Document:

SeaGen - CellTech CTR

EXHIBIT 10.3

Confidential

treatment requested

 

COLLABORATION AGREEMENT

 

This Agreement is entered

into as of March 27, 2002 (“Effective Date”), by and between:

 

ð                                    SEATTLE

GENETICS, INC., a Delaware corporation, having its principal place

of business at 21823 30th Drive S.E., Bothell, Washington 98021

 

                                                (hereinafter

referred to as “SGI”)

 

and:

 

ð                                    CELLTECH R

& D LIMITED, a corporation organized and existing under the laws

of England, having its principal place of business at 208 Bath Road, Slough,

Berkshire SL1 3WE UK.

 

                                                (hereinafter

referred to as “Celltech”).

 

WITNESSETH

 

WHEREAS, SGI owns

or controls intellectual property rights relating to certain drug conjugation

and linker technology;

 

WHEREAS, Celltech

is a biopharmaceutical company currently conducting research and development

programs aimed at the discovery of antigens and antibodies targeting those

antigens for the development and commercialization of pharmaceutical products;

 

WHEREAS, Celltech

wishes to acquire from SGI exclusive options to worldwide exclusive licenses

under SGI’s patent rights and know-how related to SGI’s drug conjugation and

linker technology;

 

WHEREAS, SGI is

willing to grant to Celltech such exclusive options in order to allow Celltech

to evaluate SGI’s drug conjugation and linker technology for use with certain

of Celltech’s proprietary antigens and antibodies, and

 

WHEREAS, SGI is

willing to grant to Celltech such exclusive licenses, subject to the terms of

and conditioned upon this Agreement.

 

NOW, THEREFORE, in

consideration of the mutual covenants and obligations set forth herein, the

Parties hereto, intending to be legally bound, agree as follows:

 

ARTICLE

I - DEFINITIONS AND INTERPRETATION

 

1.1.          Definitions:  For the purposes of this Agreement the following words and

phrases shall have the following meanings:

 

 

“Additional

Research Program Fees” has the meaning set forth in

Section 3.4(b) hereof.

 

“ADC”

means any Antibody [***] that incorporates or uses Drug

Conjugation Technology.

 

“Affiliate”

means, with respect to a Party, any person, corporation or business entity that

directly, or indirectly through one or more intermediaries, controls, is

controlled by, or is under common control with, a Party.  For the purpose of this definition, control

of a corporation or of another business entity shall mean the possession,

directly or indirectly, of the power to direct or cause the direction of the

management or the policies of the entity, whether through the ownership of

voting securities, by agreement or otherwise; provided, however,

that the direct or indirect beneficial ownership of less than [***]

of the voting interests in, or less than a [***] interest in the equity of, such

corporation or other business entity shall not alone constitute control of such

corporation or other business entity.

 

“Agreement”

means this agreement, all amendments and supplements to this Agreement and all

schedules to this Agreement.

 

“Antibody”

or “Antibodies”

means any monoclonal antibody, fragment thereof or modification thereof, [***],

with a unique amino acid sequence that binds to a Research Antigen or Exclusive

Antigen.  By way of clarification,

Antibodies with different amino acid sequences shall be deemed to be different

Antibodies, irrespective of whether they bind to the same Research Antigen or

Exclusive Antigen.

 

“Antigen”

means any [***]

(including any [***]), [***], compound or other composition, and

any [***]

thereof, to which an antibody binds.

 

“[***]”

and “[***]”

have the meaning set forth in Schedule B.

 

“[***]”

and “[***]”

have the meaning set forth in Schedule B.

 

“[***]”

means the Third Party Patents and Third Party Know-How licensed to SGI under

the License Agreement between [***] and SGI, dated [***], as amended.

 

“Calendar

Quarter” means any of the three-month periods beginning

January 1, April 1, July 1 and October 1 in any year.

 

“Celltech Know-How” means confidential

information and materials, excluding Third Party Know-How, which is Controlled

by Celltech or its Affiliates, whether as of or after the Effective Date, to

the extent such is necessary or useful, as reasonably determined by the JDC,

for SGI to perform its obligations under the Research Program.  The Celltech Know-How shall include the

Program Know-How to the extent Controlled by Celltech.

 

“Celltech Patents” means all Patent Rights

which are Controlled by Celltech or its Affiliates as of or after the Effective

Date and which are necessary, as reasonably determined by the JDC, for SGI to

perform its obligations under the Research Program.  Celltech Patents shall include the Program Patents to the extent

Controlled by Celltech.

 

2

 

“Celltech Technology” means the Celltech

Know-How and the Celltech Patents.

 

“Combination Product” means any Licensed

Product that contains, in addition to an ADC, one or more other ingredients

that have a biologic activity as a therapeutic agent when administered alone.

 

“Commercially

Reasonable Efforts” means, with respect to any objective by any

Party, reasonable, diligent, good faith efforts to accomplish such objective as

such Party would normally use to accomplish a similar objective under similar

circumstances.

 

“Confidential

Information” has the meaning set forth in Section 10.1.

 

“Control”  or “Controlled”  means

with respect to any (a) material, item of information, method, data or other

know-how, or (b) intellectual property right, in each case the possession

(whether by ownership or license, other than pursuant to this Agreement) by a

Party or its Affiliates of the ability to grant to the other Party access

and/or a license as provided herein under such item or right without violating

the terms of any agreement or other arrangement with any Third Party existing

before or after the Effective Date.

 

“[***]”

means any [***],

or [***]

thereof, that does not [***].

 

“Drug

Conjugation Technology” means drug conjugates and drug conjugation

chemistry Controlled by SGI, including [***] and analogues and derivatives

thereof, [***]

and analogues and derivatives thereof and linker technology for attaching drugs

to Antibodies.

 

“Effective

Date” means the date of this Agreement as set forth above.

 

“Events of

Force Majeure” shall have the meaning set forth in Article 17.

 

“Exclusive

Antigen” shall have the meaning set forth in Section 4.2.1.

 

“Exclusive

License” shall have the meaning set forth in Section 4.2.1.

 

“Field”

means the [***];

provided that with respect to use of the [***], the Field shall be limited to the

use of [***].

 

“FTE” means

the per annum rate of full time work of an SGI employee who is adequately

trained to perform Research Program activities pursuant to this Agreement.

 

“GLP

Toxicology” means the first toxicology study commenced using

GLP grade Licensed Product in an animal model to determine toxicology of said

Licensed Product.

 

“First

Commercial Sale” means, in each country of the Territory, the first

commercial sale of a Licensed Product by Celltech, its Affiliates or

Sublicensees to a Third-Party following, if required by law, Regulatory

Approval and, when Regulatory Approval is not required by law, the first

commercial sale in that country, in each case for use or consumption of such

Licensed Product in such country by the general public; for avoidance of doubt,

First 

 

3

 

Commercial Sale of a given Licensed Product cannot occur more than once

in any particular country of the Territory.

 

“Initial

Research

Program Fee” shall have the meaning set forth in

Section 3.4(a).

 

“Initiation”  means,

with respect to a human clinical trial, the treatment of the first patient with

a Licensed Product pursuant to a clinical protocol of the specified clinical

trial.

 

“JDC”  shall

have the meaning set forth in Section 3.6.

 

“Licensed

Product” means any and all products that incorporates or uses the

SGI Technology and where the development, manufacture, sale or use of such

products, absent the rights granted to Celltech under this Agreement, would

constitute a misappropriation and/or an infringement of SGI Technology.

 

“Net Sales”

means the gross amount received by Celltech, its Affiliates and Sublicensees

from the sale of Licensed Products to Third-Parties, less the sum of the

following deductions for amounts actually incurred related to said sale:

 

(i)            normal, customary trade discounts

(including volume discounts), credits, allowances and adjustments for

rejections, recalls and returns; and

 

(ii)           cost of freight and insurance,

special packaging, sales, use, excise, value added and similar taxes,

surcharges, duties and other governmental charges (other than income tax)

imposed on the sale and included in the gross amount charged to customers.

 

In the

event that a Licensed Product is sold as part of a kit or Combination Product,

the Parties shall negotiate in good faith an appropriate adjustment to “Net

Sales,” taking into account SGI’s Third Party Obligations and the price or (if

not available) the fair market value of the products sold as part of the kit or

Combination Product if sold separately.

 

“[***]” means all [***] pursuant to which SGI

or its Affiliates have, [***], obtained [***] of any [***]

under any [***]

or [***] and [***].  SGI’s [***] and during the Term shall be set

forth on Schedule B hereof and the [***] of the [***] shall be set forth on

Schedule F.

 

“Option”

means, with respect to each Research Antigen, the exclusive option granted by

SGI to Celltech pursuant to the provisions of Section 4.1 hereof to obtain

an Exclusive License under Section 4.2 hereof.

 

“Option

Exercise Fee” shall have the meaning set forth in

Section 7.1.1.

 

“Option

Period” means, with respect to each Research Antigen, the period

commencing as of the date that [***], provided that for any Research

Antigen the Option Period shall be the greater of [***] or [***] from the date that SGI [***].

 

4

 

“Parties”

means Celltech and SGI, and “Party” means either of them.

 

“Patent Rights” means all claims in [***]

patents, [***]

patent applications and all patent applications [***], provided, such patent

has not expired, lapsed, or been held invalid or unenforceable by a final

decision, which is unappealed or unappealable, of a court of competent

jurisdiction or of an administrative agency having authority over patents or such patent application has not been the

subject of a rejection notice from which an appeal cannot be taken or in

respect of which the applicable period for appeal has not expired, and any

continuations, continuations-in-part, divisions, provisionals or any substitute

applications, any patent issued with respect to any such patent applications,

any reissue, reexamination, renewal or extension (including any supplementary

protection certificate) of any such patent, and any  confirmation patent or registration patent  or patent of

addition based on any such patent, and all foreign counterparts of any of the

foregoing.

 

“Phase I

Clinical Trial” means a clinical study in subjects to evaluate the

pharmacokinetic and pharmacodynamic properties, maximum tolerated dose, dosing

interval, and absorption, distribution, metabolism and excretion of a candidate

drug.

 

 “Phase III Clinical Trial” means a

controlled, multi-center clinical trial, involving patients with the disease or

condition of interest to obtain sufficient efficacy and safety data to support

regulatory submissions and labeling of a candidate drug.

 

“[***]”

and “[***]”

have the meaning set forth in Schedule B.

 

“Program

Invention” means all patentable inventions that are conceived or

reduced to practice by one or more employees, agents or consultants of Celltech

and/or one or more employees, agents or consultants of SGI in the course of

performing the Research Program.

 

“Program Know-How”  means confidential

information and materials, including, but not limited to, (i) pharmaceutical,

chemical, biological and biochemical products, (ii) technical and non-technical

data, and information relating to the results of tests, assays, methods and/or

processes, and (iii) drawings, plans, diagrams, specifications and/or other

documents containing said information and data, in each case which is made

jointly by employees, consultants or agents of SGI or its Affiliates and by

employees, consultants or agents of Celltech or its Affiliates following the

Effective Date during the course of the Research Program Term, but excluding

the Program Patents.

 

“Program Patents”  means all Patent Rights that

claim or cover Program Inventions.

 

“Regulatory

Approval” means final regulatory approval (including, where

applicable, pricing approval in the event that actual sales do not take place

before such approval) required to market a Licensed Product for a disease or

condition in accordance with the applicable laws and regulations of a given

country.  In the United States, its

territories and possessions, Regulatory Approval means approval of a Biologics

License Application (“BLA”) or its equivalent by the United States Food

and Drug Administration (“FDA”), or successor agency.

 

5

 

“Research

Antigen”  means any Antigen that is [***]

designated a “Research Antigen” under this Agreement pursuant to Section

2.1.2.

 

“Research

Fees” shall have the meaning set forth in Section 3.4(c).

 

“Research

Fees Report” shall have the meaning set forth in Section 3.4(c).

 

“Research

Program” means the research program conducted pursuant to

Article 3.

 

“Research

Program Term” means the term of the Research Program set forth in

Section 3.3.

 

“Royalty Term”

means, on a Licensed Product-by-Licensed Product and country-by-country basis,

the period of time equal to the longer of: (a) [***] from the date of First

Commercial Sale of Licensed Product in such country; or (b) the term for

which there are Valid Claims of SGI Owned Patents or Third Party Patents

directly relating to the Licensed Product in such country.

 

“SGI Know-How”

shall mean confidential information and materials relating to the Drug

Conjugation Technology, excluding Third Party Know-How, which is Controlled by

SGI or its Affiliates, whether as of or after the Effective Date, to the extent

such is useful or necessary for the manufacture, testing, use or sale of a

Licensed Product in the Field.  The SGI

Know-How shall include Drug Conjugation Technology and, to the extent

Controlled by SGI, the Program Know-How.

 

“SGI Patents” means all Patent Rights within

Third Party Patents, the SGI Owned Patents and, to the extent Controlled by

SGI, the Program Patents.

 

“SGI Owned Patents” means all Patent Rights

relating to the Drug Conjugation Technology, other than the Third Party

Patents, which are owned and Controlled by SGI or its Affiliates, whether as of

or after the Effective Date and which contain claims which would be infringed

by the manufacture, use or sale of Licensed Products in the Field in the

absence of this Agreement.  The relevant

SGI Owned Patents as of the Effective Date are listed in Schedule A, which may

be amended from time to time by the Parties.

 

“SGI

Technology” means all SGI Patents, Third Party Know-How and SGI

Know-How.

 

“Sublicensees”

means any person acting pursuant to a sublicense granted to it by Celltech or

its Affiliates as provided in Section 4.2.2 hereof.

 

“Term”

shall have the meaning set forth in Article 15.

 

“Territory”

means all countries in the world.

 

6

 

“Third-Party”

means any person or entity other than Celltech, SGI and their respective

Affiliates.

 

“Third Party Know-How” means confidential information and materials relating to the Drug

Conjugation Technology, excluding SGI Know-How which is Controlled by SGI or

its Affiliates and Celltech Know-How which is Controlled by Celltech or its

Affiliates, as of the Effective Date, to the extent such is useful or necessary

for the manufacture, testing, use or sale of a Licensed Product in the Field.

 

“Third Party License Agreement”

means all contracts or agreements with Third Parties pursuant to which SGI

or its Affiliates have, as of the Effective Date, obtained Control of any

rights under any Third Party Patent or Third Party Know-How.  SGI’s Third Party License Agreements

existing as of the Effective Date are set forth in Schedule B and the material

provisions of the Third Party License Agreements are set forth on Schedule D.

 

“Third Party Obligations” shall have the

meaning set forth in Section 7.3.1.

 

“Third Party Patents”  means all Patent Rights relating

to the Drug Conjugation Technology, other than the SGI Owned Patents or Program

Patents, which are Controlled by SGI or its Affiliates as of the Effective Date

and which contain claims which would be infringed by the manufacture, use or

sale of Licensed Products in the Field in the absence of this Agreement.  The relevant Third Party Patents as of the

Effective Date are listed in Schedule C, which may be amended from time to time

by the Parties.

 

“Valid Claim” means a claim of any issued

unexpired patent, which has not been revoked or held unenforceable or invalid

by a decision of a court or governmental agency of competent jurisdiction from

which no appeal can be taken, or with respect which an appeal is not taken

within the time allowed for appeal, and which has not been disclaimed, denied

or admitted to be invalid or unenforceable through reissue, disclaimer or

otherwise.

 

1.2.          Certain Rules of Interpretation in this Agreement and

the Schedules.

 

(a)           Unless otherwise specified, all

references to monetary amounts are to United States of America currency (U.S.

Dollar);

 

(b)           The descriptive headings of Articles

and Sections are inserted solely for convenience of reference and are not

intended as complete or accurate descriptions of the content of such Articles

or Sections;

 

(c)           The use of words in the singular or

plural, or with a particular gender, shall not limit the scope or exclude the

application of any provision of this Agreement to such person or persons or

circumstances as the context otherwise permits;

 

(d)           The words “include” and “including”

have the inclusive meaning frequently identified with the phrases “without

limitation” and “but not limited to”;

 

7

 

(e)           Whenever a provision of this Agreement

requires an approval or consent by a Party to this Agreement and notification

of such approval or consent is not delivered within the applicable time limit,

then, unless otherwise specified, the Party whose approval or consent is

required shall be conclusively deemed to have withheld its approval or consent;

 

(f)            Unless otherwise specified, time

periods within or following which any payment is to be made or act is to be

done shall be calculated by excluding the day on which the period commences and

including the day on which the period ends and by extending the period to the

next business day following if the last day of the period is not a business day

in the jurisdiction of the Party to make such payment or do such act; and

 

(g)           Whenever any payment is to be made or

action to be taken under this Agreement is required to be made or taken on a

day other than a business day, such payment shall be made or action taken on

the next business day following such day to make such payment or do such act.

 

ARTICLE

2 - RESEARCH ANTIGENS

 

2.1.1        Number of Options for Research Antigens.

 

Subject to the provisions

of this Agreement, including the availability of an Antigen pursuant to Section

2.3, Celltech may acquire Options pursuant to Section 4.1 for the following

number of Research Antigens during the Research Program Term:

 

(a)           Upon payment of the Initial Research

Program Fee set forth in Section 3.4(a), Celltech shall receive Options for up

to [***]

Research Antigens for evaluation in the Research Program; and

 

(b)           Celltech may acquire Options for up

to an additional [***] Research Antigens for evaluation in the Research Program

by paying the Additional Research Program Fees set forth in Section 3.4(b)

hereof.

 

2.1.2        Designation of Research Antigens.  Celltech shall notify SGI of the

identity of, and to the extent available the genetic sequence for, any Antigen

that Celltech wishes to designate as a Research Antigen.  Within [***] following receipt of such notice, SGI

shall notify Celltech whether the Antigen is available for designation as a

Research Antigen pursuant to Section 2.3. Upon notice by SGI to Celltech that

an Antigen is available for designation as a Research Antigen pursuant to

Section 2.3, such Antigen shall be deemed to be a “Research Antigen”

under this Agreement. If SGI does not respond within the [***] following receipt of

such notice, the Antigen Celltech wishes to designate as a Research Antigen

shall be deemed to be a Research Antigen. 

Schedule E to this Agreement will be amended from time to time to

list the Research Antigens (including a description thereof) under this

Agreement.

 

2.1.3        [***].  At any time after designation of a Research Antigen pursuant to

Section 2.1.2 but prior to the earlier of (i) delivery of materials for such

Research Antigen to SGI or (ii) [***] from the date of designation of such

Research Antigen, Celltech may, at its sole discretion, 

 

8

 

[***] such Research

Antigen and [***], at no additional cost, [***]; provided that Celltech

may not make more than [***] for each Research Antigen.

 

2.2.1        Research License to Celltech.

 

Subject to the provisions

of this Agreement, SGI hereby grants to Celltech and its Affiliates, for the

Research Program Term, a non-exclusive license in the Territory under SGI

Technology as may be specifically designated in writing by Celltech solely for

the purpose of conducting research and development activities on Research

Antigens to evaluate Celltech’s interest in exercising the Options.  The research license granted to Celltech

under this Section 2.2.1 shall not include (i) the right to use SGI

Technology for any commercial purpose whatsoever, (ii) the right to grant

sublicenses thereto to any Third-Party other than to engage the services of

Third-Party contractors to undertake certain research activities on Celltech’s

behalf consistent with the research license granted herein or (iii) the

right to initiate any human clinical trial of a Licensed Product in any

country.  Nothing in this Agreement

shall be construed to grant Celltech rights to use SGI Technology in any human

clinical trial or similar clinical activity with respect to a Licensed Product

prior to Celltech exercising its Option for the applicable Research Antigen

pursuant to Section 4.2 hereof.

 

2.2.2                        Research

License to SGI.

 

Subject to the provisions

of this Agreement, Celltech hereby grants to SGI and its Affiliates, for the

Research Program Term, a non-exclusive license under Celltech Technology solely

for the purpose of conducting research and development activities on Research

Antigens and Antibodies thereto in order for SGI to perform its obligations

under this Agreement.  The research

license granted to SGI under this Section 2.2.2 shall not include

(i) the right to use Celltech Technology for any commercial purpose

whatsoever,  (ii) the right to

grant sublicenses thereto to any Third-Party or (iii) the right to initiate any

human clinical trials using any Celltech Technology.

 

2.2.3        Additional Assistance.

 

In addition to other

assistance explicitly set forth in this Agreement, during the course of the

Term, SGI and Celltech shall each provide the other Party with reasonable

technical assistance relating to the use of such SGI Technology and Celltech

Technology, respectively, solely to the extent licensed to the other Party in

this Agreement.

 

2.3.          Availability of an Antigen [***].

 

It is understood and

agreed that SGI shall grant Celltech’s request to designate an Antigen as a

Research Antigen unless, prior to Celltech’s request pursuant to Sections 2.1.2

or 2.1.3: (i) [***] or (ii) [***] pursuant to Sections 2.1.2 or 2.1.3.  Additionally, SGI shall not be

required to [***] any [***] pursuant to Section 3.5.1 if such [***]

are unavailable pursuant to this Section 2.3(i) or (ii).

 

9

 

ARTICLE

3 - RESEARCH PROGRAM 

 

3.1.          Objective.  Celltech intends to conduct a Research Program to evaluate

Research Antigens and Antibodies for commercial development under this

Agreement.  In support of the Research

Program, upon SGI’s receipt of Antibodies to Research Antigens, SGI shall

prepare ADCs for Celltech pursuant to Section 3.5.

 

3.2.          Conduct of Research Program.  Celltech and SGI shall use all

Commercially Reasonable Efforts to complete research works in accordance with

the stated objective of the Research Program as set forth in Section 3.1.  Any research work performed by Celltech and

SGI pursuant hereto shall be performed in a good scientific manner and in compliance

with all applicable laws.

 

3.3.          Term of the Research Program.  The term of the Research Program shall

be for a period of [***] from the Effective Date unless

terminated earlier in accordance with Article 15 hereof (the “Research

Program Term”).

 

3.4.          Research Program Fees.  Celltech shall pay to SGI the following

amounts in consideration of the Research Program:

 

(a)           In consideration for the Options on

the [***]

Research Antigens as set forth in Section 2.1.1(a) and within thirty (30) days

of the Effective Date, Celltech shall pay to SGI the sum of [***]

by wire transfer of immediately available funds, which payment shall be

nonrefundable and non-creditable (the “Initial Research Program Fee”).

 

(b)           If Celltech elects to acquire

additional Options pursuant to Section 2.1.1(b) during the Research Program

Term,

Celltech shall make an additional payment in the sum of [***] per Antigen for up to [***]

additional Antigens and a maximum aggregate total of [***] Research Antigens.  Payment shall be by wire transfer of

immediately available funds for each additional Research Antigen within thirty

(30) days of Option exercise, which payment shall be nonrefundable and

non-creditable (the “Additional Research Program Fees”).

 

(c)           In partial consideration for the

research performed by SGI, Celltech shall reimburse SGI for all JDC (as defined

in Section 3.6) pre-approved (which approval will not be unreasonably

withheld): 1) out-of-pocket costs incurred by SGI and 2) FTEs at a rate of [***]

per FTE per year for the [***] of the Research Program and [***]

per FTE per year for the [***] of the Research Program

(collectively, the “Research Fees”). 

Within thirty (30) days after the end of each Calendar Quarter, SGI

shall submit a report to Celltech supporting the calculation of both

out-of-pocket costs and FTEs due for such Calendar Quarter (a “Research Fees

Report”).  Celltech shall pay all

Research Fees to SGI within thirty (30) days of receipt of each Research Fees

Report.

 

(d)           Celltech shall pay SGI the following

fees immediately upon delivery to Celltech of 1) ADCs meeting the reasonable

criteria set by the Joint Development Committee 

 

10

 

and 2) all SGI Know-How and Third Party Know-How necessary or useful to

evaluate such ADCs:

 

(i)            [***] upon receipt of [***] requested by Celltech;

 

(ii)           [***] upon receipt of [***] requested by Celltech;

and

 

(iii)          [***]

upon receipt of [***] requested by

Celltech.

 

3.5.          SGI Preparation of ADCs.

 

3.5.1        During the Research Program Term, at the

request of Celltech and utilizing SGI Technology specifically designated in

writing by Celltech, SGI will use Commercially Reasonable Efforts to prepare

and deliver to Celltech ADC’s for (i) any and all Antibodies provided by

Celltech recognizing Research Antigens designated by Celltech under this

Agreementand (ii) [***]; provided that SGI may

decline to prepare an ADC for a [***] to an Antigen based on the

availability of the [***] pursuant to Section 2.3(i) and (ii);

and provided  further that Celltech shall not be permitted to

designate as a Research Antigen any [***] for which SGI prepares an ADC

pursuant to this Section 3.5.1.

 

3.5.2        EXCEPT AS PROVIDED IN ARTICLE 14, SGI

MAKES NO REPRESENTATIONS AND GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, EITHER

IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, REGARDING THE ADCs

PREPARED BY SGI INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS

FOR A PARTICULAR USE OR PURPOSE.

 

3.6           Joint

Development Committee. 

Within [***] of the Effective Date, the Parties will establish a Joint

Development Committee (the “JDC”) to make decisions regarding the

Research Program consistent with the objective as set forth in Section 3.1

hereof.  The JDC will be responsible

for, among other things, reviewing research plans, exchanging information, monitoring

use of the SGI Technology by Celltech and the Celltech Technology by SGI,

facilitating cooperation and coordination between the Parties, and for

implementing all activities approved by the JDC.  The JDC will be composed of [***] of each Party, who shall be appointed

(and may be replaced at any time) by such Party on written notice to the other

in accordance with this Agreement.  Such

representatives shall possess the requisite experience and seniority to enable

them to make decisions on behalf of the Parties with respect to the Research

Program.  The JDC will make decisions

based on a majority vote or by a written resolution signed by the designated

representatives of each of the Parties. Any member of the JDC may designate a

substitute to attend and perform the functions of that member at any meeting of

the JDC.  If the members of the JDC are

split on a decision, [***].  The

JDC will meet at least [***] annually until [***],  and at least [***]

annually thereafter during the Term, or at any other frequency unanimously

agreed by the members of the JDC.

 

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ARTICLE

4 - OPTIONS AND LICENSES

 

4.1.          Option Grant.

 

4.1.1.       Grant of the Options.  Subject to the terms of this Agreement, SGI

hereby grants to Celltech an exclusive Option during the Option Period for each

Research Antigen designated pursuant to Section 2.1.2 or 2.1.3 to obtain an

Exclusive License as set forth in Section 4.2.1 hereof.

 

4.1.2.       Exercise of the Options.   During the Option Period and on a Research

Antigen by Research Antigen basis, Celltech may provide written notice to SGI

that it wishes to acquire the Exclusive License to the SGI Technology, as set

forth in Section 4.2.1.

 

4.2.          Exclusive License Grant to Celltech.

 

4.2.1.       Grant.  If (i) Celltech elects to exercise its Option pursuant to Section

4.1.2, and (ii) Celltech pays the Option Exercise Fee pursuant to Section

7.1.1, then subject to the terms and conditions of this Agreement, and

commencing as of the date that SGI receives the Option Exercise Fee, SGI is

automatically deemed to grant, and in such event hereby grants, to Celltech, on

a Research Antigen-by-Research Antigen basis, an exclusive (even as to SGI),

royalty-bearing license, including the right to sublicense as set forth in

Section 4.2.2 hereof,  under such SGI

Technology specifically designated in writing by Celltech, as  required, to develop, have developed, make,

have made, use, import, have imported, export, have exported, offer to sell,

sell and have sold Licensed Products directed toward such Research Antigen

within the Field in the Territory (an “Exclusive License”), whereupon

the Research Antigen shall thereafter be deemed to be an “Exclusive Antigen”.

 

The

date upon which an Exclusive License is granted with respect to each Research

Antigen under this Section 4.2 is referred to herein as the “Exclusive

License Date” for such Research Antigen.

 

4.2.2.       Rights to Sublicense.

 

(a)            For each License granted pursuant to

Section 4.2.1 hereof, Celltech shall have the right to sublicense its rights to

any Affiliate or any Third-Party (“Sublicensee”), subject to the terms and

conditions of this Agreement.

 

(b)           Celltech shall be responsible for

making all payments due to SGI for completion of any milestones or due to Net

Sales of any Licensed Products by any such Sublicensee and for compliance with

all terms of this Agreement applicable to Celltech (including all terms of this

Agreement identified as applicable to Sublicensee).

 

(c)           Celltech shall notify SGI of each

sublicense granted to Affiliates or Third-Parties and shall provide SGI with

the name and address of each Sublicensee and a description of the rights

granted and the territory covered by such Sublicensee.

 

12

 

4.3.          [***].  Subject to the bona fide rights of Third-Parties that may exist,

SGI hereby

[***] the right to [***],”  any [***] under any [***].  SGI shall promptly notify  Celltech

of any

[***] by providing a description of the [***] thereunder,  including

all [***]

applicable to [***] including any [***] or [***]. 

Upon such notification, Celltech may, at its sole discretion,

by giving written notice to SGI at any time during the Term, [***]

under this Agreement; provided that Celltech will [***] to SGI for all [***] that [***] under

any [***]

any such [***] as provided  in Section 7.3.2 in so far

as they relate to [***] and all [***] that [***] under any [***] covering

any such

[***] as provided in Section 7.5.2 in so far as they relate to [***].  If Celltech does not [***] to [***] under

a [***],

then Celltech shall have [***] to such [***] and the [***] and

[***] under

such

[***] shall be [***]. 

Nothing herein shall be construed to obligate SGI to [***] or

to [***]

thereunder.  Nothing contained herein

shall affect SGI’s representations and warranties contained in Section 14.1.

 

4.4.          Compliance with Third Party License Agreements.  To the extent that Celltech designates an

SGI Technology pursuant to [***] that is covered under a Third Party

License Agreement [***], Celltech hereby agrees to comply

with the covenants and conditions of such Third Party License Agreement as set

forth in Schedule D  [***] hereto as they apply to Celltech, its

Affiliates or Sublicensees as a sublicensee of SGI under such Third Party

License Agreement [***]. 

To the extent that Celltech [***] an SGI Technology pursuant to [***]

licensed by SGI under a Third Party License Agreement [***], and such agreement is

amended to include additional terms or conditions, the parties agree to amend Schedules

D [***]

to include such terms and conditions as are relevant to this Agreement; provided,

however, that SGI shall not [***] that would [***] under this Agreement [***];

and provided, further, that SGI shall not [***] that [***].

 

ARTICLE

5 - TECHNOLOGY DISCLOSURE AND SUPPLY

 

5.1.          Disclosure of Drug Conjugation Technology.

 

SGI shall disclose and

supply to Celltech in a timely manner such SGI Technology, including Drug

Conjugation Technology, SGI Know-How and technology covered by New Third Party

License Agreements and any related materials, as may be useful to enable

Celltech to use the same at its own facilities for the purposes of and on the

terms and conditions of this Agreement. 

In addition, during the term of this Agreement, SGI shall, upon Celltech’s

reasonable request and with reasonable notice to SGI, make available to

Celltech at SGI’s facilities, SGI’s personnel to provide a reasonable amount of

technical assistance and training to Celltech’s personnel. Celltech shall pay

all out-of-pocket expenses and FTE costs incurred by SGI in providing such

technical assistance and training in accordance with Section 3.4(c).

 

ARTICLE

6 - DEVELOPMENT AND COMMERCIALIZATION

 

6.1           Celltech shall develop, commercialize

and market Licensed Products using Commercially Reasonable Efforts. Without

limiting the foregoing, Celltech, at its sole discretion, (i) shall be

responsible for conducting such preclinical and clinical trials as are

necessary or 

 

13

 

desirable to obtain

regulatory approvals to develop and commercialize such Licensed Products,

(ii) shall be responsible for developing and obtaining neces­sary approval

to market such Licensed Products (including, as the case may be, pricing

approval), and (iii) shall be responsible for marketing such Licensed

Products.   Celltech shall comply with

all applicable good laboratory, clinical and manufacturing practices in the

development and commercialization of such Licensed Products, and shall use

Commercially Reasonable Efforts to cause its Affiliates and subcontractors to

do the same.

 

6.2           Celltech shall be solely responsible

for funding all costs of the development and commercialization of each such

Licensed Product.  Celltech shall keep

SGI informed upon reasonable requests by SGI from time to time as to the

progress of the development of Licensed Products.  Beginning on [***] and thereafter within [***]

following the end of each [***] upon SGI’s request, Celltech shall

provide SGI with a written report summarizing Celltech’s activities related to

research and development of Licensed Products and status of clinical trials and

government approvals necessary for marketing Licensed Products.

 

ARTICLE

7 - OPTION EXERCISE FEE, EXCLUSIVE LICENSE FEES, ROYALTIES AND MILESTONES.

 

7.1.          Option Exercise Fee; Exclusive License Fees.

 

7.1.1.       In consideration for each Option

exercised pursuant to Section 4.1.2, Celltech shall make a payment to SGI in

the sum of [***] by wire transfer of immediately available funds (the “Option

Exercise Fee”). Each Option Exercise Fee paid by Celltech to SGI is [***]

for the applicable Exclusive Antigen during the [***] period from the

Exclusive License Date for such Exclusive Antigen.

 

7.1.2        On the [***] of each Exclusive

License date and on each subsequent [***] until terminated pursuant to 7.1.3 or

Article 15, Celltech shall pay to SGI an exclusive license fee in the amount of

[***]

for each Exclusive Antigen.  Each annual

exclusive license fee is [***] for the applicable Exclusive Antigen

during the [***] period.

 

7.1.3.       Celltech may terminate the Exclusive

License for any Exclusive Antigen for any reason and at any time upon [***]

prior notice to SGI.  Upon termination

pursuant to this Section 7.1.3, [***].

 

7.2.          Royalties Payable by Celltech.

 

In consideration for the

Exclusive Licenses granted to Celltech herein, during the Royalty Term,

Celltech shall pay to SGI royalties on Net Sales of Licensed Products.  Such royalties shall be at the following

rates, determined on a Licensed Product-by-Licensed Product basis:

 

(a)           [***] of the first [***] in aggregate Net Sales

of Licensed Product in each calendar year;

 

14

 

(b)           [***] of Net Sales of Licensed Product over

[***]

up to [***]

in each calendar year; and

 

(c)           [***] of 

Net Sales of Licensed Product in excess of [***] in each calendar year.

 

7.3.          Third-Party Royalties.

 

7.3.1.       [***], Celltech shall pay to SGI [***]

any Third-Party royalties owed by SGI to a Third Party pursuant to each Third

Party License Agreement accruing due to the sale of Licensed Product in the

Field in the Territory by Celltech, its Affiliates and Sublicensees (“Third

Party Obligations”). The Third Party Obligations are as follows:  [***]. 

To the extent Third Party Obligations accrue due to the sale of Licensed

Product, Celltech shall be responsible for such royalties based on the

following schedule:

 

(a)           [***];

 

(b)           [***]

 

(c)           [***];

 

provided, that SGI shall not be obligated to pay any

Third Party Obligations hereunder in excess of [***].

 

7.3.2        [***]

 

7.4.          Milestone Payments.

 

As additional

consideration for the licenses granted to Celltech hereunder, Celltech shall

pay to SGI the following milestone payments on Licensed Product within [***]

of each occurrence of each milestone event set forth below:

 

(a)           Upon [***];

 

(b)           Upon [***];

 

(c)           Upon [***];

 

(d)           Upon [***]; and

 

(e)           Upon [***].

 

Celltech will only be required to pay each of the

above milestones to SGI for the [***] Licensed Product associated with each

Exclusive Antigen to complete the milestone event.

 

15

 

7.5           Third

Party Milestone Payments.

 

7.5.1        SGI shall be responsible for [***].  SGI and Celltech shall each pay [***]

pursuant to 4.2.1 for the development and commercialization of a Licensed

Product under this Agreement.  The

milestones owed by SGI under the [***] that may be applicable to Licensed

Products are as follows:

 

(a)           [***] upon [***];

 

(b)           [***] upon [***];

 

(c)           [***] upon [***]; and

 

(d)           [***] upon [***].

 

7.5.2        [***]

 

ARTICLE

8 - ROYALTY REPORTS AND ACCOUNTING

 

8.1.          Reports, Exchange Rates.

 

8.1.1.       During the Royalty Term, Celltech shall

furnish to SGI, with respect to each Calendar Quarter following the First

Commercial Sale, a written report showing on a consolidated basis in reasonably

specific detail and on a country-by-country basis, (a) the gross sales of

Licensed Products sold by Celltech, its Affiliates and its Sublicensees in the

Territory during the corresponding Calendar Quarter and the calculation of Net

Sales from such gross sales; (b) the royalties payable in U.S. dollars, if

any, which shall have accrued hereunder based upon Net Sales of Licensed

Products; (c) the withholding taxes, if any, required by law to be

deducted in respect of such royalties; (d) the dates of the First

Commercial Sale of each Licensed Product in each country in the Territory if it

has occurred during the corresponding Calendar Quarter; and (e) the

exchange rates (as determined pursuant to Section 8.1.3 herein) used in determining

the royalty amount expressed in U.S. dollars (collectively, “Reports”).

 

8.1.2.       Reports shall be due on the [***]

following the close of each Calendar Quarter. 

Celltech shall keep complete and accurate records in sufficient detail

to properly reflect all gross sales and Net Sales and to enable the royalties

payable hereunder to be determined.

 

8.1.3.       With respect to sales (if any) of

Licensed Products invoiced in U.S. dollars, the gross sales, Net Sales, and

royalties payable shall be expressed in U.S. dollars.  With respect to sales of Licensed Products invoiced in a currency

other than U.S. dollars, the gross sales, Net Sales and royalties payable shall

be expressed in the currency of the invoice issued by the Party making the sale

together with the U.S. dollars equivalent of the royalty payable, calculated

using [***].

 

16

 

8.2.          Audits.

 

8.2.1.       Upon the written request of SGI and not

more than once in each calendar year, Celltech shall permit an independent

certified public accounting firm of internationally recognized standing,

selected by SGI and reasonably acceptable to Celltech, at SGI’s expense, to

have access during normal business hours to such of the records of Celltech and

its Affiliates as may be reasonably necessary to verify the accuracy of the

Reports hereunder for any year ending not more than [***] prior to the date of

such request.  The accounting firm shall

disclose to SGI only whether the records are correct or not and the specific

details concerning any discrepancies. 

No other information shall be shared.

 

8.2.2.       If such accounting firm concludes that

additional royalties were owed during such period, Celltech shall pay the

additional royalties within [***] of the date SGI delivers to Celltech

such accounting firm’s written report so concluding.  The fees charged by such accounting firm shall be paid by SGI; provided,

however, if the audit discloses that the royalties payable by Celltech

for the audited period are more than [***] of the royalties actually paid for

such period, then Celltech shall pay the reasonable fees charged by such

accounting firm.

 

8.2.3        Upon the expiration of [***]

following the end of any calendar year, the calculation of royalties payable

with respect to such year shall be binding and conclusive upon SGI, and

Celltech, its Affiliates and Sublicensees shall be released from any liability

or accountability with respect to royalties for such year.

 

8.3.          Confidential Financial Information.

 

SGI shall treat all

financial information subject to review under this Article 8 or under any

sublicense agreement as Confidential Information of Celltech, and shall cause

its accounting firm to retain all such financial information in confidence.

 

ARTICLE

9 - PAYMENTS.  LATE PAYMENTS

 

9.1.          Payment Terms.

 

Royalties shown to have

accrued by each Report provided for under Article 8 of this Agreement shall be

due on the date such Report is due. 

Payment of royalties in whole or in part may be made in advance of such

due date.  Past due payments shall

accrue interest at a rate of [***] per annum, or if less, the maximum

applicable rate permitted by law, unless occurring as a result of an event the

Parties agree constitutes an Event of Force Majeure or as a result of a good

faith dispute between the Parties regarding performance or breach of their

obligations hereunder.

 

9.2.          Payment Method.

 

All payments by Celltech to SGI under

this Agreement shall be paid in U.S. dollars, and all such payments shall be

made by bank wire transfer in immediately available funds to the bank account

designated by SGI in writing.

 

17

 

9.3.          Exchange Control.

 

If at any time legal

restrictions prevent the prompt remittance of part or all royalties with

respect to any country in the Territory where Licensed Product is sold, payment

shall be made through such lawful means or method as the Parties reasonably

shall determine.

 

9.4.          Withholding Taxes.

 

Except as otherwise

provided below, all amounts owing from Celltech to SGI under this Agreement are

gross amounts.  Celltech shall be

entitled to deduct the amount of any withholding taxes payable or required to

be withheld by Celltech, its Affiliates or Sublicensees, to the extent

Celltech, its Affiliates or Sublicensees pay to the appropriate governmental

authority on behalf of SGI such taxes. 

Celltech shall use Commercially Reasonable Efforts to minimize any such

taxes, levies or charges required to be withheld on behalf of SGI by Celltech,

its Affiliates or Sublicensees. 

Celltech shall promptly deliver to SGI 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

10 - CONFIDENTIALITY

 

10.1.        Non-Disclosure Obligations.

 

Except as otherwise

provided in this Article 10, during the Term and for a period of [***]

thereafter, each Party shall maintain in confidence, and use only for purposes

as expressly authorized and contemplated by this Agreement, all confidential or

proprietary information, data, documents or other materials supplied by the

other Party under this Agreement and marked or otherwise identified as “Confidential”.  For purposes of this Agreement, information

and data described above shall be hereinafter referred to as “Confidential

Information.”  Each Party shall use

at least the same standard of care as it uses to protect its own Confidential

Information to ensure that its and its Affiliates’ and its sublicensees (or

prospective sublicensees) and their employees, agents, consultants and clinical

investigators only make use of Confidential Information for purposes as

expressly authorized and contemplated by this Agreement and do not disclose or

make any unauthorized use of such Confidential Information.

 

10.2.        Permitted Disclosures.

 

Notwithstanding the foregoing, the provisions of

Section 10.1 hereof shall not apply to information, documents or materials that

the disclosing Party can conclusively establish:

 

(a)           have become published or otherwise

entered the public domain other than by acts of the disclosing Party or its

Affiliates in contravention of this Agreement;

 

(b)           are permitted to be disclosed by

prior consent of the other Party;

 

18

 

(c)           have become known to the disclosing

Party by a Third-Party, provided such Confidential Information was not obtained

by such Third-Party directly or indirectly from the other Party under this

Agreement on a confidential basis;

 

(d)           prior to disclosure under the

Agreement, was already in the possession of the disclosing Party, its

Affiliates or Sublicensees, provided such Confidential Information was not

obtained directly or indirectly from the other Party under this Agreement;

 

(e)           is disclosed in a press release

agreed to by both Parties hereto, which agreement shall not be unreasonably

withheld; and

 

(f)            are required to be disclosed by the

disclosing Party to comply with any applicable law, regulation or court order,

or are reasonably necessary to obtain patents, copyrights or authorizations to

conduct clinical trials with, and to commercially market Licensed Product(s),

provided that the disclosing Party shall provide prior notice of such

disclosure to the other Party and take reasonable and lawful actions to avoid

or minimize the degree of disclosure.

 

10.3.        Terms of the Agreement.

 

Celltech and SGI shall

not disclose any terms or conditions of this Agreement to any Third-Party

without the prior written consent of the other Party, except as required by applicable

laws, regulations or a court order (and in any such case the disclosing Party

shall provide notice to the other Party and take reasonable and lawful actions

to avoid or minimize the degree of such disclosures).  However, Celltech may disclose the terms and conditions of this

Agreement to potential licensees.

 

10.4.        Press Releases and Other Disclosures to Third-Parties.

 

Neither SGI nor Celltech

will, without the prior written consent of the other, issue any press release

or make any other public announcement or furnish any statement to any Third

Party (other than either Parties’ respective Affiliates) concerning the

existence of this Agreement, its terms and the transactions contemplated

thereby, except for (i) general statement referring to the existence of this

Agreement, and identity of the Parties but no other details, (ii) disclosures

made in compliance with Sections 10.2 and 10.3 hereof, (iii) attorneys,

consultants, and accountants retained to represent them in connection with the

transactions contemplated hereby and (iv) occasional, brief comments by

the respective officers of Celltech and SGI consistent with such guidelines for

public statements as may be mutually agreed by Celltech and SGI made in

connection with routine interviews with analysts or members of the financial

press.

 

10.5.        Publications Regarding Results of the Research Program.

 

No Party may publish,

present or announce results of the Research Program either orally or in writing

(the “Publication”) without obtaining the written consent of the other

Party, provided that either Party may release a Publication that generally sets

forth information concerning their research programs.  The other Party shall have [***] from receipt of the 

 

19

 

proposed

Publication to provide comments and/or proposed changes to the disclosing

Party.  The disclosing Party shall take

into account the comments and/or proposed changes made by the other Party on

any Publication and shall agree to have employees or others acting on behalf of

the other Party be mentioned as co-authors on any Publication describing

results to which such persons have contributed.  If the other Party reasonably determines the Publication would

amount to the public disclosure of such Party’s Confidential Information and/or

of a patentable invention upon which a patent application may be filed prior to

any such disclosure, submission of the concerned Publication to Third-Parties

shall be delayed for a [***] period from the date of said notice,

or for such longer period which may appear necessary for appropriately deleting

Confidential Information from the proposed Publication and/or drafting and

filing a patent application covering such invention.

 

ARTICLE

11 - INVENTIONS AND PATENTS 

 

11.1.        Ownership of Inventions.

 

11.1.1.     Disclosure of Program Inventions.  Each Party shall promptly disclose to the

other Party the making, conception or reduction to practice of any Program

Inventions.

 

11.1.2  Ownership of Program

Inventions.  All right,

title and interest in all Program Inventions that are discovered, made or

conceived as part of the activities conducted pursuant to this Agreement during

the Research Program Term shall be owned as follows:

 

a)     [***]

shall own all Program Inventions that are invented solely by one or more

employees, agents or consultants of [***];

 

b)    [***]

shall own all Program Inventions that are invented solely by one or more

employees, agents or consultants of [***]; and

 

c)     Subject to

Section 11.1.3, [***] shall [***] own all Program Inventions that are

invented by one or more of its employees, agents or consultants, together with

one or more employees, agents or consultants of the other.

 

For

the purposes of determining ownership of Program Inventions under this Section

11.1.2, inventorship shall be determined under U.S. patent law.  In the event of a dispute regarding

inventorship, the JDC shall engage a Third Party patent attorney jointly

selected by the Parties to resolve such dispute.

 

11.1.3      Ownership of Drug Conjugate Technology,

Antibodies, Research Antigens and Exclusive Antigens.

 

For

all Program Inventions set forth under Section 11.1.2.(c):

 

(a)           As between Celltech and

SGI, [***]

shall have and retain all right, title and interest in and to any and all Program

Inventions directly relating to [***] developed as a direct result of the

Research Program, and to the extent that any such [***] within Program 

 

20

 

Inventions shall have been invented by [***]

and is owned by [***]; [***], subject to retaining an [***]

hereto during the Term for all [***] licensed under this Agreement.

 

(b)           As between SGI and Celltech, [***]

shall have and retain all right, title and interest in and to any and all

Program Inventions directly relating to [***] developed as a direct result of the

Research Program, and to the extent that any such [***] within Program

Inventions shall have been invented by [***] and are owned by [***],  [***].

 

11.1.4      Assignment by Employees, Agents or

Independent Contractors.  Celltech

and SGI agree that all employees acting on its behalf in performing its

obligations under this Agreement shall be obligated to assign to such Party all

Program Inventions made or conceived by such employee as part of the activities

conducted under this Agreement. 

Celltech and SGI agree that in the case of non-employees working on its

behalf, that such Party shall endeavor to obtain an assignment of all Program

Inventions made by such non-employees.

 

11.2.        Patent Prosecution and Maintenance.

 

11.2.1.  SGI Owned Patents.  SGI shall be responsible for and shall

control the preparation, filing, prosecution, grant and maintenance of all SGI

Owned Patents and shall keep Celltech currently advised as to the status of the

same.  SGI shall, at its sole expense,

prepare, file, prosecute and maintain such SGI Owned Patents in good faith

consistent with its customary patent policy and its reasonable business

judgment, and shall consider in good faith the interests of Celltech in so

doing.  If SGI elects to abandon a SGI

Owned Patent and/or terminate its obligations to file, prosecute or maintain

any such patent, then it shall notify Celltech in writing of its election and

provide Celltech a [***] period from receipt of such written

notification in which to respond to such notice before abandoning and/or

discontinuing its obligations to file, prosecute or maintain such patent.  If Celltech responds within such [***]

response period that it wishes to file, prosecute or maintain such patent, then SGI shall promptly transfer and assign such

patent to Celltech

and shall continue to file, prosecute and maintain such patent until such

transfer and assignment becomes effective. 

Celltech shall reimburse SGI for all reasonable costs associated with

filing, prosecuting or maintaining such patent from date it notifies SGI it

wishes to assume responsibility for the patent(s) until the transfer and

assignment becomes effective.  Upon such

transfer and assignment becoming effective, SGI shall transfer its files to

Celltech and shall reasonably assist Celltech in the filing, prosecuting and

maintaining of such patent.

 

11.2.2.  Celltech Patents.  Subject to Section 11.2.1 and 11.2.3,

Celltech shall be responsible for and shall control the preparation, filing, prosecution,

grant and maintenance, of all Celltech Patents other than the Program

Patents.  Celltech shall, at its sole

expense, prepare, file, prosecute and maintain such Patent Rights in good faith

consistent with its customary patent policy and its reasonable business

judgment.

 

11.2.3                  Program

Inventions.

 

(a)           SGI shall have the sole right, but

not the obligation, to prepare, file, prosecute, and maintain, at SGI’s

expense, any patent(s) on Program Inventions set forth in 

 

21

 

Section 11.1.3(a). 

SGI shall keep Celltech currently advised as to the status of all

patent(s) with respect to the Program Inventions set forth in Section 11.1.3(a)

and shall supply Celltech promptly with copies of all patents, patent

applications, substantive patent office actions, substantive responses received

or filed in connection with such applications. 

In the event that SGI elects not to file for patent protection or elects

not to prosecute or maintain a patent(s) on the Program Inventions set forth in

Section 11.1.3(a), it shall notify Celltech in writing of such decision and

provide Celltech a [***] period from receipt of such written

notification in which to respond to such notice before abandoning and/or

discontinuing to file, prosecute or maintain such patent(s).  Celltech shall have the right, but not the

obligation to assume the responsibility therefore, at its own cost and

expense.  If Celltech responds within

such [***]

response period that it wishes to file, prosecute or maintain such patent(s),

then SGI shall promptly transfer and assign all right, title and interest in

and to such patent(s), including all files, to Celltech and shall continue to

file, prosecute and maintain such patent(s) until such transfer and assignment

become effective.  Celltech shall

reimburse SGI for all reasonable costs associated with filing, prosecuting or

maintaining such Patent(s) from date it notifies SGI it wishes to assume

responsibility for the patent(s) until the transfer and assignment becomes

effective.  Upon such transfer and

assignment becoming effective, SGI shall transfer its files to Celltech and

shall reasonably assist Celltech in the filing, prosecuting and maintaining of

such patent(s).

 

(b)           Celltech shall have the sole right,

but not the obligation to prepare, file, prosecute, and maintain, at Celltech’s

expense, any patent(s) on Program Inventions set forth in Section 11.1.3(b).

 

(c)           For all patents other than as set

forth in Sections 11.2.3(a) and (b), Celltech shall have the sole right, but

not the obligation to prepare, file, prosecute, and maintain, at both Celltech

and SGI’s expense, patent(s) on Program Inventions.  Celltech shall keep SGI currently advised as to the status of all

such patent(s) and shall supply SGI promptly with copies of all patents, patent

applications, substantive patent office actions, substantive responses received

or filed in connection with such applications. 

In the event that Celltech elects not to file for patent protection or

elects not to prosecute or maintain such patent(s), it shall notify SGI in

writing of such decision and provide SGI a [***] period from receipt of such written

notification in which to respond to such notice before abandoning and/or

discontinuing to file, prosecute or maintain such patent(s).  SGI shall have the right, but not the

obligation to assume the responsibility therefore, at its own cost and

expense.  If SGI responds within such [***]

response period that it wishes to file, prosecute or maintain such patent(s), then

Celltech shall promptly transfer and assign all its right, title and interest

in and to such patent(s) to SGI and shall continue to file, prosecute and

maintain such patent(s) until such transfer and assignment become effective.  SGI shall reimburse Celltech for all

reasonable costs associated with filing, prosecuting or maintaining such

Patent(s) from date it notifies Celltech it wishes to assume responsibility for

such patent(s) until the transfer and assignment becomes effective.  Upon such transfer and assignment becoming

effective, Celltech shall transfer its files to SGI and shall reasonably assist

SGI in the filing, prosecuting and maintaining of such patent(s).

 

11.2.4      Cooperation.  The Parties shall at all times fully

cooperate in order to reasonably implement the foregoing provisions.

 

22

 

11.3.        Enforcement of 

Patents.

 

11.3.1      SGI Patents.  Subject to Section 11.3.3, SGI shall have

the right, at its sole expense, to determine the appropriate course of action

to enforce the SGI Patents or otherwise abate the infringement thereof, to take

(or refrain from taking) appropriate action to enforce the SGI Patents, to

control any litigation or other enforcement action and to enter into, or

permit, the settlement of any such litigation or other enforcement action with

respect to the SGI Patents, and in good faith shall consider the interests of

Celltech in so doing.  All monies

recovered upon the final judgment or settlement of any such suit to enforce any

SGI Patents shall be retained by SGI; provided, however, that to

the extent that any award is attributable to loss of sales of a Licensed

Product, the Parties shall negotiate in good faith an appropriate allocation of

such award to reflect the economic interests of the Parties under this

Agreement with respect to such Licensed Product.  Celltech and SGI shall fully cooperate with each other in any

action to enforce the SGI Patents.  If

SGI fails to take any action to enforce the SGI Patents or control any litigation

with respect to the SGI Patents within a period of [***] after reasonable notice

of the infringement of the SGI Patents, then Celltech shall have the right to

bring and control any such action by counsel of its own choice, and in such

case, all monies recovered upon the final judgment or settlement of any such

suit to enforce any SGI Patents shall be retained by Celltech.  In such a case, SGI shall cooperate fully

with Celltech, at Celltech’s expense, in its efforts to enforce the SGI

Patents, including being joined as a party to such action if necessary.

 

11.3.2.     Celltech Patents.  Subject to Section 11.3.3, Celltech shall

have the right, at its sole expense, to determine the appropriate course of

action to enforce the Celltech Patents or otherwise abate the infringement

thereof, to take (or refrain from taking) appropriate action to enforce the

Celltech Patents, to control any litigation or other enforcement action and to

enter into, or permit, the settlement of any such litigation or other enforcement

action with respect to the Celltech Patents. 

All monies recovered upon the final judgment or settlement of any such

suit to enforce any Celltech Patents shall be retained by Celltech.  SGI and Celltech shall fully cooperate with

each other in any action to enforce the Celltech Patents.

 

11.3.3      Program Inventions.

 

(a)           Enforcement.  In the event that either Party becomes aware

that any patent covering a Program Invention is infringed or misappropriated by

a Third Party or is subject to a declaratory judgment action, the Party

becoming aware of such event shall promptly notify the other Party.  The Party with the right to prepare, file,

prosecute, and maintain a patent(s) with respect to such Program Invention, as

set forth in Sections 11.2.3(a)-(c), and which is then maintaining said

patent(s), in its sole discretion, shall have the right and shall be solely

responsible for pursuing any action for infringement or misappropriation

against Third Parties or defending any declaratory judgment action relating

thereto.  To the extent that the Program

Invention being pursued is a Program Invention as set forth in Section

11.2.3(c) or an SGI Patent covering a Licensed Product, the Party not having

the right to prepare, file, prosecute, and maintain a Patent(s) with respect to

such Program Invention and which is not then actually maintaining said

Patent(s) shall have the option to participate in such action at its sole

expense.

 

23

 

(b)           Failure to Enforce. If

the Party with the right to pursue any action for infringement or

misappropriation against Third Parties or defending any declaratory judgment

action as set forth in Section 11.3.3(a) above fails to pursue or defend such

action relating to a Program Invention within [***] written notice by the

other Party of its desire to proceed, then the other Party shall have the

option to pursue or defend such actions; provided, that such Party pays

all costs and expenses related to the same, and keeps the other Party reasonably

informed of its progress and provides copies of any documents related to such

proceedings and reasonable notice of all proceedings relating to same. A Party

electing to exercise its option to proceed under this Section 11.3.3(b) shall

notify the other Party of its decision to exercise its option as soon as

possible.

 

(c)           Division

of Recoveries.  Any recovery of damages received in

connection with a suit (including by way of settlement) under Section 11.3.3(a)

involving a Program Invention set forth in Section 11.2.3(a) or (b) shall be

retained by the Party that owns said Program Invention. Any recovery of damages

received in connection with a suit (including by way of settlement) under

Section 11.3.3(a) involving a Program Invention set forth in Section 11.2.3(c)

brought by SGI or Celltech shall be retained by the Party that conducted such

suit (other than the assistance that each party is required to provide to the

litigating party pursuant to Section 11.5 and for which it has been

reimbursed).  Any recovery of damages

received in connection with a suit under Section 11.3.3(a) (including by way of

settlement) jointly brought by SGI and Celltech (other than the assistance that

each party is required to provide to the litigating party pursuant to Section 11.5

and for which it has been reimbursed) shall be used first to reimburse the

Parties, on a pro-rata basis, for all expenses actually incurred in such suit,

and any remainder shall be divided equally between Celltech and SGI after

payment of any obligations to any Third Party in relation to any recovery;

provided, however, that to the extent that any award recovered under this

section 11.3.3(c) is attributable to loss of sales of a Licensed Product, the

Parties shall negotiate in good faith an appropriate allocation of such award

to reflect the economic interests of the Parties under this Agreement with

respect to such Licensed Product.

 

11.4.        Prior Patent Rights.  Notwithstanding anything to the contrary in

this Agreement, with respect to any SGI Patents that are subject to any Third

Party License Agreement, the rights and obligations of the Parties under

Section 11.2 and 11.3 shall be subject to such Third Party rights to

participate in and control prosecution, maintenance and enforcement of such

Third Party Patents in accordance with the terms and conditions of the

applicable Third Party License Agreement.

 

11.5         Cooperation.  In any claim, suit or proceeding under Section 11.3.3 which

either Party may become involved, the other Party shall, at the request and

expense of the Party initiating or defending the claim, suit or proceeding,

cooperate and assist such Party in all reasonable respects, including having

its employees testify when requested and making available relevant records,

papers, information, specimens and the like.

 

24

 

ARTICLE

12 - INFRINGEMENT ACTIONS BY THIRD-PARTIES 

 

12.1        Infringement

Claims by Third Parties.

 

(a)           Third Party Claims.  If the making, having made, developing,

using, distributing for sale, promoting, marketing, offering for sale, selling,

having sold, importing or exporting of any Licensed Products results in an

assertion or a claim against a Party of infringement or misappropriation of any

Third Party’s intellectual property right due to the use of SGI Technology

(“Third Party Claim”), the Party first having notice of a Third Party Claim

shall promptly notify the other Party in writing specifying in reasonable

detail the alleged grounds or basis for the Third Party Claim.

 

(b)           Response to Third Party Claims.  In the event of a Third Party Claim, the

Parties agree to respond to and/or defend against the Third Party Claim as

follows:

 

(i)  Each

Party shall use Commercially Reasonable Efforts in responding to and defending

against such Third Party Claim, and will render such reasonable assistance as

the other Party may request, at the requesting Party’s expense, in defending

such Third Party Claim.

 

(ii)  Neither

Party shall settle any Third Party Claim in a manner that is prejudicial to the

other Party without the other Party’s prior written consent.

 

(iii)  Each

Party shall be responsible for its own fees and costs of attorneys and

consultants, together with court costs, incurred in defending against the Third

Party Claim.

 

(iv)  Each

party shall keep the other Party reasonably informed of the status of the suit

under this Article 12.

 

(c)           Third

Party Royalties.  If

Celltech, its respective Affiliates or Sublicensees, by court order, settlement

or other agreement entered into in good faith, is required to pay royalties

and/or damages to any Third Parties in connection with the disposition of a

Third Party Claim, Celltech, its Affiliates or Sublicensees, shall be entitled

to reduce the royalties payable to SGI hereunder by [***]; provided that: (1)

such Third Party Claim is directly related to SGI Technology and (2) such

reductions reduce by no more than [***] the royalties otherwise due to SGI

hereunder after taking account of Third Party royalties under Section 7.3.

 

ARTICLE

13 - REGULATORY ASSISTANCE

 

Should Celltech develop

an ADC for clinical development, SGI will provide at Celltech’s request,

technical information required for Celltech to file for and obtain permission

to commence human clinical trials.  This

information will include, as available, Chemistry Manufacturing and Controls

documentation, other toxicity and safety data, access to any drug master files

on record with the FDA and any other relevant materials.  Celltech shall reimburse SGI for any

out-of-pocket and FTE costs incurred by SGI in providing such information, as

set forth in Section 3.4(c).

 

25

 

ARTICLE

14 - REPRESENTATIONS AND WARRANTIES

 

14.1.        Representations and Warranties.

 

(a)           This Agreement has been duly executed

and delivered by each Party and constitutes the valid and binding obligation of

each Party, enforceable against such Party in accordance with its terms, except

as enforceability may be limited by bankruptcy, fraudulent conveyance,

insolvency, reorganization, moratorium or other laws relating to or affecting

creditors’ rights generally and by general equitable principals.  The execution, delivery and performance of

this Agreement has been duly authorized by all necessary action on the part of

each Party, its officers and directors.

 

(b)           The execution, delivery and

performance of the Agreement by each Party does not conflict with any

agreement, instrument or understanding, oral or written, to which it is a party

or by which it is bound, nor violate any law or regulation of any court,

governmental body or administrative or other agency having jurisdiction over

it.

 

(c)           SGI has not, and during the term of

the Agreement will not, grant any right to any Third-Party relating to any SGI

Technology which would conflict with the rights granted to Celltech hereunder.

 

(d)           SGI represents and warrants that it

has the right to grant the licenses granted herein and that it has no knowledge

of any rights of any Third-Parties that would interfere with the practice of

the SGI Technology.

 

(e)           SGI represents and warrants that as

of the Effective Date, Schedules A, B, C and D are accurate and complete in all

material respects.

 

(f)            SGI represents and warrants that as

of the Effective Date it has complied with all requirements under [***].

 

(g)           SGI represents and warrants that as

of the Effective Date it is not in breach of any of the Third Party License

Agreements and shall use Commercially Reasonable Efforts to continue to comply

with the terms of said Third Party License Agreements and any New Third Party

License Agreements.

 

14.2         Performance by Affiliates.

 

The Parties recognize

that each may perform some or all of its obligations under this Agreement

through Affiliates, provided, however, that each Party shall

remain responsible and be guarantor of the performance by its Affiliates and

shall cause its Affiliates to comply with the provisions of this Agreement in

connection with such performance.

 

26

 

ARTICLE

15 - TERM AND TERMINATION

 

15.1.        Term.

 

15.1.1      Unless earlier terminated pursuant to this

Article 15, the term of this Agreement shall commence on the Effective Date and

shall remain in full force and effect until the expiration of the Royalty Term

(“Term”).

 

15.1.2      Notwithstanding Section 15.1, this

Agreement shall terminate upon the conclusion of the Research Program Term if

Celltech has not exercised an Option as set forth in Section 4.1.2.

 

15.2.        Termination by Celltech.

 

Celltech shall have the

right, at its sole discretion at any time after [***], to terminate this

Agreement by providing [***] prior written notice to SGI of such

termination.

 

15.3.        Discontinuance of Development Efforts by Celltech.

 

Celltech shall promptly

give SGI notice if Celltech intends to abandon the commercial development of

any Exclusive Antigen or Antibody thereto whereupon any Exclusive License with

respect to such Exclusive Antigen shall automatically terminate and all rights

related to the use of SGI Technology in connection with the Exclusive Antigen

shall revert back to SGI, provided, however, that Celltech shall retain any and

all rights in and to [***] and any and all rights granted

pursuant to [***].

 

15.4.        Termination for Cause.

 

Either Party may

terminate this Agreement for material breach by the other Party (the “Breaching

Party”) of any material provision of the Agreement, if the Breaching Party

has not cured such breach within [***] after notice thereof; provided,

however, that termination under this Section 15.4 shall be automatically

stayed for the duration of any dispute resolution proceeding initiated under

Section 21.3; and provided further, however, that in the event Celltech fails

to timely pay SGI any undisputed annual exclusive license fees, royalty

payments and milestone payments set forth in Article 7, Research Program Fee(s)

set forth in Section 3.4 or Option Exercise Fee(s) set forth in Section 7.1.1,

Celltech shall have only [***] from said notice to cure such breach.

 

15.5.        Termination Upon Insolvency.

 

Either Party may terminate

this Agreement if, at any time, the other Party shall file in any court or

agency pursuant to any statute or regulation of any state, country or

jurisdiction, a petition in bankruptcy or insolvency or for reorganization or

for an arrangement or for the appointment of a receiver or trustee of that

Party or of its assets, or if such other Party proposes a written agreement of

composition or extension of its debts, or if such other Party shall be served 

 

27

 

with an

involuntary petition against it, filed in any insolvency proceeding, and such

petition shall not be dismissed within [***] after the filing thereof, or if such

other Party shall propose or be a party to any dissolution or liquidation, or

if such other Party shall make an assignment for the benefit of its creditors.

 

15.6.        Termination of Third Party License Agreements.  All rights and obligations under any Third

Party License Agreements  sublicensed to

Celltech under this Agreement shall terminate upon [***] prior written notice by

SGI if Celltech breaches any material provision of such  Third Party License Agreement and fails to

cure such breach within such [***] period; provided, however such cure

period may be extended by consent of the Parties; All rights and obligations

under the [***]

shall automatically terminate if Celltech is utilizing any [***]

and fails to maintain the insurance required under the Third Party License

Agreement with [***] or as otherwise agreed with [***].  All rights and obligations under any Third

Party License Agreement sublicensed to Celltech under this Agreement shall

terminate upon termination of such Third Party License Agreements.

 

15.7.        Effect of Expiration and Termination.

 

15.7.1.      Except where explicitly provided within

this Agreement, termination of this Agreement for any reason, or expiration of

this Agreement, will not affect any: (i) obligations, including payment of any

royalties or other sums which have accrued as of the date of termination or

expiration, and (ii) rights and obligations which, from the context thereof,

are intended to survive termination or expiration of this Agreement, including

provisions of Articles 10, 11, 12, 16 and 21, and Sections 8.2, 8.3 and

15.7, which shall survive the expiration or termination of the Agreement.  Notwithstanding the foregoing, all licenses

granted by SGI to Celltech hereunder, including all Exclusive Licenses, and all

sublicenses granted by Celltech hereunder, will immediately terminate upon

termination of this Agreement pursuant to Sections 15.2, 15.4 or 15.5.

 

15.7.2.      Upon the expiration of the Royalty Term

for each Exclusive Antigen pursuant to Section 15.1, SGI hereby grants Celltech

a royalty-free, perpetual, worldwide, license to use the SGI Technology for

that Exclusive Antigen.

 

15.8         [***]

Notification.  SGI

shall provide Celltech with written notice of any termination of the [***]

at least [***]

prior to the effective date of such termination.

 

ARTICLE

16 - INDEMNITY.

 

16.1.        Direct Indemnity.

 

16.1.1.      Each Party shall indemnify and hold

harmless, and hereby forever releases and discharges the other Party from and

against all Third Party claims, demands, liabilities, damages and expenses,

including attorneys’ fees and costs (collectively, the “Liabilities”)

arising out of (i) the breach of any material provision of this Agreement by

the indemnifying Party (or the inaccuracy of any representation or warranty

made by such Party in this Agreement), except 

 

28

 

to the extent such Liabilities resulted from the gross

negligence, recklessness or willful misconduct of the other Party; or (ii) the

gross negligence, recklessness or willful misconduct of the indemnifying Party.

 

16.1.2.      Celltech shall indemnify and hold

harmless, and hereby forever releases and discharges SGI from and against all

Liabilities suffered or incurred arising out of any Third-Party claims for

personal injury, death or disability or any Licensed Product recall to the

extent caused by (a) any failure to test for or provide adequate warnings of

adverse side effects to the extent such failure arises out of acts or omissions

in connection with the preclinical or clinical testing of any Licensed Product,

(b) any manufacturing defect in any Licensed Product or (c) any other act or

omission of Celltech in connection with its obligations under this Agreement;

except in each case to the extent such Liabilities resulted from the gross

negligence, recklessness or willful misconduct by SGI or the inaccuracy of any

representation or warranty made by SGI in this Agreement.

 

16.1.3.      SGI shall indemnify and hold harmless, and

hereby forever releases and discharges Celltech from and against all

Liabilities suffered or incurred arising out of any Third-Party claims for

personal injury, death or disability or any Licensed Product recall to the

extent caused by (a) any SGI Technology incorporated in a Licensed Product

other than any Celltech Technology, (b) any manufacturing defect in any SGI

Technology, or (c) any other act or omission of SGI in connection with its

obligations under this Agreement; except in each case to the extent such

Liabilities resulted from the gross negligence, recklessness or willful

misconduct by Celltech or the inaccuracy of any representation or warranty made

by Celltech in this Agreement.

 

16.2.        Procedure.

 

A Party (the “Indemnitee”)

that intends to claim indemnification under this Article 16 shall promptly

provide written notice to the other Party (the “Indemnitor”) of any

Liability or action in respect of which the Indemnitee intends to claim such

indemnification, which notice shall include a reasonable identification of the

alleged facts giving rise to such Liability, and 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 representation of such Indemnitee by

the counsel retained by the Indemnitor would be inappropriate due to actual or

potential differing interests between such Indemnitee and any other Party

represented by such counsel in such proceedings.  Any settlement of a Liability for which any Indemnitee seeks to

be reimbursed, indemnified, defended or held harmless under this Article 16

shall be subject to prior consent of such Indemnitee, which consent shall not

be withheld unreasonably.

 

ARTICLE

17- FORCE MAJEURE

 

No Party (or any of its

Affiliates) shall be held liable or responsible to the other Party (or any of

its Affiliates) nor be deemed to have defaulted under or breached the Agreement

for failure or delay in fulfilling or performing any term of the Agreement when

such failure or delay 

 

29

 

is caused by or

results from causes beyond the reasonable control of the affected Party (or any

of its Affiliates) including fire, floods, embargoes, war, acts of war (whether

war be declared or not), insurrections, riots, civil commotions, acts of God or

acts, or omissions or delays in acting by any governmental authority

(collectively, “Events of Force Majeure”); provided, however,

that the affected Party shall exert all reasonable efforts to eliminate, cure

or overcome any such Event of Force Majeure and to resume performance of its

covenants with all possible speed. 

Notwithstanding the foregoing, to the extent that an Event of Force

Majeure continues for a period in excess of [***], the affected Party

shall promptly notify in writing the other Party of such Event of Force Majeure

and within [***] of the other Party’s receipt of such notice, the Parties

agree to negotiate in good faith either (i) to resolve the Event of Force

Majeure, if possible, (ii) to extend by mutual agreement the time period to

resolve, eliminate, cure or overcome such Event of Force Majeure, (iii) to

amend this Agreement to the extent reasonably possible, or (iv) to terminate

this Agreement.

 

ARTICLE

18 - ASSIGNMENT

 

This Agreement may not be

assigned or otherwise transferred, nor, except as expressly provided hereunder,

may any right or obligations hereunder be assigned or transferred to any

Third-Party by either Party without the consent of the other Party, such

consent not to be unreasonably withheld; provided, however, that

either Party may, without such consent but with notification, assign this

Agreement and its rights and obligations hereunder to any of its Affiliates or

in connection with the transfer or sale of all or substantially all of its

business, or in the event of its merger or consolidation (such merger or

consolidation shall be hereinafter referred to as a “Change in Control”).  Any permitted assignee shall assume all

rights and obligations of its assignor under this Agreement[***].

 

ARTICLE

19 - SEVERABILITY

 

Each Party hereby agrees

that it does not intend to violate any public policy, statutory or common laws,

rules, regulations, treaty or decision of any government agency or executive

body thereof of any country or community or association of countries.  Should one or more provisions of this

Agreement be or become invalid, the Parties hereto shall substitute, by mutual

consent, valid provisions for such invalid provisions which valid provisions in

their economic effect are sufficiently similar to the invalid provisions that

it can be reasonably assumed that the Parties would have entered into this

Agreement with such provisions.

 

In case such provisions

cannot be agreed upon, the invalidity of one or several provisions of this

Agreement shall not affect the validity of this Agreement as a whole, unless

the invalid provisions are of such essential importance to this Agreement that

it is to be reasonably assumed that the Parties would not have entered into

this Agreement without the invalid provisions.

 

ARTICLE

20 - INSURANCE

 

20.1         During the term of this Agreement and thereafter for the

period of time required below, each Party shall maintain [***] and  [***].

 

30

 

20.2         Prior

to [***], Celltech shall either:  (i)

obtain and maintain on an ongoing basis [***] (which amount shall be increased

to [***] if [***] or (ii) [***], and, at SGI’s request ( but not more than

annually), Celltech provides [***] or (iii) obtain and maintain such other

insurance as may be agreed by the Parties.

 

ARTICLE

21 - MISCELLANEOUS

 

21.1.        Notices.

 

Any consent, notice or

report required or permitted to be given or made under this Agreement by one of

the Parties hereto to the other shall be in writing, delivered personally or by

facsimile (and promptly confirmed by personal delivery, first class air mail or

courier), first class air mail or courier, postage prepaid (where applicable),

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 address or

in accordance with this Section 21.1 and (except as otherwise provided in this Agreement)

shall be effective upon receipt by the addressee.

 

If to SGI:

Seattle Genetics, Inc.

21823 30th Drive S.E.

Bothell, WA 98021

Attention:  Chief Executive Officer

 

With copy to:

Venture Law Group

4750 Carillon Point

Kirkland, WA  98033

Attention: Sonya F.

Erickson

 

If to Celltech:

Celltech R&D Limited

208 Bath Road

Slough, Berkshire SL1 3WE

United Kingdom

Attention:  Company Secretary

 

21.2.        Applicable Law.

 

The Agreement shall be

governed by and construed in accordance with the laws of the State of New York,

without regard to the conflict of law principles thereof.

 

21.3.        Dispute Resolution.

 

The Parties agree that if

any dispute or disagreement arises between Celltech on the one hand and SGI on

the other in respect of this Agreement, they shall follow the following

procedure in an attempt to resolve the dispute or disagreement.

 

 

31

 

(a)           The Party claiming that such a

dispute exists shall give notice in writing (“Notice of Dispute”) to the

other Party of the nature of the dispute;

 

(b)           Within [***] of receipt of a Notice

of Dispute, a nominee or nominees of Celltech and a nominee or nominees of SGI

shall meet in person and exchange written summaries reflecting, in reasonable

detail, the nature and extent of the dispute, and at this meeting they shall

use their reasonable endeavors to resolve the dispute;

 

(c)           If, within a further period of [***],

the dispute has not been resolved, the President of SGI and the President of

Celltech shall meet at a mutually agreed upon time and location for the purpose

of resolving such dispute;

 

(d)           If, within a further period of [***],

the dispute has not been resolved or if, for any reason, the required meeting

has not been held, then the same shall be submitted by the Parties to

arbitration in Seattle, Washington in accordance with the then-current

commercial arbitration rules of the American Arbitration Association (“AAA”)

except as otherwise provided herein. 

The Parties shall choose, by mutual agreement, one (1) arbitrator within

[***]

of receipt of notice of the intent to arbitrate.  If no arbitrator is appointed within the times herein provided or

any extension of time that is mutually agreed upon, the AAA shall make such

appointment within [***] of such failure.  The judgment rendered by the arbitrator

shall include costs of arbitration, reasonable attorneys’ fees and reasonable

costs for expert and other witnesses. 

Nothing in this Agreement shall be deemed as preventing either Party

from seeking injunctive relief (or any other provisional remedy).  If the issues in dispute involve scientific,

technical or commercial matters, any arbitrator chosen hereunder shall have

educational training and/or industry experience sufficient to demonstrate a

reasonable level of relevant scientific, medical and industry knowledge and

have at least ten (10) years relevant experience.

 

(e)           In the event of a dispute regarding

any payments owing under this Agreement, all undisputed amounts shall be paid

promptly when due and the balance, if any, promptly after resolution of the

dispute.

 

21.4.        Entire Agreement.

 

This Agreement contains

the entire understanding of the Parties with respect to the subject matter

hereof.  All express or implied

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 hereto.

 

21.5.        Independent Contractors.

 

SGI and Celltech each

acknowledge that they shall be independent contractors and that the

relationship between the two Parties shall not constitute a partnership, joint

venture or agency.  Neither SGI nor

Celltech shall have the authority to make any statements, 

 

32

 

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.

 

21.6.        Affiliates

 

Each Party shall cause

its respective Affiliates to comply fully with the provisions of this Agreement

to the extent such provisions specifically relate to, or are intended to

specifically relate to, such Affiliates, as though such Affiliates were

expressly named as joint obligors hereunder.

 

21.7.        Waiver.

 

The waiver by either

Party hereto of any right hereunder or the failure to perform or of a breach by

the other Party shall not be deemed a waiver of any other right hereunder or of

any other breach or failure by said other Party whether of a similar nature or

otherwise.

 

21.8.        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.

 

21.9         Section Headings.  The captions or headings of the sections or

other subdivisions hereof are inserted only as a matter of convenience or for

reference and shall have no effect on the meaning of the provisions hereof.

 

IN WITNESS WHEREOF, the

Parties have executed this Agreement as of the date first set forth above.

 

 

	

   

  	

  SEATTLE GENETICS, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  CELLTECH R&D LIMITED

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
									

 

33Document

EXHIBIT

10i.5

 

This amends the Schedule of Management Parties filed as a schedule to

the Form of Management Agreement filed by the Registrant as Exhibit 10.5 to the

Company’s Annual Report on Form 10-K for the fiscal year ended December 31,

2001.

 

schedule of management parties

 

 

	

  Name

  	

   

  	

  Title

  	

   

  	

  Amount

  	

   

  	

  Date

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Janet M. Dolan

  	

   

  	

  President and Chief Executive Officer

  	

   

  	

  $

  	

  367,500

  	

   

  	

  May 22, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  James H. Moar

  	

   

  	

  Chief Operating Officer

  	

   

  	

  $

  	

  286,000

  	

   

  	

  May 22, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Richard M. Adams

  	

   

  	

  Vice President

  	

   

  	

  $

  	

  178,092

  	

   

  	

  May 22, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Anthony T.

  Brausen

  	

   

  	

  Vice President, Chief Financial Officer and

  Treasurer

  	

   

  	

  $

  	

  205,000

  	

   

  	

  May 22, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Grant M.

  DesRoches

  	

   

  	

  Vice President

  	

   

  	

  $

  	

  154,876

  	

   

  	

  May 22, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Thomas J. Dybsky

  	

   

  	

  Vice President

  	

   

  	

  $

  	

  170,888

  	

   

  	

  May 22, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  James J. Seifert

  	

   

  	

  Vice President, General Counsel & Secretary

  	

   

  	

  $

  	

  170,625

  	

   

  	

  May 22, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  David T. Vedder

  	

   

  	

  Vice President

  	

   

  	

  $

  	

  160,364

  	

   

  	

  May 22, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Steven K. Weeks

  	

   

  	

  Vice President

  	

   

  	

  $

  	

  160,200

  	

   

  	

  May 22, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Anthony Lenders

  	

   

  	

  Managing Director, TNV

  	

   

  	

  $

  	

  210,000

  	

   

  	

  May 22, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Robert J. Luck

  	

   

  	

  Director, Australia/Export/Japan

  	

   

  	

  $

  	

  145,320

  	

   

  	

  May 22, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Rex L. Carter

  	

   

  	

  Vice President, E-Solutions

  	

   

  	

  $

  	

  250,000

  	

   

  	

  October 15, 2001

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  H. Chris

  Killingstad

  	

   

  	

  Vice President, North America

  	

   

  	

  $

  	

  305,000

  	

   

  	

  March 13, 2002

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}]]