amended from time to time. 
 1.3
“Activity” means each task, and “Activities” mean any and all tasks, in each case to be performed by or under the authority of either Party (alone or together) under the Work Plan. 

1.4 “Affiliate” of a Party means (i) any corporation or business entity of which fifty percent (50%) or more of
the securities or other ownership interests representing the equity, the voting stock or general partnership interest are owned, controlled or held, directly or indirectly, by such Party; or (ii) any corporation or business entity which,
directly or indirectly, owns, controls or holds fifty percent (50%) (or the maximum ownership interest permitted by Applicable Laws) or more of the securities or other ownership interests representing the equity, the voting stock or, if applicable,
the general partnership interest, of such Party; or (iii) any corporation or business entity of which fifty percent (50%) or more of the securities or other ownership interests representing the equity, the voting stock or general partnership
interest are owned, controlled or held, directly or indirectly, by a corporation or business entity described in (i) or (ii), in each case, for so long as such corporation or business entity meets the requirements in (i), (ii) or
(iii) above. 
 1.5 “Applicable Laws” means all federal, state, local, national and supra-national laws,
statutes, rules and regulations, including any rules, regulations, guidelines or requirements of Regulatory Authorities, national securities exchanges or securities listing organizations that may be in effect from time to time during the Term and
applicable to a particular activity hereunder. 
 1.6 “Audited Party” means the Party that is the subject of an
audit by the other Party under Section 7.5.2. 
 1.7 “Auditing Party” means the Party that
is conducting an audit of the other Party under Section 7.5.2 

  
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 1.8 “BLA” means a Biologics License Application, New Drug
Application, MAA, premarket notification filed pursuant to Section 510(k) of the Act, or similar application or submission for Marketing Authorization of a Product filed with a Regulatory Authority to obtain marketing clearance or approval for a
biological, pharmaceutical or diagnostic product in that country or in that group of countries. 
 1.9 “Business
Day” means any day other than Saturday or Sunday on which the banks in New York City are open for business. 
 1.10
“Calendar Quarter” means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31 of any Calendar Year. 

1.11 “Calendar Year” means each successive period of twelve (12) months commencing on January 1 and ending
on December 31. 
 1.12 “[...***...]” means the Target more specifically identified as [...***...]. 

1.13 “cGLP” or “current Good Laboratory Practice” means the applicable then-current standards for
laboratory activities for pharmaceuticals or biologicals, as set forth in the Act and any regulations or guidance documents promulgated thereunder, as amended from time to time, together with any similar standards of good laboratory practice as are
required by any applicable Regulatory Authority in the Territory. 
 1.14 “cGMP” or “current Good
Manufacturing Practices” means all laws and regulations relating to the manufacture of a Program Antibody and/or Product, including but not limited to the current Good Manufacturing Practices as specified in the United States Code of
Federal Regulations and/or in the EU Good Manufacturing Guidelines, Q7A Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients (also known as Annex 18 to EudraLex Volume 4, “European Commission Guide to Good Manufacturing
Practice for Medicinal Products”), as are in effect on the Effective Date and as may be modified or supplemented during the Term. 

1.15 “Change of Control” means with respect to a Party: (a) the sale of all or substantially all of such
Party’s tangible and intangible assets or business relating to this Agreement; (b) a merger, reorganization or consolidation involving such Party in which the voting securities of such Party outstanding immediately prior thereto cease to
represent at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such merger, reorganization or consolidation; or (c) any transaction or series of transactions in which a person or entity, or group
of persons or entities, acting in concert, acquire more than fifty percent (50%) of the voting equity securities or management control of such Party, other than in connection with a bona fide financing transaction, or series of bona fide financing
transactions, provided to such Party by financial and/or venture capital investors. 

  
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 1.16 “Clinical Trial” means a Phase I Clinical Trial, Phase II
Clinical Trial or Phase III Clinical Trial, and/or any post-approval human clinical trial, as applicable. 
 1.17
“Combination Product” means a Product that contains one or more active agents that are not Program Antibodies (e.g., one or more antibodies other than Program Antibodies and/or one or more chemotherapeutics) in addition
to one or more Program Antibodies. 
 1.18 “Commercialized Product” means a Product for which there has been a First
Commercial Sale within the Territory. 
 1.19 “Commercially Reasonable Efforts” means, with respect to particular
objectives or tasks of a Party, the use of reasonable and good faith efforts and commitment of such resources by a Party, in each case consistent with exercise of prudent scientific and business judgment, to accomplish such objective as that Party
would normally use to accomplish a similar objective under similar circumstances or with respect to products of comparable commercial potential, stage of medical/scientific development, probability of technical success, technical and regulatory
profile, competitive landscape and risk profile and patent protection, in a particular geographic locale. 
 1.20
“Competitive Entity” means any Third Party that (a) together with its Affiliates and subsidiaries, collectively had worldwide sales of ethical pharmaceutical products, in the Calendar Year that preceded the Change of
Control, of [...***...] United States dollars (USD $[...***...]) or more, or (b) on the date of such Change of Control, is actively engaged in a Competitive Program. 

1.21 “Competing Pharma Change of Control” means a Change of Control involving a Competitive Entity. 

1.22 “Competitive Program” means, with respect to a Product, any program of a Third Party for the research,
development or commercialization of one or more Multi-Specific Antibodies or products that contain one or more Multi-Specific Antibodies, in each case which is/are Directed To the Merck Target Pair to which such Product is Directed. 

1.23 “Confidential Information” means all Know-How and other Information,
which is generated by or on behalf of a Party under this Agreement or which one Party or any of its Affiliates or contractors has supplied or otherwise made available to the other Party whether made available orally, in writing, or in electronic
form, including such Information comprising or relating to concepts, discoveries, Inventions, data, designs or formulae arising from this Agreement. This Agreement and its Attachments and amendments constitute Confidential Information of each of the
Parties. 
 1.24 “Control” or “Controlled” means, with respect to any material, Information, or
intellectual property right, that a Party (i) owns or (ii) has a license to such material, Information, or intellectual property right and, in each case, has the power to grant to the other Party access, a license, or a sublicense (as
applicable) to the same on the terms and conditions set forth in this Agreement without violating any obligations of the granting Party to a Third Party or subjecting 

  
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the granting Party to any additional fee or charge. Notwithstanding anything to the contrary in this Agreement, the following shall not be deemed to be Controlled by Zymeworks: (i) any
materials, data, information or intellectual property owned or licensed by any Acquiring Entity immediately prior to the effective date of merger, consolidation or transfer, and (ii) any materials, data, information or intellectual property
that any Acquiring Entity subsequently develops without accessing or practicing the Zymeworks Platform or any Zymeworks Intellectual Property; provided, however all such materials data, information or intellectual property subsequently developed or
created by any Acquiring Entity from or through access to or practice of the Zymeworks Platform or any Zymeworks Intellectual Property shall be deemed to be Controlled by Zymeworks. 

1.25 “Directed To” means, with regard to an antibody or product, that such antibody or product (a) binds directly
to a Target, and (b) exerts its primary diagnostic, prophylactic and/or therapeutic activity as a result of such binding and/or modifies the profile (e.g., PK, tissue penetration and distribution) of the antibody as a result of such
binding, as determined based on reasonable experimental data or generally accepted scientific literature, in either case available at the time of completion of preclinical development of such molecule. When required grammatically, the defined
term “Directed To” may be separated and shall have the same meaning set forth above; e.g., when discussing Targets To which an antibody is Directed. 

1.26 “Eligible Scaffold” means (a) with respect to Program Antibodies Directed To the Initial Targets, any
Zymeworks Scaffold, and (b) with respect to any other Program Antibody, any Zymeworks Scaffold other than a Zymeworks Optimized Scaffolds. 

1.27 “Expanded Zymeworks Technology” means the Heavy-Light Chain Pairing Technology, the Zymeworks Knock-Out Scaffolds and the Zymeworks Optimized Scaffolds. 
 1.28 “Fc Heterodimer
Scaffold” means an immunoglobulin Fc region composed of two different immunoglobulin heavy chain constant regions containing complementary mutations that allow [...***...] heterodimer formation. 

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

1.30 “Field” means any and all uses of Zymeworks Scaffolds, Program Antibodies and Products, including human and
veterinary therapeutics, diagnostics and prophylactic uses. 
 1.31 “First Commercial Sale” means, with respect to a
Product in any country in the Territory, the first sale, transfer or disposition for value or for end use or consumption of such Product in such country after Marketing Authorization has been received in such country; provided, that (i) any
sale to a Related Party will not constitute a First Commercial Sale unless the Related Party is the last entity in the distribution chain of the Product, (ii) any distribution of samples with respect to a Product will not constitute a First
Commercial Sale, and (iii) any sale or other distribution for use in a Clinical Trial or for compassionate use in which no monetary consideration is paid to Merck will not constitute a First Commercial Sale. 

  
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 1.32 “Full Time Equivalent” or “FTE” means the
equivalent of a full-time scientist’s work time over a twelve-month period (including normal vacations, sick days and holidays). The portion of an FTE year devoted by a scientist to work under this Agreement shall be determined by dividing the
number of full days during any twelve-month period devoted by such employee to such work by the total number of working days during such twelve-month period. 

1.33 “Heavy-Light Chain Pairing Technology” means the proprietary IgG Fab heavy-light chain pairing technology
Controlled by Zymeworks as of the Restatement Effective Date and thereafter during the Research Program Term. 
 1.34
“IND” means an investigational new drug application, clinical trial application, or similar application, filed with, and accepted by, a Regulatory Authority in any country or group of countries prior to beginning Clinical Trials
in that country or in that group of countries. 
 1.35 “Information” means any and all information and data,
including without limitation all Know-How, information regarding Zymeworks Patent Rights and all other scientific, pre-clinical, clinical, regulatory, manufacturing,
marketing, financial and commercial information or data, whether communicated in writing or orally or by any other method, which is provided by one Party to the other Party in connection with this Agreement. 

1.36 “Invention” means any Know-How, method, composition of matter, article of
manufacture, finding or other subject matter, whether patentable or not, that is conceived and/or reduced to practice under and as a result of, and within the scope of, the work performed under the Agreement. 

1.37 “Joint Invention” means any Invention developed or invented jointly by one or more employees of Merck and/or its
Affiliate and/or a Third Party acting on behalf of Merck or its Affiliate, on the one hand, and one or more employees of Zymeworks and/or its Affiliate and/or a Third Party acting on behalf of Zymeworks or its Affiliate, on the other hand. 

1.38 “Joint Know-How” means all
Know-How comprising a Joint Invention. 
 1.39 “Joint Patent Right” means
all Patent Rights claiming a Joint Invention. 
 1.40 “Know-How” means all
technical information, know-how and data, including inventions, discoveries, trade secrets, specifications, instructions, processes, formulae, materials, methods, protocols, expertise and other technology
applicable to formulations, compositions or products or to their manufacture, development, registration, use or marketing or to methods of assaying or testing them, and all biological, chemical, pharmacological, biochemical, toxicological,
pharmaceutical, physical and analytical, safety, quality control, manufacturing, preclinical and clinical data relevant to any of the foregoing. For clarity, Know-How excludes Patent Rights. 

1.41 “MAA” means an application for the Marketing Authorization of a Product in any country or group of countries
outside the United States, and all supplements thereto, as defined in the Applicable Laws of a given country or group of countries. 

  
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 1.42 “Major Market” means (i) any [...***...] of the
[...***...] or (ii) [...***...]. For clarity, any [...***...] of the countries together under (i) constitute a Major Market and all [...***...] of the countries together under (ii) constitute a Major Market. 

1.43 “Marketing Authorization” means all approvals (including without limitation, all applicable pricing and
governmental reimbursement approvals) from the relevant Regulatory Authority necessary to market and sell a product (including a Product) in any country. 

1.44 “Merck Target” means a Target selected by Merck in accordance with Article 4 and available under this Agreement
for Merck to develop and Commercialize Program Antibodies and Products Directed To such Target, as set forth in Section 4.3. 

1.45 “Multi-Specific Antibody” means an antibody or an antibody analogue that contains independent binding sites
Directed To [...***...]. 
 1.46 “Net Sales” means the gross invoice price (excluding [...***...] of
Product sold by Merck or its Related Parties to a Third Party (where such Third Party is not a Related Party) after deducting, if not previously deducted, from the amount invoiced or received: 

1.46.1 [...***...]; 

1.46.2 [...***...]; 

1.46.3 [...***...]; 

1.46.4 [...***...]; 

1.46.5 [...***...], and 

1.46.6 [...***...]. 

With respect to sales of a particular Combination Product, and on a
country-by-country basis, the “Net Sales” for royalty purposes hereunder shall be calculated by multiplying the actual Net Sales (calculated in the manner
described above) of such Combination Product by the fraction A/B, in which A is the invoice price of the Program Antibody of the same strength and in the same quantity as contained in the Combination Product, sold separately in the same period
without the other active ingredient(s) in the same country of sale as the Combination Product, and B is the invoice price of the Combination Product sold in the same period in such country. All invoice prices of the Program Antibody and the
Combination Product shall be calculated as the average invoice price of such active ingredients during the applicable accounting period for which the Net Sales are being calculated. If, on a country-by-country basis, no separate sale of the Program Antibody in the same strength as contained in the Combination Product, sold separately without other active ingredient(s), is made in such country
during the applicable accounting period, or if the invoice price for the Program Antibody cannot be determined for an accounting period, then the “Net Sales” for royalty purposes hereunder for sales of such Combination Product in each such
country shall be determined by multiplying the Net Sales (calculated in the manner described above) of such Combination Product in such 

  
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country by a fraction, determined in good faith by mutual agreement of the Parties, that reflects the relative contribution in value that the Program Antibody contained in the Combination
Product makes to the total value of such Combination Product to the end user in such country. In addition, Net Sales are subject to the following: 

(i) If Merck or any of its Related Parties effects a sale, disposition or other transfer of a Product to a customer in a particular country
other than on customary commercial terms or as part of a package of products and services, the Net Sales of such Product to such customer shall be deemed to be “the fair market value” of such Product. For purposes of this subsection (i),
“fair market value” means the value that would have been derived [...***...] in the country concerned on customary commercial terms. 

(ii) [...***...]. 
 (iii)
For purposes of clarity, the use of any Product in Clinical Trials or other development activities by or on behalf of a Party, or disposal or transfer of Products for purposes of a commercially reasonable sampling program or compassionate use
program, in each case in which no monetary consideration is paid to Merck, shall not give rise to any Net Sales. 
 (iv) For the purpose of
clarity, it is understood that [...***...]. In addition, sales of Product [...***...] shall be excluded from the computation of Net Sales if the further use or provision of such Product falls within the scope of Subsection
(iii) above. 
 1.47 “Patent Rights” means the rights and interests in and to issued patents and pending patent
applications (which, for purposes of this Agreement, include certificates of invention, applications for certificates of invention and priority rights) in any country or region, including all provisional applications, substitutions, continuations, continuations-in-part, continued prosecution applications including requests for continued examination, divisional applications and renewals, and all letters patent or
certificates of invention granted thereon, and all reissues, reexaminations, extensions (including, without limitation, pediatric exclusivity patent extensions), term restorations, renewals, substitutions, confirmations, registrations,
revalidations, revisions and additions of or to any of the foregoing, and all U.S. and foreign counterparts of any of the foregoing. 

1.48 “[...***...]” means the Target more specifically identified as [...***...]. 

1.49 “Phase I Clinical Trial” means a study in humans which provides for the first introduction into humans of a
product, conducted in normal volunteers or patients to generate information on product safety, tolerability, pharmacological activity or pharmacokinetics, as more fully defined in Federal Regulation 21 C.F.R. § 312.21(a) and its foreign
equivalents. 
 1.50 “Phase II Clinical Trial” means a study in humans of the safety, dose ranging and efficacy of a
product, which is prospectively designed to generate sufficient data (if successful) to commence a Phase III Clinical Trial or to file for accelerated approval, as further defined in Federal Regulation 21 C.F.R. § 312.21(b) and its foreign
equivalents. 

  
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 1.51 “Phase III Clinical Trial” means a controlled study in humans of
the efficacy and safety of a product, which is prospectively designed to demonstrate statistically whether such product is effective and safe for use in a particular indication in a manner sufficient to file an BLA to obtain regulatory approval to
market the product, as further defined in Federal Regulation 21 C.F.R. § 312.21(c), and its foreign equivalents. 
 1.52
“Product” means a pharmaceutical preparation in final form containing one or more Program Antibody for (i) sale by prescription,
over-the-counter or any other method, or (ii) administration to animals in one or more studies (for development of a veterinary product) or human patients in one or
more Clinical Trials. Product includes any Combination Product. For clarity, new formulations, presentations, [...***...], excipients, or [...***...] of the Program Antibody contained in a Product (including any Second
Generation Product, other than with respect to the Milestone Events set forth in Section 6.2.5) shall all be considered the same Product for purposes of this Agreement, including under Section 6.2
and Section 6.3.  
 1.53 “Program Antibody” means (i) as to any
Program Antibody developed prior to the Restatement Effective Date, a Multi-Specific Antibody into which Merck has incorporated a Selected Scaffold and which is Directed To [...***...]; or (ii) as to any Program Antibody developed on and
after the Restatement Effective Date, any Multi-Specific Antibody into which a Party has incorporated a Selected Scaffold and a Merck Sequence Pair in accordance with this Agreement. For clarity, with respect to Program Antibodies Directed To Merck
Target Pairs other than Merck Target Pairs that include the [...***...], Selected Scaffolds shall not include Zymeworks Optimized Scaffolds. Accordingly, antibodies Directed To Merck Target Pairs other than those that include the
[...***...], which incorporate a Zymeworks Optimized Scaffold, are not included in the definition of Program Antibody for purposes of this Agreement. 

1.54 “Program Antibody Success” means successful achievement of all Activities by at least one Program Antibody
(including Proof of Concept) under the Work Plan. 
 1.55 “Proof of Concept” means successful completion (as
reasonably determined by Merck) of Activity [...***...] in the Work Plan: [...***...]. 
 1.56 “Regulatory
Authority” means the FDA or any counterpart of the FDA outside the United States, or other national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity with
authority over the distribution, importation, exportation, manufacture, production, use, storage, transport, clinical testing or sale of a pharmaceutical product (including a Product), which may include the authority to grant the required
reimbursement and pricing approvals for such sale. 
 1.57 “Related Party” means each Party, its Affiliates, and
their respective licensees or sublicensees (which term excludes any Third Parties to the extent functioning as distributors), as applicable. In no event shall Zymeworks be a Related Party with respect to Merck or Merck be a Related Party with
respect to Zymeworks. 
 1.58 “Scaffold Package” means, prior to the Restatement Effective Date, with respect to a
particular Zymeworks Scaffold, (i) the Information associated with such Zymeworks 

  
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Scaffold (including Zymeworks Patent Rights and Zymeworks Know-How) described on Attachment 1.58, and (ii) any other Zymeworks
Intellectual Property, (a) which Zymeworks or the SCC believes would be necessary or useful to Merck in exercising the licenses granted under Section 2.1 with respect to such Zymeworks Scaffold, or (b) Merck
requests and which Merck believes may be necessary or useful to Merck in exercising the licenses granted under Section 2.1 with respect to such Zymeworks Scaffold; and after the Restatement Effective Date, with respect to a
particular Eligible Scaffold, (iii) the Information associated with such Eligible Scaffold (including Zymeworks Patent Rights and Zymeworks Know-How) described on Attachment 1.58, and (iv) any other
Zymeworks Intellectual Property, (a) which Zymeworks or the SCC believes would be necessary or useful to Merck in exercising the licenses granted under Section 2.1 with respect to such Eligible Scaffold, or
(b) Merck requests and which Merck believes may be necessary or useful to Merck in exercising the licenses granted under Section 2.1 with respect to such Eligible Scaffold. 

1.59 “Second Generation Product” means a Product containing a different Selected Scaffold from any Selected Scaffold
in a Commercialized Product but which contains, as its active ingredient, a Program Antibody that is generated using the same Merck Sequence Pair as the Program Antibody that is the active ingredient in the Commercialized Product and which requires
at least one new Phase III Clinical Trial to receive a Marketing Authorization. 
 1.60 “Target” means any
[...***...] (or portion thereof). 
 1.61 “Territory” means the world. 

1.62 “Third Party” means any entity other than Merck or Zymeworks or an Affiliate of Merck or Zymeworks. 

1.63 “United States” or “US” means the United States of America and its territories and possessions.

 1.64 “USD” and “$” mean United States dollars. 

1.65 “Valid Patent Claim” means any claim of an issued and unexpired patent included within the Zymeworks Patent
Rights covering a Product which has not been revoked or held unenforceable, invalid or unpatentable by a court or other government body of competent jurisdiction with no further possibility of appeal and which claim has not been disclaimed, denied
or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise. For clarity, a Valid Patent Claim does not include any claim of an issued and unexpired patent within the
Zymeworks Patent Rights which claims a method for making a Program Antibody. 
 1.66 “Written Notice” means a
written notice to be provided by one Party to the other Party. 
 1.67 “Zymeworks Intellectual Property” means the
Zymeworks Patent Rights and the Zymeworks Know-How. 

  
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 1.68 “Zymeworks Know-How”
means all Know-How, which: (a) are Controlled by Zymeworks as of the Effective Date and during the Term of the Agreement, (b) are not generally known, and (c) are reasonably necessary or useful
to Merck in: (i) carrying out the Research Program, (ii) incorporating Zymeworks Scaffolds or Eligible Scaffolds (including Scaffold Modifications) into Program Antibodies and/or (iii) researching, developing, manufacturing and/or
commercializing Program Antibodies and Products. Notwithstanding the preceding, Zymeworks Know-How does not include (a) Know-How embodied within the Zymeworks
Platform, or (b) Know-How Controlled by Zymeworks not related to Zymeworks Scaffolds or Eligible Scaffolds. 

1.69 “Zymeworks Patent Rights” means any and all Patent Rights that are Controlled by Zymeworks or its Affiliates
(including without limitation Patent Rights Controlled by Zymeworks claiming Zymeworks Inventions) as of the Effective Date and during the Term of the Agreement, which claim: (a) a Zymeworks Scaffold or an Eligible Scaffold, (b) the
Program Antibodies or (c) any Zymeworks Know-How. Zymeworks Patent Rights, as of the Restatement Effective Date, are set forth on Attachment 1.69.    For clarity, Zymeworks
Patent Rights do not include (x) Patent Rights embodied within the Zymeworks Platform, or (y) Patent Rights claiming any antibody constructs that do not use [...***...] (e.g., constructs for the enhancement of [...***...] or
[...***...]) or any non-antibody protein therapeutics. 
 1.70 “Zymeworks
Optimized Scaffold” means a Zymeworks Scaffold Controlled by Zymeworks as of the Restatement Effective Date containing optimized [...***...] mutations. 

1.71 “Zymeworks Platform” means Zymeworks’ Predictive Protein Engineering Platform which is more fully described
in Attachment 1.71. The Zymeworks Platform combines proprietary molecular simulation software with high-performance computing, creating a comprehensive environment for predictive protein engineering and design. The Zymeworks Platform enables
the systematic research and design of [...***...], which may be incorporated into antibodies resulting in a protein optimized for a specific need. 

1.72 “Zymeworks Scaffold” means an [...***...] Scaffold Controlled by Zymeworks and any Scaffold Modifications
thereto Controlled by Zymeworks. 
 Additional Definitions. In addition, each of the following definitions shall have the
respective meanings set forth in the section of this Agreement indicated below. 
  

			
	 Definition
	  	Section/
Attachment
	 120 Day Period
	  	11.1.1
	 AAA
	  	15.6.1
	 Accounting Firm
	  	7.5.2
	 Additional Selected Scaffold
	  	3.2.5
	 Agreement
	  	Preamble
	 Agreement Payments
	  	7.4
	 Allowed Target Pair
	  	5.3

  
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	 Definition
	  	Section/
Attachment
	 Allowed Target Pairs Experiments
	  	5.3.1
	 Antibody Development Work Plan
	  	3.1
	 Challenge Countries
	  	2.5
	 Claims
	  	14.1
	 Code
	  	12.6
	 Confidentiality Agreement
	  	15.14
	 Controlling Party
	  	8.3.4
	 Dispute
	  	15.6.1
	 Early Selection Criteria
	  	3.2.2
	 Effective Date
	  	Preamble
	 Excluded Claim
	  	15.6.7
	 Expenses and Payments
	  	7.5.2
	 First Amendment
	  	Preamble
	 Indemnified Party
	  	14.3.1
	 Indemnifying Party
	  	14.3.1
	 Infringement
	  	8.3.1
	 Initial Selected Scaffold
	  	3.2.2
	 Initial Target
	  	4.2.1
	 Initial Target Sequence Pair
	  	4.2.2
	 Losses
	  	14.1
	 Merck
	  	Preamble
	 Merck Challenged Zymeworks Patent Rights
	  	2.5
	 Merck Indemnified Party
	  	14.1
	 Merck RP Termination Decision
	  	11.2.1(c)
	 Merck Selection Criteria
	  	3.2.3
	 Merck Sequence Pair
	  	4.1
	 Merck Target Pair
	  	4.1
	 Milestone Event
	  	6.2
	 Milestone Payment
	  	6.2
	 Notice of Dispute
	  	15.6.1
	 Officials
	  	3.1.1(d)
	 Original Agreement
	  	Preamble
	 Other Targets
	  	4.2.1
	 Party
	  	Preamble
	 Parties
	  	Preamble
	 Payment
	  	3.1.1(d)
	 Product No. 1
	  	6.2.7(a)
	 Product No. 2
	  	6.2.7(a)
	 Product No. 3
	  	6.2.7(b)
	 Prosecution
	  	8.2.1
	 [... ***...]
	  	3.4
	 Relationship Liaison
	  	3.11

  
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	 Definition
	  	Section/
Attachment
	 Research Program
	  	3.1
	 Research Program Term
	  	3.1
	 Restatement Effective Date
	  	Preamble
	 Royalty
	  	6.3.1
	 Royalty Term
	  	7.2
	 Sale
	  	15.21
	 [... ***...]
	  	3.4
	 SCC
	  	3.12
	 Second Amendment
	  	Preamble
	 Selected Scaffold
	  	3.2.5
	 Sequence
	  	4.1
	 Sequence Pair
	  	4.1
	 Surviving License
	  	12.3.2
	 Suspended Product
	  	6.2.7
	 Taxes
	  	7.4
	 Term
	  	11.1.1
	 Validation Phase
	  	3.2.4
	 [... ***...]
	  	5.1
	 [... ***...]
	  	3.2.4
	 Work Plan
	  	3.1
	 Zymeworks
	  	Preamble
	 Zymeworks Change of Control Notice
	  	15.1.1
	 Zymeworks Indemnified Party
	  	14.2
	 Zymeworks [... ***...] Scaffolds
	  	3.3.3
	 Zymeworks Sequence Pair
	  	4.3.1(c)

 In this Agreement, unless the context requires otherwise: 

(a) the headings are included for convenience only and shall not affect its construction; 

(b) references to “persons” includes individuals, bodies corporate (wherever incorporated), unincorporated associations and
partnerships; 
 (c) words denoting the singular shall include the plural and vice versa and words denoting any gender shall include all
genders; 
 (d) references to the word “include” and “including” shall mean includes and including without limitation;

 (e) a Party includes its permitted assignees and/or the respective successors in interest to substantially the whole of its undertaking;

  
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 (f) any reference to an enactment or statutory provision is a reference to it as it may have
been, or may from time to time be amended, modified, consolidated or re-enacted; 
 (g) the
Attachments form part of the operative provisions of this Agreement and references to this Agreement shall, unless the context otherwise requires, include references to the Attachments. In the event of any inconsistency between the Attachments and
the terms of this Agreement, the terms of this Agreement shall prevail; 
 (h) general words shall not be given a restrictive interpretation
by reason of their being preceded or followed by words indicating a particular class of acts, matters or things; 
 (i) any reference in this
Agreement to an Article, Section, subsection, paragraph, clause or Attachment shall be deemed to be a reference to an Article, Section, subsection, paragraph, clause or Attachment, of or to, as the case may be, this Agreement, unless otherwise
indicated. Unless the context of this Agreement otherwise requires, (a) words such as “herein”, “hereof”, and “hereunder” refer to this Agreement as a whole and not merely to the particular provision in which such
words appear, and (b) the use of “shall” and “will” have interchangeable meanings for purposes of this Agreement; and 

(j) neither Party or its Affiliates shall be deemed to be acting “under authority of” or “on behalf” of the other Party or
its Affiliates. 
 This Agreement amends, restates and supersedes in its entirety the Original Agreement, as of the Restatement Effective
Date. All activities performed by either Party under the Original Agreement prior to the Restatement Effective Date shall be deemed performed hereunder, and rights and obligations of the Parties with respect thereto shall be as set forth herein.

 2. GRANT OF LICENSES 

2.1 Licenses to Merck. 

2.1.1 Commencing on the Effective Date and expiring on the Restatement Effective Date, Zymeworks hereby grants to Merck an assignable
(solely to Merck Affiliates or as otherwise permitted under Section 15.2), worldwide license with the right to sublicense to Affiliates of Merck and Third Parties undertaking activities on Merck’s behalf, under the
Zymeworks Intellectual Property (including Zymeworks’ interest in Joint Inventions) in all cases solely for Merck to (a) perform its activities (including Activities under the Work Plan) under the Research Program, and
(b) evaluate and perform any and all other activities under this Agreement with respect to, the Zymeworks Scaffolds that are required solely for the purpose of evaluating whether Merck wishes to include a particular Zymeworks Scaffold within
the Selected Scaffolds, evaluating various Program Antibodies in conjunction with Selected Scaffolds or evaluating whether to include a particular Target [...***...]. The preceding license shall be (i) exclusive (even as to Zymeworks)
from the Effective Date through the [...***...], except that Zymeworks shall have the right to (A) perform its obligations hereunder and (B) exercise the rights retained pursuant to Section 5.1.1 during such period, and (ii) non-exclusive 

  
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after the [...***...] and until the Restatement Effective Date. For clarity, the license set forth in this Section 2.1.1 is of no further effect as of the Restatement Effective Date.

 2.1.2 Commencing on the Restatement Effective Date, Zymeworks hereby grants to Merck an assignable (solely to Merck Affiliates or
as otherwise permitted under Section 15.2), worldwide, non-exclusive license with the right to sublicense to Affiliates of Merck and Third Parties undertaking activities on
Merck’s behalf, under the Zymeworks Intellectual Property (including Zymeworks’ interest in Joint Inventions) in all cases solely for Merck to (a) perform its activities (including Activities under the Work Plan) under the
Research Program, and (b) evaluate and perform any and all other activities under this Agreement with respect to, the Zymeworks Scaffolds that are required solely for the purpose of evaluating whether Merck wishes to include a particular
Zymeworks Scaffold within the Selected Scaffolds, evaluating various Program Antibodies in conjunction with the Scaffolds incorporated therein or evaluating whether to include a particular Target pair within the Merck Target Pairs or a particular
Sequence Pair within the Merck Sequence Pairs. 
 2.1.3 Zymeworks hereby grants to Merck an exclusive (even as to Zymeworks except as
necessary for Zymeworks to carry out its responsibilities under this Agreement or as otherwise expressly permitted under the Agreement), sublicenseable, assignable (solely to Merck Affiliates or as otherwise permitted under
Section 15.2) license under the Zymeworks Intellectual Property (including Zymeworks’ interest in Joint Inventions) for Merck to (a) research, develop, make, have made, use, import and export Program Antibodies
for incorporation into Products (including but not limited to incorporating Selected Scaffolds (including [...***...] thereto) into Program Antibodies prior to the Restatement Effective Date, and, as of the Restatement Effective Date,
Heavy-Light Chain Pairing Technology into Program Antibodies; provided that as of the Restatement Effective Date Merck may only incorporate (i) a Zymeworks Optimized Scaffold that is included within the Selected Scaffolds, and (ii) the
Heavy-Light Chain Pairing Technology, into the Program Antibodies that are generated using such Zymeworks Optimized Scaffold or such Heavy-Light Chain Pairing Technology, as applicable, pursuant to the Antibody Development Work Plan and no other
Program Antibodies) and (b) research, develop, made, have made, use, offer for sale, import and export Products, in each case in the Field in the Territory. 

2.1.4 Subject to Section 3.5, Zymeworks hereby grants to Merck a
non-exclusive sublicenseable, assignable (solely to Merck Affiliates or as otherwise permitted under Section 15.2) license under the Zymeworks Intellectual Property (including
Zymeworks’ interest in Joint Inventions) for Merck to make [...***...] (singly or in conjunction with Zymeworks) and to incorporate such [...***...] into Selected Scaffolds. 

2.2 License to Zymeworks. Commencing on the Effective Date and expiring on the Restatement Effective Date, Merck hereby grants
Zymeworks a non-exclusive, worldwide, irrevocable (but only with respect to Subsection 2.2(b) and subject to Article 12), fully-paid, sublicensable (but only as set forth in Section 2.2.1), assignable
(solely to Zymeworks’ Affiliates or as otherwise permitted under Section 15.2) license under the Patent Rights and Know-How Controlled by Merck (including Merck’s interest in Joint Inventions)
arising under this Agreement and limited to Patent Rights and Know-How covering [...***...] to: (a) perform its 

  
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activities under the Agreement prior to the Restatement Effective Date, and (b) undertake activities outside the scope of this Agreement prior to the Restatement Effective Date, including
the making, having made, using, offering for sale, selling, importing and otherwise exploiting products other than Products. The preceding license is subject to the exclusivity provisions in Article 5 and disclosure limitations and restrictions set
forth in Article 9. For clarity, nothing in this Section 2.2 grants Zymeworks a license to any Program Antibody or Product; provided that any [...***...] incorporated into a Program Antibody or Product shall be subject to the license set
forth in this Section 2.2. 
 2.2.1 The license granted to Zymeworks in
Section 2.2 shall include the right to grant and authorize sublicenses; provided that Zymeworks provides Merck with prompt Written Notice of any such sublicenses that it grants and provided further that any sublicensee may
not grant a further sublicense of such Patent Rights and Know-How Controlled by Merck. 
 2.3
Third Party Rights in Zymeworks Scaffolds. Zymeworks is solely responsible for the payment of all monetary obligations (including any license fees or royalties), if any, due to Third Parties under any agreements pursuant to which
Zymeworks obtained or obtains rights in or to any Zymeworks Intellectual Property. All such payments shall be made promptly by Zymeworks and in accordance with the terms of such agreements. 

2.4 No Implied Licenses. Except as specifically set forth in this Agreement, neither Party, by virtue of this Agreement, shall
acquire any license or other intellectual property interest, by implication or otherwise, in any Know-How or Patents Rights Controlled by the other Party or its Affiliates. Subject to the licenses
granted to Merck hereunder and the other terms and conditions of this Agreement, Zymeworks will retain all rights under the Zymeworks Intellectual Property. The licenses granted in Section 2.1 do not give Merck any right to
practice the Zymeworks Intellectual Property except as expressly provided in Section 2.1. The license granted in Section 2.2 do not give Zymeworks any right to practice any Patent Rights or Know-How Controlled by Merck except as expressly provided in Section 2.2. 

2.5 Termination for Patent Challenge. Notwithstanding anything herein to the contrary, in the event that Merck or its Affiliates
file or initiate an action challenging (directly or indirectly (e.g., through a Third Party)) in a court or by administrative proceeding seeking the invalidity or unenforceability or seeking to limit the scope of certain Zymeworks Patent Rights (the
specific Zymeworks Patent Rights challenged by Merck or its Affiliates constituting the “Merck Challenged Zymeworks Patent Rights”), then Zymeworks, at its discretion, may give Written Notice to Merck that Zymeworks will terminate
the license under Section 2.1 with respect to (and only to) the Merck Challenged Zymeworks Patent Rights in any or all countries in the Territory in which Merck or its Affiliates is specifically challenging the Merck
Challenged Zymeworks Patent Rights (collectively, the “Challenge Countries”) unless such challenge is withdrawn, abandoned, or terminated (as appropriate) within [...***...] days. In the event that Merck or its Affiliates (as
the case may be) does not withdraw, abandon or terminate (as appropriate) such challenge within such [...***...] day period, Zymeworks may terminate the license to Merck under Section 2.1 with respect to the Merck
Challenged Zymeworks Patent Rights in any or all Challenge Countries in the Territory. 

  
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 3. RESEARCH PROGRAM AND DEVELOPMENT AND COMMERCIALIZATION OF PRODUCTS 

3.1 General; Term. Merck and Zymeworks shall collaborate on a research program (the “Research Program”) as more
fully described in this Agreement and the attached work plan (the “Work Plan”) (Attachment 3.1(a)) (which may be amended from time to time by Merck with the consent of Zymeworks, such consent not to be unreasonably withheld,
conditioned or delayed), the main purpose of which is to validate one or more Zymeworks Scaffolds, and achieve Proof of Concept with one or more Program Antibodies and thereafter successfully complete the remaining Activities under the Work Plan.
The term of the Research Program shall run from the Effective Date until August 22, 2017 (the “Research Program Term”), without further extension unless otherwise agreed by the Parties in writing, and subject to earlier
termination in accordance with Article 11. Commencing on the Restatement Effective Date, the Parties will conduct the development Activities set forth on Attachment 3.1(b) to generate certain Multi-Specific Antibodies (the
“Antibody Development Work Plan”), which shall be included within the Research Program. For clarity, (a) Zymeworks’ conduct of the Antibody Development Work Plan may include the use of the Expanded Zymeworks
Technology, as set forth in the Antibody Development Work Plan or as otherwise reasonably required to complete the activities described in such plan, and (b) the Multi-Specific Antibodies resulting from the Antibody Development Work Plan will
be Program Antibodies for purposes of this Agreement. Accordingly, the Program Antibodies resulting from the Antibody Development Work Plan may incorporate Zymeworks Optimized Scaffolds and/or the Heavy-Light Chain Pairing Technology. 

3.1.1 Conduct of Research. 

(a) Zymeworks and Merck shall proceed diligently with the activities under the Research Program by using their respective Commercially
Reasonable Efforts to allocate sufficient time, effort, equipment and facilities to the Research Program and to use personnel with sufficient skills and experience as are required to accomplish the Research Program in accordance with the terms of
this Agreement, the Work Plan and the Antibody Development Work Plan. 
 (b) Zymeworks and Merck shall conduct the Research Program in
compliance with all Applicable Laws, rules and regulations, including, without limitation, current Good Laboratory Practice to the extent applicable to the activities being conducted. In addition, if animals are used in research hereunder, the Party
conducting such research shall comply with the Animal Welfare Act or any other applicable local, state, national and international laws and regulations relating to the care and use of laboratory animals. Such Party shall use reasonable efforts to
comply with the highest standards, such as those set forth in the Guide for the Care and Use of Laboratory Animals (NRC), for the humane handling, care and treatment of such research animals. Any animals which are used in the course of the
Research Program, or products derived from those animals, such as eggs or milk, shall not be used for food purposes, nor shall these animals be used for commercial breeding purposes. Each Party shall notify the other in writing of any deviations
from Applicable Law in its conduct of the Research Program. Each Party hereby certifies that it has not employed or otherwise used in any capacity 

  
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and shall not employ or otherwise use in any capacity, the services of any person debarred under United States law, including but not limited to Section 21 USC 335a, in performing any
portion of the Research Program or other activities under this Agreement. Zymeworks shall notify Merck in writing immediately if any such debarment occurs or comes to its attention, and shall, with respect to any person or entity so debarred
promptly remove such person or entity from performing any activities under this Agreement. 
 (c) Merck may utilize the services of its
Affiliates and Third Parties to perform its Research Program activities. Zymeworks may utilize the services of its Affiliates to perform its Research Program activities. Zymeworks and its Affiliates shall not utilize the services of Third Parties to
perform Zymeworks’ Research Program activities, except those Third Parties listed on Attachment 3.1.1(c). Should Zymeworks utilize the services of such Third Parties to perform its Research Program activities, Zymeworks shall cause each
such Third Party to execute an agreement consistent with Merck’s rights and concurring with the relevant obligations of Zymeworks as set forth herein, including without limitation obligations under Articles 3, 8, 9 and 10. Zymeworks shall
remain at all times fully liable for performance of its obligations hereunder. 
 (d) Zymeworks acknowledges that Merck’s corporate
policy requires that Merck’s business must be conducted within the letter and spirit of the law. By signing this Agreement, Zymeworks agrees to conduct the services contemplated herein in a manner which is consistent with both law and good
business ethics. Zymeworks’ failure to abide by the provisions of this Section 3.1.1 in any material respect shall be deemed a material breach of this Agreement. 

(i) Specifically, Zymeworks warrants that none of its employees, agents, officers or other members of its management are officials, officers,
agents, representatives of any government or international public organization. Zymeworks shall not make any payment, either directly or indirectly, of money or other assets, including but not limited to the compensation Zymeworks
derives from this Agreement (hereinafter collectively referred as a “Payment”), to government or political party officials, officials of international public organizations, candidates for public office, or representatives of
other businesses or persons acting on behalf of any of the foregoing (hereinafter collectively referred as “Officials”) where such Payment would constitute violation of any law. In addition regardless of legality, Zymeworks shall
make no Payment either directly or indirectly to Officials if such Payment is for the purpose of influencing decisions or actions with respect to the subject matter of this Agreement or any other aspect of Merck’s business. 

(ii) Zymeworks acknowledges that no employee of Merck or its Affiliates shall have authority to give any direction, either written or oral,
relating to the making of any commitment by Zymeworks or its agents to any Third Party in violation of terms of this Section 3.1.1 or any other provision of this Agreement. 

  
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 3.2 Validation Phase; Initial Disclosure of Zymeworks Scaffolds. 

3.2.1 Initial Disclosure of Zymeworks Scaffolds. Prior to the Restatement Effective Date, Zymeworks disclosed to Merck the
Scaffold Package for all Zymeworks Scaffolds meeting the Early Selection Criteria and existing as of the date of such disclosure. In addition, Zymeworks independently and contemporaneously provided to Merck’s patent counsel the intellectual
property status for each Zymeworks Scaffold for which Zymeworks provides a Scaffold Package to Merck. 
 3.2.2 Merck Selection
Criteria. Prior to the Restatement Effective Date, Merck, in collaboration with Zymeworks, developed criteria against which to evaluate Zymeworks Scaffolds (the “Early Selection Criteria”). Merck thereafter (taking
into account but not being bound by the Early Selection Criteria) selected or shall select the Zymeworks Scaffolds disclosed by Zymeworks under Section 3.2.1 that Merck desires for further testing and provided
or shall provide Zymeworks with prompt Written Notice of each selected Zymeworks Scaffold, which upon Zymeworks’ receipt of such Written Notice became or shall become an “Initial Selected Scaffold”. The Initial Selected
Scaffolds are set forth on Attachment 3.2.2. 
 3.2.3 Reiterative Process. The Parties anticipate that the selection of
Zymeworks Scaffolds under the Agreement will be a reiterative process, which, over time, may enable better selection and modification of Zymeworks Scaffolds and incorporation of Zymeworks Scaffolds into Program Antibodies Directed To Merck Target
Pairs other than those that include the [...***...]. The Initial Selection Criteria, together with any new selection criteria against which to evaluate Zymeworks Scaffolds agreed to by the Parties in writing during the Term may be referred to
herein as the “Merck Selection Criteria”. 
 3.2.4 Merck Diligence. Merck shall use Commercially
Reasonable Efforts to progress one or more Selected Scaffolds successfully through Activities 1.a through 2.a in the Work Plan (such Activities constituting, collectively, the “Validation Phase”; [...***...]
“[...***...]”). In doing so, Merck may use one or more Program Antibodies, regardless of whether Merck intends to further research or develop any such Program Antibodies. 

3.2.5 Disclosure and Selection of Additional Zymeworks Scaffolds Prior to [...***...]. At any time
prior to the first Zymeworks Scaffold achieving [...***...], Merck may request that Zymeworks disclose additional Zymeworks Scaffolds or Scaffold Modifications as a result of Merck’s experience with the selection of Zymeworks Scaffolds
under Section 3.2.2 or as a result of related experience within Zymeworks that would lead Zymeworks, in its reasonable determination, to recommend certain Zymeworks Scaffolds. Zymeworks shall comply with Merck’s
request(s) and promptly disclose to Merck the Scaffold Package for all Zymeworks Scaffolds existing as of the date of such disclosure and meeting the Merck Selection Criteria, to the extent such Zymeworks Scaffolds were not previously disclosed to
Merck. Subject to Section 3.3.2, Merck thereafter (taking into account but not being bound by the Merck Selection Criteria) may select Zymeworks Scaffolds disclosed by Zymeworks under this
Section 3.2.5 that Merck desires for further testing and shall provide Zymeworks with prompt Written Notice of each selected Zymeworks Scaffold, which upon Zymeworks’ receipt of such Written Notice shall become an
“Additional Selected Scaffold.” Each (a) Initial Selected Scaffold and 

  
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Additional Selected Scaffold, and (b), solely with respect to Program Antibodies Directed To the Initial Targets, each Zymeworks Optimized Scaffold incorporated into such a Program Antibody
pursuant to the Antibody Development Work Plan, may be referred to herein, individually, as a “Selected Scaffold” and, collectively, as the “Selected Scaffolds.” 

3.2.6 Limitation on Additional Selected Scaffolds. The Parties acknowledge and agree that the first Zymeworks
Scaffold achieved [...***...] prior to the Restatement Effective Date. Accordingly, and notwithstanding anything herein to the contrary, Zymeworks is not obligated to disclose to Merck any additional Zymeworks Scaffolds that were not disclosed
prior to the Restatement Effective Date unless otherwise expressly set forth in the Antibody Development Work Plan or Section 3.3.2 below, and the Zymeworks Scaffolds disclosed to Merck prior to the Restatement Effective
Date or incorporated into Program Antibodies pursuant to the Antibody Development Work Plan are the only Zymeworks Scaffolds eligible to be or become Selected Scaffolds. 

3.3 Remaining Activities after Achievement of Validation Phase Success. 

3.3.1 General. Once [...***...] has been achieved, Merck shall use Commercially Reasonable Efforts during the
remainder of the Research Program Term to successfully progress at least [...***...] Program Antibody through the remaining Activities (although Merck is free to progress as many Program Antibodies as it so desires). 

3.3.2 Additional Scaffold Information. Zymeworks shall continue to disclose to Merck, from time to time during the period
commencing with [...***...] and ending upon the earlier to occur of (i) completion of the first [...***...] for the first Program Antibody and (ii) [...***...] from the first achievement of Activity 1.d, additional
information regarding the advancement of any Selected Scaffold that is reasonably likely to be necessary or useful, as appreciated by Zymeworks at the time, in the development or commercialization of any Program Antibody or Product.
Notwithstanding anything to the contrary herein, Merck shall have the right to select a maximum of [...***...] Selected Scaffolds under this Agreement, unless otherwise agreed in writing by Zymeworks. The Parties recognize that,
notwithstanding Zymeworks’ compliance with the terms and conditions of this Agreement, it is possible that Zymeworks may generate a total number of Zymeworks Scaffolds that is less than [...***...] Zymeworks Scaffolds. 

3.3.3 [...***...] Scaffolds. Via the SCC (as defined in Section 3.12 below), Zymeworks shall
provide Merck with Information, the scope of which shall correspond to the scope of Information included in a Scaffold Package, regarding any Zymeworks Scaffolds with [...***...] that are Controlled by Zymeworks as of the Restatement Effective
Date (“Zymeworks [...***...] Scaffolds”), including existing relevant experimental data on antibodies containing such Zymeworks [...***...] Scaffolds, without necessarily disclosing the Target(s) of the associated
antibodies. Such Information will include intellectual property status, protein and DNA sequence information. The duration and timing for, and limitations on, the foregoing disclosure obligation shall be the same as are set forth in
Section 3.6 with respect to Scaffold Packages. For clarity, Zymeworks shall not be obligated to develop any such Zymeworks [...***...] Scaffolds. Merck will have a non-exclusive
right to incorporate these Zymeworks 

  
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[...***...] Scaffolds into Program Antibodies for development and commercialization in accordance with this Agreement. 

3.4 Activities with Selected Scaffolds. Zymeworks singly, Merck singly, or both Parties jointly have the right to modify
Selected Scaffolds under this Agreement (each, a “[...***...]”). Any [...***...] made prior to the first achievement of Activity 1.d constitutes a “[...***...]” ([...***...]). Prior to achievement of the
Validation Milestone Event, Merck shall notify Zymeworks of each [...***...] made singly by Merck within [...***...] of such modification. Merck has the right, both during and after the Research Program Term, to undertake activities
(including modifications) with any or all Selected Scaffolds solely in furtherance of developing, manufacturing and commercializing Program Antibodies and Products in accordance with the licenses granted to Merck under
Section 2.1, including incorporating Selected Scaffolds into Program Antibodies and modifying Selected Scaffolds and Program Antibodies containing any such Selected Scaffolds. Notwithstanding anything herein to the
contrary, Merck shall not be permitted to (a) conduct such activities with respect to any Zymeworks Optimized Scaffolds or the Heavy-Light Chain Pairing Technology or (b) modify Zymeworks Optimized Scaffolds or the Heavy-Light Chain
Pairing Technology pursuant to Section 3.5 below, except in each case (a) and (b), solely for purposes developing, manufacturing and commercializing the Program Antibodies Directed To the Initial Targets and
incorporating such Zymeworks Optimized Scaffold or Heavy-Light Chain Pairing Technology, as applicable, that are generated pursuant to the Antibody Development Work Plan. 

3.5 Modifications to Program Antibodies. Zymeworks shall not make any modifications or changes to a Program Antibody separate
from making [...***...] to Zymeworks Scaffold(s) incorporated into a Program Antibody or as otherwise provided in writing in the Work Plan. Except as expressly set forth in Section 3.5 (including with respect to
limitations on Merck’s use of the Zymeworks Optimized Scaffolds and the Heavy-Light Chain Pairing Technology), Merck may freely modify or improve a Program Antibody as Merck so desires during the Term, including making changes to Zymeworks
Scaffolds incorporated therein (e.g., the [...***...] may be modified, including changes to one or more amino acid which alters (i) [...***...] or [...***...], (ii) [...***...] binding and/or (iii)
[...***...]), provided that, except as otherwise expressly set forth in this Agreement, no license under any Patent Rights of Zymeworks other than the Zymeworks Patent Rights shall be implied thereby. 

3.6 Update of Scaffold Package Information. Until the earlier to occur of (i) completion of the first
[...***...] for the first Program Antibody and (ii) [...***...] from the successful achievement of Activity 1.d and (iii) the Restatement Effective Date, Zymeworks shall from time-to-time but no less frequently than once every [...***...] update the Scaffold Packages previously disclosed to Merck with any Information within the scope of such packages that was not previously
disclosed to Merck. Effective as of the Restatement Effective Date and during the rest of the Term, Zymeworks shall provide written updates upon the availability of Information which Zymeworks believes would be necessary or useful to Merck in
exercising the licenses granted under Section 2.1 with respect to Scaffolds that are incorporated into the Program Antibodies. For clarity, if no such additional Information exists at the time for such update, Zymeworks
shall so indicate. 

  
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 3.6.1 Zymeworks, during the Term, shall independently provide Merck patent counsel
with updates regarding the intellectual property status for each Zymeworks Scaffold that is incorporated into a Program Antibody and any Heavy-Light Chain Pairing Technology that is incorporated into a Program Antibody, which Zymeworks believes
would be necessary or useful to Merck in exercising the licenses granted under Section 2.1. 
 3.7
Affiliates, Licensees and Third Party Contractors. Merck, in utilizing the services of its Affiliates, licensees and Third Party contractors under this Agreement, may sublicense its rights under this Agreement in accordance with
Section 2.1 and share Confidential Information with such Affiliates, licensees and Third Party contractors in furtherance of the Research Program and in undertaking development activities and commercialization under
this Agreement, in each case in accordance with Article 9; provided, however, that Merck shall remain responsible for such performance of its Affiliates, licensees and Third Party contractors and shall cause such Affiliates, licensees and
Third Party contractors to comply with the provisions of this Agreement in connection with such performance, including the provisions addressing confidentiality and non-use. 

3.8 Research Expenses. 

3.8.1 Zymeworks and Merck shall each bear all expenses associated with their respective duties under Section 3
of this Agreement, except as expressly set forth below and further specified in Attachment 3.8, Budget and Payment Schedule, attached to this Agreement. 

3.8.2 Subject to the payment provisions in this Section 3.8, Merck shall pay Zymeworks up to [...***...]
USD ($[...***...]) in accordance with the Budget and Payment Schedule set forth in Attachment 3.8 for performance of Zymework’s activities set forth in the Antibody Development Work Plan. Zymeworks shall be solely
responsible for any amounts owed to Third Parties engaged by Zymeworks pursuant to Section 3.1.1(c). 
 3.8.3 To the extent that the
amounts paid to Zymeworks for goods or services to be provided under this Section 3.8 are subject to any sales, use, rental, personal property, value added or any other taxes, payment of said taxes is Zymeworks’
responsibility, subject to any applicable exemption entitlement. Zymeworks shall be liable for any and all taxes on any and all income it receives from Merck under this Section 3.8. 

3.8.4 All amounts invoiced pursuant to this Section 3.8 shall be paid to Zymeworks within [...***...]
calendar days following receipt of such original invoice together with the following information: (i) the applicable purchase order number under which the service was performed, (ii) the amount due, (iii) the calculation of such
amount due, and (iv) applicable supporting documentation. The purchase order number is required for payment. All invoices shall be directed as indicated in Attachment 3.8 for payment. Merck shall have the right to make a reasonable
request for additional information from Zymeworks for the purposes of determining the sufficiency of the service performed and the amount, and Zymeworks shall respond to such request promptly and reasonably. Merck may dispute any invoiced amount by
providing written notice to Zymeworks within [...***...] of receipt of the applicable invoice. Merck is not obligated to pay any invoiced amount that is the subject of a good faith dispute until

  
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such dispute is resolved, provided that Merck pays any undisputed invoiced amount. Once an invoice dispute is resolved, the invoice shall be paid within [...***...] calendar days of such
resolution. 
 3.9 Records and Reports. 

3.9.1 Records. Each Party shall maintain records, for so long as necessary to comply with Applicable Laws or reasonably
necessary to support the prosecution, maintenance and enforcement of intellectual property rights (including Patent Rights) in accordance with Article 8 below, regarding its conduct of the Research Program after the applicable
activity, in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall fully and properly reflect all work done and results achieved by such Party in the performance of the Research Program. 

3.9.2 Copies and Inspection of Records. During the period that such records are required to be maintained pursuant to
Section 3.9.1, Merck shall have the right, during normal business hours and upon reasonable notice, to inspect and copy all such records of Zymeworks referred to in Section 3.9.1, solely in
furtherance of activities under this Agreement. Upon reasonable request, Zymeworks shall provide copies of the records described in Section 3.9.1 maintained by Zymeworks to Merck, at Merck’s expense. Merck shall
have the right to arrange for its employee(s) and/or consultant(s) involved in the activities contemplated hereunder to visit the offices and laboratories of Zymeworks and any of its Third Party contractors during normal business hours and upon
reasonable notice, and to discuss the Research Program work and its results in detail with the technical personnel and consultant(s); provided that any such visits shall occur no more frequently than once per Calendar Quarter. 

3.10 Regulatory. Zymeworks shall cooperate with and provide reasonable assistance to Merck, at Merck’s expense, in
connection with filings with or before any Regulatory Authority under this Agreement relating to the Zymeworks Scaffolds in Program Antibodies and/or Products, including by executing any required documents, providing access to personnel and
providing Merck with copies of requested Zymeworks Know-How and documents regarding Zymeworks Patent Rights and other Information that is necessary to support regulatory filings for Products in the Field in
the Territory. 
 3.11 Relationship Liaison. As soon as practicable after the Effective Date, Merck and Zymeworks will
each assign one (1) employee to serve as primary point of contact between the Parties with respect to matters under the Agreement (each a “Relationship Liaison”). Either Party, upon prior Written Notice to the other Party, may
change its Relationship Liaison. Except for those Disputes that are subject to the purview of the SCC, prior to submitting any Dispute to the dispute resolution mechanism set forth in Section 15.6, the Relationship Liaisons
shall attempt, for a period of [...***...], to resolve such Dispute. 
 3.12 Scientific Coordination Committee. As of
the Restatement Effective Date, the Parties have established a Scientific Coordination Committee (the “SCC”) to facilitate the Research Program. The SCC shall be comprised of two (2) employees from Merck and two
(2) employees from Zymeworks. (Either Party, however, at its discretion, may add a third employee 

  
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as a non-voting member.) Subject to the foregoing, each Party shall appoint its respective representatives to the SCC from time to time, and may substitute
one (1) or more of its representatives, in its sole discretion, effective upon Written Notice to the other Party designating such change. Representatives from each Party shall have appropriate technical credentials, experience and knowledge
pertaining to and ongoing familiarity with the Research Program. One (1) of the members of the SCC appointed by Merck shall be designated the SCC Chair. The SCC Chair will be responsible for calling meetings of the SCC, circulating agenda and
performing administrative tasks required to assure efficient operation of the SCC. The SCC shall be promptly disbanded upon achievement of Program Antibody Success. 

3.12.1 SCC Meetings. The SCC shall meet in accordance with a schedule established by mutual written agreement of the
Parties no less frequently than once per Calendar Quarter until completion of Activity 2.a under the Work Plan; thereafter, the SCC shall meet no less frequently than once every [...***...] until Program Antibody Success. The location for
meetings shall alternate between Zymeworks and Merck facilities (or such other location as is determined by the SCC). Alternatively, the SCC may meet by means of teleconference, videoconference or other similar communications equipment. As
appropriate, additional employees or consultants may from time to time attend the SCC meetings as nonvoting observers, subject to any such consultant’s written agreement to comply with the confidentiality obligations under this Agreement and
provided that no Third Party personnel may attend unless otherwise agreed by both Parties. Each Party shall bear its own expenses related to the attendance of the SCC meetings by its representatives. Each Party may also call for special meetings to
resolve particular matters requested by such Party. The SCC Chair or his/her designee shall keep minutes of each SCC meeting that records in writing all decisions made, action items assigned or completed and other appropriate matters. Merck shall
send meeting minutes to all members of the SCC promptly after a meeting for review. Each member shall have [...***...] days from receipt in which to comment on and to approve the minutes (such approval not to be unreasonably withheld, delayed
or conditioned). If a member, within such time period, does not notify Merck that s/he does not approve of the minutes, the minutes shall be deemed to have been approved by such member. 

3.12.2 SCC Functions. The SCC’s responsibilities with respect to the Research Program are as follows: 

(a) Facilitating the exchange of Know-How and Inventions as required hereunder; 

(b) Periodically reviewing the progress of the Research Program; 

(c) Subject to Section 3.1, updating or modifying the Work Plan and the Antibody Development Work Plan in writing,
and proposing corresponding changes to the Budget and Payment Schedule as necessary; 
 (d) Reviewing the selection of Zymeworks Scaffolds
as Selected Scaffolds; 

  
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 (e) Discussing potential additional Information for inclusion within the Scaffold Packages,
provided that inclusion of such information would require mutual written agreement of the Parties; 
 (f) Serving as a forum, until
achievement of Activity 1.d, for discussion of [...***...]; 
 (g) Serving as a forum for selection of the first [...***...]
Merck Targets, if selected, and the Merck Sequence Pairs; 
 (h) Determining, until such time that the SCC is disbanded, whether Milestone
Events under the Agreement have been achieved. Thereafter, Merck will determine whether Milestones Events have been achieved, subject to Zymeworks’ right to dispute such determination as set forth herein. 

From and after the disbanding of the SCC and except as otherwise provided in this Section 3.12.2, the roles of the
SCC will be performed by the Relationship Liaisons or their designees. 
 3.12.3 SCC Disputes. The SCC will act
by unanimous vote, with each voting member of Merck and Zymeworks having one vote. If agreement is not reached by such representatives pursuant to such vote, then the matter may be escalated by either Party to designated officers of both Merck and
Zymeworks with appropriate decision making authority for resolution in accordance with Section 15.6. In the event the designated officers are unable to resolve the issue within [...***...] days, Merck has and shall
have the right to make the final decision with respect to such dispute, provided that Merck will not have the right to revise the Work Plan or Antibody Development Work Plan except as set forth in Section 3.1 or to obligate
Zymeworks to perform any task outside of or beyond its obligations under this Agreement. For clarity and notwithstanding the creation of the SCC, each Party shall retain the rights, powers and discretion granted to it hereunder, and the SCC shall
not be delegated or vested with such rights, powers or discretion unless such delegation or vesting is expressly provided herein, or the Parties expressly so agree in writing. The SCC shall not have the power to amend, waive or modify any term of
this Agreement, and no decision of the SSC shall be in contravention of any terms and conditions of this Agreement. It is understood and agreed that issues to be formally decided by the SCC are only those specific issues that are expressly provided
in this Agreement to be decided by the SCC. 
 3.13 Development and Commercialization by Merck. Subject to
Section 3.10, Merck is solely responsible, at its sole discretion and expense, for all aspects of development, manufacture and commercialization of Program Antibodies and Products in the Field in the Territory, including
planning and implementation. Notwithstanding anything herein to the contrary, Merck is solely responsible for preparing, filing, prosecuting and maintaining all applications for Marketing Authorizations and any other necessary licenses, permits,
authorizations and approvals (or waivers) required by any Regulatory Authority for the use, promotion, import, export, manufacture, sale, distribution and commercialization of Program 

  
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Antibodies and Products in the Field in the Territory. Merck shall have the sole right to determine all pricing of Products in the Territory. 

4. TARGET AND SEQUENCE PAIR SELECTION AND PRODUCT LIMITATIONS 

4.1 Merck Sequence Pairs; Definitions. Subject to Merck’s ability to swap out Sequence Pairs and Target pairs in accordance
with Section 4.3.5, Merck shall have the right to select, in accordance with this Article 4 and during the Research Program Term, up to [...***...] Merck Sequence Pairs that it may direct Zymeworks to
incorporate into Program Antibodies, and such Merck Sequence Pairs may be Directed To a total of not more than [...***...] Merck Target Pairs. To designate a Sequence Pair as a Merck Sequence Pair, Merck shall provide Zymeworks with written
notice of such Sequence Pair, setting forth the Sequences included in such Sequence Pair and the Target(s) To which they are Directed, and requesting that such Sequence Pair be submitted to gatekeeping. Each designated Sequence Pair shall be subject
to gatekeeping pursuant to Section 4.3 below, and if a designated Sequence Pair is available in accordance with such gatekeeping, it shall become a “Merck Sequence Pair.” Each Merck Sequence Pair shall be
subject to the exclusivity set forth in Section 5.2 below. For clarity, Merck may submit more than [...***...] Sequence Pairs for consideration as potential Merck Sequence Pairs during the Research Program Term. For
purposes of this Agreement, “Sequence” means an antibody nucleic acid or amino acid sequence corresponding only to the [...***...] that is Directed To [...***...]; “Sequence Pair” means a pair of
Sequences, each of which is Directed To a [...***...]; and “Merck Target Pair” means the [...***...] or a [...***...] To which a Merck Sequence Pair is Directed. 

4.2 Initial Targets and Sequence Pairs. 

4.2.1 Prior to the Restatement Effective Date, Merck notified Zymeworks in writing of Merck’s selection of the first
[...***...] exclusive Targets To which Program Antibodies and Products may be Directed (i.e., the first [...***...] exclusive Targets to which Merck may develop and commercialize Program Antibodies and Products). Under
Section 5.2 these first [...***...] Targets, [...***...] (each, an “Initial Target”), were subject to exclusivity prior to the Restatement Effective Date. In addition, prior to the Restatement Effective Date, Merck
notified Zymeworks in writing of Merck’s selection of the following Targets: [...***...] (collectively, the “Other Targets”). As of the Restatement Effective Date, Merck shall no longer have any exclusivity with respect
to the Initial Targets or the Other Targets, except to the extent set forth in Section 5.4 with respect to the Initial Targets. Zymeworks, during the Research Program Term, will generate Program Antibodies incorporating
[...***...] Merck Sequence Pair(s) Directed To Merck Target Pairs that include [...***...] and [...***...] Merck Sequence Pair Directed To a Merck Target Pair that includes [...***...], in accordance with the Antibody
Development Work Plan and Section 3.1.1; provided that, subject to Section 4.1, the Antibody Development Work Plan, including the number of Merck Sequence Pairs set forth above, may be amended from
time to time upon mutual written agreement of the Parties. The Program Antibodies resulting from the Antibody Development Work Plan shall comprise all Program Antibodies Directed To the Initial Targets, and Merck shall not generate additional
Program Antibodies Directed To the Initial Targets outside of the Antibody Development Work Plan. For clarity, the Merck Sequence Pairs that are subject to the Antibody Development Work 

  
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Plan shall represent [...***...] of the [...***...] permitted Merck Sequence Pairs, unless and until swapped for other Merck Sequence Pairs as set forth below. 

4.2.2 Initial Target Sequence Pair Selection. Subject to Sections 4.1 and 4.3, Merck will not be
limited with respect to which Sequence Pairs it may select as Merck Sequence Pairs Directed To Merck Target Pairs including each Initial Target (each, an “Initial Target Sequence Pair”), during the Research Program Term.
Accordingly, during Research Program Term, Merck has the right, subject to Section 4.3.1 (a) to select any Sequence Pair (or modified derivative thereof) as an Initial Target Sequence Pair, (b) to substitute a
different Sequence Pair for any Initial Target Sequence Pair, and (c) to request Zymeworks to design, produce and optimize such additional Multi-Specific Antibodies based on such Initial Target Sequence Pairs utilizing the Zymeworks Platform or
the Expanded Zymeworks Technology pursuant to this Agreement. During the Research Program Term, Zymeworks will refrain from internally developing products Directed To the Merck Target Pairs that include [...***...]. 

4.3 Target and Sequence Selection Limitations. 

4.3.1 As of the Restatement Effective Date, Merck may select any Sequence Pair as a Merck Sequence Pair provided that, at the time that
Merck notifies Zymeworks of the selection of such Sequence Pair, Zymeworks is not, as of the date Zymeworks receives such Written Notice from Merck, 

(a) contractually obligated to grant, or has not granted, to a Third Party rights with respect to products incorporating such Sequence Pair or
exclusive rights with respect to products Directed To the Target or Target pair To which such Sequence Pair is Directed; 
 (b) actively and
in good faith engaged in negotiations with a Third Party regarding the development or commercialization of products incorporating such Sequence Pair or exclusive rights with respect to the development or commercialization of products Directed To the
Target or Target pair To which such Sequence Pair is Directed [...***...]; or 
 (c) subject to Sections 4.2.2 and 5.4,
[...***...] on its own behalf regarding the development or commercialization of products incorporating such Sequence Pair or [...***...] (as evidenced by documented [...***...])) (each such Sequence, a “Zymeworks Sequence
Pair”). 
 4.3.2 Within [...***...] Business days of Zymeworks’ receipt of Merck’s Written Notice with
respect to each Sequence Pair that Merck proposes to select under Section 4.1 or 4.2, Zymeworks shall provide Merck with Written Notice if such proposed Merck Sequence Pair is unavailable for any of the reasons set forth in
Section 4.3.1, and the basis for the unavailability. If any such Sequence Pair is so unavailable, Merck may propose another Merck Sequence Pair, subject to Section 4.3 and the process set forth
therein. 
 4.3.3 Notwithstanding the foregoing, in the event that Merck proposes to select, as a Merck Sequence Pair, a Sequence Pair
that is a Zymeworks Sequence Pair and, 

  
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notwithstanding such awareness, Merck desires that such Zymeworks Sequence Pair become a Merck Sequence Pair, then the Parties shall negotiate in good faith to reach commercially reasonable terms
pursuant to which such Zymeworks Sequence Pair would become a Merck Sequence Pair. 
 4.3.4 Sequences Pairs selected by Merck and not
unavailable constitute Merck Sequences Pairs and are subject to exclusivity as set forth in Section 5.2. 

4.3.5 Merck may research, develop and commercialize up to three (3) Products (excluding Second Generation Products) incorporating
no more than [...***...] Merck Sequence Pairs and Directed To no more than [...***...] Merck Target Pairs. However, to test feasibility and biological relevance of Sequence Pairs in conjunction with Zymeworks Scaffolds, Merck may
undertake research and development (but no commercial activities) with respect to antibodies incorporating Zymeworks Scaffolds incorporating more than [...***...] Merck Sequence Pairs; provided that, as set forth in Section 4.1, at any
given time no more than [...***...] Sequence Pairs may be designated as Merck Sequence Pairs. Moreover, if the development of a Program Antibody incorporating a particular Merck Sequence Pair is terminated prior to the achievement of
Development Milestone Event 1 with respect to the Product incorporating such Program Antibody, Merck may select a replacement Merck Sequence Pair for the Merck Sequence Pair incorporated into such Program Antibody by providing Written Notice to
Zymeworks and subject to this Section 4.3 (and, upon such substitution (a) the dropped Merck Sequence Pair shall no longer constitute a Merck Sequence Pair, (b) the replacement Sequence Pair shall be a Merck
Sequence Pair, and (c) the number of Merck Sequence Pairs selected by Merck, and the number of Merck Target Pairs To which Merck Sequence Pairs are Directed shall not therefore have increased). 

5. EXCLUSIVITY 
 5.1
General. From the Effective Date until the earlier of (i) [...***...] after the date that Merck pays Zymeworks for achievement of [...***...] in Section 6.1 and (ii) the date [...***...]
months after the Effective Date (such time period constituting the “[...***...]”), Zymeworks and its Affiliates shall not: (a) undertake activities on any Zymeworks Scaffolds or Multi-Specific Antibodies that
incorporate a Zymeworks Scaffold; and/or (b) work with or grant any license, access or other rights to any Third Party with respect to any (i) Zymeworks Scaffolds or Multi-Specific Antibodies that incorporate a Zymeworks Scaffold and
(ii) Zymeworks Patent Rights and Zymeworks Know-How with respect to such scaffolds and antibodies, except as necessary for Zymeworks to undertake its obligations under the Agreement. For clarity, the
[...***...] expired prior to the Restatement Effective Date, and the foregoing exclusivity and the limitations set forth below on internal research activities are of no further force or effect. 

5.1.1 Exclusions. Notwithstanding anything in Section 2.1 or
Section 5.1 to the contrary, Zymeworks, during the [...***...], may undertake internal research activities (i.e. activities which Zymeworks is undertaking solely on its own behalf) on antibodies, provided that
Zymeworks does not initiate internal research activities on a Multi-Specific Antibody which, at the time such activities are initiated, is [...***...], and (b) Zymeworks, during the [...***...], does

  
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not initiate [...***...] with respect to any [...***...] that incorporates one or more Zymeworks Scaffolds on which it undertook such research activities (regardless of whether any
such Multi-Specific Antibody is [...***...]). For clarity, Zymeworks may engage contractors to perform its activities on its behalf pursuant to this Section 5.1.1. 

5.2 Sequence Pair Exclusivity. During the Research Program Term, Zymeworks will grant Merck exclusivity with respect to
Merck Sequence Pairs as set forth in this Section 5.2 and subject to Section 5.3 and 5.4. For clarity, as of the Restatement Effective Date, Merck is not granted any Target level or Merck
Target Pair level exclusivity pursuant to this Agreement and any such Target or [...***...] level exclusivities granted under the Original Agreement are hereby terminated as of the Restatement Effective Date. Unless expressly permitted
otherwise under this Agreement, Zymeworks and its Affiliates, during the Term, (a) shall not grant any Third Party rights (by license grant or otherwise) to research, develop, manufacture or commercialize any antibody, antibody analogue or
product generated using a Merck Sequence Pair, in each case which incorporates a Zymeworks Scaffold; and (b) shall not grant any Third Party any license or other right to use any Zymeworks Scaffold or grant any license or other rights to any
Third Party to use Patent Rights and/or Know-How Controlled by Zymeworks, in either case to undertake any activities (e.g., research, develop, manufacture and commercialize) with respect to any
Multi-Specific Antibody generated using a Merck Sequence Pair which incorporates a Zymeworks Scaffold, or product which incorporates such a Multi-Specific Antibody. For clarity, the preceding (x) precludes Zymeworks and its Affiliates, directly
or through any Third Party under an agreement with Zymeworks (or a Zymeworks Affiliate) from researching, developing, manufacturing and commercializing any antibody, antibody analogue or product generated using a Merck Sequence Pair and
incorporating a Zymeworks Scaffold, (y) precludes Zymeworks from granting licenses to Third Parties to develop, manufacture or commercialize Antibodies or products based on a [...***...] that is the Confidential Information of Merck, and
(z) is in addition to Zymeworks’ confidentiality obligations to Merck set forth in this Agreement. For clarity, the Merck Sequence Pair level exclusivity set forth in this Section 5.2 shall apply to Merck Sequence
Pairs incorporated into the Program Antibodies designed, produced and optimized by Merck and/or Zymeworks for Merck pursuant to the Antibody Development Work Plan (including
proof-of-concept Antibodies and lead Antibodies); subject to Merck’s right to swap out the applicable Merck Sequence Pair as provided in Section 4.3.5. 

5.3 Additional Exclusivity Exception. Notwithstanding anything in Sections 5.2 or 5.4 to the contrary and without
limiting any other rights retained by Zymeworks, Merck agrees that Zymeworks may research, develop, manufacture and commercialize Multi-Specific Antibodies (including those that incorporate Selected Scaffolds) itself or through Affiliates or Third
Parties that are Directed To Target pairs (a) [...***...] and [...***...] or (b) [...***...] and [...***...] (each, an “Allowed Target Pair”), and any product incorporating such Multi-Specific
Antibodies without any ongoing obligation to Merck, by itself or with a Third Party; provided that the following terms are met: 
 5.3.1
Zymeworks shall, via the SCC, provide Merck with a list of completed, ongoing and planned (through to IND-enablement) experiments conducted by or on behalf of Zymeworks with Multi-Specific Antibodies which
incorporate a Zymeworks Scaffold and are Directed To an Allowed Target Pair (the “Allowed Target Pairs Experiments”). For clarity, 

  
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experiments conducted by a licensee of Zymeworks are not conducted on behalf of Zymeworks. Zymeworks will use good faith, commercially reasonable efforts to obtain the right to provide Merck with
data from the [...***...] arm of experiments conducted by Zymeworks’ licensees with Multi-Specific Antibodies which incorporate a Zymeworks Scaffold and are Directed To either Allowed Target Pairs within the scope, and for the purposes,
described in Section 5.3.2 below; provided that if, despite such good faith, commercially reasonable efforts, Zymeworks is unable to obtain such rights, Zymeworks shall not be deemed to be in breach of this
Section 5.3.1. 
 5.3.2 Via the SCC, Zymeworks shall provide Merck with data from the Allowed Target Pairs
Experiments promptly after it becomes available to Zymeworks. This data sharing will consist of, at a minimum, (i) Scaffold Packages concerning the Allowed Target Pairs, (ii) assay protocols related to the [...***...] arm of the
Allowed Target Pairs Experiments, (iii) parenteral and humanized [...***...] sequences and characterization (DNA and protein), including any [...***...] light-chain pairings; (iv) construct design (e.g. scFv-Fc, scFv-Fab-Fc, Fab-Fc, other); (v) anti-[...***...] binding affinity (to
[...***...] target as appropriate); (vi) Tm of the isolate anti-[...***...] or the anti-[...***...] arm of such Multi-Specific Antibody (vii) expression titer; and (viii) post-protein A % HMW aggregate. Merck shall only
use the data disclosed pursuant to this Section 5.3.2, on a non-exclusive basis, in the course of its internal research and development activities, as well as its development and
commercialization of the Program Antibodies pursuant to the licenses granted to Merck in Section 2.1. For clarity, the use of such data or any intellectual property rights therein by Merck in the further development or
commercialization of products outside of the scope of the licenses granted in Section 2.1 would be the subject of a separate agreement between the Parties. 

5.4 Initial Target Exclusivity. Zymeworks has the right to grant exclusive or
non-exclusive licenses under the Zymeworks Intellectual Property to Third Parties with respect to products containing Antibodies Directed To either Initial Target (alone or as a
bi-specific); provided that Zymeworks shall not grant an exclusive license under the Zymeworks Intellectual Property to research, develop, manufacture or commercialize Antibodies Directed To any Target pair
that includes [...***...] or [...***...] (other than [...***...] or [...***...], which are subject to Section 5.3 above) until the earlier of (a) [...***...] and (b) the date of the
[...***...], as applicable. For clarity, after the [...***...], Zymeworks will have the right to grant an exclusive license under the Zymeworks Intellectual Property to research, develop, manufacture or commercialize Antibodies Directed
To any Target pair that includes [...***...], subject to the Merck Sequence Pair exclusivities granted to Merck pursuant to Section 5.2 above, if any. Similarly, after the [...***...], Zymeworks will have the
right to grant an exclusive license under the Zymeworks Intellectual Property to research, develop, manufacture or commercialize Antibodies Directed To any Target pair that includes [...***...], subject to the Merck Sequence Pair exclusivities
granted to Merck pursuant to Section 5.2 above, if any. 
 6. FINANCIAL PROVISIONS 

6.1 Upfront Payment. In consideration of Zymeworks’ granting of the licenses and rights to Merck and Zymeworks’
undertaking of the activities required under this Agreement, Merck shall pay to Zymeworks a one-time upfront payment of One Million, Two Hundred and Fifty Thousand US dollars (USD $1,250,000) within
[...***...] Business Days following the Effective Date. 

  
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 6.2 Milestone Payments. Within [...***...] days after the achievement of
a milestone event under Section 6.2.1, Section 6.2.2, Section 6.2.3, Section 6.2.4 and Section 6.2.5 (each, a
“Milestone Event”), Merck shall make the corresponding milestone payment (each, a “Milestone Payment”): 

6.2.1 Research Milestones. 
  

			
	 Research Success Milestone Events
	  	 Milestone Payments

	 1. [...***...]
	  	USD $2.0 Million
	 2. [...***...]
	  	USD $1.5 Million

 6.2.2 IND Enabling Milestone. 

 

			
	 IND Milestone Event
	  	 Milestone Payment

	 1. [...***...]
	  	USD $[...***...]

 6.2.3 Development Milestones. 

 

			
	 Development Milestone Events
	  	 Milestone Payments

	 1. [...***...]
	  	USD $[...***...]
	 2. [...***...]
	  	USD $[...***...]
	 3. [...***...]
	  	USD $[...***...]
	 4. [...***...]
	  	USD $[...***...]

 6.2.4 Commercial Milestones. 

 

			
	 Commercial Milestone Events
	  	 Milestone Payments

	 1. [...***...]
	  	USD $[...***...]
	 2. [...***...]
	  	USD $[...***...]
	 3. [...***...]
	  	USD $[...***...]

 6.2.5 Second Generation Milestones. 

 

			
	 Second Generation Milestone Events
	  	 Milestone Payments

	 1. [...***...]
	  	USD $[...***...]
	 2. [...***...]
	  	USD $[...***...]

  
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	 3. [...***...]
	  	USD $[...***...]
	 4. [...***...]
	  	USD $[...***...]

 6.2.6 Each Milestone Payment associated with a Research Milestone Event is payable [...***...].
Subject to Section 6.2.6(a), each Milestone Payment associated with the IND Milestone Event and each Development Milestone Event and each Commercial Milestone Event is payable [...***...]. Each Milestone Payment associated with a Second
Generation Milestone Event is payable [...***...].  
 (a) For clarity, (i) Milestone Payments associated with the IND
Milestone Event and each Development Milestone Event may be paid no more than [...***...] times during the Term, (ii) First Commercial Sale in a Major Market under Section 6.2.4 and
Section 6.2.5 means that there has been a First Commercial Sale of the Product in all of the countries that make up the Major Market, (iii) the IND Enabling Milestone Payments, the Development Milestone Payments and
the Commercial Milestone Payments are not payable for a Second Generation Product and (iv) the Second Generation Milestone Payments are not payable for a Product that is not a Second Generation Product. 

6.2.7 Suspended Product. Notwithstanding the preceding, if (a) development of a Product ceases or is indefinitely
suspended after a Milestone Payment is made with respect to such Product or (b) commercialization of a Product ceases or is indefinitely suspended for safety reasons (each such Product constituting a “Suspended Product”), then
Merck shall only make Milestone Payments on the first subsequent developed Product (regardless of whether such later developed Product is Directed To the same Merck Target Pair To which the Suspended Product was Directed) to achieve Milestone Events
after the last Milestone Event achieved by the Suspended Product. For purposes of clarity, if the development of a Product that has triggered any Milestone Payments is discontinued (so that that Product constitutes a Suspended Product), and Merck
subsequently develops any later Product, Merck shall be required to pay only those Milestone Payments with respect to the first such subsequent Product that achieves Milestone Events that were not achieved and paid for the Suspended Product. 

(a) By way of first example, a Product (“Product No. 1”) achieves all Milestone Events up to and
including Development Milestone Event 1 and Merck pays the associated Milestone Payments. Thereafter, Product No. 1 became a Suspended Product. Subsequently, the next Product (“Product No. 2”) achieves all
Milestones up to and including Development Milestone Event 1. Merck would not pay any of the Milestone Payments for Product No. 2 until such time that Product No. 2 achieves a Milestone Event subsequent to achieving Development Milestone
Event 1. 
 (b) By way of second example, a Product (“Product No. 1”) achieves all Milestone
Events up to and including Development Milestone Event 1 and Merck pays the associated Milestone Payments. Thereafter, Product No. 1 became a Suspended Product. Subsequently, the next Product (“Product
No. 2”) achieves all Milestones up to and including the IND Milestone Event and then becomes a Suspended Product. Thereafter, the next Product 

  
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(“Product No. 3”) achieves all Milestone Events up to and including Development Milestone Event 1. Merck would not pay any of the Milestone Payments for
Product No. 2 since the Milestone Events that it achieved had already been achieved and the associated Milestone Payments paid for with respect to Product No. 1. Moreover, since Product No. 2 had itself become a Suspended Product, it
would not be until such time that Product No. 3 achieved a Milestone Event subsequent to achieving Development Milestone Event 1 that Merck would pay the associated Milestone Payment because Merck had already paid the Milestone Payments for
Product No. 1 up to and including the Milestone Payment associated with achievement of Development Milestone Event 1. 
 6.3
Royalties. 
 6.3.1 Patent Royalty Payments. Merck shall pay Zymeworks a royalty (each such royalty payment
under this Section 6.3.1 and Section 6.3.2 constituting a “Royalty”) on Net Sales of each Product in each country in the Territory where, were it not for a license granted to Merck
under Article 2, the sale of such Product in a country would infringe a Valid Patent Claim, at the following rates (which are a percentage of Net Sales). 
  

					
	 Calendar Year worldwide Net Sales of Each Product
	  	Royalty
Rate	 
	 USD $[...***...] to USD $[...***...]
	  	 	[...***...	]% 
	 Above USD $[...***...] to USD $[...***...]
	  	 	[...***...	]% 
	 Above USD $[...***...]
	  	 	[...***...	]% 

 6.3.2 Know-How Royalty Rates. If the sale of a Product,
as applicable, is not covered by a Valid Patent Claim in a country in the Territory in which it is sold, Merck shall pay Zymeworks Royalties at [...***...] percent ([...***...]%) of the applicable Royalty rates specified in
Section 6.3 for a period commencing on the date of First Commercial Sale of such Product in such country and expiring [...***...] years after the First Commercial Sale in such country. 

6.3.3 One Royalty; Samples. Only one Royalty shall be due with respect to the same unit of Product. Annual Net Sales of a
Product, for purposes of determining the payment of Royalties, shall not be aggregated with the annual Net Sales of any other Product. No Royalties shall accrue on the disposition of Product in reasonable quantities by Merck or its Related Parties
as [...***...] or as [...***...]. 
 6.3.4 Royalty Offset. The foregoing Royalties with respect to sales of
a Product in a country in the Territory shall be reduced by [...***...] percent ([...***...]%) of any royalties or other payments owed by Merck or its Related Party making such sales, as applicable, to Third Parties, directly or
indirectly, for the use of or rights to Patent Rights controlled by one or more Third Parties that, in Merck’s reasonable opinion, cover one or more Zymeworks Scaffolds incorporated in such Product (or cover uses of such Zymeworks Scaffold(s))
in such country, provided, however, that Royalties payable to Zymeworks under this Section 6.3 shall 

  
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not be reduced to less than [...***...] percent ([...***...]%) of the Royalties otherwise payable to Zymeworks with respect to sales of such Product in such country. 

6.3.5 Compulsory Licenses. If Merck or a Related Party, as a condition of obtaining or maintaining Marketing Authorization
for a Product in a country in the Territory, is required by a government authority to grant a compulsory license to a Third Party with respect to such Product in the Field in such country, and the royalty rate under such compulsory license is
lower than the Royalty Rate provided under Section 6.3.1 or Section 6.3.2 (as the case may be), then the Royalty Rate to be paid by Merck on Net Sales by such compulsory licensee in that country
under Section 6.3.1 or Section 6.3.2 will be reduced to the [...***...] for so long as such compulsory license continues in effect. 

6.3.6 Change in Sales Practices. The Parties acknowledge that during the Term, Merck’s sales practices for the
marketing and distribution of Product may change to the extent to which the calculation of the payment for Royalties on Net Sales may become impractical or even impossible. In such event the Parties agree to meet and discuss in good faith new ways
of compensating Zymeworks to the extent currently contemplated under Section 6.3. 
 6.4 Payment for
Additional Work by Zymeworks. If, after the IND Milestone Event is first achieved for the first Program Antibody, Merck requests that Zymeworks undertakes additional work (a) as set forth in Section 3.10 or
(b) in order to obtain scientifically and commercially viable Product, and, in the case of (b) only, subject to Zymeworks having sufficient resources and personnel to address Merck’s request, then Merck shall compensate Zymeworks for
such work actually performed by Zymeworks scientists at the FTE rate of USD $[...***...]. The FTE rate shall be subject to annual increases not to exceed the consumer price index for such Calendar Year as reported by Statistics
Canada for such Calendar Year. Before initiating such work, Zymeworks shall provide Merck with a proposal (which includes a budget, total cost for the proposed work and detailed work plan) and obtain Merck’s written approval thereof.
After initiating the work, Zymeworks shall periodically submit to Merck invoices, along with appropriate documentation demonstrating work completed to Merck’s reasonable satisfaction. The documentation shall include, among other things, the
type and extent of work performed and the amount of time spent by Zymeworks personnel undertaking such work. Merck shall compensate Zymeworks within [...***...] days of receipt of such invoice. 

6.5 Milestone Payments and Royalties Associated with Zymeworks Scaffolds. For clarity, even if a Selected Scaffold contains a
[...***...] where the [...***...] is Controlled by Merck, the underlying Selected Scaffold still constitutes a Selected Scaffold under this Agreement (notwithstanding the fact that Merck Controls the [...***...]). In the event that
Zymeworks would have received a Milestone Payment or Royalty under this Agreement for Merck’s use of the Selected Scaffold even if the Zymeworks Scaffold had not contained the [...***...] Controlled by Merck, then Zymeworks shall be
entitled to such payment even if the Selected Scaffold contains such [...***...]. 

  
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 7. REPORTS AND PAYMENT TERMS FOR MILESTONES AND ROYALTIES 

7.1 Payment Terms for Milestone and Royalties. 

7.1.1 Within [...***...] days of the SCC determining (as reflected in its minutes) that Research Milestone Event 1 or Research
Milestone Event 2, respectively, has been achieved, Merck shall pay to Zymeworks the corresponding Milestone Payment. Merck shall provide Zymeworks with Written Notice of the achievement of each other Milestone Event (that is, Milestone Events after
Research Milestone Event 1 and Research Milestone Event 2) within [...***...] days thereafter and make the corresponding Milestone Payment within [...***...] days after achievement of the Milestone Event. 

7.1.2 During the Term, following the First Commercial Sale of a Product, Merck shall furnish to Zymeworks a quarterly written report for
the Calendar Quarter showing the Net Sales of all Products sold by Merck and its Related Parties during the reporting Calendar Quarter and the Royalties payable under this Agreement in sufficient detail to allow Zymeworks to verify the amount of
Royalties paid by Merck with respect to such Calendar Quarter, including, on a country-by-country basis, the number of each Product sold, the Net Sales of each Product,
and the Royalties (in US dollars) payable with respect to each Product and in total. Reports shall be due no later than [...***...] days following the end of each Calendar Quarter. Royalties shown to have accrued by each report provided under
this Section 7.1.2 shall be due and payable on the date such report is due. For clarity, each report provided by Merck shall constitute Merck Confidential Information. 

7.1.3 Except as otherwise provided herein, amounts shall be due and payable within [...***...] days of receipt of invoice
therefor. 
 7.2 Royalty Term. Royalties shall be payable on a
Product-by-Product and country-by-country basis until no longer required as set forth
under this Agreement (“Royalty Term”). Following the Royalty Term on a Product-by-Product and country-by-country basis, Merck’s licenses with respect to such Product in such country shall continue as set forth in Section 11.1.2. 

7.3 Payment Exchange Rate. All payments to be made by Merck to Zymeworks under this Agreement shall be made in United States
dollars. Payments to Zymeworks shall be made by electronic wire transfer of immediately available funds to the account of Zymeworks, as designated in writing to Merck. In the case of sales outside the United States, the rate of exchange to be used
in computing the monthly amount of currency equivalent in United States dollars due Zymeworks shall be made at the monthly rate of exchange utilized by Merck in its worldwide accounting system, prevailing on the third to the last Business Day of the
month preceding the month in which such sales are recorded by Merck. 
 7.4 Taxes. Each Party shall be responsible for its own
tax liabilities arising under this Agreement. Subject to this Section 7.4, Zymeworks shall be liable for all income and other taxes (including interest) (“Taxes”) imposed upon any payments made by Merck to
Zymeworks under this Agreement (“Agreement Payments”). If Applicable Laws, rules or regulations 

  
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require the withholding of Taxes, Merck shall make such withholding payments in a timely manner and shall subtract the amount thereof from the Agreement Payments. Merck shall promptly (as
available) submit to Zymeworks appropriate proof of payment of the withheld Taxes as well as the official receipts within a reasonable period of time. Merck shall provide Zymeworks reasonable assistance in order to allow Zymeworks to obtain
the benefit of any present or future treaty against double taxation or refund or reduction in Taxes which may apply to the Agreement Payments. 

7.5 Records and Audit Rights. 

7.5.1 Records. Merck will keep (and will cause its Related Parties to keep) complete, true and accurate books and records
in sufficient detail for Zymeworks to determine payments due to Zymeworks under this Agreement, including Royalties. Each Party will keep (and will cause its Related Parties to keep) complete, true and accurate books and records in sufficient detail
to allow the other Party to confirm those expenses incurred by the first Party and its Related Parties for which the other Party is obligated to pay under this Agreement. Each Party will keep such books and records for at least [...***...]
years following the end of the Calendar Year to which they pertain. 
 7.5.2 Audit Rights. Each Party shall have the
right for a period of [...***...] after the latter of the date when expenses were incurred or payments made under this Agreement (the “Expenses and Payments”) to appoint at its expense an independent certified public
accountant of nationally recognized standing (the “Accounting Firm”) reasonably acceptable to the other Party to inspect or audit the relevant records of the other Party and its Affiliates to verify that the amount of such payments
or expenses were correctly determined. The Audited Party and its Related Parties shall each make its records available for inspection or audit by the Accounting Firm during regular business hours at such place or places where such records are
customarily kept, upon reasonable notice from the Auditing Party, solely to verify the Expenses and Payments hereunder were correctly determined. Such inspection or audit right shall not be exercised by the Auditing Party more than once in any
Calendar Year and may cover a period ending not more than [...***...] prior to the date of such request. All records made available for inspection or audit shall be deemed to be Confidential Information of the Audited Party. The results of
each inspection or audit, if any, shall be binding on both Parties. In the event there was an error in the amount of Expenses and Payments reported by the Audited Party hereunder, (a) if the amount of Expenses and Payments was over reported,
the Party that received the overpayment shall promptly (but in any event no later than [...***...] days after the Audited Party’s receipt of the Accounting Firm’s report so concluding) make payment to the other Party of the over
reported amount, and (b) if the amount of Expenses and Payments was underreported, the Party that owes the additional payment (but in any event no later than [...***...] days after the Auditing Party’s receipt of the Accounting
Firm’s report so concluding) make payment to the other Party of the underreported amount. The Auditing Party shall bear the full cost of such audit unless such audit discloses an over reporting by the Audited Party of more than the greater of
(a) [...***...] percent ([...***...]%) of the aggregate amount of the Expenses and Payments reportable in any Calendar Year, and (b) USD $[...***...], in which case the Audited Party shall reimburse the Auditing Party for all
costs incurred by the Auditing Party in connection with such inspection or audit. 

  
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 (a) The Accounting Firm will disclose to the Auditing Party only whether the Expenses and
Payments are correct or incorrect and the specific details concerning any discrepancies. No other information will be provided to the Auditing Party without the prior consent of the Audited Party unless disclosure is required by Applicable Laws or
judicial order. The Audited Party is entitled to require the Accounting Firm to execute a reasonable confidentiality agreement prior to commencing any such audit. The Accounting Firm shall provide a copy of its report and findings to the Audited
Party. 
 (b) Upon the expiration of [...***...] following the end of any Calendar Year, the calculation of Royalties payable with
respect to such Calendar Year will be binding and conclusive upon both Parties, and the other Party will be released from any liability or accountability with respect to Expenses and Payments for such Calendar Year. 

7.6 Other. Notwithstanding any other provision of this Agreement, if at any time legal restrictions prevent the prompt
remittance of part or all of the payments required hereunder in any country, payment shall be made through such lawful means or methods as the receiving Party may reasonably determine. 

8. INTELLECTUAL PROPERTY RIGHTS 

8.1 Ownership of Inventions. 

8.1.1 Ownership of all Inventions, including Patent Rights and other intellectual property rights covering such Inventions, shall be as
set forth in this Article 8. Determination of inventorship of Inventions shall be made in accordance with US laws. Each Party will continue to own any Patent Rights and Know-How that it owned prior to
the Effective Date or created or obtained outside the scope of this Agreement, or which it licenses to the other Party under this Agreement. All Inventions arising from the Agreement shall be owned by the inventing Party or Parties.
Inventions that are made solely by Zymeworks (and the Patent Rights claiming them) shall be owned solely by Zymeworks, and Inventions that are made solely by Merck (and the Patent Rights claiming them) shall be owned solely by Merck. Joint
Inventions (and the Patent Rights claiming them) shall be owned jointly by the Parties. Subject to Article 2, Article 5 and Article 12, each Party has the right to grant licenses under such Joint Inventions (and the Patent
Rights claiming them) to any Third Party without the consent of, or accounting to, the other Party. 
 8.1.2 Merck has the
right (and nothing in this Agreement shall limit Merck’s right) to file patent applications disclosing and claiming Program Antibodies comprising Selected Scaffolds disclosed to Merck. 

8.2 Patent Prosecution and Maintenance. 

8.2.1 Definitions. As used herein, “prosecution” includes (a) all communication and other
interaction with any patent office or patent authority having jurisdiction over a patent application in connection with pre-grant proceedings and (b) interferences, reexaminations, reissues,
oppositions, and the like. 

  
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 8.2.2 Zymeworks Patent Rights. 

(a) Zymeworks, at Zymeworks’ expense, shall have the sole right to control the preparation, filing, prosecution and maintenance of
Zymeworks Patent Rights using patent counsel of Zymeworks’ choice. Zymeworks shall keep Merck reasonably advised with respect to the status of the filing, prosecution and maintenance of the Zymeworks Patent Rights and, upon Merck’s
request, shall provide advance copies of submissions to any patent office related to the filing, prosecution and maintenance of such patent filings. Zymeworks shall promptly give Written Notice to Merck of the grant, lapse, revocation, surrender,
invalidation or abandonment of any Zymeworks Patent Rights licensed to Merck under this Agreement. 
 (b) Zymeworks may elect not to file or
to cease prosecution and/or maintenance of Zymeworks Patent Rights on a country-by-country basis, and if so, Zymeworks shall give timely Written Notice to Merck. In such
event, Merck may by providing Written Notice to Zymeworks and at Merck’s option, direct Zymeworks to file or to continue prosecution or maintenance of such Zymeworks Patent Rights at Merck’s expense (unless Third Parties also have a
license in such Zymeworks Patent Rights, in which case Merck shall only pay a percentage of such costs based on the number of such licenses (for example, if [...***...] Third Parties also have a license, then Merck would only pay
[...***...] of the costs)). Zymeworks shall use reasonable efforts to comply with such direction and promptly provide Merck with copies of the prosecution bills. Merck shall have the right to offset all amounts paid to Zymeworks under this
Section 8.2.2(b) against (i) Royalties payable to Zymeworks under Section 6.3.1 and, in the event that there is insufficient offset under (i), then (ii) Royalties payable to Zymeworks under
Section 6.3.2, but only [...***...] percent ([...***...]%) of amounts paid to Zymeworks under this Section 8.2.2(b) may be offset against Royalties payable to Zymeworks under
Section 6.3.2. 
 8.2.3 Patent Rights Controlled by Merck and Joint Patent Rights. 

(a) Merck, at Merck’s expense, shall have the sole right to control the preparation, filing, prosecution and maintenance of Patent Rights
Controlled by Merck arising under this Agreement. In addition, Merck, at Merck’s expense, shall have the sole right (except as set forth in Section 8.2.3(b)) to control the preparation, filing, prosecution and maintenance of Joint Patent
Rights using patent counsel reasonably acceptable to Zymeworks. Merck shall keep Zymeworks reasonably advised with respect to the status of the filing, prosecution and maintenance of the Joint Patent Rights and shall provide advance copies of
any papers related to the filing, prosecution and maintenance of such patent filings on Joint Patent Rights to Zymeworks for review and comment. Merck shall take into consideration any comments from Zymeworks. Merck shall promptly give Written
Notice to Zymeworks of the grant, lapse, revocation, surrender, invalidation or abandonment of any Joint Patent Rights. 
 (b) Merck may
elect not to file or to cease prosecution and/or maintenance of Joint Patent Rights on a country-by-country basis, and if it does so, Merck shall give timely Written
Notice to Zymeworks. Zymeworks may by Written Notice to Merck assume prosecution or maintenance of such Joint Patent Rights at Zymeworks’ expense. 

  
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 8.2.4 Cooperation in Prosecution. Each Party shall provide the other
Party all reasonable assistance and cooperation in the patent prosecution efforts provided above in Section 8.2, including providing any necessary powers of attorney and assignments of employees of the Parties and their
Affiliates and sublicensees and Third Party contractors and executing any other required documents or instruments for such prosecution. 

(a) All communications between the Parties relating to the preparation, filing, prosecution or maintenance of the Zymeworks Patent Rights,
Patent Rights Controlled by Merck, and Joint Patent Rights, including copies of any draft or final documents or any communications received from or sent to patent offices or patenting authorities with respect to such Patent Rights, shall be
considered Confidential Information, subject to Article 9. For clarity, all such communications regarding the Zymeworks Patent Rights shall be the Confidential Information of Zymeworks; all such communications regarding Patent Rights
Controlled by Merck shall be the Confidential Information of Merck; and all such communications regarding Joint Patent Rights shall be the Confidential Information of both Parties. 

8.3 Enforcement and Defense. 

8.3.1 Notice. Each Party shall provide prompt Written Notice to the other Party of any infringement of Joint Patent
Rights, Patent Rights or Know-How Controlled by either Party, or Joint Know-How covering a Pre-Validation Research Program
Scaffold Modification, a Selected Scaffold or Program Antibody of which such Party becomes aware (each, an “Infringement”). Merck and Zymeworks shall thereafter consult and cooperate fully to determine a course of action, including
but not limited to the commencement of legal action by either or both Merck and Zymeworks, to terminate any such Infringement. Zymeworks shall also provide prompt Written Notice to Merck of any Infringement of Patent Rights covering the Zymeworks
Platform of which Zymeworks becomes aware. 
 8.3.2 Zymeworks Patent Rights and Zymeworks
Know-How. Zymeworks shall have the first right to enforce the Zymeworks Patent Right or Zymeworks Know-How with respect to any Infringement, and to defend
any declaratory judgment action with respect thereto, at its own expense and by counsel of its own choice and in the name of Zymeworks and shall notify Merck of such enforcement actions. If Zymeworks fails to bring or defend any such action against
an Infringement with respect to Program Antibodies or Products in the Territory within (a) [...***...] following the notice of alleged Infringement or (b) [...***...] before the time limit, if any, set forth in Applicable Laws for
the filing of such actions, whichever comes first, Merck shall have the right to bring and control any such action at its own expense and by counsel of its own choice, and Zymeworks shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice. In no event shall Merck admit the invalidity of, or after exercising its right to bring and control an action under this Section 8.3.2, fail to defend the validity of, any Zymeworks
Patent Rights with respect to Program Antibodies or Products without Zymeworks’ prior written consent, which shall not be unreasonably withheld. Prior to Zymeworks admitting the invalidity of, or after exercising its right to bring and control
an action under this Section 8.3.2 or failing to defend the validity of, any Zymeworks Patent Rights with respect to Program Antibodies or Products, it shall provide Written Notice to Merck and at the

  
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request of Merck shall discuss alternatives thereto including Merck taking over control of such action. 

8.3.3 Joint Patent Rights and Joint Know-How. Merck shall have the first right to
enforce Joint Patent Rights or Joint Know-How, and to control the defense of any declaratory judgment action relating thereto, with respect to such Infringement at its own expense and by counsel of its own
choice reasonably acceptable to Zymeworks (such acceptance which shall not be unreasonably withheld or delayed), and Zymeworks shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. If Merck
fails to bring or defend such action within (a) [...***...] following the notice of alleged Infringement or (b) [...***...] days before the time limit, if any, set forth in the Applicable Laws for the filing of such actions, whichever
comes first, Zymeworks shall have the right to bring and control any such action at its own expense and by counsel of its own choice, and Merck shall have the right, at its own expense, to be represented in any such action by counsel of its own
choice. In no event shall either Party admit the invalidity of, or after exercising its right to bring and control an action under this Section 8.3.3, fail to defend the validity of any Joint Patent Rights without the other
Party’s prior written consent. 
 8.3.4 Infringement Action. In the event a Party brings an Infringement action in
accordance with this Section 8.3 (the “Controlling Party”), such Controlling Party shall keep the other Party reasonably informed of the progress of any such action, and the other Party shall cooperate
fully with the Controlling Party, including by providing information and materials, at the Controlling Party’s request and expense and if required to bring such action, the furnishing of a power of attorney or being named as a Party. The other
Party shall cooperate fully, including, if required to bring such action, the furnishing of a power of attorney or being named as a Party. Neither Party shall have the right to settle any patent infringement litigation under this
Section 8.3 relating to Joint Patent Rights without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed. 

8.3.5 Recovery. Except as otherwise agreed by the Parties as part of a cost-sharing arrangement, any recovery obtained by
either or both Merck and Zymeworks in connection with or as a result of any action contemplated by this Section 8.3, whether by settlement or otherwise, shall be shared in order as follows: 

(a) the Party which initiated and prosecuted the action shall [...***...]; 

(b) the other Party shall then, [...***...]; and 

(c) the portion of any recovery remaining that is attributable to [...***...] in accordance with this Agreement. If the recovery is
attributable to [...***...]. The portion of any recovery remaining that is not attributable to [...***...]. 
 8.3.6
Certification. Each Party shall inform the other Party of any certification regarding any Zymeworks Patent Rights or Joint Patent Rights it has received pursuant to either 21 U.S.C. §§355(b)(2)(A)(iv) or
(j)(2)(A)(vii)(IV) or its successor provisions, or any similar provisions in a country in the Territory other than the United States, and shall provide the other 

  
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Party with a copy of such certification within [...***...] of receipt. Zymeworks’ and Merck’s rights with respect to the initiation and prosecution of any legal action as a result
of such certification or any recovery obtained as a result of such legal action shall be as defined in Section 8.3.2 through Section 8.3.5 hereof. Regardless of which Party has the right to
initiate and prosecute such action, both Parties shall, as soon as practicable after receiving notice of such certification, convene and consult with each other regarding the appropriate course of conduct for such action. The non-initiating Party shall have the right to be kept fully informed and participate in decisions regarding the appropriate course of conduct for such action. 

8.4 Infringement of Third Party Rights in the Territory. 

8.4.1 Notification. Each Party shall provide prompt Written Notice to the other Party of any claim, suit or proceeding
brought against a Party or its Related Parties by a Third Party that the manufacture, use, sale or importation of a Program Antibody or a Product by or on behalf of Merck or its Related Parties infringes or misappropriates such Third Party’s
Patent Rights or other intellectual property rights where such claim, suit or proceeding is based on, at least in part, the manufacture, use, sale or importation of a Zymeworks Scaffold. 

(a) Zymeworks shall provide prompt Written Notice to Merck of any claim, suit or proceeding brought against a Party or its Related Parties by
a Third Party that the use of the Zymeworks Platform infringes or misappropriates such Third Party’s Patent Rights or other intellectual property rights. 

8.4.2 Defense by Zymeworks. Zymeworks shall have the first right, but not the obligation, to defend and control the
defense of any claim, suit or proceeding described in Section 8.4.1 to the extent based on the manufacture, use, sale or importation of a Zymeworks Scaffold, the Zymeworks Platform or Zymeworks Intellectual Property,
at its own expense, using counsel of its own choice; provided, however, that prior to Zymeworks entering into any settlement which admits or concedes that any aspect of the Zymeworks Patent Rights, Zymeworks Know-How or Patent Rights Controlled by Zymeworks covering the Zymeworks Platform is invalid or unenforceable it shall provide Written Notice to Merck and at the request of Merck shall discuss alternatives thereto
including Merck taking over control of such action. Zymeworks shall keep Merck reasonably informed of all material developments in connection with any such claim, suit, or proceeding, shall provide Merck with copies of all pleadings filed therein,
and shall allow Merck reasonable opportunity to participate in the defense thereof. In connection with any such claim defended by Zymeworks, Zymeworks shall, if Merck so requests, use commercially reasonable efforts to procure for Merck a freedom to
operate license under Third Party intellectual property asserted as a basis for such claim, provided such license is necessary for Merck to undertake activities under this Agreement (e.g., developing Program Antibodies and developing and
commercializing Products); provided that Zymeworks shall have no obligation to pay any fees or costs to the Third Party in procuring such a license (although Merck may direct Zymeworks (and Zymeworks shall comply therewith) to procure such license
at Merck’s cost). If Zymeworks fails to defend any such claim, suit or proceeding within (a) [...***...] following the notice thereof or (b) [...***...] days before the time limit, if any, set forth in the Applicable Laws for the
filing of such actions, whichever comes first, Merck shall have the right to control the defense of any such action at its own expense and by counsel of its own 

  
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choice, and Zymeworks shall have the right, at its own expense, to participate in any such defense and be represented in any such action by counsel of its own choice. Merck shall not enter into
any settlement which admits or concedes that any aspect of the Zymeworks Patent Rights or Patent Rights Controlled by Zymeworks covering the Zymeworks Platform is invalid or unenforceable, or otherwise diminishes the rights or interest of Zymeworks,
without the prior written consent of Zymeworks, such consent not to be unreasonably withheld, conditioned or delayed. Merck shall keep Zymeworks reasonably informed of all material developments in connection with any such claim, suit, or proceeding.

 8.4.3 Defense by Merck. Merck shall have the exclusive right to defend and control the defense of any claim, suit or
proceeding described in Section 8.4.1 to the extent based on the manufacture, use, sale or importation of a Program Antibody or Product (and not based on the manufacture, use, sale or importation of a Zymeworks Scaffold,
the Zymeworks Platform or Zymeworks Intellectual Property), at its own expense, using counsel of its own choice; provided, however, that Merck shall not enter into any settlement which admits or concedes that any aspect of the Joint Patent Rights or
Zymeworks Patent Rights is invalid or unenforceable without the prior written consent of Zymeworks, such consent not to be unreasonably withheld or delayed. Merck shall keep Zymeworks reasonably informed of all material developments in connection
with any such claim, suit, or proceeding. 
 8.5 Cooperation; Drug Price Competition and Patent Term Restoration
Act. 
 8.5.1 The Parties will cooperate and take reasonable actions to maximize the protections of the Program Antibody or
the Products available under the safe harbor provisions of 35 U.S.C. §103(c) for U.S. patents/patent applications within the Zymeworks Patent Rights and Joint Patent Rights. 

8.5.2 The Parties shall use Commercially Reasonable Efforts to cooperate to avoid loss of any Patent Rights covering Program Antibodies
or Products which may otherwise be available to the Parties hereto under the provisions of the Drug Price Competition and Patent Term Restoration Act of 1984 or comparable laws outside the United States, including by executing any documents as may
be reasonably required. In particular, the Parties shall cooperate with each other in obtaining patent term restoration or supplemental protection certificates or their equivalents in any country and region where applicable to the Zymeworks Patent
Rights and Joint Patent Rights. By way of example, Merck may request that Zymeworks seek a regulatory extension on a Zymeworks Patent Rights covering Program Antibody and Zymeworks shall reasonably cooperate with Merck to effectuate such extension.

 8.5.3 Zymeworks shall provide reasonable assistance to Merck, at Merck’s reasonable request and expense, with respect to BLAs
filed by Merck with Regulatory Authorities by executing any required documents and providing any relevant patent and other information to Merck, in each case that are within Zymeworks’ possession and control so that Merck, as BLA applicant, may
provide the FDA or other Regulatory Authority with required information regarding the Zymeworks Scaffolds included in the Products. 

  
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 9. CONFIDENTIALITY 

9.1 Duty of Confidence . During the Term and for [...***...] thereafter, all Confidential Information disclosed by one
Party to the other Party hereunder shall be maintained in confidence by the receiving Party and shall not be disclosed to any Third Party or used for any purpose, except as set forth herein, without the prior written consent of the disclosing Party.
A recipient Party may only use Confidential Information of the other Party for purposes of exercising its rights and fulfilling its obligations under this Agreement and may disclose Confidential Information of the other Party and its Affiliates to
employees, agents, contractors, consultants and advisers of the recipient Party and its Affiliates, licensees and sublicensees to the extent reasonably necessary for such purposes; provided that such persons and entities are bound by confidentiality
and non-use of the Confidential Information consistent with the confidentiality provisions of this Agreement as they apply to the recipient Party. 

9.2 Exceptions . The obligations under Article 9 shall not apply to any information to the extent the recipient Party can
demonstrate by competent evidence that such information: 
 9.2.1 is (at the time of disclosure) or becomes (after the time of
disclosure) known to the public or part of the public domain through no breach of this Agreement by the recipient Party or its Affiliates; 

9.2.2 was known to, or was otherwise in the possession of, the recipient Party or its Affiliates prior to the time of disclosure by the
disclosing Party; 
 9.2.3 is disclosed to the recipient Party or an Affiliate on a
non-confidential basis by a Third Party that is entitled to disclose it without breaching any confidentiality obligation to the disclosing Party or any of its Affiliates; or 

9.2.4 is independently developed by or on behalf of the recipient Party or its Affiliates, as evidenced by its written records, without
use of or reference to the Confidential Information disclosed by the disclosing Party or its Affiliates under this Agreement. 
 Any
combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individual features are published or available to the general public or in the rightful possession of the receiving Party unless the
combination itself and principle of operation are published or available to the general public or in the rightful possession of the receiving Party. 

9.3 Authorized Disclosures . Subject to Section 9.4, the recipient Party may disclose Confidential
Information belonging to the other Party to the extent permitted as follows: 
 9.3.1 such disclosure is deemed necessary by
counsel to the recipient Party to be disclosed to such Party’s attorneys, independent accountants or financial advisors for the sole purpose of enabling such attorneys, independent accountants or financial advisors to provide advice to the
receiving Party, on the condition that such attorneys, independent accountants and 

  
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financial advisors are bound by confidentiality and non-use obligations consistent with the confidentiality provisions of this Agreement as they
apply to the recipient Party; 
 9.3.2 disclosure by either Party or its Affiliates to governmental or other regulatory agencies in
order to obtain and maintain patents consistent with Article 8 or disclosure by Merck or a Merck Affiliate or sublicensee to gain or maintain approval to conduct Clinical Trials for a Product, to obtain and maintain Marketing Authorization or
to otherwise develop, manufacture and market Products, but such disclosure may be only to the extent reasonably necessary to obtain and maintain patents or authorizations; 

9.3.3 disclosure required in connection with any judicial or administrative process relating to or arising from this Agreement
(including any enforcement hereof) or to comply with applicable court orders or governmental regulations; 
 9.3.4 disclosure to
potential or actual investors in connection with due diligence or similar investigations by such Third Parties (provided that Zymeworks remains a privately held company and has not been otherwise acquired by a Third Party); provided, in each case,
that any such potential or actual investor agrees to be bound by confidentiality and non-use obligations consistent with those contained in this Agreement as they apply to the recipient Party. Notwithstanding
the preceding, Zymeworks may not disclose the Initial Targets, [...***...], Merck Target Pairs, or Merck Sequence Pairs, Research Program data (except pursuant to Section 9.4) or other data generated by Merck and
disclosed to Zymeworks hereunder to potential or actual investors without Merck’s prior written permission; or 
 9.3.5
disclosure to potential acquirors in connection with due diligence or similar investigations by such Third Parties; provided, in each case, Zymeworks may not disclose the identity of Merck or its Affiliates linked to any of the following, the
Initial Targets, [...***...], Merck Target Pairs, or Merck Sequence Pairs, Research Program data (except pursuant to Section 9.4) or other data generated by Merck and disclosed to Zymeworks hereunder to potential
acquirors without Merck’s prior written permission, except Zymeworks may disclose the Initial Targets, [...***...], Merck Target Pairs and Merck Sequence Pairs, but not the identity of Merck or its Affiliates as having rights to any of
the foregoing, to a potential acquiror (a) if the potential acquiror agrees to be bound by confidentiality and non-use obligations consistent with those contained in this Agreement as they apply to
Zymeworks under this Agreement and (b) as part of a final diligence process in connection with the negotiation of a near-final version of a definitive agreement for the acquisition by the acquiror of Zymeworks. Subject to
Section 15.1.2, an acquirer of Zymeworks to which this Agreement is assigned shall be bound by all obligations of Zymeworks under this Agreement. 

9.3.6 If a recipient Party is required by judicial or administrative process to disclose Confidential Information that is subject to the
non-disclosure provisions of this Article 9, such Party shall promptly inform the other Party of the disclosure that is being sought in order to provide the other Party an opportunity
to challenge or limit the disclosure obligations. Confidential Information that is disclosed as permitted by this Section 9.3 shall remain otherwise subject to the confidentiality and
non-use provisions of this Article 9, and the Party disclosing Confidential Information as permitted by this Section 9.3 shall take all steps reasonably

  
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necessary, including without limitation obtaining an order of confidentiality and otherwise cooperating with the other Party, to ensure the continued confidential treatment of such Confidential
Information. 
 9.4 Nondisclosure by Zymeworks. Except as expressly provided otherwise in this Article 9, Zymeworks
shall not disclose the results of the Research Program during the Term (e.g., Merck’s selection of [...***...], Merck Target Pairs or Sequences and resultant data from the Research Program) without Merck’s prior written
consent; provided that Zymeworks shall have the right, subject to Section 9.3.4, to disclose the resultant data from the Research Program received by Zymeworks pursuant to Section 3.9.2 in a
redacted form that has been approved by Merck (such approval not to be unreasonably refused, conditioned or delayed) for business development and funding purposes. Zymeworks shall not have the right to disclose Merck’s selection of
[...***...]. However, if a Third Party requests rights with respect to a Merck Target Pairs or Merck Sequence Pairs, then Zymeworks may disclose to such Third Party (without identifying Merck) that that Target is unavailable for developing
antibodies incorporating Zymeworks Scaffolds and products incorporating such antibodies. 
 9.5 Joint Defense/Common Interest
Agreement . If appropriate and necessary pursuant to Section 3.2.1 or Section 3.6, the Parties will promptly enter into a joint defense/common interest agreement on standard and customary terms
and conditions as mutually agreed and reasonably necessary before Zymeworks discloses opinions of counsel or other information regarding Zymeworks Patent Rights and/or Third Party Patent Rights where (a) such opinions or information are subject
to the attorney-client privilege and (b) there is a legitimate threat of litigation associated with the subject matter of the opinions or information. 

10. PUBLICATIONS AND PUBLICITY 

10.1 Publications. 

10.1.1 Except as provided in Section 9.4, Zymeworks may not publish or publicly disclose the results of the
Research Program without Merck’s prior written consent, and any publication of the results of the Antibody Development Work Plan shall be made jointly by the Parties.  

10.1.2 Zymeworks acknowledges Merck’s interest in publishing the results of its activities under the Agreement in order to obtain
recognition within the scientific community and to advance the state of scientific knowledge, and Merck shall have the right to publish such results with respect to the Products or Program Antibodies (including data on Selected Scaffolds contained
within Program Antibodies) in accordance with this Section 10.1.2. For clarity, Merck shall not have the right to publish the results of its activities under the Work Plan with respect to (a) Zymeworks Scaffolds that
are not Selected Scaffolds or (b) antibodies incorporating Zymeworks Scaffolds that do not constitute Selected Scaffolds, and neither Party shall have the right to publish the results of the activities under the Antibody Development Work Plan
other than as part of a joint publication with the other Party. Except for disclosures permitted pursuant to Article 9, Merck, its employees or consultants wishing to make a publication of the results of its activities under the Agreement
that contains Zymeworks Confidential Information, shall deliver to Zymeworks a copy of the proposed written publication 

  
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or an outline of an oral disclosure at least [...***...] days prior to submission for publication or presentation. For clarity and notwithstanding anything in this Agreement to the
contrary, Zymeworks may not limit Merck’s rights to publish or disclose information with respect to Program Antibodies and Products (excluding sequence information specific to the Selected Scaffold) and Zymeworks acknowledges that such
information does not constitute Zymeworks Confidential Information. 
 10.1.3 Subject to Section 10.1.2,
Zymeworks shall have the right (a) to request the removal of Zymeworks’ Confidential Information from any such publication or presentation, or (b) to request a reasonable delay in publication or presentation in order to protect
patentable information. If Zymeworks requests a delay, Merck shall delay submission or presentation for a period of [...***...] days to enable patent applications protecting Zymeworks’ rights in such information to be filed in accordance
with Article 8. Upon expiration of such [...***...] days, Merck shall be free to proceed with the publication or presentation. 

10.2 Publicity. The Parties have mutually approved a press release attached hereto as Attachment 10.2(a) with
respect to the Original Agreement, and either Party may make subsequent public disclosure of the contents of such press release. The Parties have mutually approved a press release attached hereto as Attachment 10.2(b) with respect to the execution
of this Agreement, and either Party may make subsequent public disclosure of the contents of such press release. Subject to the foregoing, each Party agrees not to issue any press release or other public statement, whether oral or written,
disclosing execution of this Agreement, the terms hereof or any the activities under the Research Program conducted hereunder without the prior written consent of the other Party, provided however, that neither Party will be prevented from complying
with any duty of disclosure it may have pursuant to Applicable Laws or pursuant to the rules of any recognized stock exchange or quotation system, subject to that Party notifying the other Party of such duty and limiting such disclosure as
reasonably requested by the other Party (and giving the other Party sufficient time to review and comment on any proposed disclosure). In the event that Zymeworks desires to make a public announcement regarding the achievement of any Milestone
Payment, Zymeworks will provide Merck with no less than [...***...] Business Days in which to review and approve such announcement, such approval not to be unreasonably withheld, conditioned or delayed. All Milestone Events prior to the second
Clinical Milestone Event may only be referenced in public announcements in general terms and without specificity as to the particular milestone. 

11. TERM AND TERMINATION 

11.1 Term. 

11.1.1 The term of this Agreement (the “Term”) will commence on the Effective Date and (subject to earlier termination
in accordance with Section 11.2, Section 11.3, or Section 11.4) will terminate (a) if Program Antibody Success is not achieved prior to expiration of the Research
Program Term, or (b) if Program Antibody Success is achieved prior to expiration of the Research Program Term, then 120 days after expiration of the Research Program Term (such period constituting the “120 Day Period”), unless,
during the Research Program Term or within the 120 Day Period, Merck provides Written Notice to Zymeworks that 

  
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Merck plans to progress or develop (or is progressing or developing) one or more Program Antibodies and/or Products. 

11.1.2 Notwithstanding Section 11.1.1, in the event that Merck plans to progress or develop (or is progressing
or developing) one or more Program Antibodies and/or Products within the 120 Day Period and has provided Zymeworks with the Written Notice in accordance with Section 11.1.1 then subject to earlier termination in accordance
with Section 11.2, Section 11.3, or Section 11.4, the Term shall terminate on the last to occur of: 

(a) the expiry of the last to expire Valid Patent Claim; or 

(b) the expiration of the last-to-expire Royalty due under
Section 6.3 and Section 6.4. 
 Upon termination of this Agreement under
Section 11.1.2, the licenses under Article 2 shall become non-exclusive, fully paid-up, perpetual licenses. For clarity, Merck’s
licenses and rights shall continue on a country-by-country and Product-by-Product basis
in the Territory until such time that this Agreement fully terminates even if, in any such country with respect to the Product, both the last to expire Valid Patent Claim in such country covering such Product has expired and the last-to-expire Royalty in such country with respect to such Product has expired. 

11.2 Termination by Merck. 

11.2.1 During the Research Program Term. 

(a) Merck has the right, during the Research Program Term, to terminate the Agreement upon [...***...] prior Written Notice to Zymeworks
if, in Merck’s sole opinion, success under the Work Plan is not scientifically feasible or commercially viable. 
 (b) Merck has the
right during the Research Program Term to terminate the Agreement (if such termination does not fall under Section 11.2.1(a)) in its sole discretion upon [...***...] prior Written Notice to Zymeworks, subject to Merck paying Zymeworks,
within [...***...] of such termination, the amount of USD $[...***...].  
 (c) In the event Merck decides
internally to terminate the Research Program prior to completion of the Research Program Term (the “Merck RP Termination Decision”), (i) Merck shall promptly cease any and all activities under the Research Program, and (ii) as
of the Merck RP Termination Decision, (y) Merck shall have no right or obligation to pursue or achieve any further Milestone Event (except as may occur as a result of completing an on-going experiment)
and (z) notwithstanding anything in this Agreement to the contrary, Merck shall have no obligation to pay any further Milestone Payments for Milestone Events not achieved prior to the Merck RP Termination Decision, even if the Milestone Event
is achieved thereafter as a result of an ongoing experiment. 
 11.2.2 After the Research Program Term. Notwithstanding
anything contained in this Agreement to the contrary, Merck shall have the right, after the Research 

  
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Program Term, to terminate this Agreement at any time in its sole discretion upon [...***...] advance Written Notice to Zymeworks. 

11.3 Termination for Cause. If either Merck or Zymeworks is in material breach of any obligation hereunder, the non-breaching Party may give Written Notice to the breaching Party specifying the claimed particulars of such breach, and in such event, if the breach is not cured within [...***...] after receipt of such
Written Notice, the non-breaching Party shall have the rights thereafter to terminate this Agreement immediately by giving Written Notice to the breaching Party to such effect; provided, however that if such
breach is capable of being cured, but cannot be cured within such [...***...] period and the breaching Party initiates actions to cure such breach within such period and thereafter diligently pursues such actions, the breaching Party shall
have such additional period as is reasonable in the circumstances to cure such breach not to exceed an additional [...***...] period, provided, however, that in the event of a good faith dispute with respect to the existence of a
material breach, the cure period shall be tolled until such time as the dispute is resolved pursuant to Section 15.6. Notwithstanding the foregoing, Zymeworks shall only have the right to terminate this Agreement pursuant
to this Section 11.3 only following a final award by the arbitration panel pursuant to Section 15.6 that Merck has materially breached this Agreement and such breach cannot be adequately remedied
through monetary damages, equitable relief or specific performance. 
 11.4 Termination for Material Breach by Zymeworks
after Insolvency. In the event that Zymeworks files for protection under the bankruptcy laws, makes an assignment for the benefit of creditors, appoints or suffers appointment of a receiver or trustee over its property, files a petition
under any bankruptcy or insolvency act or has any such petition filed against it which is not discharged within [...***...] days of the filing thereof, and thereafter is in material breach of any obligation hereunder, Merck may give Written
Notice to Zymeworks specifying the claimed particulars of such breach, and in such event, if the breach is not cured within [...***...] days after receipt of such Written Notice, Merck shall have the rights thereafter to terminate this
Agreement immediately by giving Written Notice to Zymeworks to such effect; provided, however that if such breach is capable of being cured, but cannot be cured within such [...***...] day period and Zymeworks initiates actions to cure such
breach within such period and thereafter diligently pursues such actions, Zymeworks shall have such additional period as is reasonable in the circumstances to cure such breach not to exceed an additional [...***...] day period. 

12. EFFECTS OF TERMINATION 

12.1 Termination of Agreement Pursuant to Section 11.1. If this Agreement terminates under
Section 11.1 (including as set forth in Section 3.1), then no later than [...***...] days after the effective date of such termination, Merck shall pay all amounts then due and owing as of
the termination date and each Party shall return or cause to be returned to the other Party, or destroy, all Confidential Information received from the other Party and all copies thereof; provided, however, that each Party may retain
any Confidential Information reasonably necessary for such Party’s continued practice under any license(s) which do not terminate pursuant to this Section 12.1, and may otherwise keep one (1) copy of Confidential
Information received from the other Party in its confidential files for record purposes. 

  
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 12.1.1 In the event of termination of this Agreement under
Section 11.1 (which includes termination as set forth in Section 3.1), except as expressly set forth otherwise in this Agreement (including under the surviving provisions set forth in
Section 12.4), the rights and obligations of the Parties hereunder shall terminate as of the date of such termination. In addition, each Party shall have the non-exclusive right, on a
fully paid-up and royalty-free, perpetual, worldwide basis, (a) to use Joint Inventions as it deems appropriate for any and all purposes in and outside the Field, and (b) to grant licenses under its
interest in any Joint Inventions and to assign its interest in Joint Inventions as it deems appropriate without the consent of and without accounting to the other Party. 

12.2 Termination by Merck under Section 11.2 or Termination by Zymeworks under Section 11.3.
In the event that Merck terminates this Agreement under Section 11.2 or Zymeworks terminates this Agreement under Section 11.3, then, no later than [...***...] days after the effective date of such termination, each
Party shall return (or cause to be returned) to the originating Party, or destroy, all Confidential Information and Know-How in tangible form received from the originating Party and all copies thereof;
provided, however, that each Party may retain any Confidential Information reasonably necessary for such Party’s continued practice under any license(s) which do not terminate in the event of such termination and may keep one copy
of Confidential Information received from the other Party in its confidential files for record purposes. In the event of termination by Merck under Section 11.2 or by Zymeworks under Section 11.3, the rights and obligations
of the Parties hereunder shall terminate as of the date of such termination, subject to Section 12.4, provided, however, Merck shall pay all amounts then due and owing as of the termination date. Notwithstanding anything in
this Agreement to the contrary, in the event of termination by Zymeworks under Section 11.3, the licenses to Zymeworks under Section 2.2 shall not terminate. 

12.3 Termination by Merck under Section 11.3 or Section 11.4. 

12.3.1 Due to Willfulness or Bad Faith under Section 11.3 or Insolvency by Zymeworks and then
Material Breach under Section 11.4. Upon termination of this Agreement by Merck pursuant to (a) Section 11.3 if it is determined pursuant to
Section 15.6 that Zymeworks’ breach giving rise to such termination (i) was willful in nature or (ii) otherwise resulted from the bad faith activities of Zymeworks or
(b) Section 11.4 in the event of insolvency as set forth under Section 11.4 and subsequent material breach of this Agreement by Zymeworks, then any licenses granted by Merck to Zymeworks under
this Agreement will terminate (notwithstanding any other provision to the contrary in this Agreement) and revert to Merck and all licenses and other rights granted by Zymeworks to Merck under this Agreement (to the extent desired to continue by
Merck) will remain in effect and become perpetual, subject to the obligation of Merck to pay Royalties in accordance with Article 6, except that (a) all Royalties shall be reduced by [...***...] percent ([...***...]%) from
those set forth in Article 6 and (b) Merck shall be relieved of making any further Milestone Payments; otherwise in such a termination (except as expressly set forth otherwise under this Agreement (e.g., in
Section 12.4)), all rights and licenses granted by either Party to the other Party shall terminate and be of no further effect. For clarity, if Merck does not wish to make any such payments, the licenses subject to such
payments shall terminate. 

  
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 12.3.2 Termination otherwise under Section 11.3
or Section 11.4. Upon termination of this Agreement by Merck pursuant to Section 11.3 (except as set forth under Section 12.3.1) or
Section 11.4 (except as set forth under Section 12.3.1), any licenses granted by Merck to Zymeworks under this Agreement will terminate (notwithstanding any other provision to the contrary in this
Agreement) and revert to Merck and (except as expressly set forth otherwise under this Agreement (e.g., in Section 12.4)) all licenses and other rights granted by Zymeworks to Merck under this Agreement (the
“Surviving License”) will remain in effect and become perpetual, subject to the obligation of Merck to pay Milestone Payments and Royalties in accordance with Article 6. Notwithstanding the foregoing, the Surviving License
shall be subject to termination in the event of Merck’s material breach of such ongoing obligations in accordance with Section 11.3. 

12.3.3 Return of Confidential Information. No later than [...***...] after the effective date of termination of this
Agreement by Merck pursuant to Section 11.3 or Section 11.4, each Party shall return (or cause to be returned) to the originating Party or destroy all Confidential Information in tangible form
received from the originating Party and all copies thereof; provided, however, that Merck may retain any Confidential Information of Zymeworks reasonably necessary for Merck’s continued practice under any licenses and rights which
do not terminate, and in addition each Party may keep one copy of Confidential Information received from the other Party in its confidential files for record purposes. 

12.4 Survival. Termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such termination,
nor affect in any way the survival of any other right, duty or obligation of the Parties which is expressly stated elsewhere in this Agreement to survive such termination. Without limiting the foregoing and except as expressly set forth otherwise in
this Agreement, Article 1, Article 6 and Article 7 (but only with respect to payments accrued prior to the effective date of termination or after a termination described in Section 12.3.2), Article
10, Article 12, Article 14 and Article 15, and Section 2.2, Section 2.2.1, Section 8.1.1, Section 8.1.2 and
Section 11.1.2 shall survive any expiration or termination of this Agreement. The provisions of Section 9.1, Section 9.2, Section 9.3 and
Section 9.4 shall survive the termination of this Agreement for a period of [...***...] years. Except as otherwise expressly provided herein, all other rights and obligations of the Parties under this Agreement shall
terminate upon termination of this Agreement. 
 12.5 Damages; Relief. Termination of this Agreement shall not preclude
either Party from claiming any other damages, compensation or relief that it may be entitled to upon such termination. 
 12.6
Bankruptcy Code. If this Agreement is rejected by a Party as a debtor under Section 365 of the United States Bankruptcy Code or similar provision in the bankruptcy laws of another jurisdiction (the “Code”), then,
notwithstanding anything else in this Agreement to the contrary, all licenses and rights to licenses granted under or pursuant to this Agreement by the Party in bankruptcy to the other Party are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of the United States Bankruptcy Code (or similar provision in the bankruptcy laws of the jurisdiction), licenses of rights to “intellectual property” as defined under Section 101(35A) of the United States Bankruptcy
Code (or similar provision in the bankruptcy laws of 

  
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the jurisdiction). The Parties agree that a Party that is a licensee of rights under this Agreement shall retain and may fully exercise all of its rights and elections under the Code, and that
upon commencement of a bankruptcy proceeding by or against a Party under the Code, the other Party shall be entitled to a complete duplicate of, or complete access to (as such other Party deems appropriate), any such intellectual property and all
embodiments of such intellectual property, if not already in such other Party’s possession, shall be promptly delivered to such other Party (a) upon any such commencement of a bankruptcy proceeding upon written request therefor by such
other Party, unless the bankrupt Party elects to continue to perform all of its obligations under this Agreement or (b) if not delivered under (a) above, upon the rejection of this Agreement by or on behalf of the bankrupt Party upon
written request therefor by the other Party. The foregoing provisions of Section 12.6 are without prejudice to any rights a Party may have arising under the Code. 

13. REPRESENTATIONS AND WARRANTIES 

13.1 Representations and Warranties by Each Party. Each Party represents and warrants to the other as of the Effective
Date that: 
 13.1.1 it is a corporation duly organized, validly existing, and in good standing under the laws of its
jurisdiction of formation; 
 13.1.2 it has full corporate power and authority to execute, deliver, and perform this Agreement, and
has taken all corporate action required by law and its organizational documents to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement; 

13.1.3 this Agreement constitutes a valid and binding agreement enforceable against it in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, bank moratorium or similar laws affecting creditors’ rights generally and laws restricting the availability of equitable remedies and may be subject to general principles of equity whether or
not such enforceability is considered in a proceeding at law or in equity); and 
 13.1.4 the execution and delivery of this Agreement
and all other instruments and documents required to be executed pursuant to this Agreement, and the consummation of the transactions contemplated hereby do not and shall not (i) conflict with or result in a breach of any provision of its
organizational documents, (ii) result in a breach of any agreement to which it is a party; or (iii) violate any law. 
 13.2
Representations, Warranties and Covenants by Zymeworks. Zymeworks represents, warrants as of the Effective Date and covenants to Merck as follows: 

13.2.1 Attachment 1.68 sets forth a complete and accurate list of all Zymeworks Patent Rights in existence as of the Effective
Date; 
 13.2.2 Zymeworks is the sole and exclusive owner of all of the Zymeworks Patent Rights listed on Attachment 1.68 as of
the Effective Date and is listed (or is in the process 

  
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of becoming listed) in the records of the appropriate United States and/or foreign governmental agencies as the sole and exclusive owner of record or exclusive licensee for each registration,
grant and application included in such Zymeworks Patent Rights; 
 13.2.3 Zymeworks has the right to grant to Merck the licenses under
Section 2.1 that it purports to grant hereunder including under the Zymeworks Know-How; 

13.2.4 As of the Effective Date, (a) Zymeworks does not have any other Patent Rights or
Know-How within the scope of the Zymeworks Intellectual Property not otherwise licensed to Merck under this Agreement to which Merck needs a license in order to practice the rights granted to Merck
pursuant to Section 2.1 and (b) Zymeworks does not Control any Patent Rights or Know-How other than the Zymeworks Intellectual Property necessary for Merck to make, have made,
use, sell, offer to sell, have sold, export and import the Program Antibodies and Products in the Field in the Territory in accordance with this Agreement. 

13.2.5 Zymeworks has the right to use and disclose and to enable Merck to use and disclose (in each case under appropriate conditions of
confidentiality) the Zymeworks Intellectual Property in accordance with this Agreement; 
 13.2.6 Except to the extent not yet due, as
of the Effective Date, all necessary and material application, registration, maintenance and renewal fees in respect of the Zymeworks Patent Rights in existence as of the Effective Date have been paid and, except to the extent not yet due, as of the
Effective Date, all necessary documents and certificates have been filed with the relevant agencies for the purpose of maintaining such Zymeworks Patent Rights; 

13.2.7 As of the Effective Date, there are no claims, judgments or settlements against Zymeworks relating to the Zymeworks Patent
Rights; 
 13.2.8 To the knowledge of Zymeworks as of the Effective Date, there is no infringement of any Zymeworks Patent Rights by
any Third Party or any misappropriation by a Third Party of any Zymeworks Know-How which is a trade secret or proprietary to Zymeworks or any of its Affiliates; 

13.2.9 As of the Effective Date, Zymeworks has not licensed from any Third Party rights that constitute Zymeworks Intellectual Property;

 13.2.10 As of the Effective Date, Zymeworks has not entered into a government funding relationship that would result in rights to
the Zymeworks Scaffolds, Program Antibodies or Products residing in the U.S. Government, National Institutes of Health or other agency, and the licenses granted hereunder are not subject to overriding obligations to the U.S. Government as set forth
in Public Law 96-517 (35 U.S.C. §§200-204), as amended, or any similar obligations under the laws of any other country; 

13.2.11 Zymeworks has the sole and exclusive right (a) to use the Zymeworks Platform and (b) to use the Zymeworks Platform in
generating and/or providing Zymeworks Scaffolds under this Agreement; 

  
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 13.2.12 During the Term, Zymeworks will not grant any right, license or interest, that
conflicts with the rights and licenses granted to Merck, under the terms of this Agreement; 
 13.2.13 During the Term, Zymeworks will
not allow any Third Party rights to which Merck has a license pursuant to Section 2.1 to lapse or terminate. Zymeworks further covenants that it will use Commercially Reasonable Efforts (a) not to undertake any action
and not to fail to undertake any action that would cause Zymeworks to be in material breach of any obligation to any Third Party with respect to such Third Party rights and (b) to take all steps necessary to maintain such rights in full force
and effect; and 
 13.2.14 To Zymeworks’ knowledge as of the Effective Date except as otherwise expressly disclosed by
Zymeworks’ patent counsel to Merck’s patent counsel, the exercise of the license granted to Merck under the Zymeworks Patent Rights and Zymeworks Know-How as contemplated hereunder, including without
limitation the development, manufacture, use, sale and import of Program Antibodies and Products, does not infringe or misappropriate any intellectual property rights owned or possessed by any Third Party. 

13.3 Limitation. NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, THAT ANY OF THE RESEARCH,
DEVELOPMENT AND/OR COMMERCIALIZATION EFFORTS WITH REGARD TO A PROGRAM ANTIBODY OR PRODUCT WILL BE SUCCESSFUL. 
 13.4 No Other
Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, EITHER EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 

14. INDEMNIFICATION AND LIABILITY 

14.1 Indemnification by Zymeworks. Zymeworks shall indemnify, defend and hold Merck and its Affiliates, and their respective
officers, directors, employees, contractors, agents and assigns (each, a “Merck Indemnified Party”), harmless from and against losses, damages and liability, including reasonable legal expense and attorneys’ fees,
(collectively, “Losses”) to which any Merck Indemnified Party may become subject as a result of any Third Party demands, claims or actions (“Claims”) against any Merck Indemnified Party (including without limitation
product liability claims) arising or resulting from: (a) the negligence or willful misconduct of Zymeworks or its Related Parties pursuant to this Agreement, (b) Zymeworks’ (or Zymeworks’ Affiliate’s or contractor’s)
use or employment of the Zymeworks Platform, or (c) the material breach of any term in or the covenants, warranties, representations made by Zymeworks to Merck under this Agreement. Zymeworks is only obliged to so indemnify and hold the Merck
Indemnified Parties harmless to the extent that such Claims do not arise from the material breach of this Agreement by or the negligence or willful misconduct of Merck or its Related Parties. 

  
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 14.2 Indemnification by Merck. Merck shall indemnify, defend and hold Zymeworks
and its Affiliates, and their respective officers, directors, employees, contractors, agents and assigns (each, a “Zymeworks Indemnified Party”), harmless from and against Losses incurred by any Zymeworks Indemnified Party as a
result of any Third Party Claims against any Zymeworks Indemnified Party (including without limitation product liability claims) arising or resulting from: (a) the research, development or commercialization of Program Antibodies and/or Products
by Merck or its Affiliates, licensees or sublicensees (excluding Zymeworks and its Related Parties) under this Agreement; (b) the negligence or willful misconduct of Merck or its Affiliates pursuant to this Agreement; or (c) the material
breach of any term in or the covenants, warranties, representations made by Merck to Zymeworks under this Agreement. Merck is only obliged to so indemnify and hold the Zymeworks Indemnified Parties harmless to the extent that such Claims do not
arise from the material breach of this Agreement or the negligence or willful misconduct of Zymeworks or its Related Parties. 

14.3 Indemnification Procedure. 

14.3.1 Any Merck Indemnified Party or Zymeworks Indemnified Party seeking indemnification hereunder (“Indemnified
Party”) shall notify the Party against whom indemnification is sought (“Indemnifying Party”) in writing reasonably promptly after the assertion against the Indemnified Party of any Claim in respect of which the Indemnified
Party intends to base a claim for indemnification hereunder, but the failure or delay so to notify the Indemnifying Party shall not relieve the Indemnifying Party of any obligation or liability that it may have to the Indemnified Party except to the
extent that the Indemnifying Party demonstrates that its ability to defend or resolve such Claim is adversely affected thereby. 
 14.3.2
Subject to the provisions of Section 14.3.4 and Section 14.3.5 below, the Indemnifying Party shall have the right, upon providing Written Notice to the Indemnified Party of its intent to do so
within [...***...] days after receipt of the Written Notice from the Indemnified Party of any Claim, to assume the defense and handling of such Claim, at the Indemnifying Party’s sole expense. 

14.3.3 The Indemnifying Party shall select counsel reasonably acceptable to the Indemnified Party in connection with conducting the
defense and handling of such Claim, and the Indemnifying Party shall defend or handle the same in consultation with the Indemnified Party, and shall keep the Indemnified Party timely apprised of the status of such Claim. The Indemnifying Party shall
not, without the prior written consent of the Indemnified Party, agree to a settlement of any Claim which could lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not
entitled to indemnification hereunder, or would involve any admission of wrongdoing on the part of the Indemnified Party. The Indemnified Party shall cooperate with the Indemnifying Party, at the request and expense of the Indemnifying Party, and
shall be entitled to participate in the defense and handling of such Claim with its own counsel and at its own expense. Notwithstanding the foregoing, in the event the Indemnifying Party fails to conduct the defense and handling of any Claim in good
faith after having assumed such, then the provisions of Section 14.3.5 below shall govern. 

  
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 14.3.4 If the Indemnifying Party does not give Written Notice to the Indemnified
Party, within [...***...] days after receipt of the Written Notice from the Indemnified Party of any Claim with respect to which it has indemnification obligation sunder this Article 14, of the Indemnifying Party’s election to
assume the defense and handling of such Third Party Claim, or otherwise elects not to assume the defense and handling of such Claim, the provisions of Section 14.3.5 below shall govern. 

14.3.5 In the event that the Indemnifying Party fails to conduct the defense and handling of a claim in good faith as set forth in
Section 14.3.3 or elects not to assume the defense and handling of such Claim as set forth in Section 14.3.4, the Indemnified Party may, at the Indemnifying Party’s expense, select counsel
reasonably acceptable to the Indemnifying Party in connection with conducting the defense and handling of such Claim and defend or handle such Claim in such manner as it may deem appropriate, provided, however, that the Indemnified Party shall keep
the Indemnifying Party timely apprised of the status of such Claim and shall not settle such Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld. If the Indemnified Party defends or
handles such Claim, the Indemnifying Party shall cooperate with the Indemnified Party, at the Indemnified Party’s request but at no expense to the Indemnified Party, and shall be entitled to participate in the defense and handling of such Claim
with its own counsel and at its own expense. 
 14.4 Special, Indirect and Other Losses. NEITHER PARTY NOR ANY OF ITS
AFFILIATES SHALL BE LIABLE UNDER THIS AGREEMENT FOR SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE 9.
NOTHING IN THIS SECTION 14.4 SHALL BE CONSTRUED TO LIMIT EITHER PARTY’S INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 14. 

14.5 Insurance. Each Party, at its own expense, shall maintain liability insurance (or self-insure) in an amount consistent with
industry standards during the Term. Each Party shall provide a certificate of insurance (or evidence of self-insurance) evidencing such coverage to the other Party upon request. 

15. GENERAL PROVISIONS 

15.1 Change of Control. 

15.1.1 Notice. If Zymeworks enters into a binding definitive agreement that results or, if completed, would result, in a
Change of Control of Zymeworks, Zymeworks shall provide Merck with prompt Written Notice describing such Change of Control in reasonable detail (the “Zymeworks Change of Control Notice”). The Zymeworks Change of Control Notice shall
be provided by Zymeworks prior to consummating such transaction or agreement, if permitted under Applicable Laws and not prohibited by the terms of any agreement between Zymeworks and any Third Party, and otherwise promptly following the
consummation of such transaction or agreement; provided, that, Zymeworks agrees to use Commercially Reasonable 

  
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Efforts to avoid including any such prohibition in any agreement negotiated by Zymeworks with any such Third Party. 

15.1.2 Change of Control of Zymeworks Involving Competing Pharma Change of Control. If the Change of Control that is
described in the Zymeworks Change of Control Notice results in a Competing Pharma Change of Control then, Zymeworks shall notify Merck in writing of the effective date of such Change of Control and following the effective date of such Change of
Control, the rights granted herein remain in effect. However, and notwithstanding any provision in this Agreement to the contrary, Zymeworks or the surviving entity (as the case may be) shall only receive the following information with respect to
activities under this Agreement: (a) Merck’s achievement of a Milestone Event, and (b) commercial sales reports limited to worldwide aggregate sales for each Product. In addition, the SCC shall be immediately disbanded. Zymeworks
shall only disclose the [...***...], Merck Target Pairs or Merck Sequence Pairs to employees of the acquiring Competitive Entity on an as needed basis and subject to such employees being subject to confidentiality and non-use provisions as they apply to Zymeworks under this Agreement. 
 15.2 Assignment.
Except as provided in this Section 15.2, this Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by either Party without the consent of the other
Party; provided, however, that (and notwithstanding anything elsewhere in this Agreement to the contrary) either Party may, without such consent, assign this Agreement and its rights and obligations hereunder in whole or in part to an
Affiliate of such Party, provided further that, subject to Section 15.1 with respect to Zymeworks, either Party, without the written consent of the other Party, may assign this Agreement and its rights and
obligations hereunder (or under a transaction under which this Agreement is assumed) in connection with the transfer or sale of all or substantially all of its assets or business related to the subject matter of this Agreement, or in the event of
its merger or consolidation or Change of Control or similar transaction. In the event of such a transaction (whether this Agreement is actually assigned or is assumed by the acquiring party by operation of law (e.g., in the context of a
reverse triangular merger)) then with respect to Zymeworks, if such assignment is to a Competitive Entity, the restrictions under Section 15.1 with respect to information provided by Merck under this Agreement to a
Competitive Entity shall apply. Any attempted assignment not in accordance with this Section 15.2 shall be void. Any permitted assignee shall assume all assigned obligations of its assignor under this Agreement. 

15.3 Extension to Affiliates. Except as expressly set forth otherwise in this Agreement, each Party shall have the right to
extend the rights and immunities granted in this Agreement to one or more of its Affiliates. All applicable terms and provisions of this Agreement, except this right to extend, shall apply to any such Affiliate to which this Agreement has been
extended to the same extent as such terms and provisions apply to the Party extending such rights and immunities. The Party extending the rights and immunities granted hereunder shall remain primarily liable for any acts or omissions of its
Affiliates. 
 15.4 Severability. Should one or more of the provisions of this Agreement become void or unenforceable
as a matter of law, then this Agreement shall be construed as if such provision were not contained herein and the remainder of this Agreement shall be in full force 

  
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and effect, and the Parties will use their best efforts to substitute for the invalid or unenforceable provision a valid and enforceable provision which conforms as nearly as possible with the
original intent of the Parties. 
 15.5 Governing Law; English Language. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York and the patent laws of the United States without reference to any rules of conflict of laws or renvoi. This Agreement was prepared in the English language, which language shall govern the
interpretation of, and any dispute regarding, the terms of this Agreement. 
 15.6 Dispute Resolution. 

15.6.1 If any dispute, claim or controversy of any nature arising out of or relating to this Agreement, including, without limitation,
any action or claim based on tort, contract or statute, or concerning the interpretation, effect, termination, validity, performance and/or breach of this Agreement (each, a “Dispute”), arises between the Parties and the Parties
cannot resolve such Dispute through their respective Relationship Liaisons or SCC, if and as applicable, within [...***...] days of a written request by either Party to the other Party (“Notice of Dispute”), and such Dispute
is not one for which a Party has final decision-making as expressly set forth in this Agreement, either Party may refer the Dispute to senior representatives of each Party for resolution. Each Party, within [...***...] Business Days after a
Party has received such written request from the other Party to so refer such Dispute, shall notify the other Party in writing of the senior representative to whom such dispute is referred. If, after an additional [...***...] days after the
Notice of Dispute, such representatives have not succeeded in negotiating a resolution of the Dispute, and a Party wishes to pursue the matter, each such Dispute, controversy or claim that is not an “Excluded Claim” (defined below) shall
be finally resolved by binding arbitration in accordance with the Commercial Arbitration Rules and Supplementary Procedures for Large Complex Disputes of the American Arbitration Association (“AAA”), and judgment on the arbitration
award may be entered in any court having jurisdiction thereof. 
 15.6.2 The arbitration shall be conducted by a panel of three
(3) persons, including at least one (1) person experienced in the business of pharmaceuticals (including biologicals). Specifically, if the issues in dispute involve scientific, technical or commercial matters, at least one of the
arbitrators chosen hereunder shall have educational training and/or industry experience sufficient to demonstrate a reasonable level of relevant scientific, medical and industry knowledge. Within [...***...] days after initiation of
arbitration, each Party shall select one person to act as arbitrator; and the two Party-selected arbitrators shall select a third arbitrator within [...***...] days of the appointment of the last of the two Party-selected arbitrators. If the
arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator within such [...***...] day period, the third arbitrator shall be appointed by the AAA. The place of arbitration shall be San Francisco, California, and
all proceedings and communications shall be in English. 
 15.6.3 Prior to the arbitration panel being in place, either Party, without
waiving any remedy under this Agreement, may seek from any court having jurisdiction any temporary injunctive or provisional relief necessary to protect the rights or property of that Party until final

  
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resolution of the issue by the arbitration panel or other resolution of the controversy between the Parties. Once the arbitration panel is in place, either Party may apply to the arbitrators for
interim injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved, and either Party may apply to a court of competent jurisdiction to enforce interim injunctive relief granted by the arbitration panel. Any
final award by the arbitration panel may be entered by either Party in any court having appropriate jurisdiction for a judicial recognition of the decision and applicable orders of enforcement. The arbitrators shall have no authority to award
punitive or any other type of damages not measured by a Party’s compensatory damages. Each Party shall bear its own costs and expenses and attorneys’ fees and an equal share of the arbitrators’ fees and any administrative fees of
arbitration, unless the arbitrators agree otherwise. 
 15.6.4 Except to the extent necessary to confirm an award or as may be
required by law, neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties. In no event shall an arbitration be initiated after the date when commencement of
a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the applicable New York statute of limitations. 

15.6.5 Subject to Section 11.4, the Parties agree that, in the event of a good faith dispute over the nature
or quality of performance under this Agreement, neither Party may effectively terminate this Agreement until final resolution of the Dispute through arbitration or other judicial determination. The Parties further agree that any payments made
pursuant to this Agreement pending resolution of the Dispute shall be refunded if an arbitrator or court determines that such payments are not due. 

15.6.6 With respect to any Dispute as to whether Merck has materially breached this Agreement, the arbitrators shall determine whether
such breach occurred and is uncured and whether such breach cannot be adequately remedied through monetary damages, equitable relief or specific performance. In the event that the arbitrators determine that such breach exists and cannot be
adequately remedied through monetary damages, equitable relief or specific performance, then Zymeworks shall have the right to terminate this Agreement pursuant to Section 11.3; otherwise, in such circumstance, the
arbitrators shall also determine the appropriate remedies to make Zymeworks with respect to such breach, including notwithstanding Section 15.6.9 reimbursement of all costs and expenses (including attorneys’ fees,
expert fees, administrative fees and the like) incurred by Zymeworks to enforce its rights with respect to such breach. 
 15.6.7 As
used in this Section 15.6, the term “Excluded Claim” shall mean a dispute, controversy or claim that concerns (a) the validity, enforceability or infringement of a patent, trademark or copyright, or
(b) any antitrust, anti-monopoly or competition law or regulation, whether or not statutory. Excluded Claims may be submitted by either Party to any court having jurisdiction. 

15.6.8 Notwithstanding the provisions of this Section 15.6 above, if the SCC and the Parties (through their
senior representatives as set forth under Section 15.6.1) do not agree as to whether Research Milestone Event 1 has occurred, then such matter shall be resolved by binding arbitration in accordance with
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arbitration, the arbitrator shall be an independent expert in the area of antibody development mutually acceptable to the Parties. If the Parties are unable to agree on an arbitrator, the
arbitrator shall be an independent expert as described in the preceding sentence selected by the chief executive of the San Francisco office of the AAA. Each Party shall prepare a written report setting forth its position with respect to the
substance of Research Milestone Event 1. Any such arbitration shall be completed within [...***...] days following a request by either Party for such arbitration. The Parties agree that, provided that the unsuccessful Party’s position
with respect to achievement of Research Milestone Event 1 is not based on bad faith, then the resolution of the arbitration under this Section 15.6.8 shall not give grounds for termination of this Agreement by the other
Party.  
 15.6.9 Each Party shall bear its own costs and expenses and attorneys’ fees and an equal share of the
arbitrators’ fees and any administrative fees of arbitration. 
 15.7 Force Majeure. Neither Party shall be responsible
to the other for any failure or delay in performing any of its obligations under this Agreement or for other nonperformance hereunder (excluding, in each case, the obligation to make payments when due) if such delay or nonperformance is caused by
strike, fire, flood, earthquake, accident, war, act of terrorism, act of God or of the government of any country or of any local government, or by any other cause unavoidable or beyond the control of any Party hereto. In such event, the Party
affected will use commercially reasonable efforts to resume performance of its obligations and will keep the other Party informed of actions related thereto. 

15.8 Waivers and Amendments. The failure of any Party to assert a right hereunder or to insist upon compliance with any term or
condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other Party. No waiver shall be effective unless it has been given in writing and signed by
the Party giving such waiver. No provision of this Agreement may be amended or modified other than by a written document signed by authorized representatives of each Party. 

15.9 Relationship of the Parties. Nothing contained in this Agreement shall be deemed to constitute a partnership, joint
venture, or legal entity of any type between Zymeworks and Merck, or to constitute one as the agent of the other. Each Party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to give any Party the power
or authority to act for, bind, or commit the other. 
 15.10 Notices. All notices, consents or waivers under this Agreement
shall be in writing and will be deemed to have been duly given when (a) scanned and converted into a portable document format file (i.e., pdf file), and sent as an attachment to an e-mail message,
where, when such message is received, a read receipt e-mail is received by the sender (and such read receipt e-mail is preserved by the Party sending the notice),
provided further that a copy is promptly sent by an internationally recognized overnight delivery service (receipt requested)(although the sending of the e-mail message shall be when the notice is deemed to
have been given), or (b) the earlier of when received by the addressee or five (5) days after it was sent, if sent by registered letter or overnight courier by an internationally recognized overnight delivery service (receipt requested),
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addresses set forth below (or to such other addresses and e-mail addresses as a Party may designate by notice): 

 

			
	If to Zymeworks:	  	Zymeworks, Inc.
		  	540-1385 West 8th Avenue
		  	Vancouver, BC
		  	Canada
		  	V6H 3V9
		  	E-mail address: [... ***...]
		
	and	  	Wilson Sonsini Goodrich & Rosati
		  	650 Page Mill Road
		  	Palo Alto, CA 95070
		  	Attention: [... ***...]
		  	E-mail address: [... ***...]
		
	If to Merck:	  	Merck Sharp & Dohme Research GmbH
		  	Weystrasse 20
		  	6000 Lucerne 6
		  	Switzerland
		  	Attention: [... ***...]
		
	and	  	[... ***...]
		  	c/o Merck Sharp & Dohme Corp.
		  	One Merck Drive
		  	P.O. Box 100, WS3A-65
		  	Whitehouse Station, NJ 08889-0100
		  	E-mail Address: [... ***...]
		
	and	  	
		  	Merck Sharp & Dohme Corp.
		  	One Merck Drive
		  	P.O. Box 100, WS2A-30
		  	Whitehouse Station, NJ 08889-0100
		  	Attn: [... ***...]
		  	E-mail Address: [... ***...]

 Zymeworks shall also provide a copy of any Written Notice (via e-mail
if available) to Merck’s Relationship Liaison. 
 15.11 Further Assurances. Merck and Zymeworks hereby covenant and agree
without the necessity of any further consideration, to execute, acknowledge and deliver any and all documents and take any action as may be reasonably necessary to carry out the intent and purposes of this Agreement. 

15.12 Compliance with Law. Each Party shall perform its obligations under this Agreement in accordance with all Applicable Laws.
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undertake any activity under or in connection with this Agreement which violates, or which it believes, in good faith, may violate, any Applicable Laws. 

15.13 No Third Party Beneficiary Rights. This Agreement is not intended to and shall not be construed to give any Third Party
any interest or rights (including, without limitation, any Third Party beneficiary rights) with respect to or in connection with any agreement or provision contained herein or contemplated hereby, except as otherwise expressly provided for in this
Agreement. 
 15.14 Entire Agreement. This Agreement, together with its Attachments, sets forth the entire agreement and
understanding of the Parties as to the subject matter hereof and supersedes all proposals, oral or written, and all other communications between the Parties with respect to such subject matter. In the event of any conflict between the main body of
this Agreement and any Attachment hereto, the main body of this Agreement shall prevail. The Parties acknowledge and agree that, as of the Effective Date, all Confidential Information disclosed pursuant to the Confidentiality Agreement by a Party or
its Affiliates shall be included in the Confidential Information subject to this Agreement and the Confidentiality Agreement is hereby superseded in its entirety; provided, that the foregoing shall not relieve any person of any right or obligation
accruing under the Confidentiality Agreement prior to the Effective Date. “Confidentiality Agreement” means the Mutual Non-Disclosure Agreement between Zymeworks and Merck Sharp &
Dohme Corp. (an Affiliate of Merck) dated [...***...], as amended by Amendment No. 1 to Mutual Non-Disclosure Agreement (dated [...***...]). 

15.15 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. 
 15.16 Expenses. Each Party shall pay its
own costs, charges and expenses incurred in connection with the negotiation, preparation and completion of this Agreement. 
 15.17
Effect of Laws. Nothing in this Agreement shall operate to exclude any provision implied into this Agreement by Applicable Laws and which may not be excluded by Applicable Laws. 

15.18 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective legal
representatives, successors and permitted assigns. 
 15.19 Interpretation. The Parties hereto acknowledge and agree that:
(a) each Party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (b) the rule of construction to the effect that any ambiguities are resolved against the drafting Party
shall not be employed in the interpretation of this Agreement; and (c) the terms and provisions of this Agreement shall be construed fairly as to all Parties hereto and not in a favor of or against any Party, regardless of which Party was
generally responsible for the preparation of this Agreement. 

  
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 15.20 Cumulative Remedies. No remedy referred to in this Agreement is intended
to be exclusive unless explicitly stated to be so, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law. 

15.21 Notification of Possible Sale. Until the earlier of (a) first achievement of Development Milestone Event 1 and
(b) the [...***...] anniversary of the Effective Date, Zymeworks shall notify Merck in writing within [...***...] Business Days of (i) each time that Zymeworks [...***...] contemplating a Sale. A “Sale”
means (A) a sale or acquisition of (I) at least [...***...] of the equity or voting stock of Zymeworks to a [...***...], (II) at least [...***...] of the equity or voting stock of Zymeworks to a Third Party (where such
Third Party is not a [...***...]), (III) a majority of Zymeworks’ assets or (iv) a majority of Zymeworks’ assets or business relating to this Agreement, or (B) the merger of Zymeworks and a Third Party. 

15.22 Export. Each Party acknowledges that the laws and regulations of the United States restrict the export and re-export of commodities and technical data of United States origin. Each Party agrees that it will not export or re-export restricted commodities or the technical data of the
other Party in any form without appropriate United States and foreign government licenses. 
 15.23 Notification and Approval.
In the event that this Agreement and/or the transaction(s) set forth herein are subject to notification and/or regulatory approval in one or more countries, then development and commercialization in such country(ies) will be subject to such
notification and/or regulatory approval. The Parties will reasonably cooperate with each other with respect to such notification and the process required thereunder, including in the preparation of any filing. Merck will be responsible for any and
all costs, expenses, and filing fees associated with any such filing. 
 [Remainder of page left blank intentionally; signature page to
follow.] 

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

			
	ZYMEWORKS INC.

			
		
	By:	 	 /s/ Ali Tehrani

			
	Name: Ali Tehrani, Ph.D.
	Title: President & Chief Executive Officer
	
	MERCK SHARP & DOHME RESEARCH GMBH

			
		
	By:	 	 /s/ Christoph Brombacher

			
	Name: Christoph Brombacher
	Title: Director

  
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63 

 CONFIDENTIAL 
  

 ATTACHMENT 1.58 

[...***...] 
 [...***...] 

  
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64 

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 ATTACHMENT 1.69 

ZYMEWORKS PATENT RIGHTS 
 As
of the Restatement Effective Date 
 Zymeworks IP Update for Merck -November 2014 

 

													
	 Title: [...***...]

	 	  	Type	  	Filing Date
(day/month/year)	  	Priority
(day/month/year)	  	Country	  	Application Number	  	IP Right
Status
	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	
	 Title: [...***...]

	 	  	Type	  	Filing Date
(day/month/year)	  	Priority
(day/month/year)	  	Country	  	Application Number	  	IP Right
Status
	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	  	  	  	[...***...]	  	[...***...]	  	[...***...]
	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
	
	 Title:[...***...]

	 	  	Type	  	Filing Date
(day/month/year)	  	Priority
(day/month/year)	  	Country	  	Application Number	  	IP Right
Status
		  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
	  	[...***...]	  	[...***...]	  	  	[...***...]	  	[...***...]	  	[...***...]

  
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Title: [...***...]

	 	  	Type	  	Filing Date
(day/month/year)	  	Priority
(day/month/year)	  	Country	  	Application Number	  	IP Right
Status
		  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
		  	[...***...]	  	[...***...]	  	  	[...***...]	  	[...***...]	  	[...***...]
	
	 Title: [...***...]

	 	  	Type	  	Filing Date
(day/month/year)	  	Priority
(day/month/year)	  	Country	  	Application Number	  	IP Right
Status
		  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
	
	 Title:[...***...]

	 	  	Type	  	Filing Date
(day/month/year)	  	Priority
(day/month/year)	  	Country	  	Application Number	  	IP Right
Status
		  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
		  	[...***...]	  	[...***...]	  		  	[...***...]	  	[...***...]	  	[...***...]
		  	[...***...]	  	[...***...]	  		  	[...***...]	  	[...***...]	  	[...***...]
	
	 Title:[...***...]

	 	  	Type	  	Filing Date
(day/month/year)	  	Priority
(day/month/year)	  	Country	  	Application Number	  	IP Right
Status
	 	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
	 	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]
	
	 Title: [...***...]

	 	  	Type	  	Filing Date
(day/month/year)	  	Priority
(day/month/year)	  	Country	  	Application Number	  	IP Right
Status
		  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]

  
 -Confidential 

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 ATTACHMENT 1.71 

ZYMEWORKS PLATFORM 
 The Zymeworks Platform
is Zymeworks’ proprietary computational protein-engineering platform designed to provide proprietary insight into the sequence-structure-[...***...] relationships [...***...] approach (“Zymeworks’ Protein
Engineering Approach”). 
 Zymeworks’ Protein Engineering Approach combines protein structural information with computational modeling and
in silico simulation [...***...] to create [...***...]. 
 Zymeworks’ Platform (Fig. 1) includes a number of advanced algorithms
that are used to (a) efficiently develop high quality models of protein structure and their complexes with other proteins, (b) [...***...], and (c) [...***...]. Zymeworks’ advanced algorithms include [...***...]. 

Structural characteristics of the protein are studied in the context of [...***...]. The detailed treatment of [...***...]. 

The platform is designed to [...***...]. Quality software engineering procedure allows for the development of an extensible, reliable and secure
platform [...***...]. 
 The following summarizes the various algorithms and features available in the Zymeworks Platform. 

Molecular Models 
 High quality structural models of
protein systems are a critical component in Zymeworks’ Protein Engineering Approach. Zymeworks’ Platform includes a number of proprietary tools used to build and refine the quality of models, incorporating structural data from multiple
sources including [...***...]. 
 Conformational Dynamics 

Zymeworks’ Platform incorporates a number of [...***...] simulation approaches to sample changes within the target systems, including protein
(a) backbone, (b) sidechain, and (c) interdomain conformational changes. Proprietary simulation analysis results in the development of an understanding of the alternate conformational states of the protein of interest
[...***...]. This understanding is critical as many functionally important characteristics of proteins, including binding and stability, [...***...]. 

  
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 Energy function and Scoring 

Zymeworks developed and implemented proprietary energy and scoring functions that score and rank the stability of proteins and binding energies across protein
interfaces. [...***...]. This empirical ranking is used in various protein engineering tasks including [...***...]. 
 Hot Spot Determination

 Identifying a specific subset of key amino acids in a protein or protein system is critical to determining its functional characteristic and overall
stability. These amino acid residues play a role either independently or as part of a cluster of networked residues, [...***...]. Zymeworks has developed proprietary algorithms that identify these critical residues (referred to as ‘hot
spots’) based on [...***...]. Additionally, Zymeworks has developed proprietary algorithms to [...***...]. 

  
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68 

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 ATTACHMENT 3.1(a) 

WORK PLAN 
 The Activities
(described below) would be undertaken primarily by Merck to enable Merck: 
 [...***...] 

  
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 ATTACHMENT 3.1(b) 

ANTIBODY DEVELOPMENT WORK PLAN 

The projected durations for each stage are provided as approximates and subject to change pending the initiation dates for each project and
laboratory capacities. 
 [...***...]: 
  

																	
	 Part 1: [...***...]
	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  	 	- [...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	- [...***...]	 
	[...***...]	 

  

																	
	 Part 2: [...***...]
	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  	 	- [...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	- [...***...]	 
	[...***...]	  	 	- [...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	- [...***...]	 
	[...***...]	  				  				  				  			
	[...***...]	  	 	- - [...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	- [...***...]	 

  

																	
	 Part 3: [...***...]
	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  	 
 
	- [...***...]

-                 
	 
  
	  	 	[...***...]	 	  	 	[...***...]	 	  	 	- [...***...]	 

  
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	[...***...]	  	 
 
	[...***...]

-                 
	 
  
	  	 	[...***...]	 	  	 	[...***]	 	  	 	- [...***...]	 
	[...***...]	  				  				  				  			
	[...***...]	  	 	- [...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	- [...***...]	 

 [...***...]: 
  

																	
	 Part 1: [...***...]
	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  				  				  				  			
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 

  

																	
	 Part 2: [...***...]
	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 	  	 	[...***...]	 

  
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	[...***...]	  		  		  		  	
	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]	  	[...***...]

  
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 ATTACHMENT 3.1.1(c) 

LIST OF THIRD PARTY SERVICE PROVIDERS 

[...***...] 
  

					
	[...***...]	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 

 [...***...] 
  

					
	[...***...]	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 
		  	 	[...***...]	 

 [...***...] 
  

					
	[...***...]	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 
	[...***...]	  	 	[...***...]	 

  
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 ATTACHMENT 3.2.2 

[...***...] 
 [...***...] 

• [...***...] 

  
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 ATTACHMENT 3.8 

Budget and Payment Schedule 

(All Figures in $USD) 
 Total
Budget:[...***...] 
 Total Budget: 

[...***...] 
 Payment
Schedule: 
 • [...***...] 

  
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 Payment may be made by wire transfer to the following account: 

Name: [...***...] 
 Bank: [...***...] 

Branch: [...***...] 
 Address of Bank: [...***...]

 Account Number: [...***...] 
 Swift Code:
[...***...] 
 IBAN: 
 BIC: 

  
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 ATTACHMENT 10.2(a) 

ORIGINAL AGREEMENT PRESS RELEASE 

Zymeworks Inc. Announces Collaboration with Merck to Develop Bi-specific Antibody Therapeutics 

Strategic Collaboration Advances Zymeworks’ Proprietary AzymetricTM Platform for developing therapeutic antibodies 

Vancouver, Canada (August XX, 2011) – Zymeworks Inc. today announced a research collaboration with Merck, known as MSD outside the United States
and Canada, around Zymeworks’ proprietary AzymetricTM platform for the development of novel bi-specific antibody therapeutic candidates. Bi-specific antibodies
are designed to bind to two different drug targets for broad use in clinical applications such as oncology or autoimmune disease. 
 “We are delighted
to establish a strategic collaboration with the exceptional biologics team at Merck to advance our revolutionary bi-specific antibody platform,” Ali Tehrani, Ph.D., CEO of Zymeworks, said. “This is
an important validation of our scientific leadership in the field of structure-guided protein engineering and we look forward to working with Merck to realizing the full value of this novel platform technology across a range of therapeutic
indications.” 
 Under the terms of the agreement Zymeworks has granted Merck, through a subsidiary, a worldwide license to develop and commercialize bi-specific antibodies generated through use of the AzymetricTM platform toward certain exclusive therapeutic targets. Both companies will collaborate to advance the technology platform, with Merck working to
progress the bi-specific therapeutic antibody candidates through clinical development. Zymeworks will receive an upfront fee and is eligible to receive research, development and regulatory milestones with a
potential value of up to US $187 million, as well as tiered royalty payments on sales of products. Merck will have exclusive worldwide commercialization rights to products derived from the collaboration. 

“Zymeworks’ technology platform has the potential to provide a unique solution for engineering novel antibodies,” said Richard Murray, Ph.D.,
senior vice president, biologics research at Merck. “At Merck, we continue to build upon our portfolio of novel technologies aimed at developing a new generation of biologic candidates designed to provide improved therapeutic properties.”

 About the AzymetricTM Platform 
 Antibodies
developed using the AzymetricTM platform, unlike native antibodies, consist of two different heavy chains engineered to exclusively assemble into a single molecule, thereby allowing bi-specific binding of
two different antigens or drug targets. Due to having two 

  
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different but complementary heavy chain subunits, Azymetric antibodies are classified as “heterodimeric” antibodies. Similar to natural antibodies, heterodimeric antibodies retain long
serum half-lives and the ability to induce effector function. 
 About Zymeworks Inc. 

Zymeworks is a privately held biotechnology company that is developing
best-in-class antibody therapeutics for the treatment of oncology, autoimmunity and inflammatory diseases. The company’s proprietary ZymeCADTM structure-guided
protein engineering technology and its novel AzymetricTM and AlbuCORETM platforms enable the development of highly potent bi-specific antibodies and multivalent protein therapeutics targeted across a
range of indications. Zymeworks is focused on growing its preclinical biotherapeutics pipeline through in-house research and development programs and strategic collaborations. More information on Zymeworks can
be found at www.zymeworks.com. 
 Contact: 
 Zymeworks
Inc. 
 David Poon, Ph.D. 
 Senior Manager, External R&D and
Business Development 
 info@zymeworks.com 
 Source: Zymeworks
Inc. 

  
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 ATTACHMENT 10.2(b) 

AMENDED AGREEMENT PRESS RELEASE 

Zymeworks Inc. and Merck & Co. Extend and Expand Bi-specific Antibody Therapeutics Collaboration 

Vancouver, Canada (October XX, 2014) – Zymeworks Inc. today announced the extension of a research collaboration with Merck, known as MSD outside
the United States and Canada, that was originally announced in August 2011. In addition, Merck gains expanded access to Zymeworks’ proprietary AzymetricTM platform for the development of novel
bi-specific antibody therapeutic candidates. 
 “We are extremely pleased with how the strategic collaboration
is progressing with Merck and we are looking forward to working even closer together with the Merck biologics team in bringing groundbreaking therapies to the clinic,” said Ali Tehrani, Ph.D., President & CEO of Zymeworks. 

Under the terms of this agreement Zymeworks has granted Merck, through a subsidiary, a worldwide license to develop and commercialize bi-specific antibodies generated through use of the AzymetricTM platform towards certain therapeutic targets. Both Zymeworks and Merck will progress bi-specific
therapeutic antibody candidates in pre-clinical developments with Merck responsible for clinical development and commercialization. 

About the AzymetricTM Platform 
 Bi-specific antibodies developed using the AzymetricTM platform resemble conventional mono-specific antibodies while incorporating two different Fab domains to bind to different antigens or drug targets.
AzymetricTM antibodies spontaneously assemble into a single molecule comprising two unique heavy and light chain pairs and are manufactured using conventional monoclonal antibody processes. The AzymetricTM platform can be used to rapidly
screen target and sequence combinations for bi-specific activities in the final therapeutic format, significantly shortening drug development timelines. 

About Zymeworks Inc. 
 Zymeworks is a privately held
biotherapeutics company that is developing best-in-class AzymetricTM bi-specific antibodies and antibody drug conjugates for
the treatment of oncology, autoimmunity and inflammatory diseases. The company’s novel AzymetricTM and AlbuCORETM platforms, and its proprietary ZymeCADTM structure-guided protein engineering technology, enable the development of
highly potent bi-specific antibodies and multivalent protein therapeutics targeted across a range of indications. Zymeworks is focused on accelerating its preclinical biotherapeutics pipeline through in-house research and development programs and strategic collaborations. More information on Zymeworks can be found at www.zymeworks.com. 

  
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 Contact: 

Zymeworks Inc. 
 David Poon, Ph.D. 

Director, External R&D and Alliances 
 info@zymeworks.com
 
 Source: Zymeworks Inc. 

  
 Confidential 

80EX-10.17

 Exhibit 10.17 

CONFIDENTIAL 
 CONFIDENTIAL
TREATMENT REQUESTED UNDER RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. [...***...] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE COMMISSION. 
 LICENSING AND COLLABORATION AGREEMENT 

Between 
 ZYMEWORKS INC.

 and 
 ELI LILLY
AND COMPANY 
 December 17, 2013 

  
 Confidential 

 

 CONFIDENTIAL 
  

 TABLE OF CONTENTS 

 

					
	 Section
	  	Page	 
	 1.        DEFINITIONS AND INTERPRETATIONS
	  	 	5	 
		
	 2.        GRANT OF LICENSES
	  	 	17	 
		
	  2.1          Licenses to Lilly
	  	 	17	 
	  2.2          License to
Zymeworks
	  	 	18	 
	  2.3          No Implied
Licenses
	  	 	18	 
		
	 3.        RESEARCH PROGRAM AND DEVELOPMENT AND
COMMERCIALIZATION OF PRODUCTS
	  	 	19	 
		
	  3.1          Research Program
	  	 	19	 
	  3.2          Affiliates, Sublicensees
and Contractors
	  	 	22	 
	  3.3          Records and
Reports
	  	 	22	 
	  3.4          Development and
Commercialization by Lilly
	  	 	22	 
	  3.5          Target
Exclusivity
	  	 	23	 
		
	 4.        GOVERNANCE
	  	 	24	 
		
	  4.1          Project Leader
	  	 	24	 
	  4.2          Joint Steering
Committee
	  	 	24	 
	  4.3          JSC Meetings
	  	 	24	 
	  4.4          JSC Functions
	  	 	24	 
		
	 5.        FINANCIAL PROVISIONS
	  	 	26	 
		
	  5.1          Upfront Payment
	  	 	26	 
	  5.2          Expenses
	  	 	26	 
	  5.3          Development
Milestones
	  	 	26	 
	  5.4          Commercialization
Milestones
	  	 	27	 
	  5.5          Royalties
	  	 	27	 
		
	 6.        REPORTS AND PAYMENT TERMS
	  	 	28	 
		
	  6.1          Payment Terms
	  	 	28	 
	  6.2          Payment Currency /
Exchange Rate
	  	 	29	 
	  6.3          Taxes
	  	 	29	 
	  6.4          Records and Audit
Rights
	  	 	29	 
		
	 7.        INTELLECTUAL PROPERTY RIGHTS
	  	 	30	 
		
	  7.1          Ownership of
Inventions
	  	 	30	 
	  7.2          Patent Prosecution and
Maintenance
	  	 	31	 
	  7.3          Enforcement and
Defense
	  	 	32	 
		
	 8.        CONFIDENTIALITY
	  	 	35	 
		
	  8.1          Duty of
Confidence
	  	 	35	 
	  8.2          Exceptions
	  	 	35	 
	  8.3          Authorized
Disclosures
	  	 	36	 

  
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 CONFIDENTIAL 
  

 TABLE OF CONTENTS 

(Continued) 
  

					
	 	  	Page	 
		
	 9.        PUBLICATIONS AND PUBLICITY
	  	 	37	 
		
	  9.1          Publications
	  	 	37	 
	  9.2          Publicity
	  	 	38	 
		
	 10.      TERM AND TERMINATION
	  	 	38	 
		
	  10.1       Term
	  	 	38	 
	  10.2       Termination by Lilly
	  	 	38	 
	  10.3       Termination for Cause
	  	 	39	 
		
	 11.      EFFECTS OF TERMINATION
	  	 	39	 
		
	  11.1       Termination of Agreement
	  	 	39	 
	  11.2       Survival
	  	 	40	 
	  11.3       Damages; Relief
	  	 	40	 
	  11.4       Bankruptcy Code
	  	 	40	 
		
	 12.      REPRESENTATIONS AND WARRANTIES
	  	 	40	 
		
	  12.1       Representations and Warranties by Each
Party
	  	 	40	 
	  12.2       Representations, Warranties and Covenants
by Zymeworks
	  	 	41	 
	  12.3       Limitation
	  	 	42	 
	  12.4       No Other Warranties
	  	 	42	 
		
	 13.      INDEMNIFICATION AND LIABILITY
	  	 	42	 
		
	  13.1       Indemnification by Zymeworks
	  	 	42	 
	  13.2       Indemnification by Lilly
	  	 	43	 
	  13.3       Indemnification Procedure
	  	 	43	 
	  13.4       Special, Indirect and Other Losses
	  	 	44	 
	  13.5       Insurance
	  	 	44	 
		
	 14.      Compliance
	  	 	44	 
		
	  14.1       Compliance with this Agreement
	  	 	44	 
	  14.2       Compliance with Party Specific
Regulations
	  	 	44	 
	  14.3       Compliance with Internal Compliance
Codes
	  	 	44	 
	  14.4       Anti-Bribery Commitments
	  	 	44	 
		
	 15.      GENERAL PROVISIONS
	  	 	45	 
		
	  15.1       Assignment
	  	 	45	 
	  15.2       Extension to Affiliates
	  	 	45	 
	  15.3       Severability
	  	 	46	 
	  15.4       Governing Law; English Language
	  	 	46	 
	  15.5       Dispute Resolution
	  	 	46	 
	  15.6       Force Majeure
	  	 	47	 
	  15.7       Waivers and Amendments
	  	 	48	 
	  15.8       Relationship of the Parties
	  	 	48	 
	  15.9       Notices
	  	 	48	 
	  15.10     Further Assurances
	  	 	49	 
	  15.11     Compliance with Law
	  	 	49	 
	  15.12     No Third Party Beneficiary Rights
	  	 	49	 
	  15.13     Entire Agreement
	  	 	49	 
	  15.14     Counterparts
	  	 	50	 
	  15.15     Expenses
	  	 	50	 

  
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(Continued) 
  

					
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	  14.16     Binding Effect
	  	 	50	 
	  14.17     Construction
	  	 	50	 
	  14.18     Cumulative Remedies
	  	 	50	 
	  14.19     Export
	  	 	50	 
	  14.20     Notification and Approval
	  	 	51	 

  
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 LICENSING AND COLLABORATION AGREEMENT 

THIS LICENSING AND COLLABORATION AGREEMENT (the “Agreement”), effective as of December     , 2013
(the “Effective Date”), by and between ELI LILLY AND COMPANY, a corporation organized and existing under the laws of Indiana, with its principal business office located at Lilly Corporate Center, Indianapolis, Indiana 46285,
U.S.A. (“Lilly”) and ZYMEWORKS INC., a corporation organized and existing under the laws of Canada, and extraprovincially in British Columbia, having an address at 540-1385 West 8th
Avenue, Vancouver, BC, Canada V6H 3V9 (“Zymeworks”). Zymeworks and Lilly are each referred to individually as a “Party” and together as the “Parties”. 

BACKGROUND 
 A. Zymeworks
controls a proprietary Fc/Fab heterodimerization and heavy-light chain pairing platform that was developed using Zymeworks’ proprietary molecular simulation software suite, known as ZymeCADTM. 

B. Lilly controls certain proprietary technology that includes, among other things, technology related to antibodies, including technology
related to the Lilly Sequences, and the Lilly Target Pair. 
 C. Lilly and Zymeworks desire to enter into this Agreement under which
Zymeworks will utilize such platform to generate and develop certain Antibodies (as defined below) based on antibody nucleic acid or amino acid sequences provided by Lilly. 

D. Lilly desires to obtain certain licenses under certain intellectual property controlled by Zymeworks to develop certain products
incorporating such Antibodies, and Zymeworks is willing to grant such rights, all on the terms and conditions as set forth below. 
 NOW
THEREFORE, in consideration of the mutual covenants and agreements contained herein below, the sufficiency which is acknowledged by both Parties, the Parties agree as follows: 

1. DEFINITIONS AND INTERPRETATIONS 

Whenever used in this Agreement with an initial capital letter, the terms defined in this Article 1 and elsewhere in this Agreement, whether
used in the singular or plural, shall have the meanings specified. 
 1.1 “Acquiring Entity” means a Third Party that
merges or consolidates with or acquires Zymeworks, or to which Zymeworks transfers all or substantially all of its assets to which this Agreement pertains. 

  
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 1.2 “Act” means, as applicable, the United States Federal Food, Drug
and Cosmetic Act, 21 U.S.C. §§ 301 et seq., or the Public Health Service Act, 42 U.S.C. §§ 262 et seq., as such may be amended from time to time. 

1.3 “Affiliate” means with respect to either Party, any Person controlling, controlled by or under common control with
such Party, for so long as such control exists. For purposes of this Section 1.3 only, “control” means (i) direct or indirect ownership of fifty percent (50%) or more of the stock or shares having the right to vote for the
election of directors of such corporate entity or (ii) the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of such entity, whether through the ownership of voting securities, by
contract or otherwise. 
 1.4 “Annual Net Sales” means, with respect to a particular Product and Calendar Year, all
Net Sales of such Product throughout the Territory during such Calendar Year. 
 1.5 “Antibody” means
any and all antibodies or antibody analogues, including Fc or Fab components thereof, derived and generated from the Lilly Sequences through the application of the Zymeworks Platform pursuant to the Research Program. For clarity, the Antibodies
shall be Multi-Specific Antibodies Directed to the Lilly Target Pair. 
 1.6 “Applicable Laws” means all federal,
state, local, national and supra-national laws, statutes, rules and regulations, including any rules, regulations, guidelines or requirements of Regulatory Authorities, national securities exchanges or securities listing organizations that may be in
effect from time to time during the Term and applicable to a particular activity hereunder. 
 1.7 “Approved CRO”
means any contract research organization listed on Exhibit 1.7 and any other contract research organization selected by Zymeworks and approved by Lilly, such approval not to be unreasonably withheld, provided, however, that Zymeworks shall
remain responsible for such performance of its CROs and shall cause such CROs to comply with the provisions of this Agreement in connection with such performance, including the provisions regarding confidentiality and
non-use. 
 1.8 “Audited Party” means the Party that is the subject of an
audit by the other Party under Section 6.4.2. 
 1.9 “Auditing Party” means the Party that is conducting an
audit of the other Party under Section 6.4.2. 
 1.10 “Business Day” means any day other than a Saturday, Sunday
or any other day on which commercial banks in New York, New York, U.S.A are authorized or required by Applicable Law to remain closed. 

  
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 1.11 “Calendar Quarter” means any respective period of three
(3) consecutive calendar months ending on March 31, June 30, September 30 and December 31 of any Calendar Year. 

1.12 “Calendar Year” means each successive period of twelve (12) months commencing on January 1 and ending on
December 31. 
 1.13 “Clinical Trial” means a Phase I Clinical Trial, Phase II Clinical Trial or Phase III Clinical
Trial, or any post-approval human clinical trial, as applicable. 
 1.14 “Combination Product” means a Product that
incorporates at least one clinically active component having independent biological or chemical activity in the Field when present alone (“Other Active Component”) in addition to the Antibody(ies) incorporated in the Product and
where the Antibody(ies) and Other Active Component(s) are sold as a single formulation for a single price. All references to “Product” in this Agreement shall be deemed to include Combination Products. 

1.15 “Commercially Reasonable Efforts” means, with respect to particular objectives or tasks of a Party, that level of
efforts and resources required to carry out a particular task or obligation in an active and sustained manner, consistent with the general practice followed by such Party in the exercise of its reasonable business discretion relating to other
pharmaceutical products owned by it, or to which it has exclusive rights, which are of similar market potential at a similar stage in their development or product life, taking into account issues of patent coverage, safety and efficacy, product
profile, the competitiveness of products in development and in the marketplace, supply chain management considerations, the proprietary position of the compound or product, the regulatory structure involved, the profitability of the applicable
products (including, without limitation, pricing and reimbursement status achieved), and other relevant factors, including without limitation, technical, legal, scientific and/or medical factors. 

1.16 “Compliance” shall mean the adherence by the Parties in all material respects to all
Applicable Laws and Party Specific Regulations, in each case with respect to the activities to be conducted under this Agreement. 

1.17 “Confidential Information” means all Know-How, which is generated by or on
behalf of a Party under this Agreement or which one Party or any of its Affiliates or contractors has provided or otherwise made available to the other Party whether made available orally, in writing, or in electronic form, including such Know-How comprising or relating to concepts, discoveries, Inventions, data, designs or formulae arising from this Agreement. This Agreement and its Exhibits and amendments constitute Confidential Information of both
of the Parties. 
 1.18 “Control” or “Controlled” means, with respect to any material, Know-How, or intellectual property right (including Patent Rights), that a Party (a) owns or (b) has a license to such material, Know-How, or intellectual property
right and, in each case, has the power to grant to the other Party access, a license, or a sublicense (as applicable) to the same on the terms and 

  
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conditions set forth in this Agreement without violating any obligations of the granting Party to a Third Party or subjecting the granting Party to any additional fee or charge. Notwithstanding
anything to the contrary in this Agreement, the following shall not be deemed to be Controlled by Zymeworks: (i) any materials, Know-How or intellectual property right owned or licensed by any Acquiring
Entity immediately prior to the effective date of the merger, consolidation or transfer making such Third Party an Acquiring Entity, and (ii) any materials, Know-How or intellectual property right that
any Acquiring Entity subsequently develops without accessing or practicing the Zymeworks Platform or any Zymeworks Intellectual Property. 

1.19 “Covered” or “Cover” means, with respect to a Product in a particular country, that the
manufacture, use, sale or importation of such Product in such country would, but for the licenses granted herein, infringe a Valid Patent Claim. 

1.20 “Directed To” means, with regard to an antibody or product, that such antibody or product (a) binds directly to a
Target(s), and (b) exerts its primary diagnostic, prophylactic or therapeutic activity as a result of such binding or modifies the profile (e.g., PK, tissue penetration and distribution) of the antibody as a result of such binding, as
determined based on reasonable experimental data or generally accepted scientific literature, in either case available at the time of completion of preclinical development of such antibody or product. When required grammatically, the defined term
“Directed To” may be separated and shall have the same meaning set forth above; e.g., when discussing Targets To which an antibody is Directed. 

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

1.22 “Field” means any and all uses and purposes, including, without limitation, diagnostic, prophylactic, and
therapeutic uses, in humans and animal. 
 1.23 “First Commercial Sale” means, with respect to a Product in any
country in the Territory, the first sale, transfer or disposition for value or for end use or consumption of such Product in such country after Marketing Authorization has been received in such country; provided, that any sale, transfer or
disposition (i) to a Related Party will not constitute a First Commercial Sale unless the Related Party is the last Person in the distribution chain of the Product, (ii) of samples with respect to a Product will not constitute a First
Commercial Sale, and (iii) for use in a Clinical Trial or for compassionate use in which such Product is sold at or below the cost of goods therefor will not constitute a First Commercial Sale. For clarity, with respect to the Key European
Countries only, in the event Lilly receives Marketing Authorization for the first Key European Country but the pricing in such first country is not reasonably acceptable to Lilly for it to commercially launch with national reimbursement for such
Product (even if Lilly merely makes such Product available in pharmacies without national reimbursement) then a “First Commercial Sale” shall not be deemed to occur with respect to such country unless and until the earlier of either:
(i) Lilly receiving pricing in such country that is reasonably acceptable to Lilly for it to commercially launch such Product with national reimbursement in such country; or (ii) the first sale, transfer or disposition for value or for end
use or consumption of a Product 

  
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occurs in any subsequent Major Market country after Marketing Authorization has been received in such country (subject to the exceptions set forth in (i) – (iii) above), including in any Key
European Country other than the Key European Country that triggered the analysis as described in this sentence. 
 1.24 “FTE
Rate” means the annual compensation rate for an FTE, which shall be $[...***...] (USD) as of the Effective Date, beginning with Calendar Year 2014. The FTE Rate shall be subject to an annual adjustment equal to the change in the
consumer price index for such Calendar Year as reported by United States Bureau of Labor Statistics. 
 1.25 “Full Time
Equivalent” or “FTE” means the equivalent of a full-time scientific or technical employee’s work time over an accounting period (including normal vacations, sick days and holidays) based on [...***...]
([...***...]) hours per year. The portion of an FTE year devoted by a scientist to activities under the Research Program shall be determined by dividing (a) the number of hours during any accounting period devoted by such individual to
such activities by (b) the product of eight (8) hours * the number of Business Days during such accounting period. At minimum, [...***...] percent ([...***...]%) of the FTE positions will be at the PhD scientist level and the
ratio of technical to administrative activities shall be no less than [...***...], respectively. For clarity, in no event shall any individual Zymeworks employee be considered more than a single FTE for any accounting period. 

1.26 “Generic Competition” shall be deemed to exist with respect to a Product in a country in the Territory only if a
Generic Product(s) represent a total unit volume of at least [...***...] percent ([...***...]%) of the combined unit volume of the Product and such Generic Product(s) for all indications, in the aggregate, in such country for the
one (1) preceding calendar quarters, determined by the number of prescriptions given for such Product and such Generic Product(s), in the aggregate, during such one (1) preceding calendar quarters (as measured by IMS Health
Incorporated, Fairfield, Connecticut (or any of its affiliates) (“IMS”) or similar independent source if IMS is unavailable). 

1.27 “Generic Product” means a Product (regardless of whether such product dosage or formulation differs from
Lilly’s Product) that is commercialized by a Third Party that: (A) is approved for sale under Section 505(j) of the Act (or a successor or foreign equivalent Applicable Law) in reliance on the prior approval of a Product obtained or held
by Lilly or its Affiliate or sublicensee or is biosimilar to such a Product; and (B) is legally marketed in the applicable country in the Territory by an entity other than, and which is not authorized to do so by, Lilly, its Affiliates or its
sublicensees. 
 1.28 “Good Clinical Practices” or “GCP” means all applicable Good Clinical Practice
standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of Clinical Trials, including, as applicable, (a) as set forth in the International Conference on Harmonisation of Technical Requirements
for Registration of Pharmaceuticals for Human Use (“ICH”) Harmonised Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) and any other guidelines for good clinical practice for trials on

  
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medicinal products in the Territory, (b) the Declaration of Helsinki (2004) as last amended at the 52nd World Medical Association in October 2000 and any further amendments or
clarifications thereto, (c) U.S. Code of Federal Regulations Title 21, Parts 50 (Protection of Human Subjects), 56 (Institutional Review Boards) and 312 (Investigational New Drug Application), as may be amended from time to time, and
(d) the equivalent Applicable Laws in any relevant country, each as may be amended and applicable from time to time and in each case, that provide for, among other things, assurance that the clinical data and reported results are credible and
accurate and protect the rights, integrity, and confidentiality of trial subjects. 
 1.29 “Good Laboratory Practices” or
“GLP” means all applicable Good Laboratory Practice standards, including, as applicable, (a) as set forth in the then-current good laboratory practice standards promulgated or endorsed by the FDA as defined in 21 C.F.R. Part 58,
and (b) the equivalent Applicable Laws in any relevant country, each as may be amended and applicable from time to time. 
 1.30
“Good Research Practices” or “GRP” means all applicable Good Research Practices including, as applicable, (a) the research quality standards defining how Lilly’s research laboratories conduct good science for
non-regulated work as set forth in Exhibit 1.30 of this Agreement, (b) the BARQA Guidelines for Quality in Non-regulated Scientific Research,
(c) the WHO Quality Practices in Basic Biomedical Research Guidelines or, (d) the equivalent Applicable Laws if any, in any relevant country, each as may be amended and applicable from time to time. 

1.31 “Governmental Authority” means any court, commission, authority, department, ministry, official or other
instrumentality of, or being vested with public authority under any law of, any country, state or local authority or any political subdivision thereof, or any association of countries. 

1.32 “Internal Compliance Codes” means a Party’s internal policies and procedures intended to ensure that a Party
complies with Applicable Laws, Party Specific Regulations, and such Party’s internal ethical, medical and similar standards. 

1.33 “IND” means an investigational new drug application filed with the FDA with respect to a Product, or an equivalent
application filed with a Regulatory Authority in a country other than the United States to commence a clinical trial of pharmaceutical product. 

1.34 “Invention” means any Know-How, composition of matter, article of manufacture or
other subject matter, whether patentable or not, that is conceived or reduced to practice under and as a result of, and within the scope of, any work performed under the Agreement. 

1.35 “Joint Invention” means any Invention conceived or reduced to practice jointly by one or more employees of Lilly
or its Affiliate or a Third Party acting on behalf of Lilly or its 

  
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Affiliate, on the one hand, and one or more employees of Zymeworks or its Affiliate or a Third Party acting on behalf of Zymeworks or its Affiliate, on the other hand. 

1.36 “Joint Know-How” means all
Know-How comprising a Joint Invention. 
 1.37 “Joint Patent Rights” means
all Patent Rights claiming a Joint Invention. 
 1.38 “Know-How” means all
technical information, know-how, data, inventions, discoveries, trade secrets, specifications, instructions, processes, formulae, methods, protocols, expertise and other technology applicable to formulations,
compositions or products or to their manufacture, development, registration, use or marketing or to methods of assaying or testing them, and all biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical and
analytical, safety, quality control, manufacturing, preclinical and clinical data relevant to any of the foregoing. For clarity, Know-How excludes Patent Rights and materials. 

1.39 “Lilly Target Pair” means [...***...], as more specifically referred to under [...***...], and
[...***...], as more specifically referred to under [...***...], or any Target with which it is replaced in accordance with Section 3.1.5, may be referred to herein as “Target 2”. 

1.40 “Major Market” means each of [...***...]. For purposes of this Agreement the term
“[...***...]” means [...***...]. 
 1.41 “Marketing Authorization” means all approvals
(including, without limitation, any pricing, reimbursement or access approvals) from the relevant Regulatory Authority necessary to initiate marketing and selling a Product in any country. 

1.42 “Multi-Specific Antibody” means an antibody or an antibody analogue, generated through the application of the
Zymeworks Platform, that contains independent binding sites Directed to [...***...]. 
 1.43 “Net Sales” means,
with respect to a Product, the gross amount invoiced by Lilly (including a Lilly Affiliate) or any sublicensee thereof to unrelated Third Parties, excluding any sublicensee, for the Product in the Territory, less: 

a) [...***...]; 

b) [...***...]; 

c) [...***...]; 

d) [...***...]; 

e) [...***...]; 

f) [...***...]; 

  
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 g) [...***...]; and 

h) [...***...] which are in accordance with U. S. Generally Accepted Accounting Principles (U.S. GAAP). 

Such amounts shall be determined from the books and records of Lilly or sublicensee, maintained in accordance with U. S. GAAP or, in the case
of sublicensees, such similar accounting principles, consistently applied. Lilly further agrees in determining such amounts, it will use Lilly’s then current standard procedures and methodology, including Lilly’s then current standard
exchange rate methodology for the translation of foreign currency sales into U.S. Dollars or, in the case of sublicensees, such similar methodology, consistently applied. 

In the event that the Product is sold as part of a Combination Product (where “Combination Product” means any pharmaceutical product
which comprises the Product and other active compound(s) and/or ingredients), the Net Sales of the Product, for the purposes of determining royalty payments, shall be determined by multiplying the Net Sales of the Combination Product (as defined in
the standard Net Sales definition) by the fraction, A / (A+B) where A is the weighted average sale price of the Product when sold separately in finished form, and B is the weighted average sale price of the other product(s) sold separately in
finished form. 
 In the event that the weighted average sale price of the Product can be determined but the weighted average sale price of
the other product(s) cannot be determined, Net Sales for purposes of determining royalty payments shall be calculated by multiplying the Net Sales of the Combination Product by the fraction A / C where A is the weighted average sale price of the
Product when sold separately in finished form and C is the weighted average sale price of the Combination Product. 
 In the event that the
weighted average sale price of the other product(s) can be determined but the weighted average sale price of the Product cannot be determined, Net Sales for purposes of determining royalty payments shall be calculated by multiplying the Net Sales of
the Combination Product by the following formula: one (1) minus (B / C) where B is the weighted average sale price of the other product(s) when sold separately in finished form and C is the weighted average sale price of the Combination
Product. 
 In the event that the weighted average sale price of both the Product and the other product(s) in the Combination Product cannot
be determined, the Net Sales of the Product shall be deemed to be equal to the mutually agreed (by the Parties) percentage of the Net Sales of the Combination Product, based on the relative value and/or cost of the Product and other product(s) in
such Combination Product provided; however, that in the event the Parties cannot, in spite of good faith efforts, mutually agree to such a percentage, then such percentage shall be equal to fifty percent (50%) of the Net Sales of the Combination
Product. 

  
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 The weighted average sale price for a Product, other product(s), or Combination Product shall be calculated
once each Calendar Year and such price shall be used during all applicable royalty reporting periods for the entire following Calendar Year. When determining the weighted average sale price of a Product, other product(s), or Combination Product, the
weighted average sale price shall be calculated by dividing the sales dollars (translated into U.S. dollars) by the units of active ingredient sold during the twelve (12) months (or the number of months sold in a partial calendar year) of the
preceding Calendar Year for the respective Product, other product(s), or Combination Product. In the initial Calendar Year, a forecasted weighted average sale price will be used for the Product, other product(s), or Combination Product. Any over or
under payment due to a difference between forecasted and actual weighted average sale prices will be paid or credited in the first royalty payment of the following Calendar Year. 

1.44 “Party Specific Regulations” means all judgments, decrees, orders or similar decisions issued by any
Governmental Authority specific to a Party, and all consent decrees, corporate integrity agreements, or other agreements or undertakings of any kind by a Party with any Governmental Authority, in each case as the same may be in effect from time to
time and applicable to a Party’s activities contemplated by this Agreement 
 1.45 “Patent Rights” means the
rights and interests in and to issued patents and pending patent applications (which, for purposes of this Agreement, include certificates of invention, applications for certificates of invention and priority rights) in any country or region,
including all provisional applications, substitutions, continuations, continuations-in-part, continued prosecution applications including requests for continued
examination, divisional applications and renewals, and all letters patent or certificates of invention granted thereon, and all reissues, reexaminations, extensions (including, without limitation, pediatric exclusivity patent extensions), term
restorations, renewals, substitutions, confirmations, registrations, revalidations, revisions and additions of or to any of the foregoing, in each case, in any country. 

1.46 “Person” means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated
organization or government or political subdivision thereof. 
 1.47 “Phase I Clinical Trial” means a study in humans
which provides for the first introduction into humans of a product, conducted in normal volunteers or patients to generate information on product safety, tolerability, pharmacological activity or pharmacokinetics, or otherwise consistent with the
requirements of U.S. 21 C.F.R. §312.21(a) or its foreign equivalents. 
 1.48 “Phase II Clinical Trial” means a
study in humans of the safety, dose ranging and efficacy of a product, which is prospectively designed to generate sufficient data (if successful) to commence a Phase III Clinical Trial or to file for accelerated approval, or otherwise consistent
with the requirements of U.S. 21 C.F.R. §312.21(b) or its foreign equivalents. 

  
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 1.49 “Phase III Clinical Trial” means a controlled study in humans of
the efficacy and safety of a product, which is prospectively designed to demonstrate statistically whether such product is effective and safe for use in a particular indication in a manner sufficient to file for Marketing Authorization, or otherwise
consistent with the requirements of U.S. 21 C.F.R. §312.21(c) or its foreign equivalents. 
 1.50 “Product” means a
pharmaceutical preparation in final form containing one or more Antibody(ies). For clarity, a Product includes any formulation, delivery device, or dispensing device required for effective use of the Product (collectively the “Product
Delivery Mechanism”) provided, however, notwithstanding anything to the contrary herein, the Parties agree that any Patent Rights that claim solely the Product Delivery Mechanism and no other component or aspect of the Product shall be
deemed to not Cover the Product for purpose of determining the Royalty Term as set forth in Section 5.5.2 of this Agreement. 

1.51 “Regulatory Authority” means the FDA or any counterpart of the FDA outside the United States, or other national,
supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity with authority over the distribution, importation, exportation, manufacture, production, use, storage, transport,
clinical testing or sale of a pharmaceutical product (including a Product), which may include the authority to grant the required reimbursement and pricing approvals for such sale. 

1.52 “Regulatory Exclusivity” means any exclusive marketing rights or data exclusivity rights conferred by any
applicable Regulatory Authority, other than an issued and unexpired Patent Right, including any new chemical entity exclusivity, pediatric exclusivity or orphan drug exclusivity. 

1.53 “Related Party” means each Party, its Affiliates, and their respective licensees or sublicensees hereunder (which
term excludes any Third Parties to the extent functioning as distributors), as applicable. In no event shall Zymeworks be a Related Party with respect to Lilly or Lilly be a Related Party with respect to Zymeworks. 

1.54 “Research Program Patent Rights” means any and all Patent Rights claiming an Invention arising from the Research
Program that are Controlled by either Party or their respective Affiliates. 
 1.55 “Target” means any clinically
relevant [...***...] (or portion thereof). 
 1.56 “Territory” means all of the countries and territories in
the world. 
 1.57 “Third Party” means any Person other than Lilly or Zymeworks or an Affiliate of Lilly or
Zymeworks. 
 1.58 “United States” or “US” means the United States of America and its territories
and possessions. 

  
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 1.59 “USD” and “$” means United States dollars. 

1.60 “Valid Patent Claim” means any claim of (a) an issued and unexpired patent or (b) a pending patent
application, in each case included within the Zymeworks Patent Rights or the Research Program Patent Rights which has not been abandoned, revoked or held unenforceable, invalid or unpatentable by a court or other government body of competent
jurisdiction with no further possibility of appeal and which claim has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise. 

1.61 “Zymeworks Internal Program” means a bona fide internal research, development or commercialization program
undertaken by Zymeworks with respect to a Target, with respect to which, as of the date of Replacement Target nomination under Section 3.1.5 for such Target (the “Receipt Date”), a Zymeworks internal product candidate Directed
To such Target has been generated and that (a) as of or prior to the Receipt Date, Zymeworks or an Affiliate of Zymeworks [...***...] of such Zymeworks internal product candidate or (b) as of the Receipt Date, Zymeworks
[...***...] involving such internal product candidate under such Zymeworks Internal Program in a sustained manner consistent with Zymeworks’ other internal programs at similar stages of research and development. 

1.62 “Zymeworks Intellectual Property” means the Zymeworks Patent Rights and the Zymeworks Know-How. 
 1.63 “Zymeworks Know-How”
means all Know-How, which: (a) is Controlled by Zymeworks as of the Effective Date and during the Term of the Agreement, (b) is not generally known, and (c) is reasonably necessary or useful to
Lilly in: (i) carrying out the activities assigned to it under the Research Program or (ii) developing, manufacturing or commercializing Products (including developing and manufacturing of any Antibody for inclusion in such Products). 

1.64 “Zymeworks Patent Rights” means any and all Patent Rights that are Controlled by Zymeworks or its Affiliates
(including without limitation Patent Rights Controlled by Zymeworks claiming Zymeworks Inventions) as of the Effective Date and during the Term of the Agreement, which (a) are necessary or reasonably useful for the use or exploitation of the
Zymeworks Platform for carrying out the Research Program or (b) claim the manufacture, use, sale or importation of any Antibody (including, the make, use, offer to sell, sell, and import Antibodies). 

1.65 “Zymeworks Platform” means Zymeworks’ proprietary antibody engineering tools and capabilities and the amino
acid mutations included therein used to generate antibodies consisting of [...***...] and/or [...***...]. 
 1.66
Additional Definitions. In addition, each of the following definitions shall have the respective meanings set forth in the section of this Agreement indicated below. 

  
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	 Definition
	  	 Section/Exhibit

	 Accounting Firm
	  	6.4.2(a)
	 Agreement
	  	Preamble
	 Agreement Payments
	  	6.3
	 Challenge Countries
	  	10.2.3
	 Claims
	  	13.1
	 Code
	  	11.4
	 Commercialization Milestone Event
	  	5.4
	 Commercialization Milestone Payment
	  	5.4
	 Confidentiality Agreement
	  	15.13
	 Controlling Party
	  	7.3.4
	 Development Milestone Event
	  	5.3
	 Development Milestone Payment
	  	5.3
	 Dispute
	  	15.5.1
	 Effective Date
	  	Preamble
	 Excluded Claim
	  	15.5.5
	 Expenses and Payments
	  	6.4.2(a)
	 Indemnified Party
	  	13.3.1
	 Indemnifying Party
	  	13.3.1
	 Infringement
	  	7.3.1
	 JSC
	  	4.3
	 Lilly Challenged Zymeworks Patent Rights
	  	10.2.3
	 Lilly Indemnified Party
	  	13.1
	 Lilly RP Termination Decision
	  	10.2.1(b)
	 Lilly Sequences
	  	3.1.3(a)
	 Losses
	  	13.1
	 Notice of Dispute
	  	15.5.1
	 Party
	  	Preamble
	 Parties
	  	Preamble
	 Project Leader
	  	4.1
	 prosecution
	  	7.2.1
	 Replacement Target
	  	3.1.5
	 Research Plan
	  	3.1.3
	 Research Program
	  	3.1.1
	 Research Program Term
	  	3.1.2
	 Royalty
	  	5.5.1
	 Target 2
	  	1.39
	 Target 2 Replacement Term
	  	3.1.5
	 Taxes
	  	6.3
	 Term
	  	10.1
	 Third Party Expenses
	  	5.2.2

  
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	 Definition
	  	Section/Exhibit
	 Third Party Expense Threshold
	  	5.2.2
	 Zymeworks
	  	Preamble
	 Zymeworks Indemnified Party
	  	13.2

 1.67 Interpretation. The captions and headings
to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections or Exhibits mean the particular
Articles, Sections or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. In the event of any conflict between the main body of this Agreement and any Exhibit hereto, the main body of this Agreement shall
prevail. Unless context otherwise clearly requires, whenever used in this Agreement: (a) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without
limitation;” (b) the word “day” or “year” means a calendar day or year unless otherwise specified; (c) the word “notice” shall mean notice in writing (whether or not specifically stated) and shall include
notices, consents, approvals and other written communications contemplated under this Agreement; (d) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement as a whole and not
merely to the particular provision in which such words appear; (e) the words “shall” and “will” have interchangeable meanings for purposes of this Agreement; (f) provisions that require that a Party, the Parties or a
committee hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise;
(h) words of any gender include the other gender; (i) words using the singular or plural number also include the plural or singular number, respectively; (j) references to any specific law, rule or regulation, or article, section or
other division thereof, shall be deemed to include the then-current amendments thereto or any replacement law, rule or regulation thereof; and (h) neither Party shall be deemed to be acting on behalf of the other Party. 

2. GRANT OF LICENSES 

2.1 Licenses to Lilly. Subject to the terms and conditions of this Agreement, 

2.1.1 Conduct of the Research Program. Zymeworks hereby grants to Lilly a license, including the right to sublicense to
Affiliates of Lilly and Third Parties undertaking activities hereunder on Lilly’s behalf, under the Zymeworks Intellectual Property (including Zymeworks’ interest in Joint Inventions) solely for Lilly to perform those activities assigned
to Lilly under the Research Program. 
 2.1.2 For Products. Zymeworks hereby grants to Lilly an exclusive license under the
Zymeworks Intellectual Property (including Zymeworks’ interest in Joint Inventions) to (a) make, use and import Antibodies for incorporation into Products and (b) make, use, offer to sell, sell, and import Products in the Field in the
Territory as of the Effective Date and during 

  
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the Term of the Agreement. Notwithstanding anything to contrary in this Agreement, during the Term of this Agreement, Zymeworks agrees that it shall neither: (i) make, use, offer to sell,
sell, and import Products and/or Antibodies in the Field in the Territory; nor (ii) grant any rights to Zymeworks Intellectual Property to any Affiliate, sublicensee or other Third Parties to make, use, offer to sell, sell, and import Products
and/or Antibodies in the Field in the Territory. 
 2.1.3 Modifications. The foregoing license shall include the right to
modify the Antibodies; provided that such modifications shall in no event modify the amino acid mutations included in the Antibodies if such modification would infringe upon a Valid Claim of a Zymeworks Patent Right that claims subject matter that
was not generated or conceived under the Research Program. Conversely, however, this license shall include the right to modify the Antibodies [...***...] using Zymeworks Know-How and Zymeworks Patent
Rights that were generated or conceived under the Research Program provided that such use would not infringe a Valid Claim of a Zymeworks Patent Right that claims subject matter that was not generated or conceived under the Research Program. 

2.1.4 Sublicenses. The license granted to Lilly in Section 2.1.2 includes the right to grant sublicenses through multiple
tiers, provided that each sublicense granted by Lilly shall be consistent with the terms and conditions of this Agreement. Lilly shall, upon Zymeworks’ written request to Lilly, provide Zymeworks with prompt notice of any such sublicenses that
it grants. Lilly shall be and remain responsible to Zymeworks for the performance of each sublicensee under such sublicense. 
 2.2
License to Zymeworks. During the Research Program Term and subject to the terms and conditions of this Agreement, Lilly hereby grants Zymeworks a non-exclusive license to make, use and otherwise
exploit subject matter within the Know-How and Patents Controlled by Lilly or its Affiliates (including Lilly’s interest in Joint Inventions) solely for Zymeworks to perform those activities assigned to
it under the Research Program or otherwise cooperate with Lilly hereunder. The license granted under this Section 2.2 shall not include the right to sublicense; provided, however, that the use by Zymeworks of contractors shall not
be construed as a sublicense. 
 2.3 No Implied Licenses. Except as expressly set forth in this Agreement, neither Party, by
virtue of this Agreement, shall acquire any license or other interest, by implication or otherwise, in any materials, Know-How, Patent Rights or other intellectual property rights Controlled by the
other Party or its Affiliates. For clarity, except for rights necessary for Zymeworks to carry out its responsibilities under the Research Program as contemplated hereunder, Lilly is not granting Zymeworks any rights, implicitly, explicitly or
otherwise to use the Lilly Target Pair for any purpose. Subject to the licenses explicitly granted to Lilly hereunder and the other terms and conditions of this Agreement, Zymeworks will retain all rights under the Zymeworks Intellectual Property.
Without limiting the foregoing and notwithstanding anything herein to the contrary 

  
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(except as provided in this Section 2.3 or Section 8.4 below), the licenses granted to Lilly in this Agreement do not include the right to utilize or otherwise exploit the Zymeworks
Platform to independently develop or modify Antibodies or to modify or improve the Zymeworks Platform. Furthermore, notwithstanding anything to the contrary in this Agreement, by entering into this Agreement with Zymeworks, Lilly is not forfeiting
any rights that Lilly may have including, without limitation, its rights to perform research activities in compliance with 35 U.S.C. § 271(e)(1) or any experimental or research use exemption that may apply in any country. 

3. RESEARCH PROGRAM AND DEVELOPMENT AND 

COMMERCIALIZATION OF PRODUCTS 

3.1 Research Program. 

3.1.1 General. Lilly and Zymeworks shall conduct a program to generate and optimize antibodies or antibody analogues Directed To
the Lilly Target Pair using the Lilly Sequences and the Zymeworks Platform for applications in the Field on a collaborative basis and in accordance with the Research Plan (the “Research Program”). The Research Program shall be
coordinated by the Parties through the JSC. 
 3.1.2 Research Term. The Research Program shall commence on the Effective Date
and shall conclude twelve (12) months after the commencement of Part A – Project Initiation of the Research Plan (such period, the “Research Program Term”) provided that the Parties agree, notwithstanding the foregoing,
that commencement of the Research Program Term in no event shall be deemed to have occurred any earlier than such time as Lilly has delivered to Zymeworks at least one of the Lilly Sequences as described in Section 3.1.3(a) of this Agreement. The
Research Program Term may be extended by up to six (6) additional months upon mutual written agreement of the Parties, and Zymeworks shall charge no additional upfront fee or milestone to Lilly in connection with such extension. 

3.1.3 Research Plan. The Research Program shall cover the following activities, as set forth in further detail in a written
research plan agreed to by the Parties in writing (the initial plan for the Research Program is attached hereto as Exhibit 3.1.3, which may be amended from time to time with the mutual written consent of the Parties, such consent not to be
unreasonably withheld, conditioned or delayed) (collectively, the “Research Plan”): 
 (a) Lilly will provide to
Zymeworks at least one (1) and up to three (3) antibody nucleic acid or amino acid sequences Directed To each Target in the Lilly Target Pair (the “Lilly Sequences”). Each Lilly Sequence shall consist [...***...]
sequence that encodes [...***...] within the Lilly Target Pair. The Lilly Sequences shall be provided to Zymeworks within [...***...] days after the Effective Date. 

  
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 (b) Zymeworks will, subject to Section 5.2, apply the Zymeworks Platform to the
Lilly Sequences as described in the Research Plan. 
 (c) Zymeworks or an Approved CRO of Zymeworks’ choice will, subject to
Section 5.2, perform the initial rounds of cloning, expression and characterization work with respect to each Antibody as described within Part B or C of the Research Plan. 

(d) Lilly or a contract research organization of Lilly’s choice will perform [...***...]. 

3.1.4 Conduct of Research Program. Each Party: 

(a) shall conduct its responsibilities under the Research Program, as assigned to it under the Research Plan and shall use Commercially
Reasonable Efforts to achieve the objectives and timelines within the Research Plan. 
 (b) conduct the Research Program in
compliance with all Applicable Laws and in accordance with GLPs, GCPs and GRPs to the extent applicable. 
 (c) may utilize the
services of its Affiliates and, to the extent permitted under Sections 3.1.3(c), 3.1.3(d) or 3.2, Third Parties to perform those activities assigned to it under the Research Program. 

3.1.5 Replacement of Target 2. During the period commencing on the Effective Date and ending [...***...] (the
“Target 2 Replacement Term”), Lilly may replace Target 2 by providing Zymeworks with written notice referencing this Section 3.1.5 and nominating such replacement Target (each, a “Replacement Target”); provided
that the selection of any Replacement Target shall be subject to the provisions of this Section 3.1.5; and provided further than Lilly may nominate [...***...] Replacement Targets during the Target 2 Replacement Term. Provided that a
Replacement Target is available in accordance with this Section 3.1.5, such Replacement Target shall become Target 2 for purposes of this Agreement, and Lilly shall cease to have any rights under this Agreement (including Section 3.5) with
respect to any Target previously selected as Target 2. The Lilly Sequences Directed To any replacement Target 2 selected pursuant to this Section 3.1.5 shall be provided to Zymeworks within [...***...] after such Replacement Target is
nominated by Lilly. [...***...] of Zymeworks’ receipt of Lilly’s notice of a Replacement Target that Lilly proposes to select as Target 2 pursuant to Section 3.1.5, Zymeworks shall provide Lilly with notice that the proposed
Replacement Target is available or unavailable, and the basis for such status. 
 (a) Available Replacement Target. A proposed
Replacement Target shall be available for purposes of this Section 3.1.5; provided that, at the time that Lilly notifies Zymeworks of the selection of such Replacement Target, the following circumstances are not applicable: 

  
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 (i) Zymeworks is [...***...]; 

(ii) Zymeworks is [...***...]; or 

(iii) Zymeworks is [...***...]. 
 If any
Replacement Target selected by Lilly to become Target 2 is so available, such Replacement Target shall become Target 2, and Lilly’s exclusivity under Section 3.5 shall apply with respect to such Target 2 as part of a corresponding Target
Pair. 
 (b) Unavailable Target. A proposed Replacement Target shall be unavailable if Zymeworks is subject to any of the
circumstances set forth in Section 3.1.5(a)(i), (ii) or (iii) above with respect to products incorporating antibody nucleic acid or amino acid sequences developed or optimized using the Zymeworks Platform that are Directed To such Replacement
Target. If any such Replacement Target is so unavailable, such Target shall not be Target 2, and Lilly may propose another Replacement Target(s) as Target 2, subject to this Section 3.1.5. For purposes of clarity, in the event a nominated
Replacement Target is unavailable such nomination shall not be considered a nomination of a Replacement Target for the purpose of determining whether Lilly has exceeded the limitation for the nomination of Replacement Targets as described above in
this Section 3.1.5 of this Agreement. 
 3.1.6 Exchange of Know-How and Materials.

 (a) To the extent any physical materials need to be delivered to a Party as may be determined by the JSC under this Agreement to
enable that Party to perform its obligations under the Research Program the delivering Party shall arrange for prompt delivery of such physical materials in the manner determined by the JSC. The Party receiving such physical materials shall use the
same for the sole purpose of conducting activities under the Research Program or otherwise exercising its rights and fulfilling its obligations hereunder and treat all such physical materials as Confidential Information of the delivering Party.
Unless expressly agreed otherwise, physical materials so supplied by a Party to another Party pursuant to this Agreement shall be “AS IS” without warranty of any kind and shall not be used in any human application. 

(b) Zymeworks will only provide to Lilly (1) the Antibodies and the sequences thereof to be provided in accordance with the
Research Plan and description of the mechanism to generate such Antibodies (the “Research Program Work Product”) and (2) any additional Zymeworks Know-How that is reasonably required for
Lilly to perform its obligations under the Research Program and progress the Products through preclinical development. For clarity (except as specifically provided in this Section 3.1.5(b), Zymeworks shall have no obligation to disclose or transfer
to Lilly any Know-How or technology. 

  
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 (c) Lilly will only provide to Zymeworks (1) the Lilly Sequences and
(2) any additional Know-How Controlled by Lilly that is reasonably required for Zymeworks to perform its obligations under the Research Program, in each case (i) and (ii) as specified in the Research
Plan. For clarity (except as specifically provided in this Section 3.1.5(c)), Lilly shall have no obligation to disclose or transfer to Zymeworks any Know-How or technology. 

3.2 Affiliates, Sublicensees and Contractors. Lilly, in utilizing the services of its Affiliates, sublicensees and contractors
under this Agreement, may sublicense its rights under this Agreement in accordance with Section 2.1.4 and share Confidential Information with such Affiliates, sublicensees and contractors in furtherance of the Research Program and in
undertaking development and commercialization activities under this Agreement, in each case in accordance with Article 8; provided, however, that Lilly shall remain responsible for such performance of its Affiliates, sublicensees and
contractors and shall cause such Affiliates, sublicensees and contractors to comply with the provisions of this Agreement in connection with such performance, including the provisions regarding confidentiality and
non-use. 
 3.3 Records and Reports.

 3.3.1 Records. Each Party shall maintain records, for so long as necessary to comply with Applicable Laws or
reasonably necessary to support the prosecution, maintenance and enforcement of intellectual property rights (including Patent Rights) in accordance with Article 7 below, regarding its conduct of the Research Program after the applicable activity,
in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall fully and properly reflect the work done and results achieved by such Party in the performance of the Research Program. 

3.3.2 Copies and Inspection of Records. During the period that such records are required to be maintained pursuant to
Section 3.3.1, each Party shall have the right, during normal business hours and upon reasonable notice, to inspect and copy all such records referred to in Section 3.3.1, solely for purposes of exercising its rights or fulfilling its
obligations under this Agreement. Upon reasonable request, each Party shall provide copies of the records described in Section 3.3.1, at the other Party’s request and expense. Lilly shall have the right to arrange with Zymeworks for its
employee(s) or consultant(s) involved in the activities contemplated hereunder to visit the offices and laboratories of Zymeworks and any of its contractors during normal business hours and upon reasonable notice, and to discuss the Research Program
work and its results in detail with the technical personnel and consultant(s); provided that any such visits shall occur no more frequently than once per Calendar Quarter. 

3.4 Development and Commercialization by Lilly. Subject to the terms and conditions of this Agreement, Lilly (itself or through
its Affiliates or Third Parties) shall have the sole responsibility and exclusive right to further 

  
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develop, manufacture and commercialize any Products upon the conclusion of the Research Program (including, subject to Section 2.3, the right to develop and manufacture Antibodies for
incorporation into Products). Until [...***...], Lilly shall use Commercially Reasonable Efforts to develop and commercialize Product(s). Until [...***...], Lilly shall provide Zymeworks with written reports summarizing the then current
development status of each Product as set forth in this Section 3.4 below. 
 3.4.1 Development. After the expiration of
the Research Program Term until the first Product achieves a First Commercial Sale in at least one Major Market, with respect to each Product hereunder, for so long as Lilly is conducting development activities with respect to such Product, Lilly,
upon written request by Zymeworks (such request may not occur more than once in any one calendar year) shall, provide to Zymeworks a high-level written summary describing the status of development activities that it has conducted during the previous
six-month period and the activities planned to be conducted during the twelve (12) month period immediately following such written request. 

3.4.2 Safety and Regulatory Obligations. Upon first submission of an IND for a Product, the Parties, upon
Lilly’s request, will meet, if necessary, to evaluate safety and regulatory obligations related to the development of the Product. 

3.5 Target Exclusivity. During the Research Program Term, the Parties will collaborate exclusively with each other (and not with
any Third Party) with respect to developing antibodies Directed To the Lilly Target Pair. The Parties acknowledge and agree, without limiting the foregoing and without limiting the exclusive licenses explicitly granted to Lilly pursuant to
Section 2.1 above, that each Party may, as of the Effective Date or in the future, [...***...]. After the Research Program Term, Zymeworks shall collaborate exclusively with Lilly (and not with any Third Party) with respect to applying
the Zymeworks Platform to antibodies Directed To the Lilly Target Pair, [...***...]. Exclusivity with respect to antibodies Directed To the Lilly Target Pair under this Section 3.5 shall [...***...]. Provided, however, that under no
circumstances, shall Zymeworks use then Zymeworks Intellectual Property to make, use, sell, offer to sell or import Antibodies or Products or use any Antibodies to make, use, sell, offer to sell or import other products. For clarity,
nothing in this Section 3.5 shall grant either Party any rights under any Patent Rights, Know-How or other intellectual property rights Controlled by the other Party or its Affiliates for purposes set
forth in this Section 3.5. 
 3.6 Meeting upon Completion of Research Program. Within [...***...] days of the
completion of the Research Program, the Parties shall meet to discuss the results of the Research Program and Lilly’s plans for progressing the development and commercialization of the Antibodies and the Products. 

  
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 4. GOVERNANCE 

4.1 Project Leader. Within [...***...] days of the Effective Date, Lilly and Zymeworks will each assign one
(1) employee to serve as primary point of contact between the Parties with respect to the Research Program (each, a “Project Leader”). The Project Leaders shall regularly communicate with each other to address Research
Program-related issues, needs and updates. Either Party, upon prior notice to the other Party, may change its Project Leader. Except for those Disputes that are subject to the purview of the JSC, prior to submitting any Dispute to the dispute
resolution mechanism set forth in Section 15.5, the Project Leaders shall attempt, for a period of [...***...] days, to resolve such Dispute. 

4.2 Alliance Manager. Within 30 days of the Effective Date, each Party shall also appoint an individual to act as the
Alliance Manager for such Party. Each Alliance Manager shall thereafter be permitted to attend meetings of the JSC and any sub-committee as a nonvoting observer. The Alliance Managers shall be the primary
point of contact for the Parties regarding the collaboration activities contemplated by this Agreement (other than the activities/responsibilities of the Project Leader outlined in Section 4.1. above) and shall help facilitate all such
activities hereunder. 
 4.3 Joint Steering Committee. The Parties will establish, as soon as practicable after the
Effective Date, a Joint Steering Committee (the “JSC”) to oversee and coordinate the activities of the Parties under the Research Program. The JSC shall be comprised of two (2) employees from Lilly and two (2) employees
from Zymeworks. Subject to the foregoing, each Party shall appoint its respective representatives to the JSC from time to time, and may change its representatives, in its sole discretion, effective upon notice to the other Party designating such
change. Representatives from each Party shall have appropriate technical credentials, experience and knowledge pertaining to and ongoing familiarity with the Research Program. One (1) of the members of the JSC appointed by Lilly shall be
designated the JSC Chair. The JSC Chair will be responsible for calling meetings of the JSC, circulating agenda and performing administrative tasks required to assure efficient operation of the JSC. The JSC shall be promptly disbanded upon
completion of the Research Program. 
 4.4 JSC Meetings. The JSC shall meet in accordance with a schedule established by
mutual written agreement of the Parties no less frequently than once every [...***...] months until expiration of the Research Program Term. The location for meetings shall alternate between Zymeworks and Lilly facilities (or such other
location as is determined by the JSC). Alternatively, the JSC may meet by means of teleconference, videoconference or other similar means. As appropriate, additional employees or consultants may from time to time attend the JSC meetings as nonvoting
observers, provided that any such consultant shall agree in writing to comply with the confidentiality obligations under this Agreement; and provided further that no Third Party personnel may attend unless otherwise agreed by both
Parties. Each Party shall bear its own expenses related to the attendance of the JSC meetings by its representatives. Each Party 

  
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may also call for special meetings to resolve particular matters requested by such Party. The JSC Chair or his/her designee shall keep minutes of each JSC meeting that records in writing all
decisions made, action items assigned or completed and other appropriate matters. Lilly shall send meeting minutes to all members of the JSC promptly after a meeting for review. Each member shall have [...***...] from receipt in which to
comment on and to approve/provide comments to the minutes (such approval not to be unreasonably withheld, conditioned or delayed). If a member, within such time period, does not notify Lilly that s/he does not approve of the minutes, the minutes
shall be deemed to have been approved by such member. 
 4.5 JSC Functions. The JSC’s responsibilities with respect
to the Research Program are as follows: 
 (a) Overseeing and coordinating the activities of the Parties under the Research Program;

 (b) Facilitating the exchange of Know-How and materials as required hereunder; 

(c) Periodically reviewing the progress of the Research Program; and 

(d) Updating or modifying the Research Plan. 

(e) Approving the achievement of Development Milestone 1. 

(f) JSC Disputes. The JSC will endeavor to make decisions by consensus, with each of Lilly and Zymeworks having one
vote. If consensus is not reached by the Parties’ representatives pursuant to such vote, then the matter may be escalated by either Party to designated officers of both Lilly and Zymeworks with appropriate decision making authority for
resolution in accordance with Section 15.5. In the event the designated officers are unable to resolve the issue within [...***...] days, Lilly has and shall have the right to make the final decision with respect to such dispute, provided
that Lilly will not have the right to unilaterally revise the Research Plan or to obligate Zymeworks to perform any task or expend any resources outside of or beyond its express obligations under this Agreement. For clarity and notwithstanding the
creation of the JSC, each Party shall retain the rights, powers and discretion granted to it hereunder, and the JSC shall not be delegated or vested with such rights, powers or discretion unless such delegation or vesting is expressly provided
herein, or the Parties expressly so agree in writing. The JSC shall not have the power to amend, waive or modify any term of this Agreement, and no decision of the SSC shall be in contravention of any terms and conditions of this Agreement. It is
understood and agreed that issues to be formally decided by the JSC are limited to those specific issues that are expressly provided in this Agreement to be decided by the JSC. 

  
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 5. FINANCIAL PROVISIONS 

5.1 Upfront Payment. In consideration of Zymeworks’ granting of the licenses and rights to Lilly under this
Agreement, Lilly shall pay to Zymeworks a one-time, non-refundable upfront payment of One Million US dollars (USD $1,000,000) within [...***...] following
the Effective Date. 
 5.2 Expenses. Zymeworks and Lilly shall each bear all expenses it incurs in performance under
this Agreement, except as expressly set forth in this Agreement. Lilly shall provide FTE funding to Zymeworks in support of the Research Program and shall reimburse Zymeworks for all Third Party expenses incurred by Zymeworks but only to the extent
as specifically provided for in the Research Plan and in accordance with the Research Plan and Section 5.2 of this Agreement. 

5.2.1 FTE Funding. The FTE funding to be provided by Lilly shall be based on the FTE Rate and actual hours worked by Zymeworks
FTEs on the Research Program, including for purposes of any needed design cycle iterations and any initial rounds of cloning and expression work in which Zymeworks participates, as supported by approved time sheets for such FTEs coded to the
Research Program after review and approval by Lilly, such approval not to be unreasonably withheld. For clarity, Lilly shall provide Zymeworks funding for all Zymeworks FTEs engaged in the Research Program; provided that Lilly shall not be
responsible for funding more than three (3) FTEs in any given month during the Research Program Term, unless otherwise agreed by Lilly in writing (such agreement not to be unreasonably withheld). 

5.2.2 Third Party Expenses. Costs associated with subcontractors (including Approved CROs) and other Third Party expenses,
including Project-specific reagents, instrumentation costs and laboratory costs, incurred by Zymeworks with respect to the Research Program (collectively, “Third Party Expenses”) will be passed through to Lilly at cost without
markup. Third Party Expenses shall not exceed (a) [...***...] dollars ($[...***...]) prior to achievement of Gate 1 in the Research Plan or (b) [...***...] dollars (USD $[...***...]) during the conduct of Part C(iv) of the
Research Plan, in each case unless otherwise agreed by Lilly in writing (such agreement not to be unreasonably withheld) (each of (a) and (b), a “Third Party Expense Threshold”). Notwithstanding the foregoing, in the event that
Lilly nominates [...***...], the Third Party Expense Threshold(s) shall reset such that another [...***...] dollars ($[...***...]) applies with respect to the applicable period or periods. Zymeworks shall invoice Lilly for Third
Party Expenses on a quarterly basis and shall provide a report to Lilly setting forth such expenses in reasonable detail and any supporting invoices relating thereto, together with each such invoice provided to Lilly. Lilly shall pay such invoices
within [...***...] days of receipt. 
 5.3 Development Milestones. Within [...***...] after the first
achievement of each milestone event set forth in the table below for each Product (each, a “Development Milestone Event”), Lilly shall make the corresponding milestone payment to Zymeworks (each, a

  
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“Development Milestone Payment”). For clarity, each Development Milestone Payment [...***...]. 

 

					
	 	  	 Development Milestone Events
	  	 Milestone Payments

			
	 1.
	  	[ *** ]	  	USD $1.0 Million
			
	 2.
	  	[ *** ]	  	USD $2.0 Million
			
	 3.
	  	[ *** ]	  	USD $[ *** ]
			
	 4.
	  	 [ *** ]
	  	 USD $[ *** ]

			
		  	Total Possible Development Milestone Payments per Product	  	USD $11.0 Million

 5.4 Commercialization Milestones. Within [...***...] after the first achievement of each
milestone event set forth in the table below for each Product (each, a “Commercialization Milestone Event”), Lilly shall make the corresponding milestone payment to Zymeworks (each, a “Commercialization
Milestone Payment”): 
  

					
	 	  	 Commercial Milestone Events
	  	 Milestone Payments

	 1.
	  	[ *** ]	  	USD $[ *** ]
	 2.
	  	[ *** ]	  	USD $[ *** ]
	 3.
	  	[ *** ]	  	USD $[ *** ]

 For clarity, each of the foregoing Commercial Milestone Payments [...***...]. 

5.5 Royalties. 

5.5.1 Patent Royalty Payments. Lilly shall pay Zymeworks a royalty (each such royalty payment, a “Royalty”) on
Net Sales of each Product at the rates set forth below: 

  
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	Annual Worldwide Net Sales on a Product-by-Product basis 	  	Royalty Rate
		
	 USD $[ *** ] to USD $[ *** ]
	  	[ *** ]%
		
	 Above USD $[ *** ]to USD $[ *** ]
	  	[ *** ]%
		
	 Above USD $[ *** ]
	  	[ *** ]%

 5.5.2 Royalty Term. The Royalty will be payable on a Product-by-Product and country-by-country basis from First Commercial Sale in such country until (i) such Product is no
longer Covered by a Valid Patent Claim in such country or (ii) ten (10) years after the First Commercial Sale of such Product in such country, whichever is later (the “Royalty Term”); provided that in the event of [...***...],
then the Royalty payable with respect to Product sales in such country shall be reduced by [...***...] percent ([...***...]%) during the Royalty Term for so long as such [...***...]. 

6. REPORTS AND PAYMENT TERMS 

6.1 Payment Terms. 

6.1.1 Milestone Payments. Within [...***...] of the JSC determining (as reflected in its minutes) that Development
Milestone Event 1 (in the table in Section 5.3) has been achieved, Lilly shall pay to Zymeworks the corresponding Milestone Payment. Lilly shall provide Zymeworks with notice of the achievement of each other Development Milestone Event and
Commercial Milestone Event within [...***...] thereafter and make the corresponding Milestone Payment within [...***...] after such achievement. 

6.1.2 Royalties. During the Term, following the First Commercial Sale of a Product, Lilly shall furnish to Zymeworks a written
report for each Calendar Quarter showing the Net Sales by Product sold by Lilly and its Related Parties during the reporting Calendar Quarter and the Royalties payable under this Agreement in sufficient detail to allow Zymeworks to verify the amount
of Royalties paid by Lilly with respect to such Calendar Quarter, including, on a country-by-country and
Product-by-Product basis, the Net Sales of each Product, and the Royalties (in US dollars) payable and in total for all Products and the manner and basis for any
currency conversion in accordance with Section 6.2. Reports shall be due no later than [...***...] following the end of each Calendar Quarter. Royalties shown to have accrued by each report provided under this Section 6.1.2 shall be
due and payable on the date such report is due. 
 6.1.3 Invoices. Except as otherwise provided herein, amounts shall be due
and payable within [...***...] days of receipt of invoice therefor. 

  
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 6.2 Payment Currency / Exchange Rate. All payments to be
made by Lilly to Zymeworks under this Agreement shall be made in USD. Payments to Zymeworks shall be made by electronic wire transfer of immediately available funds to the account of Zymeworks, as designated in writing to Lilly. If any currency
conversion is required in connection with the calculation of amounts payable hereunder, such conversion shall be made in a manner consistent with Lilly’s normal practices used to prepare its audited financial statements for external reporting
purposes; provided that such practices use a widely accepted source of published exchange rates. 
 6.3 Taxes. Each
Party shall be responsible for its own tax liabilities arising under this Agreement. Subject to this Section 6.3, Zymeworks shall be liable for all income and other taxes (including interest) (“Taxes”) imposed upon any payments
made by Lilly to Zymeworks under this Agreement (“Agreement Payments”). If Applicable Laws require the withholding of Taxes, Lilly shall make such withholding payments in a timely manner and shall subtract the amount thereof from
the Agreement Payments. Lilly shall promptly (as available) submit to Zymeworks appropriate proof of payment of the withheld Taxes as well as the official receipts within a reasonable period of time. Lilly shall provide Zymeworks reasonable
assistance in order to allow Zymeworks to obtain the benefit of any present or future treaty against double taxation or refund or reduction in Taxes which may apply to the Agreement Payments. Notwithstanding the foregoing, if as a result of a Party
assigning this Agreement or changing its domicile additional Taxes become due that would not have otherwise been due hereunder with respect to Agreement Payments, such Party shall be responsible for all such additional Taxes. 

6.4 Records and Audit Rights. 

6.4.1 Records. Lilly will keep (and will cause its Related Parties to keep) complete, true and accurate books and records in
sufficient detail for Zymeworks to determine payments due to Zymeworks under this Agreement, including Royalties. Each Party will keep (and will cause its Related Parties to keep) complete, true and accurate books and records in sufficient detail to
allow the other Party to confirm those expenses incurred by the first Party and its Related Parties for which the other Party is obligated to pay under this Agreement. Each Party will keep such books and records for at least [...***...] years
following the end of the Calendar Year to which they pertain. 
 6.4.2 Audit Rights. 

(a) Each Party (the “Auditing Party”) shall have the right during the [...***...] described in
Section 6.4.1 to appoint at its expense an independent certified public accountant of nationally recognized standing (the “Accounting Firm”) reasonably acceptable to the other Party to inspect or audit the relevant records of
the other Party (the “Audited Party”) and its Affiliates to verify that the amount of such expenses and payments (“Expenses and Payments”) were correctly determined. The Audited Party and its Related Parties shall
each 

  
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make its records available for inspection or audit by the Accounting Firm during regular business hours at such place or places where such records are customarily kept, upon reasonable notice
from the Auditing Party, solely to verify the expenses and payments hereunder were correctly determined. Such inspection or audit right shall not be exercised by the Auditing Party more than once in any Calendar Year and may cover a period ending
not more than [...***...] prior to the date of such request. All records made available for inspection or audit shall be deemed to be Confidential Information of the Audited Party. The results of each inspection or audit, if any, shall be
binding on both Parties. The Auditing Party shall bear the full cost of such audit unless such audit discloses at least a [...***...]percent ([...***...]%) shortfall that exceeds at least [...***...] dollars ($[...***...]),
in which case the Audited Party will bear all reasonable costs and expenses of the audit. The Auditing Party will be entitled to recover any shortfall in payments as determined by such audit. Similarly, if the audit reveals an overpayment, the
Audited Party will be entitled to recover such overpayment as determined by such audit as actually received by the Auditing Party. Any underpayment or overpayment as determined under this Section 6.4.2(a) shall be promptly (but in any event no later
than [...***...] after the Audited Party’s receipt of the Accounting Firm’s report so concluding) paid to the Party entitled to payment hereunder. 

(b) The Accounting Firm will disclose to the Auditing Party only whether the Expenses and Payments are correct or incorrect and the
specific details concerning any discrepancies. No other information will be provided to the Auditing Party without the prior consent of the Audited Party unless disclosure is required by Applicable Laws or judicial order. The Audited Party is
entitled to require the Accounting Firm to execute a reasonable confidentiality agreement prior to commencing any such audit. The Accounting Firm shall provide a copy of its report and findings to the Audited Party. 

7. INTELLECTUAL PROPERTY RIGHTS 

7.1 Ownership of Inventions. Ownership of all Inventions, including Patent Rights and other intellectual property rights with
respect to such Inventions, shall be as set forth in this Article 7. Determination of inventorship of Inventions shall be made in accordance with US laws. Each Party will continue to own any Patent Rights and
Know-How that it owned prior to the Effective Date or created or obtained outside the scope of this Agreement, or which it licenses to the other Party under this Agreement. For clarity, as between the Parties
and notwithstanding anything herein to the contrary, Lilly shall have and retain ownership of the Lilly Sequences and any Inventions related solely to the Lilly Sequences, and Zymeworks shall retain all rights in the Zymeworks Platform and any
Inventions comprising improvements thereto. For clarity, all antibody mutations created or introduced by Zymeworks using the Zymeworks Platform will comprise improvements thereto and will be owned by Zymeworks, subject to the licenses set forth in
Section 2.1; provided, however, that the physical embodiment of all Antibodies shall be owned by Lilly, subject to the rights and licenses granted to Zymeworks hereunder, including pursuant to Section 2.2. Except as otherwise provided in
the foregoing sentence, Inventions that are made solely by Zymeworks (and all intellectual property rights therein, including the Patent Rights claiming 

  
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them) shall be owned solely by Zymeworks; Inventions that are made solely by Lilly (and all intellectual property rights therein, including the Patent Rights claiming them) shall be owned solely
by Lilly; and Joint Inventions (and the Joint Patent Rights) shall be owned jointly by the Parties. Subject to Article 2 and Article 11, each Party has the right to grant licenses under such Joint Inventions (and the Joint Patent Rights) to any
Third Party without the consent of, or accounting to, the other Party. 
 7.2 Patent Prosecution and
Maintenance. 
 7.2.1 Definitions. As used in this Section 7.2, “prosecution” includes
(a) all communication and other interaction with any patent office or patent authority having jurisdiction over a patent application in connection with pre-grant proceedings and (b) interferences,
reexaminations, reissues, oppositions, and the like. 
 7.2.2 Zymeworks Patent Rights. Zymeworks, at Zymeworks’ expense,
shall have the sole right to control the preparation, filing, prosecution and maintenance of Zymeworks Patent Rights using patent counsel of Zymeworks’ choice. Zymeworks agrees that its filings with respect to the Zymeworks Patent Rights will
not incorporate data or information specific to the Antibodies. Zymeworks shall keep Lilly reasonably advised with respect to the status of the filing, prosecution and maintenance of the Zymeworks Patent Rights and, upon Lilly’s request, shall
provide copies of material submissions to any patent office related to the filing, prosecution and maintenance of the Zymeworks Patent Rights. Zymeworks shall promptly give notice to Lilly of the grant, lapse, revocation, surrender, invalidation or
abandonment of any Zymeworks Patent Rights licensed to Lilly under this Agreement. Notwithstanding the foregoing, Lilly shall have the first right (but not the obligation) to control the preparation, filing, prosecution and maintenance of Patent
Rights claiming subject matter generated or conceived under the Research Program to the extent such Patent Rights are specific to the Antibodies or the Products, including, without limitation, therapeutic methods, pharmaceutical compositions,
methods of manufacture, product by process, and also including the genetic sequence of the Antibodies. 
 7.2.3 Joint Patent
Rights. 
 (a) Lilly, at Lilly’s expense, shall have the first right to control the preparation, filing, prosecution and
maintenance of Joint Patent Rights. Lilly shall keep Zymeworks reasonably advised with respect to the status of the filing, prosecution and maintenance of the Joint Patent Rights and shall provide copies of material submissions to any patent
office in any Major Market related to the filing, prosecution and maintenance of the Joint Patent Rights to Zymeworks for review and comment. Such copies shall be provided in advance of submission to the extent reasonably practicable. Lilly shall
take into consideration any comments from Zymeworks; provided, however, that the Parties acknowledge and agree that if there is any dispute between the Parties regarding such patent matters, Lilly’s decision shall be

  
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final. Lilly shall promptly give notice to Zymeworks of the grant, lapse, revocation, surrender, invalidation or abandonment of any Joint Patent Rights. 

(b) Lilly may elect not to file or to cease prosecution or maintenance of Joint Patent Rights on a country-by-country basis, and if it does so, Lilly shall give timely notice to Zymeworks. Zymeworks may by notice to Lilly assume filing for, prosecution or maintenance of such Joint Patent Rights at
Zymeworks’ expense, in which case Lilly shall promptly assign to Zymeworks all of its rights, title and interest (except as provided below) in and to such Joint Patents, and such Joint Patents shall no longer be subject to the exclusive
licenses set forth in Section 2.1; provided, however, the Parties acknowledge and agree that Lilly shall still retain its joint ownership rights in such Joint Patents and, therefore, shall retain the right to use and otherwise exploit such
Joint Patent Rights in a manner consistent with its joint ownership interest in such Joint Patent Rights; and provided further that claims within such Joint Patent Rights shall remain within the definition of Valid Patent Claim (subject to the
limitation set forth in such definition) for purposes of determining the Royalty Term and whether a Royalty is owed on a particular Product pursuant to Section 5.5 of this Agreement. 

7.2.4 Cooperation in Prosecution. Each Party shall provide the other Party all reasonable assistance and cooperation in the
patent prosecution efforts provided above in Section 7.2, including providing any necessary powers of attorney and assignments of employees of the Parties and their Affiliates and sublicensees and Third Party contractors and executing any other
required documents or instruments for such prosecution. All communications between the Parties relating to the preparation, filing, prosecution or maintenance of the Zymeworks Patent Rights and Joint Patent Rights, including copies of any draft or
final documents or any communications received from or sent to patent offices or patenting authorities with respect to such Patent Rights, shall be considered Confidential Information, subject to Article 8. For clarity, all such communications
regarding the Zymeworks Patent Rights shall be the Confidential Information of Zymeworks and all such communications regarding Joint Patent Rights shall be the Confidential Information of both Parties. 

7.3 Enforcement and Defense. 

7.3.1 Notice. Each Party shall provide prompt notice to the other Party of any infringement of Zymeworks Patent Rights or Joint
Patent Rights which cover a Product then under development or being commercialized of which such Party becomes aware (an “Infringement”). Subject to the provisions of Sections 7.3.2, 7.3.3, 7.3.4, Lilly and Zymeworks shall
thereafter consult and cooperate fully to determine a course of action, including but not limited to the commencement of legal action by either or both Lilly and Zymeworks, to terminate any such Infringement of a Zymeworks Patent Right or Joint
Patent Right; provided, however, if the Parties cannot agree to the specific course of action the provisions of Sections 7.3.2, 7.3.3 and 7.3.4 shall continue to apply. 

  
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 7.3.2 Zymeworks Patent Rights. Except as otherwise provided below in this
Section 7.3.2, Zymeworks shall have the first right to enforce the Zymeworks Patent Rights with respect to any Infringement, and to defend any declaratory judgment action with respect thereto, at its own expense and by counsel of its own choice
and in the name of Zymeworks and shall notify Lilly of such enforcement actions. If Zymeworks fails to bring or defend any such action against an Infringement within (a) [...***...] days following the notice of alleged Infringement or (b)
[...***...] days before the time limit, if any, set forth in Applicable Laws for the filing of such actions, whichever comes first, Lilly shall have the right to bring and control any such action at its own expense and by counsel of its own
choice, and Zymeworks shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. Notwithstanding the foregoing, for clarity, Lilly shall have the first right (but not the obligation) to control the
enforcement of Patent Rights claiming subject matter generated or conceived under the Research Program solely to the extent such Patent Rights are specific to the Antibodies or the Products, including the genetic sequence of the Antibodies. If Lilly
fails to bring or defend such an action within (a) [...***...] days following the notice of the alleged infringement or (b) [...***...] days before the time limit, if any, set forth in Applicable Laws for the filing of such actions,
whichever comes first, Zymeworks shall have the right to bring and control any such action at its own expense and by counsel of its own choice. In no event shall Lilly admit the invalidity of, or after exercising its right to bring and control an
action under this Section 7.3.2, fail to defend the validity of, any Zymeworks Patent Rights without Zymeworks’ prior written consent, which shall not be unreasonably withheld, conditioned or delayed. 

7.3.3 Joint Patent Rights. Lilly shall have the first right to enforce Joint Patent Rights and to control the defense of any
declaratory judgment action relating thereto, with respect to such Infringement at its own expense and by counsel of its own choice reasonably acceptable to Zymeworks (such acceptance which shall not be unreasonably withheld, conditioned or
delayed), and Zymeworks shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. If Lilly fails to bring or defend such action within (a) [...***...] days following the notice of alleged
Infringement or (b) [...***...] days before the time limit, if any, set forth in the Applicable Laws for the filing of such actions, whichever comes first, Zymeworks shall have the right to bring and control any such action at its own expense
and by counsel of its own choice, and Lilly shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. In no event shall either Party admit the invalidity of, or after exercising its right to bring
and control an action under this Section 7.3.3, fail to defend the validity of any Joint Patent Rights without the other Party’s prior written consent. 

7.3.4 Infringement Action. In the event a Party brings an Infringement action in accordance with this Section 7.3 (the
“Controlling Party”), such Controlling Party shall keep the other Party reasonably informed of the progress of any such action, and the other Party shall cooperate fully with the Controlling Party, including by providing information
and materials, at the Controlling Party’s request and expense and if required to bring such action, the furnishing of a power of attorney or being named as a party. The other Party shall cooperate fully, including,

  
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if required to bring such action, the furnishing of a power of attorney or being named as a party. Neither Party shall have the right to settle any Infringement action under this Section 7.3
relating to Joint Patent Rights without the prior written consent of the other Party, which shall not be unreasonably withheld, conditioned or delayed. 

7.3.5 Recovery. Except as otherwise agreed by the Parties as part of a cost-sharing arrangement, any recovery obtained by either
or both Lilly and Zymeworks in connection with or as a result of any action contemplated by this Section 7.3 involving Product or Antibodies licensed to Lilly herein, whether by settlement or otherwise, shall be shared in order as follows: 

(a) the Party which initiated and prosecuted the action shall recoup all of its costs and expenses incurred in connection with the
action; 
 (b) the other Party shall then, to the extent possible, recover its costs and expenses incurred in connection with the
action; and 
 (c) the portion of any recovery remaining, whether by settlement or judgment, that is allocable to an Infringement
shall be shared between Lilly and Zymeworks in the same proportion to the share of profits each would have been entitled to under this Agreement had the remaining recovery represented Lilly sales of Product taking into consideration all costs and
expenses Lilly would have incurred in making any such sales. For purposes of clarity, the provisions of this Section 7.3.5 shall not apply to infringement actions that are not involved with or based on the manufacture, use and/or sale (i.e.,
make, use, offer to sell, sell and/or import) the Products and/or Antibodies licensed under this Agreement, and all recoveries for such other infringement actions shall: (i) with respect to the Zymeworks Patent Rights, be retained by, or paid
to, Zymeworks; and (ii) with respect to Joint Patent Rights, be retained by Lilly and Zymeworks equally (and in each case of (i) and (ii), above) after recovering costs and expenses in the same manner as described in subsections
(a) and (b), above. 
 7.3.6 Notice. In the event that either Party (i) receives a copy of an application submitted
to the FDA under subsection (k) of Section 351 of the PHSA (a “Biosimilar Application”), whether or not such notice or copy is provided under any Applicable Laws (including under the Biologics Price Competition and Innovation Act
of 2009 (the “BPCIA”), the United States Patient Protection and Affordable Care Act or implementing FDA regulations and guidance) applicable to the approval or manufacture of any biosimilar or interchangeable biological product (a
“Proposed Biosimilar Product”) for which a Product is a “reference product,” as such term is used in the BPCIA, or (ii) otherwise becomes aware that such a Biosimilar Application has been filed (such as in an instance
described in Section 351(l)(9)(C) of the PHSA), then such Party shall promptly provide the other Party with written notice. If a Party with the right to initiate legal proceedings under this Agreement lacks standing to do so (or lacks the right
under the BPCIA to do so) and the other Party has standing (or the sole right under the BPCIA) to initiate such legal proceedings, such Party with standing shall initiate such legal proceedings at the request and expense of the other Party. 

  
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 7.3.7 Defense of Infringement Claims. In the event that a claim is brought
against either Party alleging the infringement, violation or misappropriation of any Third Party intellectual property right based on the manufacture, use, sale or importation of the Antibodies or the Products, the Parties shall promptly meet to
discuss the defense of such claim, and the Parties shall discuss entering into a joint defense agreement with respect to the common interest privilege protecting communications regarding such claim in a form reasonably acceptable to the Parties.

 8. CONFIDENTIALITY 

8.1 Duty of Confidence. During the Term and for [...***...] years thereafter, all Confidential Information disclosed by
one Party to the other Party hereunder shall be maintained in confidence by the receiving Party and shall not be disclosed to any Third Party or used for any purpose, except as set forth herein, without the prior written consent of the disclosing
Party. The recipient Party may only use Confidential Information of the other Party for purposes of exercising its rights and fulfilling its obligations under this Agreement and may disclose Confidential Information of the other Party and its
Affiliates to employees, agents, contractors, consultants and advisers of the recipient Party and its Affiliates, licensees and sublicensees to the extent reasonably necessary for such purposes; provided that such persons and entities are bound by
confidentiality and non-use of the Confidential Information consistent with the confidentiality provisions of this Agreement as they apply to the recipient Party. 

8.2 Exceptions. The obligations under this Article 8 shall not apply to any information to the extent the recipient Party can
demonstrate by competent evidence that such information: 
 8.2.1 is (at the time of disclosure) or becomes (after the time of
disclosure) known to the public or part of the public domain through no breach of this Agreement by the recipient Party or its Affiliates; 

8.2.2 was known to, or was otherwise in the possession of, the recipient Party or its Affiliates prior to the time of disclosure by the
disclosing Party; 
 8.2.3 is disclosed to the recipient Party or an Affiliate on a
non-confidential basis by a Third Party that is entitled to disclose it without breaching any confidentiality obligation to the disclosing Party or any of its Affiliates; or 

8.2.4 is independently developed by or on behalf of the recipient Party or its Affiliates, as evidenced by its written records, without
use of or reference to the Confidential Information disclosed by the disclosing Party or its Affiliates under this Agreement. 

  
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 8.3 Authorized Disclosures. Subject to this Section 8.3, the recipient
Party may disclose Confidential Information belonging to the other Party to the extent permitted as follows: 
 8.3.1 such disclosure
is deemed necessary by counsel to the recipient Party to be disclosed to such Party’s attorneys, independent accountants or financial advisors for the sole purpose of enabling such attorneys, independent accountants or financial advisors to
provide advice to the receiving Party, on the condition that such attorneys, independent accountants and financial advisors are bound by confidentiality and non-use obligations consistent with the
confidentiality provisions of this Agreement as they apply to the recipient Party; 
 8.3.2 disclosure by either Party or its
Affiliates to governmental or other regulatory agencies in order to obtain and maintain patents consistent with Article 7 or disclosure by Lilly or a Lilly Affiliate or sublicensee to gain or maintain approval to conduct Clinical Trials for a
Product, to obtain and maintain Marketing Authorization or to otherwise develop, manufacture and market Products, but such disclosure may be only to the extent reasonably necessary to obtain and maintain patents or authorizations; 

8.3.3 disclosure required in connection with any judicial or administrative process relating to or arising from this Agreement
(including any enforcement hereof) or to comply with applicable court orders or governmental regulations; or 
 8.3.4 disclosure to
potential or actual investors or potential or actual acquirers in connection with due diligence or similar investigations by such Third Parties (provided that, with respect to investors, Zymeworks remains a privately held company and has not been
otherwise acquired by a Third Party); provided, in each case, that any such potential or actual investor or acquirer agrees to be bound by confidentiality and non-use obligations consistent with those
contained in this Agreement as they apply to the recipient Party. Notwithstanding the preceding, Zymeworks shall not disclose the Lilly Target Pair or other data generated by Lilly and disclosed to Zymeworks hereunder (in each case which is not
within the scope of any of the exceptions set forth in Sections 8.2.1-8.2.4) to investors or prospective acquirers without Lilly’s prior written permission; except that Zymeworks may disclose the Lilly
Target Pair to a potential or actual acquirer as part of the advanced stages of diligence conducted in connection with an acquisition, the material terms of which have been proposed to the Zymeworks board of directors and the board has agreed to
proceed with the negotiation of such acquisition, provided that the prospective acquirer agrees to be bound by confidentiality and non-use obligations consistent with those contained in this Agreement as they
apply to Zymeworks. 
 If the recipient Party is required by judicial or administrative process to disclose Confidential Information that is
subject to the non-disclosure provisions of this Article 8, such Party shall promptly inform the other Party of the disclosure that is being sought in order to provide the other Party an opportunity to
challenge or limit the disclosure obligations. Confidential Information that is disclosed as permitted by this Section 8.3 shall remain otherwise 

  
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subject to the confidentiality and non-use provisions of this Article 8, and the Party disclosing Confidential Information as permitted by this
Section 8.3 shall take all steps reasonably necessary, including without limitation obtaining an order of confidentiality and otherwise cooperating with the other Party, to ensure the continued confidential treatment of such Confidential
Information. 
 8.4 Lilly’s Right to use Confidential Information for Research Purposes. Notwithstanding
anything in this Article 8 to the contrary and without limiting license rights granted to Lilly under Article 2, beginning [...***...] months after the initiation of the Research Program, Lilly will also have the right (i.e., a nonexclusive
license) to use Zymeworks’ Confidential Information disclosed in connection with the Research Program that comprises the Research Program Work Product solely for its own internal research and development purposes related to other products;
provided that such use would not infringe a Valid Claim of a Zymeworks Patent Rights or any other Patent Rights Controlled by Zymeworks that claims subject matter that was not first conceived under the Research Program. For clarity, the foregoing
provisions of this Section 8.4 shall not be deemed to grant Lilly any rights or licenses under any Valid Claim of any Patent Rights Controlled by Zymeworks or its Affiliates that claims subject matter first conceived outside of the Research
Program. 
 9. PUBLICATIONS AND PUBLICITY 

9.1 Publications. 

9.1.1 Lilly shall have the right to publish the results of the Research Program with respect to the Products or Antibodies in accordance
with this Section 9.1. Except for disclosures permitted pursuant to Article 8 or this Article 9, a Party, its employees or consultants wishing to make a publication of the results of its activities under this Agreement that contains the other
Party’s Confidential Information, shall deliver to such Party a copy of the proposed written publication or an outline of an oral disclosure at least [...***...] days prior to submission for publication or presentation. 

9.1.2 Notwithstanding Section 9.1.1, the reviewing Party shall have the right (a) to request the removal of its Confidential
Information from any such publication or presentation by the other Party, and/or (b) to request a reasonable delay in publication or presentation in order to protect patentable information. If a reviewing Party requests such a delay, the other
Party shall delay submission or presentation for a period of [...***...] days to enable patent applications or other registrations protecting the reviewing Party’s rights in such information to be filed in accordance with Article 7. 

  
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 9.2 Publicity. The Parties have mutually approved a press release attached
hereto as Exhibit 9.2 with respect to this Agreement and either Party may make subsequent public disclosure of the contents of such press release. Subject to the foregoing, each Party agrees not to issue any press release or other public
statement, whether oral or written, disclosing the terms hereof or any the activities under the Research Program conducted hereunder without the prior written consent of the other Party, provided however, that neither Party will be prevented from
complying with any duty of disclosure it may have pursuant to Applicable Laws or pursuant to the rules of any recognized stock exchange or quotation system, subject to that Party notifying the other Party of such duty and limiting such disclosure as
reasonably requested by the other Party (and giving the other Party sufficient time to review and comment on any proposed disclosure). In the event that Zymeworks desires to make a public announcement regarding the achievement of any milestone event
under Section 5.3 or 5.4, Zymeworks will provide Lilly with no less than [...***...] in which to review and approve such announcement, such approval not to be unreasonably withheld, conditioned or delayed. 

10. TERM AND TERMINATION 

10.1 Term. The term of this Agreement (the “Term”) will commence on the Effective Date and (subject to earlier
termination in accordance with Section 10.2 or Section 10.3) will expire on the expiration of the last-to-expire Royalty due under Section 5.5. Upon
expiration of this Agreement (but not termination), the licenses granted to Lilly under this Agreement shall become non-exclusive (with right to sublicense), fully
paid-up, perpetual licenses. 
 10.2 Termination by Lilly. 

10.2.1 During the Research Program Term. 

(a) Lilly has the right during the Research Program to terminate the Agreement in its sole discretion upon [...***...] days prior
notice to Zymeworks. 
 (b) In the event Lilly decides to terminate the Research Program prior to the expiration of the
Research Program (the “Lilly RP Termination Decision”), (i) Lilly shall promptly cease any and all activities under the Research Program, and (ii) as of the Lilly RP Termination Decision, (A) Lilly shall have no right or
obligation under this Agreement, to pursue or achieve any further Milestone Event (except as may occur as a result of completing an on-going experiment), (B) Lilly shall pay any further Milestone Payments for
Milestone Events achieved prior to the Lilly RP Termination Decision, or thereafter as a result of an ongoing experiment commenced prior to the Lilly RP Termination Decision, and (C) Lilly shall have no further rights under Section 8.4 to
use Zymeworks’ Confidential Information for internal research and development purposes. 

  
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 10.2.2 After the Research Program Term. Notwithstanding anything contained in
this Agreement to the contrary, Lilly shall have the right, after the Research Program Term, to terminate this Agreement at any time in its sole discretion upon [...***...] days advance notice to Zymeworks. 

10.2.3 Termination for Patent Challenge. Notwithstanding anything herein to the contrary, in the event that Lilly or its
Affiliates file or initiate an action challenging (directly or indirectly (e.g., through a Third Party)) in a court or by administrative proceeding seeking the invalidity or unenforceability or seeking to limit the scope of any Zymeworks
Patent Rights (the specific Zymeworks Patent Rights challenged by Lilly or its Affiliates constituting the “Lilly Challenged Zymeworks Patent Rights”), then Zymeworks, at its discretion, may give notice to Lilly that Zymeworks will
terminate the licenses granted to Lilly under Section 2.1 with respect to (and only to) the Lilly Challenged Zymeworks Patent Rights in any or all countries in the Territory in which Lilly or its Affiliates is specifically challenging the Lilly
Challenged Zymeworks Patent Rights (collectively, the “Challenge Countries”) unless such challenge is withdrawn, abandoned, or terminated (as appropriate) without prejudice within [...***...] days. In the event that Lilly or
its Affiliates (as the case may be) does not withdraw, abandon or terminate (as appropriate) such challenge within such [...***...] day period, Zymeworks may terminate the license granted to Lilly under Section 2.1 with respect to the
Lilly Challenged Zymeworks Patent Rights in any or all Challenge Countries in the Territory. 
 10.3 Termination for Cause. If
either Lilly or Zymeworks is in material breach of any obligation hereunder, the non-breaching Party may give notice to the breaching Party specifying the claimed particulars of such breach, and in such event,
if the breach is not cured within[...***...] days after receipt of such notice, the non-breaching Party shall have the rights thereafter to terminate this Agreement immediately by giving notice to the
breaching Party to such effect. 
 11. EFFECTS OF TERMINATION 

11.1 Termination of Agreement. If this Agreement terminates for any reason, then no later than [...***...] days after the
effective date of such termination, Lilly shall pay all amounts then due and owing (except that Lilly shall have the right to offset any monies owed to Lilly by Zymeworks, if any) as of the termination date and each Party shall return or cause to be
returned to the other Party, or destroy, all Confidential Information received from the other Party and all copies thereof; provided, however, that each Party may keep one (1) copy of Confidential Information received from the
other Party in its confidential files for record purposes. In the event of termination of this Agreement, except as expressly set forth otherwise in this Agreement (including under the surviving provisions set forth in Section 11.2), the rights
and obligations of the Parties hereunder shall terminate as of the date of such termination. 

  
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 11.2 Survival. Termination of this Agreement shall not relieve the
Parties of any obligation accruing prior to such termination, nor affect in any way the survival of any other right, duty or obligation of the Parties which is expressly stated elsewhere in this Agreement to survive such termination. Without
limiting the foregoing and except as expressly set forth otherwise in this Agreement, Articles 1 (for interpretation purposes only), 6 (to the extent that any amounts payable accrued prior to the effective date of such expiration/termination and
remain unpaid), 8, 9, 10.1, 11, 13 and 15 and Sections 2.3, 3.3, 7.1 and 12.3 shall survive to the extent applicable. Except as otherwise expressly provided herein, all other rights and obligations of the Parties under this Agreement shall terminate
upon termination of this Agreement. 
 11.3 Damages; Relief. Termination of this Agreement shall not preclude either Party from
claiming any other damages, compensation or relief that it may be entitled to upon such termination. 
 11.4 Bankruptcy Code.
If this Agreement is rejected by a Party as a debtor under Section 365 of the United States Bankruptcy Code or similar provision in the bankruptcy laws of another jurisdiction (the “Code”), then, notwithstanding anything else
in this Agreement to the contrary, all licenses and rights to licenses granted under or pursuant to this Agreement by the Party in bankruptcy to the other Party are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the
United States Bankruptcy Code (or similar provision in the bankruptcy laws of the jurisdiction), licenses of rights to “intellectual property” as defined under Section 101(35A) of the United States Bankruptcy Code (or similar provision in
the bankruptcy laws of the jurisdiction). The Parties agree that a Party that is a licensee of rights under this Agreement shall retain and may fully exercise all of its rights and elections under the Code, and that upon commencement of a bankruptcy
proceeding by or against a Party under the Code, the other Party shall be entitled to a complete duplicate of, or complete access to (as such other Party deems appropriate), any such intellectual property and all embodiments of such intellectual
property, if not already in such other Party’s possession, shall be promptly delivered to such other Party (a) upon any such commencement of a bankruptcy proceeding upon written request therefor by such other Party, unless the bankrupt
Party elects to continue to perform all of its obligations under this Agreement or (b) if not delivered under (a) above, upon the rejection of this Agreement by or on behalf of the bankrupt Party upon written request therefor by the other
Party. The foregoing provisions of this Section 11.4 are without prejudice to any rights a Party may have arising under the Code. 

12. REPRESENTATIONS AND WARRANTIES 

12.1 Representations and Warranties by Each Party. Each Party represents and warrants to the other as of the Effective Date that:

  
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 12.1.1 it is a corporation duly organized, validly existing, and in good standing
under the laws of its jurisdiction of formation; 
 12.1.2 it has full corporate power and authority to execute, deliver, and perform
this Agreement, and has taken all corporate action required by Applicable Laws and its organizational documents to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement; 

12.1.3 this Agreement constitutes a valid and binding agreement enforceable against it in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, bank moratorium or similar laws affecting creditors’ rights generally and laws restricting the availability of equitable remedies and may be subject to general principles of equity whether or
not such enforceability is considered in a proceeding at law or in equity); and 
 12.1.4 the execution and delivery of this Agreement
and all other instruments and documents required to be executed pursuant to this Agreement, and the consummation of the transactions contemplated hereby do not and shall not (a) conflict with or result in a breach of any provision of its
organizational documents, (b) result in a breach of any agreement to which it is a party; or (c) violate any Applicable Laws. 

12.2 Representations, Warranties and Covenants by Zymeworks. Zymeworks represents, warrants as of the Effective Date and
covenants to Lilly as follows: 
 12.2.1 Zymeworks has the right to grant to Lilly the licenses under Section 2.1 that it
purports to grant hereunder including under the Zymeworks Know-How; 
 12.2.2 Zymeworks has
not granted, and will not grant during the Term, rights (or other encumbrances) to any Third Party under the Zymeworks Intellectual Property, or Joint Inventions that conflict with the rights granted to Lilly hereunder; 

12.2.3 As of the Effective Date: (a) Zymeworks has not received any written notice of any threatened claims or litigation seeking
to invalidate or otherwise challenge the Zymeworks Patent Rights or Zymeworks’ rights therein; and (b) Zymeworks is not aware of any pending or threatened action, suit, proceeding or claim by a Third Party asserting that Zymeworks is
infringing or has misappropriated or otherwise is violating any patent, trade secret or other proprietary right of any Third Party as would reasonably be expected to result in a material adverse effect upon the ability of Zymeworks to fulfill any of
its obligations under this Agreement; 

  
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 12.2.4 There are no claims, actions, or proceedings pending or, to Zymeworks’
knowledge, threatened; nor, to Zymeworks’ knowledge, are there any formal inquiries initiated or written notices received that may lead to the institution of any such legal proceedings, in each case (or in aggregate) against Zymeworks or its
properties, assets or business, which if adversely decided, would, individually or in the aggregate, have a material adverse effect on, or prevent Zymeworks’ ability to conduct the Research Program or to grant the licenses or rights granted to
Lilly under this Agreement. 
 12.3 Limitation. NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED,
THAT ANY OF THE RESEARCH, DEVELOPMENT AND/OR COMMERCIALIZATION EFFORTS WITH REGARD TO ANY ANTIBODY OR PRODUCT WILL BE SUCCESSFUL. 
 12.4
No Other Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, EITHER EXPRESS OR
IMPLIED, INCLUDING ANY WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 

13. INDEMNIFICATION AND LIABILITY 

13.1 Indemnification by Zymeworks. Zymeworks shall indemnify, defend and hold Lilly and its Affiliates, and their
respective officers, directors, employees, contractors, agents and assigns (each, a “Lilly Indemnified Party”), harmless from and against losses, damages and liability, including reasonable legal expense and attorneys’ fees,
(collectively, “Losses”) to which any Lilly Indemnified Party may become subject as a result of any Third Party demands, claims or actions (“Claims”) against any Lilly Indemnified Party (including without limitation
product liability claims) arising or resulting from: (a) the research or development of the Antibodies by or on behalf of Zymeworks or its Affiliates under this Agreement (excluding Lilly and its Related Parties); (b) the negligence or willful
misconduct of Zymeworks or its Affiliates pursuant to this Agreement, or (c) the material breach of any term in or the covenants, warranties, representations made by Zymeworks to Lilly under this Agreement. Zymeworks is only obliged to so
indemnify and hold the Lilly Indemnified Parties harmless to the extent that such Claims do not arise from the material breach of this Agreement by or the negligence or willful misconduct of Lilly or its Related Parties. 

  
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 13.2 Indemnification by Lilly. Lilly shall indemnify, defend and hold Zymeworks
and its Affiliates, and their respective officers, directors, employees, contractors, agents and assigns (each, a “Zymeworks Indemnified Party”), harmless from and against Losses incurred by any Zymeworks Indemnified Party as a
result of any Third Party Claims against any Zymeworks Indemnified Party (including without limitation product liability claims) arising or resulting from: (a) the research, development or commercialization of Antibodies or Products by or on
behalf of Lilly or its Affiliates, licensees or sublicensees (excluding Zymeworks and its Related Parties) under this Agreement; (b) the negligence or willful misconduct of Lilly or its Affiliates pursuant to this Agreement; or (c) the
material breach of any term in or the covenants, warranties, representations made by Lilly to Zymeworks under this Agreement. Lilly is only obliged to so indemnify and hold the Zymeworks Indemnified Parties harmless to the extent that such Claims do
not arise from the material breach of this Agreement or the negligence or willful misconduct of Zymeworks or its Related Parties. 
 13.3
Indemnification Procedure. 
 13.3.1 Any Lilly Indemnified Party or Zymeworks Indemnified Party seeking indemnification
hereunder (“Indemnified Party”) shall notify the Party against whom indemnification is sought (“Indemnifying Party”) in writing reasonably promptly after the assertion against the Indemnified Party of any Claim in
respect of which the Indemnified Party intends to base a claim for indemnification hereunder, but the failure or delay so to notify the Indemnifying Party shall not relieve the Indemnifying Party of any obligation or liability that it may have to
the Indemnified Party except to the extent that the Indemnifying Party demonstrates that its ability to defend or resolve such Claim is adversely affected thereby. 

13.3.2 Subject to the provisions of Section 13.3.3 below, the Indemnifying Party shall have the right, upon providing notice to the
Indemnified Party of its intent to do so within [...***...] days after receipt of the notice from the Indemnified Party of any Claim, to assume the defense and handling of such Claim, at the Indemnifying Party’s sole expense. 

13.3.3 The Indemnifying Party shall select competent counsel in connection with conducting the defense and handling of such Claim, and
the Indemnifying Party shall defend or handle the same in consultation with the Indemnified Party, and shall keep the Indemnified Party timely apprised of the status of such Claim. The Indemnifying Party shall not, without the prior written consent
of the Indemnified Party, agree to a settlement of any Claim which could lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder,
or would involve any admission of wrongdoing on the part of the Indemnified Party. The Indemnified Party shall cooperate with the Indemnifying Party, at the request and expense of the Indemnifying Party, and shall be entitled to participate in the
defense and handling of such Claim with its own counsel and at its own expense. 

  
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 13.4 Special, Indirect and Other Losses. NEITHER PARTY NOR ANY OF ITS
AFFILIATES SHALL BE LIABLE UNDER THIS AGREEMENT FOR SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE 8. NOTHING IN
THIS SECTION 13.4 SHALL BE CONSTRUED TO LIMIT EITHER PARTY’S INDEMNIFICATION OBLIGATIONS UNDER THIS ARTICLE 13. 
 13.5
Zymeworks’ Insurance. Zymeworks, at its own expense, shall maintain liability insurance in an amount adequate to cover its obligations under this Agreement during the Term. Zymeworks shall provide a certificate of
insurance (or evidence of self-insurance) evidencing such coverage to Lilly upon request. 
 14. COMPLIANCE 

14.1 Compliance with this Agreement. Each of the Parties shall, and shall cause their respective Affiliates to, comply in all
material respects with the terms of this Agreement. 
 14.2 Compliance with Party Specific Regulations. In carrying out their
respective obligations under this Agreement, the Parties agree to cooperate with each other as may reasonably be required to help ensure that each is able to fully meet its obligations with respect to the Party Specific Regulations applicable to it.
Neither Party shall be obligated to pursue any course of conduct that would result in such Party being in material breach of any Party Specific Regulation applicable to it; provided that in the event that a Party refuses to fulfill its obligations
under this Agreement in any material respect on such basis, the other Party shall have the right to terminate this Agreement in accordance with Section 10.3; however, under such circumstances, such termination shall be the sole remedy for such
terminating-Party and such terminating-Party shall not be entitled to any other remedy under law or equity. All Party Specific Regulations are binding only in accordance with their terms and only upon the Party to which they relate. 

14.3 Compliance with Internal Compliance Codes. All Internal Compliance Codes shall apply only to the Party to which they
relate. The Parties agree to cooperate with each other to help insure that each Party is able to comply with the substance of its respective Internal Compliance Codes and, to the extent practicable, each Party shall operate in a manner
consistent with its Internal Compliance Codes applicable to its performance under this Agreement.
 14.4 Anti-Bribery Commitments.
Without limiting the other obligations of the Parties set forth in this Section, in connection with any activities of the Parties under this Agreement, the Parties confirm that they have not given, offered, promised, or authorized, and will not
give, offer, promise, or authorize, any payment, benefit, or gift of money or anything else of value, directly or through a third party, to (i) any Government or Public Official, as 

  
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defined below; (ii) any political party, party official or candidate for public or political office; (iii) any person while knowing or having reason to know that all or a portion of the
value will be given, offered or promised, directly or indirectly, to anyone describe in terms (i) or (ii) above; or (iv) any owner, director, employee, representative or agent of any actual or potential customer of the Parties, for
purposes of influencing any act or decision of such individual in his official capacity, inducing such individual to do or omit to do any act in violation of the individual’s duty, inducing the individual to use the individual’s official
influence with a government to affect or influence an act or decision of the government, or to secure any improper advantage in order to assist in obtaining or retaining business. The Parties shall comply with all applicable anti-bribery laws of any
jurisdiction, including any record keeping requirements of such laws, in the Countries where the Parties have their principal places of business and where they conduct any activities under this Agreement or any Related Agreements. For the
purposes of this Section, “Government or Public Official” means any officer or employee or anyone acting in an official capacity on behalf of: a government or any department or agency thereof; a public international
organization (such as the United Nations, the International Monetary Fund, the International Red Cross, and the World Health Organization), or any department, agency or institution thereof; or a government-owned or controlled company, institution,
or other entity, including a government-owned hospital or university. 
 15. GENERAL PROVISIONS 

15.1 Assignment. Except as provided in this Section 15.1, this Agreement may not be assigned or otherwise transferred, nor
may any right or obligation hereunder be assigned or transferred, by either Party without the consent of the other Party; provided, however, that (and notwithstanding anything elsewhere in this Agreement to the contrary) either Party
may, without such consent, assign this Agreement and its rights and obligations hereunder in whole or in part to an Affiliate of such Party so long as such Party remains primarily liable for any acts or omissions of such Affiliate, provided
further that, either Party, without the written consent of the other Party, may assign this Agreement and its rights and obligations hereunder (or under a transaction under which this Agreement is assumed) in connection with the transfer or
sale of all or substantially all of its assets or business related to the subject matter of this Agreement, or in the event of its merger or consolidation or similar transaction. Any attempted assignment not in accordance with this Section 15.1
shall be void. Any permitted assignee shall assume all assigned obligations of its assignor under this Agreement. 
 15.2 Extension to
Affiliates. Except as expressly set forth otherwise in this Agreement, each Party shall have the right to extend the rights and immunities granted in this Agreement to one or more of its Affiliates. All applicable terms and provisions of
this Agreement, except this right to extend, shall apply to any such Affiliate to which this Agreement has been extended to the same extent as such terms and provisions apply to the Party extending such rights and immunities. The Party 

  
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extending the rights and immunities granted hereunder shall remain primarily liable for any acts or omissions of its Affiliates. 

15.3 Severability. Should one or more of the provisions of this Agreement become void or unenforceable as a matter of Applicable
Laws, then this Agreement shall be construed as if such provision were not contained herein and the remainder of this Agreement shall be in full force and effect, and the Parties will use their best efforts to substitute for the invalid or
unenforceable provision a valid and enforceable provision which conforms as nearly as possible with the original intent of the Parties. 

15.4 Governing Law; English Language. This Agreement shall be governed by and construed in accordance with the laws of the State
of New York and the patent laws of the United States without reference to any rules of conflict of laws. This Agreement was prepared in the English language, which language shall govern the interpretation of, and any dispute regarding, the terms of
this Agreement. 
 15.5 Dispute Resolution. 

15.5.1 If any dispute, claim or controversy of any nature arising out of or relating to this Agreement, including, without limitation,
any action or claim based on tort, contract or statute, or concerning the interpretation, effect, termination, validity, performance or breach of this Agreement (each, a “Dispute”), arises between the Parties and the Parties cannot
resolve such Dispute through their respective Project Leaders or JSC, if and as applicable, within [...***...] days of a written request by either Party to the other Party (“Notice of Dispute”), and such Dispute is not one for
which Lilly has final decision-making as expressly set forth in section 4.5 (f) of this Agreement, either Party may refer the Dispute to senior representatives of each Party for resolution. Each Party, within [...***...] after a Party has
received such written request from the other Party to so refer such Dispute, shall notify the other Party in writing of the senior representative to whom such dispute is referred. If, after an additional [...***...] days after the Notice of
Dispute, such representatives have not succeeded in negotiating a resolution of the Dispute, and a Party wishes to pursue the matter, each such Dispute, controversy or claim that is not an “Excluded Claim” (defined below) shall be finally
resolved by binding arbitration JAMS pursuant to the Comprehensive Arbitration Rules and Procedures of JAMS then in effect, and judgment on the arbitration award may be entered in any court having jurisdiction thereof. 

15.5.2 The arbitration shall be conducted by a single arbitrator experienced in the business of pharmaceuticals (including biologicals).
If the issues in dispute involve scientific, technical or commercial matters, the arbitrator chosen hereunder shall engage experts that have educational training or industry experience sufficient to demonstrate a reasonable level of

  
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relevant scientific, medical and industry knowledge, as necessary to resolve the dispute. Within [...***...] days after initiation of arbitration, the Parties shall select the arbitrator.
If the Parties are unable or fail to agree upon the arbitrator within such [...***...] day period, the arbitrator shall be appointed by JAMS. The place of arbitration shall be New York, New York, and all proceedings and communications shall be
in English. 
 15.5.3 Prior to the arbitrator being selected, either Party, without waiving any remedy under this Agreement, may seek
from any court having jurisdiction any temporary injunctive or provisional relief necessary to protect the rights or property of that Party until final resolution of the issue by the arbitrator or other resolution of the controversy between the
Parties. Once the arbitrator is in place, either Party may apply to the arbitrator for interim injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved, and either Party may apply to a court of competent
jurisdiction to enforce interim injunctive relief granted by the arbitrator. Any final award by the arbitrator may be entered by either Party in any court having appropriate jurisdiction for a judicial recognition of the decision and applicable
orders of enforcement. The arbitrator shall have no authority to award punitive or any other type of damages not measured by a Party’s compensatory damages. Each Party shall bear its own costs and expenses and attorneys’ fees and an equal
share of the arbitrator’s fees and any administrative fees of arbitration, unless the arbitrators agree otherwise. 
 15.5.4
Except to the extent necessary to confirm an award or as may be required by law, neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties. In no event shall
an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the applicable New York statute of limitations. 

15.5.5 As used in this Section 15.5, the term “Excluded Claim” means any dispute, controversy or claim that
concerns (a) the validity, enforceability or infringement of any patent, trademark or copyright, or (b) any antitrust, anti-monopoly or competition law or regulation, whether or not statutory. Any Excluded Claim may be submitted by either
Party to any court of competent jurisdiction over such Excluded Claim. 
 15.6 Force Majeure. Neither Party shall be
responsible to the other for any failure or delay in performing any of its obligations under this Agreement or for other nonperformance hereunder (excluding, in each case, the obligation to make payments when due) if such delay or nonperformance is
caused by strike, fire, flood, earthquake, accident, war, act of terrorism, act of God or of the government of any country or of any local government, or by any other cause unavoidable or beyond the control of any Party hereto. In such event, the
Party affected will use commercially reasonable efforts to resume performance of its obligations and will keep the other Party informed of actions related thereto. 

  
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 15.7 Waivers and Amendments. The failure of any Party to assert a right
hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other Party. No waiver shall be
effective unless it has been given in writing and signed by the Party giving such waiver. No provision of this Agreement may be amended or modified other than by a written document signed by authorized representatives of each Party. 

15.8 Relationship of the Parties. Nothing contained in this Agreement shall be deemed to constitute a partnership, joint venture,
or legal entity of any type between Zymeworks and Lilly, or to constitute one as the agent of the other. Each Party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to give any Party the power or
authority to act for, bind, or commit the other. 
 15.9 Notices. All notices, consents or waivers under this Agreement shall
be in writing and will be deemed to have been duly given when (a) scanned and converted into a portable document format file (i.e., pdf file), and sent as an attachment to an e-mail message, where,
when such message is received, a read receipt e-mail is received by the sender (and such read receipt e-mail is preserved by the Party sending the notice),
provided further that a copy is promptly sent by an internationally recognized overnight delivery service (receipt requested)(although the sending of the e-mail message shall be when the notice
is deemed to have been given), or (b) the earlier of when received by the addressee or five (5) days after it was sent, if sent by registered letter or overnight courier by an internationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and e-mail addresses set forth below (or to such other addresses and e-mail addresses as a Party may designate by
notice): 
  

			
	If to Zymeworks:	  	Zymeworks, Inc.
		  	540-1385 West 8th Avenue
		  	Vancouver, BC
		  	Canada
		  	V6H 3V9
		  	E-mail address: [...***...]
		
	and	  	
		
		  	Wilson Sonsini Goodrich & Rosati
		  	650 Page Mill Road
		  	Palo Alto, CA 95070
		  	Attention: [...***...]
		  	E-mail address: [...***...]
		
	If to Lilly:	  	Eli Lilly and Company

  
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		  	Lilly Corporate Center 46285
		  	Indianapolis, Indiana 46285
		  	Attention: [...***...]
		  	Fax (317) 651-3051
		
	and	  	
		
		  	Eli Lilly and Company
		  	Lilly Corporate Center
		  	Indianapolis, IN 46285
		  	Attention: [...***...]
		  	Fax (317) 433-3000

 Zymeworks shall also provide a copy of any notice (via e-mail if
available) to Lilly’s Project Leader. 
 15.10 Further Assurances. Lilly and Zymeworks hereby covenant and agree without
the necessity of any further consideration, to execute, acknowledge and deliver any and all documents and take any action as may be reasonably necessary to carry out the intent and purposes of this Agreement. 

15.11 Compliance with Law. Each Party shall perform its obligations under this Agreement in accordance with all Applicable Laws.
No Party shall, or shall be required to, undertake any activity under or in connection with this Agreement which violates, or which it believes, in good faith, may violate, any Applicable Laws. 

15.12 No Third Party Beneficiary Rights. This Agreement is not intended to and shall not be construed to give any Third Party any
interest or rights (including, without limitation, any Third Party beneficiary rights) with respect to or in connection with any agreement or provision contained herein or contemplated hereby, except as otherwise expressly provided for in this
Agreement. 
 15.13 Entire Agreement. This Agreement sets forth the entire agreement and understanding of the Parties as to the
subject matter hereof and supersedes all proposals, oral or written, and all other communications between the Parties with respect to such subject matter. The Parties acknowledge and agree that, as of the Effective Date, all Confidential Information
disclosed pursuant to the Confidentiality Agreement by a Party or its Affiliates shall be included in the 

  
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Confidential Information subject to this Agreement and the Confidentiality Agreement is hereby superseded in its entirety; provided, that the foregoing shall not relieve any Person of any right
or obligation accruing under the Confidentiality Agreement prior to the Effective Date. “Confidentiality Agreement” means the Mutual Non-Disclosure Agreement between Zymeworks and Lilly dated
[...***...]. 
 15.14 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. 
 15.15 Expenses. Each
Party shall pay its own costs, charges and expenses incurred in connection with the negotiation, preparation and completion of this Agreement. 

15.16 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective legal
representatives, successors and permitted assigns. 
 15.17 Construction. The Parties hereto acknowledge and agree that:
(a) each Party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (b) the rule of construction to the effect that any ambiguities are resolved against the drafting Party
shall not be employed in the interpretation of this Agreement; and (c) the terms and provisions of this Agreement shall be construed fairly as to all Parties hereto and not in a favor of or against any Party, regardless of which Party was
generally responsible for the preparation of this Agreement. 
 15.18 Cumulative Remedies. No remedy referred to in this
Agreement is intended to be exclusive unless explicitly stated to be so, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law. 

15.19 Export. Each Party acknowledges that the laws and regulations of the United States restrict the export and re-export of commodities and technical data of United States origin. Each Party agrees that it will not export or re-export restricted commodities or the technical data of the
other Party in any form without appropriate United States and foreign government licenses. 

  
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 15.20 Notification and Approval. In the event that this Agreement or the
transaction(s) set forth herein are subject to notification or regulatory approval in one or more countries, then development and commercialization in such country(ies) will be subject to such notification or regulatory approval. The Parties will
reasonably cooperate with each other with respect to such notification and the process required thereunder, including in the preparation of any filing. Lilly will be responsible for any and all costs, expenses, and filing fees associated with any
such filing. 
 [Remainder of page left blank intentionally.] 

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

			
	ZYMEWORKS INC.
		
	By:	 	 /s/ Ali Tehrani

	Name:	 	Ali Tehrani, Ph.D.
	Title:	 	President & Chief Executive Officer
	
	ELI LILLY AND COMPANY
		
	By:	 	 /s/ Jan Lundberg

	Name:	 	Jan Lundberg
	Title:	 	Executive Vice President Science and Technology and President LRL

  
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 EXHIBIT 1.7 

APPROVED CRO 
 [...***...] 

  
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 Exhibit 1.30 

ELI LILLY AND COMPANY GOOD RESEARCH PRACTICES 

Lilly’s quality standards, along with the high level expectations for each standard, are listed below: 

1. Facility / Organization 

• Facility is suitable for the intended use. 

• Facility is adequately protected for the work that is to be performed. 

• Risk to continuation of the business identified and minimized in order to restore normal business operation. 

2. Contracts / Work Agreements 

• Legally binding work agreements are established. 

3. Personnel 

• Personnel for Study/project support are qualified and can perform Study/project tasks to meet expectations (e.g.,
curriculum vitae, training records, education records, experiences, etc.). 
 4. Equipment 

• Equipment is adequate to meet the deliverables’ expectations. 

5. Computer Systems 

• Computer systems are adequate to meet the deliverables’ expectations. 

  
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 6. Test Material 

• Test materials must be identified, characterized and stored appropriately to ensure that they are suitable for the
research purpose. Upon Study completion or termination, all materials should be disposed of appropriately in accordance with the terms of this Agreement. 

7. Biological Sample Integrity 

• Biological sample life cycle is managed to ensure integrity of their properties (e.g., urine samples, blood samples,
tissue samples, cell lines, and genetically engineered mice (GEMs)). 
 8. Record / Data / Notebook Management 

• Data is managed to ensure accuracy, completeness and retrievability. 

• Storage areas for essential documents are configured such that the documents are identifiable, retrievable and
protected. This includes both short-term and archival storage. 
 9. Reports 

• All data included in reports must be reviewed to ensure that the reports accurately reflect the data. 

10. In Vitro Assay 

• In vitro assays are performed in a manner that meets scientific and statistical principles and requirements as defined
in the work agreements. 
 11. In Vivo Assay 

• In vivo assays are performed with a study design and data analysis plan that meets scientific and statistical principles
and requirements. 

  
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 12. Quality Systems 

• Mechanisms exist to help personnel clearly understand their roles and responsibilities (e.g., work instructions,
guidance documents, work plans, protocols, requirements, SOPs). 
 • Quality Control processes exist to show
specifications are met. 

  
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 EXHIBIT 3.1.3 

THE INITIAL RESEARCH PLAN 

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 Confidential 

 
 57 

 CONFIDENTIAL 
  

 EXHIBIT 9.2 

PRESS RELEASE 

Zymeworks Inc. Announces Strategic Collaboration with Lilly Subsidiary ImClone Systems to Develop
Bi-specific Antibodies Using Zymeworks’ AzymetricTM Platform 
 Vancouver, Canada
(December XX, 2013) – Zymeworks Inc. today announced that it has entered into a licensing and collaboration agreement with ImClone Systems, a wholly-owned subsidiary of Eli Lilly and Company, to develop an undisclosed number of novel bi-specific antibody oncology therapeutics using Zymeworks’ proprietary AzymetricTM platform. Bi-specific antibodies have the potential to provide improved outcomes
for patients by simultaneously targeting two tumor associated antigens to induce a synergistic therapeutic response. 
 “We are excited
to enter into a strategic collaboration with ImClone and its world class biologics team,” said Ali Tehrani, Ph.D., president and CEO of Zymeworks. “This collaboration can help to advance and broaden the therapeutic utility of our novel bi-specific antibody platform and we are looking forward to working together to bring these groundbreaking therapies to the clinic and ultimately to patients with unmet medical needs.” 

Under the terms of the agreement, Zymeworks has granted Lilly and its subsidiaries, a worldwide license to the AzymetricTM platform to
develop and commercialize an undisclosed number of bi-specific therapeutic candidates toward Lilly’s therapeutic targets. This collaboration complements Lilly’s
bi-specifics program aimed at speeding the delivery of novel medicines to cancer patients with unmet needs. Zymeworks will receive an upfront fee and research support and is eligible to receive research,
development, and commercial milestone as well as tiered royalty payments on future product sales. Lilly will have exclusive worldwide commercialization rights to the antibodies derived from the collaboration. 

About the AzymetricTM Platform 

Bi-specific antibodies developed using the AzymetricTM platform resemble conventional mono-specific
antibodies while incorporating two different Fab domains to bind to different antigens or drug targets. AzymetricTM antibodies spontaneously assemble into a single molecule comprising two unique heavy and light chain pairs. Similar to natural
IgG antibodies, therapeutics based on the AzymetricTM platform retain long serum half-life and the ability to induce effector function and can be manufactured using well established and validated processes. 

About Zymeworks Inc. 

Zymeworks is a privately held biotechnology company that is developing
best-in-class antibody therapeutics for the treatment of oncology, autoimmunity and inflammatory diseases. The company’s proprietary ZymeCADTM structure-guided
protein engineering technology and its novel AzymetricTM and AlbuCORETM platforms enable the development of highly potent bi-specific antibodies and multivalent protein therapeutics targeted across a
range of indications. Zymeworks is focused on growing its preclinical biotherapeutics pipeline through in-house research and development programs and strategic collaborations. More information on Zymeworks can
be found at www.zymeworks.com. 
 Contact: 

  
 Confidential 

 
 58 

 CONFIDENTIAL 
  

 Zymeworks Inc. 

David Poon, Ph.D. 
 Director,
External R&D and Alliances 
 info@zymeworks.com 

Source: Zymeworks Inc. 

  
 Confidential 

 
 59

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