Exhibit 10.5
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
SECOND AMENDED AND RESTATED
COLLABORATION AGREEMENT
GENENTECH, INC. AND
BIOGEN IDEC INC.

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COLLABORATION AGREEMENT
THIS SECOND AMENDED AND RESTATED COLLABORATION AGREEMENT (this “Agreement) is
made effective as of the 18th day of October, 2010 (the “Second Restated
Effective Date”) by and between Biogen Idec Inc. (formerly IDEC Pharmaceuticals
Corporation), a Delaware corporation having its principal place of business at
133 Boston Post Road, Weston, Massachusetts 02493 (“IDEC”) and GENENTECH, INC.,
a Delaware corporation having its principal place of business at 1 DNA Way,
South San Francisco, California 94080 (“Genentech”), each on behalf of itself
and its Affiliates. IDEC and Genentech are sometimes referred to herein
individually as a “Party” and collectively as the “Parties,” and references to
“IDEC” and “Genentech” shall include their respective Affiliates.
RECITALS
     1. Genentech and IDEC entered into that certain Collaboration Agreement
dated as of March 16, 1995 related to the development and commercialization of
Licensed Products, including without limitation C2B8 (the “Original Agreement”).
     2. In the Original Agreement, IDEC granted to Genentech, and Genentech
obtained, rights to co-promote Licensed Products in the United States and Canada
and to develop and market Licensed Products in the rest of the world (excluding
certain Asian countries, which were added to the Original Agreement by amendment
at a later date).
     3. Simultaneously with the execution of the Original Agreement, IDEC and
Genentech entered into a Preferred Stock Purchase Agreement (the “Stock Purchase
Agreement”) of even date therewith, pursuant to which Genentech purchased
$5 million of Preferred Stock of IDEC in accordance with the terms and
conditions thereof.
     4. Simultaneously with the execution of the Original Agreement, IDEC and
Genentech entered into the Expression Technology License of even date therewith
granting Genentech rights to certain enabling technology (the “Expression
Technology License”).
     5. Following the execution of the Original Agreement, the Parties entered
into a first amendment to the Collaboration Agreement of November 30, 1995 (the
“First Amendment”) expanding Genentech’s rights to develop and market Licensed
Products in the world to include certain Asian countries.
     6. Following the execution of the Original Agreement, the parties entered
into an amendment of June 15, 1998 (the “Second Amendment”) approving the
assignment of certain rights of Genentech in Canada with respect to C2B8 to F.
Hoffmann La Roche Ltd.
     7. On June, 19 2003 (the “Restated Effective Date”), the Parties amended
and restated the Original Agreement to include certain additional products (“New
Products”, as defined below) whose mechanism of action is initiated by
interaction with the CD20 B-cell determinant, including
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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without limitation the humanized molecule created by Genentech known as G2H7
(the “2003 Restated Agreement”).
     8. In an effort to be efficient in the drafting of this Agreement, the
Parties have elected to preserve substantial portions of the historical content
of the Original Agreement, the First Amendment, the Second Amendment, and the
2003 Restated Agreement in this Agreement (with the expressed understanding that
such content is not given any renewed or additional meaning by its inclusion
herein).
     9. The Parties desire to change certain aspects of their collaboration,
including (i) adjusting certain financial terms applicable to Licensed Products,
and (ii) providing Genentech the sole right to develop and market OCR throughout
the world, and the sole right to make decisions with respect thereto, and to
modify the financial and other terms that apply to the sale of OCR in the
Co-Promotion Territory.
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:
ARTICLE 1.
DEFINITIONS
     Capitalized terms not otherwise defined herein have the meaning given them
in the Schedule of Master Definitions attached hereto as Appendix 1.
ARTICLE 2.
SCOPE OF COLLABORATION; DEVELOPMENT COSTS
     2.1 Initial Licensed Product. The Parties will focus their initial efforts
on the development of C2B8 in the Field.
     2.2 Y2B8 and In2B8 Option and Phase II Trial. If IDEC decides, or the
Parties mutually agree, to commence a Phase II Clinical Trial of IDEC’s [**]
(“Y2B8”) and IDEC’s [**] (“In2B8”) (the “Y2B8 Phase II Trial”), IDEC shall give
notice, including the number of evaluable patients, of such proposed Y2B8 Phase
II Trial (the “Y2B8 Phase II Notice”) to Genentech. If Genentech notifies IDEC
within sixty (60) days of receipt of the Y2B8 Phase II Notice that it intends to
participate with IDEC in the Y2B8 Phase II Trial, then Genentech shall bear [**]
of the costs of the Y2B8 Phase II Trial up to a maximum Genentech contribution
of [**]. Once Genentech has reached its maximum contribution, [**] for the Y2B8
Phase II Trial in excess of this amount shall be borne 100% by IDEC. If IDEC
does not receive timely notice from Genentech of its intention to participate in
the Y2B8 Phase II Trial, then IDEC may proceed with the Y2B8 Phase II Trial
provided that IDEC shall bear the cost of the Y2B8 Phase II Trial. Upon
completion of the Y2B8 Phase II Trial and delivery to Genentech of a final
report with respect thereto, Genentech shall have 120 days to exercise an option
to include Y2B8 and In2B8 as Licensed Products (the “Y2B8 Option”). The Y2B8
Option shall be exercisable by written notice to IDEC (“Notice of Y2B8/In2B8
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Exercise”) together with payment in the amount of [**] (the “Option Fee”).
Notwithstanding the foregoing, if Genentech shall have elected to participate
with IDEC in the Y2B8 Phase II Trial and contribute up to [**] toward the costs
of such Y2B8 Phase II Trial, then the Option Fee shall be reduced to [**].
Within 60 days of the Notice of Y2B8/1n2B Exercise, the Parties shall agree upon
the terms and conditions governing the development and commercialization of
products derived from Y2B8 and In2B8, taking into account the commercial value
of Y2B8 and In2B relative to C2B8. In any event, no later than publication of
the Pivotal Phase III Clinical Trial results of C2B8, the Parties shall discuss
in good faith the initiation of the Y2B8 Phase II Trial.
     2.3 Development Costs for C2B8.
     (a) Except as set forth below, or unless otherwise agreed to in writing by
Genentech, IDEC shall bear all costs for development and obtaining Regulatory
Approval of C2B8 in the Field in the Co-Promotion Territory through the date of
Regulatory Approval of C2B8 in the United States, including but not limited to
certain manufacturing process improvements for the current production process
and using the existing cell line. Genentech agrees, however, that it shall bear
the costs of the following development activities incurred in connection with
C2B8 through the date of the first Regulatory Approval in the United States:
          (i) accelerated product stability studies conducted by Genentech as
set forth in Appendix I of the Development Plan and, if a replacement
formulation is deemed necessary by the JDC, reasonable assistance for
development of such formulation and attendant studies;
          (ii) assistance with assays as set forth in Appendix I to the
Development Plan;
          (iii) assistance provided by [**] or equivalents from Genentech,
deployed at the direction of the persons designated by the JDC to supervise the
Pivotal Phase III Clinical Trial; and
          (iv) the process development and manufacturing approvals of a
reamplified cell-line or the current cell-line if a reamplified cell-line
scale-up is not feasible as specified in Section 8.1.
     (b) Subject to Section 2.7 and Section A.11 of Exhibit A, all Development
Costs for Licensed Products incurred by the Parties for development or marketing
in the Co-Promotion Territory after the first Regulatory Approval for C2B8 in
the United States shall be charged against Operating Profits (or Losses).
     (c) Subject to Section A.11 of Exhibit A, Genentech shall bear all
Development Costs for Licensed Products for development or marketing in the
Field in the Licensed Territory, unless otherwise agreed in writing by the
Parties.
     2.5 IDEC’s Rights Regarding New Products Other Than G2H7.
     (a) Opt-in Notice for New Products Other Than G2H7. For so long as the
Parties are entitled to receive a share of Operating Profits or Losses on any
Franchise Product hereunder,
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Genentech agrees to keep IDEC informed as to the existence of research and/or
development activities regarding Potential New Products other than G2H7. With
respect to [**] Potential New Products and Genentech Potential New Products,
within thirty (30) days of the date that Genentech’s portfolio planning
committee (or successor committee or process thereto, “PPC”) makes a formal
decision, as recorded in the minutes of the relevant PPC meeting, to commence
clinical development of such a Potential New Product (or a similar development
decision is made as part of any successor process), Genentech shall provide IDEC
with the same development assessment package that was provided to the PPC as the
basis of its development decision (or otherwise reviewed in connection with such
decision), including an identification as to whether such product is a [**]
Potential New Product [**] Potential New Product. Without limiting the
foregoing, such development assessment package shall include a summary of the
preclinical data and the proposed Development Plan including proposed clinical
study designs, manufacturing cost estimates, timelines, program cost, target
product profile(s), and market forecast. With respect to [**] Potential New
Products, [**], Genentech will provide to IDEC a summary of Genentech’s rights
(and IDEC’s potential rights) to develop and commercialize such [**] Potential
New Product, as well as relevant information about the product, including
preclinical and clinical data and reports [**].
     (b) Exercise of Opt-In by IDEC. IDEC shall have sixty (60) days from the
date of Genentech’s notice to IDEC of the availability of a Potential New
Product to provide written notice to Genentech that it elects to participate in
the development and commercialization of such Potential New Product. In order
for IDEC to preserve any rights under Section 2.5(c) with respect to Genentech
Potential New Products, notice of an election to not opt-in with respect to such
product under this Section 2.5(b) must be provided to Genentech within such
sixty (60) day period.
          (i) Genentech Potential New Products. Within ten (10) days following
an election to participate in a Genentech Potential New Product, IDEC shall pay
Genentech the opt-in fee set forth in Section 7.1(b)(ii) or (iii), as the case
may be. From and after the date of the payment of such fee, such Genentech
Potential New Product shall be deemed a New Product under this Agreement, and
IDEC shall have the right to participate with Genentech with respect to such
product [**] New Product.
          (ii) [**] Potential New Products. For a period of thirty (30) days
following an election by IDEC to participate in an [**] Potential New Product,
Genentech and IDEC shall use good faith efforts to agree upon the amount of the
opt-in fee IDEC shall pay in order to obtain the right to include such [**]
Potential New Product as a New Product hereunder; such amount to be in any event
[**] cost of such product attributable to rights in the United States. In
determining such cost, the Parties shall take into consideration [**] in
developing such product to such stage, including without limitation [**]. If the
Parties are unable to agree upon the amount of the opt-in fee for such [**]
Potential New Product, either Party may, by written notice to the other, have
such matter referred to an independent investment banker, mutually agreeable to
both Parties, to determine the amount of such opt-in fee; such determination to
be binding upon both Parties. Within ten (10) days following the Parties
agreement upon, or the independent investment banker’s determination of, such
opt-in fee, IDEC shall pay Genentech such amount. From and after the date
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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of the payment of such fee, such Potential New Product shall be deemed a New
Product under this Agreement, and:
          (1) IDEC shall have the right to participate with Genentech with
respect to such product in the United States [**]; or
          (2) to the extent that Genentech was able at the time of Genentech’s
[**] in the development and commercialization activities with [**] to
participate in the development and commercialization [**].
Notwithstanding anything to the contrary in this Agreement, it is understood and
agreed that, with respect to [**] Potential New Products for which IDEC has
timely opted-in and paid the opt-in fee hereunder, Genentech is under no
obligation under this Agreement to offer or grant to IDEC any rights to such
[**] Potential New Products outside the United States, or make any payments to
IDEC with respect to Genentech’s development and commercialization of such [**]
Potential New Products outside the United States.
Failure by IDEC under this Section 2.5(b) to provide a timely election notice or
to timely pay the opt-in fee, or rejection by IDEC of a independent investment
banker’s determination of the amount of the opt-in fee (when provided in the
manner set forth above with respect to [**] Potential New Products), will be
deemed to be an election not to participate in such Potential New Product (and
following any such failure or rejection, Genentech shall (except as provided in
Section 2.5(c) with respect to Genentech Potential New Products) have no further
obligation to offer such Potential New Product to IDEC and IDEC shall have no
further rights under this Agreement with respect to such Potential New Product).
     (c) [**] With respect to each Genentech Potential New Product for which
IDEC was provided the opportunity to opt-in pursuant to Section 2.5(a) before
the same shall have [**], and for which IDEC pursuant to Section 2.5(b) timely
elected to not opt-in (but not including a failure to elect to opt-in), promptly
following [**] for such Genentech Potential New Product, Genentech shall provide
IDEC with [**] data package for such Genentech Potential New Product that
summarizes the clinical data and the proposed Development Plan going forward,
including proposed clinical study designs, timelines and program costs. IDEC
shall have sixty (60) days from the date of Genentech’s notice to IDEC of such
development assessment package to provide written notice to Genentech that it
elects to participate in the development and commercialization of such Genentech
Potential New Product. Within ten (10) days following an election to participate
in such Genentech Potential New Product, IDEC shall pay Genentech the opt-in fee
set forth in Section 7.1(b)(iv). From and after the date of the payment of such
fee, such Genentech Potential New Product shall be deemed a New Product under
this Agreement, and the Parties shall [**] New Product as provided herein.
Failure by IDEC under this Section 2.5(c) to provide a timely election notice or
to timely pay the opt-in fee will be deemed to be an election not to participate
in such Genentech Potential New Product, and following any such failure,
Genentech shall have no further obligation to offer such Genentech Potential New
Product to IDEC and IDEC shall have no further rights under this Agreement with
respect to such Genentech Potential New Product.
     2.6 IDEC Right of Negotiation for Third Party Anti-CD20 Products.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     (a) Right of Negotiation. If Genentech decides to seek a license to develop
and/or commercialize a Third Party Anti-CD20 Product, Genentech shall promptly
notify IDEC of such decision in writing (such occurrence to “seek a license”
shall be deemed to have occurred no later than the date that [**]. IDEC shall
have thirty (30) days to elect in writing to participate in negotiations, and a
failure to timely so elect shall be deemed a decision not to participate in such
negotiations (and following any such failure, Genentech shall have no further
obligation to offer such Third Party Anti-CD20 Product to IDEC and IDEC shall
have no further rights under this Agreement with respect to such Third Party
Anti-CD20 Product). In the event that IDEC timely notifies Genentech of its
desire to participate in such negotiations, then for a period of ninety
(90) days, Genentech and IDEC shall use good faith efforts to agree upon terms
with the Third Party for a license to such Third Party Anti-CD20 Product that
includes the participation of IDEC and Genentech, vis-à-vis each other, in the
United States [**]; provided, at Genentech’s reasonable discretion, Genentech
may choose to negotiate with such Third Party alone (but to the extent
reasonably possible, on terms and conditions reasonably acceptable to IDEC). In
the event that IDEC and Genentech have not agreed upon terms with such Third
Party within ninety (90) days of IDEC’s election to participate, or if the
Parties have not entered into a definitive agreement with such Third Party
within one hundred and eighty (180) days of IDEC’s election to participate, then
Genentech may enter into a definitive agreement on its own and at its sole
discretion with such Third Party for such Third Party Anti-CD20 Product;
provided, Genentech will use its commercially reasonable and diligent efforts to
obtain the right for IDEC to participate with Genentech with respect to such
product in the United States.
     (b) Third Party Anti-CD20 Product In-licensed After the Restated Effective
Date.
          (i) Notice. If, following IDEC’s timely notification to Genentech
pursuant to Section 2.6(a) to participate in negotiations with a Third Party for
a Third Party Anti-CD20 Product, Genentech enters into a definitive agreement
with such Third Party for such Third Party Anti-CD20 Product without IDEC, then
Genentech shall promptly notify IDEC of the existence of such definitive
agreement and provide IDEC with a summary of the terms, including any data
package provided by such Third Party to Genentech, under which IDEC may
participate with Genentech in the United States for such Third Party Anti-CD20
Product (such terms, vis-à-vis each other, other than the amount of the opt-in
fee to be paid by IDEC to Genentech pursuant to this Section 2.6(b), to the
extent reasonably possible under such Third Party agreement, to be on [**].
          (ii) Opt-in Fee. The opt-in fee under Section 2.6(b)(i) above, to be
determined by Genentech [**], shall be based on the terms of the agreement with
such Third Party attributable to rights in the United States, and shall be
intended to compensate Genentech for [**] of Genentech’s costs in acquiring the
rights in the United States to such product under such agreement with such Third
Party [**]. The Parties shall seek to agree on the amount of such opt-in fee,
and to the extent the Parties are unable to agree within a twenty (20) day
period, such dispute shall be subject to Section 17.2.
     (c) Third Party Anti-CD20 Product In-licensed Prior to the Restated
Effective Date.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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          (i) Notice. With respect to any Third Party Anti-CD20 Products for
which Genentech obtained a license to develop and commercialize such product
from a Third Party prior to the Restated Effective Date, within thirty (30) days
of the date that Genentech’s PPC makes a formal decision, as recorded in the
minutes of the relevant PPC meeting, [**], Genentech shall provide IDEC with the
same development assessment package that was provided to the PPC as the basis of
its [**], including a summary of the terms of the license from such Third Party
under which IDEC may participate with Genentech in the United States for such
Third Party Anti-CD20 Product, (such terms, other than the amount of the opt-in
fee to be paid by IDEC to Genentech pursuant to this Section 2.6(c)(i), to the
extent reasonably possible under such Third Party agreement, to be on [**].
Without limiting the foregoing, such development assessment package shall
include a summary of the preclinical data and the proposed Development Plan
including proposed clinical study designs, manufacturing cost estimates,
timelines, program cost, target product profile(s), and market forecast, and any
data package provided by such Third Party to Genentech.
          (ii) Opt-in Fee. The opt-in fee under Section 2.6(c)(i) above, to be
determined by Genentech [**], shall be [**] cost of such product attributable to
rights in the United States. [**]. The Parties shall seek to agree on the amount
of such opt-in fee, and to the extent the Parties are unable to agree within a
twenty (20) day period, such dispute shall be subject to Section 17.2.
     (d) Election. IDEC shall have thirty (30) days from the date of Genentech’s
notice under Section 2.6(b)(i) or 2.6(c)(i) above to elect in writing to
participate with Genentech on such terms under such definitive agreement,
including without limitation the opt-in fee (and to the extent the amount of the
opt-in fee is not agreed upon at the time of such election, the amount of the
opt-in fee as determined by the arbitration panel under Section 17.2; such
amount to be paid upon the earlier of agreement by the Parties on such amount,
or final determination by such arbitration panel of such amount), and a failure
to so elect shall be deemed a decision not to participate with Genentech with
respect to such Third Party Anti-CD20 Product, and following any such failure,
Genentech shall have no further obligation to offer such Third Party Anti-CD20
Product to IDEC and IDEC shall have no further rights under this Agreement with
respect to such Third Party Anti-CD20 Product.
     (e) Any agreement which IDEC and Genentech enter into under this
Section 2.6 to develop and commercialize a Third Party Anti-CD20 Product in the
United States shall provide for licenses from each Party to the other Party
necessary to develop and commercialize such product under such agreement; such
licenses, to the extent permissible under the terms of the license from such
related Third Party, to be commensurate in scope with the licenses granted under
Section 9.2.
     (f) Notwithstanding anything to the contrary in this Agreement, it is
understood and agreed that Genentech is under no obligation to offer or grant to
IDEC any rights to any Third Party Anti-CD20 Product outside the United States,
or make any payments to IDEC with respect to Genentech’s development and
commercialization of any Third Party Anti-CD20 Product outside the United
States.
     (g) Genentech represents and warrants that, to the best of its knowledge,
it has not, prior to the Restated Effective Date initiated clinical development
with (i) any proteins or peptides that meet the definition of Potential New
Products (other than G2H7), or (ii) any Third Party Anti-CD20
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Product for which Genentech obtained a license to develop and commercialize such
product from a Third Party prior to the Restated Effective Date, in each case as
recorded in the minutes of its PPC.
     2.7 Development Costs for New Products. Unless otherwise agreed in writing
by the Parties, from and after the Restated Effective Date, and notwithstanding
a Party’s share in Operating Profits (or Losses), all Development Costs for New
Products for development or marketing in the Co-Promotion Territory shall be
shared by the Parties, [**] by Genentech and [**] by IDEC until [**]. After
[**], the Parties will share in the Development Costs for New Products for
development or marketing in the Co-Promotion Territory commensurate with the
profit/loss sharing relationship specified in Section A.9.3 and the guidelines
for charging costs specified in Section A.11 of Exhibit A for such products.
Genentech shall bear [**] Development Costs for New Products for development or
marketing in the Licensed Territory, unless otherwise agreed in writing by the
Parties.
ARTICLE 3.
MANAGEMENT OF THE COLLABORATION
     3.1 Management Committee.
     (a) Within thirty (30) days of the Original Effective Date, the Parties
will establish a Management Committee to oversee and manage the collaboration in
the Co-Promotion Territory contemplated by this Agreement. The Management
Committee will be composed of three representatives appointed and replaced by
IDEC and three representatives appointed and replaced by Genentech. All such
representatives will be senior officers and/or managers of IDEC or Genentech.
Either Party may replace any or all of its representatives at any time upon
prior written notice to the other Party. The Management Committee will meet at
least once each calendar quarter, or more frequently, as agreed by the
Management Committee, and will operate by consensus, except as expressly set
forth herein. If the Management Committee is unable to resolve a dispute
regarding any issue presented to it, such dispute shall be resolved in
accordance with Article 17 below.
     (b) The Management Committee shall perform the following functions:
          (i) determine the overall strategy for the collaboration in the manner
contemplated by this Agreement, including without limitation, overseeing and
determining the strategy for the coordination, development and commercialization
of Licensed Products and New Products so as to maximize the Operating Profits of
all Franchise Products subject to and in accordance with Section 4.1.
          (ii) coordinate the activities of the Parties hereunder;
          (iii) establish a governance structure for the collaboration including
overseeing the establishment and organization of one or more Operating
Committees, or other structure to implement this Agreement. The establishment of
certain Operating Committees is provided for in Sections 3.2, 3.3 and 3.4 of
this Agreement. Each Operating Committee contemplated by this
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Agreement shall be subordinate to the Management Committee. If any Operating
Committee contemplated by this Agreement is not constituted or continued, any
reference to such Committee in this Agreement shall be deemed to be a reference
to the Management Committee or such other committees or structures to which the
Management Committee may delegate responsibility;
          (iv) settle disputes or disagreements that are unresolved by an
Operating Committee unless otherwise indicated in this Agreement; and
          (v) perform such other functions as appropriate to further the
purposes of this Agreement as determined by the Parties.
     (c) Notwithstanding the foregoing, or anything else in this agreement to
the contrary, the Management Committee shall have no oversight of, involvement
in or authority over any aspect of OCR.
     3.2 Joint Development Committee.
     (a) Within thirty (30) days of the Original Effective Date, the Parties
will establish the Joint Development Committee to oversee and control all
development of Franchise Products in the Co-Promotion Territory, in the Field,
including pre-clinical research, clinical research, manufacturing, regulatory
filings and post-approval development studies. The JDC will be composed of three
representatives appointed by each of IDEC and Genentech. Each representative
will have one vote on all matters within the JDC’s purview. Such representatives
will include individuals with expertise and responsibilities in the areas of
preclinical development, clinical development, process sciences, manufacturing
or regulatory affairs. Either Party may replace any or all of its
representatives at any time upon written notice to the other Party. The JDC will
meet at least once each calendar quarter, or more frequently, as agreed by the
JDC. The JDC will operate by consensus, except as expressly set forth herein. If
the JDC is unable to resolve a dispute regarding any issue presented to it, such
dispute shall be resolved in accordance with Article 17 below.
     (b) The JDC shall coordinate, expedite and guide the development of
Franchise Products, including review and approval of Development Plans for New
Products, to obtain Regulatory Approvals in the Co-Promotion Territory, and in a
manner consistent with maximizing the Operating Profits for all Franchise
Products subject to and in accordance with Section 4.1. The JDC will update the
Development Plans from time to time as it deems necessary.
     (c) The JDC shall also be the forum for exchange of information on
Genentech’s substantive development of Franchise Products in the Licensed
Territory, unless an IDEC representative is permitted to attend meetings of a
Genentech development committee as set forth in Section 6.4. While the IDEC
representatives may comment on such development, Genentech shall have the final
say.
     (d) If any Genentech European development partner so requests, IDEC will
consider in good faith allowing a representative of such partner to attend the
JDC meetings.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     (e) The term of the JDC will be determined by the Management Committee.
     (f) For clarity, the JDC shall have no oversight of, involvement in or
control over any aspect of the development of OCR, which shall reside solely
with and in the discretion of Genentech.
     3.3 Joint Commercialization Committee.
     (a) Within thirty (30) days of the Original Effective Date, the Parties
will establish the Joint Commercialization Committee. When established, the JCC
shall be composed of two representatives appointed by each of IDEC and
Genentech. Either Party may replace any or all of its representatives at any
time upon prior written notice to the other Party. The JCC will be an
operational committee made up of individuals with expertise and responsibilities
in the areas of product development and marketing, sales management or market
research. The JCC will meet on a quarterly basis, except that from submission of
a BLA for a Franchise Product in the Co-Promotion Territory until the end of the
second year of sales for such Franchise Product in the Co-Promotion Territory,
the JCC shall meet more frequently in order to prepare for and oversee the
launch of such Franchise Product. The JCC will operate by consensus, except as
expressly set forth herein. Each representative will have one vote. If the JCC
is unable to resolve a dispute regarding any issue presented to it, such dispute
shall be resolved in accordance with Section 17.1.
     (b) The purposes of the JCC shall be to (i) monitor, review and approve
commercialization plans with regard to the commercialization of Franchise
Products in the Co-Promotion Territory, including, in accordance with
Section 5.4, top-line annual marketing and sales budgets (as described in
Section A.1(a) of Exhibit A), annual forecasts of sales and production
requirements, the annual marketing plan, broad product positioning, initial
product pricing, and Phase IV clinical strategy (e.g. overall plans for
investigator sponsored trials and publication studies) as well as (ii) select
trademarks for Franchise Products.
     (c) The JCC shall have no involvement in the commercialization of Licensed
Products in the Licensed Territory or of OCR in either the Licensed Territory or
Co-Promotion Territory, which shall be solely the responsibility of Genentech at
its expense.
     (d) The term of the JCC will be determined by the Management Committee.
     (e) For clarity, the JCC shall have no oversight of, involvement in or
control over any aspect of the commercialization of OCR, which shall reside
solely with and in the discretion of Genentech.
     3.4 Joint Finance Committee.
     (a) Within thirty (30) days of the Original Effective Date, the Parties
will establish the Joint Finance Committee to be composed of two representatives
appointed by each of IDEC and Genentech. Either Party may replace any or all of
its representatives at any time upon prior written
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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notice to the other Party. Such representatives will include individuals with
expertise and responsibilities in the areas of accounting, cost allocation,
budgeting and financial reporting. The JFC will operate by consensus, except as
expressly set forth herein. If the JFC is unable to resolve a dispute regarding
any issue presented to it, such dispute shall be resolved in accordance with
Article 17.
     (b) The JFC shall operate under the direction of the Management Committee
to provide services to and consult with the JDC and the JCC in order to address
the financial, budgetary and accounting issues which arise in connection with
the Development Plans and updates thereto as described in Exhibit A, as well as
commercialization plans and updates thereto.
      (c) The JFC shall have no involvement in the development of Licensed
Products in the Licensed Territory or of OCR in either the Licensed Territory or
Co-Promotion Territory, which shall be the responsibility of Genentech, subject
to the terms and conditions of this Agreement.
     (d) The JFC will cease operating and have no further function hereunder on
the date on which the Parties are no longer sharing Operating Profits or Losses
with respect to any Franchise Product in the Co-Promotion Territory.
     (e) For clarity, the JFC shall have no oversight of, involvement in or
control over any aspect of OCR, including any financial, budgetary and
accounting issues in connection with OCR, which shall reside solely with and in
the discretion of Genentech.
     3.5 Collaboration Co-Chairpersons. Within sixty (60) days of the Restated
Effective Date, each Party shall designate a Collaboration Co-Chairperson. Each
such Collaboration Co-Chairperson shall be a vice president, unless otherwise
agreed, and shall serve as a member or an ex-officio member of the Management
Committee and each Operating Committee and shall be responsible (together, or as
the Collaboration Co-Chairpersons may elect to divide responsibilities) to set
the agenda of, call and take minutes of meetings of each Committee. In the event
of any reasonable dispute between the Collaboration Co-Chairpersons as to any
matter to include in the agenda of a meeting, such matter shall by default be
included in the agenda.
ARTICLE 4.
DEVELOPMENT IN THE CO-PROMOTION TERRITORY
     4.1 Development Efforts for C2B8. IDEC and Genentech each agree to
collaborate diligently in the development of C2B8 in the Field and to use
commercially reasonable and diligent efforts to develop and bring C2B8 to market
in the Field as soon as practicable. The Parties further agree to execute and
substantially perform the Development Plan for C2B8 and to cooperate with the
other in carrying out such Development Plan. It is anticipated that the Parties
may develop and commercialize one or more New Products, and Genentech may
develop and commercialize GA101 and/or OCR, each in a manner that might
adversely affect the development and commercialization of C2B8, but in any event
such efforts shall be directed towards maximizing the Operating Profits of
Franchise Products and GA101 in the aggregate; provided that Genentech
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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shall remain free, in its sole discretion, but subject to the limitations
enumerated in Section 4.8, to determine how to develop OCR. As used in this
Agreement, the term commercially reasonable and diligent efforts will mean those
efforts consistent with the exercise of prudent scientific and business
judgment, as applied to other pharmaceutical products of similar potential and
market size by the Party in question. IDEC acknowledges and agrees that
Genentech’s failure to agree to the development of C2B8 in an indication for
which OCR is then currently being developed is not a breach of any obligation to
diligently develop C2B8, use commercially reasonable and diligent efforts to
develop and bring C2B8 to market, or to direct efforts toward maximizing the
Operating Profits of Franchise Products and GA101 in the aggregate.
     4.2 Drug Approval Applications for C2B8. Consistent with the Development
Plan, IDEC (or Genentech, if appropriate) shall file Drug Approval Applications
and seek Regulatory Approvals for C2B8 in the Co-Promotion Territory. Prior to
submitting any Drug Approval Application, the Parties, through the JDC, shall
consult, cooperate in preparing and mutually agree on such Applications and
their content and scope. Each Party shall own all regulatory submissions
including all Drug Approval Applications for C2B8 that such Party files in the
Co-Promotion Territory. The Parties will endeavor to include on all package
labels and inserts for C2B8 sold in the Co-Promotion Territory, where
appropriate (i.e., to the extent such materials identify or otherwise make
reference to either of the Parties), the names and logos of each of IDEC and
Genentech with equal prominence, to the extent permitted by the applicable
regulatory authorities.
     4.3. Development Efforts for New Products. IDEC and Genentech each agree to
collaborate diligently in the development of New Products in the Co-Promotion
Territory in the Field and to use commercially reasonable and diligent efforts
to develop and bring each New Product to market in the Co-Promotion Territory in
the Field as soon as practicable so as to maximize the potential Operating
Profits as to Franchise Products in the aggregate in the Co-Promotion Territory
subject to and in accordance with Section 4.1. The Parties further agree to
execute and substantially perform the Development Plan for each New Product and
to cooperate with the other in carrying out each such Development Plan.
     4.4 Drug Approval Applications for New Products. Consistent with the
Development Plans for New Products, unless otherwise agreed in writing,
Genentech shall file Drug Approval Applications and seek Regulatory Approvals
for New Products in the Co-Promotion Territory. Prior to submitting any Drug
Approval Application, the Parties, through the JDC, shall consult, cooperate in
preparing and mutually agree upon such Application and its content and scope.
Each Party shall own all regulatory submissions including all Drug Approval
Applications for New Products that such Party files in the Co-Promotion
Territory. The Parties will endeavor to include on all package labels and
inserts for New Products sold in the Co-Promotion Territory, when appropriate
(i.e., to the extent such materials identify or otherwise make reference to
either of the Parties), the names and logos of each of IDEC and Genentech with
equal prominence, to the extent permitted by the applicable regulatory
authorities.
     4.5 Development Activities for Franchise Products. With regard to the
development of New Products, including, without limitation, G2H7, and with
regard to all Franchise Products (including, without limitation, C2B8) [**],
Genentech will be responsible for proposing strategic
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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plans (including plans to initiate a company sponsored trial), as well as
Development Plans, for such Franchise Products. Such Development Plans shall
include, where appropriate and without limitation, clinical development plans,
timelines, and overall budgets (consisting of aggregate estimated annual
expenditures and top line expenses for clinical development) for such Franchise
Products. Such strategic plans and Development Plans and other materials shall
be delivered to the JDC for review and approval by unanimous consent. Once a
Development Plan has been approved by the JDC, Genentech shall be responsible
for implementing such Development Plans, except to the extent that the JDC
allocates particular activities, by unanimous consent, to IDEC. In addition, and
notwithstanding the dispute resolution provisions of Sections 3.1 through 3.4,
with regard to the development of New Products, including without limitation
G2H7, and with regard to all Franchise Products (including without limitation
C2B8) [**], Genentech shall have final decision-making control over the
implementation of each such Development Plan, including without limitation,
clinical development, provided, however, that Genentech shall not have the right
to (i) exceed the annual aggregate budget approved with a Development Plan by
[**] without the unanimous approval of the JDC, (ii) assign tasks to IDEC that
were not otherwise approved by unanimous consent of the JDC, or (iii) materially
amend a Development Plan without the unanimous approval of the JDC. For the
avoidance of doubt, it is understood and agreed that Genentech’s implementation
of a Development Plan shall not be deemed a material amendment to such
Development Plan, unless such implementation would (x) materially modify the
strategic direction agreed upon by the Parties thereunder, or (y) result in an
agreed upon timeline thereunder being [**].
     4.6 Clinical Trials Not Approved by the JDC. In the event that Genentech
proposes a particular clinical trial as part of a Development Plan (other than a
clinical trial proposed for C2B8 prior to the First New Product FDA Approval)
and such trial is not approved by the JDC within thirty (30) days of the date
that such trial was proposed to the JDC (or in the event such trial was proposed
to the JDC other than at a meeting of the JDC, within thirty (30) days of the
date that the JDC first meets (whether in person or by teleconference) following
the date such trial was proposed to the JDC), then Genentech shall have the
right to conduct such trial at its own expense. During such thirty (30) day
period, Genentech shall timely provide all information reasonably requested by
any member of the JDC that would be material to making a determination as
whether such proposed clinical trial should be approved. If in such
circumstance, Genentech elects to conduct such trial within a reasonable period
of time thereafter, and such trial meets all of its primary endpoints, then IDEC
shall reimburse Genentech for [**] of the Development Costs related to such
trial that IDEC would otherwise have been responsible for if the JDC had
approved such trial (i.e., [**] the total Development Costs).
     4.7 Development of OCR. Notwithstanding anything in this Agreement to the
contrary, but except as specifically set forth in Section 4.8, as between the
Parties, Genentech shall be solely responsible for and shall have sole control
over, at its sole expense (except for IDEC’s share of the costs and losses
specified in Sections 12.10(e) and 16.2), the development (including, but not
limited to, the initiation and conduct of clinical trials) of OCR in the
Co-Promotion Territory and the Licensed Territory. As between the Parties,
Genentech shall have the sole authority to file, in its own name, at its sole
expense, all regulatory submissions and filings, including all Drug Approval
Applications, for OCR in the Co-Promotion Territory and the Licensed Territory.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Genentech shall have the sole authority and control over communications with any
regulatory authority (including FDA) regarding any development activities
(including any clinical trials) related to a OCR, Drug Approval Application for
a OCR, or any Regulatory Approval of OCR once granted. Promptly following the
Second Restated Effective Date, the Parties’ regulatory departments shall review
the existing agreements between the Parties regarding pharmacovigilance and
global safety reporting for OCR, and make amendments to such agreements to
account for the fact that Genentech has sole control over the development of OCR
and sole authority and control of communications with regulatory authorities
with respect to OCR.
     4.8 Restrictions on Genentech’s Development of OCR. Neither Genentech nor
any Genentech sublicensee of rights under this Agreement shall conduct in the
Co-Promotion Territory a clinical trial in humans of OCR in the following
indications: chronic lymphocytic leukemia, non-Hodgkin’s lymphoma and rheumatoid
arthritis. In addition , neither Genentech nor any Genentech sublicensee of
rights under this Agreement shall file a Drug Approval Application in the
Co-Promotion Territory or seek Regulatory Approval in the Co-Promotion Territory
for OCR in rheumatoid arthritis.
ARTICLE 5.
COMMERCIALIZATION IN THE CO-PROMOTION TERRITORY
     5.1 Commercialization Efforts
          (a) Commercialization Efforts for Licensed Products. IDEC and
Genentech each agree to (i) collaborate diligently in the commercialization of
C2B8 and (ii) use commercially reasonable and diligent efforts to commercialize
C2B8 promptly and in such a manner as to maximize Operating Profits as to
Franchise Products in the aggregate in the Co-Promotion Territory subject to and
in accordance with Section 4.1. The Parties agree that Genentech will play the
primary role and IDEC the secondary role in all sales, marketing and product
launch activities and tactical execution of marketing and sales promotional
programs in the Co-Promotion Territory. The Parties shall be guided by a
standard of reasonableness in economic terms and of fairness to each of the
Parties, striving to balance as best they can the legitimate interests and
concerns of the Parties and to realize the economic potential of C2B8.
          (b) Commercialization Efforts for New Products. IDEC and Genentech
each agree to (i) collaborate diligently in the commercialization of New
Products in the Co-Promotion Territory and (ii) use commercially reasonable and
diligent efforts to commercialize New Products promptly and in such a manner as
to maximize Operating Profits as to Franchise Products in the aggregate in the
Co-Promotion Territory subject to and in accordance with Section 4.1. The
Parties agree that, as to New Products, Genentech will be responsible for all
marketing and product launch activities and tactical execution of marketing and
sales promotional programs in the Co-Promotion Territory. Genentech and IDEC
shall deploy a co-promotion sales force according to section 5.2 below. The
Parties shall be guided by a standard of reasonableness in economic terms and of
fairness to each of the Parties, striving to balance as best they can the
legitimate interests and concerns of the Parties and to realize the economic
potential of New Products in the Co-Promotion Territory.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     5.2 Sales Efforts in the Co-Promotion Territory.
     (a) Although Genentech has the primary marketing role, IDEC shall have the
right to deploy a co-promotion sales force in the Co-Promotion Territory; such
IDEC sales force shall comprise [**] Sales Representatives consistent with [**]
between IDEC and Genentech, or as otherwise determined by the unanimous consent
of the JCC. As of [**], such sales forces deployed by Genentech and/or IDEC
shall be solely dedicated to selling (i) Franchise Products and (ii) products
that are not Franchise Products [**].
     (b) In addition, Genentech shall have the right, at its election, to [**]
as follows:
          (i) Genentech shall provide written notice to IDEC of the specific
date upon which [**] (such notice to be provided at least [**]);
          (ii) To the extent [**]; and
          (iii) To the extent [**].
IDEC shall timely provide Genentech with invoices for any [**] incurred under
this Section 5.2(b), and Genentech shall pay such invoices within sixty
(60) days thereof. Genentech shall have the right to audit such invoiced [**] no
more than once a calendar year, such audit to be conducted in accordance with
Section A.6 of Exhibit A.
As used herein:
          [**];
          “IDEC Sales Force FTEs” means that number of additional incremental
IDEC FTEs actually allocated by IDEC to its sales force in a given calendar year
to convert a portion of such sales force to a sales force dedicated to selling
[**] (“Y2B8”) (and to the extent IDEC elects to allocate any of such sales force
dedicated to selling [**] to also selling non-Franchise Products [**], it is
understood that [**]; provided such FTE’s shall not include that portion of any
FTEs allocated by IDEC to selling [**] prior to the date of Genentech’s written
notice to IDEC under Section 5.2(b)(i) above nor as of the Restated Effective
Date;
          “FTE” means the equivalent of a full-time employee (or [**]) assigned
to selling, supporting or overseeing the sale activity of [**] in the
Co-Promotion Territory over a calendar year (including normal vacation, sick
days and holidays), and in the case of less than a full-time employee (or [**]),
the portion of an FTE year devoted by an employee (or [**]) to the [**] sales
force shall be determined by dividing the number of days (or partial days)
during any calendar year devoted by such employee (or [**]) to the [**] sales
force by the total number of working days of a full-time employee (or [**])
during such calendar year; and
          “FTE Rate” means [**] per FTE per calendar year.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     (c) Unless the JCC shall otherwise unanimously agree: (i) each Party shall
be entitled to assign its respective sales force to such markets and accounts as
it shall determine in its reasonable discretion, and (ii) there shall be no
prohibition on the sales forces of both Parties calling on any individual
customer; provided in each case, such sales force shall conduct such activities
in accordance with coordinated messages approved by the JCC.
     (d) The Parties shall recover their Sales Costs in accordance with
Exhibit A.
     5.3 Sales and Distribution. Unless otherwise agreed in writing, Genentech
shall have the sole responsibility with respect to the following:
     (a) Booking sales for and distributing Franchise Products. If IDEC receives
any orders for Franchise Products, it shall refer such orders to Genentech.
     (b) Handling all returns of Franchise Products. If Franchise Products are
returned to IDEC, it shall promptly be shipped to the facility responsible for
shipment of Franchise Products in the country in question to the attention of
the Returned Goods Department or another location as may be designated by
Genentech.
     (c) Handling all recalls of Franchise Products. IDEC will make available to
Genentech, upon request, all of its pertinent records which Genentech may
reasonably request to assist Genentech in effecting any recall.
     (d) Handling all aspects of order processing, invoicing and collection,
Franchise Products distribution, warehousing, inventory and receivables, and
collection of data of sales to hospitals and other end users (e.g., DDD data).
     (e) Handling all other customer service related functions.
     5.4 Commercialization Plans and Materials.
     (a) Marketing and Promotional Materials for Licensed Products. All
marketing and promotional materials related to Licensed Products shall be
prepared by Genentech, and all marketing and promotional strategies and
campaigns for Licensed Products shall be subject to review and approval by the
JCC. Genentech shall be entitled to select any Third Parties involved in the
preparation of such materials. With respect to written and visual promotional or
educational materials, to the extent such materials identify or otherwise make
reference to either of the Parties, IDEC and Genentech shall both be presented
and described with equal prominence and emphasis as having joined and
participated in the development and joint commercialization of Licensed
Products, as permitted by the applicable laws and regulations of each country in
which such materials are to be presented. All documentary information,
promotional materials and oral presentations (where practical) regarding the
detailing and promoting of Licensed Products shall maximize the brand equity of
the products and state this arrangement and display, where appropriate (i.e., to
the extent such materials identify or otherwise make reference to either of the
Parties), the names and logos of each of IDEC and Genentech, with equal
prominence.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     (b) Commercialization Plans and Materials for Franchise Products. With
regard to the commercialization of New Products, including without limitation
G2H7, and with regard to all Franchise Products (including, without limitation,
C2B8) [**], Genentech will be responsible for proposing strategic plans and
strategies, as well as commercialization plans, for such Franchise Products.
Such commercialization plans shall include, where appropriate and without
limitation, life cycle plans, long range plans, three year brand plans, pricing
strategies and Annual Commercial Operating Budgets for such Franchise Products.
Such commercialization plans shall be delivered to the JCC for review and
approval by unanimous consent (such delivery to take place upon completion of
such plan or upon completion of an updated plan, as the case may be, regardless
of when such completion occurs during the calendar year). Once a
commercialization plan has been approved by the JCC, Genentech shall be
responsible for implementing such commercialization plan, except to the extent
that the JCC allocates particular activities, by unanimous consent, to IDEC. In
addition, and notwithstanding the dispute resolution provisions of Sections 3.1
through 3.4, with regard to the commercialization of New Products, including
without limitation G2H7, and with regard to all Franchise Products (including,
without limitation, C2B8) [**], Genentech shall have final decision-making
control over the implementation of each such commercialization plan, including
without limitation, marketing and promotional activities and materials (e.g.,
medical education, medical information, public relations, investigator sponsored
studies, publication planning, sales resource analysis and key opinion leader
development), provided, however, that Genentech shall not have the right to
(i) exceed (in the aggregate) the Annual Commercial Operating Budget approved
with such commercialization plan by [**] without the unanimous approval of the
JCC, (ii) assign tasks to IDEC that were not otherwise approved by unanimous
consent of the JCC, (iii) assign an initial pricing for a Franchise Product,
unless such initial pricing is within [**] of the current price for C2B8, or
(iv) materially amend a commercialization plan without the unanimous approval of
the JCC. For the avoidance of doubt, it is understood and agreed that
Genentech’s implementation of a commercialization plan shall not be deemed a
material amendment to such commercialization plan, unless such implementation
would materially modify the strategic direction agreed upon by the Parties
thereunder. All documentary information, promotional materials and oral
presentations (where practical) regarding the detailing and promoting of New
Products shall maximize the brand equity of the products and display, where
appropriate (i.e., to the extent such materials identify or otherwise make
reference to either of the Parties), the names and logos of each of IDEC and
Genentech with equal prominence.
     5.5 Training Program. Genentech shall develop training programs relating to
Franchise Products for the sales forces of each respective Party and for any
Third Parties engaged in selling or promotion, and shall assign responsibility
to itself, IDEC or a Third Party for the preparation of materials and conduct of
training. The Parties agree to utilize such training programs on an ongoing
basis to assure a consistent, focused promotional strategy. The initial training
as to any Franchise Product shall be carried out at a time which is mutually
acceptable to the Parties, and which is prior to but reasonably near the date on
which the first Regulatory Approval for such Franchise Product is expected in
the Co-Promotion Territory. As additional members are added to the Parties’
respective sales forces, training will be given to groups of the newly selected
members.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     5.6 Commercialization of OCR. Notwithstanding anything in this Agreement to
the contrary, as between the Parties, Genentech shall be solely responsible for
(except for IDEC’s share of the costs and losses specified in Sections 12.10(e)
and 16.2), and shall have sole control over, the commercialization (including
sales, pricing, marketing and distribution) of OCR in the Co-Promotion Territory
and the Licensed Territory.
ARTICLE 6.
DEVELOPMENT AND COMMERCIALIZATION IN LICENSED TERRITORY
     6.1 Development Efforts. Genentech will use commercially reasonable and
diligent efforts to develop C2B8, including pursuing preclinical development and
clinical development of C2B8 and obtaining Regulatory Approvals therefor in all
countries in the Licensed Territory, taking into account the scientific and
commercial potential of C2B8, including, without limitation, each of the
potential indications in the Field for C2B8. Within ninety (90) days of the
Original Effective Date, Genentech agrees to provide IDEC with a written
development strategy for C2B8 in the Licensed Territory indicating (i) whether
Genentech will develop C2B8 alone or with a partner in Europe, (ii) the identity
of its European partner (if any), and (iii) a list of clinical trials which
Genentech would conduct for C2B8 approval in Europe assuming adequate quantities
of C2B8 are available.
     6.2 Marketing Efforts. Genentech will use commercially reasonable and
diligent efforts to commercialize C2B8 in each country in which Regulatory
Approval is granted, taking into account the scientific and commercial potential
for C2B8, including without limitation each of the potential indications
therefor.
     6.3 Development Costs and Marketing Costs. Genentech shall bear all
Development Costs and Marketing Costs for C2B8 for development or marketing in
the Licensed Territory. Genentech shall have the sole responsibility for, and
right to make all decisions regarding, all development and marketing activities
in the Licensed Territory.
     6.4 Cooperation on Development Efforts. To facilitate cooperation between
the Parties on the worldwide development and marketing of C2B8, Genentech shall
keep IDEC informed of all substantive development activities in the Licensed
Territory, and agrees to use its good faith efforts to have an IDEC
representative attend meetings of any development committee or similar body
governing development activities of Licensed Products in the Licensed Territory.
Genentech shall consider in good faith any comments made by such IDEC
representative. The Parties agree that they will do nothing during C2B8
development activities to imperil early Regulatory Approvals in any country in
any territory. Genentech further agrees that its European development plan for
Licensed Products will not specify clinical trials on a time line that would
delay or slow Regulatory Approval in the United States.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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ARTICLE 7.
MILESTONES, PROFIT SHARING, ROYALTIES AND OTHER PAYMENTS
     7.1 (a) Payments by Genentech upon Execution of Original Agreement.
Genentech made the following payments to IDEC at the times set forth herein or
in the operative agreement:

(i)     [**], within 10 days of the Original Effective Date;   (ii)     [**];
and

(iii)   $5,000,000 to purchase shares of IDEC Preferred Stock as set forth in
the Stock Purchase Agreement.

     (b) Payment by IDEC upon Execution of this Agreement; Opt-in Fees. IDEC
shall make the following payments to Genentech at the times set forth herein:

(i)   [**], within 10 days of the Restated Effective Date;   (ii)   [**], within
10 days of making an opt-in election pursuant to Section 2.5(b) for the first
New Product other than G2H7 for which such an election is made, provided,
however, that if a fee is paid under Section 7.1(b)(iv) before any fee is paid
under this Section 7.1(b)(ii), then this Section 7.1(b)(ii) shall be deemed void
ab initio and the word “second” in Section 7.1(b)(iii) shall be deemed changed
to “first”;   (iii)   [**], within 10 days of making an opt-in election pursuant
to Section 2.5(b) for the second and each subsequent New Product other than G2H7
for which such an election is made.   (iv)   [**], within 10 days of making an
opt-in election pursuant to Section 2.5(c) for the first and each subsequent New
Product other than G2H7 for which such an election is made.

     7.2 Additional Equity Purchases. Genentech shall make certain additional
equity purchases in accordance with the terms and conditions of the Stock
Purchase Agreement.
     7.3 Special Pre-Approval Debt or Equity Purchase. Genentech shall, at the
election of IDEC, make an additional investment or loan in accordance with the
terms and conditions of an Option Agreement of even date of the Original
Effective Date between IDEC and Genentech (the “Option Agreement”).
     7.4 Milestone Payments. Subject to the terms of the equity purchases set
forth in the Stock Purchase Agreement and the credit as provided in the Option
Agreement, Genentech made or shall make the following payments to IDEC, within
30 days after the first achievement of each of the following milestones for
C2B8:
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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      MILESTONE   Payment
(a) Upon Regulatory Approval in the United States
  [**]
 
   
(b) Upon Regulatory Approval in the First Major European Country
  [**]
 
   
(c) Patent Milestone Event
  [**]

     7.5 Share of Operating Profits or Losses. Upon the first Regulatory
Approval in the United States, IDEC and Genentech shall share in Operating
Profits or Losses from sales of Franchise Products other than OCR in the
Co-Promotion Territory as provided in Exhibit A.
     7.6 Term of Operating Profits or Losses. The Parties shall share Operating
Profits or Losses hereunder in the Co-Promotion Territory until the earlier of
the date the Parties mutually agree to terminate the collaboration in the
Co-Promotion Territory, or as provided in Section 15.2.
     7.7 Royalties.
     (a) OCR in Co-Promotion Territory. Genentech shall pay IDEC a royalty on
Royalty-Bearing Sales in the Co-Promotion Territory of OCR as follows:
(i) a 13.5% royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory up to and including [**];
(ii) a [**] royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory above [**] and up to and including [**];
(iii) a [**] royalty on the portion of annual Royalty-Bearing Sales of OCR in
the Co-Promotion Territory above [**] and up to and including [**];
(iv) a [**] royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory above [**] and up to and including [**];
(v) a [**] royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory above [**] and up to and including [**];
(vi) a [**] royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory above [**] and up to and including [**]; and
(vii) a 24% royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory above [**].
     Upon the first entry in the Co-Promotion Territory of a biosimilar for OCR,
the foregoing royalty rates shall be reduced by [**]. For the purposes of the
preceding sentence, a “biosimilar”
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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for OCR means a product developed by an entity other than Genentech, a Genentech
Affiliate or F. Hoffman-La Roche AG, which product either: (i) has been deemed a
biosimilar or interchangeable product pursuant to Section 351(k) of the Public
Health Service Act or Section 505(b)(2) of the Food, Drug and Cosmetic Act, or
successor provisions of either, or any implementing legislation or regulations
thereof, wherein OCR was the reference product relied upon in making such
determination; or (ii) has been approved for marketing in the Co-Promotion
Territory as a biosimilar or generic version of OCR pursuant to similarly
purposed legislation as described in (i) above which may be enacted following
the Second Restated Effective Date.
     (b) Licensed Products. Genentech shall pay IDEC a royalty on
Royalty-Bearing Sales of Licensed Products in the Licensed Territory as follows:
(i) the royalty rate shall be [**] of Royalty-Bearing Sales in the Licensed
Territory in any calendar year, and (ii) the royalty rate shall be [**] of
Royalty-Bearing Sales in the Licensed Territory in any calendar year.
     (c) New Products and OCR in Licensed Territory. Genentech shall pay IDEC a
[**] royalty on Royalty-Bearing Sales in the Licensed Territory of (i) G2H7 and
each other New Product and (ii) OCR; provided however, that no such royalty
shall be due on any [**] Potential New Product that was deemed a New Product
pursuant to Section 2.5(b)(ii), nor on any Third Party Anti-CD20 Product for
which IDEC enters into a written agreement with Genentech pursuant to
Section 2.6.
     (d) Third Party Royalties on Franchise Products in Co-Promotion Territory.
Royalties owed to any Third Party on account of sales of Franchise Products in
the Co-Promotion Territory will be charged against Co-Promotion Profits, except
that IDEC will pay any payments owed to ML/MS Partners on account of any sales
of Licensed Products in any territory.
     (e) Third Party Royalties on Franchise Products and on OCR in the Licensed
Territory. Genentech shall pay any Third Party royalties (except to ML/MS
Partners) owed on account of sales of Franchise Products and OCR in the Licensed
Territory, including royalties owed due to the manufacture of Franchise Products
by Genentech or IDEC. Genentech shall receive a credit of [**] of the royalties
it pays on account of the manufacture, use or sale of Licensed Products against
royalties it owes to IDEC. Prior to the Original Effective Date, Genentech
discussed with IDEC the significant Third Party royalties that it believed at
such time would be payable on sales of Licensed Products. In addition, Genentech
shall receive a credit of [**] of the royalties it pays on account of the
manufacture, use or sale of G2H7 and each other New Product and OCR in the
Licensed Territory against royalties it owes to IDEC; provided, however that the
royalty that would otherwise be due under Section 7.7(c) shall not be reduced
below a [**] royalty.
     (f) Third Party Royalties on OCR in the Co-Promotion Territory. Genentech
shall pay any Third Party royalties owed on account of sales of OCR in the
Co-Promotion Territory, which shall not be creditable against any royalty or
other payment owed by Genentech to IDEC.
     (g) The Parties (i) shall, within ninety (90) days following the Original
Effective Date, amend the Cabilly license dated December 7, 1993 between
Genentech and IDEC (the “Cabilly
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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License”) to waive any royalties owed by IDEC to Genentech on manufacture, use
or sale of Licensed Products covered by the Cabilly License in the Co-Promotion
Territory, and (ii) to the extent IDEC would be obligated to pay royalties (if
any) under the Cabilly License in order to manufacture, use or sell any New
Products in the Co-Promotion Territory, Genentech agrees to amend such license
to waive any such royalties; provided, however, that any payment Genentech must
make to any Third Party on account of the development, manufacture, use or sale
of Franchise Products covered by the patents included in the Cabilly License
shall be included in Cost of Sales of such Franchise Products.
     (h) If the Parties mutually agree to develop an anti-CD19 protein under
this Agreement covered by a claim of a Patent included in the Cabilly License,
Genentech will make available a license for CD19 antigens to Patents included in
the Cabilly License as part of the commercial terms for the development of such
product.
     7.8 Royalty Payment Reports. Royalty payments under this Agreement shall be
made to IDEC or its designee quarterly within sixty (60) days following the end
of each calendar quarter for which royalties are due. Each royalty payment shall
be accompanied by a report summarizing the Royalty-Bearing Sales during the
relevant three-month period.
     7.9 Term of Royalty Obligations.
     (a) Genentech shall pay royalties hereunder with respect to Franchise
Products and OCR in each country in the Licensed Territory for eleven (11) years
from the date of first commercial sale of such Franchise Product or OCR,
respectively, in such country. Genentech shall pay royalties hereunder with
respect to OCR in the Co-Promotion Territory until [**].
     (b) Upon expiration of the royalty term for a Licensed Product in a country
as described above, Genentech shall thereafter have an exclusive, fully paid-up,
irrevocable license under the IDEC Patents, IDEC Know-how and IDEC regulatory
submissions to make, use, sell, offer for sale, have sold and import that
Licensed Product in that country. Upon expiration of the royalty term for a New
Product or OCR in a country as described above, Genentech shall thereafter have
an non-exclusive, fully paid-up, irrevocable license under the IDEC Patents,
IDEC Know-how and IDEC regulatory submissions to make, use, sell, offer for
sale, have sold and import OCR and/or that New Product, as applicable, in that
country.
     7.10 Taxes. IDEC shall pay any and all taxes levied on account of, or
measured exclusively by, any payment including royalties it receives under this
Agreement. If laws or regulations require that taxes be withheld, Genentech will
(i) deduct those taxes from the remittable royalty, (ii) timely pay the taxes to
the proper taxing authority, and (iii) send proof of payment to IDEC within
sixty (60) days following that payment.
     7.11 Blocked Currency. In each country where the local currency is blocked
and cannot be removed from the country, at the election of Genentech, royalties
accrued in that country shall be paid to IDEC in the country in local currency
by deposit in a local bank designated by IDEC.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     7.12 Foreign Exchange. For the purpose of computing Royalty-Bearing Sales
for Franchise Products sold in a currency other than United States Dollars, such
currency shall be converted into United States Dollars in accordance with
Genentech’s customary and usual translation procedures consistently applied.
     7.13 Payments to or Reports by Affiliates. Any payment required under any
provision of this Agreement to be made to either Party or any report required to
be made by any Party shall be made to or by an Affiliate of that Party if
designated by that Party as the appropriate recipient or reporting entity.
     7.14 Sales By Sublicensees. In the event Genentech grants licenses or
sublicenses to others to make or sell Franchise Products in the Licensed
Territory, or OCR in the Co-Promotion Territory or in the Licensed Territory,
such licenses or sublicenses shall include an obligation for the licensee or
sublicensee to account for and report its Royalty-Bearing Sales of such
Franchise Products and/or OCR (as applicable) on the same basis as if such sales
were Royalty-Bearing Sales by Genentech, and Genentech shall pay royalties to
IDEC as if the Royalty-Bearing Sales of the licensee or sublicensee were
Royalty-Bearing Sales of Genentech.
ARTICLE 8.
MANUFACTURE AND SUPPLY
     8.1 Process Development, Manufacturing Approvals of C2B8. IDEC shall be
responsible for, at its own expense, process development, scale-up, validation
and FDA licensure of its existing C2B8-producing CHO cell line to the 2,750
liter fermenter scale. As soon as practicable after the Original Effective Date,
IDEC will transfer to Genentech a re-amplified CHO C2B8-producing cell line,
and, within 30 days of the Original Effective Date, transfer the technology to
be licensed to Genentech under the terms and conditions of the Expression
Technology License of even date herewith, and provide reasonable training of
Genentech personnel as requested by Genentech necessary to allow Genentech to
scale up C2B8 process with the re-amplified cell line. Immediately after receipt
of IDEC’s re-amplified CHO C2B8 producing cell line by Genentech, Genentech will
begin work, at its own expense, on the scale-up of a re-amplified cell line in
optimal growth media to produce C2B8 at commercial scale. If Genentech
determines that such scale up is not commercially feasible, it will so notify
the JDC. Upon the decision of the JDC to go forward, Genentech will, at its own
expense, attempt to scale up another cell line selected by the JDC or the cell
line used for 2,750 liter fermenter scale production. If Genentech has
successfully scaled up a cell line to its commercial scale and IDEC is then
manufacturing C2B8, Genentech will, at its own expense, transfer the optimized
cell line and information sufficient to allow IDEC to manufacture C2B8 by
essentially the same process used by Genentech except for the size of the
fermentation vessel. If bridging or any other studies are required to permit the
use or sale of C2B8 produced by Genentech by the optimized process, the costs of
such clinical studies shall be paid by Genentech, but shall be charged against
Operating Profits over the first three years after the first commercial sale of
C2B8 produced by the optimized process. IDEC will otherwise be responsible, at
its own expense, for all expenses incurred in obtaining Regulatory Approvals for
the manufacturing process used to produce C2B8, except that Genentech, at its
own expense, will pay the expenses incurred to receive FDA licensure of
Genentech facilities. Notwithstanding
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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anything to the contrary in this Section 8.1, costs incurred by either Party
under this Section 8.1 after Regulatory Approval in the United States shall be
charged to Operating Profits.
     8.2 Manufacture and Supply of C2B8. IDEC shall, pursuant to a Supply
Agreement to be entered into between the Parties prior to the date of the first
submission of an application or registration for Regulatory Approval, supply all
requirements for C2B8 in final vial form for commercial sale in all territories
for the first two years after the first Regulatory Approval in the United States
or Europe, whichever comes earlier (the “Initial Commercial Period”). The
average annual Cost of Goods Sold of C2B8 packaged in final vial form during the
Initial Commercial Period shall be the lower of (i) [**] or (ii) [**]. IDEC may
continue to supply, at its option, commercial requirements for C2B8 up to the
capacity of its current manufacturing plant [**] in San Diego (the “Supply
Option”). The Supply Option shall be exercised, if at all, by written notice on
or before the date of the first Regulatory Approval including a good faith
estimate of IDEC’s planned production levels. If the parties determine that the
FDA will not grant establishment licenses to two manufacturing facilities using
different scales of production, then the parties will use best efforts to
develop a manufacturing capacity plan by the first Regulatory Approval.
Subsequent to the Initial Commercial Period, if both Parties are manufacturing
Licensed Product at the same time, the Cost of Goods Sold for both Parties used
for calculation of Operating Profits shall be the lower of Genentech’s or IDEC’s
actual cost of Goods Sold for commercial production of C2B8 packaged in final
vial form. After the Initial Commercial Period, Genentech shall manufacture all
requirements of C2B8 for commercial sale in excess of that which IDEC has agreed
to produce.
     8.3 Transfer of Materials and Know-how for C2B8.
     (a) IDEC shall on Genentech’s request at any time transfer to, and fully
enable Genentech with, the then most current version of all biological
materials, know-how, reagents and expertise necessary for Genentech to undertake
the manufacture of C2B8. IDEC shall periodically update biological materials and
information related to C2B8 previously transferred to Genentech. All transfers
of materials and information to Genentech shall be free of charge to Genentech;
provided, however, IDEC’s obligation to train Genentech personnel in the use of
such material and information shall be limited to [**] person hours.
     (b) At the time Genentech completes the commercialization scale-up
described in Section 8.1, if IDEC continues to manufacture commercial quantities
of C2B8, Genentech will transfer to, and fully enable IDEC with, the then most
current version of all biological materials, know-how, reagents and expertise
applicable to the actual manufacturing process in use by IDEC necessary for IDEC
to undertake the manufacture of C2B8 provided that IDEC uses such biological
materials, know-how, reagents and expertise solely to manufacture C2B8.
Genentech’s obligation to train IDEC personnel in the use of such materials or
information shall be limited to [**] person hours.
     (c) IDEC agrees to allow Genentech to audit, at its expense, any Regulatory
Approval documentation in the possession of IDEC concerning products other than
the Licensed Products to determine if such products utilize Genentech Patents or
Genentech Know-how. Such audit(s) shall
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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be conducted by an independent party to be mutually agreed upon by Genentech and
IDEC, and shall be limited to one audit during any twelve month period.
     8.4 Transfer Price of Products for C2B8. The transfer price for C2B8
supplied to Genentech for sale in the Licensed Territory will be [**]. IDEC will
invoice Genentech within 10 days after each shipment of C2B8 to the Licensed
Territory on a shipment by shipment basis. Genentech shall pay each invoice
within thirty (30) days of receipt of both of C2B8 and invoice.
     8.5 Manufacture of C2B8 for Clinical Trials.
     (a) IDEC will supply at no cost all quantities of C2B8 for pre-clinical
studies and clinical trials in the Co-Promotion Territory directed toward
obtaining the first Regulatory Approval in the Co-Promotion Territory.
     (b) IDEC shall supply to Genentech, at IDEC’s [**] until the beginning of
the Initial Commercial Period and at [**] thereafter, all quantities of C2B8 for
preclinical studies and clinical trials in the Licensed Territory or for
expanded needs beyond those set forth in the original Development Plan.
     8.6 Manufacture and Supply of Franchise Products (other than C2B8).
Genentech shall be responsible, and have complete decision making control for
all process development, scale-up, validation and FDA licensure for the
manufacture of all Franchise Products (other than C2B8) in the Co-Promotion
Territory, the cost of which shall be considered Development Costs pursuant to
this Agreement. In addition, Genentech, either itself or through a third party
manufacturer, shall be responsible for the manufacture and supply of clinical
and commercial supply of New Products for the Co-Promotion Territory (Genentech
shall use commercially reasonable and diligent efforts to maintain a reasonable
Cost of Goods Sold for manufacture and supply of all Franchise Products).
Genentech shall be responsible, and have complete decision making control, for
all process development, scale-up, validation and FDA licensure for the
manufacture of (i) OCR in the Co-Promotion Territory and Licensed Territory and
(ii) all Franchise Products in the Licensed Territory.
     8.7 Right of First Negotiation for Manufacture and Supply of Franchise
Products in the Co-Promotion Territory. In the event Genentech decides to seek a
Third Party (other than F. Hoffmann La Roche AG) to manufacture and supply a
particular Franchise Product, in the Co-Promotion Territory, Genentech shall
promptly notify IDEC in writing. IDEC shall have thirty (30) days from the date
of Genentech’s notice to IDEC to provide written notice to Genentech that it
elects to negotiate with Genentech the rights under which it may manufacture and
supply such Franchise Product in the Co-Promotion Territory, and a failure to
timely so elect shall be deemed a decision not to negotiate for such rights. In
the event that IDEC timely notifies Genentech of its desire to engage in such
negotiations, then for a period of ninety (90) days, Genentech and IDEC shall
use good faith efforts to agree upon terms under which IDEC would manufacture
and supply such Franchise Product in the Co-Promotion Territory. In the event
that IDEC and Genentech have not entered into a definitive agreement within
ninety (90) days of IDEC’s election to negotiate, then
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Genentech shall be free to grant to any Third Party the right to manufacture and
supply such Franchise Product in the Co-Promotion Territory on any terms that
Genentech considers appropriate.
ARTICLE 9.
LICENSES
     9.1 Licensed Products
          (a) Licenses To Genentech Within The Field. IDEC grants to Genentech a
worldwide license (including Asia, pursuant to the First Amendment) under the
IDEC Patents and IDEC Know-how and IDEC regulatory submissions in the Field to
develop, make, have made, use, sell, offer for sale, have sold and import
Licensed Products. Such license shall be co-exclusive with IDEC in the
Co-Promotion Territory and exclusive even as to IDEC in the Licensed Territory.
          (b) Nonexclusive License To IDEC. Genentech grants IDEC a nonexclusive
license in the United States and Canada to use Genentech Know-how and Genentech
Patents in the Field solely for the purposes of developing, manufacturing,
having manufactured, using, selling, offering for sale, having sold and
importing C2B8 and such additional Licensed Products as the Parties mutually
agree to develop in the Co-Promotion Territory. IDEC covenants and agrees not to
develop, make, have made, use, sell, offer for sale, have sold or import any
product using any of the Genentech Know-how or Genentech Patents outside of the
Field. If Genentech is sublicensing any Third Party patents under this grant,
IDEC shall pay any royalties owed to any such Third Party on account of the
manufacture, use or sale of any Licensed Products by IDEC. Genentech further
grants to IDEC a co-exclusive (with Genentech) license to use Genentech
regulatory submissions in the Field solely for the purposes of developing,
manufacturing, having manufactured, using, selling, offering for sale, having
sold and importing C2B8 and such additional Licensed Products as the Parties
mutually agree to develop in the Co-Promotion Territory.
     9.2 New Products
          (a) Nonexclusive License to Genentech. IDEC grants to Genentech a
worldwide, nonexclusive license under the IDEC Patents, IDEC Know-how and IDEC
regulatory submissions in the Field to develop, make, have made, use, sell,
offer for sale, have sold and import G2H7 and each other New Product.
          (b) License to IDEC in the Co-Promotion Territory. Genentech grants to
IDEC a co-exclusive (with Genentech) license under the Genentech Patents,
Genentech NP Patents, Genentech Know-how and Genentech regulatory submissions in
the Field in the United States to develop, use, sell, offer for sale, have sold
and import G2H7 and each other New Product. Genentech does not grant any license
or rights to IDEC regarding development or commercialization of New Products
outside the Field or outside of the United States, and nothing in this Agreement
shall be construed as granting IDEC any license or right to control the
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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development and/or commercialization of New Products outside the Field and
outside the United States.
     9.2a OCR. IDEC hereby grants to Genentech an exclusive (even as to IDEC)
license, under the IDEC Patents, IDEC Know-How, IDEC’s interests in Joint
Patents and Joint Know-How, and IDEC regulatory submissions in the Field, to
develop, make, have made, use, sell, offer for sale, have sold and import OCR in
the Co-Promotion Territory and Licensed Territory.
     9.3 Sublicensing. Genentech may grant sublicenses to its rights under this
Agreement with the prior written consent of IDEC, such consent not to be
unreasonably withheld; except that the consent of IDEC is not required for
Genentech to grant sublicenses regarding the development or commercialization of
OCR which sublicenses do not also include a sublicense for a Franchise Product
        . IDEC hereby consents to such a sublicense to F. Hoffmann La Roche or
any of its affiliates. Unless otherwise agreed, each sublicensee shall be
subject to all of the obligations of Genentech hereunder applicable to that part
of the territory being licensed.
     9.4 Inclusion of Asia in the Licensed Territory. If a license in Asia
becomes available on an exclusive basis with respect to C2B8, IDEC shall notify
Genentech in writing. If such notification is prior to or on December 31, 1995,
then Genentech shall pay IDEC [**] upon signing of an amendment to this
Agreement to include such territory in the Licensed Territory. After December
31, 1995, Genentech shall have the option to include Asia in the Licensed
Territory, if available, on sixty (60) days written notice, for the [**] license
issue fee payable pursuant to this Section. IDEC agrees to use its best efforts
within 90 days of the Original Effective Date to obtain at least a co-exclusive
license for Genentech in the Asian territory. The consideration to IDEC for a
co-exclusive license involving Genentech in the Asian territory shall not be
less than [**], of which Genentech shall pay no more than [**]. If Asia is added
to the Licensed Territory, it shall be subject to the same terms and conditions
set forth in this Agreement, provided that Genentech shall have no obligation to
make any additional payments with respect to such added Asian territory other
than royalties as specified in this Agreement. Notwithstanding the foregoing
provisions of this Section 9.4, the Parties acknowledge that Asia, pursuant to
the First Amendment, is included within the Licensed Territory.
     9.5 Shared Information. All of the information described in Section 14.1
below shall be deemed IDEC Know-how and Genentech Know-how for purposes of this
Article 9 and the licenses granted herein.
     9.6 Third Party Rights. In the event that IDEC or Genentech becomes aware
of any Third Party rights that may be relevant to development, manufacture or
commercialization of the Franchise Products in the Co-Promotion Territory, that
Party shall promptly notify the other Party. To the extent that the Parties
mutually agree that such rights are necessary to develop, manufacture or
commercialize the Franchise Products in the Co-Promotion Territory, the Parties
shall discuss an appropriate course of action to obtain a license to such rights
in order to further the objectives of the Parties under this Agreement.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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ARTICLE 10.
TRADEMARKS
     10.1 (a) Product Trademarks for Licensed Products. All Licensed Products
shall be sold in the Co-Promotion Territory under trademarks selected by the JCC
and owned jointly by Genentech and IDEC in the Co-Promotion Territory and
Licensed Territory. The JCC shall use best efforts to select a worldwide
trademark. Each Party hereby grants the other a fully-paid co-exclusive license
to use its trademarks in the Co-Promotion Territory for the Co-Promotion
activities provided for in this Agreement. IDEC shall control preparation,
prosecution and maintenance of applications related to such trademarks and the
costs in the Co-Promotion Territory (“Trademark Costs”) shall (i) prior to
Regulatory Approval in the United States, be paid by IDEC, and (ii) after
Regulatory Approval in the United States, be included in Other Operating
Income/Expense pursuant to Exhibit A. Genentech shall control preparation,
prosecution, maintenance and applications related to trademarks in the Licensed
Territory and shall pay all costs incurred with respect thereto, and will notify
IDEC if Genentech believes in good faith that sole ownership of the trademark in
a particular country in the Licensed Territory is the best method to protect the
trademark, in which case Genentech shall be the sole owner of such trademark.
     (b) Trademarks for New Products. G2H7 and each other New Product shall be
sold in the Co-Promotion Territory under trademarks selected by the JCC and
owned jointly by Genentech and IDEC in the Co-Promotion Territory. The JCC shall
use best efforts to select a worldwide trademark. Each Party hereby grants the
other a fully-paid co-exclusive license to use its trademarks in the
Co-Promotion Territory for the Co-Promotion activities provided for in this
Agreement. Genentech shall control preparation, prosecution and maintenance of
applications related to such trademarks and the Trademark Costs associated with
New Products in the Co-Promotion Territory shall be included in Other Operating
Income/Expense pursuant to Exhibit A. Genentech shall solely own, and control
preparation, prosecution, maintenance and applications related to such
trademarks outside the United States and shall pay all costs incurred with
respect thereto.
     (c) Trademarks for OCR. Genentech shall own all right, title and interest
in and to all OCR Trademarks, and Genentech shall have sole authority and
responsibility, at its expense, for the selection, prosecution and maintenance
of, all OCR Trademarks. Any and all right, title or interest in, to or under any
OCR Trademark, including any goodwill which has accrued or may accrue to the
benefit of IDEC shall hereby be assigned to and inure to the sole benefit of
Genentech. IDEC shall not, at any time, apply for any trademarks or other
protection that would affect Genentech’s ownership or use of any rights in the
OCR Trademarks, or file any document with any government authority or take any
other action that would affect Genentech’s ownership or use of the OCR
Trademarks, or assist any Third Party in doing so. The costs and expenses for
the preparation, prosecution and maintaince of OCR Trademarks shall be the sole
responsibility of Genentech.
     10.2 Infringement of Trademarks. Each Party shall notify the JCC promptly
upon learning of any actual, alleged or threatened infringement of a trademark
applicable to a Franchise Product (the “Trademark”) in the Co-Promotion
Territory or of any unfair trade practices, trade dress imitation, passing off
of counterfeit goods, or like offenses in the Co-Promotion Territory. Upon
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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learning of such offenses from a Party regarding a jointly owned Trademark, the
JMC shall confer with the Parties regarding which Party and counsel should be
assigned to defend the Trademark. The Party defending the Trademark shall take
all reasonable and appropriate steps to protect, defend and maintain the
Trademark for use by the Parties in connection with the Franchise Product. Upon
learning of such an offense from a Party regarding a Trademark owned solely by
one of the Parties, and not provided for above in this Section, the JCC shall
confer with the Parties regarding the defense of such Trademark. The decision
whether and how to defend such a Trademark owned solely by one Party will rest
with such Party.
     10.3 Costs of Defense for Trademarks. All of the costs, expenses and legal
fees in bringing, maintaining and prosecuting any action to maintain, protect or
defend a jointly owned Trademark in the Co-Promotion Territory, and any recovery
shall be included in the Other Operating Income/Expense. All of the costs,
expenses and legal, fees in bringing, maintaining and prosecuting any action to
maintain, protect or defend a Trademark in the Licensed Territory or a OCR
Trademark in either the Licensed Territory or Co-Promotion Territory shall be
paid by, and any recovery shall be paid to, Genentech.
ARTICLE 11.
CONFIDENTIALITY
     11.1 Confidentiality; Exceptions. Except to the extent expressly authorized
by this Agreement or otherwise agreed in writing, the Parties agree that, for
the term of this Agreement and for seven (7) years thereafter, the receiving
Party shall keep confidential and shall not publish or otherwise disclose or use
for any purpose other than as provided for in this Agreement any Information and
other information and materials furnished to it by the other Party pursuant to
this Agreement (collectively, “Confidential Information”), except to the extent
that it can be established by the receiving Party that such Confidential
Information:
     (a) was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the other Party;
     (b) was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the receiving Party;
     (c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving Party in breach of this Agreement;
     (d) was disclosed to the receiving Party, other than under an obligation of
confidentiality, by a Third Party who had no obligation to the disclosing Party
not to disclose such information to others; or.
     (e) was subsequently developed by the receiving Party without use of the
Confidential Information as demonstrated by competent written records.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     11.2 Authorized Disclosure. Each Party may disclose Confidential
Information hereunder to the extent such disclosure is reasonably necessary in
filing or prosecuting patent applications, prosecuting or defending litigation,
complying with applicable governmental regulations or conducting preclinical or
clinical trials, provided that if a Party is required by law or regulation to
make any such disclosure of the other Party’s Confidential Information it will,
except where impracticable for necessary disclosures, for example in the event
of medical emergency, give reasonable advance notice to the other Party of such
disclosure requirement and, except to the extent inappropriate in the case of
patent applications, will use its reasonable efforts to secure confidential
treatment of such Confidential Information required to be disclosed. In
addition, each Party shall be entitled to disclose, under a binder of
confidentiality containing provisions as protective as those of this Article 11,
Confidential Information to consultants and other Third Parties only for any
purpose provided for in this Agreement. Nothing in this Article 11 shall
restrict any Party from using for any purpose any Information developed by it
during the course of the collaboration hereunder.
     11.3 Survival. This Article 11 shall survive the termination or expiration
of this Agreement for a period of seven (7) years.
     11.4 Termination of Prior Agreement. This Agreement supersedes the
Confidentiality Agreement between the Parties dated September 9, 1994. All
Information exchanged between the Parties under that Agreement shall be deemed
Confidential Information and shall be subject to the terms of this Article 11.
     11.5 Publications. Prior to the end of Phase II Clinical Trials of each
Franchise Product in the Co-Promotion Territory and subject to the applicable
publication provisions of any Clinical Trial Agreements with investigators, the
JDC with appropriate input from the JCC will determine the overall strategy for
publication in support of such Franchise Product in the Co-Promotion Territory.
Except as required by law, each Party agrees that it shall not publish or
present the results of studies carried out as part of the collaboration without
the approval of the JDC and the opportunity for prior review by the other Party.
Each Party shall provide to the other the opportunity to review any proposed
abstracts, manuscripts or presentations (including information to be presented
verbally) which relate to any Franchise Product at least thirty (30) days prior
to their intended submission for publication and such submitting Party agrees,
upon written request from the other Party, not to submit such abstract or
manuscript for publication or to make such presentation until the other Party is
given a reasonable period of time to seek patent protection for any material in
such publication or presentation which it believes is patentable. Genentech may,
without IDEC’s consent or prior review, publish or present the results of
studies carried out with OCR, provided such publication or presentation does not
disclose Confidential Information of IDEC.
ARTICLE 12.
OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS
     12.1 Modified Definitions. For purposes of this Article 12, IDEC Patents,
Genentech Patents and Genentech NP Patents shall not include Patents owned
jointly by the Parties. “Joint
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Patents” shall mean Patents owned jointly by the Parties which cover the
manufacture, use or sale of Franchise Products or OCR.
     12.2 Ownership of Intellectual Property. IDEC shall own all inventions made
under this Agreement solely by it or its employees. Genentech shall own all
inventions made under this Agreement solely by its employees. All inventions
made under this Agreement jointly by employees of IDEC and Genentech will be
owned jointly by IDEC and Genentech and each Party shall retain full ownership
under any Patents resulting therefrom, with full ownership rights in any field
and subject to the licenses granted in Article 9, the right to sublicense
without the consent of the other Party, without accounting. The laws of the
United States with respect to joint ownership of inventions shall apply in all
jurisdictions giving force and effect to this Agreement. The Parties shall
jointly own Joint Know-how.
     12.3 Disclosure of Patentable Inventions. In addition to the disclosures
required under Article 14, each Party shall provide to the other, any written
invention disclosure submitted to a Party’s legal department in the normal
course which discloses an invention made under this Agreement that is useful in
the Field, except that Genentech shall not be required to disclose to IDEC
inventions made following the Second Restatement Date related solely to OCR made
solely by employees of Genentech and/or its collaboration partners other than
IDEC. Such invention disclosures shall be provided to the other Party within
thirty (30) days after the Party commences preparation of a patent application
based on such disclosure.
     12.4 Coordination. The Parties intend to prosecute and manage IDEC Patents,
Genentech Patents and Genentech NP Patents for the purpose of providing the
broadest protection for Franchise Products and OCR. The Parties will share
information and each Party will consider the views of the other Party with
respect to the scope of claims and decisions regarding the prosecution and
maintenance of such Patents as necessary to achieve such purpose.
     12.5 Prosecution of Existing Patents.
     (a) IDEC shall disclose to Genentech the complete texts of all IDEC Patents
filed by IDEC prior to the Restated Effective Date which claim the manufacture,
use or sale of Franchise Products as well as all information received concerning
the institution or possible institution of any interference, opposition,
reexamination, reissue, revocation, nullification or any official proceeding
involving an IDEC Patent anywhere in the Co-Promotion Territory or Licensed
Territory. Genentech shall have the right to review all such IDEC Patents and
all proceedings related thereto and make recommendations to IDEC concerning them
and their conduct and IDEC shall consider in good faith for the Co-Promotion
Territory and take into account for the Licensed Territory Genentech’s
reasonable comments related thereto. IDEC agrees to keep Genentech promptly and
fully informed of the course of patent prosecution or other proceedings of such
IDEC Patents including by providing Genentech with copies of substantive
communications, search reports and third party observations submitted to or
received from patent offices within the Co-Promotion Territory or Licensed
Territory. Genentech shall provide such patent consultation to IDEC related to
such IDEC Patents at no cost to IDEC. All reasonable costs that IDEC incurs
after the Original Effective Date in filing, prosecuting and maintaining IDEC
Patents in the Co-Promotion Territory shall be borne by IDEC until the date of
Regulatory Approval and thereafter
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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shall be charged to Other Operating Income/Expense. All such reasonable costs
which IDEC will incur in the Licensed Territory shall be reimbursed by
Genentech; provided, however, that Genentech shall have the right to determine
which countries within the Licensed Territory in which to file, prosecute and
maintain IDEC Patents. Genentech shall hold all information disclosed to it
under this Article 12 as confidential subject to the provisions of Article 11 of
this Agreement. Genentech shall have the right to assume responsibility for any
IDEC Patent or any part of any such Patent which IDEC intends to abandon or
otherwise cause or allow to be forfeited provided that the claims of such IDEC
Patent covers Franchise Product or formulations, methods of manufacture or
methods of use thereof.
     (b) Genentech shall have the right, using in-house or outside legal counsel
selected at Genentech’s sole discretion, to prepare, file, prosecute, maintain
and obtain extensions of Genentech Patents, Genentech NP Patents or Joint
Patents filed prior to the Restated Effective Date in countries of Genentech’s
choice throughout the Licensed Territory and in such countries within the
Co-Promotion Territory as agreed by the Parties with appropriate credit to IDEC
representatives, including the naming of such parties as inventors where
appropriate. Genentech shall bear the costs relating to such activities in the
Licensed Territory at all times and in the Co-Promotion Territory until
Regulatory Approval in the United States. Such costs in the Co-Promotion
Territory after Regulatory Approval in the United States shall be included in
Other Operating Income/Expense pursuant to Exhibit A. Genentech shall disclose
to IDEC the complete text of, and shall use reasonable efforts to solicit IDEC’s
advice and review of the nature and text of, all Genentech Patents, Genentech NP
Patents and Joint Patents and material prosecution matters related thereto in
reasonably sufficient time prior to filing thereof, and Genentech shall consider
in good faith for the Co-Promotion Territory and take into account for the
Licensed Territory IDEC’s reasonable comments related thereto.
     12.6 Prosecution of New Patents.
     (a) Genentech shall have the first right, using in-house or outside legal
counsel selected at Genentech’s sole discretion, to prepare, file, prosecute,
maintain and obtain extensions of Genentech Patents, Genentech NP Patents or
Joint Patents filed after the Restated Effective Date in countries of
Genentech’s choice throughout the Licensed Territory and in such countries
within the Co-Promotion Territory as agreed by the Parties with appropriate
credit to IDEC representatives, including the naming of such parties as
inventors where appropriate. Genentech shall bear the costs relating to such
activities in the Licensed Territory at all times and in the Co-Promotion
Territory until Regulatory Approval in the United States. Such costs in the
Co-Promotion Territory after Regulatory Approval in the United States shall be
included in Other Operating Income/Expense pursuant to Exhibit A. Genentech
shall disclose to IDEC the complete text of, and shall use reasonable efforts to
solicit IDEC’s advice and review of the nature and text of, all Genentech
Patents, Genentech NP Patents and Joint Patents and material prosecution matters
related thereto in reasonably sufficient time prior to filing thereof, and
Genentech shall consider in good faith IDEC’s reasonable comments related
thereto.
     (b) IDEC shall have the first right, using in-house or outside legal
counsel selected at IDEC’s sole discretion, to prepare, file, prosecute,
maintain and obtain extensions of IDEC Patents
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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filed after the Restated Effective Date in countries agreed to by the Parties
within the Co-Promotion Territory and in countries of Genentech’s choice within
the Licensed Territory. IDEC shall disclose to Genentech the complete text of,
and shall use reasonable efforts to solicit Genentech’s advice and review of the
nature and text of, such IDEC Patents and material prosecution matters related
thereto in reasonably sufficient time prior to filing thereof, and IDEC shall
(i) in the Co-Promotion Territory consider in good faith Genentech’s reasonable
comments related thereto and (ii) in the Licensed Territory take into account
Genentech’s reasonable comments related thereto. All reasonable costs related to
preparing, filing, prosecuting, maintaining and extending IDEC Patents shall be
(i) prior to Regulatory Approval in the United States, paid by IDEC and
(ii) after Regulatory Approval in the United States, included in Other Operating
Income/Expense pursuant to Exhibit A for activities within the Co-Promotion
Territory and reimbursed by Genentech to IDEC for activities within the Licensed
Territory.
     (c) If Genentech, prior or subsequent to filing any Genentech Patents,
Genentech NP Patents or Joint Patents, elects not to file, prosecute or maintain
such Patents or certain claims encompassed by such Patents, Genentech shall give
IDEC notice thereof within a reasonable period prior to allowing such Patents or
certain claims encompassed by such Patents to lapse or become abandoned or
unenforceable, and IDEC shall thereafter have the right, at its sole expense, to
prepare, file, prosecute and maintain Patents or certain claims encompassed by
such Patents that claim Franchise Products or formulations, methods of
manufacture or methods of use thereof in countries of its choice throughout the
world. If IDEC, prior or subsequent to filing IDEC Patents, elects not to file,
prosecute or maintain such Patents or certain claims encompassed by such Patents
that claim Franchise Products or OCR, or formulations, methods of manufacture or
methods of use thereof, IDEC shall give Genentech notice thereof within a
reasonable period prior to allowing such Patents or certain claims encompassed
by such Patents to lapse or become abandoned or unenforceable, and Genentech
shall thereafter have the right, at its sole expense, to prepare, file prosecute
and maintain such Patents or certain claims encompassed by such Patents in
countries of its choice throughout the world.
     (d) The Party filing Joint Patents shall do so in the name of and on behalf
of both Genentech and IDEC. Each of IDEC and Genentech shall hold all
information it presently knows or acquires under this Paragraph which is related
to all such Patents as confidential subject to the provisions of Article 11 of
this Agreement.
     12.6a Prosecution of Genentech OCR Patents. Genentech shall have the sole
right, using in-house or outside legal counsel selected at Genentech’s sole
discretion, to prepare, file, prosecute, maintain and obtain extensions of
Genentech OCR Patents in countries of Genentech’s choice throughout the Licensed
Territory and the Co-Promotion Territory. Genentech shall bear the costs
relating to such activities in the Licensed Territory and the Co-Promotion
Territory incurred.
     12.7 Waiver.
     (a) IDEC on behalf of itself and its directors, employees, officers,
shareholders, agents, successors and assigns hereby waives any and all actions
and causes of action, claims and demands
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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whatsoever, in law or equity of any kind it or they may have against Genentech,
its officers, directors, employees, shareholders, agents, successors and
assigns, which may arise in any way except as a result of Genentech’s gross
negligence, recklessness, or willful misconduct in performance of its rights or
obligations under Section 12.5 or Section 12.6 of this Agreement.
     (b) Genentech on behalf of itself and its directors, employees, officers,
shareholders, agents, successors and assigns hereby waives any and all actions
and causes of action, claims and demands whatsoever, in law or equity of any
kind it or they may have against IDEC, its officers, directors, employees,
shareholders, agents, successors and assigns, which may arise in any way except
as a result of IDEC’s gross negligence, recklessness, or willful misconduct in
performance of its rights or obligations under Section 12.5 or Section 12.6 of
this Agreement.
     12.8 Further Assurances. Notwithstanding the provisions of Section 12.5 or
Section 12.6 or 12.6a of this Agreement, each Party shall, at its own expense,
provide reasonable assistance to the other Party to facilitate filing of all
Patents covering inventions referred to in Section 12.2 of this Agreement and
shall execute all documents deemed necessary or desirable therefor.
     12.9 Initial Filings If Made Outside of the United States. The Parties
agree to use reasonable efforts to ensure that any IDEC Patent, Genentech
Patent, Genentech NP Patent or Joint Patent filed outside of the United States
prior to a U.S. filing will be in a form sufficient to establish the date of
original filing as a priority date for the purposes of a subsequent U.S. filing
and that the requisite foreign filing license will be obtained.
     12.10 Patent Enforcement.
     (a) Notice. In the event that IDEC or Genentech becomes aware of actual or
threatened infringement of a patent related to Franchise Product, anywhere in
the world, that Party shall promptly notify the other Party in writing.
     (b) IDEC Patents. IDEC shall have the first right but not the obligation to
bring an infringement action or file any other appropriate action or claim
directly related to infringement of an IDEC Patent , wherein such infringement
relates to a Franchise Product, against any Third Party. The costs of patent
enforcement and related recoveries associated with the Co-Promotion Territory
incurred by IDEC shall be included in Other Operating Income/Expense. Such
patent enforcement costs in the Licensed Territory shall be borne by IDEC. If
IDEC does not commence a particular infringement action within ninety (90) days
after it received such written notice, Genentech, after notifying IDEC in
writing, shall be entitled to bring such infringement action or any other
appropriate action or claim at its own expense. The Party conducting such action
shall consider in good faith the other Party’s comments on the conduct of such
action. Recovery from any settlement or judgment from such action in the
Licensed Territory shall go first to reimburse the expenses of the Parties and
the remainder shall be shared by the Parties in proportion to their respective
economic interests. In any event, IDEC and Genentech shall assist one another
and reasonably cooperate in any such litigation at the other’s request without
expense to the requesting Party.
 

[**]   = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     (c) Genentech Patents and Genentech NP Patents. Genentech shall have the
first right but not the obligation to bring an infringement action or file any
other appropriate action or claim directly related to infringement of a
Genentech Patent or Genentech NP Patent, wherein such infringement relates to
Franchise Product, against any Third Party. The costs of patent enforcement and
related recoveries associated with the Co-Promotion Territory incurred by
Genentech shall be charged to Other Operating Income/Expense. Such patent
enforcement costs in the Licensed Territory shall be borne by Genentech.
Recovery from any settlement or judgment from such action in the Licensed
Territory shall go first to reimburse the expenses of the Parties and the
remainder shall be shared by the Parties in proportion to their respective
economic interests.
     (d) Joint Patents. Upon notice of an alleged infringement of a Joint
Patent, the Parties will discuss in good faith an appropriate course of action
to further the objectives of the Parties under this Agreement.
     (e) Genentech OCR Patents and OCR Related Infringement. Genentech shall
have the sole right, but not the obligation, to bring an infringement action or
file any other appropriate action or claim directly related to infringement of
(i) a Genentech OCR Patent in both the Co-Promotion Territory and Licensed
Territory and (ii) a Genentech Patent or Genentech NP Patent, wherein such
infringement relates to OCR. IDEC shall be responsible for [**] of the costs of
enforcement of a Genentech OCR Patent associated with the Co-Promotion Territory
incurred by Genentech, such amounts to be paid to Genentech within thirty
(30) days of receipt by IDEC of an invoice for such amounts. All monies
recovered upon the final judgment or settlement of any patent enforcement of a
Genentech OCR Patent associated with the Co-Promotion Territory shall be used:
(i) first, to reimburse each party for their respective share of out-of-pocket
expenses relating to the action; and (ii) second, any remaining balance shall be
shared by the Parties with IDEC receiving [**] and Genentech receiving [**] of
such remaining balance. The costs of patent enforcement of a Genentech OCR
Patent associated with the Licensed Territory incurred by Genentech shall be
borne by Genentech. Recovery from any settlement or judgment from such
enforcement in the Licensed Territory shall go first to reimburse the expenses
of the Parties and the remainder shall be shared by the Parties in proportion to
their respective economic interests in OCR in the Licensed Territory.
     12.11 Infringement Defense.
     (a) Defense in the Co-Promotion Territory. If a Third Party asserts that a
patent or other right owned by it is infringed by any Franchise Product in the
Co-Promotion Territory, the JMC shall establish a plan for a common defense and
select the Party responsible for managing such plan. The costs of any such
action incurred by one or both of the Parties at the direction of the JMC
(including the costs of any judgment, award, decree or settlement) will be
chargeable to the collaboration as Other Operating Income/Expense pursuant to
Exhibit A.
     (b) Defense in the Licensed Territory. If a Third Party asserts that a
patent or other right owned by it is infringed by any Franchise Product in the
Licensed Territory, Genentech will be solely responsible for deciding how and
whether to defend against any such assertions at its cost and expense. If
Genentech is required to pay royalties to such Third Party as a result of such
action, it
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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will be entitled to deduct [**] of such royalties against royalties owing to
IDEC under, but only to the extent permitted by, Section 7.7(e).
     (c) Defense of OCR. If a Third Party asserts that a patent or other right
owned by it is infringed by OCR, Genentech will be solely responsible for
deciding how and whether to defend against any such assertions at its cost and
expense. If Genentech is required to pay royalties to such Third Party as a
result of such action, it will be entitled to deduct a percentage of such
royalties against royalties owing to IDEC under, but only to the extent
permitted by, Section 7.7(e).
ARTICLE 13.
REPRESENTATIONS AND WARRANTIES
     13.1 Representations and Warranties. Each of the Parties hereby represents
and warrants, as of the Restated Effective Date, as follows:
     (a) This Agreement is a legal and valid obligation binding upon such Party
and enforceable in accordance with its terms. The execution, delivery and
performance of the Agreement by such 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.
     (b) Such Party has not, and during the term of the Agreement will not,
grant any right to any Third Party relating to its respective Patents and
Know-how in the Field which would conflict with the rights granted to the other
Party hereunder.
     (c) Each Party represents and warrants that it has the right to grant the
licenses granted herein.
     (d) Except as set forth on Exhibit D of the Original Agreement, IDEC is not
obligated under any agreement as of the Original Effective Date to pay any Third
Party royalties with respect to C2B8
As used in this Section 13.1, “Patents” means IDEC Patent with respect to IDEC,
and Genentech Patents and Genentech NP Patents with respect to Genentech; and
“Know-how” means IDEC Know-how with respect to IDEC, and Genentech Know-how with
respect to Genentech.
     13.2 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.
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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ARTICLE 14.
INFORMATION AND REPORTS
     14.1 Information. Genentech and IDEC will disclose and make available to
each other all preclinical, clinical, regulatory, commercial and other
information with respect to Franchise Products, including without limitation all
information relevant to the joint promotion of Franchise Products, developed by
Genentech or IDEC concerning Franchise Products at any time during the term of
this Agreement. Each Party will use commercially reasonable and diligent efforts
to disclose to the other Party all such significant information promptly after
it is learned or its significance is appreciated. Each Party shall own and
maintain its own database of clinical trial data accumulated from all clinical
trials of Franchise Products for which it was responsible and of adverse drug
event information for all Franchise Products. At the option of the requesting
Party, such data shall be provided in a computer readable format by the
providing Party, to the extent available, which shall also assist in the
transfer and validation of such data to the receiving Party.
     14.2 Complaints. Each Party shall maintain a record of all complaints it
receives with respect to any Franchise Product. Each Party shall notify the
other of any complaint received by it in respect of a Franchise Product in
sufficient detail and within five (5) business days after the event, and in any
event in sufficient time to allow the responsible Party to comply with any and
all regulatory requirements imposed upon it in any country. IDEC shall notify
Genentech of any complaint received by it in respect of OCR in sufficient detail
and within five (5) business days after the event, and in any event in
sufficient time to allow Genentech to comply with any and all regulatory
requirements imposed upon it in any country.
     14.3 Adverse Drug Events. The Parties recognize that the holder of a Drug
Approval Application may be required to submit information and file reports to
various governmental agencies on compounds under clinical investigation,
compounds proposed for marketing, or marketed drugs. Information must be
submitted at the time of initial filing for investigational use in humans and at
the time of a request for market approval of a new drug. In addition,
supplemental information must be provided on compounds at periodic intervals and
adverse drug experiences must be reported at more frequent intervals depending
on the severity of the experience. Consequently, each Party agrees to:
     (a) provide to the other for initial and/or periodic submission to
government agencies significant information on the drug from preclinical
laboratory, animal toxicology and pharmacology studies, as well as adverse drug
experience reports from clinical trials and commercial experiences with the
compound;
     (b) in connection with investigational drugs, report to the other within
three (3) days of the initial receipt of a report of any unexpected or serious
experience with the drug, or sooner if required for either Party to comply with
regulatory requirements; and
     (c) in connection with marketed drugs, report to the other within five
(5) business days of the initial receipt of a report of any adverse experience
with the drug that is serious and unexpected or sooner if required for either
Party to comply with regulatory requirements. Serious adverse
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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experiences mean any experience that suggests a significant hazard,
contraindication, side effect or precaution, or any experience that is fatal or
life threatening, is permanently disabling, requires or prolongs inpatient
hospitalization, or is a congenital anomaly, cancer, or overdose. An unexpected
adverse experience is one not identified in nature, specificity, severity or
frequency in the current investigator brochure or the U.S. labeling for the
drug. Each Party also agrees that if it contracts with a Third Party for
research to be performed by such Third Party on the drug, that Party agrees to
require such Third Party to report to contracting Party the information set
forth in subparagraph (a), (b), and (c) above.
     14.4 Records of Net Sales and Costs. Each Party will maintain complete and
accurate records which are relevant to costs, expenses, sales and payments under
this Agreement and such records shall be open during reasonable business hours
for a period of three (3) years from creation of individual records for
examination at the other Party’s expense, and, with respect to the audit
provisions of Section A.6.1 and A.6.2 of Exhibit A, such examination shall not
be conducted more often than once each year by an independent public accountant
selected by the other Party as described in A.6 of Exhibit A. Any records or
accounting information received from the other Party shall be Confidential
Information for purposes of Article 11. Results of any such audit shall be
provided to both Parties, subject to Article 11.
     14.5 Publicity Review. The Parties agree that the public announcement of
the execution of this Agreement shall be in the form of a press release to be
agreed upon on or before the Restated Effective Date and thereafter each Party
shall be entitled to make or publish any public statement consistent with the
contents thereof. Thereafter, IDEC and Genentech will jointly discuss and agree,
based on the principles of this Section 14.5, on any statement to the public
regarding this Agreement or any aspect of this Agreement subject in each case to
disclosure otherwise required by law or regulation as determined in good faith
by each Party. The principles to be observed by IDEC and Genentech in such
public disclosures will be: accuracy, the requirements for confidentiality under
Article 11, the advantage a competitor of IDEC or Genentech may gain from any
public statements under this Section 14.5, and the standards and customs in the
biotechnology and pharmaceutical industries for such disclosures by companies
comparable to IDEC and Genentech. The terms of this Agreement may also be
disclosed to (i) government agencies where required by law, or (ii) Third
Parties with the prior written consent of the other Party, which consent shall
not be unreasonably withheld, so long as such disclosure is made under a binder
of confidentiality and so long as highly sensitive terms and conditions such as
financial terms are extracted from the Agreement or not disclosed upon the
request of the other Party.
ARTICLE 15.
TERM AND TERMINATION
     15.1 Term. This Agreement, which shall commence as of the Second Restated
Effective Date, shall continue the collaboration contemplated by the Parties
under the 2003 Restated Agreement, and the Original Agreement, including the
First Amendment and Second Amendment thereto, as modified hereby. The Parties
have specifically provided elsewhere in this Agreement
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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the term during which certain rights and obligations hereunder shall apply.
Unless sooner terminated as provided herein and except as provided in
Section 15.2 below, (a) the remaining provisions of this Agreement relating to
activities in the Co-Promotion Territory shall continue in effect until the date
on which the Parties are no longer entitled to receive a share of Operating
Profits or Losses on any Franchise Product, (b) the remaining provisions of this
Agreement relating to activities in the Licensed Territory, or with respect to
OCR, shall continue in effect until the date on which Genentech is no longer
required to pay a royalty on Royalty-Bearing Sales in the Licensed Territory or
on OCR, and (c) the remaining provisions of this Agreement relating to
activities with respect to OCR shall continue in effect until the date on which
Genentech is no longer required to pay a royalty on Royalty-Bearing Sales of
OCR. Those provisions shall govern the term of the rights and obligations
specifically covered thereby. Upon the expiration, but not an earlier
termination, of this Agreement, all licenses granted by either Party to the
other Party hereunder shall become fully paid up and irrevocable.
     15.2 Sale or Purchase of Co-Promotion Rights on Change of Control.
     (a) Purchase Option with respect to all Franchise Products and Third Party
Anti-CD20 Products. Genentech may, by written notice by certified mail, return
receipt requested, to IDEC (the “Auction Notice”), indicate a single price (the
“Auction Price”) at which Genentech would be willing to purchase from IDEC all
of the rights held by IDEC hereunder with respect to all Licensed Products in
the Co-Promotion Territory (the “Purchase Option”). This right will be
exercisable at any time if (i) a single stockholder or group of affiliated
stockholders, other than Genentech or an Affiliate, who would be required to
file a Schedule 13D under the Securities Exchange Act of 1934, as amended,
acquires or obtains the right to acquire voting stock of IDEC so that its total
holdings of such stock equal or exceed fifty percent (50%) of the then
outstanding voting stock of IDEC, or (ii) a Third Party acquires or obtains the
right to acquire all or substantially all of the assets of IDEC, in which case
Genentech must exercise such right within ninety (90) days after the date on
which such stockholder or group of stockholders passes the fifty percent (50%)
threshold or the date of such acquisition. Either such event shall be referred
to as a “Change of Control Event.” IDEC shall promptly notify Genentech upon
IDEC’s receipt of written notice that such Change of Control Event will be
occurring and shall use best efforts to ensure that such notice is given to
Genentech at least ninety (90) days before the occurrence of such Change of
Control Event. The Auction Price may be in the form of (i) cash, (ii) a royalty
on sales of the Licensed Products in the Co-Promotion Territory or (iii) some
combination of the foregoing. Concurrent with the initiation of an Auction
Notice by Genentech under this Section 15.2, a royalty price (the “Royalty
Price”) at which Genentech will purchase from IDEC all of the rights held by
IDEC hereunder with respect to all New Products (including G2H7), OCR, and Third
Party Anti-CD20 Products for which IDEC entered into a written agreement with
Genentech pursuant to Section 2.6 prior to such date, in the United States shall
be set. The Royalty Price with respect to such New Products, OCR and Third Party
Anti-CD20 Products shall be based on the [**] of such product at the time of
Genentech’s written notice to IDEC under this Section 15.2 as follows:
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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      Stage of Product   Royalty Price
Prior to completion of the [**] for the product:
  Compensation equivalent to [**] of such product in the United States;
provided, IDEC (or its successor) timely reimburses Genentech, on a calendar
quarter basis, [**] of its Development Costs for developing or marketing such
product in the Co-Promotion Territory through [**] for such product. Genentech
shall timely provide IDEC (or its successor) with quarterly invoices for
Development Costs incurred under this section, and IDEC (or its successor) shall
pay such invoices within sixty (60) days thereof. IDEC (or its successor) shall
have the right to audit such invoices no more than once a calendar year, such
audit to be conducted as provided in accordance with Section 15.2(c)(iii).
 
   
After completion of the [**] for the product, but prior to [**] of such product:
  Compensation equivalent to [**] of such product in the United States.
 
   
After [**] of the product:
  With respect to (i) such New Products, compensation to IDEC or payment by IDEC
to Genentech equivalent to [**] for such New Product in the United States,
(ii) OCR the royalty on Royalty-Bearing Sales of OCR in the United States set
forth in Section 7.7(a).
 
   
 
  With respect to such Third Party Anti-CD20 Products, compensation to IDEC or
payment by IDEC to Genentech equivalent to the amount otherwise specified to be
paid on such product in the United States [**], as established pursuant to the
provisions of Section 2.6.

It is understood and agreed that Genentech shall only be required to make
Royalty Price payments on such New Products or Third Party Anti-CD20 Products
(which were opted in by IDEC pursuant to Section 2.6 prior to the Auction
Notice) which were under development pursuant to an approved or proposed
Development Plan or being commercially sold at the time of such Auction Notice,
and that subsequent development of any products incorporating any protein or
peptide, other than the proteins or peptides that were incorporated into such
New Products or Third Party Anti-CD20 Products, shall not be subject to such
Royalty Price payments.
     (b) Sales Option with respect to all Licensed Products. Within thirty
(30) days of receipt of the Auction Notice, IDEC shall notify Genentech in
writing whether it elects to accept the Auction Price for its rights with
respect to all Licensed Products or pay Genentech the Profit Sharing Ratio times
the Auction Price for such Licensed Products (where “the Profit Sharing Ratio”
[**], to purchase all of the rights held by Genentech hereunder with respect to
Licensed Products in the Co-Promotion Territory (the “Sales Option”); provided,
however, if IDEC does not notify Genentech of its election within such period,
IDEC shall be deemed to have sold its rights hereunder with respect to the
Licensed Products in the Co-Promotion Territory at the
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Auction Price under the Purchase Option. If Genentech has not received a
response within twenty (20) days after Genentech sends its initial notice
hereunder, Genentech shall on the twentieth (20th) day after sending such
initial notice, deliver a second notice by certified mail, return receipt
requested. For the avoidance of doubt, it is understood and agreed that IDEC
shall have no right under this Agreement to purchase any of the rights held by
Genentech hereunder with respect to New Products, and/or Third Party Anti-CD20
Products for which IDEC entered into a written agreement with Genentech pursuant
to Section 2.6 prior to such date.
     (c) On that date which is thirty (30) days after receipt of the Auction
Notice:
          (i) all rights held by IDEC (including any successor in interest)
under Section 2.5 and 2.6, other than with respect to New Products and/or Third
Party Anti-CD20-Products for which IDEC entered into a written agreement with
Genentech pursuant to Section 2.6 prior to such date, shall terminate;
          (ii) all rights held by IDEC (including any successor in interest)
hereunder with respect to New Products and OCR in the United States, and Third
Party Anti-CD20 Products for which IDEC entered into a written agreement with
Genentech pursuant to Section 2.6 prior to such date, including the right to
receive further payments from Genentech shall terminate and Genentech shall
thereafter pay IDEC the Royalty Price for each such product in the United
States, without offset of any kind; such obligation to continue, on a
product-by-product basis, for eleven (11) years from the date of first
commercial sale of such product in the United States (for avoidance of doubt, a
sale for “compassionate use” shall not be deemed a first commercial sale);
          (iii) Genentech or its designee shall make its Royalty Price payments
to IDEC or its designee quarterly within sixty (60) days following the end of
each calendar quarter for which such payments are due. Each Royalty Price
payment shall be accompanied by a report summarizing the Net Sales or Operating
Profits (or Losses), as applicable, for such New Product, OCR or Third Party
Anti-CD20 Product, during the relevant calendar quarter. IDEC shall have the
right, upon written notice to Genentech, and not more often than once each
calendar year, to have an independent accounting firm, selected by IDEC and
reasonably approved by Genentech, inspect Genentech’s books of accounts for the
sole purpose of verifying the correctness of calculations or such costs,
expenses or payments made under this Section 15.2 with respect to sales of such
products. Such audits will be conducted at the expense of IDEC; provided,
however, that if the audit results in an adjustment of greater than [**] of Net
Sales or Operating Profits (or Losses), as applicable, in any period, the cost
of the audit will be borne by Genentech. Audit results will be shared with both
Parties. Audits are limited to results in the two (2) years prior to audit
notification;
          (iv) if the Purchase Option was elected (or deemed to be elected)
pursuant to Section 15.2(b) with respect to all Licensed Products, all rights
held by IDEC hereunder with respect to the Licensed Products in the Co-Promotion
Territory including the right to receive further payments from Genentech shall
terminate and Genentech shall pay IDEC [**] of the Auction Price that is payable
in cash on such date;
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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          (v) if the Sales Option was elected pursuant to Section 15.2(b) with
respect to all Licensed Products, all rights held by Genentech hereunder with
respect to the Licensed Products in the Co-Promotion Territory shall terminate
and IDEC shall pay Genentech [**] of the price [**] that is payable in cash on
such date;
          (vi) the purchasing Party’s rights under the selling Party’s Patents
and Know-how shall become exclusive (with right of sublicense) and non-revocable
with respect to all Licensed Products in the Field and in the Co-Promotion
Territory (and to the extent not already included on such date, such rights
shall include the right to manufacture and have manufactured under the selling
Party’s Patents and Know-How), and the selling Party’s license under the
purchasing Party’s Patents and Know-how with respect to all Licensed Products in
the Field and in the Co-Promotion Territory shall terminate;
          (vii) the selling Party shall (x) extend to the purchasing Party the
opportunity to acquire a non-exclusive license under any Third Party rights
Controlled by the selling Party as of such date, such terms, to the extent
reasonably practicable, to be on the same financial terms as the selling Party
has with respect to such Third Party rights; and (y) to the extent the selling
Party is licensed under any Third Party rights not Controlled by the selling
Party on such date, use its commercially reasonable and diligent efforts to
assist the purchasing Party in obtaining a license for such Third Party rights
under the same financial terms, to the extent reasonably practicable, as the
selling Party has with respect to such Third Party rights, in each case, to the
extent such rights are necessary for the purchasing Party to develop,
manufacture or commercialize the Franchise Products purchased by the purchasing
Party as of such date.
          (viii) the selling Party shall use commercially reasonable and
diligent efforts to transfer to the purchasing Party any technology, materials,
data and regulatory submissions, existing and utilized in the development,
manufacture and commercialization of the Franchise Product as of such date, so
as to fully enable the purchasing Party to develop, manufacture and
commercialize the Franchise Product, with the costs of such transfer to be borne
by the purchasing Party;
          (ix) the selling Party shall make its personnel and other resources
reasonably available to the purchasing Party as necessary to effect an orderly
transition of development, manufacturing and commercialization responsibilities,
with the cost of making such personnel and resources to be borne by the
purchasing Party; and
          (x) the remaining [**] of the Auction Price that is payable in cash
shall be paid upon the later to occur of (A) thirty (30) days of the date
thereafter on which the purchasing Party manufactures and sells any Licensed
Product in the Co-Promotion Territory or (B) the date on which such technology
transfer (including data and regulatory submissions) is substantially complete.
As used in this Section 15.2(c), “Patents” means IDEC Patent with respect to
IDEC, and Genentech Patents and Genentech NP Patents with respect to Genentech;
and “Know-how” means IDEC Know-how with respect to IDEC, and Genentech Know-how
with respect to Genentech.
     (d) In the event of a buy-out of a Franchise Product pursuant to this
Sections 15.2:
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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          (i) the Party selling its rights to the Franchise Product shall
continue to supply the amounts of such Franchise Product it was obligated to
supply at the time of such buy-out for a [**] to allow the purchasing Party to
obtain an alternate source of supply, if necessary;
          (ii) the Party purchasing the rights to the Franchise Product going
forward shall also receive from the selling Party an exclusive license to use
any and all jointly-owned trademarks pursuant to Section 10.1; and
          (iii) the Party purchasing the rights to a Franchise Product shall, to
the extent Third Party rights are passed by the selling Party to the purchasing
Party, pay any and all Third Party royalties.
     15.3 Accrued Rights, Surviving Obligations. Termination, relinquishment or
expiration of the Agreement for any reason shall be without prejudice to any
rights which shall have accrued to the benefit of either Party prior to such
termination (including paid up irrevocable licenses), relinquishment or
expiration, including damages arising from any breach hereunder. Such
termination, relinquishment or expiration shall not relieve either Party from
obligations under Articles 11, 12, 16 and 18 herein, and any other obligations
which are expressly indicated to survive termination or expiration of the
Agreement.
ARTICLE 16.
INDEMNIFICATION
     16.1 Indemnification in the Licensed Territory.
     (a) Genentech hereby agrees to save, defend and hold IDEC and its agents
and employees harmless from and against any and all suits, claims, actions,
demands, liabilities, expenses and/or loss, including reasonable legal expense
and attorneys’ fees (“Losses”) resulting directly from the manufacture, use,
handling, storage, sale or other disposition of chemical agents or Franchise
Products sold or used in the Licensed Territory by Genentech, its Affiliates,
agents or sublicensees except to the extent such Losses result from the
negligence of IDEC.
     (b) In the event that IDEC is seeking indemnification under
Section 16.1(a), it shall inform Genentech of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit Genentech to
assume direction and control of the defense of the claim (including the right to
settle the claim solely for monetary consideration), and shall cooperate as
requested (at the expense of Genentech) in the defense of the claim.
     (c) IDEC hereby agrees to save, defend and hold Genentech and its agents
and employees harmless from and against any and all suits, claims, actions,
demands, liabilities, expenses and/or loss, including reasonable legal expense
and attorneys’ fees (“Losses”) resulting directly from the manufacture by IDEC
of Licensed Products sold or used in the Licensed Territory by Genentech, its
Affiliates, agents or sublicensees.
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     (d) In the event Genentech is seeking indemnification under
Section 16.1(c), it shall inform IDEC of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit IDEC to assume
direction and control of the defense of the claim (including the right to settle
the claim solely for monetary consideration), and shall cooperate as requested
(at the expense of IDEC) in the defense of the claim.
     16.2 Indemnification in the Co-Promotion Territory.
     (a) Each Party hereby agrees to save, defend and hold the other Party and
its agents and employees harmless from and against any and all losses resulting
directly or indirectly from the manufacture, use, handling, storage, sale or
other disposition of chemical agents or Franchise Products and OCR sold or used
in the Co-Promotion Territory by the indemnifying Party, its Affiliates, agents
or sublicensees, but only to the extent such losses result from the negligence
or willful misconduct of the indemnifying Party or its employees and agents and
do not also result from the negligence or willful misconduct of the Party
seeking indemnification. Any other losses resulting directly or indirectly from
the manufacture, use, handling, storage, sale or other disposition of
(i) chemical agents or Franchise Products in the Co-Promotion Territory shall be
charged to the collaboration as an Other Operating Income/Expense at the time
such claim is finally determined, whether by judgment, award, decree or
settlement; and (ii) OCR shall be borne by Genentech, at the time such claim is
finally determined, whether by judgment, award, decree or settlement, provided
that Genentech may deduct [**] of such losses from royalties owed to IDEC
pursuant to Section 7.7(a) as long as such deduction in any given payment period
does not result in IDEC receiving less than [**] of the royalty amount that
would otherwise be owed to IDEC pursuant to Section 7.7(a) for such period.
Genentech may carry forward any losses not utilized as a result of the cap on
deductions to future periods, not to exceed [**] from the relevant claim’s final
determination, until any such losses not utilized are fully deducted.
     (b) In the event that either Party receives notice of a claim with respect
to a Franchise Product in the Co-Promotion Territory, such Party shall inform
the other Party as soon as reasonably practicable. The Parties shall confer how
to respond to the claim and how to handle the claim in an efficient manner.
ARTICLE 17.
DISPUTE RESOLUTION
     17.1 Disputes. The Parties recognize that disputes as to certain matters
may from time to time arise during the term of this Agreement which relate to
either Party’s rights and/or obligations hereunder. It is the objective of the
Parties to establish procedures to facilitate the resolution of disputes arising
under this Agreement in an expedient manner by mutual cooperation and without
resort to litigation. To accomplish this objective, the Parties agree to follow
the procedures set forth in this Article 17, if and when a dispute arises under
this Agreement. Unless otherwise specifically recited in this Agreement,
disputes among members of each Operating Committee will be resolved as recited
in this Article 17. Any disputes among members of Operating Committees formed
hereunder relating to the collaboration, and which are within the
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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scope of such Operating Committee’s responsibilities, shall be first referred to
the Management Committee by either Party at any time after such dispute has
arisen and such Party believes that there has been sufficient discussion of the
matter at the Operating Committee level. If the Management Committee is unable
to resolve such a dispute within thirty (30) days of being requested by a Party
to resolve an Operating Committee dispute, any Party may, by written notice to
the other, have such dispute referred to their respective chief executive
officers, for attempted resolution by good faith negotiations within fourteen
(14) days after such notice is received. In the event the designated executive
officers are not able to resolve such dispute, such dispute shall be resolved as
follows:
     (a) [**], if such dispute relates to issues of commercialization of
Franchise Products that are within the scope of the JCC’s responsibilities
(including post-marketing and investigator sponsored trails), Genentech shall
have final decision making authority with respect to such dispute; provided
however, that Genentech may not make a final decision which decision would: (i)
establish or amend an Annual Commercial Operating Budget; (ii) result in the
Annual Commercial Operating Budget approved with a commercialization plan being
exceeded [**] (and to the extent such budget is not exceeded [**], such
activities shall not be deemed an amendment to the budget for purposes of
17.1(a)(i) above); (iii) assign tasks to IDEC that were not otherwise approved
by unanimous consent of the JCC; (iv) restrict a Party’s rights under
Section 5.2(c), or with respect to the first sentence of Section 5.2(a) restrict
a Party’s rights to deploy a co-promotion sales force in the Co-Promotion
Territory as specified in Section 5.2(a)(except as modified by Section 5.2(b)),
in each case, unless the JCC unanimously agrees otherwise, (v) assign an initial
pricing for a Franchise Product, unless such initial pricing is within [**] of
the current price for C2B8; (vi) materially amend a commercialization plan
without the unanimous approval of the JCC (where “materially amend” means to
materially modify the strategic direction agreed upon by the Parties under such
commercialization plan ); or (vii) result in the cessation of development and/or
commercialization of a Franchise Product in the Co-Promotion Territory without
the consent of IDEC (such consent not to be unreasonably withheld); and
     (b) with respect to all other disputes, either Party may at anytime after
the 14-day period invoke the provisions of Section 17.2 hereinafter.
     For clarity, any dispute, controversy or claim relating to OCR, as it is
not subject to the oversight, involvement or control of any Operating Committee
or the Management Committee, shall not be subject Section 17.1, but shall
(except as to any issue relating to intellectual property owned in whole or in
part by IDEC or Genentech) be resolved by binding arbitration in accordance with
Section 17.2.
     17.2 Arbitration. The parties agree that any dispute, controversy or claim
(except as to any issue relating to intellectual property owned in whole or in
part by IDEC or Genentech) arising out of or relating to this Agreement, or the
breach, termination, or invalidity thereof, shall be resolved through
negotiation and/or binding arbitration. If a dispute arises between the parties,
and if said dispute cannot be resolved pursuant to Section 17.1, the Parties
agree that any unresolved controversy or claim between the parties shall be
resolved by binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, except as modified herein. The
Company and Buyer shall each select one arbitrator and the two arbitrators
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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so selected shall choose a third arbitrator to resolve the dispute. The
arbitration decision shall be rendered in a writing stating the basis on which
the decision was made within six months of conclusion of arbitration and shall
be binding and not be appealable to any court in any jurisdiction. The
prevailing Party may enter such decision in any court having competent
jurisdiction. The arbitration proceeding shall be conducted at the location of
the Party not originally requesting the resolution of the dispute. The Parties
agree that they shall share equally the cost of the arbitration filing and
hearing fees, and the cost of the arbitrator. Each Party must bear its own
attorney’s fees and associated costs and expenses.
     17.3 Jurisdiction. For the purposes of this Article 17, the Parties agree
to accept the jurisdiction of the federal courts located in the Northern
District of California for the purposes of enforcing awards entered pursuant to
this Article and for enforcing the agreements reflected in this Article.
     17.4 Determination of Patents and Other Intellectual Property. Any dispute
relating to the determination of validity of a Party’s Patents or other issues
relating solely to a Party’s intellectual property shall be submitted
exclusively to the federal court located in the location of the defendant, and
the Parties hereby consent to the jurisdiction and venue of such court.
ARTICLE 18.
MISCELLANEOUS
     18.1 Assignment.
     (a) With respect to: (i) Licensed Products, either Party may assign any of
its rights under this Agreement in any country to any Affiliates and, with the
prior written consent of the other Party, may delegate its obligations under
this Agreement in any country to any Affiliates; and (ii) New Products, IDEC
may, with the prior written consent of Genentech, assign and/or delegate any of
its rights under this Agreement in any country to any Affiliates; provided,
however, that such assignment shall not relieve the assigning Party of its
responsibilities for performance of its obligations under this Agreement.
Genentech may assign and/or delegate its rights with respect to any New Product
or OCR in any country to any Affiliates.
     (b) Either Party may assign all of its rights and obligations under this
Agreement in connection with a merger or similar reorganization or the sale of
all or substantially all of its assets, or otherwise with the prior written
consent of the other Party; provided, however, that IDEC may not so assign its
rights and obligations if it is in breach of the provisions of Section 7.7. This
Agreement shall survive any such merger or reorganization of either Party with
or into, or such sale of assets to, another party and no consent (except as
otherwise set forth above) for such merger, reorganization or sale shall be
required hereunder.
     (c) This Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of the Parties. Any assignment not in
accordance with this Agreement shall be void.
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     18.2 Non-Solicitation. The Parties recognize that each Party has a
substantial interest in preserving and maintaining confidential its Confidential
Information hereunder. Each Party recognizes that certain of the other Party’s
employees, including those engaged in development, marketing and sale of any
Franchise Product, may have access to such Confidential Information of the other
Party. The Parties therefore agree not to solicit or otherwise induce or attempt
to induce for purposes of employment, any employees from the other Party
involved in the development, marketing or sales of any Franchise Product during
the period in which any Party is developing or commercializing a Franchise
Product in the Co-Promotion Territory hereunder and for a period of two years
thereafter.
     18.3 Consents Not Unreasonably Withheld. Whenever provision is made in this
Agreement for either Party to secure the consent or approval of the other, that
consent or approval shall not unreasonably be withheld, and whenever in this
Agreement provision is made for one Party to object to or disapprove a matter,
such objection or disapproval shall not unreasonably be exercised.
     18.4 Retained Rights. Nothing in this Agreement shall limit in any respect
the right of either Party to conduct research and development with respect to
and market products outside the Field using such Party’s technology.
     18.5 Force Majeure. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, earthquake, fire, explosion, flood, strike, lockout, embargo,
mycoplasmal contamination, act of God, or any other cause beyond the control of
the defaulting Party, provided that the Party claiming force majeure has exerted
all reasonable efforts to avoid or remedy such force majeure; provided however,
that in no event shall a Party be required to settle any labor dispute or
disturbance.
     18.6 Further Actions. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.
     18.7 No Right to Use Names. Except as otherwise provided herein, no right,
express or implied, is granted by the Agreement to use in any manner the name
“IDEC,” “Genentech” or any other trade name or trademark of the other Party or
its Affiliates in connection with the performance of the Agreement.
     18.8 Notices. All notices hereunder shall be in writing and shall be deemed
given if delivered personally or by facsimile transmission (receipt verified),
telexed, mailed by registered or certified mail (return receipt requested),
postage prepaid, or sent by express courier service, to the Parties at the
following addresses (or at such other address for a Party as shall be specified
by like notice; provided, that notices of a change of address shall be effective
only upon receipt thereof).
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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If to IDEC,
   
addressed to:
  Biogen Idec Inc.
 
  133 Boston Post Road
 
  Weston, MA 02493
 
  Attention:      Corporate Secretary
 
  Telephone:     (858) 431-8500
 
  Telecopy:       (858) 431-8755
 
   
If to Genentech,
   
addressed to:
  GENENTECH. INC.
 
  1 DNA Way
 
  South San Francisco, CA 94080
 
  Attention:      Corporate Secretary
 
  Telephone:      (650) 225-1000
 
  Telecopy:       (650) 952-9881

     18.9 Waiver. Except as specifically provided for herein, the waiver from
time to time by either of the Parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
same or of any other of such Party’s rights or remedies provided in this
Agreement.
     18.10 Severability. If any term, covenant or condition of this Agreement or
the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (i) the remainder of this Agreement,
or the application of such term, covenant or condition to Parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (ii) the Parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the Parties that the basic purposes of this Agreement are to be effectuated.
     18.11 Governing Law. This Agreement shall be governed by and construed in
accordance with, the laws of the State of California without giving effect to
principles of conflict of laws.
     18.12 Ambiguities. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authorized the ambiguous provision.
     18.13 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.
     18.14 Entire Agreement. This Agreement, including all Exhibits and the
Appendix attached hereto which are hereby incorporated herein by reference, sets
forth all the covenants, promises, agreements, warranties, representations,
conditions and understandings between the
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Parties hereto and supersedes and terminates the 2003 Restated Agreement between
the Parties; provided, Exhibits B and D to the Original Agreement and the First
Amendment and the Second Amendment shall as of the Second Restated Effective
Date be incorporated herein by reference and deemed Exhibits B and D, the First
Amendment and the Second Amendment, respectively to this Agreement; provided
further, with respect to any conflict between this Agreement and the 2003
Restated Agreement (including Exhibits B and D, the First Amendment and the
Second Amendment thereto), as to any acts or omissions by the parties that
occurred after the Original Effective Date but prior to the Restated Effective
Date, the terms of the Original Agreement shall prevail. There are no covenants,
promises, agreements, warranties, representations, conditions or understandings,
either oral or written, between the Parties other than as set forth herein and
therein; provided, to the extent the Parties entered into any written agreements
(other than the 2003 Restated Agreement, Original Agreement, the First Amendment
or the Second Amendment) with respect to Third Party intellectual property
rights regarding the development, manufacture or commercialization of Licensed
Products prior to the Second Restated Effective Date, and to the extent such
agreements are in full force and effect immediately prior to the Second Restated
Effective Date, such agreements (including without limitation, that certain
Letter Agreement between the Parties of May 21, 1996 relating to the Original
Agreement) shall continue in full force and effect under their respective terms
and not be deemed to be superseded by this Agreement. No subsequent alteration,
amendment, change or addition to this Agreement shall be binding upon the
Parties hereto unless reduced to writing and signed by the respective authorized
officers of the Parties.
     IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by their proper officers as of the date and year first above written.

                  BIOGEN IDEC INC.   GENENTECH, INC.    
 
               
By:
  /s/ George Scangos
 
  By:   /s/ Steve Krognes
 
   
 
               
Title:
  Chief Executive Officer   Title:   Chief Financial Officer    

 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Appendix 1
Schedule of Master Definitions
 

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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APPENDIX 1
TO THE
SECOND AMENDED AND RESTATED COLLABORATION AGREEMENT
BETWEEN BIOGEN IDEC INC AND GENENTECH, INC.
SCHEDULE OF MASTER DEFINITIONS
     1. “Administration Costs” shall have the meaning set forth in Exhibit A to
the Collaboration Agreement.
     2. “Affiliate” means an entity that, directly or indirectly, through one or
more intermediaries, is controlled by IDEC or Genentech. As used herein, the
term “control” will mean the direct or indirect ownership of fifty percent (50%)
or more of the stock having the right to vote for directors thereof or the
ability to otherwise control the management of the corporation or other business
entity. For the avoidance of doubt, as of the Restated Effective Date, F.
Hoffman-La Roche AG shall not be considered an Affiliate of Genentech.
     3. “Allocable Overhead” shall have the meaning set forth in Exhibit A to
the Collaboration Agreement.
     4. “Ancillary Agreements” shall mean the License Agreements, Preferred
Stock Purchase Agreement, Option Agreement, Registration Rights Agreement and
Standstill Agreement.
     5. “Annual Commercial Operating Budget” means an annual top line budget
with respect to commercialization activities in any one fiscal year in respect
of Franchise Products in the form attached hereto as Section A.1(a) of
Exhibit A.
     6. “Approvable Process Event” means a determination by the JDC that the
formulation of C2B8 and the process for C2B8 recovery are commercially viable as
more fully described in Appendix I to the Development Plan.
     7. “Asia” means Japan, Bangladesh, Myanmar, Cambodia, Indonesia, People’s
Republic of China, Hong Kong, Republic of Korea, Laos, Malaysia, Papua New
Guinea, Philippines, Singapore, Sri Lanka, Republic of China (Taiwan) and
Thailand and the territories and possessions of each.
     8. “Business Day” means a day on which banking institutions are open for
business in California.
     9. “C2B8” means that certain monoclonal antibody to B cells more
particularly described on Exhibit B to the Collaboration Agreement.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     10. “Certificate of Determination of Preferred Stock” means the Certificate
of Determination of Series A-1 Preferred Stock, Series A-2 Preferred Stock,
Series A-3 Preferred Stock, Series A-4 Preferred Stock, Series A-5 Preferred
Stock, Series A-6 Preferred Stock and Series A-7 Preferred Stock, to be filed
with the Secretary of State of the State of California.
     11. “Collaboration Agreement” shall mean the Collaboration Agreement dated
the Restated Effective Date between IDEC and Genentech.
     12. “Combination Product Adjustment” means the following: in the event a
Franchise Product or OCR is sold in the form of a combination product containing
one or more active ingredients in addition to a Franchise Product or OCR,
respectively, Royalty-Bearing Sales or Net Sales for such combination product
will be adjusted by multiplying actual Royalty-Bearing Sales, or Net Sales as
applicable, of such combination product by the fraction A/(A + B) where A is the
invoice price of the Franchise Product or OCR, as applicable, if sold
separately, and B is the invoice price of any other active component or
components in the combination, if sold separately. If, on a country-by-country
basis, the other active component or components in the combination are not sold
separately in said country, Royalty-Bearing Sales or Net Sales shall be
calculated by multiplying actual Royalty-Bearing Sales or Net Sales of such
combination product by the fraction A/C where A is the invoice price of the
Franchise Product or OCR, as applicable, if sold separately, and C is the
invoice price of the combination product. If, on a country-by-country basis,
neither the Franchise Product or OCR, as applicable, nor the other active
component or components of the combination product is sold separately in said
country, Royalty-Bearing Sales or Net Sales shall be determined by the Parties
in good faith.
     13. “Control” or “Controlled” means possession of the ability to grant a
license or sublicense as provided for herein without violating the terms of any
agreement or other arrangement with any Third Party.
     14. “Co-Promote” means to promote jointly Franchise Products through
Genentech, IDEC and their respective sales forces under a single trademark in a
given country in the Co-Promotion Territory.
     15. “Co-Promotion Profits” shall have the same meaning as Operating Profits
or Losses.
     16. “Co-Promotion Territory” means, with regard to Licensed Products, the
United States and Canada, and with regard to OCR and New Products, the United
States only.
     17. “Cost of Goods Sold” shall have the meaning set forth in Exhibit A to
the Collaboration Agreement.
     18. “Cost of Sales” shall have the meaning set forth in Exhibit A to the
Collaboration Agreement.
     19. “Delay Option” means the option exercisable by IDEC upon written notice
to Genentech at least thirty (30) days prior to the First Anniversary Date that
IDEC elects to delay [**] of Genentech’s investment on the First Anniversary
Date such that either (i) IDEC shall receive in
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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lieu of such delayed portion of the investment, a [**] payment upon the
occurrence of the Patent Milestone Event or instead issue shares of Series A
Preferred Stock, or if the Patent Milestone Event does not occur prior to the
Third Anniversary Date, then (ii) IDEC shall receive the delayed investment in
accordance with Section 2(d) of the Preferred Stock Purchase Agreement; provided
that this Delay Option will not be exercisable by IDEC if the Approvable Process
Event does not occur on or prior to the First Anniversary Date.
     20. “Development Costs” shall have the meaning set forth in Exhibit A to
the Collaboration Agreement.
     21. “Development Plan” means the comprehensive plan for the development of
a Franchise Product, designed to generate the preclinical, process development,
manufacturing scale-up, clinical and regulatory information required to obtain
Regulatory Approval in the Co-Promotion Territory, and which may be modified
from time to time by the JDC. Development shall refer to all activities related
to preclinical testing, toxicology, formulation, process development,
manufacturing scale-up, quality assurance/quality control, clinical studies and
regulatory affairs for a Franchise Product in connection with obtaining
Regulatory Approvals of such Franchise Product.
     22. “Distribution Costs” shall have the meaning set forth in Exhibit A to
the Collaboration Agreement.
     23. “Drug Approval Application” means an application for Regulatory
Approval required for commercial sale or use of a Franchise Product as a drug in
the Field in a regulatory jurisdiction.
     24. ’’Excluded Patent” means the rights under any Patent within the
following, as defined in Exhibit G: the Cabilly Patents and the Itakura/Riggs
Patents.
     25. “First Anniversary Date” means the date which is twelve (12) calendar
months following the Original Effective Date.
     26. “First New Product FDA Approval” means the date upon which the first
approval is received from the United States Food and Drug Administration with
respect to the first New Product (immediately following which such New Product
may be manufactured and commercially sold in the United States).
     27. “First GA101 FDA Approval” means the date upon which the first approval
is received from the United States Food and Drug Administration with respect to
GA101 (immediately following which GA101 may be commercially sold in the United
States).
     28. “First Non-CLL GA101 FDA Approval” means the date upon which the first
approval is received from the United States Food and Drug Administration with
respect to GA101 in an indication other than chronic lymphocytic leukemia
(immediately following which GA101 may be commercially sold in the United
States).
     27. “FDA Approval Date” means the date on which the United States Food and
Drug Administration grants Regulatory Approval of C2B8 for manufacture and sale
in the United States.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     29. “FDA Approval Event” means the FDA Approval Date occurs on or before
the Fifty-Four Month Anniversary Date.
     30. “FDA Review Event” means the date on which the relevant United States
Food and Drug Administration public advisory committee meets to determine
whether to recommend approval of the manufacture and sale in the United States
of C2B8.
     31. “Field” means the use of Franchise Product in humans.
     32. “Fifty-Four Month Anniversary Date” means that date which is fifty-four
(54) calendar months following the Original Effective Date.
     33. “Franchise Products” means Licensed Products and New Products.
     34. “GA101” means “Licensed Products” as defined in the GA101 License and
Collaboration Agreement made and entered on September 23, 2008 by and between F.
Hoffmann-La Roche Ltd and GlycArt Biotechnology AG and Genentech.
     35. “GA101 CLL Sales Trigger” means the first day of the first calendar
quarter following the first date cumulative Gross Sales of GA101 (calculated
only with respect to GA101 in the United States) within any consecutive 12 month
period reaches $500,000,000.
     36. “G2H7” means [**].
     37. “Genentech” means Genentech, Inc., a Delaware corporation, and its
Affiliates.
     38. “Genentech Know-how” means Information which (i) Genentech discloses to
IDEC under the Collaboration Agreement and (ii) is within the Control of
Genentech.
     39. “Genentech NP Patent” means the rights under any Patent, other than a
Genentech Patent or Excluded Patent, which covers a method, apparatus, material,
manufacture, use, treatment, process, compound, composition, or
product-by-process necessary to develop, make, use or sell a New Product in the
Field in the Co-Promotion Territory, which Patent is Controlled by Genentech,
including its interest in any Patents owned jointly by the Parties as provided
hereunder.
     40. “Genentech OCR Patent” means the rights under any Patent, filed after
the Second Restated Effective Date, other than a Genentech Patent, Genentech NP
Patent or Excluded Patent, which covers a method, apparatus, material,
manufacture, use, treatment, process, compound, composition, or
product-by-process necessary to develop, make, use or sell OCR in the Field,
which Patent is Controlled by Genentech, including its interest in any Patents
owned jointly by the Parties as provided hereunder.
     41. “Genentech Patent” means the rights under any Patent, other than an
Excluded Patent, which covers a method, apparatus, material, manufacture, use,
treatment, process, compound, composition, or product-by-process necessary to
develop, make, use or sell a Licensed Product in the Field, which Patent is
Controlled by Genentech, including its interest in any Patents owned jointly by
the Parties as provided hereunder.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     42. “Gross Sales” shall have the meaning set forth in Exhibit A to the
Collaboration Agreement.
     43. “IDEC” means IDEC Pharmaceuticals Corporation, a Delaware corporation,
and its Affiliates.
     44. “IDEC Know-how” means Information which (i) IDEC discloses to Genentech
under the Collaboration Agreement and (ii) is within the Control of IDEC.
     45. “IDEC Patent” means the rights under a Patent which covers a method,
apparatus, material, manufacture, use, treatment, process, compound, composition
or product-by-process (i) useful in the development, manufacture, use or sale of
Licensed Products, or (ii) necessary to develop, make, use or sell a New Product
or OCR, in each case which Patent is Controlled by IDEC, including its interest
in any Patents owned jointly by the Parties as provided hereunder.
     46. “ln2B8” shall have the meaning set forth in Section 2.2. of the
Collaboration Agreement.
     47. “Information” means techniques and data relating to the Franchise
Products and/or OCR, including, but not limited to, biological materials,
inventions, practices, methods, knowledge, know-how, skill, experience, test
data (including pharmacological, toxicological and clinical test data),
analytical and quality control data, marketing, pricing, distribution, cost,
sales, manufacturing, patent data or descriptions.
     48. “Joint Commercialization Committee” or “JCC” means that committee
established pursuant to Section 3.3 of the Collaboration Agreement.
     49. “Joint Development Committee” or “JDC” means that committee established
pursuant to Section 3.2 of the Collaboration Agreement.
     50. “Joint Finance Committee” or “JFC” means that committee established
pursuant to Section 3.4 of the Collaboration Agreement.
     51. “Joint Know-how” means Information developed by or on behalf of a Party
hereunder and which is co-funded by the Parties, including without limitation
being charged against Operating Profits (or Losses).
     52. “Licensed Product(s)” means any compound or composition of matter [**]
(including C2B8, but excluding Y2B8 and In2B8 unless the option set forth in
Section 2.3 of the Collaboration Agreement is exercised) (a) developed by IDEC
or (b) the intellectual property rights to which are owned or Controlled, in
whole or in part, by IDEC, in either (a) or (b) as of the Original Effective
Date or during the term of the Collaboration Agreement. Notwithstanding the
foregoing, Licensed Products shall not be considered OCR, New Products or Third
Party Anti-CD20 Products.
     53. “Licensed Territory” means worldwide (including Asia, pursuant to the
First Amendment (as defined in the Collaboration Agreement)), excluding the
Co-Promotion Territory.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     54. “Major European Country” means the United Kingdom, Italy, Germany,
France or Spain.
     55. “Management Committee” means that committee established pursuant to
Section 3.1 of the Collaboration Agreement.
     56. “Marketing Costs” shall have the meaning set forth m Exhibit A to the
Collaboration Agreement
     57. “ML/MS Agreement” means the Preferred and Common Stock Purchase
Agreement dated March 16, 1995 by and between ML/MS Associates, L.P. and IDEC,
whereby IDEC reacquired the rights to certain technologies for the treatment of
B-cell lymphomas funded and developed by ML/MS Partners pursuant to a
Development Agreement and related agreements, dated as of February 17, 1988 and
October 27, 1988.
     58. “ML/MS Partners” shall mean ML Technology Ventures, L.P. and Morgan
Stanley Ventures, L.P., and any assignee or successor to ML/MS Partners.
     59. “National Exchange” shall mean the Nasdaq National Market or any other
national exchange on which the Common Stock of IDEC is listed.
     60. “Net Sales” shall have the meaning set forth in Exhibit A to the
Collaboration Agreement.
     61. “New Product” means (i) G2H7 (from and after the date of payment
pursuant to Section 7.1(b)(i) of the Collaboration Agreement) and (ii) any
Potential New Product for which IDEC has exercised an opt-in pursuant to
Section 2.5 of the Collaboration Agreement (from and after the date of payment
pursuant to Section 7.1(b)(ii), (iii) or (iv), as applicable, of the
Collaboration Agreement). At the time a Potential New Product becomes a New
Product, such New Product shall be defined to include [**] was (were) the
subject of such Potential New Product, as well as (x) any modifications to [**]
which result from [**] are not required to obtain Regulatory Approval, and
(y) modifications or derivatives to [**] which result from activities specified
in the Development Plan [**].
     62. “OCR” means [**].
     63. “OCR Trademarks” means trademarks, service marks, trade dress, logos,
names, slogans and domain names used or to be used in connection with the
marketing and commercialization of OCR (and all translations, adaptations,
derivations, and combinations thereof), together will all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith.
     64. “Operating Committee” means a committee established by the Management
Committee, including but not limited to, the Joint Development Committee, Joint
Commercialization Committee and the Joint Finance Committee.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     65. “Operating Profits or Losses” shall have the meaning set forth in
Exhibit A of the Collaboration Agreement.
     66. “Option Agreement” means the Option Agreement to be dated as of the
Original Effective Date between Genentech and IDEC.
     67. “Original Agreement” shall mean that certain collaboration agreement by
and between the Parties dated March 16, 1995.
     68. “Original Effective Date” means March 16, 1995.
     69. “Party” means IDEC or Genentech, as applicable.
     70. “Parties” means IDEC and Genentech.
     71. “Patent(s)” means (i) valid and enforceable letters patent, including
any extension, registration, confirmation, reissue, re-examination or renewal
thereof and (ii) pending applications for letters patent, including any
continuation, division or continuation-in-part.
     72. “Patent Costs” means the fees and expenses paid to outside legal
counsel and experts, and filing and maintenance expenses, (i) incurred after the
Original Effective Date in connection with the establishment and maintenance of
rights under Patents covering any Licensed Product, and (ii) incurred after the
Restated Effective Date in connection with the establishment and maintenance of
rights under Patents covering OCR or any New Product, including, in each case,
costs of patent interference, reexamination, reissue, opposition and revocation
proceedings.
     73. “Patent Milestone Event” means the notice of grant in the European
Patent Office or issuance in a Major European Country of the first valid and
enforceable letters patent covering C2B8.
     74. “Phase II Clinical Trial” means such studies in humans of the safety,
dose ranging and efficacy of a Franchise Product which have generated sufficient
data to commence a Phase III Clinical Trial.
     75. “Phase III Clinical Trial” means a study in humans of the efficacy and
safety of a Franchise Product which is prospectively designed to demonstrate
statistically whether the Franchise Product is effective for use in a particular
indication in a manner sufficient to obtain Regulatory Approval to market that
Franchise Product and which the Joint Development Committee designates as a
Phase III Clinical Trial.
     76. “Phase III Milestone Event” means completion of the Pivotal Phase III
Clinical Trial and presentation of the results of the entire Pivotal Phase III
Clinical Trial in a peer-reviewed journal or public forum.
     77. “Pivotal Phase III Clinical Trial” means IDEC Protocol #102-05, as
amended, and as further amended by the agreement of the JDC or as otherwise
agreed by the JDC.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     78. “Potential New Product” means any protein(s) or peptide(s) (other than
G2H7 and OCR) [**], and such protein(s) or peptide(s):
          (a) was (were) acquired by [**] from a Third Party [**] (such
Potential New Product a “ [**] Potential New Product”); or
          (b) was (were) acquired by [**] from a Third Party [**] (such
Potential New Product a “[**] Potential New Product”) (collectively, [**]
Potential New Products and [**] Potential New Products may be referred to herein
as “[**] Potential New Products”); or
          (c) was (were) developed by Genentech (including any protein(s) or
peptide(s) acquired by [**] (such Potential New Product a “[**] Potential New
Product”)).
As used in this Collaboration Agreement, “protein” or “peptide” means any
protein or peptide having a [**]; and “acquired” means, in addition to the
direct acquisition of rights to a product, the indirect acquisition of rights to
a product through the acquisition of [**]. Notwithstanding the foregoing, [**],
and Potential New Products and New Products shall not be considered Third Party
Anti-CD20 Products.
     79. “Preferred Stock Purchase Agreement” means the Preferred Stock Purchase
Agreement dated the Original Effective Date between IDEC and Genentech.
     80. “Proceed with Formulation Event” means the affirmative decision by the
JDC to proceed with the current formulation (including modified formulations, if
any, not requiring a halt in current clinical trials) of C2B8 more fully
described in Appendix I to the Development Plan.
     81. “Product License Application Filing Event” shall mean the date on which
the first product license application is filed with the United States Food and
Drug Administration for approval of the manufacture and sale of C2B8 in the
United States.
     82. “Regulatory Approval” means any approvals (including pricing and
reimbursement approvals), licenses, registrations or authorizations of any
federal, state or local regulatory agency, department, bureau or other
governmental entity, necessary for the manufacture and sale of a Franchise
Product in a regulatory jurisdiction.
     83. “Registration Rights Agreement” means the 1995 Registration Rights
Agreement dated as of the Original Effective Date between Genentech, ML/MS
Associates, L.P. and IDEC.
     84. “Royalty-Bearing Sales” means, as to each Franchise Product in the
Licensed Territory or OCR in the Co-Promotion Territory and Licensed Territory,
the gross amount invoiced by Genentech or its permitted sublicensees for sales
to an unrelated Third Party of a Franchise Product in the Licensed Territory or
OCR in the Co-Promotion Territory or Licensed Territory (as applicable), less
(i) trade, cash and quantity discounts or rebates, (ii) credits or allowances
given or made for rejection or return of, and for uncollectible amounts on,
previously sold products or for retroactive price reductions (including rebates
similar to Medicare), (iii) taxes, duties or other governmental charges levied
on or measured by the billing amount, as adjusted for rebates and refunds,
(iv) charges for freight and insurance directly related to the distribution of
Franchise
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Products and OCR, as applicable (to the extent not paid by the Third Party
customer), and (v) credits or allowances given or made for wastage replacement,
indigent patient and similar programs (but only to the extent such amounts were
included in the gross amount invoiced). The amount obtained by deducting
(i) through (v) from the gross amount invoiced shall then be adjusted by the
Combination Product Adjustment, if applicable. For the avoidance of doubt,
Royalty-Bearing Sales will, following the Restated Effective Date, be determined
in a manner consistent with the practice immediately prior to the Restated
Effective Date, unless otherwise agreed to in writing by the Parties.
     85. “Sales Costs” shall have the meaning set forth in Exhibit A to the
Collaboration Agreement.
     86. “Sales Returns and Allowances” shall have the meaning set forth in
Exhibit A to the Collaboration Agreement.
     87. “Sales Representative” means an employee of either Party or its
Affiliates (i) who is responsible for contacting customers and others who can
buy or influence the buying decision on the applicable Franchise Product in the
applicable country in the Co-Promotion Territory, and (ii) whose success at such
activities is a significant factor in the ongoing employment of the individual,
and shall exclude an employee of either Party or an Affiliate engaged in
telemarketing, professional education, and similar indirect activities in
support of direct selling.
     88. “Stability Benchmark Date” means the date on which the accelerated
stability study has been completed and data has been reviewed by the JDC as more
fully described on Appendix I to the Development Plan.
     89. “Standstill Agreement” means the Standstill Agreement to be dated as of
the Original Effective Date between Genentech and IDEC.
     90. “Third Anniversary Date” means that date which is thirty-six months
following the Original Effective Date.
     91. “Third Party” means any entity other than IDEC or Genentech.
     92. “Third Party Anti-CD20 Products” means any protein or peptide [**] that
is controlled (either before or after Genentech decides to seek a license to the
same) by any Third Party. As used in the previous sentence, “controlled” means
that such Third Party had the ability to grant a license or sublicense to
develop and commercialize such product without violating the terms of any
agreement or other arrangement it had with any other Third Party.
Notwithstanding the foregoing, Third Party Anti-CD20 Products shall not be
considered Potential New Products or New Products.
     93. “Third Party Royalties” means royalties payable by either Party to a
Third Party in connection with the manufacture, use or sale of Franchise
Products.
     94. “Y2B8” shall have the meaning set forth in Section 2.2 of the
Collaboration Agreement.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Exhibit A
Financial Planning, Accounting and Reporting
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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EXHIBIT A
FINANCIAL PLANNING, ACCOUNTING AND REPORTING
FOR THE
SECOND AMENDED AND RESTATED COLLABORATION AGREEMENT
     This Exhibit A to the Second Amended and Restated Collaboration Agreement
(the “Collaboration Agreement”) dated as of October 18, 2010, between Biogen
Idec Inc. (“IDEC”) and Genentech, Inc. (“Genentech”) addresses the financial
planning, accounting policies and procedures to be followed in determining
Operating Profits or Losses and related sharing of revenue and expenses in the
Co-Promotion Territory. Terms not defined in this Exhibit shall have the
meanings set forth in the Schedule of Master Definitions which is attached as
Appendix 1 to the Collaboration Agreement, or to the extent not in the Schedule
of Master Definitions, in the Collaboration Agreement.
     This Exhibit sets forth the principles for reporting actual results and
budgeted plans of the combined operations in the Co-Promotion Territory, the
frequency of reporting, the use of a single functional currency for reporting,
and the methods of determining payments to the Parties and auditing of accounts.
     For purposes of this Exhibit only, the consolidated accounting of
operations for the collaboration in the Co-Promotion Territory shall be referred
to as GenIDEC. GenIDEC is not a legal entity and has been defined for
identification purposes only.
A.1. Principles of Reporting
The results of operations of GenIDEC will be presented in the following format
(as to all Franchise Products and also on a product-by-product basis), with the
categories as defined in Section A.4 below:
A.1(a) Income Statement

                              IDEC     Genentech     Total  
Gross Sales
                       
less Sales Returns and Allowances
                       
= Net Sales
                       
less Cost of Sales
                       
= Gross Profits
                       
less Marketing Costs
                       
less Sales Costs
                       
less Development Costs chargeable to GenIDEC
                       
less Other Operating Income/Expense
                       
= Contribution
                       
less Distribution Costs
                       
less Administration Costs
                       
= Operating Profit (Loss)
                       

 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     It is the intention of the Parties that the interpretation of these
definitions will be consistent with generally accepted accounting principles in
the United States.
     A.1(b) Subcomponent Reporting
     For reporting purposes only, expenses will be identified for the budget,
forecast, and quarterly actuals reporting events within this Section A.1 by the
following detail sub-components within the aggregate Income Statement expense
components specified under Section A.l(a):
     Cost of Sales — cost of goods sold (COGS), cost of sales royalties, freight
& other
     Marketing — marketing promotion, market research, marketing headcount
     Sales — sales headcount, sales promotion & sales operations
     Development — by indication label-enabling activities & trials, by
indication post-marketing activities & trials
     The requirement defined within Section 4.5, 5.4 (b) and 17.1(a) not to
exceed budget by [**] without unanimous JDC or JCC approval, as applicable,
shall not apply to these reporting detail sub-components, but shall only apply
to the aggregate expense components specified within the Income Statement format
specified within Section A.l(a).
A.2. Frequency of Reporting
     The fiscal year of GenIDEC will be a calendar year.
     Reporting by each Party for GenIDEC revenues and expenses will be performed
as follows (with copies provided to the JFC and to the other Party):

                  Reporting Event   Frequency   Timing of Submission        
Actuals
  Quarterly   Q1-Q3:   +30 days    
 
      Q4:   +45 days    
 
               
Forecasts
  Quarterly   Mid Quarter        
(rest of year — by month)
               
 
               
Budgets
  Annually   October 31        
(one year — by month)
               
 
               
Long Range Plan
  Annually   July 31        
(current year plus 5 years)
               

 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Genentech will be responsible for the preparation of consolidated reporting
(actuals, budgets, forecasts, and long range plans), calculation of the
profit/loss sharing and determination of the cash settlement. Genentech will
provide the JFC (and IDEC) within five working days of the submission date shown
above, a statement showing the consolidated results (and forecasts) and
calculations of the profit/loss sharing and cash settlement required in a format
agreed to by the Parties.
Reports of actual results compared to budget (as to all Franchise Products and
also on a product- by-product basis) will be made to the Operating Committees on
a quarterly basis. After approval by the JFC as to amounts, the JFC will forward
the report to the Management Committee for its approval. Line item variances
from budgets judged to be significant by the JFC will only be included in
calculation of Operating Profit and Loss when approved by the JCC and the
Management Committee.
On a monthly basis Genentech will supply IDEC with Gross Sales (as to all
Franchise Products and also on a product-by-product basis) in units, local
currency and U.S. dollars by country of each month’s sales according to
Genentech’s sales reporting system, which shall be consistent with the
definitions in Section A.4.
The Joint Finance Committee will meet as appropriate to review and approve the
following (as to all Franchise Products and also on a product-by-product basis):

  -   Actual Results     -   Forecasts     -   Budget     -   Inventory Levels  
  -   Sales Returns and Allowances     -   Other financial matters, including
each Party’s methodologies for charging costs and allocating Sales
Representatives to GenIDEC for actuals, forecasts, budgets and long range plans
and the results of applying such methodologies.

A.3. Budget and Long Range Plan
Responsibility for the Budget and Long Range Plan with regard to Licensed
Products, [**], will rest with the JCC and the JDC, who will develop budgets for
development and commercialization in coordination with the Joint Finance
Committee, subject to final approval by the Management Committee.
Responsibility for the Budget and Long Range Plan with regard to New Products,
including, without limitation, G2H7, and with regard to all Franchise Products
(including, without limitation, C2B8) [**], will rest with Genentech, who will
develop budgets for development and commercialization in coordination with the
Joint Finance Committee, subject to final approval by the Management Committee.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Budgets will be prepared annually for the following full calendar year
containing monthly details/numbers.
Budgets will be supplemented with high level business plans and costs for
clinical trials, registration applications, and plans for product introduction,
sales efforts and promotion as approved by the Joint Development Committee and
Joint Commercialization Committee. Budgets, once ratified by the Management
Committee, can only be changed with the approval of the Management Committee
(with the exception of the provisions outlined in Sections 4.5 and 5.4(b) of the
Collaboration Agreement).
A five-year Long Range Plan for GenIDEC will be established on a yearly basis
under the direction of the Management Committee and submitted to Genentech and
IDEC by July 31st.
A.4. Definitions
     A.4.1 “Administration Costs” means, as to each Franchise Product in the Co-
Promotion Territory, costs chargeable to GenIDEC equal to [**] of the sum of
each Party’s own Marketing Costs and Sales Costs and Development Costs (each,
only to the extent chargeable to GenIDEC), subject to a cap for each Party, as
to all Franchise Products, in each calendar year of [**] (subject to annual
increases per the PPI).
     A.4.2 “Allocable Overhead” means costs incurred by a Party or for its
account which are attributable to a Party’s supervisory, services, occupancy
costs, corporate bonus (to the extent not charged directly to department), and
its payroll, information systems, human relations or purchasing functions and
which are allocated to company departments based on space occupied or headcount
or other activity-based method. Allocable Overhead shall not include any costs
attributable to general corporate activities including, by way of example,
executive management, investor relations, business development, legal affairs
and finance.
     A.4.3. “Cost of Goods Sold” means, as to each Franchise Product in the Co-
Promotion Territory, the fully burdened cost of such Franchise Product in final
therapeutic form as limited by Section 8.2 or Section 8.6. The fully burdened
cost of each Franchise Product will be determined in accordance with generally
accepted accounting principles in the United States as applied by the Party
performing or contracting for each stage of the manufacturing process and will
include direct labor, material, product testing costs and Allocable Overhead.
     A.4.4. “Cost of Sales” means, as to each Franchise Product in the
Co-Promotion Territory, Cost of Goods Sold, Third Party Royalties (except to
ML/MS Partners) (i.e., any allocable intellectual property acquisition and
licensing costs) and outbound freight on sales if borne by the seller.
     A.4.5. “Development Costs” means, as to each Franchise Product in the Co-
Promotion Territory, costs, including Allocable Overhead, required to obtain the
authorization and/or ability to manufacture, formulate, fill, ship and/or sell
such Franchise Product in the Field in commercial quantities in the Co-Promotion
Territory. Development Costs shall include but are not limited to the
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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cost of studies on the toxicological, pharmacokinetic, metabolic or clinical
aspects of such Franchise Product conducted internally or by individual
investigators, or consultants necessary for the purpose of obtaining and/or
maintaining approval of such Franchise Product in the Field by a government
organization in a country of the Co-Promotion Territory, and costs for
preparing, submitting, reviewing or developing data or information for the
purpose of a submission to a governmental authority to obtain and/or maintain
approval of such Franchise Product in the Field in a country of the Co-Promotion
Territory as well as costs of process development scale-up and recovery
(including plant costs). In addition, Development Costs in the Co-Promotion
Territory shall include the cost of post-launch clinical studies in support of
such Franchise Product in the Field in the Co-Promotion Territory. Development
Costs in the Co-Promotion Territory shall include expenses for compensation,
benefits and travel and other employee-related expenses, as well as data
management, statistical designs and studies, document preparation, and other
expenses associated with the clinical testing program. Development Costs that
are to be paid solely by one but not both of the Parties as set forth in
Section 2.3 of the Collaboration Agreement shall not be included in the
determination of Operating Profits (Losses).
     A.4.6. “Distribution Costs” means, as to each Franchise Product in the
Co-Promotion Territory, the costs, including Allocable Overhead, specifically
identifiable to the distribution of such Franchise Product including customer
services, collection of data of sales to hospitals and other end users (e.g. DDD
sales data), order entry, billing, credit and collection and other activities
described in Section 5.3 of the Agreement. For the purpose of this Agreement,
only Genentech will charge GenIDEC for Distribution Costs an amount of [**] of
Net Sales in a lump sum.
     A.4.7. “Gross Sales” means, as to each Franchise Product in the
Co-Promotion Territory, the gross amount invoiced by either Party or their
Affiliates or permitted sublicensees for sales of such Franchise Product to
Third Parties in the Co-Promotion Territory.
     A.4.8. “Marketing Costs” means, as to each Franchise Product in the
Co-Promotion Territory, the costs, excluding Allocable Overhead, of marketing,
promotion, advertising, professional education, product related public
relations, relationships with opinion leaders and professional societies, market
research, healthcare economics studies and other similar activities directly
related to such Franchise Product and approved by the Joint Commercialization
Committee. Such costs will include both internal costs (e.g., salaries,
benefits, supplies and materials, etc.) as well as outside services and expenses
(e.g., consultants, agency fees, meeting costs, etc.). Marketing Costs shall
also include activities related to obtaining reimbursement from payers and costs
of sales and marketing data. Marketing Costs will specifically exclude the costs
of activities which promote (i) either Party’s business as a whole without being
product specific (such as corporate image advertising), or (ii) non-Franchise
Products.
     A.4.9. “Net Sales” means Gross Sales less Sales Returns and Allowances.
     A.4.10. “Operating Profit or Loss” means, as to all Franchise Products (or,
where applicable, on a product-by-product basis), GenIDEC’s Net Sales less the
following items: Cost of Sales, Marketing Costs, Sales Costs, Development Costs,
(to the extent chargeable to GenIDEC), Other Operating Income/Expense,
Distribution Costs and Administrative Costs, for a given period.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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     A.4.11. “Other Operating Income/Expense” means other operating income or
expense from or to third parties which is not part of the primary business
activity of GenIDEC, but is considered and approved by the Joint Finance
Committee as income or expense generated from GenIDEC operations, and limited to
the following:

  -   Inventory Write-Offs     -   Patent Costs (as defined and to the extent
permitted in the Collaboration Agreement)     -   Certain losses as set forth in
section 16.2 of the Collaboration Agreement Product liability insurance to the
extent the Parties obtain a joint policy     -   Other (To be approved by JFC)

     A.4.12. “Sales Costs” means, as to each Franchise Product in the
Co-Promotion Territory (to the extent practicable and without being overly
burdensome to provide, Sales Costs will be identified on a product -by-product
basis, otherwise such Sales Costs shall be attributed between the products in a
reasonable manner as determined by the JFC), costs, including Allocable
Overhead, approved by the JCC and the annual budget and specifically
identifiable to the sales of such Franchise Product to all markets in the
Co-Promotion Territory including the managed care market. Sales Costs shall
include costs associated with Sales Representatives, including compensation,
benefits and travel, supervision and training of the Sales Representatives,
sales meetings, and other sales expenses. Sales Costs will not include the
startup costs associated with either Party’s sales force, including recruiting,
relocation and other similar costs.
     A.4.13. “Sales Returns and Allowances” means, as to each Franchise Product
in the Co-Promotion Territory, the sum of (a), (b) and (c) where (a) is a
provision, determined under generally accepted accounting principles in the
United States, for (i) trade, cash and quantity discounts or rebates (other than
price discounts granted at the time of invoicing and which are included in the
determination of Gross Sales), (ii) credits or allowances given or made for
rejection or return of, and for uncollectible amounts on, previously sold
products or for retroactive price reductions (including Medicare and similar
types of rebates), (iii) taxes, duties or other governmental charges levied on
or measured by the billing amount, as adjusted for rebates and refunds, (iv)
charges for freight and insurance directly related to the distribution of such
Franchise Product, and (v) credits or allowances given or made for wastage
replacement, indigent patient and any other sales programs agreed to by the
Parties, (b) is a periodic adjustment of the provision determined in (a) to
reflect amounts actually incurred for (i), (ii), (iii), (iv) and (v), and (c) is
the Combination Product Adjustment as defined in the Collaboration Agreement, if
any. Provisions allowed in (a) and adjustments made in (b) and (c) will be
reviewed by the Joint Finance Committee.
A.5. Foreign Exchange
The functional currency for accounting for operating profit will be U.S.
Dollars.
The statement of operations will be translated into U.S. dollars using the
average exchange rate for the reporting period.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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A.6 Audit and Interim Reviews
     A.6.1 Either Party shall have the right to request that an independent
accounting firm selected by such requesting Party, and approved by the other
Party (such approval not to be unreasonably withheld), perform an audit or
interim review of the other Party’s books (as to all Franchise Products and also
on a product-by-product basis) in order to express an opinion regarding said
Party’s compliance with generally accepted accounting principles. Such audits or
review will be conducted at the expense of the requesting Party.
     A.6.2 Either Party shall have the right to request that an independent
public accounting firm selected by such requesting Party, and approved by the
other Party (such approval not to be unreasonably withheld), perform an audit of
the other Party’s books of accounts (as to all Franchise Products and OCR, and
also on a product -by-product basis) for the sole purpose of verifying
compliance with the Agreement. Such audits will be conducted at the expense of
the requesting Party; provided, however, that if the audit results in an
adjustment of greater that [**] of Operating Losses or Profits in any period,
the cost of the audit will be borne by the Party audited. Audit results will be
shared with both Parties. Audits are limited to results in the two (2) years
prior to audit notification.
     A.6.3 Each Party shall provide the other Party, as reasonably requested,
sharable work product generated by such Party or its accountants with respect to
Franchise Products and OCR in preparation of such providing Party’s obligation
to comply with the reporting obligations mandated under the Sarbanes Oxley Act
of 2002 (including implemented federal regulations thereunder); provided, such
providing Party shall have the right to redact such work product to (i) remove
any reference to any products other than a Franchise Product and OCR, and
(ii) to preserve any right of confidentiality not otherwise governed by the
terms of Article 11 of the Collaboration Agreement; provided further, such
receiving Party shall only use such information disclosed hereunder to assist it
in complying with the reporting obligations mandated under the Sarbanes Oxley
Act of 2002. All costs incurred by the providing Party in complying with such
request shall be reimbursed by the receiving Party.
     A.6.4 At either Party’s written request, the other Party shall, to the
extent commercially reasonable and practicable, commission, facilitate, support,
and/or assist an independent accounting firm with the execution of an
agreed-upon procedures engagement (and written report thereon), whose scope,
frequency and timing will be mutually agreed upon by the Parties, to support the
requesting Party’s relevant internal control understanding and compliance
assertions. All costs incurred by the other Party in complying with such request
shall be reimbursed by the requesting Party.
A.7. Payments between the Parties
Balancing payments between the Parties will be approved by the Management
Committee based on Operating Profit or Loss. Payments will be made quarterly
based on actual results within 60 days
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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after the end of each quarter, adjusted for reimbursement of the net expenses or
income incurred or received by each Party.
A.8. Accounting for Development Costs, Marketing Costs and Sales Costs
All Development Costs, Marketing Costs and Sales Costs will be based on the
appropriate costs definition stated in Section A.4 of this Exhibit.
Each party shall report Development Costs in a manner consistent with its
Project Cost System. In general, these project cost systems report actual time
spent on specific projects, apply the actual labor costs, capture actual costs
of specific projects and allocate other expenses to projects. For Marketing
Costs, the Parties will report costs based on spending in Marketing departments.
The Parties acknowledge that the methodologies used will be based on systems in
place and consistent with Section A.11 of this Exhibit.
For the purpose of determining Sales Costs, the Parties, through the JCC and JFC
shall determine the number of Sales Representatives selling Franchise Products
during the period and develop a method consistent with Sections A.4 and A.11 of
this Exhibit to allocate Sales Costs to those Sales Representatives.
A.9. Sharing of Operating Profits and Losses
The Parties agree to share the Operating Profit or Loss resulting from the
collaborative arrangement in the Co-Promotion Territory according to the
following manner:
     A.9.1 Licensed Products. With regard to Licensed Products, including
without limitation, C2B8, for each calendar year or portion thereof prior to the
earlier of the GA101 CLL Sales Trigger, First Non-CLL GA101 FDA Approval or
First New Product FDA Approval, IDEC and Genentech shall receive 30% and 70%,
respectively, of the first $50 million in Operating Profits (calculated solely
with respect to Licensed Products) and 40% and 60%, respectively, of Operating
Profits (calculated solely with respect to Licensed Products) in excess of
$50 million. To the extent there is an Operating Loss (calculated solely with
respect to Licensed Products) on sales of Licensed Product in the Co-Promotion
Territory in any calendar year, IDEC shall absorb 30% and Genentech 70% of such
loss; provided, however, that: (i) Genentech shall finance the cost of building
inventory necessary for product launch, bridging or other studies required under
Section 8.1 of the Collaboration Agreement and other pre-launch marketing or
commercial activities approved by the Joint Commercialization Committee and the
Joint Finance Committee, and (ii) IDEC shall repay its 30% share of such costs
following product approvals from the Operating Profits allocated to IDEC in any
calendar quarter. If repayment is not complete three years following first
approval, IDEC shall complete repayment in a lump sum at the end of the next
calendar quarter. Interest on any such repayment will be charged at a rate equal
to the sum of [**].
     A.9.2 New Products Prior to the GA101 CLL Sales Trigger, First Non-CLL
GA101 FDA Approval or First New Product FDA Approval. With regard to New
Products (including without limitation G2H7), prior to the earlier of the GA101
CLL Sales Trigger, First GA101 Non-
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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CLL FDA Approval or First New Product FDA Approval, in each calendar year IDEC
and Genentech shall pay [**], respectively, of all Operating Losses (calculated
solely with respect to New Products).
     A.9.3 All Franchise Products following the GA101 CLL Sales Trigger, First
Non-CLL GA101 FDA Approval or First New Product FDA Approval.
     A.9.3a With regard to all Franchise Products, including without limitation
C2B8 and G2H7, following the GA101 CLL Sales Trigger, but prior to either the
First Non-CLL GA101 FDA Approval or the First New Product FDA Approval, for each
calendar year or portion thereof, IDEC and Genentech shall receive (or pay):
     (i) 30% and 70%, respectively, of the first $50 million in Operating
Profits (calculated with respect to all Franchise Products); except that for the
calendar year in which the GA101 CLL Sales Trigger occurs, this first
$50 million Operating Profits tier shall only apply with respect to Operating
Profits of all Franchise Products if this first $50 million Operating Profits
tier has not been completely achieved, and then only to the extent it has not
been achieved, with respect to Operating Profits of Licensed Products (as
defined within A.9.1) prior to the GA101 CLL Sales Trigger; and
     (ii) 35% and 65%, respectively, of the Operating Profits (calculated with
respect to all Franchise Products) in excess of the first $50 million in
Operating Profits (calculated with respect to all Franchise Products); and
     (iii) 35% and 65%, respectively, of any Operating Losses, calculated with
respect to all Franchise Products.
For clarity, on and after the First Non-CLL GA101 FDA Approval or the First New
Product FDA Approval this section A.9.3a shall no longer apply and the Parties
respective share of Operating Profit or Loss for all Franchise Products shall be
determined in accordance with section A.9.3b or A.9.3c, as applicable, below.
     A.9.3b With regard to all Franchise Products, including without limitation
C2B8 and G2H7, following the First Non-CLL GA101 FDA Approval, but prior to the
First New Product FDA Approval, for each calendar year or portion thereof, IDEC
and Genentech shall receive (or pay):
(i) 30% and 70%, respectively, of the first $50 million in Operating Profits
(calculated with respect to all Franchise Products); except that for the
calendar year in which the First GA101 FDA Approval occurs, this first
$50 million Operating Profits tier shall only apply with respect to Operating
Profits of all Franchise Products if this first $50 million Operating Profits
tier has not been completely achieved, and then only to the extent it has not
been achieved, with respect to Operating Profits of Licensed Products (as
defined within A.9.1) prior to the First GA101 FDA Approval; and
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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(ii) If the GA101 CLL Sales Trigger has not occurred prior to the First Non-CLL
GA101 FDA Approval, then
(x) 39% and 61%, respectively, of the Operating Profits (calculated with respect
to all Franchise Products) in excess of the first $50 million in Operating
Profits (calculated with respect to all Franchise Products) until the First
GA101 Threshold Date (as used herein the “First GA101 Threshold Date” means the
earlier of (1) the date of the First Non-CLL GA101 FDA Approval if on that date
the cumulative Gross Sales (calculated only with respect to GA101 in the United
States) within the consecutive 12 month period immediately preceding the First
Non-CLL GA101 FDA Approval reached at least $150,000,000 and (2) if cumulative
Gross Sales (calculated only with respect to GA101 in the United States) had not
within the consecutive 12 month period immediately preceding the First Non-CLL
GA101 FDA Approval reached $150,000,000 then the first day of the first calendar
quarter following the first date following the First Non-CLL GA101 FDA Approval
that the cumulative Gross Sales (calculated only with respect to GA101 in the
United States) within any consecutive 12 month period reaches $150,000,000), it
being understood that if the First GA101 Threshold Date is the same date as the
First Non-CLL GA101 FDA Approval, then this subsection (x) is effectively
passed-over and subsection (y) immediately applies; and
(y) 37.5% and 62.5%, respectively, of the Operating Profits (calculated with
respect to all Franchise Products) in excess of the first $50 million in
Operating Profits (calculated with respect to all Franchise Products) following
the First GA101 Threshold Date and until the Second GA101 Threshold Date (as
used herein the “Second GA101 Threshold Date” means first day of the first
calendar quarter following the first date the cumulative Gross Sales (calculated
only with respect to GA101 in the United States) within any consecutive 12 month
period reaches $500,000,000); and
(z) 35% and 65%, respectively, of the Operating Profits (calculated with respect
to all Franchise Products) following the Second GA101 Threshold Date;
(iii) If the GA101 CLL Sales Trigger has occurred prior to the First Non-CLL
GA101 FDA Approval, then 35% and 65%, respectively, of the Operating Profits
(calculated with respect to all Franchise Products) in excess of the first
$50 million in Operating Profits (calculated with respect to all Franchise
Products); and
(iv) 35% and 65%, respectively, of any Operating Losses, calculated with respect
to all Franchise Products.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Within a calendar month that the First GA101 Threshold Date or the Second GA101
Threshold Date is met, Operating Profits shall be calculated by (x) pro-rating
the expenses in such month on a straight line basis to pre and post threshold
time frames, (y) identifying daily product sales within such calendar month by
the pre and post threshold timeframes and (z) allocating their related
Cost-of-Sales by the proper product sales proportions for pre and post threshold
timeframes.
For clarity, on and after the First New Product FDA Approval this section A.9.3b
shall no longer apply and the Parties respective share of Operating Profit or
Loss for all Franchise Products shall be determined in accordance with section
A.9.3c below.
     A.9.3.c With regard to all Franchise Products, including without limitation
C2B8, following the First New Product FDA Approval, for each calendar year or
portion thereof, IDEC and Genentech shall receive (or pay):
(i) 30% and 70%, respectively, of the first $50 million in Operating Profits
(calculated with respect to all Franchise Products); except that for the
calendar year in which the First New Product FDA Approval occurs, this first
$50 million Operating Profits tier shall only apply with respect to Operating
Profits of all Franchise Products if this first $50 million Operating Profits
tier has not been completely achieved, and then only to the extent it has not
been achieved, with respect to Operating Profits of Licensed Products (as
defined within A.9.1) prior to the First New Product FDA Approval; and
(ii) prior to the First GA101 Threshold Date 38% and 62%, and after the First
GA101 Threshold Date 37.5% and 62.5%, respectively, of the Operating Profits
(calculated with respect to all Franchise Products) in excess of the first
$50 million in Operating Profits (calculated with respect to all Franchise
Products) until the First Threshold Date (as used herein the “First Threshold
Date” means the earlier of (1) the GA101 CLL Sales Trigger, (2) the Second GA101
Threshold Date and (3) the later of (x) the first date the Gross Sales in any
calendar year (calculated only with respect to New Products in the United
States) reaches $150,000,000, and (y) January 1 of the calendar year following
the calendar year in which the First New Product FDA Approval occurs if Gross
Sales of New Products reached $150,000,000 within the same calendar year in
which the First New Product FDA Approval occurred); and
(iii) 35% and 65%, respectively, of the Operating Profits (calculated with
respect to all Franchise Products) in excess of the first $50 million in
Operating Profits (calculated with respect to all Franchise Products) following
the First Threshold Date and until the Second Threshold Date (as used herein the
“Second Threshold Date” means the later of (x) the first date the Gross Sales in
any calendar year (calculated only with respect to New Products in the United
States) reaches $350,000,000, and (y) January 1 of the calendar year following
the calendar year in which the First Threshold Date occurs); and
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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(iv) 30% and 70%, respectively, of the Operating Profits (calculated with
respect to all Franchise Products) following the Second Threshold Date; and
(v) 30% and 70%, respectively, of any Operating Losses, calculated with respect
to all Franchise Products.
Within a calendar month that the First Threshold Date or the Second Threshold
Date is met, Operating Profits shall be calculated by (x) pro-rating the
expenses in such month on a straight line basis to pre and post threshold time
frames, (y) identifying daily product sales within such calendar month by the
pre and post threshold timeframes and (z) allocating their related Cost-of Sales
by the proper product sales proportions for pre and post threshold timeframes.
The Parties’ respective share of Operating Profit or Loss in the Co-Promotion
Territory for Licensed Products and other Franchise Products, as described in
this Section A.9, is summarized in the table attached as Appendix A-1 to this
Exhibit.
A.10. Start of Operations
Operation of GenIDEC will be deemed to have commenced on April 1, 1995. Costs
incurred prior to April 1, 1995, are not chargeable to GenIDEC. Costs incurred
with respect to a Potential New Product prior to the time such product becomes a
New Product under the Collaboration Agreement are not chargeable to GenIDEC.
A.11. Guidelines for Charging Costs
The following guidelines shall be used in determining amounts chargeable to
GenIDEC subject to the cost definitions in Section A.4 of this Exhibit. Disputes
over the allocation of costs are not subject to Genentech’ s tie breaking vote
under Section 17.1.
A.11.1 If an expense is specifically and exclusively (i.e., for no other
product) used for the development or commercialization of a Franchise Product in
the Field in the Co-Promotion Territory, then 100% of the expense will be
charged to GenIDEC.
A.11.2 If an expense is specifically and exclusively (i.e., for no other
product) used for the development or commercialization of a Franchise Product in
the Field in both the Co-Promotion Territory and the Licensed Territory, then
the following shall apply:
(a) If the portion of that expense used for the development or commercialization
of such Franchise Product in the Field in the Licensed Territory can be
objectively determined through specific means (e.g., man hours of effort,
amounts consumed, etc.), then the amount so used will be charged to Genentech
and the remaining portion will be charged to GenIDEC.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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(b) If the Franchise Product is a Licensed Product and if the portion of that
expense used for the development or commercialization of such Franchise Product
in the Field in the Licensed Territory cannot be objectively determined through
specific means, then only the direct and incremental costs related to such
Franchise Product in the Field in the Licensed Territory will be charged to
Genentech and the remaining portion will be charged to GenIDEC.
(c) If the Franchise Product is a New Product and if the portion of that expense
used for the development or commercialization of such Franchise Product in the
Field in the Licensed Territory cannot be objectively determined through
specific means, then only the direct and incremental costs related to such
Franchise Product in the Field in the Co-Promotion Territory will be charged to
GenIDEC and the remaining portion will be charged to Genentech.
A.11.3 If an expense within the Co-Promotion Territory is not specifically and
exc1usively (i.e., for other products in addition to a Franchise Product) used
for the development or commercialization of a Franchise Product in the Field in
the Co-Promotion Territory, then the following shall apply:
(a) If the portion of that expense used for the development or commercialization
of a Franchise Product in the Field in the Co-Promotion Territory can be
objectively determined through specific means (e.g., man hours of effort,
amounts consumed, etc.), then the amount so used will be charged to GenIDEC.
(b) If the portion of that expense used for the development or commercialization
of a Franchise Product in the Field in the Co-Promotion Territory cannot be
objectively determined through specific means, then only the direct and
incremental costs related to the Franchise Product in the Field shall be charged
to GenIDEC.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Appendix A-1
Operating Profit and Loss split expressed as Biogen Idec:GNE (e.g. 40:60 = 40%
Biogen Idec: 60% GNE)

                                  Profit Split                     for all      
              Franchise         First:           Products         Approvals:    
      (including         GA-101 CLL,       Products used   Rituxan) after  
Earliest date     GA-101 non-   Gross Sales   to calculate   the first $50M  
the profit split   Share of CLL, or New   Thresholds   Gross Sales   of
operating   change can be   Operating Products (NP)   ($ million)   Thresholds  
profit *   effective   Losses
No approvals
  n/a   n/a   40:60 Rituxan   n/a   40:60 Rituxan
 
                  [**] New Products
 
                   
GA-101 CLL
  < 500   GA-101   40:60   n/a   35:65
(not non-CLL or NP)
  ³ 500   (in any consecutive 12 months period)   35:65   First day of following
quarter   35:65
 
                   
First GA-101
  < 150   GA-101   39:61   (see A.9.3)   35:65
non-CLL (but not NP)
  ³ 150 and < 500   (in any consecutive 12 months period)   37.5:62.5      
35:65
 
  ³ 500     35:65       35:65
 
                   
First New Product
  < 150   New Products (in any calendar year)   38:62 (but unchanged if already
at 37.5:62.5 or 35:65)       30:70
 
  ³ 150 and < 350     35:65   Jan 1 of the year after New Product approval  
30:70
 
  ³ 350       30:70   Jan 1 if the year after prior profit split change   30:70

 

*   First $50M operating profit always split 30:70 (Biogen Idec: GNE)

THIS CHART IS FOR ILLUSTRATIVE PURPOSES ONLY. ACCORDINGLY, IF THERE IS ANY
CONFLICT OR INCONSISTENCY BETWEEN THIS CHART AND SECTION A.9 OF THE FINANCIAL
APPENDIX, SECTION A.9 OF THE FINANCIAL APPENDIX CONTROLS.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Exhibit B
C2B8
“C2B8” shall have the meaning as defined in Exhibit B to the Original Agreement.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Exhibit D
IDEC — Third Party License Agreements
“IDEC- Third Party License Agreements” shall have the meaning as defined in
Exhibit D to the Original Agreement.
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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Exhibit G
Excluded Patents
Cabilly Patents
“Cabilly Patents” shall mean the “Licensed Patents” as defined in Section 1.09
of the Cabilly License (as defined in the Collaboration Agreement).
Itakura/Riggs Patents
“Itakura/Riggs Patents” shall mean any of the U.S. patents listed below and any
and all divisionals, continuations, continuations-in-part, reissues,
reexaminations or extensions of these patents or of any application from which
these U.S patents claim priority, as well as foreign counterparts of the
foregoing.
U.S. 4,356,270
U.S. 4,366,246
U.S. 4,425,437
U.S. 4,431,739
U.S. 4,563,424
U.S. 4,571,421
U.S. 4,704,362
U.S. 4,812,554
U.S. 5,221,619
U.S. 5,420,020
U.S. 5,583,013
 

[**] =   Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the Commission.

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