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Exhibit 10.18

Confidential treatment requested  

    This Agreement, dated as of 24 January 2000 is between Genentech, Inc., a Delaware corporation having a principal place of business 1 DNA Way,
South San Francisco, California 94080 (hereinafter "Genentech") and Seattle Genetics Inc., having a place of business at 22215 26th Ave. S.E. Bothell, WA 98021 (hereinafter "Licensee'). 

WHEREAS: 

	A.
	Genentech
is the owner of certain patents and patent applications (patent rights) relating to methods and compositions in the field of immunoglobulins.

	B.
	Genentech
does not wish to have these patent rights hinder the development of immunoglobulin products and is willing to grant licenses for the development of products for public use
and benefit as specified in this Agreement.

	C.
	Licensee
desires to obtain a license under the terms and conditions specified herein.

	D.
	Genentech
and Licensee believe that the subject matter of this license will be most effectively commercialized under conditions of limited exclusivity to encourage the investments
required to develop and market such subject matter. 

NOW,
THEREFORE, the parties agree as follows: 

 
 

Article I
  
    DEFINITIONS    

    Unless
otherwise specifically set forth herein, the following terms shall have the following meanings: 

    1.01.  "Affiliate" of Licensee shall mean any entity that controls, is controlled by or is under common
control with Licensee; and "control" for purposes of this definition shall mean the possession of the power to direct or cause the direction of the management and policies of an entity, whether
through the ownership of voting stock, by contract or otherwise. In the case of a corporation, "control" shall mean the direct or indirect ownership of fifty percent (50%) or more of the outstanding
voting stock together with a controlling membership on the board of directors of such corporation. 

    1.02.  "Antigen" as used in this Agreement shall mean a substance listed in Schedule A attached
hereto and made a part of this Agreement. Schedule A may be amended from time to time by mutual agreement of the Parties in writing, at which time the financial terms pertaining to the newly
added Antigen(s) may also be modified. 

    1.03.  "Bulk Product" shall mean Licensed Product supplied in a form other than Finished Product which
can be converted into Finished Product. 

    1.04.  "Cost of Product" shall mean the cost of acquisition, if purchased, or the cost of manufacture,
the latter being the sum of direct production costs and manufacturing overhead costs determined in accordance with generally accepted accounting principles. 

    1.05.  "Designee" shall mean a person or entity designated by a Party to exercise the rights of and
perform obligations hereunder in place of and to the exclusion of that Party in the Territory or a portion thereof. 

[*]   Confidential treatment requested 

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    1.06.  "Effective Date" shall mean as to each Antigen, or Licensed Product based thereon, the later of
the date of this Agreement or the date on which such Antigen was added to Schedule A by amendment. 

    1.07.  "Field" shall mean the manufacture, use or sale of Licensed Product for the prevention or therapy
of human diseases. 

    1.08.  "Finished Product" shall mean any and all Licensed Products in form for use by an end user and
not intended for further chemical or genetic manipulation or transformation. 

    1.09.  "Licensed Patents" shall mean 

U.S.
Patent No. 4,816,567 and the claims relating to chimeric antibodies found in patents or patent applications arising from divisionals, continuations or
continuations-in-part of any application from which U.S. Patent No. 4,816,567 claims priority (excluding U.S.S.N. 07/205,419 and foreign counterparts thereof) as well as
the foreign counterparts of the foregoing and any and all reissues, reexaminations or extensions of the foregoing ("Chimera Patents"). 

Licensee
hereby acknowledges they have specifically declined to license any patent issuing based on U.S.S.N. 07/205,419 (a continuation of the application maturing into U.S. Patent
No. 4,816,567) relating to the coexpression of immunoglobulin chains in recombinant host cells, as well as the divisionals, continuations or continuations-in-part of
such U.S.S.N. 07/205,419, the issued foreign counterparts of such U.S.S.N. 07/205,419 and any and all reissues, reexaminations or extensions of the foregoing ("Coexpression Patents"). 

Attached
hereto as Schedule B is a list of patents and patent applications that Genentech in good faith believes represents Licensed Patents as of the end of 1998. However no warranty is given
as to the completeness or accuracy of Schedule B or any update thereof that might subsequently be provided to licensee. 

    1.10.  "Licensed Product(s)" shall mean substances capable of binding to an Antigen listed in
Schedule A hereto, the manufacture, use or sale of which substances would, if not licensed under this Agreement, infringe one or more claims of Chimera Patents, which have neither expired nor
been held invalid by a court or other body of competent jurisdiction from which no appeal has been or may be taken. 

    1.11.  "Net Sales" shall mean the gross invoice or contract price to third party customers for Finished
Products. Finished Products used or consumed by Licensee or its Affiliates or Designees as part of the delivery of services to customers shall be considered Net Sales at the gross invoice or contract
price of like Finished Products which are sold to customers. If Licensed Product is sold in combination with one or more active ingredients, Net Sales shall be calculated by multiplying Net Sales of
the combination product by the fraction A/(A+B) where A is the sales price of the Finished Product in the combination when sold separately and B is the total sales price of all other active
ingredients in the combination when sold separately. If the Finished Product and the other active ingredients are not sold separately, the percentage of the total cost of the combination product
attributed to Cost of Product shall be multiplied times the sales price of the combination product to arrive at Net Sales. For all Licensed Product used or consumed by others than Licensee, Licensee
shall be entitled to deduct [*]% from Net Sales in lieu of all other deductions such as taxes, shipping charges, allowances and the like prior to calculating royalties due. 

    Net
Sales for Bulk Products shall be calculated by doubling the gross invoice or contract price of Bulk Products sold to non-affiliated customers. 

    The
method of calculating Net Sales of materials in form other than Finished Product or Bulk Product that can be converted into Finished Product shall be established by the Parties
prior to the first sale or transfer of any such material by Licensee to a non-affiliated third party. 

2

 

    1.12.  "Party" shall mean Genentech or Licensee and when used in the plural shall mean Genentech and
Licensee. 

    1.13.  "Territory" shall mean the entire world. 

 
 

Article II
  
    GRANT    

    2.01.  License.  Subject to the fulfillment by Licensee
of all the terms and conditions of this Agreement, Genentech hereby grants to Licensee and Licensee hereby accepts a coexclusive license together with the right to sublicense its Affiliates and
Designees under Licensed Patents for the term thereof to make, use and sell Licensed Products in the Field and the Territory. This grant shall be coexclusive with Genentech, Inc., and
additional licensees, if any, to be selected solely by Genentech. Genentech shall be free at its discretion to enter into agreements with such additional licensees at any time and on terms solely of
its choosing. However, Genentech represents that, unless for a particular Antigen a different number of additional licenses is specified at the time such Antigen is included in Schedule A, it
will not grant more than four (4) additional licenses in which both the Field and Territory are coextensive with that which is set forth herein. 

    2.02.  Right to Appoint Designee.  Licensee shall have
the right to sublicense all of its rights hereunder for all or part of the Territory (including on a country-by-country basis) to a Designee of its choosing, to the exclusion
of Licensee in such Territory or portion thereof, provided that Licensee agrees that it will indemnify Genentech for any failure of performance on the part of such Designee. An entity that simply acts
to co-promote or to co-market Licensed Product supplied by Licensee shall not be considered a Designee and Licensee may co-promote or co-market such
Licensed Product with such entity in a given country or countries, provided that (i) both Licensee and such entity obtain Licensed Products from the same manufacturing source, (ii) only
one such entity shall be permitted to co-promote or co-market the same Licensed Product in a given country, and (iii) Licensee shall be responsible for the payment of
royalties on Net Sales of Licensed Products by such entity and for all other acts of such entity as if such acts were those of the Licensee. 

    2.03.  No Other License.  Licensee understands and agrees
that no license under any patent or application other than Licensed Patents is or shall be deemed to have been granted under this Agreement, either expressly or by implication. 

    2.04.  Licenses Separately Available.  Licensee
acknowledges that separate licenses under Chimera Patents and Coexpression Patents were available from Genentech and that Licensee specifically declined to license Coexpression Patents. Licensee
further acknowledges that it was not coerced to enter into a license under either one of Chimera or Coexpression Patents as a condition to obtaining a license under the other, and that the licenses
hereunder were not offered as a mandatory package. Licensee understands that no assurances can be given that Coexpresion Patent licenses for any given Antigen will be available in the future or that
the same or similar terms will be available to any Licensee in the future. 

 
 

Article III
  
    FEES AND ROYALTIES    

    3.01.  License Grant Fee.  

    (a) Within
sixty (60) days after execution of this Agreement, Licensee shall pay to Genentech a non-creditable, non-refundable initial
installment license grant fee of $[*] and 

3

 

    (b) Within thirty (30) days of filing an NDA or BLA or equivalent for any indication, Licensee shall pay to Genentech a non-creditable,
non-refundable final installment license grant fee of $[*]. 

    3.02.  Minimum Annual Royalties.  Licensee shall pay to
Genentech a minimum annual royalty for each Antigen on or before January 31 of each year beginning with the [*] full calendar year after the Effective Date for such
Antigen in accordance with the following table: 

	Full Calendar Year
	 	Minimum Annual Royalty

	[*]	 	$[*]
	[*]	 	$[*]
	[*]	 	$[*]
	[*]	 	$[*]

Such
payments shall be non-refundable but shall be creditable against earned royalties as provided in Section 3.05. 

    3.03.  Earned Royalties.  

    Licensee
shall pay to Genentech a royalty of [*] percent ([*]%) for Chimera Patents on Net Sales of Licensed Products sold by Licensee
and its sublicensees. 

    3.04.  Sales To and Between Sublicensees.  No royalties
shall be due upon sales of Licensed Products to and between Licensee, its Affiliates, its sublicensees, co-promoting parties or co-marketing parties as permitted under
Section 2.02 for further sale; provided, however, that the royalty hereunder shall be payable upon the final sale by any of the foregoing to a non-affiliated vendee. 

    3.05.  Credits Against Royalties.  

    (a) Licensee
shall be entitled to reduce the earned royalty payment due under Section 3.03 for a given Antigen by up to [*] percent
([*]%) by applying as a one-time credit against such royalty (i) the minimum annual royalty payment paid for such Antigen for the calendar year for which
earned royalties are then due and (ii) an amount equal to the cumulative payments previously made under Section 3.02 for the [*] ([*])
years immediately preceding the calendar year in which Licensee [*] in [*] of a particular Licensed Product for so long as is necessary to amortize such
cumulative payments. Credits earned for one Antigen are not applicable to royalties due for other Antigens. 

    (b) Licensee
may apply as a credit against royalties owed to Genentech for any Licensed Product pursuant to Section 3.03 up to [*] of
royalties actually paid during the relevant quarter to any third party for the same Licensed Product pursuant to a license agreement for the third party's patent rights covering such License Product,
including royalties paid to the Medical Research Council with respect to valid and enforceable claims of United Kingdom Patent No. 2,188,638 or foreign counterparts thereof. 

    (c) In
no event shall the credits taken pursuant to subparagraphs (a) and (b) of this Section 3.05 taken in the aggregate exceed
[*] percent ([*]%) of the royalties owed to Genentech for any reporting quarter. 

    3.06.  No Non-Monetary
Consideration.  Without the prior written consent of Genentech, Licensee and its Affiliates shall not solicit or accept any consideration for the sale of any
Licensed Product other than as will be accurately reflected in Net Sales. 

    3.07.  Most Favored Licensee.  Should Genentech enter
into a coexclusive license with any other party after the Effective Date for the same Licensed Product and Field and any portion of the same Territory solely for monetary consideration, or monetary
consideration coupled with the grant of rights 

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as set forth in Section 2.04, and on financial terms more favorable than those set forth herein, Genentech shall notify Licensee and permit Licensee to substitute into this Agreement all of the
terms of such other license that differ from those herein, including those that are less favorable. 

 
 

Article IV
  
    RECORDS, REPORTS AND PAYMENTS    

    4.01.  Records Retention.  Licensee shall keep and shall
cause its sublicensees to keep records of the sales of all Licensed Products in sufficient detail to permit Genentech to confirm the accuracy of Licensee's royalty calculations. At Genentech's request
and expense, Licensee shall permit an independent certified public accountant appointed by Genentech and acceptable to Licensee to examine, upon reasonable notice and at reasonable times, such records
solely to the extent necessary to verify Licensee's calculations. Such examination shall be limited to a period of time no more than three (3) years immediately preceding the request for
examination. If Licensee's royalties are found to be in error such that royalties to Genentech were underpaid by more than five (5) percent then Licensee shall promptly pay any deficiency, plus
interest at the prime rate, to Genentech and reimburse Genentech for its costs in examining such records. 

    4.02.  Reports.  Within sixty (60) days after the
end of each calendar quarter following Licensee's or its sublicensee's first sale of Licensed Product, Licensee shall furnish to Genentech a written report of all sales of Licensed Products subject to
royalty under Section 3.03 during such calendar quarter. Such report shall include (i) the determination of Net Sales as specified in Section 1.11; (ii) detailed
itemization of the credits taken pursuant to Section 3.05; and (iii) the royalty payment then due. 

    4.03.  Payments.  Concurrently with each report pursuant
to Section 4.02, Licensee shall make the royalty payment then due. Payments shall be in United States dollars and, unless otherwise agreed in writing, shall be made by wire transfer to such
bank as Genentech may from time to time designate in writing, without set-off and free and clear of and without any deduction or withholding for or on account of any taxes, duties, levies,
imposts, fees or charges except for withholding required by tax authorities for income taxes on royalties actually payable to Genentech after application of the credits permitted by Sections 3.05.
Licensee shall make any withholding payments due on behalf of Genentech and shall promptly provide Genentech with official tax receipts or other written documentation sufficient to enable Genentech to
satisfy the United States tax authorities with respect to Genentech's application for a foreign tax credit for such payment. 

    4.04.  Currency Conversion.  Royalties due on Net Sales
of Licensed Products made in currency other than United States dollars shall first be calculated in the foreign currency and then converted to United States dollars on the basis of the rate of
exchange in effect for purchase of dollars published in the Wall Street Journal on the last business day of the period for which royalties are due. 

 
 

Article V
  
    LIABILITY    

    5.01.  Indemnification.  Licensee shall defend, indemnify
and hold Genentech harmless against any and all liability, damage, loss, cost or expense resulting from any claim, suit or other action arising out of or based on the manufacture, use or sale of any
Licensed Product by Licensee, its sublicensees or co-promoting or co-marketing entities pursuant to Section 2.02; provided, however, that upon the filing of any such
claim or suit, Genentech shall promptly notify Licensee and permit Licensee, at Licensee's cost, to handle and control such claim or suit and shall cooperate in the defense thereof. 

5

 
 
 

Article VI
  
    PATENT INFRINGEMENT    

    6.01.  Notification of Infringement.  Licensee shall
notify Genentech of any infringement by third parties of any patent within Licensed Patents of which Licensee is aware and shall provide Genentech with the available evidence, if any, of such
infringement. 

    6.02.  Enforcement of Licensed Patents.  Genentech shall
retain the sole right, at its sole discretion and expense, to enforce Licensed Patents against third party infringers. However, if (i) a non- Affiliated third party which is not
licensed under Chimera Patents or Coexpression Patents attains a market share of the greater of (a) at least ten percent (10%) of sales (in monetary volume) or (b) ten million dollars
($10 million) in sales of a particular Licensed Product within the Field in any country, (ii) Licensee or its sublicensee is selling the Licensed Product in such country,
(iii) there is reasonable evidence that such
third party is infringing either Chimera Patents or Coexpression Patents under which Licensee is paying royalties, (iv) Licensee has paid and is not in arrears in the payment to Genentech of
all royalties due under this Agreement and (v) Genentech fails to take action to abate the infringement within six (6) months after receipt of notice pursuant to Section 6.01,
then Licensee shall be entitled to reduce the royalty rates to one-half (0.5) of the rates otherwise set forth in Section 3.03 for the country in which the qualifying infringement exists. Such
reduction shall continue until such time as Genentech takes action to abate the infringement or until the market share of such third party drops below ten percent of the total market or sales below
10 million dollars for that particular Licensed Product within the Field in the country in question. Royalties shall not be affected in countries in which such infringement is not occurring.
Unlicensed infringing sales shall not affect the payment under Section 3.01. Unlicensed infringing sales shall not affect minimum royalties under Section 3.02 unless such sales
constitute greater than twenty-five percent (25%) of the market for such particular Licensed Product in all markets in which Licensee and its sublicensees sell the Product, in which case the otherwise
appropriate minimum shall be reduced by the percentage market share held by the unlicensed infringer. Genentech shall be entitled to recovery of all damages, costs and the like in any action brought
under this Section 6.02. 

    6.03.  No Warranty of
Non-Infringement.  Nothing in this Agreement shall be construed as a representation made or warranty given by Genentech that the practice by Licensee
or its sublicensees of the license granted hereunder will not infringe the patent rights of any third party. 

 
 

Article VII
  
    TERM AND TERMINATION    

    7.01.  Term.  This Agreement shall come into force as of
its Effective Date and shall continue in full force and effect on a country-by-country basis unless earlier terminated as provided herein or until the expiration of the last to
expire of the Licensed Patents. 

    7.02.  Termination for Breach.  Genentech shall have the
right to terminate this Agreement and the licenses granted hereunder upon thirty (30) days' written notice to Licensee for Licensee's material breach of this Agreement if Licensee has failed to
cure such breach within thirty (30) days of notice thereof. 

    7.03.  Insolvency.  Either Party may terminate this
Agreement if, at any time, the other Party shall file in any court pursuant to any statute of any individual state or country, a petition in bankruptcy, insolvency or for reorganization or for an
agreement among creditors or for the appointment of a receiver or trustee of the Party or of its assets, or if the other Party proposes a written agreement of composition
or extension of its debts, or if the other Party shall be served with an involuntary petition against it filed in any insolvency proceeding, and such petition shall not be dismissed within sixty 

6

 

(60) days after the filing thereof, or if the other Party shall propose or be a Party to any dissolution or liquidation, or if the other Party shall make an assignment for the benefit of
creditors. 

    7.04.  Termination by Licensee.  Licensee may terminate
this Agreement in its entirety or with respect to one or more Antigens at any time upon six (6) months' written notice to Genentech. 

    7.05.  Effect of Termination.  Termination of this
Agreement in whole or in part for any reason shall not relieve Licensee of its obligations to pay all fees and royalties that shall have accrued hereunder prior to the effective date of termination.
Termination of this Agreement as to Licensee shall result in the termination of the licenses of Licensee and all sublicensees of Licensee. The provisions of Sections 5.01 shall survive termination of
the Agreement for any reason except termination for breach by Genentech. 

 
 

Article VIII
  
    MISCELLANEOUS PROVISIONS    

    8.01.  Limitations on Assignments.  Neither this
Agreement nor any interests hereunder shall be assignable by either Party without the written consent of the other; provided, however, that either Party may assign this Agreement to any corporation or
entity with which it may merge or consolidate, or to which it may transfer substantially all of its assets or all of its assets to which this Agreement relates without obtaining the consent of the
other Party. 

    8.02.  Jurisdiction and Choice of Laws.  This Agreement
shall be interpreted and construed under the laws of California, and Licensee agrees to submit to the jurisdiction of California. 

    8.03.  Relationship of the Parties.  Nothing in this
Agreement is intended or shall be deemed to constitute a partnership, agency, employer-employee, or joint venture relationship between the Parties. 

    8.04.  Further Acts and Instruments.  Each Party hereto
agrees to execute, acknowledge and deliver such further instruments and to do all such other acts as may be necessary or appropriate to effect the purpose and intent of this Agreement. 

    8.05.  Entire Agreement.  This Agreement constitutes and
contains the entire agreement of the Parties and supersedes any and all prior negotiations, correspondence, understandings and agreements between the Parties respecting the subject matter hereof. This
Agreement may be amended or modified or one or more provisions thereof waived only by a written instrument signed by the Parties. 

    8.06.  Severability.  If in any jurisdiction any one or
more of the provisions of this Agreement should for any reason be held by any court or authority having jurisdiction over this Agreement or any of the Parties hereto to be invalid, illegal or
unenforceable, such provision or provisions shall be validly reformed to as nearly approximate the intent of the Parties as possible and if unreformable, the Parties shall meet to discuss what steps
should be taken to remedy the situation; in other jurisdictions, this Agreement shall not be affected. 

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

    8.08.  WARRANTIES.  The Parties represent and warrant
that they have the power to enter into this agreement. OTHERWISE, THE PARTIES EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. 

    8.09.  Notices.  Any notice, request, approval or other
document required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given when delivered in person, transmitted by telex, telecopier,
telegraph or deposited in the mail, postage 

7

 

prepaid, for mailing by first class, certified or registered mail, return receipt requested, addressed as follows: 

If
to Licensee, addressed to:

Seattle Genetics, Inc.

22215 26th Ave. S.E. Suite 3000

Bothell, WA 98021

Attn: President
If to Genentech, addressed to:

Genentech, Inc.

1 DNA Way

South San Francisco, CA 94080

Attn: Corporate Secretary 

or
to such other address or addresses as may be specified from time to time in a written notice. 

    8.10.  Wire Transfer of Funds.  Unless otherwise
specified in writing, all payments by Licensee required hereunder shall be made by wire transfer at the direction of Genentech. 

    IN
WITNESS WHEREOF, Genentech and Licensee have caused this Agreement to be executed by their duly authorized representatives. 

	 	 	SEATTLE GENETICS INC.
	

 	
 	

By:	
 	

/s/ H. PERRY FELL   

	

 	
 	

Title:	
 	
President

	

 	
 	

Date:	
 	

1-17-2000

	

 	
 	
GENENTECH INC.
	

 	
 	

BY:	
 	

/S/ NICHOLAS J. SIMON   

	

 	
 	

Title:	
 	
Vice President

	

 	
 	

Date:	
 	

24 January 2000

8

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Article I DEFINITIONS

Article II GRANT

Article III FEES AND ROYALTIES

Article IV RECORDS, REPORTS AND PAYMENTS

Article V LIABILITY

Article VI PATENT INFRINGEMENT

Article VII TERM AND TERMINATION

Article VIII MISCELLANEOUS PROVISIONSPrepared by MERRILL CORPORATION www.edgaradvantage.com

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Exhibit 10.19

Confidential treatment requested

 
 

LICENSE AGREEMENT
  No. 651-O1.LIC    
  

    THIS
AGREEMENT (the "Agreement"), made this 3rd day of February, 2000 (the "EFFECTIVE DATE"), is by and between the ARIZONA BOARD OF REGENTS, a body corporate of the
State of Arizona, acting on behalf of and for ARIZONA STATE UNIVERSITY, of Tempe, Arizona ("ASU") and Seattle Genetics, Inc., a corporation organized under the laws of Delaware having its
principal place of business located at 22215 26th Avenue SE, Bothell, Washington 98021 ("LICENSEE"). 

RECITALS  

	A.
	A
certain invention, generally characterized as a drug known under the name "Auristatin E", hereinafter referred to as the "TECHNOLOGY", was made in the course of research at ASU by
G. Robert Pettit and Jozsef Barkoczy and are and will be covered by ASU's PATENT RIGHTS, as defined below. 
	B.
	The
National Cancer Institute sponsored part of the development of the TECHNOLOGY (as defined below) and as a consequence this license is subject to overriding obligations to the
Federal Government as set forth in 35 U.S.C. 200-212 and applicable governmental implementing regulations. 
	C.
	The
LICENSEE is a "small business firm" as defined in 15 U.S.C. 632. 
	D.
	ASU
represents and warrants that it has the right to grant licenses to make, have made, use and sell products or services covered by ASU's PATENT RIGHTS under such patent rights,
together with any patents which have issued and which may yet issue on it. 
	E.
	ASU
is desirous that the TECHNOLOGY be developed and utilized to the fullest extent so that the benefits can be enjoyed by the general public; and 
	F.
	The
LICENSEE is desirous of obtaining certain rights from ASU for the commercial development, use, and sale of products or services covered by ASU's PATENT RIGHTS, and ASU is
willing to grant such rights on the terms and conditions set forth herein. 

 
 

AGREEMENT    
  

DEFINITIONS  

    1.1.   "AFFILIATE"
means any corporation or other business entity that, directly or indirectly, controls, is controlled by or is under control with
LICENSEE where control shall mean: (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or participating shares entitled to vote for
the election of directors; and (b) in the case of non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest or the power to direct
the management and policies of such entity; provided, however, that in any country where the local law shall not permit foreign equity participation of at least 50%, then an "AFFILIATE" shall include
any company in which the LICENSEE shall own or control, directly or indirectly, the maximum percentage of such outstanding stock or voting rights permitted by local law. 

	[*]
	Confidential treatment requested

1

 

    1.2.   "ASU's
PATENT RIGHTS" shall mean patent rights to certain subject matter, which is included in the following: 

Under ASU Case No. 651:

U.S.
Patent No. 5,635,483 entitled "Tumor Inhibiting Tetrapeptide Bearing Modified Phenethyl Amides". 

For
the purposes of this Agreement, only those compounds taught in the above named patent and identified as stereoisomers of a compound commonly referred to as "Auristatin E" are included in this
license and the grant of rights described in Article 2 of this Agreement shall pertain only to the following: 

Auristatin E, Compound No. 1S2R 

Auristatin E, Compound No. 1R2R 

Auristatin E, Compound No. 1S2S 

Auristatin E, Compound No. 1R2S  

Each of which falls within the general structure shown below:

   

and
any corresponding extensions or foreign applications or patents. 

    1.3.   "INVENTOR"
shall, for the purposes of the Agreement, mean Dr. George R. Pettit and Jozsef Barkoczy whose names appear on the patent
described by ASU's PATENT RIGHTS. 

    1.4.   "KNOW-HOW"
shall mean all technical data, information, materials and technical expertise that relates to TECHNOLOGY, including without
limitation, chemical and physical data and techniques, clinical data, medical uses, product forms, formulations, and specifications. 

    1.5.   "LICENSED
FIELD OF USE" shall mean all uses of LICENSED PRODUCTS or LICENSED METHODS. 

    1.6.   "LICENSED
METHOD" shall mean any method, procedure, process or other subject matter whose use or practice would constitute, but for any license
granted to LICENSEE hereunder, an infringement of any VALID CLAIM contained in ASU's PATENT RIGHTS, as defined herein. 

    1.7.   "LICENSED
PRODUCT' shall mean any material, composition, composition of matter, compound, device or embodiment the manufacture, use or sale of
which would constitute, but for the license granted to the LICENSEE pursuant to this Agreement, an infringement of any VALID CLAIM contained in ASU's PATENT RIGHTS, as defined herein. For the purposes
of this Agreement, 

2

 

LICENSED PRODUCT shall include combinations of chemical compounds in which a single agent such as Auristatin E is combined with another compound such as an antibody. 

    1.8.   "NET
SALES" means the total of the gross invoice prices of LICENSED PRODUCTS sold by the LICENSEE, an AFFILIATE, or a SUB-LICENSEE,
less the sum of the following actual and customary deductions where applicable: cash, trade, or quantity discounts; sales, use, tariff, import/export duties or other excise taxes imposed upon or
levied with respect to any sale of LICENSED PRODUCTS; transportation and insurance charges; and allowances or credits because of rejections or returns or uncollectible amounts. Transfers to an
AFFILIATE or SUB-LICENSEE for end use by the AFFILIATE or SUB-LICENSEE shall be treated as NET SALES. 

    1.9.   "SUB-LICENSEE"
shall mean any corporation or other business entity to which the LICENSEE has granted a sub-license under
the ASU's PATENT RIGHTS, as permitted herein. 

    1.10.  "TECHNOLOGY"
shall mean certain inventions relating to Auristatin E, which were made in the course of research at ASU by Drs. G. Robert Pettit,
and Jozsef Barkoczy which are covered by ASU's PATENT RIGHTS, as defined herein. 

    1.11.  "TERM"
shall mean the period of time commencing on the EFFECTIVE DATE and continuing until the expiration of the last to expire patent contained
in ASU's PATENT RIGHTS. 

    1.12.  "TERRITORY"
shall mean world-wide. 

    1.13.  "VALID
CLAIM" shall mean a claim in any issued unexpired United States patent and a pending claim in any corresponding foreign patent application
included in ASU's PATENT RIGHTS which has not been held unpatentable or invalid or unenforceable by a decision of a court or other competent authority, which is not appealable or not appealed within
the time allowed for appeal, and which has not been admitted to be invalid through reissue or disclaimer or otherwise and which is not subject to an interference claim. 

2.  GRANT  

    2.1.   ASU
hereby grants to LICENSEE an exclusive license in the TERRITORY and in the LICENSED FIELD OF USE, which shall include the right to grant
sub-licenses, under ASU's PATENT RIGHTS, as specified in Paragraph 1.1, to develop, have developed, make, have made, market, import, sell, and otherwise use LICENSED PRODUCTS and to
practice the LICENSED METHODS under ASU's PATENT RIGHTS. 

    2.2.   Except
as otherwise provided herein, the rights granted in Paragraph 2.1 shall extend for the TERM of this Agreement. 

    2.3.   The
license granted hereunder may be subject to all the applicable provisions of any Licenses to the United States Government executed by ASU. The
license granted hereunder is subject to the overriding obligations to the U.S. Government set forth in 35 U.S.C. 200-2 12 and applicable governmental implementing regulations. 

    2.4.   ASU
expressly reserves the right to use the TECHNOLOGY for educational and non-commercial research purposes. 

    2.5.   This
Agreement and grant of license hereunder are subject to the terms and conditions contained throughout this agreement including the Licensee's
specific diligence obligations specified in Article 8. 

3.  SUB-LICENSES  

    3.1.   ASU
also hereby grants to the LICENSEE the right to issue sub-licenses in the TERRITORY to SUB-LICENSEES to develop, have
developed, make, have made, market, import, sell and otherwise use LICENSED PRODUCTS and to practice the LICENSED METHODS, provided the 

3

 

LICENSEE has current rights thereto under this Agreement. To the extent applicable, such sub-licenses shall include all of the rights of and obligations due to ASU (and, if applicable, the
United States Government) that are contained in this Agreement including without limitation those obligations set forth in Article 25.

    3.2.   The
LICENSEE shall provide ASU with a copy of each sub-license issued within thirty (30) days after execution; collect and
guarantee payment of all royalties due ASU from SUB-LICENSEES; and deliver all reports due ASU from SUB-LICENSEES, as provided herein. 

    3.3.   Except
as otherwise provided in Paragraph 16.4 hereof, upon termination of this Agreement for any reason, ASU, at its sole discretion, may
determine whether any or all sub-licenses are to be canceled or assigned to ASU. 

4.  LICENSE ISSUE FEE AND MILESTONE PAYMENTS  

    The LICENSEE agrees to pay to ASU a non-refundable Issue Fee of $[*] within 10 days of the EFFECTIVE DATE. 

5.  PAYMENTS AND ROYALTIES  

    5.1.  License Maintenance Payments:  

    5.1.1.  The
LICENSEE shall pay to ASU an annual maintenance fee beginning at $[*] and increasing by annual increments of
$[*] each year up to a maximum of $[*] per year. For example, the [*] annual maintenance fee will be
$[*]; the [*] will be $[*]; the [*] will be $[*]; the
[*] will be $[*] and the [*] will be $[*] and will continue each year thereafter at the
$[*] rate. 

    5.1.2.  Such
annual maintenance fee payments shall be due and payable each year until a "New Drug Approval" (NDA) is received by the US Food and Drug
Administration. No maintenance fee shall be due during the years following receipt of the NDA. 

    5.1.3.  The
first such annual maintenance fee payment shall be due and payable on the first year anniversary of the EFFECTIVE DATE. 

    5.1.4.  Commencing
with the second annual maintenance fee, the annual maintenance fee shall be payable in two equal installments. The first installment
shall be due and payable on the six-month anniversary of the EFFECTIVE DATE and the second installment shall be due and payable on the one-year anniversary of the EFFECTIVE
DATE. 

    5.2  Milestone Payments  

    5.2.1.  The
LICENSEE shall make milestone payments to ASU upon the achievement of certain clinical development milestones according to the schedule,
below: 

    5.2.2.  Upon
initiation of the first Phase III clinical study in which the LICENSED PRODUCT is a single agent such as Auristatin E: 

  $[*]

    5.2.3.  Upon
initiation of the first Phase III clinical study in which the LICENSED PRODUCT that constitutes a combination of a single agent such as
Auristatin E and another compound such as an antibody: 

  $[*] 

    5.2.4.  Upon
FDA approval of an NDA for a LICENSED PRODUCT that is a single agent such as Auristatin E: 

  $[*]

4

 

    5.2.5.  Upon
FDA approval of an NDA for a LICENSED PRODUCT that constitutes a combination of a single agent such as Auristatin E and another compound
such as an antibody: 

  $[*]

    5.3.  Earned Royalties:  

    5.3.1.  The
LICENSEE shall pay to ASU an EARNED ROYALTY of [*]% of the NET SALES of all LICENSED PRODUCTS that utilize a process
or composition of matter covered by claims contained in ASU's PATENT RIGHTS and that constitute a single agent, i.e.: Auristatin E. 

    5.3.2.  The
LICENSEE shall pay to ASU an EARNED ROYALTY of [*]% of the NET SALES of all LICENSED PRODUCTS that utilize a process
or composition of matter covered by claims contained
in ASU's PATENT RIGHTS and that constitute a combination of a single agent such as Auristatin E and another compound such as an antibody. 

    5.3.3.  The
LICENSEE shall pay to ASU an earned royalty ("EARNED ROYALTY") in accordance with the rules specified in Paragraphs 5.4 through 5.14.
LICENSEE's and/or SUB-LICENSEE's obligation to pay EARNED ROYALTIES shall commence with the first sale of any LICENSED PRODUCT and will continue as long as the LICENSEE and/or
SUB-LICENSEES are selling any LICENSED PRODUCT throughout the TERM and in accordance with the sub-paragraphs, below: 

    5.4.  Minimum Annual Royalty:

    The
LICENSEE shall pay to ASU a minimum annual royalty of $[*] for the life of VALID CLAIMS of ASU's PATENT RIGHTS (the "Minimum Annual Royalty"), beginning in
the year of LICENSEE's first receipt of marketing approval for a LICENSED PRODUCT from the US Food and Drug Administration ("US FDA") or any other analogous worldwide regulatory agency. LICENSEE shall
account to ASU and pay royalties to ASU semi-annually within forty-five (45) days after the end of each calendar half-year for the just preceding calendar
half-year. Concurrent with the final royalty payment, due on February 15 following any year, LICENSEE shall make an additional payment if necessary in order to meet its obligation
to make minimum royalty payments for that year. 

    5.5.   For
sales of LICENSED PRODUCTS to an AFFILIATE of LICENSEE at a reduced price from that customarily charged to an unrelated third party, the
royalty paid to ASU shall be based on the NET SALES of such LICENSED PRODUCTS by the AFFILIATE to the AFFILIATE'S customers. Where the LICENSEE sells LICENSED PRODUCTS for end use to itself or an
AFFILIATE, such sale shall be considered a sale at list price, and ASU shall be entitled to receive a royalty in accordance with this Article based on such list price. Each reference to the LICENSEE
shall be meant to include its AFFILIATES. 

    5.6.   In
the event LICENSEE sells LICENSED PRODUCTS to a SUB-LICENSEE for end use by that SUB-LICENSEE, such sale shall be
considered a sale at list price, and ASU shall be entitled to receive a royalty in accordance with this Article based on such list price. If no such list price is available, such sale shall be
considered a sale at a commercially reasonable price between arm's length parties, as determined in good faith by LICENSEE and based on its sales price to other arm's length third parties, if
available. 

    5.7.   Article 1
defines ASU's PATENT RIGHTS and LICENSED PRODUCTS so that royalties are payable on LICENSED PRODUCTS covered by a Valid Claim.
EARNED ROYALTIES shall be due
on LICENSED PRODUCTS in each country where relevant ASU's PATENT RIGHTS exist, for the duration of VALID CLAIMS of such ASU'S PATENT RIGHTS in such country. EARNED ROYALTIES shall accrue to ASU when
LICENSED PRODUCTS are invoiced, or if not invoiced, when delivered to a third party and shall be paid as set forth below. 

5

 

    5.8.   Commencing upon the first commercial sale of a LICENSED PRODUCT, the LICENSEE shall pay EARNED ROYALTIES accruing to ASU on a
semi-annual basis on or before the following dates of each calendar year: 

	•
	[*]

	•
	[*]

    5.9.   Each
payment pursuant to this Article 5 shall be for EARNED ROYALTIES that accrued within the
LICENSEE's most recently completed calendar half-year and shall be accompanied by a royalty report. Such reports shall indicate for the relevant calendar half-year the NET
SALES of the LICENSED PRODUCT manufactured or sold by LICENSEE, its AFFILIATES and its SUB-LICENSEES with respect to which payments are due, and the amount of those payments. If no payment
is due for any period, LICENSEE shall so report. 

    5.10.  All
moneys due ASU shall be payable in United States funds collectible in Tempe, Arizona. When LICENSED PRODUCTS are sold for moneys other than
United States dollars, the EARNED ROYALTIES shall first be determined in the foreign currency of the country in which such LICENSED PRODUCTS were sold and then converted into equivalent United States
funds. The exchange rate for such conversion shall be that rate quoted in The Wall Street Journal on the last business day of the reporting period. 

    5.11.  Royalties
earned with respect to sales occurring in any country outside the United States shall not be reduced by any taxes, fees, or other
charges imposed by the government of such country on the remittance of royalty income. Notwithstanding the foregoing, all payments made by the LICENSEE in fulfillment of ASU's tax liability in any
particular country shall be credited against Earned Royalties or fees due ASU for that country and shall be reported to ASU along with payment of EARNED ROYALTIES, net of any such amount. 

    5.12.  If
at any time legal restrictions prevent the prompt remittance of part or all royalties by the LICENSEE with respect to any country where a
LICENSED PRODUCT is sold, royalty payments attributable to sales in that country shall be suspended for as long as such prohibition is in effect and as soon as such prohibition ceases to be in effect,
all royalties that ASU would have been entitled to but for the prohibition shall be deposited or transmitted to the extent allowable. 

    5.13.  If
any patent or any claim included within ASU's PATENT RIGHTS is held invalid in a final decision by a court of competent jurisdiction and last
resort and from which no appeal has or can be taken, all obligation to pay royalties hereunder based on such patent or claim or any patentably indistinct claim shall cease as of the date of such final
decision. Royalty payments shall be suspended during any period in which the PATENT RIGHTS are subject to any interference or other proceeding disputing the validity of the PATENT RIGHTS. Once such
interference or other proceeding is concluded and such disputed claims within ASU's PATENT RIGHTS are upheld, LICENSEE shall make a royalty payment to ASU to cover the royalty due on all NET SALES
during the suspension and continuing royalty payments and obligations to ASU shall be resumed as though no interference or other proceeding ever took place. 

    5.14.  No
royalties shall be collected or paid on LICENSED PRODUCTS sold to the account of the U.S. Government, any agency thereof, or any state or
domestic municipal government as provided for in any License to the Government. 

6.  PATENT EXPENSES and PATENT PROSECUTION AND MAINTENANCE  

    6.1.   The
costs of preparing, filing, prosecuting and maintaining all United States and foreign patent applications and issued patents from and after
the EFFECTIVE DATE shall be borne by ASU. These costs include any patent prosecution costs that are incurred for appeals, re-examination, re-issue, interferences, or
inventorship determinations as well as the maintenance of all resulting patents. ASU 

6

 

shall prepare and deliver to LICENSEE a report setting forth the countries in which it has filed and intends to file applications with respect to ASU's PATENT RIGHTS. LICENSEE may request ASU in
writing to file applications in additional countries. LICENSEE shall be responsible for any incremental costs incurred by ASU for any countries added in accordance with the foregoing after ASU's
receipt of such request from LICENSEE. 

    6.2.   All
patents comprising or including ASU's PATENT RIGHTS shall be held in the name of ASU and shall be obtained and maintained using counsel who
are on ASU's list of officially approved intellectual property counsel, and who are approved by LICENSEE, such approval not to be unreasonably withheld. 

    6.3.   ASU
shall use reasonable efforts to obtain, file, prosecute and maintain the United States and foreign patents comprising ASU's PATENT RIGHTS at
ASU's sole discretion. ASU agrees to consult with LICENSEE and give good faith consideration to LICENSEE's comments regarding such patent prosecution and related proceedings to the extent related to
the TECHNOLOGY. It is understood by LICENSEE that ASU counsel takes instructions only from ASU. 

    6.4.   The
LICENSEE shall have the right to request that ASU obtain patent protection on the TECHNOLOGY in foreign countries if available and if it so
desires. The LICENSEE shall notify ASU within seven (7) months of the filing of the corresponding United States application of its decision to obtain additional foreign patents. This notice
concerning foreign filing shall be in writing, shall identify the countries desired, and shall reaffirm the LICENSEE's obligation to underwrite the incremental costs thereof. 

    6.5.   ASU
shall use all reasonable efforts to amend any patent application to include claims reasonably requested by the LICENSEE to protect the
products contemplated to be sold under this Agreement, or to cover competitive products as long as such amendments, in the opinion of ASU's patent counsel will not jeopardize issuance of a patent. ASU
shall pursue all claims of improper inventorship regarding any patent or patent application, which is or would be subject to the licenses granted hereunder as reasonably requested by LICENSEE and at
LICENSEE's expense. 

    6.6.   ASU's
obligation to prosecute any patent application shall cease at such time when ASU is advised by counsel that such patent application has been
rejected and an appropriate appeal procedure must be pursued in order to gain issuance of the patent; or if an order for reexamination is issued by the patent office; or if an interference is
declared; or if a patent reissuance is required or requested by the LICENSEE. If, however, upon notification by ASU, LICENSEE re-affirms its obligation in writing that LICENSEE will
reimburse ASU for the costs involved in such appeals process, ASU will proceed with the necessary action. 

    6.7.   ASU
shall promptly advise a LICENSEE of the grant, lapse, revocation, surrender or invalidation of any ASU PATENT RIGHT. ASU shall not abandon or
irrevocably limit the scope of any ASU PATENT RIGHT in any country without the prior written consent of LICENSEE. 

7.  TECHNICAL INFORMATION and DUE DILIGENCE  

    7.1.   Within
60 days of the EFFECTIVE DATE, the ASU Cancer Research Institute shall supply one-hundred milligrams (100 mg.) of
Auristatin E to the LICENSEE. 

    7.2.   Within
60 days of the EFFECTIVE DATE, ASU shall transfer to LICENSEE all KNOW-HOW, preclinical data, assays and associated
materials, protocols, procedures and any other information in ASU's possession or control, necessary or desirable to develop the TECHNOLOGY. 

    7.3.   Each
party, for itself and any SUB-LICENSEE'S, undertakes during the TERM of this Agreement, and for a period of  5 years following the termination of this Agreement, to hold in confidence and not to use
or disclose to any third party, except as
permitted herein, the 

7

 

TECHNOLOGY and KNOW-HOW received from the other party. This obligation shall not apply to the portion(s) of TECHNOLOGY and KNOW-HOW which: 

    7.3.1.  was
known to the receiving party or any of its SUB-LICENSEES prior to its receipt by the receiving party, and can be so proved by
written or electronic records; or 

    7.3.2.  is
received at any time by the receiving party or its SUB-LICENSEES in good faith from a third party lawfully in possession of it
and having the right to disclose the same, and can be so proved by written or electronic records; or 

    7.3.3.  is
as of the date of receipt by the receiving party in the public domain or subsequently enters the public domain other than by reason of acts
or omissions of the employees or agents of the receiving party or its SUB-LICENSEES, and can be so proven by written or electronic records; or is independently developed by the receiving
party without any reference to the TECHNOLOGY or KNOW-HOW, and can be so proved by written or electronic records. 

    7.4.   LICENSEE
and its SUB-LICENSEES may use and discuss the TECHNOLOGY and KNOW-HOW received from ASU in connection with
applying for and securing necessary governmental authorization for the lawful marketing of LICENSED PRODUCTS in the TERRITORY; and in connection with LICENSEE's financing activities. 

    7.5.   Notwithstanding
the provisions of Paragraph 7.3, ASU reserves the right to publish information of scientific importance, including any
TECHNOLOGY and KNOW-HOW; provided, however, that (1) the TECHNOLOGY and KNOW-HOW or the material part of it shall, prior to such publication, have been made the subject
of a United States patent application, or (2) LICENSEE, upon review as provided for herein, shall have declined to comment within the prescribed period of time. ASU shall furnish LICENSEE with
a copy of every relevant publication by ASU pursuant to this Article, prior to publication of the information. LICENSEE shall have 30 days from receipt of the intended publication to indicate
to ASU any reasonable revisions or deletions it deems necessary to protect its proprietary rights. Title to any copyrightable material, first produced or composed by one party, shall remain with that
party; provided an irrevocable, royalty-free right to reproduce, translate and use the copyrighted material for purposes of this Agreement shall be granted to the other party. 

8.  DUE DILIGENCE AND MARKETING OBLIGATIONS  

    8.1.   The
LICENSEE, upon execution of this Agreement, shall diligently proceed with the development, manufacture and sale of LICENSED PRODUCTS and shall
diligently endeavor to market the same within a reasonable time after execution of this Agreement and in quantities sufficient to meet the market demands. LICENSEE shall promptly notify ASU in writing
of the commencement of such marketing. 

    8.2.   LICENSEE
shall promptly advise ASU in writing if it decides (i) not to market any LICENSED PRODUCT in any country, (ii) to
discontinue the marketing of such LICENSED PRODUCT in any country, or (iii) to not resume the marketing of such LICENSED PRODUCT in any country following expiration. This notice shall, unless
LICENSEE is (a) developing another LICENSED PRODUCT which is either superior, based on data available at that time, or is at the same or a later stage of development than the abandoned LICENSED
PRODUCT or (b) marketing another LICENSED PRODUCT for the same indication in such country at such time, serve to terminate this Agreement as to that LICENSED PRODUCT and that country. 

    8.3.   The
Parties shall promptly advise one another of any confirmed instance which comes to either party's attention of severe or unexpected reactions
from the use of TECHNOLOGY or any LICENSED PRODUCT. 

    8.4.   LICENSEE
shall, in a manner consistent with the effort devoted to products of the same or similar potential of its own development, prepare and
file or cause to be prepared and filed all 

8

 

necessary applications to obtain approval for LICENSED PRODUCTS in the name of LICENSEE or its AFFILIATES or SUB-LICENSEES from any necessary governmental authorities. 

    8.5.   LICENSEE
shall in the performance of any investigation, testing and solicitation of government approvals pertaining to the use of the TECHNOLOGY,
exercise at least the same degree of diligence which any reasonable and prudent manufacturer exercises in the investigation, testing and solicitation of government approvals for an invention of
similar class or utility invented by employees of and owned by the manufacturer. 

    8.6.   The
LICENSEE agrees to the following scientific and clinical development requirements. 

    8.6.1.  Perform
[*] on Auristatin E and complete same no later than [*]. 

    8.6.2.  [*]
with Auristatin E and complete same no later than [*]. 

    8.6.3.  Perform
[*] and complete same no later than [*]. 

    8.6.4.  Perform
[*] on Auristatin E and/or Auristatin E monoclonal antibody-drug conjugates
[*] and complete same no later than [*]. 

    8.6.5.  Perform
[*] on Auristatin E and/or Auristatin E monoclonal antibody-drug conjugates that
[*] and complete same no later than [*]. 

    8.6.6.  [*]
of Auristatin E and/or Auristatin E monoclonal-drug conjugates [*] and complete
same no later than [*]. 

    8.6.7.  [*]
on Auristatin E or Auristatin E monoclonal antibody-drug conjugates that [*] and
complete same no later than [*]. 

    8.6.8.  If
an IND Application is approved, initiate and conduct or have conducted at least [*] no later than
[*]. 

    8.7.   LICENSEE
shall meet the reasonably anticipated market demand for LICENSED PRODUCTS following commencement of marketing and during the TERM of this
Agreement. 

    8.8.   If
LICENSEE fails to meet any of the above requirements as set forth in Paragraphs 8.6.1 through 8.6.8, then ASU shall have the right to notify
LICENSEE of ASU's belief in writing that LICENSEE has failed to meet any such specific obligation with respect to any specified LICENSED PRODUCT(S) and to request LICENSEE to undertake immediate
remedial action. If the parties disagree as to any such failure, either may bring the matter up for arbitration in Maricopa County, Arizona upon sixty (60) days prior written notice under the
then prevailing rules of the American Arbitration Association for adjudication. If, during the arbitration process, it is determined that LICENSEE has not acted diligently with respect to such
LICENSED PRODUCT(S), then LICENSEE has the right to undertake remedial action. If the LICENSEE fails to do so, within a time deemed reasonable by the arbitrator, LICENSEE'S rights under this
Agreement(s) may be terminated by ASU with respect to the relevant LICENSED PRODUCT(S) pursuant to Paragraph 16.1. 

9.  REPORTS  

    9.1.   Beginning
on [*] and thereafter with each royalty report provided for in Paragraph  5.9, LICENSEE shall submit to ASU a progress report covering LICENSEE'S activities related to the testing and development of all
LICENSED PRODUCTS~
along with the obtaining of the governmental approvals necessary for marketing of LICENSED PRODUCTS. The LICENSEE shall make these progress reports for each LICENSED PRODUCT until the first commercial
sale of that LICENSED PRODUCT occurs in the United States. 

    9.2.   The
progress reports submitted under Paragraph 9.1 shall include, but not be limited to, the following topics: 

	•
	summary
of work completed 

9

 

	•
	key
scientific discoveries 
	•
	summary
of work in progress 
	•
	current
schedule of anticipated events or milestones 

    9.3.   At
the request of ASU from time to time, LICENSEE will provide information necessary to confirm the large/small entity status (as defined by the
United States Patent and Trademark Office) of itself and its SUB-LICENSEES and AFFILIATES. 

    9.4.   The
LICENSEE shall report to ASU the date of first commercial sale of a LICENSED PRODUCT in each country. 

    9.5.   LICENSEE
shall keep, and it shall cause its SUB-LICENSEES to keep, accurate records in sufficient detail to enable the payments due
under Article 5 to be determined for a period of 3 years following the end of the accounting period to which the information pertains. Upon the
request of ASU, LICENSEE and its SUB-LICENSEES shall permit an independent certified public accountant selected by ASU to have access, once in each calendar year during regular business
hours and upon reasonable notice to LICENSEE, to those records of LICENSEE and its SUB-LICENSEES as may be necessary or desirable to verify the accuracy of the reports made during the
previous calendar year. Should the audit reveal a discrepancy of more than 5% between the payment reported and the payment actually due to ASU, LICENSEE
shall pay all fees and expenses incurred in conducting the audit; otherwise ASU shall pay the fees and expenses incurred in conducting the audit. 

10.  WARRANTY  

    ASU warrants and represents that except for the possible government interest disclosed above, it has the full right and power to grant the license described in
Article 2, that it will take no action to negate this right and power and shall take all actions within its control to maintain this right and power and that it has no knowledge of any
outstanding undisclosed agreements, assignments, or encumbrances inconsistent with the provisions of this Agreement other than as expressly set forth herein. ASU makes no other representation or
warranty, express or implied, and ASU assumes no liability with respect of any infringement of any patent or other right of third parties due to LICENSEE's activities under the LICENSE granted
hereunder and ASU assumes no liability with regard to any claim, specious or otherwise, arising out of alleged side effects or any other alleged performance defect arising out of the use or misuse of
the LICENSED PRODUCTS. 

11.  PATENT ENFORCEMENT  

    11.1.  If
at any time during the TERM of this Agreement either party shall become aware of any infringement or threatened infringement of any of ASU's
PATENT RIGHTS, such party shall give immediate notice of it to the other party. If the infringement relates to the TECHNOLOGY, then LICENSEE shall have the first right to settle any alleged
infringement of ASU's PATENT RIGHTS. ASU shall have the first right to settle any alleged infringement of ASU's PATENT RIGHTS that does not relate to the TECHNOLOGY.. Each party shall give reasonable
assistance to the other party in connection with settling any alleged infringement and shall have the right to join in any infringement or enforcement action at its own expense. 

    11.2.  If
the party having the first right to take action under Section 11.1 is not able or willing to take action against an infringer as set
forth above, the other party shall have the right at any time following one hundred twenty (120) days of receipt of notice of the alleged infringement, to at its or their own expense take
action against the infringer. ASU shall permit, if legally necessary, the use of its name and shall execute any documents and do any acts as may be reasonably necessary for the purpose of taking
action. Any recovery received by the party taking action against an infringer pursuant to this Paragraph shall be retained for the benefit of such party, provided that in the case of LICENSEE taking
such action, royalties specified in Article 5 shall be paid to ASU on that portion of any recovery 

10

 

remaining after reimbursement of all of LICENSEE'S expenses hereunder and in the case of ASU taking such action, ASU shall pay to LICENSEE the amount of any damages for injury to LICENSEE or its
SUBLICENSEES resulting from the infringement. 

    11.3.  If
LICENSEE, its AFFILIATES or SUB-LICENSEES must pay royalties or license fees in any country to third parties under one or more
valid claims of a dominant patent to enable LICENSEE, its AFFILIATES or SUB-LICENSEES to use the inventions of the ASU's PATENT RIGHTS, those payments shall be credited against LICENSEE's
royalty obligations to ASU hereunder for sales in that country where a valid claim of a dominant patent exists to the extent of payments of royalties or license fees actually made to third parties by
LICENSEE, its AFFILIATES and SUB-LICENSEES. 

    11.4.  After
an initial determination by a court or tribunal that a claim or claims of any of ASU's PATENT RIGHTS is invalid, LICENSEE shall place all
royalties due by virtue of such ASU PATENT RIGHT in an interest-bearing escrow account until a decision by a court of last resort. If the court of last resort reverses the initial determination,
LICENSEE shall cause to be paid to ASU all amounts in escrow plus accrued interest within thirty (30) days after receipt of the determination of the court of last resort. If the court of last
resort upholds the initial determination, LICENSEE shall receive all amounts in escrow, plus accrued interest. 

    11.5.  Each
party agrees to use its best efforts whenever a protective order is to be entered with a court of competent jurisdiction, to have the order
permit at least one counsel from each party access to information provided under the protective order without restriction. 

12.  COMMUNICATION  

    Any payment, notice, or other communication required or permitted to be made or given to either party pursuant to this Agreement shall be sufficiently made or
given on the date of mailing if sent to the party by certified or registered mail, postage prepaid, addressed to it at its address set forth or to such other address as it shall be designated by
written notice to the other party as follows: 

In
the case of ASU:

Office of Technology Collaborations & Licensing

Office of the Vice Provost for Research

Arizona State University

P. 0. Box 873511

Tempe, AZ 85287.3511

USA

Attn: Director

In the case of LICENSEE:

Seattle Genetics, Inc.

22215 26th Avenue, SE

Bothell, Washington 98021

Attn: Chief Executive Officer 

13.  ASSIGNMENTS  

    This Agreement shall not be assignable by either party without the prior written consent of the other party except to an AFFILIATE or to a successor in
ownership of all or substantially all of the business assets to which this Agreement pertains and then only if such successor shall expressly assume in writing the performance of all the terms and
conditions of this Agreement which are to be performed by the assigning party. 

11

 

14.  TECHNICAL ASSISTANCE  

    14.1.  At
LICENSEE's written request, ASU shall: 

    14.1.1.  permit
representatives from LICENSEE and its SUB-LICENSEES to visit the facilities of ASU for the purpose of personally observing
the practice and testing of TECHNOLOGY or the production of LICENSED PRODUCTS, and 

    14.1.2.  arrange
for its or its AFFILIATES' representatives to visit the facilities of LICENSEE, or its SUB-LICENSEES as may be designated
by LICENSEE to provide LICENSEE, or its SUB-LICENSEES any technical assistance and advice as LICENSEE, and its SUB-LICENSEES may reasonably require in connection with the
production, packaging, inspecting, and testing of TECHNOLOGY and the LICENSED PRODUCTS or the LICENSED METHODS. 

    14.2.  LICENSEE
shall give ASU reasonable prior notice of the visits or required assistance referred to in Paragraphs 14.1.1 and 14.1.2 above and the
visits shall be of reasonable duration and made at reasonable times during regular business hours. LICENSEE and its SUB-LICENSEES shall bear the entire cost of the visits made pursuant to
Paragraph 14.1.1 and shall promptly reimburse ASU and its AFFILIATES for all reasonable salary, travel, and other expenses actually incurred by ASU and its Affiliates' representatives in the
course of the visits made to LICENSEE's and its SUB-LICENSEES' facilities pursuant to Paragraph 14.1.2. 

15.  PATENT MARKING  

    The LICENSEE shall mark all LICENSED PRODUCTS made, used or sold under the terms of this Agreement, or their containers, in accordance with the applicable
patent marking laws. 

16.  TERMINATION  

    16.1.  Material
failure by ASU or LICENSEE to comply with any of the material obligations and conditions contained in this Agreement (a "Default") shall
entitle the non-Defaulting party to give to the party in Default, written notice requiring it to cure the Default. If the Default is not cured or, if in the non-Defaulting
party's judgment, substantial steps have not been taken to cure the Default, within 90 days after the receipt of the notice by the Defaulting party, the non-Defaulting party shall
be entitled (without prejudice to any of its other rights conferred on it by this Agreement) to terminate this Agreement in whole or in part by giving notice to take effect immediately upon receipt by
the party in Default; provided, however, that with respect to a Default by LICENSEE under Paragraph 8.6., ASU's termination right hereunder shall only apply with respect to the LICENSED
PRODUCT(S) which is the subject of the Default. If the parties disagree as to the existence of any Default, such matter shall
be resolved prior to any termination hereunder by arbitration to be conducted in Maricopa County, Arizona upon 60 days prior written notice under the then prevailing rules of the American
Arbitration Association. The right of either party to terminate this Agreement shall not be affected in any way by its waiver of, or failure to take action with respect to, any previous Default. 

    16.2.  if
one of the parties shall voluntarily or involuntarily go into liquidation or bankruptcy, make an assignment for the benefit of creditors, or
have a receiver or a trustee appointed for its properties, the other party shall be entitled to terminate this Agreement immediately upon written notice to that party. 

    16.3.  LICENSEE
may terminate this Agreement with respect to such LICENSED PRODUCT or ASU PATENT RIGHT upon 30 days prior written notice with no
further obligation to ASU except for the payment of any fees which came due or royalties accrued up until the date of termination. 

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    16.4.  Upon any termination of this Agreement, any SUB-LICENSEE then in good standing shall have the right to continue as a licensee under
the relevant rights granted to it hereunder after agreeing in writing to directly assume all relevant obligations of LICENSEE hereunder. 

17.  RIGHTS AND OBLIGATIONS FOLLOWING TERMINATION  

    17.1.  Termination
of this Agreement, by expiration or otherwise for any reason, shall be without prejudice to: 

	•
	the
rights and obligations provided for in Paragraph 7.3; 
	•
	ASU's
right to receive all payments and royalties due and accrued and unpaid on the effective date of the termination; 
	•
	the
rights and obligations provided for in Article 10, Article 17 and Article 28; and 
	•
	any
other remedies which either party may have under law or equity. 

    17.2.  Following
any termination but not the expiration of this Agreement, LICENSEE and its SUB-LICENSEES, may sell, in accordance with the
terms of this Agreement, any affected LICENSED PRODUCT which was in process of manufacture or finished on the effective date of the termination, but, with respect to these sales, LICENSEE shall
continue to be bound by all of its obligations under this Agreement, including the obligation to render quarterly reports covering sales in accordance with the provisions of Article 9 and the
obligation to pay royalties at the rates set forth in Article 5. The right of each party, subsequent to the loss of its license or
sub-license upon termination of this Agreement, to challenge the validity or alleged infringement under which a license or sub-license is granted, shall not be prejudiced by
reason of the prior existence of this Agreement. 

18.  INSURANCE AND INDEMNIFICATION  

    18.1.  LICENSEE
shall at all times comply, through insurance or self-insurance, with all statutory worker's compensation and employers'
liability requirements covering all employees with respect to activities performed under this Agreement. In addition, LICENSEE shall maintain, from the initiation of human trials, if applicable, and
for so long as LICENSEE customarily maintains insurance for its other products, Comprehensive General Liability Insurance, including Products Liability Insurance, with reputable and financially secure
insurance carriers to cover the activities of LICENSEE and its SUB-LICENSEES. This insurance shall provide minimum limits of liability of $[*] and shall include the
State of Arizona, the Arizona Board of Regents, Arizona State University and their Regents, officers, employers, students and agents as additional insureds. This insurance shall be written to cover
claims made during or after the expiration of this Agreement. At ASU's request, LICENSEE shall furnish a Certificate of Insurance evidencing primary coverage and requiring 30 days prior written
notice of cancellation or material change to ASU. LICENSEE shall advise ASU, in writing, that it maintains excess liability coverage over primary insurance for at least the minimum limits set forth
above. All insurance of LICENSEE shall be primary coverage; insurance of ASU or the State of Arizona shall be excess and noncontributory. 

    18.2.  LICENSEE
agrees to indemnify, hold harmless and defend the State of Arizona, the Arizona Board of Regents, ASU, its officers, employees and
agents; the sponsors of the research that led to the TECHNOLOGY; and the INVENTOR of the patents and patent application included in ASU's COLLECTIVE PATENT RIGHTS (collectively, the INDEMNITEES)
against any and all claims, suits, losses, damages, costs, fees, and expenses resulting from or arising out of exercise of rights granted under this Agreement; provided, however, that LICENSEE shall
have no obligation to indemnify any
INDEMNITEE for negligence or willful misconduct or breach of any representation contained in this Agreement by such INDEMNITEE. 

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    18.3.  ASU shall promptly notify LICENSEE in writing of any claim or suit brought against ASU in respect of which ASU intends to invoke the provisions
of Paragraph 18.2. LICENSEE will keep ASU informed on a current basis of its defense of any claims pursuant to Paragraph 18.2. 

19.  FORCE MAJEURE  

    The parties shall not be liable for failure or delay upon fulfillment of all or part of this Agreement, directly or indirectly owing to acts of Nature,
Governmental orders or restriction, war, warlike condition, revolution, riot, looting, strike, lockout, fire, flood, or any other cause or circumstances beyond the parties' control including the
disability or death of an INVENTOR. 

20.  LATE PAYMENTS  

    In the event royalty payments, re-billings or fees are not received by ASU when due, the LICENSEE shall pay to ASU interest charges at a rate of
ten (10) percent per annum. Interest shall be calculated from the date payment was due until actually received by ASU. 

21.  WAIVER  

    No waiver by either party to this Agreement of any breach or default of any of the covenants or agreements set forth in this Agreement shall be deemed a waiver
as to any subsequent and/or similar breach or default. 

22.  COMPLIANCE  

    LICENSEE shall manufacture LICENSED PRODUCTS in accordance with applicable US law. 

23.  GOVERNING LAWS INCLUDING ARIZONA PUBLIC RECORDS LAW  

    THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ARIZONA, but the scope and validity of any patent or patent
application shall be governed by the applicable laws of the country of such patent or patent application. 

24.  REPRESENTATIONS  

    Each party represents that it is authorized to enter into this Agreement and that in the due performance of its obligations it would not be acting in violation
of any outstanding obligation, contractual or otherwise, that may be owed by that party to any third party. 

25.  PREFERENCE FOR UNITED STATES INDUSTRY  

    Because this Agreement grants the exclusive right to use or sell the TECHNOLOGY in the United States, the LICENSEE agrees that any products embodying this
TECHNOLOGY or produced through the use of the TECHNOLOGY will be manufactured substantially in the United States. 

26.  FOREIGN GOVERNMENT APPROVAL OR REGISTRATION  

    If the law of any nation requires that this Agreement or any associated transaction be either approved or registered with any governmental agency, the LICENSEE
shall assume all legal obligations to do so. 

27.  EXPORT CONTROL LAWS  

    The LICENSEE shall observe all applicable United States and foreign laws with respect to the transfer of LICENSED PRODUCTS and related technical data to
foreign countries, including, without 

14

 

limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations. 

28.  MISCELLANEOUS  

    28.1.  This
Agreement will not be binding upon the parties until it has been signed below on behalf of each party; it shall then be effective as of the
EFFECTIVE DATE. No amendment or modification shall be valid or binding upon the parties unless made in writing and signed by each party. 

    28.2.  This
Agreement embodies the entire understanding of the parties and shall supersede all previous communications, representations, or
undertakings, whether verbal or written, between the parties hereto relating to its subject matter. 

    28.3.  LICENSEE
shall have no right to use the name or other designation of the Arizona Board of Regents or Arizona State University or the INVENTOR in
connection with any sale or promotion of LICENSED PRODUCT without the express written consent of the Arizona Board of Regents, ASU or the INVENTOR, respectively. 

    28.4.  If
any provision of this Agreement shall be held to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired. 

    28.5.  The
headings of the articles are inserted for convenience of reference only, and are not intended to influence the interpretation of this
Agreement. 

    28.6.  ASU
is a public institution and only those obligations imposed upon ASU which can be lawfully undertaken by the Board of Regents in accordance
with its legislative charter shall be enforceable. 

    28.7.  LICENSEE
agrees that the personnel of LICENSEE will not for any purpose be considered employees or agents of ASU and that LICENSEE assumes full
responsibility for the actions of its personnel while performing services under this Agreement, and shall be solely responsible for their supervision, daily direction and control, payment of salary
(including withholding income taxes and social security), worker's compensation and disability benefits. ASU agrees that the personnel of ASU will not for any purpose be considered employees or agents
of LICENSEE and that ASU assumes full responsibility for the actions of its personnel while performing services under this Agreement, and shall be solely responsible for their supervision, daily
direction and control, payment of salary (including withholding income taxes and social security), worker's compensation and disability benefits. 

    28.8.  The
parties agree to comply with all applicable state and federal laws, rules, regulations and executive orders as to equal employment
opportunity, nondiscrimination and affirmative action. 

    28.9.  This
Agreement is subject to Section 38-5 11, Arizona Revised Statutes. 

    28.10.  In
the event of a dispute under this Agreement, the parties agree to use arbitration to the extent required under Sections 12-1518
and 12-133, Arizona Revised Statutes. 

    28.11.  To
the extent required by Section 35-214, Arizona Revised Statutes, LICENSEE agrees to retain all books, accounts, reports,
files and other records of LICENSEE relating to this Agreement and make those records available at all reasonable times for inspection and audit by ASU or the Auditor General of the State of Arizona,
or their agents, during the terms of and for a period of five (5) years after the completion of this Agreement. 

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    IN WITNESS WHEREOF, both ASU and LICENSEE have executed this Agreement, in duplicate originals, by their respective officers hereunto duly authorized, as of the EFFECTIVE DATE. 

	ARIZONA BOARD OF REGENTS a body corporate of the State of Arizona acting for ARIZONA STATE UNIVERSITY ("ASU")	 	SEATTLE GENETICS, INC. ("LICENSEE")
	
By:	
 	

/s/ ALAN M. POSKANZER   	
 	

By:	
 	

/s/ H. PERRY FELL   
	 	 	
	 	 	 	

	Name:	 	Alan M. Poskanzer, Ph.D.	 	Name:	 	H. Perry Fell, Ph.D., M.B.A.
	Title:	 	Director

Office of Technology Collaborations & Licensing	 	Title:	 	President & CEO
	

Date:	
 	

February 4, 2000	
 	

Date:	
 	

2/3/2000
	 	 	
	 	 	 	

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LICENSE AGREEMENT No. 651-O1.LIC

AGREEMENT

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