Document:

exv10w1

 

Exhibit 10.1

AMENDMENT OF

EMPLOYMENT AGREEMENT

     THIS AMENDMENT, made and entered into October 19, 2004 (the “Amendment
Date”), by and between Ronald H. Zech (the “Executive”) and GATX Corporation
(the “Company”);

WITNESSETH THAT:

     WHEREAS, the Executive and the Company have previously entered into an
employment agreement (the “Agreement”) effective as of October 11, 2002, and
the parties to the Agreement wish to amend its terms;

     NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the Company and the Executive hereby agree as follows, effective as of the
Amendment Date:

     1. The following is hereby substituted for Section 2.1 of the Agreement:

          2.1 DUTIES. During the Period of Employment, the Executive shall be
employed as the Chief Executive Officer of the Company with overall
charge and responsibility for the business and affairs of the Company,
unless and until the Company’s Board of Directors (the “BOARD”) elects
his successor. The Executive shall report directly to the Board and shall
perform such duties customarily incident to the office and as the
Executive shall reasonably be directed to perform by the Board. During
the Period of Employment, the Company shall cause the Executive to be
elected and to remain as a member of the Board and as Chairman of the
Board; provided, however, the Executive shall not be the Chairman of the
Board if his holding such position is contrary to then-applicable law or,
in the reasonable judgment of the Board, is contrary to the interests of
the Company given the then-current business and/or investor relations
environment.

     2. The following is hereby substituted for Section 2.2 of the Agreement:

          2.2 SCOPE. During the Period of Employment, and excluding any
periods of vacation and sick leave to which the Executive is entitled,
the Executive shall devote substantially all of his business time and
attention to the business and affairs of the Company; provided, however,
that from the time he ceases to serve as Chief Executive Officer he shall
devote such of his business time and attention to the business and
affairs of the Company as the Board shall reasonably require, consistent
with the position of Chairman of the Board. It shall not be a violation
of this Agreement for the Executive to (i) serve on corporate, civic or
charitable boards or committees, (ii) deliver lectures, fulfill speaking
engagements or teach occasional courses or seminars at educational
institutions, or (iii) manage personal investments, so long as such
activities under clauses (i), (ii) and (iii) do not interfere, in any
substantial respect, with the Executive’s responsibilities hereunder.

 

 

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the
dates written below.

	 	 	 	 	 
	 	GATX CORPORATION

 	 
	 	By:	/s/ James M. Denny 	 
	 	 	James M. Denny 	 
	 
	 	Its:	Chairman of the Compensation

Committee of the Board of Directors
	 
		Date:	 	October 19, 2004
	 
	 	By:	 	/s/ Ronald J. Ciancio	 
	 	 	 	Ronald J. Ciancio
	 
	 	Its:	Vice President, General Counsel and Secretary
	 
	 	Date:		October 19, 2004
	 	 	 	 	 	

	 
	 	RONALD H. ZECH

	 
	 		
/s/ Ronald H. Zech
	 	 
	 
	 	Date:		October 19, 2004

2exv10w2

 

Exhibit 10.2

AMENDMENT OF

AMENDED AGREEMENT FOR EMPLOYMENT FOLLOWING A CHANGE OF CONTROL

     THIS AMENDMENT, made and entered into October 19, 2004 (the “Amendment
Date”), by and between Ronald H. Zech (the “Executive”) and GATX Corporation
(the “Company”);

WITNESSETH THAT:

     WHEREAS, the Executive and the Company have previously entered into an
Amended Agreement for Employment Following a Change of Control (the
“Agreement”) effective as of March 15, 2002, and the parties to the Agreement
wish to amend its terms;

     NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the Company and the Executive hereby agree as follows, effective as of the
Amendment Date:

     1. The following is hereby substituted for Section 1(b) of the Agreement:

          (b) The “Change of Control Period” shall mean the period commencing
on January 1, 2001 and ending on October 11, 2005.

     2. The following is hereby substituted for Section 3 of the Agreement:

          3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company subject to the terms and conditions of this
Agreement, for the period commencing on the Effective Date and ending on
October 11, 2005 (the “Employment Period”).

     3. The following is hereby substituted for Section 4(a)(i) of the
Agreement:

          (i) During the Employment Period, (A) the Executive’s position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate in
all material respects with the most significant of those held, exercised
and assigned by or to the Executive on the date immediately preceding the
Effective Date (provided that it shall not be a breach of this Agreement,
and shall not constitute Good Reason, for the Board to elect a successor
to the Executive as the Company’s Chief Executive Officer); and (B) the
Executive’s services shall be performed at the location where the
Executive was employed immediately preceding the Effective Date or any
office or location less than 35 miles from such location.

     4. The following is hereby substituted for Section 4(a)(ii) of the
Agreement:

          (ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote

 

 

reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the Executive
hereunder, to use the Executive’s reasonable best efforts to perform
faithfully and efficiently such responsibilities; provided, however, that
from the time the Executive ceases to serve as Chief Executive Officer he
shall devote such of his business time and attention to the business and
affairs of the Company as the Board shall reasonably require, consistent
with the position of Chairman of the Board. During the Employment Period
it shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic or charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements or teach at educational
institutions and (C) manage personal investments, so long as such
activities do not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in accordance
with this Agreement. It is expressly understood and agreed that to the
extent that any such activities have been conducted by the Executive
prior to the Effective Date, the continued conduct of such activities (or
the conduct of activities similar in nature and scope thereto) subsequent
to the Effective Date shall not thereafter be deemed to interfere with
the performance of the Executive’s responsibilities to the Company.

     5. The following is hereby substituted for Section 4(b)(iii) of the Agreement:

          (iii) Long-Term Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
savings and retirement plans, practices, policies and programs applicable
generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and
programs provide the Executive with savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the aggregate,
than the most favorable of those provided by the Company and its
affiliated companies for the Executive under such plans, practices,
policies and programs as in effect at any time during the 120-day period
immediately preceding the Effective Date or if more favorable to the
Executive, those provided generally at any time after the Effective Date
to other peer executives of the Company and its affiliated companies.
During the Employment Period, the Executive shall receive stock options
and long-term incentive awards as determined by the Board in accordance
with the Company’s then-applicable stock plan and long-term incentive
plan. Such awards shall be made at the same time during the calendar year
as awards are generally made to senior executives of the Company, and
shall be consistent with competitive pay practices generally and
appropriate relative to awards made to other senior executives of the
Company.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the
dates written below.

	 	 	 	 	 
	 	GATX CORPORATION

 	 
	 	By:  	/s/ James M. Denny	 
	 	 	James M. Denny 	 
	 
	 	Its:	Chairman of the Compensation

Committee of the Board of Directors
	 
	 	Date:	 	October 19, 2004	 
	 
	 	By:	
/s/ Ronald J. Ciancio
	 	 
	 	 	 	Ronald J. Ciancio
	 
	 	Its:	Vice President, General Counsel and Secretary
	 
	 	Date:	 	October 19, 2004	 
	 
	 	RONALD H. ZECH

	 
	 		
/s/ Ronald H. Zech
	 	 
	 
	 	Date:	 	October 19, 2004	 

2<PAGE>

                                                                    EXHIBIT 10.1

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIALS HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                  AMENDED AND RESTATED COLLABORATION AGREEMENT

      This AMENDED AND RESTATED COLLABORATION AGREEMENT (the "Agreement") dated
as of October 15, 2004 (the "Effective Date"), is entered into between CancerVax
Corporation's wholly owned subsidiary, Cell-Matrix, Inc., a Nevada corporation,
along with its Affiliates, successors and assigns (collectively herein
"Cell-Matrix"), having a place of business at 2110 Rutherford Road, Carlsbad, CA
92008, and Applied Molecular Evolution having its principal offices at 3520
Dunhill Street, San Diego, CA 92121, along with its Affiliates, successors and
assigns, including but not limited to Eli Lilly and Company (collectively herein
"AME"). This Agreement supersedes and replaces that certain collaboration
Agreement, dated as of November 29, 1999 ("Effective Date of Prior Agreement"),
by and between Cell-Matrix (f/k/a Bio-Management) and Applied Molecular
Evolution (f/k/a Ixsys) together with the Amendments dated June 5, 2000 and July
3, 2000 (the "Prior Agreement").

      NOW THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

      For purposes of this Agreement, the terms defined in the Article 1 shall
have the respective meanings set forth below:

      1.1.  "Affiliate" shall mean, with respect to any Person, any other Person
            which directly or indirectly controls, is controlled by, or is under
            common control with, such Person. A Person shall be regarded as in
            control of another Person if it owns, or directly or indirectly
            controls, at least forty percent (40%) of the voting stock or other
            ownership interest of the other Person, or if it directly or
            indirectly possesses the power to direct or cause the direction of
            the management and policies of the other Person by any means
            whatsoever.

      1.2.  "BLA" shall mean a Biologics License Application, Product License
            Application, New Drug Application, or other application for
            marketing approval of a product for use in any human or veterinary
            therapeutic application submitted to the applicable governing health
            authority of any country.

      1.3.  "Candidate Molecules" shall mean, collectively, monoclonal antibody
            ("mAb") HUIV26 and mAb HUI77 as provided by Cell-Matrix to AME
            hereunder.

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<PAGE>

      1.4.  "Confidential Information" shall mean, with respect to a party, all
            information of any kind whatsoever (including without limitation,
            data, compilations, formulae, models, patent disclosures,
            procedures, processes, projections, protocols, results of
            experimentation and testing, specifications, strategies and
            techniques), and all tangible and intangible embodiments thereof of
            any kind whatsoever (including without limitation, apparatus,
            compositions, documents, drawings, machinery, patent applications,
            records, reports), which is disclosed by such party to the other
            party and is marked, identified as or otherwise acknowledged to be
            confidential at the time of disclosure to the other party.
            Notwithstanding the foregoing, Confidential Information of a party
            shall not include information which the other party can establish by
            written documentation (a) to have been publicly known prior to
            disclosure of such information by the disclosing party to the other
            party, (b) to have become publicly known, without fault on the part
            of the other party, subsequent to disclosure of such information by
            the disclosing party to the other party, (c) to have been received
            by the other party at any time from a source, other than the
            disclosing party, rightfully having possession of and the right to
            disclose such information, (d) to have been otherwise known by the
            other party prior to disclosure of such information by the
            disclosing party to the other party, or (e) to have been
            independently developed by employees or agents of the other party
            without access to or use of such information disclosed by the
            disclosing party to the other party.

      1.5.  "Derived" or "derived" shall mean obtained, developed, created,
            synthesized, designed, derived or resulting from, based upon or
            otherwise generated (whether directly or indirectly, or in whole or
            in part).

      1.6.  "Field" shall mean human and veterinary therapeutic and diagnostic
            applications.

      1.7.  "First Commercial Sale" shall mean, with respect to any Product, the
            first sale of such Product by a party, its Affiliates or
            sublicensees to customers who are not Affiliates in any country
            after all applicable marketing and pricing approvals (if any) have
            been granted by the applicable governing health authority of such
            country.

      1.8.  "FDA" shall mean the United States Food and Drug Administration, or
            the successor thereto.

      1.9.  "IND" shall mean an Investigational New Drug application, or any
            other filing with the governing regulatory of any country to
            commence clinical testing of a product for use in any human or
            veterinary therapeutic application submitted to the applicable
            governing health authority of any country.

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<PAGE>

      1.10. "Intellectual Property" shall mean trade secrets, Patents,
            trademarks, trade names, copyrights, know-how and similar rights of
            any type under the laws of any governmental authority, domestic or
            foreign, including all applications and registrations relating to
            any of the foregoing.

      1.11. "Materials" shall mean the Candidate Molecules, DNA sequence
            information and the cDNA to encode Candidate Molecules and the
            hybridoma cell lines expressing the Candidate Molecules.

      1.12. "Net Sales" shall mean, with respect to a Product, the gross amount
            invoiced by Cell-Matrix, its Affiliates and sublicensees thereof or
            AME, its Affiliates and sublicensees for sales of such Product to
            unrelated Third Parties, excluding any sublicensee, for the Product
            in the Territory, less:

            (a) Trade, quantity and cash discounts allowed;

            (b) Commissions, discounts, refunds, rebates, chargebacks,
            retroactive price adjustments, and any other allowances which
            effectively reduce the net selling price;

            (c) Actual Product returns and allowances;

            (d) Sales taxes, duties and other governmental charges (including
            value added tax), but excluding what is commonly known as income
            taxes.

            Such amounts shall be determined from the books and records of
            Cell-Matrix or sublicensee or AME, its Affiliates and sublicensees,
            maintained in accordance with U. S. Generally Accepted Accounting
            Principles or, in the case of sublicensees, such similar accounting
            principles, consistently applied. Cell-Matrix and AME further agree
            in determining such amounts, they will use their then current
            standard procedures and methodology, including their 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.

      1.13. "Patents" shall mean (i) all patents worldwide including without
            limitation, all substitutions, reissues, renewals, reexaminations,
            patents of addition, and inventor's certificates thereof; (ii) all
            term extensions or other government action which provides exclusive
            rights to an invention beyond the original patent expiration date;
            and (iii) all pending patent applications (including provisional
            applications, divisions, continuations, continued prosecutions and
            continuations-in-part).

      1.14. "Person" shall mean an individual, corporation, partnership, limited
            liability company, trust, business trust, association, joint stock
            company, joint venture, pool, syndicate, sole proprietorship,
            unincorporated organization, governmental authority or any other
            form of entity not specifically listed herein.

                                       3
<PAGE>

      1.15. "Phase II Clinical Trial" shall mean a human clinical trial in any
            country that is intended to initially evaluate the effectiveness of
            a product for a particular indication or indications in patients
            with the disease or indication under study, or that would otherwise
            satisfy requirements of 21 CFR 312.21(b), or its foreign equivalent.

      1.16. "Phase III Study Initiation" means a pivotal human clinical trial
            conducted in patients and designed to establish Product safety and
            efficacy and required to obtain clinical registration of a product
            with health regulatory authorities such as the FDA.

      1.17. "PMA" shall mean a Product Marketing Application, 510(k) application
            or other application for marketing approval of a product for use in
            any human or veterinary diagnostic application submitted to the
            applicable governing health authority of any country.

      1.18. "Product" shall mean any product for use in the Field, which is a
            composition that incorporates one or more Program Antibodies or is
            derived from one or more Program Antibodies.

      1.19. "Program" shall mean the collaborative research program described in
            Section 3.1 below to optimize and humanize the Candidate Molecules,
            and to use the Program Antibodies (as defined below) to evaluate
            their diagnostic and therapeutic potential.

      1.20. "Program Antibody" shall mean the optimized and humanized
            compositions of matter developed under the Program, and the cDNA
            encoding such compositions of matter, delivered to Cell-Matrix
            hereunder.

      1.21. "Program Invention" shall mean any invention, discovery,
            composition, technology, data or information (whether or not
            patentable), made or conceived by employees or others on behalf of
            AME, Cell-Matrix or both in the performance of the Program during
            the term of the Program, excluding Program Antibodies.

      1.22. "Research Plan" shall mean the written research work plan
            established by the parties pursuant to Section 3.2 below, as
            modified from time to time pursuant to Section 3.2.

      1.23. "Third Party" shall mean any Person other than AME, Cell-Matrix and
            their respective Affiliates.

                                    ARTICLE 2
                         REPRESENTATIONS AND WARRANTIES

2. Each party hereby represents and warrants to the other party as follows:

                                       4
<PAGE>

      2.1.  Corporate Existence. Such party is a corporation duly organized,
            validly existing and in good standing under the laws of the state in
            which it is incorporated.

      2.2.  Authorization and Enforcement of Obligations. Such party (a) has the
            corporate power and authority and the legal right to enter into this
            Agreement and to perform its obligations hereunder, and (b) has
            taken all necessary corporate action on its part to authorize the
            execution and delivery of this Agreement and the performance of its
            obligations hereunder. This Agreement has been duly executed and
            delivered on behalf of such party, and constitutes a legal, valid,
            binding obligation, enforceable against such party in accordance
            with its terms.

      2.3.  Consents. All necessary consents, approvals and authorizations of
            all governmental authorities and other Persons required to be
            obtained by such party in connection with this Agreement have been
            obtained.

      2.4.  No Conflict. The execution and delivery of this Agreement and the
            performance of such party's obligations hereunder (a) do not
            conflict with or violate any requirement of applicable laws or
            regulations and (b) do not conflict with, or constitute a default
            under, any contractual obligation of such party.

      2.5.  DISCLAIMER OF WARRANTIES. NEITHER PARTY MAKES ANY REPRESENTATIONS OR
            WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE MATERIALS
            (INCLUDING BUT NOT LIMITED TO THE CANDIDATE MOLECULES), INCLUDING
            WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
            PARTICULAR PURPOSE OR NONINFRINGEMENT OF THE PATENT RIGHTS OR OTHER
            INTELLECTUAL PROPERTY RIGHTS OF ANY OTHER PERSON.

                                    ARTICLE 3
                                   THE PROGRAM

      3.1   Collaborative Research. The goal of the Program is to humanize and
            optimize Candidate Molecules as detailed in Schedule A attached
            hereto.

      3.2   Conduct of Program. An initial Research Plan is attached as Schedule
            A. Either party may recommend changes to the Research Plan at any
            time during the Program Term. Such change shall only be effective if
            in a written amendment duly executed by the parties.

      3.3   Specific Obligations of Cell-Matrix. Cell-Matrix shall provide AME
            with sufficient quantities of the Materials, sufficient quantities
            of a single soluble antigen per Candidate Molecule for purposes of
            screening and affinity determination (such single soluble antigen
            per Candidate molecule shall be

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<PAGE>

            specified in writing prior to the transfer of the Materials to AME),
            antigens to which the Materials are directed, and any Cell-Matrix
            technology necessary or useful for the humanization and optimization
            in accordance with the Program, and any information known and
            available to Cell-Matrix concerning the storage of the Materials
            that may be unique or peculiar to the Materials. Cell-Matrix shall
            use its commercially reasonable efforts to perform its obligations
            under the Program in accordance with the Research Plan. Cell-Matrix
            shall perform its obligations under the Program in accordance with
            high scientific and professional standards, and in compliance with
            all material respects within the requirements of applicable laws and
            regulations and shall provide all reasonable assistance to AME in
            connection with AME's performance of the Program.

      3.4   Specific Obligations of AME. AME shall optimize and humanize the
            Candidate Molecules as set forth in the Research Plan. AME shall use
            its commercially reasonable efforts to perform its obligations under
            the Program in accordance with the Research Plan. AME shall provide
            the personnel, materials, equipment and other resources required to
            conduct its obligations under the Program. AME shall perform its
            obligations under the Program in accordance with high scientific and
            professional standards, and in compliance in all material respects
            with the requirements of applicable laws and regulations.

      3.5   Materials. AME shall use the Materials solely for purposes of
            conducting the Program, at its address listed above, under
            commercially and scientifically reasonable containment conditions,
            and not for any commercial, business or other use or purpose,
            without the prior express written consent of Cell-Matrix.
            Notwithstanding anything to the contrary in this Agreement, AME
            shall not transfer or provide access to the Materials to any Third
            Party, without the prior express written consent of Cell-Matrix. AME
            shall not transfer or transport the Materials from its address
            identified above to any other location. AME shall limit access to
            the Materials to those of its employees working on its premises, to
            the extent such access is reasonably necessary in connection with
            its activities as expressly authorized by this Agreement; provided,
            however that each such employee shall be bound by confidentiality
            obligations at least as stringent as those in Section 5.1.

      3.6   Funding of the Program. In consideration of AME's performance of its
            obligations under the Research Plan or the identification of a
            Program Antibody demonstrating an affinity equal to or greater than
            [***] times the initial affinity of the Candidate Molecule from
            which that Program Antibody was derived as determined by an in vitro
            assay to be agreed upon by the parties, Cell-Matrix shall pay to AME
            the amounts set forth in Schedule B.

      3.7   Term of the Program. Unless earlier terminated as provided herein,
            the term of the Program shall begin on November 29, 1999, and
            continue for the subsequent nineteen (19) months (the "Program
            Term"). Cell-Matrix shall have the right (in its sole discretion),
            exercisable by giving AME express written notice of

***Certain information on this page has been omiitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       6
<PAGE>

            such exercise not less than thirty (30) days prior to the expiration
            of the Program Term, to extend the Program Term with respect to the
            following Candidate Molecules: mAb XL313 and mAb FM155, for the
            period commencing on the date ninety (90) days following the date
            AME timely receives such notice of exercise from Cell-Matrix and
            continuing for the subsequent seven (7) months.

      3.8   Results.

            3.8.1  Reports. Within thirty (30) days following the end of the
                   initial seven (7) month period of the Program, within thirty
                   (30) days following the expiration or termination of the
                   Program (if extended), and within thirty (30) days after the
                   end of each twelve (12) month period thereafter for the
                   following ten (10) years, each Party shall prepare, and
                   provide to the other party, a reasonably detailed written
                   report which shall describe the work performed by such party
                   during that period, and the results achieved, to date under
                   this Agreement, together with copies of all data resulting
                   from the tests and evaluation performed by such party to date
                   under the Agreement. Such reports shall include, without
                   limitation, summaries of pre-clinical animal studies of
                   efficacy, toxicity and immunogenicity, and regulatory filings
                   such as Investigational New Drug ("IND") applications, and
                   Phase I, Phase II and Phase III FDA reports.

            3.8.2  Records. Each party shall maintain records, in sufficient
                   detail and in good scientific manner appropriate for patent
                   purposes, which shall be complete and accurate and shall
                   fully and properly reflect all work done and results achieved
                   in the performance of the Program.

            3.8.3  Inspection of Records. Each party shall have the right,
                   during normal business hours and on reasonable written
                   notice, to inspect and copy such records of the other party
                   regarding the work done and results achieved in the
                   performance of the Program, to the extent reasonably
                   necessary to enable such party to conduct its obligations
                   under the Program or to exercise its rights hereunder. Each
                   party shall maintain such records of the other party
                   (together with the information contained therein) in
                   confidence in accordance with Article 5 below and shall not
                   use such records (or information) except to the extent
                   otherwise permitted by this Agreement.

      3.9   Program Leaders. Each party shall appoint a person (a "Program
            Leader") to coordinate its part of the Program. The Program Leaders
            shall be the primary contacts between the parties with respect to
            the Program. Each party shall notify the other within thirty (30)
            days after the date of this Agreement of the appointment of its
            Program Leader and shall notify the other party as soon as
            practicable upon changing this appointment.

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<PAGE>

      3.10  Subcontracts. AME may not subcontract portions of the Program to be
            performed by it in the normal course of its business without the
            prior written consent of Cell-Matrix.

      3.11  Sale of Program Antibodies. Subject to the terms and conditions
            herein, AME herby sells, assigns, transfers and conveys to
            Cell-Matrix all right title and interest in and to the Program
            Antibodies and all Patent rights and other Intellectual Property
            rights therein. AME shall not use the Program Antibodies, or the
            suboptimized and humanized compositions of matter derived by AME
            from the Candidate Molecules under the Program (or the cDNA encoding
            such compositions of matter), for any purpose other than the
            performance of its obligations under this Agreement.

      3.12  Materials and Program Antibodies. The parties hereby acknowledge
            that the Materials and the Program Antibodies are experimental in
            nature and that they are provided "AS IS" AND WITHOUT ANY
            REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT
            LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
            ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE USE OF THE MATERIALS
            OR THE PROGRAM ANTIBODIES WILL NOT INFRINGE OR VIOLATE ANY PATENT OR
            OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY.

      3.13  Each party hereby represents that all employees and other persons
            acting on its behalf in performing its obligations under the program
            shall be obligated under a binding written agreement to assign to
            it, or as it shall direct, all inventions made or conceived by such
            employees or other persons.

      3.14  Prosecution, Maintenance and Enforcement.

            3.14.1  Cell-Matrix shall have the right, at its sole discretion, to
                    control the preparation, filing, prosecution, maintenance
                    and enforcement of all Patents which claim Program
                    Antibodies, with the exception that Wilson Sonsini Goodrich
                    & Rosati, or another intellectual property counsel with
                    biotechnology expertise specifically in the field of human
                    antibodies, shall be appointed by mutual agreement between
                    the parties and retained as the intellectual property
                    counsel for the prosecution and maintenance of all Patents
                    which claim Program Antibodies.

            3.14.2  The Parties hereby acknowledge that, as of the Effective
                    Date, all claims of the Patents are directed solely to
                    Program Antibodies ("Pending Applications"). As such,
                    Cell-Matrix will, at its sole discretion, control and pay
                    for the preparation, filing, prosecution,

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<PAGE>

                    maintenance and enforcement of all Pending Applications. If
                    at some time in the future, AME requests Cell-Matrix to file
                    Program Invention claims, prosecution and assignment
                    obligations will be in accordance with Paragraph 3.14.3 and
                    3.14.4 herein or as otherwise agreed to by the parties.

            3.14.3  In the event that Cell-Matrix desires to file a patent
                    application after the Effective Date which claims Program
                    Antibodies or Products or Program Inventions, Cell-Matrix
                    shall provide AME with a copy of any such patent application
                    prior to filing the first of such applications in any
                    jurisdiction, for review and comment by AME. Cell-Matrix
                    shall keep AME informed as to the status of patent matters
                    described in this Article 3 by providing AME copies of any
                    substantive documents that Cell-Matrix receives from any
                    patent office after receipt, and by providing the
                    opportunity, as far in advance of filing dates as reasonably
                    possible, to review and comment on any documents which will
                    be filed in any patent office. The Parties agree to
                    cooperate with and assist the other Party in connection with
                    such activities.

            3.14.4  Cessation of Prosecution or Maintenance. Cell-Matrix shall
                    give notice to AME of any decision by Cell-Matrix to cease
                    the prosecution and maintenance of Pending Applications and
                    Patents which claim Program Antibodies, and, in such case,
                    AME shall have the right at its sole discretion and expense
                    to continue such prosecution or maintenance. If AME
                    continues prosecution or maintenance, Cell-Matrix shall
                    execute such documents and perform such acts as may be
                    reasonably necessary for AME to continue such prosecution or
                    maintenance. The prosecution by AME of any patent pursuant
                    to this section 3.14.4 shall not create any ownership
                    interest in such Patents or in such patentable subject
                    matter by AME that AME would not otherwise have hereunder.

            3.14.5  Reports. Cell-Matrix shall provide AME with a written report
                    within sixty (60) days after the end of each calendar year
                    describing the status of Pending Applications and Patents
                    which claim Program Antibodies or Products. Such report
                    shall include at a minimum, the country names, patent
                    numbers, application numbers, filing dates, issuance dates,
                    expiration dates and any other relevant information.

            3.14.6  Third Party Infringement. Cell-Matrix and AME each agrees to
                    take reasonable actions to protect Patents claiming Program
                    Antibodies or Products from a claim of infringement. In the
                    event that either party becomes aware that any such Patents
                    are being or have been infringed by any third party or are
                    subject to a declaratory action, such party shall promptly
                    notify the other party hereto in writing. AME further

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                    agrees that it will not notify any such third party of a
                    potential infringement without first obtaining the consent
                    of Cell-Matrix.

            3.14.7  Enforcement: Cell-Matrix shall have the right, but not the
                    obligation, to bring suit in its own name to prosecute and
                    defend any action or proceeding which it deems necessary to
                    protect the Patents claiming Program Antibodies or Products,
                    including but not limited to actions or proceedings
                    involving infringement of such Patents. Cell-Matrix shall
                    have the sole right to control the conduct and disposition
                    of any such action or proceedings, and to retain any
                    compensation derived therefrom, whether by settlement or
                    otherwise. AME agrees to cooperate fully with Cell-Matrix in
                    any such actions or proceedings, including producing
                    documents, and making AME employees available for
                    consultation and testimony. If Cell-Matrix has not
                    instituted an action for infringement or has not commenced
                    negotiations for discontinuance of said infringement within
                    [***] after the notice provided for in 3.14.6 then AME shall
                    have the right to pursue such action in its own name, or
                    alternatively, the right to pursue such action in
                    Cell-Matrix's name but only if it has received Cell-Matrix's
                    consent to such action, such consent not to be unreasonably
                    withheld. If Cell-Matrix has commenced negotiations for
                    discontinuance of said infringement within such [***]
                    period, then the time period before AME may bring its own
                    suit or a suit in the name of Cell-Matrix shall be [***].
                    Any such actions initiated by AME shall be at AME's sole
                    expense. In any action where Cell-Matrix is a party,
                    Cell-Matrix shall have the right to control the conduct and
                    disposition of any such action or proceedings.
                    Notwithstanding the forgoing, in the event that the parties
                    enter into a commercialization agreement pursuant to
                    paragraph 7.5 of this Agreement, AME shall have the right to
                    control the action initiated by AME. In no event shall AME
                    enter into any settlement, consent judgment or other
                    voluntary final disposition of such suit which would
                    adversely affect validity and enforceability of the Patents
                    claiming Program Antibodies or Products or Cell-Matrix's
                    rights without first obtaining Cell-Matrix's written consent
                    thereto. [***]

            3.14.8  Cell-Matrix hereby assigns to AME all right, title and
                    interest in the Program Inventions and all patent rights and
                    other Intellectual Property rights therein. AME shall have
                    the right, at its sole discretion,

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                    to control and pay for the preparation, filing, prosecution,
                    maintenance and enforcement of all Patent Applications and
                    Patents which claim Program Inventions. Nothing in this
                    Section 3.14.4 shall relieve AME from its confidentiality
                    obligations set forth in Article 5 below.

            3.14.9  With regard to any assignments of Intellectual Property,
                    including all the rights in Intellectual Property thereof,
                    made or to be made by each Party to the other Party pursuant
                    to this Agreement, each Party agrees to take all acts deemed
                    necessary or desirable to the other Party to permit and
                    assist it, at the other Party's expense, in evidencing,
                    obtaining, maintaining, defending and enforcing the
                    assignment of all right, title, and interest to all such
                    inventions, including all patent and patent applications and
                    intellectual property thereof. Such acts may include, but
                    are not limited to execution of documents, and assistance or
                    cooperation in legal proceedings.

            3.14.10 Retained Rights; No Further Rights. No right or license of
                    either Party is granted hereunder, other than the expressly
                    granted herein. No other license or rights, including
                    without limitation any license or rights in Materials,
                    Candidate Molecules or Program Antibodies, shall be granted
                    or created by implication, estoppel or otherwise.

            3.14.11 Patent Enforcement. Each Party retains the right to control,
                    and, at its option and expense, to enforce and defend any
                    Intellectual Property owned solely by it.

                                    ARTICLE 4
                                  CONSIDERATION

      4.1   Financial Terms.

            4.1.1   Notice of First Commercial Sale. Within thirty (30) days
                    following the First Commercial Sale for each Product in each
                    country, and within thirty (30) days after the occurrence of
                    each of the milestone events described in Section 4.1.4
                    below, Cell-Matrix shall give written notice to AME thereof.

            4.1.2   Royalties. In consideration for the sale of Program
                    Antibodies to Cell-Matrix, pursuant to Section 3.11 above,
                    Cell-Matrix shall pay to AME royalty equal to [***] of Net
                    Sales of Products sold by Cell-Matrix, its Affiliates and
                    sublicensees; provided, however, in the event that a Program
                    Antibody demonstrates an affinity equal to or greater than
                    [***] times the initial affinity of the Candidate Molecule
                    from which that Program Antibody was derived, Cell-Matrix
                    shall pay to AME a royalty equal to [***] of Net Sales of
                    Products sold by Cell-Matrix, its Affiliates and
                    sublicensees.

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            4.1.3   [***]

            4.1.4   Length of Royalty Obligations. Cell-Matrix's obligation to
                    pay royalties with respect to each Product in such country
                    shall commence on the First Commercial Sale for such Product
                    in such country, and shall continue for such Product in such
                    country until the date ten (10) years from the First
                    Commercial Sale.

            4.1.5   Milestone Payments.

                a.  Cell-Matrix shall pay to AME [***] by November 29, 2004;

                b.  Within thirty (30) days after the first occurrence of each
                    of the following milestone events with respect to each
                    Product for use in any human or veterinary therapeutic
                    application, Cell-Matrix shall pay to AME the applicable
                    non-refundable, non-creditable milestone payment set forth
                    below:

            [***]          [***]

            [***]          [***]

            [***]          [***]

                    If any milestone event listed in this Section 4.1.5(b) is
                    achieved with respect to a Product for use in any human or
                    veterinary therapeutic application, and at such time any one
                    or more of the milestone events previously listed in this
                    Section 4.1.5(b) has not been achieved with respect to such
                    Product, then at the time of the payment of the milestone
                    payment for such achieved milestone event, Cell-Matrix shall
                    pay to AME the previously listed and unpaid payments for
                    such unmet milestone events. At the time of the First
                    Commercial Sale of a Product for use in any human or
                    veterinary therapeutic application, if any one or more of
                    the milestone events listed in this Section 4.1.5(b) has not
                    been achieved with respect to such Product, then within
                    thirty (30) days after the First Commercial Sale of such
                    Product, Cell-Matrix shall pay to AME all payments for such
                    unmet milestone events for such Product.

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                c.  Within thirty (30) days after the first occurrence of each
                    of the following milestone events with respect to each
                    Product for use in any human or veterinary diagnostic
                    application, Cell-Matrix shall pay to AME the applicable
                    non-refundable, non-creditable milestone payment set forth
                    below:

            [***]          [***]

            [***]          [***]

                    If any milestone event listed in this Section 4.1.5(c) is
                    achieved with respect to a Product for use in any human or
                    veterinary diagnostic application, and at such time any one
                    or more of the milestone events previously listed in this
                    Section 4.1.5(c) has not been achieved with respect to such
                    Product, then at the time of the payment of the milestone
                    payment for such achieved milestone event, Cell-Matrix shall
                    pay to AME the previously listed and unpaid payments for
                    such unmet milestone events. At the time of the First
                    Commercial Sale of a Product for use in any human or
                    veterinary diagnostic application, if any one or more of the
                    milestone events listed in this Section 4.1.5(c) has not
                    been achieved with respect to such Product, then within
                    thirty (30) days after the First Commercial Sale of such
                    Product, Cell-Matrix shall pay to AME all payments for such
                    unmet milestone events for such Product.

                d.  Within thirty (30) days after Cell-Matrix first grants or
                    transfers to, or authorizes, any other Person any license or
                    other right to conduct research (other than basic research
                    conducted at academic or non-profit institutions), develop
                    or commercialize any Product, Cell-Matrix shall pay to AME
                    [***] per Product.

                e.  Notwithstanding anything to the contrary in this Agreement,
                    Cell-Matrix shall not be obligated to pay each milestone
                    payment set forth above more than once with respect to each
                    milestone event described above, beyond one series of
                    milestone payments as encompassed by the provisions of this
                    Section 4.1.5, for all such Products derived from the same
                    Candidate Molecule.

      4.2   Royalty Reports and Payment Terms.

            4.2.1   Royalty Reports. Within thirty (30) days after the end of
                    each calendar quarter during the term of this Agreement
                    following the First Commercial Sale of a Product by
                    Cell-Matrix, its Affiliate, licensees or sublicensee,
                    Cell-Matrix shall furnish to AME a written report

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                    showing in reasonably specific detail, on a
                    Product-by-Product and country-by-country basis, (a) the
                    gross sales of all Products sold by Cell-Matrix, its
                    Affiliates, licensees, and sublicensees during such calendar
                    quarter and the calculation of Net Sales from such gross
                    sales; (b) the calculation of the royalties, if any, which
                    shall have accrued based upon such Net Sales; (c) the
                    withholding taxes, if any, required by law to be deducted
                    with respect to such sales; and (d) the exchange rates, if
                    any, used in determining the amount of United States
                    dollars.

            4.2.2   With respect to sales of Products invoiced in United States
                    dollars, all such amounts shall be expressed in United
                    States dollars. With respect to sales of Products invoiced
                    in a currency other than United States dollars, all such
                    amounts shall be expressed both in the currency in which the
                    distribution is invoiced and in the United States dollar
                    equivalent. The United States dollar equivalent shall be
                    calculated using the exchange rate (local currency per US$1)
                    published in The Wall Street Journal, Western Edition, under
                    the heading "Currency Trading," on each of the last business
                    day of each month during the applicable calendar quarter.

            4.2.3   Cell-Matrix shall keep complete and accurate records in
                    sufficient detail to properly reflect all gross sales and
                    Net Sales and to enable the royalties payable to be
                    determined.

      4.3   Audits.

            4.3.1   Upon the written request of AME and not more than once in
                    each calendar year, Cell-Matrix shall permit an independent
                    certified public accounting firm of nationally recognized
                    standing, selected by AME and reasonably acceptable to
                    Cell-Matrix, at AME's expense, to have access during normal
                    business hours to such of the records of Cell-Matrix as may
                    be reasonably necessary to verify the accuracy of the
                    royalty reports hereunder for any year ending not more than
                    [***] prior to the date of such request. The accounting firm
                    shall disclose to AME only whether the reports are correct
                    or not and the specific details concerning any
                    discrepancies. No other information shall be shared.

            4.3.2   If such accounting firm concludes that additional royalties
                    were owed during the audited period, Cell-Matrix shall pay
                    the additional royalties within thirty (30) days of the date
                    AME delivers to Cell-Matrix such accounting firm's written
                    report so concluding. The fees charged by such accounting
                    firm shall be paid by AME; provided, however, if the audit
                    discloses that the royalties payable by Cell-Matrix for such
                    period are more than [***]

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                    of the royalties actually paid for such period, then
                    Cell-Matrix shall pay the reasonable fees and expenses
                    charged by such accounting firm.

            4.3.3   AME shall treat all financial information subject to review
                    under this Section 4.3 as confidential, and shall cause its
                    accounting firm to retain all such financial information in
                    confidence.

            4.3.4   Payment Terms. All royalties shown to have accrued by each
                    royalty report provided for under Section 4.1 above shall be
                    payable on the date such royalty report is due. Payment of
                    royalties in whole or in part may be made in advance of such
                    due date.

            4.3.5   Payment Method. All payments by Cell-Matrix to AME under
                    this Agreement shall be paid in United States dollars, and
                    all such payments shall be originated from a United States
                    bank located in the United States and made by bank wire
                    transfer in immediately available funds to such account as
                    AME shall designate before such payment is due.

            4.3.6   Exchange Control. If at any time legal restrictions prevent
                    the prompt remittance of part or all royalties with respect
                    to any country where the Product is sold, Cell-Matrix shall
                    have the right, at its option, to make such payments by
                    depositing the amount thereof in local currency to AME's
                    account in a bank or other depository in such country. If
                    the royalty rate specified in this Agreement should exceed
                    the permissible rate established in any country, the royalty
                    rate for sales in such country shall be adjusted to the
                    highest legally permissible or government-approved rate.

            4.3.7   Withholding Taxes. Cell-Matrix shall be entitled to deduct
                    the amount of any withholding taxes, value-added taxes or
                    other taxes, levies or charges with respect to such amounts,
                    other than United States taxes, payable by Cell-Matrix, or
                    any taxes required to be withheld by Cell-Matrix, to the
                    extent Cell-Matrix pays to the appropriate governmental
                    authority on behalf of AME such taxes, levies or charges.
                    Cell-Matrix shall use reasonable efforts to minimize any
                    such taxes, levies or charges required to be withheld on
                    behalf of AME by Cell-Matrix. Cell-Matrix promptly shall
                    deliver to AME proof of payment of all such taxes, levies
                    and other charges, together with copies of all
                    communications from or with such governmental authority with
                    respect thereto.

                                    ARTICLE 5
                                 CONFIDENTIALITY

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      5.1   Confidential Information. During the term of this Agreement, and for
            a period of five (5) years following the expiration or earlier
            termination hereof, each party shall maintain in confidence all
            Confidential Information disclosed by the other party, and shall not
            use, disclose or grant the use of the Confidential Information
            except on a need-to-know basis to those directors, officers,
            employees, consultants, clinical investigators, contractors,
            sublicensees, distributors or permitted assignees, to the extent
            such disclosure is reasonably necessary in connection with such
            party's activities as expressly authorized by this Agreement. To the
            extent that disclosure is authorized by this Agreement, prior to
            disclosure, each party hereto shall obtain agreement of any such
            Person to hold in confidence and not make use of the Confidential
            Information for any purpose other than those permitted by this
            Agreement. Each party shall notify the other promptly upon discovery
            of any unauthorized use or disclosure of the other party's
            Confidential Information.

      5.2   Terms of this Agreement. Except as otherwise provided in Section 5.1
            above, neither party shall disclose any terms or conditions of this
            Agreement to any Third Party without the prior written consent of
            the other party. Notwithstanding the foregoing, prior to execution
            of this Agreement, the parties shall agree upon the substance of
            information that can be used to describe the terms of this
            transaction, and each party may disclose such information, as
            modified by mutual agreement from time to time, without the other
            party's consent.

      5.3   Permitted Disclosures. The confidentiality obligations contained in
            this Article 5 shall not apply to the extent that the receiving
            party (the "Recipient") is required (a) to disclose information by
            law, order or regulation of a governmental agency or a court of
            competent jurisdiction, or (b) to disclose information to any
            governmental agency for purposes of obtaining approval to test or
            market a Product, provided in either case that the Recipient shall
            provide written notice thereof to the other party and sufficient
            opportunity to object to any such disclosure or to request
            confidential treatment thereof.

      5.4   Notice of Publication. During the term of the Agreement, AME and
            Cell-Matrix each acknowledge the other party's interest in
            publishing certain of its results to obtain recognition within the
            scientific community and to advance the state of scientific
            knowledge. Each party also recognizes the mutual interest in
            obtaining valid patent protection and protecting business interests.
            Consequently, either party, its employees or consultants wishing to
            make a publication (including any oral disclosure made without
            obligation of confidentiality) relating to work performed by such
            party, which in the case of Cell-Matrix includes Program Inventions
            and in the case of AME includes Program Antibodies, (the "Publishing
            Party") shall transmit to the other party (the "Reviewing Party") a
            copy of the proposed written publication [***] prior to the
            presentation. The Reviewing Party shall have the right (a) to
            propose modifications to the publication for patent reasons, (b) to
            request a reasonable

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            delay in publication in order to protect patentable information and
            (c) to edit the publication in a manner reasonably acceptable to the
            Publishing Party to protect its Confidential Information.

                                    ARTICLE 6
                                    DILIGENCE

            Cell-Matrix shall use its best efforts to actively research, develop
            and obtain regulatory approvals to market in major markets
            throughout the world at least one Product hereunder as expeditiously
            as possible, and following such approval to maximize sales of such
            Product. Without limiting the foregoing, Cell-Matrix shall meet the
            following diligence milestones by the dates set forth below:

      6.1   Filing of IND. Cell-Matrix, its licensees or sublicensees shall file
            an IND with the U.S. FDA for one or more Products under this
            Agreement no later than February 28, 2006. Cell-Matrix shall use its
            best efforts to obtain FDA approval of the IND within [***]. Within
            [***] after the non-conditional approval of the IND for a Product,
            Cell-Matrix, its licensees or sublicensees, shall be required to
            have an active IND and to be actively and diligently conducting
            clinical trials in pursuit of regulatory approval for such Product
            in the U. S. until such Product may be sold commercially in the U.S.

      6.2   Conduct of Clinical Trials. Cell-Matrix, its licensees or
            sublicensees shall use its best efforts to conduct, as soon as
            commercially practicable, such human clinical trials as are
            necessary or desirable to obtain all regulatory approvals to develop
            and commercialize in the U.S. each Product for which an IND has been
            filed.

      6.3   Obtain Regulatory Approvals. Cell-Matrix, its licensees or
            sublicensees shall use its best efforts to obtain, as soon as
            commercially practicable, regulatory approval to market in the U.S.
            at least one Product, and obtain regulatory approval to market in
            the United States at least one Product no later than [***].

                                    ARTICLE 7
                              TERM AND TERMINATION

      7.1   Expiration. Unless terminated earlier pursuant to Section 7.2 below,
            this Agreement shall expire on the expiration of Cell-Matrix's
            obligations to pay royalties under this Agreement.

      7.2   Termination for Cause. A party may terminate this Agreement upon or
            after the breach of any material provision of this Agreement by the
            other party, if the breaching party has not cured such breach within
            [***] after notice

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            thereof from the other party; provided, however, that if the breach
            is due to Cell-Matrix's failure to pay under Article 4 or Section
            3.6, AME shall provide an additional notice of failure to pay and
            allow Cell-Matrix a second [***] period to cure such breach. If
            Cell-Matrix fails to cure such breach during the second [***]
            period, AME shall provide a third and final notice of failure to pay
            and allow Cell-Matrix a third and final [***] period to cure such
            breach prior to any termination hereunder.

      7.3   Effect of Expiration and Termination. Expiration or termination of
            this Agreement shall not relieve the parties of any obligation
            accruing prior to such expiration or termination. The provisions of
            Articles 2, 5, 8, and Sections 3.8.1, 3.12, 7.4 and 9.11 shall
            survive the expiration or termination of this Agreement.

      7.4   Effect of Certain Breaches. In addition to all other rights and
            remedies available by law or otherwise, in the event of a breach of
            the provisions of Section 3.6 or Article 4 or 6 above, AME shall
            have the right to terminate the Agreement pursuant to Section 7.2
            thereof. In the event of such termination, Cell-Matrix shall grant
            an exclusive license to AME under all Cell-Matrix's patent rights
            relating to Program Antibodies, Products and the use thereof in the
            Field. In addition, Cell-Matrix shall deliver to AME copies of all
            data and information in Cell-Matrix's control resulting from
            research related to the Program Antibodies and Products, and shall
            assign and deliver to AME all copies of any and all regulatory
            filings related to Program Antibodies and Products. In consideration
            of the foregoing, AME shall pay to Cell-Matrix the following: (a)
            [***] of cash consideration received by AME or its Affiliates in
            consideration for licenses (including modified or renegotiated
            sublicenses) granted thereunder (excluding royalties on sales) and
            (b) with respect to sales, [***] received on Net Sales of Products
            covered by Cell-Matrix's patents on Program Antibodies or Products
            except for [***] of which shall be retained by AME; provided,
            however, that in the event that AME sells Products directly, AME
            shall only pay to Cell-Matrix a royalty equal to [***] of Net Sales
            on Products sold by AME. In the event that such termination occurs
            and an exclusive license to AME is granted pursuant to this Section
            7.4 and Cell-Matrix previously has granted license or sublicense
            rights to any third party, AME shall enter into a license or
            sublicense, as the case may be, on substantially the same terms
            provided that such third party agrees in writing to be bound by all
            of the terms and conditions therein.

      7.5   AME's Right of First Negotiation. Cell-Matrix hereby grants to AME a
            right of first negotiation (hereinafter "the AME Right of First
            Negotiation") to obtain from Cell-Matrix an exclusive, worldwide,
            license under the Cell-Matrix Intellectual Property Rights related
            to the making, using, and selling of Products should Cell-Matrix
            intend to negotiate with or seek a collaborator for the
            commercialization (other than the 3rd party manufacturing of a
            Product for sale exclusively by Cell-Matrix). The AME Right of First
            Negotiation shall be

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            exercisable by AME in accordance with Section 7.5(g), below, and
            shall operate as follows:

                  a) Cell-Matrix shall promptly notify AME in writing (the
                  "Cell-Matrix Notification") of its intention to negotiate with
                  or seek a collaborator for commercialization (other than the
                  3rd party manufacturing of a Product for Sale exclusively by
                  Cell-Matrix or any activity under the Development and
                  Sublicensing Agreement between Eyetech Pharmaceuticals, Inc
                  and Cell-Matrix dated March 5, 2001) of any Product. [***]

                  b) AME shall notify Cell-Matrix within [***] after receipt of
                  the Cell-Matrix Notification (the "AME Response Period"),
                  indicating its interest, if any, in initiating discussions
                  regarding an agreement with Cell-Matrix with respect to the
                  commercialization of such Cell-Matrix Product.

                  c) In the event that AME notifies Cell-Matrix prior to the
                  termination of the AME Response Period that it has an interest
                  in collaborating with Cell-Matrix in the commercialization of
                  such Cell-Matrix Product (an "AME Expression of Interest"),
                  then the Parties shall negotiate exclusively in good faith
                  reasonable terms that are intended to form the basis of a
                  final agreement for a period no longer than [***] from the
                  Cell-Matrix Notification.

                  d) In the event that (i) AME fails to notify Cell-Matrix prior
                  to the termination of the AME Response Period, or (ii) AME
                  notifies Cell-Matrix prior to the termination of the AME
                  Response Period that it has no interest in collaborating with
                  Cell-Matrix in the commercialization of a Product, or (iii)
                  the Parties fail to reach agreement on the terms that are
                  intended to form the basis of a final agreement within [***]
                  of the Cell-Matrix Notification, or (iv) the Parties fail to
                  reach a final agreement within [***] following the date on
                  which the Parties reach agreement on the terms that are
                  intended to form the basis of a final agreement, then
                  Cell-Matrix shall thereafter be free to develop such Product
                  on its own or to initiate discussions with potential

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                  alternative partners with respect to the commercialization of
                  such Product; [***]

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                                    ARTICLE 8
                                    INDEMNITY

      8.1   Indemnity.

            8.1.1   By AME. AME shall indemnify and hold Cell-Matrix harmless,
                    and hereby forever releases and discharges Cell-Matrix, from
                    and against all losses, liabilities, damages and expenses
                    (including reasonable attorneys' fees and costs) resulting
                    from all claims, demands, actions and other proceedings by
                    any Third Party to the extent arising from (a) the breach of
                    any representation, warranty or covenant of AME under this
                    Agreement, (b) the use of the Materials by or, its
                    Affiliates, or (c) the gross negligence or willful
                    misconduct of AME, its Affiliates or licensees in the
                    performance of its obligations, and its permitted
                    activities, under this Agreement.

            8.1.2   By Cell-Matrix. Cell-Matrix shall indemnify and hold AME
                    harmless, and hereby forever releases and discharges AME,
                    from and against all losses, liabilities, damages and
                    expenses (including reasonable attorneys' fees and costs)
                    resulting from all claims, demands, actions and other
                    proceedings by any Third Party to the extent arising from
                    (a) the breach of any representation, warranty or covenant
                    of Cell-Matrix under this Agreement, (b) the use of the
                    Materials by Cell-Matrix, its Affiliates or licensees (other
                    than AME), (c) the making, using or selling of Products
                    (including claims, demands, actions or other proceedings
                    based on strict liability), or (d) the gross negligence or
                    willful misconduct of Cell-Matrix, its Affiliates or
                    licensees (other than AME) in the performance of its
                    obligations, and its permitted activities, under this
                    Agreement.

      8.2   Procedure. A party (the "Indemnitee") that intends to claim
            indemnification under this Article 8 shall promptly notify the other
            party (the "Indemnitor") of any claim, demand, action or other
            proceeding for which the Indemnitee intends to claim such
            indemnification. The Indemnitor shall have the right to participate
            in, and to the extent the Indemnitor so desires jointly with any
            other indemnitor similarly noticed, to assume the defense thereof
            with counsel selected by the Indemnitor; provided, however, that the
            Indemnitee shall have the right to retain its own counsel, with the
            fees and expenses to be paid by the Indemnitor, if

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            representation of the Indemnitee by the counsel retained by the
            Indemnitor would be inappropriate due to actual or potential
            differing interests between the Indemnitee and any other party
            represented by such counsel in such proceedings. The indemnity
            obligations under this Article 8 shall not apply to amounts paid in
            settlement of any claim, demand, action or other proceeding if such
            settlement is effected without the prior express written consent of
            the Indemnitor, which consent shall not be unreasonably withheld or
            delayed. The failure to deliver notice to the Indemnitor within a
            reasonable time after notice of any such claim or demand, or the
            commencement of any such action or other proceeding, if prejudicial
            to its ability to defend such claim, demand, action or other
            proceeding, shall relieve such Indemnitor of any liability to the
            Indemnitee under this Article 8 with respect thereto, but the
            omission so to deliver notice to the Indemnitor shall not relieve it
            of any liability that it may have to the Indemnitee otherwise than
            under this Article 8. The Indemnitor may not settle or otherwise
            consent to an adverse judgment in any such claim, demand, action or
            other proceeding, that diminishes the rights or interests of the
            Indemnitee without the prior express written consent of the
            Indemnitee, which consent shall not be unreasonably withheld or
            delayed. The Indemnitee, its employees and agents, shall reasonably
            cooperate with the Indemnitor and its legal representatives in the
            investigation of any claim, demand, action or other proceeding
            covered by this Article 8.

      8.3   Insurance. Each party shall maintain insurance with respect to the
            development, manufacture and sales of Products by such party, its
            Affiliates or sublicensees in such amounts as such party customarily
            maintains with respect to the development, manufacture and sales of
            its other products. Each party shall maintain such insurance for so
            long as it continues to develop, manufacture or sell Products, and
            thereafter for so long as it customarily maintains insurance for
            itself covering the development, manufacture and sales of its other
            products.

                                    ARTICLE 9
                                  MISCELLANEOUS

      9.1   Notices. Any consent, notice or report required or permitted to be
            given or made under this Agreement by one of the parties to the
            other shall be in writing and addressed to such other party at its
            address indicated below, or to such other address as the addressee
            shall have last furnished in writing to the addressor, and shall be
            effective upon receipt by the addressee.

            If to AME:     Eli Lilly & Company
                           Lilly Corporate Center
                           Indianapolis, Indiana 46285
                           Attn: General Patent Counsel

                                       22
<PAGE>

            If to Cell-Matrix:    Cell-Matrix Inc.
                                  2100 Rutherford Road
                                  Carlsbad, CA 92008
                                  Attn: General Counsel

      9.2   Assignment. Except as otherwise expressly provided under this
            Agreement neither this Agreement nor any right or obligation
            hereunder may be assigned or otherwise transferred (whether
            voluntarily, by operation of law or otherwise), without the prior
            express written consent of the other party; provided, however, that
            either party may, without such consent, assign this Agreement and
            its rights and obligations hereunder in connection with the transfer
            or sale of all or substantially all of its business related to this
            Agreement or in the event of its merger, consolidation, change in
            control or similar transaction. Any permitted assignee shall assume
            all obligations of its assignor under this Agreement. Any purported
            assignment or transfer in violation of this Section 9.2 shall be
            void.

      9.3   Applicable Law. This Agreement shall be governed by and construed in
            accordance with the laws of the State of California, without regard
            to the conflicts of law principles thereof.

      9.4   Entire Agreement. This Agreement contains the entire understanding
            of the parties with respect to the subject matter hereof. All
            express or implied representations, agreements and understandings,
            either oral or written, heretofore made are expressly superseded by
            this Agreement. This Agreement may be amended, or any term hereof
            modified, only by a written instrument duly executed by both
            parties.

      9.5   Headings. The captions to the several Articles and Sections hereof
            are not a part of this Agreement, but are merely guides or labels to
            assist in locating and reading the several Articles and Sections
            hereof.

      9.6   Independent Contractors. Each party hereby acknowledges that the
            parties shall be independent contractors and that the relationship
            between the parties shall not constitute a partnership, joint
            venture or agency. Neither party shall have the authority to make
            any statements, representations or commitments of any kind, or to
            take any action, which shall be binding on the other party, without
            the prior consent of the other party to do so.

      9.7   Waiver. The waiver by a party of any right hereunder, or of any
            failure to perform or breach by the other party hereunder, shall not
            be deemed a waiver of any other right hereunder or of any other
            breach or failure by the other party hereunder whether of a similar
            nature or otherwise.

      9.8   Force Majeure. A party shall neither be held liable or responsible
            to the other party, nor be deemed to have defaulted under or
            breached this Agreement, for failure or delay in fulfilling or
            performing any obligation under this Agreement

                                       23
<PAGE>

            (other than an obligation for the payment of money) to the extent,
            and for so long as, such failure or delay is caused by or results
            from causes beyond the reasonable control of such party including
            but not limited to fire, floods, embargoes, war, acts of war
            (whether war be declared or not), insurrections, riots, civil
            commotions, strikes, lockouts or other labor disturbances, acts of
            God or acts, omissions or delays in acting by any governmental
            authority or the other party.

      9.9   Other Activities. Except as otherwise expressly provided in this
            Agreement, nothing in this Agreement shall preclude either party
            from conducting other programs (either for its own benefit or with
            or for the benefit of any other Person) to conduct research, or to
            develop or commercialize products or services, for use in any field.

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

      9.11  Arbitration. All controversies or claims under this Agreement, the
            enforcement or interpretation hereof, or because of an alleged
            breach, default or misrepresentation under the provisions hereof,
            shall be settled by final and binding arbitration in San Diego,
            California in accordance with the then-existing commercial
            arbitration rules (the "Rules") of the American Arbitration
            Association ("AAA"), and judgment upon the award rendered by the
            arbitrators be entered in any court having jurisdiction thereof;
            provided, however, that the law applicable to any controversy shall
            be the law of the State of California, regardless of its or any
            other jurisdiction's choice of law principles. In any arbitration
            pursuant to this Agreement, the award or decision shall be rendered
            by the majority of the members of a Board of Arbitration consisting
            of three (3) members, one of whom shall be appointed by each party
            and the third of whom shall be the chairman of the panel and shall
            be appointed be mutual agreement of said two party-appointed
            arbitrators. In the event of a failure of said two arbitrators to
            agree within sixty (60) days after the commencement of the
            arbitration proceeding upon the appointment of the third arbitrator,
            the third arbitrator shall be appointed by the AAA in accordance
            with the Rules. In the event that either party shall fail to appoint
            an arbitrator within thirty (30) days after the commencement of the
            arbitration proceedings, such arbitrator shall be appointed by the
            AAA in accordance with the Rules. Notwithstanding the foregoing, the
            parties may apply to any court of competent jurisdiction for a
            temporary restraining order, as necessary, without breach of this
            arbitration agreement and without abridgement of the powers of the
            arbitrator. In no event shall the demand for arbitration be made
            after the date when institution of a legal or equitable proceeding
            based on such claim, dispute or other matter in question would be
            barred by the applicable statute of limitation.

                                       24
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.

Cell-Matrix, Inc.                        AME

Signature: /s/ William R. La Rue         Signature: /s/ Thomas F. Bumol
           --------------------------               ----------------------------

Name:  William R. La Rue                           Name: Thomas F. Bumol
Title: President and Chief Financial Officer       Title: Chairman of the Board
       Cell-Matrix, Inc.                           Applied Molecular Evolution

                                       25
<PAGE>

                                   Schedule A

                                      [***]

***Certain information on this page has been omiitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       26
<PAGE>

                                   SCHEDULE B

                                 PROJECT FUNDING

      1. Fixed Fee. Cell-Matrix shall pay to AME Five Hundred Thousand Dollar
($500,000) each for the humanization and optimization of each of the two (2)
Candidate Molecules, to be paid in equal quarterly installments over the six (6)
months starting from the Effective Date of the Prior Agreement. Payments shall
be due within thirty (30) days.

      2. Milestone Payments. Cell-Matrix shall pay to AME milestone payments
equal to [***] per Program Antibody demonstrating an affinity equal to or
greater than [***] times the initial affinity of the Candidate Molecule from
which that Program Antibody was derived as determined by an in vitro assay to be
agreed upon by the parties. These milestone payments shall be paid within sixty
(60) days following the demonstration of the Program Antibody demonstrating an
affinity equal to or greater than [***] times the initial affinity of the
Candidate Molecule from which that Program Antibody was derived. In the event
that a Program Antibody fails to demonstrate an affinity equal to or greater
than [***] times the initial affinity of that Candidate Molecule from which that
Program Antibody was derived, no milestone payment shall be payable for that
Program Antibody.

***Certain information on this page has been omiitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       27

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