Amended and Restated Collaboration Agreement between Genentech, Inc. and Idec
      Pharmaceuticals Corporation dated as of June 19, 2003.


    
      

    


    EXHIBIT 10.2

    


    


    


     

    


    


    


    


    


    


    AMENDED
      AND RESTATED

    COLLABORATION
      AGREEMENT

    


    GENENTECH,
      INC. AND

    IDEC
      PHARMACEUTICALS CORPORATION

     

     

    
 


    
      
        
        

      

      
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    COLLABORATION
      AGREEMENT

    


    THIS
      AMENDED AND RESTATED COLLABORATION AGREEMENT
      (this
“Agreement) is made effective as of the 19th day of June, 2003 (the "Restated
      Effective Date") by and between IDEC Pharmaceuticals Corporation, a Delaware
      corporation having its principal place of business at 3030 Callan Road, San
      Diego, California 92121 ("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. The
      Parties
      desire to amend and restate 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 without
      limitation the humanized molecule created by Genentech known as G2H7, in each
      case on the terms and subject to the conditions set forth in this
      Agreement.


    
      
        
        

      

      
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    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 and the Second Amendment 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 coordinate the commercial efforts related to Licensed Products with
      the development efforts related to New Products, and subsequently to synchronize
      the commercial efforts and financial treatment of all Licensed Products and
      New
      Products marketed by the Parties 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 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


    
      
        
        

      

      
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    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.

    


    2.4 Initial
      New Product. 
      From and
      after the date of the payment in Section 7.1(b)(i), G2H7 shall be deemed a
      New
      Product, the development and commercialization of which shall be governed by
      this Agreement. Following the Restated Effective Date, the Parties shall focus
      their initial efforts with regard to New Products on the development of G2H7
      in
      the Field in the Co-Promotion Territory.

    


    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, Genentech agrees to keep IDEC
      informed as to the existence of research and/or development


    
      
        
        

      

      
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    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 any
[*].
      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 of the payment
      of
      such fee, such Potential New Product shall be deemed a New Product under this
      Agreement, and: 


    
      
        
        

      

      
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    (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 [*]
      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.

    


    (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


    
      
        
        

      

      
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    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.

     

    (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 [*]


    
      
        
        

      

      
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    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 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


    
      
        
        

      

      
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    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 Franchise 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;

    


    (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 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


    
      
        
        

      

      
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    (v) perform
      such
      other functions as appropriate to further the purposes of this Agreement as
      determined by the Parties.

    


    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, as set forth
      in Article 4. 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.

    


    (e) The
      term of
      the JDC will be determined by the Management Committee.

    


    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-


    
      
        
        

      

      
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    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, which shall be solely the responsibility of Genentech at
      its
      expense.

    


    (d) The
      term of
      the JCC will be determined by the Management Committee.

    


    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 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, 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.

    


    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


    
      
        
        

      

      
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    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. Upon the entry of New Products into the development pipeline in accordance
      with Section 2.4 or 2.5, it is anticipated that the parties may elect to develop
      and commercialize one or more such New Product(s) in a manner that might
      adversely affect the development and/or commercialization of C2B8, but in any
      event such efforts shall be directed towards maximizing the Operating Profits
      of
      the Franchise Products in the aggregate. 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.

    


    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.
      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-


    
      
        
        

      

      
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    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 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 [*]
      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


    
      
        
        

      

      
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    to
      such
      trial that IDEC would otherwise have been responsible for if the JDC had
      approved such trial (i.e[*]
      total
      Development Costs).

    


    


    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. 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. 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.

    


    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 [*]
      of
      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

     

    
      
        
        

      

      
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    (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.

    


    (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.


    
      
        
        

      

      
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    (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 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.

    


    (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),


    
      
        
        

      

      
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    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.

    


    


    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.


    
      
        
        

      

      
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    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.

    


    


    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.


    
      
        
        

      

      
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    (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:

    


    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 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) 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 [*]
      of
      Royalty-Bearing Sales in the Licensed Territory in
      any
      calendar
      year.

    


    (b) New
      Products.
      Genentech
      shall pay IDEC a [*]
      royalty
      on
      Royalty-Bearing Sales in the Licensed Territory of G2H7 and each other New
      Product; 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.


    
      
        
        

      

      
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    (c) 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.

    


    (d) Genentech
      shall pay any Third Party royalties (except to ML/MS Partners) owed on account
      of sales of Franchise Product 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 New Products
      against royalties it owes to IDEC; provided, however that the royalty that
      would
      otherwise be due under Section 7.7(b) shall not be reduced below a [*]
      royalty.

    


    (e) 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 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.

    


    (f) 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 in each country
      in the Licensed Territory for eleven (11) years from the date of first
      commercial sale of such Franchise Product in such country.

    


    (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


    
      
        
        

      

      
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    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 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 that New
      Product 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.

    


    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, 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 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


    
      
        
        

      

      
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    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 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.


    
      
        
        

      

      
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    (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 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 the [*].
      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).

    


    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


    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    


    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 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


    
      
        
        

      

      
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    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 development
      and/or commercialization of New Products outside the Field and outside the
      United States.

    


    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. 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. 

    


    


    ARTICLE
      10.

    TRADEMARKS


    
      
        
        

      

      
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    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.

    


    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 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 Jointly Owned Trademark.
      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 shall be paid by, and any recovery shall
      be paid to, Genentech.


    
      
        
        

      

      
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    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.

    


    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.


    
      
        
        

      

      
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    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.

    


    


    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 Patents"
      shall mean Patents owned jointly by the Parties which cover the manufacture,
      use
      or sale of Franchise Products.

    


    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. 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.


    
      
        
        

      

      
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    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. 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 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


    
      
        
        

      

      
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    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 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 formulations, methods of manufacture or methods
      of use


    
      
        
        

      

      
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    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.

    


    12.7 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 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 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


    
      
        
        

      

      
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    of
      an IDEC
      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 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.

    


    (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.

    


    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 will be entitled to deduct [*]
      of such
      royalties against royalties owing to IDEC under, but only to the extent
      permitted by, Section 7.7(d).

    



    
      
        
        

      

      
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    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.

    


    


    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, 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 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


    
      
        
        

      

      
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    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 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.

    


    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 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


    
      
        
        

      

      
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    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 Restated Effective Date, shall
      continue the collaboration contemplated by the Parties under the Original
      Agreement, including the First Amendment and Second Amendment thereto, as
      modified hereby. The Parties have specifically provided elsewhere in this
      Agreement 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
      and
      (b) the remaining provisions of this Agreement relating to activities in the
      Licensed Territory 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. 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


    
      
        
        

      

      
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    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), 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 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:

    


    
      	
               

              Stage
                of Product 

            	
               

              Royalty
                Price

            
	
               

              Prior
                to completion of the initial
                Phase II Clinical Trial(s)
                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 such New Products, compensation to IDEC or payment by
                IDEC to
                Genentech equivalent to [*]
                for
                such New Product in the United States, and 

               

              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.

            


    

     

     

    
      
        
        

      

      
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    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 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 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


    
      
        
        

      

      
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    summarizing
      the Net Sales or Operating Profits (or Losses), as applicable, for such New
      Product 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 [*]
      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;

    


    (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;


    
      
        
        

      

      
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    (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:

    


    (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


    
      
        
        

      

      
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    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.

    


    (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 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 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.

    


    (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


    
      
        
        

      

      
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    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 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.

    


    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


    
      
        
        

      

      
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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 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.


    
      
        
        

      

      
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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).

    


    If
      to IDEC,

    addressed
      to: IDEC
      PHARMACEUTICALS CORPORATION 


    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    


    3030
      Callan
      Road

    San
      Diego,
      CA 92121

    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 Parties hereto and supersedes and terminates the Original 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 Restated Effective Date
      be
      incorporated herein by reference and


    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    


    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 Original 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 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 Restated Effective Date,
      and
      to the extent such agreements are in full force and effect immediately prior
      to
      the 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.

    


    
      


      
        	 	
                IDEC
                  PHARMACEUTICALS CORPORATION

              	 	
                GENENTECH,
                  INC.

              
	 	 	 	 	 	 
	 	
                By:

              	
                 /s/ WILLIAM
                  H. RASTETTER

              	 	
                By:

              	
                 /s/ ARTHUR
                  D. LEVINSON

              
	 	 	
                William
                  H. Rastetter

                Title:  Chairman
                  and CEO

              	 	 	
                Arthur
                  D. Levinson

                Title:  Chairman
                  and CEO

              


      

       

    

    


    GNE
      134943.12


    


    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

       

       

    

    APPENDIX
      1

    TO
      THE

    AMENDED
      AND RESTATED COLLABORATION BETWEEN IDEC

    PHARMACEUTICALS
      CORPORATION 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.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


    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 A7 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 is sold in the form of a combination
      product containing one or more active ingredients in addition to a Franchise
      Product, 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, 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 if sold separately,
      and C is the invoice price of the combination product. If, on a
      country-by-country basis, neither the Franchise Product 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, with
      regard
      to 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


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    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 final 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. "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.

    


    28. "FDA
      Approval Event"
      means the
      FDA Approval Date occurs on or before the Fifty-Four Month Anniversary
      Date.

    


    29. "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.


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    


    30. "Field"
      means
      the
      use of Franchise Product in humans.

    


    31. "Fifty-Four
      Month Anniversary Date"
      means that
      date which is fifty-four (54) calendar months following the Original Effective
      Date.

    


    32. “Franchise
      Products”
      means
      Licensed Products and New Products.

    


    33. “G2H7”
      means (i)
      that certain humanized monoclonal antibody [*].

    


    34. "Genentech"
      means
      Genentech, Inc., a Delaware corporation, and its Affiliates.

    


    35. "Genentech
      Know-how"
      means
      Information which (i) Genentech discloses to IDEC under the Collaboration
      Agreement and (ii) is within the Control of Genentech.

    


    36. “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.

    


    37. "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.

    


    38. "Gross
      Sales"
      shall have
      the meaning set forth in Exhibit A to the Collaboration Agreement.

    


    39. "IDEC"
      means IDEC
      Pharmaceuticals Corporation, a Delaware corporation, and its
      Affiliates.

    


    40. "IDEC
      Know-how"
      means
      Information which (i) IDEC discloses to Genentech under the Collaboration
      Agreement and (ii) is within the Control of IDEC.

    


    41. "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, in each case which Patent
      is Controlled by IDEC, including its interest in any Patents owned jointly
      by
      the Parties as provided hereunder.

    


    42. "In2B8"
      shall have
      the meaning set forth in Section 2.2. of the Collaboration
      Agreement.


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    43. "Information"
      means
      techniques and data relating to the Franchise Products, 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.

    


    44. "Joint
      Commercialization Committee" or "JCC"
      means that
      committee established pursuant to Section 3.3 of the Collaboration
      Agreement.

    


    45. "Joint
      Development Committee" or "JDC"
      means that
      committee established pursuant to Section 3.2 of the Collaboration
      Agreement.

    


    46. "Joint
      Finance Committee" or "JFC"
      means that
      committee established pursuant to Section 3.4 of the Collaboration
      Agreement.

    


    47. “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).

    


    48. "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 New Products or Third
      Party Anti-CD20 Products.

    


    49. "Licensed
      Territory" means
      worldwide (including Asia, pursuant to the First Amendment (as defined in the
      Collaboration Agreement)), excluding the Co-Promotion Territory.

    


    50. "Major
      European Country"
      means the
      United Kingdom, Italy, Germany, France or Spain.

    


    51. "Management
      Committee"
      means that
      committee established pursuant to Section 3.1 of the Collaboration
      Agreement.

    


    52. "Marketing
      Costs"
      shall have
      the meaning set forth in Exhibit A to the Collaboration Agreement

    


    53. "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.


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    54. "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.

    


    55. "National
      Exchange"
      shall mean
      the Nasdaq National Market or any other national exchange on which the Common
      Stock of IDEC is listed.

    


    56. "Net
      Sales"
      shall have
      the meaning set forth in Exhibit A to the Collaboration Agreement.

    


    57. “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 the
[*]
      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 [*].

    


    58. "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.

    


    59. "Operating
      Profits or Losses"
      shall have
      the meaning set forth in Exhibit A of the Collaboration Agreement.

    


    60. "Option
      Agreement"
      means the
      Option Agreement to be dated as of the Original Effective Date between Genentech
      and IDEC.

    


    61. "Original
      Agreement"
      shall mean
that
      certain
      collaboration agreement by and between the Parties dated March 16,
      1995.

    


    62. "Original
      Effective Date"
      means March
      16, 1995.

    


    63. "Party"
      means IDEC
      or Genentech, as applicable.

    


    64. "Parties"
      means
      IDEC
      and Genentech.

    


    65. "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.

    


    66. "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


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    and
      maintenance of rights under Patents covering any New Product, including, in
      each
      case, costs of patent interference, reexamination, reissue, opposition and
      revocation proceedings.

    


    67. "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.

    


    68. "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.

    


    69. "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.

    


    70. "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.

    


    71. "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.

    


    72. “Potential
      New Product”
      means any
      protein(s) or peptide(s) (other than G2H7) [*],
      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.

    


    73. "Preferred
      Stock Purchase Agreement"
      means the
      Preferred Stock Purchase Agreement dated the Original Effective Date between
      IDEC and Genentech.


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    74. "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.

    


    75. "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.

    


    76. "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.

    


    77. "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.

    


    78. "Royalty-Bearing
      Sales"
      means, as
      to each Franchise Product in the 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, 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 Products (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.

    


    79. "Sales
      Costs"
      shall have
      the meaning set forth in Exhibit A to the Collaboration Agreement.

    


    80. "Sales
      Returns and Allowances"
      shall have
      the meaning set forth in Exhibit A to the Collaboration Agreement.

    


    81. "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.


    
      
        
        

      

      
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    82. "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.

    


    83. "Standstill
      Agreement"
      means the
      Standstill Agreement to be dated as of the Original Effective Date between
      Genentech and IDEC.

    


    84. "Third
      Anniversary Date"
      means that
      date which is thirty-six months following the Original
      Effective
      Date.

    


    85. "Third
      Party"
      means any
      entity other than IDEC or Genentech.

    


    86. “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.

    87. "Third
      Party Royalties" means
      royalties payable by either Party to a Third Party in connection with the
      manufacture, use or sale of Franchise
      Products.

    


    88. "Y2B8"
      shall have
      the meaning set forth in Section 2.2 of the Collaboration
      Agreement.

    


    


    #133618
      v10

     

     

    
      
        
        

      

      
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    EXHIBIT
      A

    


    FINANCIAL
      PLANNING, ACCOUNTING AND REPORTING 

    FOR
      THE 

    AMENDED
      AND RESTATED IDEC/GENENTECH COLLABORATION AGREEMENT

    


    


    This
      Exhibit
      A to the Amended and Restated Collaboration Agreement (the "Collaboration
      Agreement") dated as of June 19, 2003, between IDEC Pharmaceuticals Corporation
      ("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)

              	 	 	 


      

      


        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

      

    

    


    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.1(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.1(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

              (rest
                of year - by month)

            	
              Quarterly

            	
              Mid
                Quarter

            
	
              Budgets

              (one
                year - by month)

            	
              Annually

            	
              October
                31st

            
	
              Long
                Range Plan

              (current
                year plus 5 years)

            	
              Annually

            	
              July
                31st

            


    

    


    


    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

     

    
      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.

    



    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    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 cost of studies on the
      toxicological, pharmacokinetic, metabolic or clinical


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    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.


    
      
        
        

      

      
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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)

    - 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 identifed
      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 start-up 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
      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.

    


    A.6 Audit
      and Interim Reviews


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    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 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
      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 (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 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.


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    


    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 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 First New Product FDA Approval. With
      regard
      to New Products (including without limitation G2H7), prior to the First New
      Product FDA Approval, in each calendar year IDEC and Genentech shall pay 30%
      and
      70% respectively,
      of all Operating Losses (calculated solely with respect to New
      Products).

    


    A.9.3 All
      Franchise Products following the First New Product FDA
      Approval.
      With
      regard to all Franchise Products, including without limitation C2B8 and G2H7,
      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


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


     

    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)
      38% and
      62%, 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 later of (x)
      the first date the Gross Sales in any calendar year (calculated only with
      respect to the New Products in the United States) reaches $150,000,000 or (v)
      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 or (y) January 1 of the calendar year following
      the
      calendar year in which the First Threshold Date occurs); and 

     

    (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.

    


    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.


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
 

    
      
        
          	 	
                  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.

              


      

      


      
        	 	 	
                (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
                    exclusively (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.

              


      

      


      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

     

     

    Exhibit
      B

     

    C2B8

    


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

    



    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


    


    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.

    



    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


    


    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

    


    
      
        
        

      

      
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