MULTI-ANTIGEN RESEARCH LICENSE & OPTION AGREEMENT

MULTI-ANTIGEN RESEARCH LICENSE AND OPTION AGREEMENT





This MULTI-ANTIGEN RESEARCH LICENSE AND OPTION AGREEMENT (this "Agreement"), effective as of January 26, 1999 (the "Effective Date") is made by and between Abgenix, Inc., a Delaware corporation ("ABX") and Genentech, Inc., a Delaware corporation ("GNE") with reference to the following facts and circumstances.





A. WHEREAS, ABX has rights in certain technology relating to certain strains of XenoMouse(TM) Animals (as defined below);



B. WHEREAS, GNE desires to use such XenoMouse Animals to generate antibodies to certain Specified Antigens and GNE Program Antigens (each as defined below);



C. WHEREAS, ABX is willing to grant to GNE, and GNE desires to acquire a license to use XenoMouse Animals solely for immunization with Specified Antigens and GNE Program Antigens for research purposes, as described below and on the terms and conditions set forth herein; and



D. WHEREAS, ABX is willing to grant to GNE, and GNE desires to acquire an option to obtain a GNE Product License Agreement with respect to Products derived from immunization of XenoMouse Animals with a particular GNE Program Antigen, all as described fully below and on the terms and conditions set forth herein.



NOW THEREFORE, for and in consideration of the covenants, conditions, and undertakings hereinafter set forth, it is agreed by and between the parties as follows:





1. DEFINITIONS



For purposes of this Agreement, capitalized terms set forth in this Agreement and not otherwise defined herein shall have the meaning set forth in the Common Definitions Exhibit attached hereto as Exhibit A.















2. RESEARCH LICENSE; SUPPLY OF MICE; MATERIALS OWNERSHIP



2.1 Research License.



2.1.1 License Grant. Subject to the terms and conditions of this Agreement (including without limitation compliance with the provisions of Section 9.4.6), ABX agrees to grant, and hereby grants, to GNE a paid up (except as otherwise provided in Section 2.1.5 below), non-exclusive license and/or sublicense of its rights, as the case may be, under the Licensed Technology and any issued U.S. patents owned or controlled by ABX that claim the Specified Antigen or Antibodies thereto, without right to grant further sublicenses to (a) immunize the XenoMouse Animals provided by ABX with up to [*] Specified Antigens per year and (b) to use the Antibodies and materials derived from such immunized XenoMouse Animals in the Research Field for conducting research and development work within the scope of the Research Field. The license contemplated in the preceding sentence shall include the right for GNE to transfer Antibodies to third parties solely for the purposes of testing and evaluation in the Research Field, provided, however, that any such transfer is under a material transfer agreement that is consistent with the terms of this Agreement and that grants no right, title or interest in or to such Antibody (or any derivative thereof) to such third party. The parties acknowledge that notwithstanding any license from ABX to GNE under this Agreement of ABX's rights within the Research Field (including, without limitation, under Section 3.1.4(c)), ABX's rights may not be exclusive from ABX's licensors. The license and/or sublicense rights granted under this Section 2.1.1 shall terminate with regard to a particular Specified Antigen on the Effective Date (if any) of a GNE Product License Agreement between ABX and GNE relating to such Specified Antigen. At such time as any Specified Antigen becomes a GNE Program Antigen under the terms and conditions of this Agreement (i.e. GNE has taken an Evaluation Position with regard to such Specified Antigen), the research licenses and/or sublicenses described above shall become exclusive licenses and/or sublicenses as set forth herein. Notwithstanding anything contained in this Agreement, immunization of XenoMouse Animals with any Antigen other than a Specified Antigen (a "Non-Specified Antigen") in good faith (e.g., as a mistake) shall be considered a breach of this Agreement; provided, however, that the sole remedy for such breach will be as provided in Section 6.6 hereof. Immunization of XenoMouse Animals with Non-Specified Antigens other than in good faith shall be a material breach of this Agreement.



2.1.2 License Term. The rights and/or (sub)licenses granted under Section 2.1.1 above shall terminate upon expiration or termination of this Agreement; provided, however, that such rights and/or (sub)licenses shall also expire and terminate with respect to each particular GNE Program Antigen on the date on which ABX duly executes and delivers the GNE Product License Agreement for such GNE Program Antigen in accordance with the provisions of Section 4.1.5 below.



2.1.3 No Other Rights. No implied licenses or rights are conveyed to GNE hereunder. GNE shall only be authorized to use the XenoMouse Animals, the ABX Materials and the materials derived in whole or part from the XenoMouse Animals (including without limitation Antibodies) solely as expressly provided in this Article 2 and Section 9.4.6.





- -------------- * Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.







2.1.4 XenoMouse Animals. On the terms and conditions of this Agreement, ABX will provide free of charge to GNE such types, strains and quantities, as GNE reasonably requests, of sterilized male XenoMouse Animals of the highest quality reasonably available for immunization with Specified Antigens; provided however, that ABX's obligation to provide such XenoMouse Animals free of charge shall be limited to providing GNE with up to [*] XenoMouse Animals per month and up to a total of [*] XenoMouse Animals per calendar year. GNE shall use such XenoMouse Animals solely for the purposes set forth in this Agreement. Notwithstanding anything to the contrary in this Agreement, unless ABX otherwise agrees in writing, ABX shall not be required to provide GNE with more than (a) [*] XenoMouse Animals in any given calendar month, or (b) [*] XenoMouse Animals in any given calendar year, in the aggregate. Subject to availability, ABX will provide to GNE reasonable quantities of XenoMouse Animals requested by GNE hereunder in excess of the number of XenoMouse Animals set forth in clauses (a) and (b) above at a cost to GNE of [*] per XenoMouse Animal.



2.1.5 New Strains. If, prior to ABX's delivery to GNE of the maximum number of XenoMouse Animals which GNE is entitled to receive in any given calendar year in Section 2.1.4 above, ABX develops and has reasonably available for licensing and shipment to GNE a strain of transgenic mice that produce human antibodies that was not available on the Effective Date (a "New Strain"), ABX shall inform GNE of the availability of such New Strain and any net Incremental Royalty associated with such New Strain and discuss with GNE whether GNE would prefer to receive some or all the remaining deliverable transgenic animals for such calendar year from the New Strain. Notwithstanding the foregoing, GNE shall have the right to continue to receive XenoMouse Animals from the strain of XenoMouse Animals available as of the Effective Date (the "Original Strain"), and ABX shall be required to continue to deliver mice from the Original Strain. If GNE chooses to receive mice from the New Strain, ABX shall provide GNE with a reasonable number of transgenic animals from the New Strain (up to a maximum of the remaining number of XenoMouse Animals deliverable to GNE under Section 2.1.4), provided that any such animals shall be deemed to be XenoMouse Animals. In the event that GNE elects to receive mice from the New Strain, (a) GNE shall agree to be bound by any other obligations, terms or conditions imposed upon the New Strain, including without limitation any reporting, indemnification, use restrictions or diligence requirements; (b) any New Strain Intellectual Property shall become part of the Licensed Technology; and (c) ABX shall modify Attachment B to reflect New Strain Intellectual Property with respect to such New Strain. Notwithstanding anything to the contrary in this Agreement, ABX shall not be obligated to develop any New Strains. Nothing herein shall prevent GNE from receiving and using XenoMouse Animals from both the Original Strain and the New Strain simultaneously provided that the maximum number of XenoMouse Animals provided in Section 2.1.4 is not exceeded.



2.1.6 Updates Concerning GNE Research. During the term of this Agreement, GNE shall update ABX, as reasonably requested by ABX, as to the general status of the activities of GNE in the Research Field under this Agreement and the results thereof. It is understood that except as the parties may otherwise agree in writing, ABX shall not be responsible for





- -------------- * Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.





conducting any research and development activities involved in the creation, research and development of Products, including without limitation immunizations of XenoMouse Animals with Specified Antigens or GNE Program Antigens, screening of Antibodies generated from such immunizations, creation of Hybridomas, production of Antibodies to the Specified Antigens or GNE Program Antigens, or preclinical evaluation of Antibodies to the Specified Antigens or GNE Program Antigens.



2.1.7 Supply of XenoMouse Animals and Materials; Material Transfer Terms. It is understood and agreed that all XenoMouse Animals, and all materials derived in whole or part from XenoMouse Animals shall be used solely in accordance with, and subject to the covenants set forth in Section 9.4.6.



2.1.8 Ownership of Materials and Data. It is understood and agreed that:



(a) ABX shall [*].



(b) Except as expressly set forth in Section 2.1.8(a), GNE shall [*]



(c) The transfer of physical possession of any materials or data owned by, and the physical possession and use of such materials and/or data by, GNE or ABX, as the case may be, shall not be (nor be construed as) a sale, lease, offer to sell or lease, or other transfer of title of such materials and/or data to GNE or ABX, as the case may be.



(d) Notwithstanding anything contained in this Agreement to the contrary (including, without limitation, in Section 6.6), GNE shall [*]



2.1.9 Notice of Specified Antigens. During the term of this Agreement, if and when GNE desires to immunize a XenoMouse Animal with an Antigen, GNE shall, prior to GNE's immunization of a XenoMouse Animal with such Antigen, provide written notice [*] [*] informing ABX [*] that GNE desires to have such Antigen designated a Specified Antigen. ABX [*] [*] will determine in accordance with this Section 2.1.9 if the Antigen can be designated a Specified Antigen of GNE.



(a) Notice. When GNE desires to have an Antigen designated a Specified Antigen, GNE shall provide written notice [*] [*] of its desire that such Antigen be designated a Specified Antigen. In such notice, GNE





- -------------- * Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.

shall provide reasonable identification and description of such Antigen (the "GNE Antigen Information"). The GNE Antigen Information shall be considered Confidential Information of GNE. Where GNE provides notice pursuant this Section 2.1.9(a) to [*]



(b) [*]



(c) Confidentiality and Non-Use. Where GNE provides notice pursuant to Section 2.1.9(a) to [*]. Where GNE provides notice pursuant to Section 2.1.9(a) to ABX, ABX shall not use or disclose the GNE Antigen Information except as expressly provided under this Agreement. Further, ABX shall not disclose the GNE Antigen Information to any third party.



(d) Determination. Upon receipt of notice pursuant to Section 2.1.9(a), ABX [*] shall objectively evaluate such request in the context of the ABX Antigen Information and determine whether the Antigen requested by GNE is available as a Specified Antigen. Where GNE provides notice pursuant to Section 2.1.9(a) to [*]; provided, however, no Confidential Information of ABX or GNE shall be provided to the other party. If ABX notifies GNE [*], that such Antigen is not available as a Specified Antigen, such Antigen shall not be designated as a Specified Antigen. In the event that GNE is notified that an Antigen requested by GNE is not available as a Specified Antigen, ABX and GNE agree to discuss the reasons for such determination.



(e) Default. Where GNE provides notice pursuant to Section 2.1.9(a) to ABX, and ABX fails to notify GNE that such Antigen is not available as a Specified Antigen within [*] of request by GNE, such Antigen shall be designated a "Specified Antigen",





- -------------- * Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.



GNE shall have the right to immunize the XenoMouse Animals with such Specified Antigen, and such Specified Antigen shall be counted as one of the [*] permitted Specified Antigens under Section 2.1.1 above. Notwithstanding the foregoing in this Section 2.1.9(e), where GNE provides notice pursuant to Section 2.1.9(a) to [*] informs GNE that such Antigen is available as a Specified Antigen.



2.1.10 Third Party Rights. It is understood and agreed that the grant of rights under this Article 2 shall be subject to and limited in all respects by the terms of the applicable ABX In-License(s) pursuant to which ABX acquired or does acquire any Licensed Technology, including, without limitation, any rights granted to or retained by GenPharm International, Inc. under the GenPharm Cross License, and that all rights or sublicenses granted under this Agreement shall be to the extent and only to the extent that ABX shall have the right to grant such rights and sublicenses under such ABX In-Licenses.





3. EVALUATION POSITIONS



3.1 Evaluation Positions. During the term of this Agreement and subject to the terms and conditions set forth herein, GNE shall have the right to obtain evaluation positions ("Evaluation Positions", as further described in Section 3.1.4) from ABX with respect to certain Specified Antigens as set forth in this Section 3.1. It is understood and agreed by the Parties that, unless and until a Specified Antigen becomes a GNE Program Antigen as set forth in this Article 3, [*]



3.1.1 Notice. For each Specified Antigen for which GNE desires to obtain an Evaluation Position, GNE shall provide ABX with written notice (each such notice an "Evaluation Notice") stating that GNE desires to obtain an Evaluation Position on such Specified Antigen and identifying in reasonable detail such Specified Antigen.



3.1.2 ABX Review. Within [*] days of receiving an Evaluation Notice from GNE, ABX shall notify GNE as to whether any of the conditions set forth under Section 3.1.2 (i)-(iii) below (each such condition, an "Impediment") exist with respect to each Specified Antigen which is the subject of such Evaluation Notice, and if so, ABX shall provide to GNE a reasonable description of such Impediment, subject to any confidentiality restrictions to which ABX may be a party. If ABX notifies GNE that an Impediment exists with respect to the Specified Antigen that is the subject of the Evaluation Notice, GNE shall not have the right to obtain an Evaluation Position for such Specified Antigen, provided, however, that if ABX has Selected a Specified Antigen for its own account under Section 3.1.2(i) below, ABX agrees to discuss with GNE the possibility of entering into a collaboration with respect to such Specified Antigen. Impediments are as follows:





- -------------- * Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.





(i) the Specified Antigen identified by GNE is not available to GNE for an Evaluation Position and cannot be Selected by ABX because under the terms of the Xenotech Agreement [*];



(ii) the Antigen so identified by GNE is at the time that ABX receives the Evaluation Notice for such Specified Antigen, an Excluded Antigen; or



(iii) as evidenced by written records prior to the date of the Evaluation Notice relating to such Specified Antigen, ABX or its Affiliates [*].



3.1.3 Acceptance by ABX; Payment. If ABX gives notice (an "Acceptance Notice") to GNE that no Impediment exists with respect to the Specified Antigen identified in the Evaluation Notice, or if ABX does not notify GNE of an Impediment within [*] of GNE's Evaluation Notice as set forth in Section 3.1.2, GNE shall have the right to obtain an Evaluation Position with respect to such Specified Antigen by paying to ABX a payment (the "Evaluation Position Payment") of [*]. Such payment shall be nonrefundable, except as provided in Section 4.1.5; provided, however, that such Evaluation Position Payment may be partially creditable against the License Fee with respect to an Option for such GNE Program Antigen, as provided in Section 4.1.6 below. Upon ABX's receipt of the Evaluation Position Payment set forth above, such Specified Antigen which is subject of such Evaluation Position, shall be designated a "GNE Program Antigen". Notwithstanding anything to the contrary in this Agreement, no Antigen shall be a GNE Program Antigen unless such antigen was first a Specified Antigen.



3.1.4 Effect of Evaluation Position. An Evaluation Position, with respect to a GNE Program Antigen, shall entitle GNE to the rights set forth below with respect to such GNE Program Antigen:



(a) Option. To exercise an Option with regard to such GNE Program Antigen as set forth in Article 4 below.





- -------------- * Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.





(b) Term of Evaluation Positions. With respect to each Evaluation Position for a GNE Program Antigen, the term of such Evaluation Position shall begin on the date which ABX receives the Evaluation Position Payment for such Specified Antigen and shall, unless earlier terminated as provided under Section 3.1.4(e) below, continue thereafter for a period of [*], at which time the Evaluation Position on such GNE Program Antigen shall expire unless extended as provided in Section 3.1.4(d) below.



(c) Exclusivity. During the term of an Evaluation Position with respect to a GNE Program Antigen, ABX shall not (i) Select such GNE Program Antigen (except for the sole benefit of GNE); (ii) cause or allow (with regard to "allow", to the extent that it is within the reasonable control of ABX and would not cause ABX to take any commercially unreasonable action or incur any commercially unreasonable expense) any Impediment described in Section 3.1.2 above to arise with respect to such GNE Program Antigen, or (iii) take any other action that would prevent GNE from obtaining an Exclusive Worldwide Product License as defined in the Xenotech Agreement.



(d) Extension. With respect to each Evaluation Position for a GNE Program Antigen, GNE shall have the right to extend the term of such Evaluation Position for such GNE Program Antigen [*] by (i) notifying ABX in writing, no later than [*] prior to the then current expiration date of such Evaluation Position, that GNE desires to extend such Evaluation Position and for how long and (ii) paying to ABX concurrently with such notice a payment of [*] extension of such Evaluation Position. GNE may extend the term of such Evaluation Position all at once or on a [*] basis, up to the maximum aggregate of [*]. All payments made by GNE to ABX to extend the period of time for an Evaluation Position shall be nonrefundable, except as provided under Section 4.1.5; provided, however, that GNE shall have the right to partially credit such payments against the License Fee for such GNE Program Antigen as set forth in Section 4.1.6 below.



(e) Termination of Evaluation Position by GNE. GNE shall have the right to terminate an Evaluation Position with respect to a GNE Program Antigen at GNE's sole discretion at any time by delivering written notice of such termination to ABX. Such termination of such Evaluation Position shall become effective upon ABX's receipt of written notice from GNE; provided however, that any amounts paid by GNE to ABX for such terminated Evaluation Position (and any extensions thereof) shall not be refundable or creditable against any other payments due under this Agreement.



(f) Effect of Termination or Expiration of Evaluation Position. If an Evaluation Position with respect to a GNE Program Antigen expires or terminates prior to GNE's exercise of an Option with respect to such GNE Program Antigen (as set forth below) (i) such GNE Program Antigen shall cease to be a GNE Program Antigen for purposes of this Agreement, (ii) GNE shall have no right to exercise an Option for such GNE Program Antigen (unless renominated as provided below under this Section 3.1.4(f)) and (iii) ABX shall have no





- -------------- * Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.

further obligations with respect to such GNE Program Antigen. After the term of an Evaluation Position has expired (during the term of this Agreement), GNE shall have the right to nominate a prior GNE Program Antigen again (if no Impediment exists) for an Evaluation Position (and designation as a GNE Program Antigen) on the terms and conditions of this Agreement by following the Evaluation Position procedures and paying an Evaluation Position Payment with respect to such Evaluation Position, provided that, such Evaluation Position shall count as one of the [*] Evaluation Positions which is in effect under Section 3.1.5.



3.1.5 Number of Evaluation Positions. During the term of this Agreement, GNE shall have the right to obtain and have in effect a maximum aggregate of [*] Evaluation Positions (i.e., representing a maximum of [*] GNE Program Antigens) at any given time. For purposes of this Section 3.1.5, an Evaluation Position for [*] shall not be counted toward the number of Evaluation Positions in effect at any given time, nor shall Evaluation Positions that have terminated or expired pursuant to the terms of this Agreement (except as set forth in Section 3.1.4(f)). Notwithstanding anything in this Agreement to the contrary, GNE shall be required to obtain from ABX and make Evaluation Position Payments for a minimum cumulative number of [*] Evaluation Positions during each consecutive [*] period (beginning on the Effective Date) during the term of this Agreement, unless the Agreement is terminated earlier than [*] from the Effective Date, respectively.



4. OPTION TO OBTAIN GNE PRODUCT LICENSE AGREEMENT



4.1 Option to Nominate GNE Program Antigens.



4.1.1 Option. Subject to the terms and conditions set forth in this Agreement, ABX hereby grants to GNE exclusive options (an "Option" or "Options") to obtain the right to enter into GNE Product License Agreements with respect to particular GNE Program Antigens. Each calendar year during the term of this Agreement, up to two (2) Options may be exercised by GNE with respect to a total of two (2) GNE Program Antigens, provided that, such Options for such GNE Program Antigens must be exercised by GNE prior to the termination or expiration of the Evaluation Position for such GNE Program Antigen (the "Option Period"), pursuant to the procedures set forth in this Article 4, and provided, further, that GNE may not exercise more than [*] Options in any [*] year period or more than [*] Options in any [*] year period, in each case excluding [*].



4.1.2 Exercise. Pursuant to and subject to Section 4.1.1, GNE may exercise Options with respect to GNE Program Antigens in accordance with the following provisions:



(a) Exercise Notice; Timing of Notice. GNE may exercise its Option with respect to a GNE Program Antigen at any time during the term of an Evaluation Position for such GNE Program Antigen by giving ABX express written notice (the "Exercise Notice") stating that GNE is exercising its Option with respect to such GNE Program Antigen and indicating whether GNE has intellectual property covering such GNE Program Antigen.





- -------------- * Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.





(b) Selection by ABX. Upon GNE's delivery to ABX of an Exercise Notice pursuant to Section 4.1.2(a), ABX shall be obligated to Select the GNE Program Antigen on behalf of GNE on a date (a "Selection Date") within the particular calendar quarter and in the particular calendar year as determined in accordance with the following table:



Calendar Quarter If Exercise Notice is "Trigger Date" by "Selection Date"

in which Antigen delivered by GNE: which GNE may by which ABX must

counts towards retract Exercise select the GNE

GNE's limits Notice with no Program Antigen

penalty



1st Calendar [*] [*] [*]

Quarter:

January 1- March

31



2nd Calendar [*] [*] [*]

Quarter:

April 1 - June 30





3rd Calendar [*] [*] [*]

Quarter:

July 1 -

September 30



4th Calendar [*] [*] [*]

Quarter:

October 1 -

December 31



Notwithstanding the foregoing in this Section 4.1.2(b):



(i) in any calendar quarter that GNE has the right to exercise [*];



(ii) should the event described in Section 4.1.2(b)(i) occur [*]





- -------------- * Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.

[*]; and



(iii) based upon the information contained in the Exercise Notice, ABX shall take the following actions with respect to Selection of a GNE Program Antigen:



...