Exhibit
10.2


 


EXECUTION
COPY


 


 


AMENDED AND RESTATED WORLDWIDE AGREEMENT


 


 


This Amended and Restated Worldwide Agreement is
entered into as of October 1, 2003 (the “Effective
Date”), by and among, on the one hand, HOFFMANN-LA ROCHE INC., a New
Jersey corporation having offices at 340 Kingsland Street, Nutley, New Jersey
07110 (“Roche-Nutley”) and F.
HOFFMANN-LA ROCHE LTD of Basel, Switzerland (“F.
Roche”) (Roche-Nutley and F. Roche are hereinafter individually
and collectively referred to as “Roche”)
and, on the other hand, PROTEIN DESIGN LABS, INC., a Delaware corporation
having offices at 34801 Campus Drive, Fremont, California  94555 (“PDL”).


 


RECITALS


 


Roche and PDL were originally parties to agreements dated
January 31, 1989, as amended (the “1989
Agreements”) pertaining to humanized and chimeric antibodies against
the interleukin-2 receptor (“IL-2R”).


 


Under the 1989 Agreements, PDL exclusively licensed to Roche rights to
a humanized antibody now known as Daclizumab (as defined below).


 


Roche is currently marketing Daclizumab under the trademark Zenapax®
for the prevention of acute organ rejection in patients receiving kidney
transplants.


 


In 1999, Roche and PDL replaced the 1989 Agreements with two new
agreements (as amended, known separately as the “1999 PDL/Roche Agreement” and the “F. Roche Agreement,” respectively, and collectively as
the “1999 Agreements”) which
provided PDL with rights to develop and, if successful, promote Daclizumab in
autoimmune indications for increased compensation from the 1989 Agreements.


 


Roche and PDL now desire to replace the 1999 Agreements with this
Amended and Restated Worldwide Agreement that (1) reverts to PDL all IL-2R
antibody rights licensed to Roche by PDL under the 1999 Agreements, subject to
Roche’s continuing exclusive license to market and sell Daclizumab for
Transplant Indications in the Roche Territory and develop and commercialize
products based [CONFIDENTIAL TREATMENT REQUESTED] that [CONFIDENTIAL TREATMENT
REQUESTED] to the [CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL TREATMENT
REQUESTED]; (2) grants to PDL the sole and exclusive worldwide rights under
Roche’s relevant intellectual property to develop, and, if successful, market
and sell Daclizumab for Autoimmune Indications and Other Indications; and (3)
grants PDL the right to purchase all of Roche’s remaining rights to Daclizumab,
subject to Roche’s right to retain its exclusive license from PDL to develop
and commercialize products based on [CONFIDENTIAL TREATMENT REQUESTED] that
[CONFIDENTIAL TREATMENT REQUESTED] to the [CONFIDENTIAL TREATMENT REQUESTED] of
[CONFIDENTIAL TREATMENT REQUESTED].


 


1

















 


NOW, THEREFORE, in consideration of the premises and
the mutual promises and covenants set forth below, PDL and Roche mutually agree
to amend and restate the 1999 Agreements in this single Amended and Restated
Worldwide Agreement as follows:


 


I.  DEFINITIONS


 


For the purposes of this Amended and Restated
Worldwide Agreement, the following terms, when written with an initial capital
letter, shall have the meaning ascribed to them below.  All references to
particular Appendices, Articles and Sections shall mean the Appendices to, and
Articles and Sections of, this Amended and Restated Worldwide Agreement, unless
otherwise specified.


 


1.1                                 “AAGS” shall mean the average annualized
Roche Adjusted Gross Sales of Daclizumab calculated according to the following:


 


[CONFIDENTIAL
TREATMENT REQUESTED]


 


1.2                                 “Acting Party” has the meaning set forth in
Section 12.1(c).


 


1.3                                 “Affiliates” means any corporation or other
business entity controlled by, controlling, or under common control with
another entity, with “control” meaning direct or indirect beneficial ownership
of more than fifty percent (50%) of the voting stock of, or more than a fifty
percent (50%) interest in the income of, such corporation or other business
entity.  Anything to the contrary in this paragraph notwithstanding,
[CONFIDENTIAL TREATMENT REQUESTED].


 


1.4                                 “AI Trademarks” means all trademarks used
in connection with the marketing, promotion, and sale of Daclizumab by PDL or
its sublicensee(s) and all trademark registrations and applications therefor,
and all goodwill associated therewith.


 


1.5                                 “Application” means a new application, or a
supplement or an amendment to an existing application, for marketing approval
for an Autoimmune Indication in the Territory.


 


1.6                                 “Autoimmune Indications” or “AI” means all indications that involve
pathogenic consequences, including tissue injury, produced by autoantibodies or
autoreactive T lymphocytes interacting with self epitopes, i.e.,
autoantigens.  Autoimmune Indications shall include, without limitation,
asthma, psoriasis, rheumatoid arthritis, systemic lupus erythematosus,
scleroderma, juvenile rheumatoid arthritis, polymytosis, Type I diabetes,
sarcoidosis, Sjogrens syndrome, chronic active non-pathogenic hepatitis,
non-infectious uveitis (Behcets), aplastic anemia, regional non-pathogenic
enteritis (including ulcerative colitis, Crohn’s Disease and inflammatory bowel
disease), Kawasaki’s disease, post-infectious encephalitis, multiple sclerosis,
and tropic spastic paraparesis.


 


1.7                                 “Change of Control” means a transaction in
which Roche
either (a) sells, conveys or otherwise disposes of all or substantially all of
its property or business; or (b) either (i) merges or consolidates with any
other entity (other than a wholly-owned subsidiary of Roche); or (ii) effects any other
transaction or series of transactions, in each case of clause (i) or (ii), such


 


2

















 


that the voting stockholders of Roche immediately
prior thereto, in the aggregate, no longer own, directly or indirectly,
beneficially or legally, at least fifty percent (50%) of the outstanding voting
securities or capital stock of the surviving entity following the closing of
such merger, consolidation, other transaction or series of transactions.


 


1.8                                 “Combination Product” means any product
containing both an ingredient that causes it to be considered a Licensed
Product and one or more other therapeutically active ingredients.


 


1.9                                 “Commercialization Term” means the period
commencing on the Effective Date and ending on the earliest of (a) the
Reversion Effective Date; (b) the Put Right Effective Date; and (c) if Roche
does not exercise the Roche Put Right and the Exercise Period ends without PDL
exercising the Transplant Reversion, the date Roche ceases to sell Daclizumab
in every country in the Roche Territory, as permitted under this Amended and
Restated Worldwide Agreement.


 


1.10                           “Controlled” means, with respect to any
intellectual property right, that the party has a license to such intellectual
property right and has the ability to grant to the other party a sublicense to
such intellectual property right as provided for herein without violating the
terms of any agreement or other arrangements with any Third Party existing at
the time such party would be first required hereunder to grant the other party
such sublicense.


 


1.11                           “Cost of Goods” means the manufacturing
cost of either (a) unformulated bulk Daclizumab, or (b) finished Daclizumab
product made from unformulated bulk, as the case may be, calculated in
accordance with internal cost accounting methods consistently applied by a
party for its other biologics pharmaceutical products, provided that such
methods comply with  [CONFIDENTIAL TREATMENT
REQUESTED].  Cost of Goods shall include [CONFIDENTIAL TREATMENT
REQUESTED].  As used in this
Amended and Restated Worldwide Agreement, the Cost of Goods shall not exceed
[CONFIDENTIAL TREATMENT REQUESTED].


 


1.12                           “Cover” (including variations thereof such
as “Covering” or “Covered”), means that the manufacture, use, sale, offer for
sale, or importation of a particular product would infringe a Valid Claim of a
patent in the absence of rights under such patent.  The determination of
whether a particular product is Covered by particular Valid Claims shall be
made on a country-by-country basis.


 


1.13                           “Daclizumab” means any product that
contains humanized anti-Tac (as defined under “Field”).


 


1.14                           “Daclizumab Assets” means  all assets owned by Roche or its
Affiliates and relevant solely to the development or commercialization of
Daclizumab, other than the Trademarks and the Roche Owned Patents. 
Daclizumab Assets include, without limitation:


 


(a)                                  domain
names used in connection with the sale or promotion of Daclizumab;


 


3

















 


(b)                                 all
then current promotional materials, including brochures, leave-behind
materials, product fact sheets, advertisements in all media;


 


(c)                                  all
then current packaging art copy, and all trade dress rights thereto;


 


(d)                                 rights
to any “look and feel” of any materials referenced in (a) through (c) above and
used in connection with the marketing, sale or promotion of Daclizumab and any
and all copyrights or other intellectual property rights appurtenant thereto;


 


(e)                                  all
then current sales training materials and medical education materials;


 


(f)                                    copies
of market research surveys, analyses, and reports;


 


(g)                                 then
current customer lists, sales records, lists of distributors;


 


(h)                                 regulatory
filings, INDs, agreements related to physician sponsored INDs (to the extent
assignable), CTXs, BLAs, and foreign equivalents of the foregoing, and all
associated communications with regulatory authorities in the Roche Territory
(excluding manufacturing approvals); and


 


(i)                                     then
current contracts with managed care groups, hospitals, transplant centers,
pharmaceutical benefit managers, distributors and other similar Third Parties.


 


1.15                           “Excluded Field” means [CONFIDENTIAL
TREATMENT REQUESTED] that (a) [CONFIDENTIAL TREATMENT REQUESTED] to the
[CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL TREATMENT REQUESTED], (b)
[CONFIDENTIAL TREATMENT REQUESTED] the [CONFIDENTIAL TREATMENT REQUESTED] of
[CONFIDENTIAL TREATMENT REQUESTED], and (c) may also [CONFIDENTIAL TREATMENT
REQUESTED].  The Parties agree that
Daclizumab is not in the Excluded Field.


 


1.16                           “Excluded Product” means any product in the
Excluded Field, including any Combination Product, that contains an
[CONFIDENTIAL TREATMENT REQUESTED] that was [CONFIDENTIAL TREATMENT REQUESTED]
by [CONFIDENTIAL TREATMENT REQUESTED] on behalf of [CONFIDENTIAL TREATMENT
REQUESTED] pursuant to the [CONFIDENTIAL TREATMENT REQUESTED].
 [CONFIDENTIAL TREATMENT REQUESTED] shall be deemed to be an Excluded
Product.


 


1.17                           “Exercise Period” has the meaning set forth
in Section 5.2(a).


 


1.18                           “FDA” means the United States Food and Drug
Administration and any successor agency thereto, and/or any equivalent foreign
governmental agency, depending on the context.


 


1.19                           “Field” means any humanized or chimeric
antibody that binds to IL-2R, where “humanized” means a genetically engineered
combination of a substantially human framework region and constant region, and
complementarity determining regions from non-human antibodies, and where
“chimeric” means a genetically engineered combination of human constant region
and non-human variable region.  “Antibodies
in the Field” means humanized and


 


4

















 


chimeric antibodies that bind to IL-2R.  It is believed that these
Antibodies in the Field may be useful for therapeutic, diagnostic, imaging and
similar purposes.  It is understood that the Field includes, but is not
limited to, that certain humanized murine monoclonal antibody prepared against
the p55 component of IL-2R (“humanized
anti-Tac”). Furthermore, the Field includes, but is not limited to,
all improvements relating to humanized anti-Tac, including without limitation
modifications in structure introduced by genetic engineering, or by chemical or
enzymatic cleavage.  Also included within the Field shall be alternate
hosts for producing humanized anti-Tac, methods for purification, formulations
incorporating humanized anti-Tac, and uses and methods of use for humanized
anti-Tac in human medicine.


 


1.20                           “Joint Inventions” means any inventions in
the Field, whether patented or not, that are jointly made during the period
beginning on January 31, 1989 and continuing until the end of the
Commercialization Term by at least one (1) PDL employee or person contractually
required to assign or license patent rights covering such inventions to PDL and
at least one (1) Roche-Nutley or F. Roche employee or person contractually
required to assign or license patent rights covering such inventions to
Roche-Nutley or F. Roche.


 


1.21                           “Licensed Product” means any product, other
than an Excluded Product, in the Field, including any Combination Product, the
making, importation, use, offer for sale, or sale of which utilizes Roche
Know-How, Roche Patents, or Joint Inventions or would, in the absence of this
Amended and Restated Worldwide Agreement, infringe a Valid Claim of a Roche
Patent.  Daclizumab shall be deemed to be a Licensed Product.


 


1.22                           “Major Country” means the United States,
United Kingdom, France, Italy and Germany.


 


1.23                           “Other Indications” means all indications
other than Transplant Indications and Autoimmune Indications.


 


1.24                           “Other Licensed Products” means all Licensed
Products other than Daclizumab.


 


1.25                           “PDL Adjusted Gross Sales” means the gross
invoice price of Daclizumab sold or otherwise disposed of for consideration in
the Roche Territory by PDL, its Affiliates or sublicensees (other than Roche
and its Affiliates hereunder) to independent Third Parties not an Affiliate of
the seller, reduced by the following amounts: (a) the amounts actually allowed
as volume or quantity discounts, rebates, price reductions, returns (including
withdrawals and recalls); and (b) sales, excise and turnover taxes imposed
directly on and actually paid by PDL, its Affiliates or sublicensees.


 


When calculating the PDL Adjusted Gross Sales, the
amount of such sales in foreign currencies shall be converted into U.S. dollars
at the average rate of exchange at the time for the applicable calendar quarter
in accordance with PDL’s then-current standard practices.


 


In the case of Combination Products for which
Daclizumab and each of the other therapeutically active ingredients contained
in the Combination Product have established market prices when sold separately,
PDL Adjusted Gross Sales shall be determined by multiplying the


 


5

















 


PDL Adjusted Gross Sales for each such Combination Product by a
fraction, the numerator of which shall be the established market price for the
form and formulation of Daclizumab contained in the Combination Product, and
the denominator of which shall be the sum of the established market prices for
such form and formulation of Daclizumab plus the other active ingredients
contained in the Combination Product.  When such separate market prices
are not established, then the parties shall negotiate in good faith to
determine the method of calculating PDL Adjusted Gross Sales for Combination
Products.


 


If PDL or its Affiliates or sublicensees receive
non-cash consideration for Daclizumab sold or otherwise transferred to an
independent Third Party not an Affiliate of the seller or transferor, the fair
market value of such non-cash consideration on the date of the transfer as
known to PDL, or as reasonably estimated by PDL if unknown, shall be deemed the
PDL Adjusted Gross Sales for such Daclizumab sold or otherwise transferred.


 


1.26                           PDL Know-How” means, except as otherwise
set forth in this Section 1.26, all inventions, discoveries, trade
secrets, information, experience, data, formulas, procedures and results in the
Field, and improvements thereon, including any information regarding the
physical, chemical, biological, toxicological, pharmacological, clinical, and
veterinary data, dosage regimens, control assays and specifications of
Daclizumab (collectively, “Know-How in the
Field”), that is owned or Controlled by PDL or its Affiliates as of
the Effective Date or that is developed or Controlled by PDL or its Affiliates
during the term of this Amended and Restated Worldwide Agreement, and which
Know-How in the Field is reasonably required or useful for manufacturing, using
or selling Daclizumab; provided, however, that PDL Know-How excludes any Know-How
in the Field of any kind concerning generic methods of manufacturing,
designing, developing or preparing antibodies including, but not limited to,
methods of humanizing antibodies, methods of reducing the immunogenicity of
antibodies, and methods of increasing the affinity of antibodies.


 


1.27                           “PDL Net Sales” means the amount determined
by deducting [CONFIDENTIAL TREATMENT REQUESTED] from PDL Adjusted Gross Sales
to cover all other expenses or discounts, including but not limited to cash
discounts, custom duties, transportation and insurance charges and other direct
expenses, to the extent not already deducted from the amount invoiced.


 


1.28                           “PDL Patents” means all patent applications
owned or Controlled by PDL alone or with a Third Party (“Sole PDL Patents”) and all patent
applications resulting from Joint Inventions (“Joint
Roche-PDL Patents”) Covering Daclizumab, which are filed prior to or
during the term of the 1989 Agreements, the 1999 Agreements or this Amended and
Restated Worldwide Agreement in the United States or any foreign jurisdiction,
including any addition, continuation, continuation-in-part or division thereof
or any substitute application therefor; any patent issued with respect to such
patent application, any reissue, extension or patent term extension of any such
patent, and any confirmation patent or registration patent or patent of
addition based on any such patent; and any other United States or foreign
patent or inventor’s certificate covering products in the Field.


 


6

















 


1.29                           “PDL Sole Territory” means all countries of
the world, as listed in Appendix C (which the parties may agree to update from
time to time), with respect to which Roche has granted an exclusive license to
PDL, in connection with the previous return or reversion of Roche’s rights
under the 1999 Agreements.


 


1.30                           “Product Operating Committee” or “POC” has the meaning set forth in
Section 6.2(a).


 


1.31                           “Put Exercise Fee” has the meaning set
forth in Section 5.3(b).


 


1.32                           “Put Right Effective Date” has the meaning
set forth in Section 5.3(a).


 


1.33                           “Queen et al. Patents” means those Sole PDL
Patents in the Territory claiming priority under 35 USC 120 to U.S. Patent
Application Serial No. 290,975, filed December 28, 1988.


 


1.34                           “Reasonable Diligence” means the same level
of effort used by Roche in developing, registering, marketing and selling its
own protein-based products that must be approved by the FDA before they can be
sold in the Roche Territory.  The parties acknowledge that Roche does not
develop, register, market and sell its own protein-based products in every
country within the Roche Territory, and it is understood that the exercise by
Roche of reasonable diligence shall be determined by judging its efforts in the
Roche Territory taken as a whole.


 


1.35                           “Regulatory Approval” means the granting of
all governmental regulatory approvals required, if any, for the sale of a
Licensed Product in a given country or jurisdiction within the Territory.


 


1.36                           “Reversion Effective Date” has the meaning
set forth in Section 5.2(b).


 


1.37                           “Reversion Exercise Fee” has the meaning
set forth in Section 5.2(c).


 


1.38                           “Roche Adjusted Gross Sales” means the
gross invoice price of Daclizumab sold or otherwise disposed of for
consideration by Roche, its Affiliates or sublicensees (other than PDL and its
Affiliates hereunder) to independent Third Parties not an Affiliate of the
seller, reduced by the following amounts: (a) the amounts actually allowed as
volume or quantity discounts, rebates, price reductions, returns (including
withdrawals and recalls); and (b) sales, excise and turnover taxes imposed
directly on and actually paid by Roche, its Affiliates or sublicensees.


 


When calculating the Roche Adjusted Gross Sales, the
amount of such sales in foreign currencies shall be converted into U.S. dollars
at the average rate of exchange at the time for the applicable calendar quarter
in accordance with Roche’s then-current standard practices.


 


In the case of Combination Products for which Daclizumab
and each of the other therapeutically active ingredients contained in the
Combination Product have established market prices when sold separately, Roche
Adjusted Gross Sales shall be determined by multiplying the Roche Adjusted
Gross Sales for each such Combination Product by a fraction, the numerator of


 


7

















 


which shall be the established market price for the form and
formulation of Daclizumab contained in the Combination Product, and the
denominator of which shall be the sum of the established market prices for such
form and formulation of Daclizumab plus the other active ingredients contained
in the Combination Product.  When such separate market prices are not
established, then the parties shall negotiate in good faith to determine the
method of calculating Roche Adjusted Gross Sales for Combination Products.


 


If Roche or
its Affiliates or sublicensees receive non-cash consideration for Daclizumab
sold or otherwise transferred to an independent Third Party not an Affiliate of
the seller or transferor, the fair market value of such non-cash consideration
on the date of the transfer as known to Roche, or as reasonably estimated by
Roche if unknown, shall be deemed the Roche Adjusted Gross Sales for such Daclizumab
sold or otherwise transferred.


 


1.39                           “Roche Commercialization Activities” has
the meaning set forth in Section 4.1(a).


 


1.40                           “Roche Controlled Patents” means all patent
applications Controlled by Roche or its Affiliates and not Controlled by PDL or
its Affiliates Covering inventions in the Field that are filed prior to or
during the term of this Amended and Restated Worldwide Agreement in the United
States or any foreign jurisdiction, including any addition, continuation,
continuation-in-part or division thereof or any substitute application
therefor; any patent issued with respect to such patent application, any
reissue, extension or patent term extension of any such patent, and any
confirmation patent or registration patent or patent of addition based on any
such patent; and any other United States or foreign patent or inventor’s
certificate covering inventions in the Field. 
Roche Controlled Patents are, specifically, those listed on
Schedule 2.8(b).


 


1.41                           “Roche Inventions” means any inventions in
the Field that are made prior to or during the term of this Amended and
Restated Worldwide Agreement by employees of Roche or persons contractually
required to assign or license patent rights covering such inventions to Roche.


 


1.42                           “Roche Know-How” means all Know-How in the
Field that is owned or Controlled by Roche or its Affiliates as of the
Effective Date, or that is developed or Controlled by Roche or its Affiliates
during the Commercialization Term and which Know-How in the Field is reasonably
required or useful for seeking registration of, manufacturing, using or selling
Daclizumab, as the case may be, provided, however, that this portion of Roche
Know-How excludes any Know-How in the Field of any kind concerning generic
methods of manufacturing, designing, developing or preparing antibodies
including, but not limited to, methods of humanizing antibodies, methods of
reducing the immunogenicity of antibodies, and methods of increasing the
affinity of antibodies.  For clarity,
Roche Know-How includes all Know-How in the Field provided to PDL by Roche or
its Affiliates under the 1989 Agreements and 1999 Agreements.


 


1.43                           “Roche Licensed Know-How” means that portion
of Roche Know-How that is reasonably required or useful for seeking
registration of, manufacturing, using or selling


 


8

















 


Daclizumab for Autoimmune Indications or any Other Indication, but
shall not include [CONFIDENTIAL TREATMENT REQUESTED].


 


1.44                           “Roche Licensed Patents” means those Roche
Patents that Cover in whole or in part the manufacture, importation, offer for
sale or sale of Daclizumab or any Other Licensed Products, or the use of
Daclizumab or any Other Licensed Products in Autoimmune Indications or Other
Indications.


 


1.45                           “Roche Net Sales” means the amount
determined by deducting [CONFIDENTIAL TREATMENT REQUESTED] from Roche Adjusted
Gross Sales to cover all other expenses or discounts, including but not limited
to cash discounts, custom duties, transportation and insurance charges and other
direct expenses, to the extent not already deducted from the amount
invoiced.  Notwithstanding the foregoing, “Roche Net Sales of Excluded Products” shall be calculated in
the same manner as Roche Net Sales, except that for the purpose of such
calculation, Roche Adjusted Gross Sales shall be based on the gross invoice
price of Excluded Products.


 


1.46                           “Roche Owned Patents” means all patent
applications owned by Roche or its Affiliates (“Sole Roche Patents”) alone or with a Third Party, and all
patent applications resulting from Joint Inventions (“Joint Roche-PDL Patents”) covering inventions in the Field
that are filed prior to or during the term of this Amended and Restated
Worldwide Agreement in the United States or any foreign jurisdiction, including
any addition, continuation, continuation-in-part or division thereof or any
substitute application therefor; any patent issued with respect to such patent
application, any reissue, extension or patent term extension of any such
patent, and any confirmation patent or registration patent or patent of
addition based on any such patent; and any other United States or foreign
patent or inventor’s certificate covering inventions in the Field.  Roche
Owned Patents as of the Effective Date are, specifically, those listed on
Schedule 2.8(a).


 


1.47                           “Roche Patents” means both the Roche Owned
Patents and the Roche Controlled Patents.


 


1.48                           “Roche Products” means Daclizumab and any
Excluded Products.


 


1.49                           “Roche Put Right” has the meaning set forth
in Section 5.3(a).


 


1.50                           “Roche Territory” means, collectively, (a)
the United States of America (“U.S.”
or “U.S.A.” or “United States”) and its territories and
possessions where the patent laws of the United States are in force and (b) all
other countries in the Territory, excluding the PDL Sole Territory (the “Roche ROW Territory”).


 


1.51                           “Territory” means all the countries of the
world.


 


1.52                           “Third Party” means any person or entity
other than PDL, Roche, and their respective Affiliates.


 


9

















 


1.53                           “Third Party License” means (a) any of the
license agreements set forth on Appendix B that were entered into by either
party, prior to the Effective Date, in order for Roche or PDL to manufacture,
use, import, offer for sale or sell Daclizumab or (b) any license agreement
entered into with a Third Party by either party in accordance with
Section 7.4(b).


 


1.54                           “Trademarks” means the trademark
“Zenapax®,” and all trademark registrations and applications therefor, and all
goodwill associated therewith, and all other trademarks owned by Roche (except
for any Roche housemarks or trade names) and used in connection with the sale
or promotion of Daclizumab in the Roche Territory.


 


1.55                           “Transplant Foreign Filing Expenses” means
ex parte out-of-pocket expenses (a) incurred by PDL after January 31,
1989, but prior to the Effective Date, in connection with the prosecution and
maintenance in the Roche ROW Territory of patent applications and patents
included within the PDL Patents or Joint Roche-PDL Patents and (b) reimbursed
by Roche pursuant to Section 7.2(a) of the 1999 PDL/Roche Agreement or
Section 5.3(a) of the F. Roche Agreement.


 


1.56                           “Transplant Indications” means all
indications that involve the suppression of rejection of transplanted organs,
bone marrow or other tissue, including, without limitation, solid organ
transplantation (including tolerance induction and xenotransplantation), bone
marrow transplantation, graft versus host disease and cell
transplantation.  In any event, if a given indication satisfies the
criteria for both an Autoimmune Indication and a Transplant Indication, 
such indication shall be deemed a Transplant Indication and not an Autoimmune
Indication, provided that an Autoimmune Indication shall not be deemed a Transplant
Indication merely because it may cause the need for a transplant (e.g., Type I
diabetes, even if it causes the need for an organ transplant).


 


1.57                           “Transplant Reversion” has the meaning set
forth in Section 5.2(a).


 


1.58                           “Valid Claim” means a claim in any issued
patent that has not been disclaimed or held unenforceable or invalid by a
decision of a court or governmental agency of competent jurisdiction by a
decision beyond right of review.


 


II.  LICENSE
GRANTS


 


2.1                                 License
Grant to PDL On Effective Date.


 


(a)                                  Subject
to the terms and conditions of this Amended and Restated Worldwide Agreement,
Roche grants to PDL and to PDL’s Affiliates the worldwide right and license
under the Roche Licensed Know-How and Roche Licensed Patents, to (i) develop,
use, market, promote, and detail Daclizumab in the Territory solely for use in
Autoimmune Indications and/or the Other Indications, and (ii) sell and offer
for sale Daclizumab in the Territory, under the AI Trademarks.


 


(b)                                 The
licenses set forth in Sections 2.1(a)(i) and 2.1(a)(ii) shall be exclusive
(even as to Roche) with respect to the Roche Licensed Know-How and Roche
Licensed Patents that Roche or its Affiliate solely owns or has an exclusive
license.  With respect to the Roche


 


10

















 


Licensed Know-How and Roche Licensed Patents to which Roche or its
Affiliate has a non-exclusive license, such licenses shall be sole,
non-exclusive licenses.  With respect to
the Roche Licensed Know-How and Roche Licensed Patents that Roche or its
Affiliate jointly owns, such licenses shall be sole licenses under Roche’s
interest in such Roche Licensed Know-How and Roche Licensed Patents.  As used in this Section 2.1(b) a “sole”
license means that the Roche will not grant to any Third Party a license that
overlaps with the scope of the licenses granted to PDL under Section 2.1(a).


 


(c)                                  Roche
grants to PDL and to PDL’s Affiliates, the nonexclusive right under the Roche
Licensed Know-How and Roche Licensed Patents to make, have made, and import
Daclizumab.


 


(d)                                 PDL
and its Affiliates may sublicense the rights and licenses granted to them under
Sections 2.1(a) and (c) to any Affiliate or Third Party, with the right to
further sublicense; provided, however, that without Roche’s written consent,
PDL shall not have the right to sublicense, during the Commercialization Term,
any of the [CONFIDENTIAL TREATMENT REQUESTED] rights or licenses in
Section 2.1(a) to any other entity, that is, as of the time of such
sublicensing, [CONFIDENTIAL TREATMENT REQUESTED] in the [CONFIDENTIAL TREATMENT
REQUESTED] (in at least one [CONFIDENTIAL TREATMENT REQUESTED] with
[CONFIDENTIAL TREATMENT REQUESTED), or [CONFIDENTIAL TREATMENT REQUESTED] in
the [CONFIDENTIAL TREATMENT REQUESTED] any [CONFIDENTIAL TREATMENT REQUESTED]
for the [CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL TREATMENT
REQUESTED] in any [CONFIDENTIAL TREATMENT REQUESTED].  It is expressly understood and agreed by Roche that PDL shall
have the right to sublicense its rights under Sections 2.1(a) and (c) to
[CONFIDENTIAL TREATMENT REQUESTED]. 
Notwithstanding the preceding limitation on sublicensing, PDL and its
Affiliates may use Third Party distributors in accordance with their customary
practices.


 


(e)                                  Subject
to the terms and conditions of this Amended and Restated Worldwide Agreement,
Roche grants to PDL and to PDL’s Affiliates a worldwide right and license (or
sublicense, as the case may be) under the Roche Licensed Know-How received by
PDL pursuant to the 1989 Agreements, 1999 Agreements or Section 2.4
hereof, the Roche Controlled Patents and only those Roche Owned Patents listed
in Schedule 2.8(a), to (i) develop, use, market, promote, and detail Other
Licensed Products in the Territory solely for use in Autoimmune Indications
and/or the Other Indications; (ii) sell and offer for sale Other Licensed
Products in the Territory; and (iii) to make, have made, and import Other
Licensed Products in the Territory.


 


(f)                                    The
license set forth in Section 2.1(e) shall be exclusive (even as to Roche) with
respect to the Roche Controlled Patents that Roche or its Affiliate solely owns
or has an exclusive license.  With
respect to the Roche Controlled Patents to which Roche or its Affiliate has a
non-exclusive license, such license shall be a sole, non-exclusive
license.  With respect to the Roche
Owned Patents that Roche or its Affiliate jointly owns, such license shall be a
sole license under Roche’s interest in such Roche Owned Patents.  PDL and its Affiliates shall have the right
freely to sublicense, through multiple tiers, the rights and licenses granted
to them under Section 2.1(e). 
Notwithstanding anything to the contrary in Section 2.1(e), the license
to Roche Licensed Know-How shall be non-exclusive.  Roche hereby covenants that, until the termination,


 


11

















 


pursuant to Section 2.2(a), of the license set forth in
Section 2.1(e), it will not grant to any Third Party any right or license
under the (i) Roche Controlled Patents to which Roche or its Affiliate has a
non-exclusive license or (ii) Roche Owned Patents that Roche or its Affiliate
jointly owns, to (A)
develop, use, market, promote, and detail Other Licensed Products in the
Territory for use in Autoimmune Indications and/or the Other Indications; (B)
sell and offer for sale Other Licensed Products in the Territory; and (C) make,
have made, and import Other Licensed Products in the Territory.


 


(g)                                 If
PDL wishes to receive a license with respect to Other Licensed Products in
Autoimmune Indications and/or Other Indication, under any Roche Owned Patents
that are not listed in Schedule 2.8(a), it shall [CONFIDENTIAL TREATMENT
REQUESTED] and Roche shall [CONFIDENTIAL TREATMENT REQUESTED].


 


2.2                                 License
Grant to PDL On Reversion Effective Date or Put Right Effective Date.


 


(a)                                  Effective
only on the Reversion Effective Date or the Put Right Effective Date, Roche
hereby grants the following license to PDL: subject to the terms and conditions
of this Amended and Restated Worldwide Agreement, Roche grants to PDL and to
PDL’s Affiliates a worldwide right and license under the Roche Know-How and
Roche Patents, to develop, use, manufacture, have manufactured, market,
promote, import, offer for sale, sell and have sold Daclizumab and all Other
Licensed Products in the Field and in the Territory.  On the effectiveness
of the license set forth in this Section 2.2(a), the licenses granted in
Section 2.1(a), (c) and (e) shall terminate.  PDL and its Affiliates shall have the right freely to sublicense,
with the right to further sublicense, the right and license granted to them
under this Section 2.2(a).


 


(b)                                 For
Daclizumab, the license set forth in Section 2.2(a) shall be exclusive
(even as to Roche) with respect to the Roche Know-How and Roche Patents that
Roche or its Affiliate solely owns or has an exclusive license.  With respect to the Roche Know-How and Roche
Patents to which Roche or its Affiliate has a non-exclusive license, the
license set forth in Section 2.2(a) shall be a sole, non-exclusive
license.  With respect to the Roche
Know-How and Roche Patents that Roche or its Affiliate jointly owns, the
license set forth in Section 2.2(a) shall be a sole license under Roche’s
interest in such Roche Know-How and Roche Patents.  Roche hereby covenants that it will not grant to any Third Party
any right or license, under (i) the Roche Know-How and Roche Patents to which
Roche or its Affiliate has a non-exclusive license or (ii) the Roche Know-How
and Roche Patents that Roche or its Affiliate jointly owns, to develop, use, manufacture, have manufactured,
market, promote, import, offer for sale and sell Daclizumab in the Field and in
the Territory.


 


(c)                                  For
Other Licensed Products, the license set forth in Section 2.2(a) shall be
non-exclusive.  Notwithstanding the
preceding sentence, Roche hereby covenants that it will not grant licenses to
any Third Party under the Roche Patents to make, have made, use, sell, offer
for sale or import any Other Licensed Product.


 


2.3                                 [CONFIDENTIAL
TREATMENT REQUESTED]


 


12

















 


2.4                                 Transfer
of Roche Licensed Know-How to PDL. Promptly after the Effective Date, Roche
shall transfer all Roche Licensed Know-How to PDL in the manner in which and to
the extent to which the parties, prior to the Effective Date, have transferred
know-how under the Joint Development Committee or the Joint Commercialization
Committee under the 1999 Agreements. 
Thereafter, and until the Reversion Effective Date or the Put Right
Effective Date, if Roche develops or gains Control of additional Roche Licensed
Know-How, Roche shall promptly provide such additional Roche Licensed Know-How
to PDL through the parties’ participation in the POC.  On either the Reversion Effective Date or the Put Right Effective
Date, Roche shall transfer to PDL any Roche Know-How not previously transferred
to PDL, including in particular, any Roche Know-How related to the Transplant
Indications.


 


2.5                                 License
Grants to Roche.


 


(a)                                  Subject
to the terms and conditions of this Amended and Restated Worldwide Agreement,
PDL grants to Roche and to Roche’s Affiliates, during the Commercialization
Term, the exclusive (even as to PDL) right and license under the PDL Know-How
and PDL Patents to (i) market, promote, and detail Daclizumab in the Roche
Territory solely for use in the Transplant Indications, and (ii) to sell and
offer for sale Daclizumab in the Roche Territory under the
Trademarks.   In addition, PDL
grants to Roche and to Roche’s Affiliates, the nonexclusive right under the PDL
Know-How and PDL Patents to make, have made and import Daclizumab, but only to
the extent reasonably necessary for Roche to carry out its rights and
obligations under this Amended and Restated Worldwide Agreement.  Roche
may sublicense the rights and licenses granted to Roche under this
Section 2.5, subject to PDL’s written consent, which consent PDL may not
unreasonably withhold.  It shall be deemed reasonable for PDL to withhold
consent with respect to sublicense by Roche of any of the rights or licenses to
any other entity that is [CONFIDENTIAL TREATMENT REQUESTED] (in at least one
[CONFIDENTIAL TREATMENT REQUESTED] with [CONFIDENTIAL TREATMENT REQUESTED]), or
[CONFIDENTIAL TREATMENT REQUESTED] in a [CONFIDENTIAL TREATMENT REQUESTED] any
[CONFIDENTIAL TREATMENT REQUESTED] for the [CONFIDENTIAL TREATMENT REQUESTED]
of any [CONFIDENTIAL TREATMENT REQUESTED].  Notwithstanding the preceding
sentence, Roche and its Affiliates may use Third Party distributors in
accordance with their customary practices. All sublicenses granted by Roche or
its Affiliates of the licenses set forth in this Section 2.5(a) shall
automatically terminate on the Reversion Effective Date or Put Right Effective
Date.


 


(b)                                 Subject
to the terms and conditions of this Amended and Restated Worldwide Agreement,
in particular the restrictions set forth in Section 3.1(b), PDL grants to
Roche and to Roche’s Affiliates the exclusive (even as to PDL) right and
license, including the right to grant sublicenses, under the PDL Know-How and
PDL Patents to use, develop, make, have made, sell, offer for sale, and import
the Excluded Products in the Roche Territory; provided, however that the
license granted under this Section 2.5(b) under [CONFIDENTIAL TREATMENT
REQUESTED] shall be nonexclusive.


 


(c)                                  PDL
hereby covenants that, until the expiration of [CONFIDENTIAL TREATMENT
REQUESTED], it will not make, have made, use, sell, offer for sale or import
any product in the Excluded Field Covered by [CONFIDENTIAL TREATMENT REQUESTED]
in


 


13

















 


the Roche Territory, and it will not grant to any Third Party any right
or license under [CONFIDENTIAL TREATMENT REQUESTED] the right to make, have
made, use, sell, offer for sale or import any product in the Excluded Field in
the Roche Territory.


 


(d)                                 If
during the term of this Amended and Restated Worldwide Agreement, Roche or its
Affiliate challenges the validity or enforceability in any jurisdiction of
[CONFIDENTIAL TREATMENT REQUESTED], then PDL shall have the right to
[CONFIDENTIAL TREATMENT REQUESTED] to Roche under this Amended and Restated
Worldwide Agreement to PDL Patents that include [CONFIDENTIAL TREATMENT
REQUESTED].


 


(e)                                  Roche
hereby covenants that it shall not, nor shall it cause any Affiliate or
sublicensee to:


 


(i)                                     knowingly
use or practice, directly or indirectly, any PDL Know-How or PDL Patents for
any other purposes other than those expressly permitted by this Amended and
Restated Worldwide Agreement or any other written agreements in the Field
between the Parties currently in existence and not expressly superceded by this
Amended and Restated Worldwide Agreement, or which may later be entered into by
the Parties;


 


(ii)                                  market,
promote, detail, sell or offer for sale Daclizumab, during the
Commercialization Term, in any manner outside the scope of the licenses set
forth in Section 2.5(a), including, in particular, for any use in the
treatment of Autoimmune Indications or Other Indications; or


 


(iii)                               use,
develop, make, have made, sell, offer for sale or import Excluded Products in
any manner outside the scope of the licenses set forth in Section 2.5(b).


 


(f)                                    PDL
hereby covenants that it shall not, nor shall it cause any Affiliate or
sublicensee to market, promote, detail, sell or offer for sale Daclizumab,
during the Commercialization Term, in any manner outside the scope of the
licenses set forth in Sections 2.1 and 2.2.


 


2.6                                 Identification
of the Queen et al Patents.  Set forth on Appendix A is a list
identifying patents or patent applications that comprise the Queen et al.
Patents in the Roche Territory as of the Effective Date.   If there
are any changes, PDL shall update this list by delivering a supplement to Roche
no less frequently than once per year during the term of this Amended and
Restated Worldwide Agreement.


 


2.7                                 Cooperation
Regarding Third Party Licenses.   In the event Roche negotiates
and intends to enter into a license agreement with a Third Party with respect
to the right to make, use, sell, import, offer for sale or sale of any
[CONFIDENTIAL TREATMENT REQUESTED] under such Third Party’s intellectual
property, it shall so inform PDL and provide PDL the opportunity to participate
in such negotiations and enter into such license agreement or take a sublicense
thereunder with respect to [CONFIDENTIAL TREATMENT REQUESTED], on such terms as
are agreed by the parties.


 


14

















 


2.8                                 Roche
Representations, Warranties and Covenants.  Roche hereby represents
and warrants as of the Effective Date as follows:


 


(a)                                  To
the best of Roche’s knowledge, Schedule 2.8(a) identifies the Roche Owned
Patents existing as of the Effective Date. 
To the extent that it is not prohibited from doing so, Roche agrees to
make available to PDL copies of such Roche Owned Patents promptly following the
Effective Date. Roche covenants that, to the extent any additional Roche Owned
Patents are identified by Roche subsequent to the Effective Date and to the
extent that it is not prohibited from doing so, it shall promptly inform PDL,
and Schedule 2.8(a) shall be revised to so reflect such additional Roche
Owned Patents.


 


(b)                                       Schedule 2.8(b)
identifies all of the license agreements under which Roche has rights to Roche
Controlled Patents existing as of the Effective Date (other than the license
rights from Genentech referred to in Section 2.3).  Roche agrees to make available to PDL copies
of such license agreements pursuant to which the Roche Controlled Patents were
licensed to Roche promptly following the Effective Date, to the extent not
already in PDL’s possession and to the extent that Roche has a right to do
so.  [CONFIDENTIAL TREATMENT REQUESTED]


 


(c)                                  Roche
has not granted any Third Party a license or other right that is currently in
effect under any of the Roche Owned Patents for any purpose.


 


(d)                                 To
Roche’s knowledge, Roche has complied with its obligation under 37 CFR §1.56(a)
to disclose to the United States Patent and Trademark Office, during the
pendency of each United States patent application included in the Roche Owned
Patents, information known to Roche to be material to the patentability of the
pending claims in such application.  None of the Roche Owned Patents is
involved in any interference or opposition proceeding, and, to Roche’s
knowledge, no such proceeding is being threatened with respect to any of the
Roche Owned Patents.


 


(e)                                  [CONFIDENTIAL
TREATMENT REQUESTED]


 


(f)                                    [CONFIDENTIAL
TREATMENT REQUESTED]


 


(g)                                 Roche
and its Affiliates have not granted to any Third Party in any Major Country,
any sublicense, under the license(s) to the PDL Know-How and PDL Patents that
Roche and its Affiliates received pursuant to the 1999 Agreements, to: (i)
promote and sell Daclizumab generally, and/or for use in Autoimmune Indications
or the Other Indications; or (ii) develop, make, use, import, offer for sale
and sell Other Licensed Products for any indication in the Field.  Roche shall, prior to the [CONFIDENTIAL
TREATMENT REQUESTED], disclose in writing to PDL all sublicenses that Roche or
its Affiliate have granted, under the PDL Know-How and PDL Patents, to develop,
make, use, import, promote, offer for sale and sell Daclizumab and Other
Licensed Products for any indication in the Field.  If any such sublicenses exist at such time, the parties, through
the POC, will work together to [CONFIDENTIAL TREATMENT REQUESTED] (including
[CONFIDENTIAL TREATMENT REQUESTED], where practicable) such sublicense.


 


15

















 


(h)                                 Roche
covenants that, in the event that Roche [CONFIDENTIAL TREATMENT REQUESTED] of
the [CONFIDENTIAL TREATMENT REQUESTED] of the [CONFIDENTIAL TREATMENT
REQUESTED] of [CONFIDENTIAL TREATMENT REQUESTED], through whatever means, on
PDL’s request, Roche will within [CONFIDENTIAL TREATMENT REQUESTED] days of
such request, meet and discuss with PDL the impact of such event on the
relationship between PDL and Roche at such time, and modify this Amended and
Restated Worldwide Agreement to the extent deemed appropriate by both parties.


 


2.9                                 Termination
of Certain Sublicenses.  If, prior
to the Effective Date, PDL and Roche or an Affiliate of Roche entered into any
agreement(s), other than the 1999 Agreements, wherein PDL granted Roche or such
Affiliate a sublicense with respect to Daclizumab or Other Licensed Product(s),
under any Third Party intellectual property rights licensed by PDL, then such
sublicenses are hereby terminated and replaced by the licenses set forth in
Section 2.5.


 


III.  DEVELOPMENT;
REGULATORY ISSUES


 


3.1                                 Development
by Roche.


 


(a)                                  Development
of Daclizumab.  Following the Effective Date, [CONFIDENTIAL TREATMENT
REQUESTED] after the Effective Date.  In
addition, to the extent Roche receives any data or other results of any
clinical trials pursuant to ongoing physician sponsored trials, Roche will
update the POC with respect to such trial results and data.  Further, Roche shall promptly forward to PDL
any requests for new [CONFIDENTIAL TREATMENT REQUESTED] studies involving
Daclizumab that Roche receives after the Effective Date.


 


(b)                                 Development
of Excluded Products.  Roche shall be solely responsible, at its sole
cost and expense and at its sole discretion, for the non-clinical, clinical,
and regulatory development of any Excluded Product.  Notwithstanding the foregoing, it is understood and agreed that
[CONFIDENTIAL TREATMENT REQUESTED] for any indication other than [CONFIDENTIAL
TREATMENT REQUESTED] without the written consent of PDL, such consent not to be
unreasonably withheld.  The Parties
recognize that it may be desirable to develop the Excluded Products for [CONFIDENTIAL
TREATMENT REQUESTED], in which case the POC shall discuss and recommend to the
parties whether [CONFIDENTIAL TREATMENT REQUESTED].  Following the Effective Date, Roche shall use Reasonable
Diligence in proceeding with the development and registration of Excluded
Products in the Roche Territory, to the extent permitted under this
Section 3.1(b).  If Roche fails to
exercise such diligence, PDL may terminate the license granted to Roche under
Section 2.5(b), but shall not be obligated to do so.


 


3.2                                 Development
by PDL.


 


(a)                                  General. 
Following the Effective Date, PDL shall be solely responsible, at its sole cost
and expense and at its sole discretion, for the non-clinical, clinical, and
regulatory development of Daclizumab for all indications in the Territory,
other than those trials referenced in Section 3.1(a), subject to the
restrictions set forth in Section 3.2(b).  All data and information


 


16

















 


generated by PDL development activities pursuant to this
Section 3.2(a) shall be PDL Know-How.


 


(b)                                 Restriction
on PDL Development.  During the period commencing on the Effective
Date and ending at the end of the Commercialization Term, PDL agrees not to
pursue the clinical or regulatory development of Daclizumab for use in the
[CONFIDENTIAL TREATMENT REQUESTED] in the Roche Territory.


 


3.3                                 Assistance
by Roche.  At no cost to PDL (except as provided in the following
sentence), Roche will allow PDL to cross-reference Roche regulatory filings and
clinical data with respect to Daclizumab and will grant PDL reasonable access
during normal business hours to such regulatory filings and clinical
data.  To the extent Roche is required under applicable law, rule or
regulation, Roche, at PDL’s cost, shall promptly make all filings reasonably
required or useful to permit the use of the clinical materials, if any,
supplied pursuant to Section 4.5(a) (e.g., preparation and filing of
required technical reports, data summaries, or a regulatory dossier).


 


3.4                                 Adverse
Event Reporting.  Each party shall notify the other of all information
coming into its possession concerning any and all side effects, injury,
toxicity, pregnancy or sensitivity event associated with commercial or clinical
uses, studies, investigations or tests with Daclizumab, throughout the world, whether
or not determined to be attributable to Daclizumab (“Adverse Event Reports”).  The parties shall each
identify a person to coordinate the exchange of Adverse Event Reports (“Report Coordinators”) so as to enable
timely reporting of such Adverse Event Reports to appropriate governmental and
regulatory authorities consistent with all laws, rules and regulations. The
parties, through their Report Coordinators, have agreed in writing on formal
procedures for such exchange, which are embodied in the PDL-Roche Procedure for
the Exchange of Daclizumab Adverse Event Reports, dated December 2000 (“Pharmacovigilance Agreement”). 
Promptly after the Effective Date, Roche and PDL agree to cause their Report
Coordinators (a) to review the Pharmacovigilance Agreement and (b) to negotiate
in good faith an amendment to the Pharmacovigilance Agreement to reflect the
terms of this Amended and Restated Worldwide Agreement, if the Report
Coordinators agree that such an amendment is required.  Such
Pharmacoviligance Agreement (as amended, if applicable) shall survive the end
of the Commercialization Term.


 


3.5                                 Copies
of Responses.  Within a reasonable time frame prior to submission of
responses to any regulatory authority on product safety issues regarding
Daclizumab, a copy of a near final draft response will be provided to the other
party for review.  Final copies of responses submitted to any regulatory
authority will be provided to the other party within five (5) business days of
document finalization.


 


3.6                                 Regulatory
Actions.  The party responsible to interact with regulators on a
specific safety issue regarding Daclizumab must communicate action requested by
regulators to the other party without delay.  Such actions may include,
for example, change in label, Dear Doctor letter, trial on hold for clinical
safety reasons and the like.


 


3.7                                 Other
Safety Issues.  Either party may request that specific safety issues
be discussed, and the parties will establish a Joint Safety Committee (“JDSC”), consisting of an


 


17

















 


equal number of representatives from each party, for such purpose. JDSC
discussion on such issues will be for the purpose of advising each party
concerning the collection and evaluation of safety data, and responding to any
significant safety issues raised, or requests made, by regulatory authorities.


 


3.8                                 Registration. 
PDL shall notify Roche in writing if PDL determines that clinical trial results
for Daclizumab justify filing an Application.  Roche shall provide cross
reference letters reasonably required or useful to allow PDL to make any such
filing and to allow PDL to carry out without delay any related clinical trial
in the Territory.  PDL shall be responsible for preparing periodic reports
required by the FDA related to any such Applications and for timely filing such
periodic reports with the FDA.  Through the POC, each party shall advise
and consult with the other with respect to any significant issues or questions
raised by any regulatory authorities with respect to Daclizumab.


 


IV.  COMMERCIALIZATION
AND MANUFACTURING


 


4.1                                 Commercialization
By Roche.


 


(a)                                  Commercialization
of Daclizumab by Roche.  The parties intend that, following the
Effective Date, Roche will continue to market and sell Daclizumab in the Transplant
Indications in the Roche Territory for the duration of the Commercialization
Term, under the Trademarks.  In particular, and without limitation, during
the Commercialization Term and in the Roche Territory, Roche shall be
responsible, at its sole cost and as permitted by applicable law, for (i) the
marketing, promotion, and detailing of Daclizumab for use in the Transplant
Indications; (ii) accepting and filling orders for Daclizumab received by it or
its Affiliates, including the distribution of Daclizumab to fill such orders;
(iii) booking all sales of Daclizumab attributable to such orders; and (iv) any
other activities reasonably related to Daclizumab that are permitted under the
license granted in Section 2.5(a) (the “Roche
Commercialization Activities”).  As provided in
Article VII, Roche shall pay royalties to PDL on Roche Net Sales.


 


(b)                                 Commercialization
of Excluded Products by Roche.  Roche, its Affiliates, or sublicensees
shall be solely responsible for, at its or their sole cost and as permitted by
law, all aspects of the commercialization of Excluded Products in the Roche
Territory, including but not limited to the booking of all sales of Excluded
Products in the Roche Territory.  Roche shall use commercially diligent
efforts to develop and commercialize such Excluded Products. Following receipt
of regulatory approval, Roche shall use Reasonable Diligence in proceeding with
the marketing, promotion and sale of Excluded Products in the Roche
Territory.   If Roche fails to exercise such diligence, PDL may
terminate the license granted to Roche under Section 2.5(b), but shall not
be obligated to do so.  As provided in
Article VII, Roche shall pay royalties to PDL on Roche Net Sales of
Excluded Products.


 


4.2                                 Commercialization
by PDL.


 


(a)                                  Commercialization
by PDL During Commercialization Term.  In the Roche Territory, PDL,
its Affiliates, or sublicensees shall have the right, but not the obligation,
at its or


 


18

















 


their sole cost and as permitted by law, to pursue all aspects of the
commercialization of Daclizumab and any Other Licensed Products, excluding the
Roche Commercialization Activities. 
Without limiting the generality of the foregoing, in the Roche Territory
and during the Commercialization Term, PDL, its Affiliates, or sublicensees
shall have the right, but not the obligation, to commercialize Licensed
Products in Autoimmune Indications and Other Indications and to commercialize
Other Licensed Products in any indication. 
In particular, in the Roche Territory, PDL shall be responsible, at its
sole cost and as permitted by applicable law, for (i) the marketing, promotion,
and detailing of Daclizumab for use in the Autoimmune Indications or Other
Indications; (ii) accepting and filling orders for Daclizumab received by it or
its Affiliates, including the distribution of Daclizumab to fill such orders;
(iii) booking all sales of Daclizumab attributable to such orders; and (iv) any
other activities reasonably related to Daclizumab that are permitted under the
license granted in Section 2.1.  As
provided in Article VII, PDL shall pay royalties to Roche on PDL Net Sales
during the Commercialization Term.


 


(b)                                 Commercialization
by PDL Following Reversion Effective Date or Put Right Effective Date. 
Following the Reversion Effective Date or the Put Right Effective Date, PDL,
its Affiliates, or sublicensees shall have the right, but not the obligation,
to pursue, at its or their sole cost and as permitted by law, all aspects of
the commercialization of Daclizumab for all indications and for all Other
Licensed Products.  Following the
Reversion Effective Date or the Put Right Effective Date, in no event shall PDL
owe any royalties or any other compensation to Roche on sales of Daclizumab
under Section 7.2(c) in the Territory, whether by PDL, its Affiliates, or
their sublicensees.


 


4.3                                 Commercialization
in the PDL Sole Territory.  PDL, its Affiliates, or sublicensees shall
have the right, but not the obligation, to pursue, at its or their sole cost
and as permitted by law, all aspects of the commercialization of Licensed
Products in the PDL Sole Territory, including but not limited to the booking of
all sales of Licensed Products in the PDL Sole Territory.


 


4.4                                 Pricing. 
As between the parties, PDL has the sole right to determine the price for
Daclizumab or any Other Licensed Product that it sells and distributes. 
As between the parties, Roche has the sole right to determine the price for any
Excluded Product that it sells and distributes, and the sole right during the
Commercialization Term to determine the price for Daclizumab that it sells and
distributes; provided, however, that until the earlier of (a) [CONFIDENTIAL
TREATMENT REQUESTED] or (b) PDL’s receipt of a [CONFIDENTIAL TREATMENT
REQUESTED] from [CONFIDENTIAL TREATMENT REQUESTED] having the power to grant
[CONFIDENTIAL TREATMENT REQUESTED], stating that [CONFIDENTIAL TREATMENT
REQUESTED] will grant [CONFIDENTIAL TREATMENT REQUESTED] for Daclizumab in
[CONFIDENTIAL TREATMENT REQUESTED], Roche shall provide PDL with [CONFIDENTIAL
TREATMENT REQUESTED] of any [CONFIDENTIAL TREATMENT REQUESTED] in the
[CONFIDENTIAL TREATMENT REQUESTED] of Daclizumab and shall give [CONFIDENTIAL
TREATMENT REQUESTED] to any [CONFIDENTIAL TREATMENT REQUESTED] or [CONFIDENTIAL
TREATMENT REQUESTED] by PDL regarding the [CONFIDENTIAL TREATMENT REQUESTED] of
Daclizumab whether [CONFIDENTIAL TREATMENT REQUESTED].  It is expressly
understood that following the date which is the earliest of (i) [CONFIDENTIAL
TREATMENT


 


19

















 


REQUESTED], (ii) the receipt of [CONFIDENTIAL TREATMENT REQUESTED] for
Daclizumab in [CONFIDENTIAL TREATMENT REQUESTED], or (iii) the Reversion
Effective Date or Put Right Effective Date, the obligations of either party in
the foregoing sentence shall terminate, and PDL shall have sole control
regarding the price of Daclizumab that it sells and distributes.


 


4.5                                 Manufacturing. 
References to Roche in Sections 4.5(a) and 4.5(b) shall include Roche, its
Affiliates [CONFIDENTIAL TREATMENT REQUESTED] and any sublicensees
manufacturing Daclizumab for Roche or its Affiliates.


 


(a)                                  Clinical
Manufacturing.


 


(i)                                     Supply. 
Subject to Section 4.5(a)(ii) and until [CONFIDENTIAL TREATMENT
REQUESTED].  All Daclizumab for the
development of Daclizumab for AI, regardless of form or formulation, shall be
manufactured in accordance with cGMPs and any other applicable regulatory or
legal requirements.  Through the POC, the parties shall meet periodically
and discuss the availability and timing of delivery of Daclizumab
hereunder.  [CONFIDENTIAL TREATMENT REQUESTED].  At PDL’s cost, PDL
shall perform any bridging studies that are necessary to enable PDL to use
PDL-manufactured Daclizumab to satisfy its clinical development requirements. 
On [CONFIDENTIAL TREATMENT REQUESTED], and any time thereafter, PDL shall have
the sole responsibility for the manufacture of all Daclizumab and placebo
required by PDL for the development of Daclizumab for AI.


 


(ii)                                  Limitations. 
From the Effective Date until [CONFIDENTIAL TREATMENT REQUESTED]. 
Notwithstanding anything to the contrary herein, from the Effective Date until
[CONFIDENTIAL TREATMENT REQUESTED] of Daclizumab.


 


(iii)                               Procedures. 
During the period commencing on the Effective Date and ending on [CONFIDENTIAL
TREATMENT REQUESTED], or under such other procedures as the POC determines.


 


(b)                                 Commercial
Manufacturing.  Effective on the Effective Date and subject to
Section 4.5(c) and this Section 4.5(b), each party shall each be
solely responsible for the manufacturing of all Daclizumab necessary to satisfy
the commercial requirements of itself, its Affiliates and its
sublicensees.  [CONFIDENTIAL TREATMENT REQUESTED]


 


(c)                                  Commercial
Manufacturing Following Exercise of the Roche Put Right.  In the event
that Roche exercises the Roche Put Right, [CONFIDENTIAL TREATMENT REQUESTED].


 


4.6                                 Roche
Diligence.  Following the Effective Date, Roche shall use Reasonable
Diligence in proceeding with the manufacturing, marketing and sale of
Daclizumab for use in the Transplant Indications in the Territory as
contemplated by this Amended and Restated Worldwide Agreement, and in a manner
comparable to its conduct of the manufacturing, marketing and sale of
Daclizumab [CONFIDENTIAL TREATMENT REQUESTED] during the


 


20

















 


[CONFIDENTIAL TREATMENT REQUESTED] prior to the Effective Date. 
If Roche fails to exercise such diligence, PDL may exercise its rights
hereunder pursuant to Section 13.3 below, but shall not be obligated to do
so. Roche’s diligence obligations under this Section 4.6 shall expire on,
(i) if PDL exercises the Transplant Reversion or Roche exercises the Roche Put
Right, the completion of all activities and undertakings set forth in Sections
5.4(b), (c), (e) and (f), or (ii) if the Exercise Period expires without PDL
exercising the Transplant Reversion.  In
the event of a dispute as to whether Roche has used Reasonable Diligence, the
party that loses on this issue in an arbitration brought pursuant to
Article XV shall reimburse all of the other party’s arbitration expenses,
including reasonable attorneys’ fees relating to such arbitration.


 


V.  PDL
RIGHT TO ACQUIRE TRANSPLANT BUSINESS FROM ROCHE


 


5.1                                 General.  The parties intend that, subject to
the terms and conditions of this Amended and Restated Worldwide Agreement, the
commercialization of Daclizumab in the Transplant Indications in the Roche
Territory will continue to be an exclusive Roche responsibility unless and
until PDL decides to undertake commercialization of Daclizumab in the
Transplant Indications under the terms provided in this Article V. 
Subject to the limitations set forth below, PDL shall have the option to
terminate Roche’s rights with respect to Daclizumab, which, if exercised, would
allow PDL to replace Roche as the party responsible for the promotion, sales,
distribution and manufacturing of Daclizumab for use in the Transplant
Indications in the Roche Territory.  In the event that PDL exercises such
option, PDL shall pay an exercise fee as set forth in Section 5.2(c)
below.  In addition, Roche shall have the right to “put” to PDL the rights
to commercialize Daclizumab in the Roche Territory prior to PDL’s exercise of
such option and payment of the exercise fee, as provided in Section 5.3
below.


 


5.2                                 PDL
Transplant Reversion.


 


(a)                                  Grant;
Exercise Period.  PDL is hereby granted the right, subject to the
terms of this Section 5.2(a), to terminate Roche’s license rights under
Section 2.5 for Daclizumab (the “Transplant
Reversion”).  Such right may be exercised by PDL in its
discretion at any time during the period commencing [CONFIDENTIAL TREATMENT
REQUESTED] and ending [CONFIDENTIAL TREATMENT REQUESTED] (the “Exercise Period”) by written notice to
Roche and payment of the Reversion Exercise Fee set forth in
Section 5.2(c).


 


(b)                                 Effective
Date of Exercise.  If, during the Exercise Period, PDL provides Roche
with written notice that PDL desires to exercise the Transplant Reversion,
[CONFIDENTIAL TREATMENT REQUESTED] shall determine the effective date (the “Reversion Effective Date”) of such
exercise and reversion of rights, which shall be at least [CONFIDENTIAL
TREATMENT REQUESTED] after the date of PDL’s written notice that it desires to
exercise the Transplant Reversion, but in no event be later than [CONFIDENTIAL
TREATMENT REQUESTED].


 


(c)                                  Reversion
Exercise Fee.  PDL shall pay to Roche an exercise fee based on the
AAGS, which exercise price shall be calculated as follows (the “Reversion Exercise Fee”):


 


21

















 


	
  AAGS

  	
   

  	
  Exercise
  Price

  
	
   

  	
   

  	
   

  
	
  [CONFIDENTIAL TREATMENT
  REQUESTED] or more

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  [CONFIDENTIAL TREATMENT
  REQUESTED] or more but not more than [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  [CONFIDENTIAL TREATMENT
  REQUESTED] or more but not more than [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  not more than
  [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  



 


(d)                                 Payment
of Reversion Exercise Fee.  Payment of such Reversion Exercise Fee
shall be made in two installments: [CONFIDENTIAL TREATMENT REQUESTED]
of such Reversion Exercise Fee shall be made within [CONFIDENTIAL TREATMENT
REQUESTED] of PDL’s written notice that it is exercising the Transplant
Reversion and the remaining [CONFIDENTIAL TREATMENT REQUESTED] of such
Reversion Exercise Fee shall be made on the later of the [CONFIDENTIAL
TREATMENT REQUESTED], or the [CONFIDENTIAL TREATMENT REQUESTED] after
completion of all activities and undertakings set forth in Sections
[CONFIDENTIAL TREATMENT REQUESTED].


 


5.3                                 Roche
Put Right Regarding Transplant Reversion.


 


(a)                                  If,
at any time from the Effective Date until Roche receives written notice from
PDL pursuant to Section 5.2(a) of PDL’s exercise of the Transplant
Reversion, Roche desires that all of its rights to market, sell, promote and
otherwise commercialize Daclizumab in the Roche Territory should revert to PDL,
Roche shall have such right, on [CONFIDENTIAL TREATMENT REQUESTED] written
notice to PDL (the “Roche Put Right”);
provided, however, that such right shall not be exercisable by Roche before
[CONFIDENTIAL TREATMENT REQUESTED] or after [CONFIDENTIAL TREATMENT
REQUESTED].  If so exercised, the effective date of such reversion (the “Put Right Effective Date”) shall be deemed
to be that date [CONFIDENTIAL TREATMENT REQUESTED] following the date of such
written notice.  The Roche Put Right shall expire on [CONFIDENTIAL
TREATMENT REQUESTED] if not previously exercised.


 


(b)                                 On
receipt from Roche of its notice of exercise of the Roche Put Right, PDL would
pay to Roche an exercise fee based on the AAGS, which exercise price shall be
calculated as follows (the “Put Exercise Fee”):


 


22

















 


	
  AAGS

  	
   

  	
  Exercise
  Price

  
	
   

  	
   

  	
   

  
	
  [CONFIDENTIAL TREATMENT
  REQUESTED] or more

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  [CONFIDENTIAL TREATMENT
  REQUESTED] or more but not more than [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  [CONFIDENTIAL TREATMENT
  REQUESTED] or more but not more than [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  not more than
  [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  



 


(c)                                  Payment
of such Put Exercise Fee shall be made in two installments: 
[CONFIDENTIAL TREATMENT REQUESTED] of such Put Exercise Fee shall be made
within [CONFIDENTIAL TREATMENT REQUESTED] of Roche’s written notice that it is
exercising the Roche Put Right and the remaining [CONFIDENTIAL TREATMENT
REQUESTED] of such Put Exercise Fee shall be made on the later of the
[CONFIDENTIAL TREATMENT REQUESTED], or the [CONFIDENTIAL TREATMENT REQUESTED]
after completion of all activities and undertakings set forth in Sections
[CONFIDENTIAL TREATMENT REQUESTED].


 


(d)                                 In
the event of exercise by Roche of the Roche Put Right, PDL agrees to do the
following, until [CONFIDENTIAL TREATMENT REQUESTED]:


 


(i)                                     to
the extent [CONFIDENTIAL TREATMENT REQUESTED], use [CONFIDENTIAL TREATMENT
REQUESTED] efforts to maintain [CONFIDENTIAL TREATMENT REQUESTED] in effect as
of the Put Right Effective Date by and between Roche and Third Party
[CONFIDENTIAL TREATMENT REQUESTED] with respect to Daclizumab for use in the
Transplant Indications in the US; and


 


(ii)                                  pay
to Roche those payments provided in Section 7.2(d).


 


5.4                                 Transfer
and Assignment of Daclizumab Assets; Cooperation.  As soon as practicable following PDL’s notice of its
exercise of the Transplant Reversion, or on delivery by Roche of written
exercise of the Roche Put Right, Roche shall take all steps reasonable and
appropriate to facilitate and shall initiate, or to cause its Affiliates to
facilitate or initiate, the assignment to PDL of all of Roche’s and its
Affiliates’ right, title and interest in and to the Daclizumab Assets and the transfer
of Daclizumab commercialization and regulatory responsibilities in the Roche
Territory from Roche to PDL. Such actions shall include, without limitation:


 


(a)                                  cooperate
and communicate with PDL as PDL may reasonably request in effectuating such transfer,
including responding in a reasonable time frame to all reasonable


 


23

















 


inquiries and requests of PDL with respect to the nature or extent of
the Daclizumab Assets, including providing copies of all relevant documents for
PDL’s use [CONFIDENTIAL TREATMENT REQUESTED];


 


(b)                                 assign
and transfer all Regulatory Approvals and other Daclizumab Assets described in
Section 1.14(h) from Roche to PDL (excluding manufacturing approvals);


 


(c)                                  identify
all distributors and other Third Parties involved in the promotion, sale and
distribution of Daclizumab, and as and to the extent possible offering to
assign agreements with such Third Parties to PDL, to the extent not adverse to
the interests of Roche to do so;


 


(d)                                 on
PDL’s request and at PDL’s sole discretion, Roche shall assign and shall cause
its Affiliates to assign, to PDL any contracts (or relevant portions thereof)
then in force between Roche and any Third Parties regarding the marketing,
promotion, and sale of Daclizumab, to the extent assignable, and where not so
assignable, use its reasonably diligent efforts to obtain consent to such
assignment;


 


(e)                                  prepare,
execute and deliver assignments to PDL of the Roche Owned Patents listed on
Schedule 2.8(a) and record, where appropriate with the relevant
authorities, such assignments to PDL of all of Roche’s and its Affiliates’
right, title and interest in and to the Roche Owned Patents listed on
Schedule 2.8(a); and


 


(f)                                    prepare,
execute and deliver assignments to PDL of all of Roche’s and its Affiliates’
right, title, and interest in and to the Trademarks.


 


In such matters, Roche shall bear the [CONFIDENTIAL TREATMENT
REQUESTED] of its [CONFIDENTIAL TREATMENT REQUESTED] and associated
[CONFIDENTIAL TREATMENT REQUESTED] but PDL shall [CONFIDENTIAL TREATMENT
REQUESTED] for any [CONFIDENTIAL TREATMENT REQUESTED] to [CONFIDENTIAL
TREATMENT REQUESTED] (such as [CONFIDENTIAL TREATMENT REQUESTED]) required in
connection with such transfers, together with any [CONFIDENTIAL TREATMENT
REQUESTED] for [CONFIDENTIAL TREATMENT REQUESTED] requested by PDL and agreed
to by Roche.  Roche shall use its commercially diligent efforts to ensure
that all such transfer activities shall be completed as expeditiously as
possible, but in any event by the Reversion Effective Date or the Put Right
Effective Date.  All such activities
shall be coordinated through and overseen by the POC, as provided in
Section 6.2.


 


5.5                                 Effect
of Exercise.  Effective immediately on either the Reversion Effective
Date or the Put Right Effective Date:


 


(a)                                  the
license granted to Roche under Section 2.5(a) shall terminate and all such
rights shall revert to PDL; except that, following any Put Right Effective
Date, the license granted to Roche to manufacture Daclizumab in the second
sentence of Section 2.5(a) shall survive, to the extent provided in
Section 2.5(a);


 


(b)                                 the
license granted to PDL in Section 2.2 shall be in full force and effect;


 


24

















 


(c)                                  PDL
shall have the right to purchase all or any portion of Roche’s then existing
inventory of bulk and/or finished Daclizumab, and Roche agrees to so sell such
bulk and/or finished Daclizumab, at a price equal to [CONFIDENTIAL TREATMENT
REQUESTED], as necessary to meet commercial requirements; and


 


(d)                                 PDL
thereafter shall commence booking all sales of Daclizumab in the Roche
Territory, whether sold under a Trademark or the AI Trademark or any other
trademark.


 


5.6                                 No
Effect on Excluded Field and Excluded Products.  Any exercise of
either the Transplant Reversion or the Roche Put Right shall have no effect on
Roche’s rights in and to the Excluded Field and the Excluded Product, or on the
license granted to Roche under Section 2.5(b), except as provided in
Section 13.3.


 


5.7                                 No
Assumption of Liabilities.  Except
as specifically assumed by PDL in writing in connection with an assignment
and/or sublicense to PDL of any Third Party contracts comprising the Daclizumab
Assets pursuant to Section 5.4, PDL shall assume no liabilities of Roche
or its Affiliates as a result of either the exercise by PDL of the Transplant
Reversion or the exercise by Roche of the Roche Put Right, including (a) tax
liabilities; (b) any liabilities relating to accounts payable, indebtedness,
accrued liabilities or legal services, accounting services, financial advisory
services or investment banking services or other professional services; (c) any
wages, salaries or benefits or any other liabilities relating to the employment
of any current or former employee; (d)  any rent, wages or other
obligations of any kind payable by Roche; (e) any environmental liabilities;
and (f) any liabilities with respect to Third Party contracts not expressly
assumed by PDL hereunder.  Roche shall
remain responsible for all liabilities associated with its sale, prior to the
Reversion Effective Date or Put Right Effective Date (as applicable), of
Daclizumab, and its manufacture of Daclizumab, including without limitation
uncollected amounts, returns, recalls, and third party royalties (subject to
Section 7.4) associated with such sales.


 


5.8                                 Effect
of [CONFIDENTIAL TREATMENT REQUESTED].  In the event of any
[CONFIDENTIAL TREATMENT REQUESTED], the following shall occur:


 


(a)                                  The
Roche Put Right shall immediately terminate;


 


(b)                                 The
exercisability of the Transplant Reversion shall [CONFIDENTIAL TREATMENT
REQUESTED] and the Exercise Period shall be deemed to commence on the date that
is [CONFIDENTIAL TREATMENT REQUESTED] after the effective date of such
[CONFIDENTIAL TREATMENT REQUESTED] and shall extend until [CONFIDENTIAL
TREATMENT REQUESTED].  In the event PDL exercises such Transplant
Reversion during such [CONFIDENTIAL TREATMENT REQUESTED] time, PDL would pay to
Roche an exercise fee based on the AAGS, which exercise price shall be
calculated as follows (the “[CONFIDENTIAL
TREATMENT REQUESTED] Exercise Fee”):


 


	
  AAGS

  	
   

  	
  Exercise
  Price

  
	
   

  	
   

  	
   

  
	
  more than [CONFIDENTIAL
  TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  more than [CONFIDENTIAL TREATMENT REQUESTED] but not more than
  [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  more than [CONFIDENTIAL
  TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  not more than
  [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  



 


25

















 


and


 


(c)                                  Payment
of such [CONFIDENTIAL TREATMENT REQUESTED] Exercise Fee shall be made  in
two installments: [CONFIDENTIAL TREATMENT REQUESTED] of such [CONFIDENTIAL
TREATMENT REQUESTED] Exercise Fee shall be made within [CONFIDENTIAL TREATMENT
REQUESTED] of PDL’s written notice that it is exercising the Transplant
Reversion and the remaining [CONFIDENTIAL TREATMENT REQUESTED] of such
[CONFIDENTIAL TREATMENT REQUESTED] Exercise Fee shall be made on the later of
the [CONFIDENTIAL TREATMENT REQUESTED], or [CONFIDENTIAL TREATMENT REQUESTED]
after completion of all activities and undertakings set forth in Sections
[CONFIDENTIAL TREATMENT REQUESTED].


 


VI.  PRODUCT OPERATING COMMITTEE


 


6.1                                 Dissolution
of Committees under 1999 Agreements.  Effective
as of the Effective Date, the Joint Development Committee and the Joint
Commercialization Committee, as authorized under the 1999 Agreements, shall be
dissolved.


 


6.2                                 Product
Operating Committee.


 


(a)                                  Within
thirty (30) days after the Effective Date, PDL and Roche shall form a Product
Operating Committee (“POC”)
composed of [CONFIDENTIAL TREATMENT REQUESTED] representatives of each party
who shall be appointed (and may be replaced at any time, subject to the terms
of this Section 6.2(a)) by such party with the prior written consent of
the other party in accordance with this Amended and Restated Worldwide
Agreement.  Each POC representative
shall have suitable experience and expertise in the development and
commercialization of biopharmaceutical drugs.  Each party shall each have
the right to replace its representatives from time to time, provided that such
party obtains the written consent of the other party on such replacement in
advance thereof.


 


(b)                                 The
POC shall meet not less than [CONFIDENTIAL TREATMENT REQUESTED] on such dates
and at such times as agreed to by PDL and Roche, alternating between Fremont,
California and Nutley, New Jersey or such other locations as the POC
determines.   On the determination of the POC, any such meetings may
be conducted by


 


26

















 


teleconference or videoconference.  Other representatives of the
parties and their invitees may also attend the POC meetings.


 


(c)                                  The
POC shall be responsible for (i) exchanging information regarding the
activities conducted by the parties, their sublicensees or their respective
Affiliates under this Amended and Restated Worldwide Agreement, including
without limitation, [CONFIDENTIAL TREATMENT REQUESTED] of any [CONFIDENTIAL
TREATMENT REQUESTED] with respect to [CONFIDENTIAL TREATMENT REQUESTED],
(ii) making recommendations to the parties regarding the [CONFIDENTIAL
TREATMENT REQUESTED] for [CONFIDENTIAL TREATMENT REQUESTED] for the
[CONFIDENTIAL TREATMENT REQUESTED] of the [CONFIDENTIAL TREATMENT REQUESTED],
(iii) discussing the [CONFIDENTIAL TREATMENT REQUESTED] for [CONFIDENTIAL
TREATMENT REQUESTED] the [CONFIDENTIAL TREATMENT REQUESTED] for [CONFIDENTIAL
TREATMENT REQUESTED] and the potential for a [CONFIDENTIAL TREATMENT REQUESTED]
between the [CONFIDENTIAL TREATMENT REQUESTED] to accomplish this goal, (iv)
coordinating and overseeing the [CONFIDENTIAL TREATMENT REQUESTED] to PDL of
the [CONFIDENTIAL TREATMENT REQUESTED] pursuant to Section [CONFIDENTIAL
TREATMENT REQUESTED]; and (vi) such other activities as mutually agreed by
Roche and PDL[CONFIDENTIAL TREATMENT REQUESTED].  If PDL elects to
exercise its Transplant Reversion under Section 5.2, or Roche exercises
its Roche Put Right under Section 5.3, the POC will coordinate transition
of manufacturing and commercialization responsibilities to PDL over the period
specified in this Amended and Restated Worldwide Agreement; the POC shall
dissolve after the completion of such transition [CONFIDENTIAL TREATMENT
REQUESTED].  The POC shall have no authority to determine pricing of
Daclizumab by either party in its respective indications nor shall the POC have
any authority to make any decisions regarding Daclizumab that shall take effect
or continue to remain in effect, after the Reversion Effective Date or Put
Right Effective Date.


 


(d)                                 In
general, the POC is not intended to be a decision-making body with respect to
either party’s efforts to develop or commercialize Daclizumab.  However,
all required decision making with respect to matters before the POC shall be
effected [CONFIDENTIAL TREATMENT REQUESTED]


 


VII.  COMPENSATION


 


7.1                                 Payment
to Roche.  In consideration for the rights and licenses granted by
Roche under this Amended and Restated Worldwide Agreement, PDL shall pay to
Roche a non-refundable, non-creditable fee in the sum of Eighty Million U.S.
Dollars (US$80,000,000), due and payable no later than [CONFIDENTIAL TREATMENT
REQUESTED] after the Effective Date.


 


7.2                                 Royalties.


 


(a)                                  Royalties
to PDL on Daclizumab Sales.


 


27

















 


(i)                                     Royalty
Rate.  Roche shall pay PDL royalties on Roche Net Sales commencing as
of the Effective Date, at a royalty rate determined by annual (or annualized,
as the case may be for partial years) Roche Net Sales as follows:


 




	
  Annual Roche Net Sales (US$)

  	
   

  	
  Royalty
  Rate

  
	
   

  	
   

  	
   

  
	
  Up to and including
  [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  Amount in excess of
  [CONFIDENTIAL TREATMENT REQUESTED] but not exceeding [CONFIDENTIAL TREATMENT
  REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  Amount in excess of
  [CONFIDENTIAL TREATMENT REQUESTED] but not exceeding [CONFIDENTIAL TREATMENT
  REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  Amount in excess of
  [CONFIDENTIAL TREATMENT REQUESTED] but not exceeding [CONFIDENTIAL TREATMENT
  REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  Amount in excess of
  [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  






 


No adjustment will be
made to the royalty rates specified in this Section 7.2(a), regardless of
whether the manufacture, use, sale, or importation of Daclizumab by Roche or
its Affiliates in a particular country is covered by a Valid Claim of a PDL
Patent.


 


(ii)                                  Expiration
of Roche’s Royalty Obligations.  Roche’s obligation to pay royalties
to PDL under this Article VII shall expire (A) with respect to sales of
Daclizumab in the [CONFIDENTIAL TREATMENT REQUESTED], on [CONFIDENTIAL
TREATMENT REQUESTED], and (B) with respect to sales of Daclizumab in the [CONFIDENTIAL
TREATMENT REQUESTED], on [CONFIDENTIAL TREATMENT REQUESTED]. 
Notwithstanding the above, Roche’s obligation to pay royalties to PDL under
this Section 7.2(a) shall expire on the first to occur, if any, of the
Reversion Effective Date or the Put Right Effective Date.


 


(b)                                 Royalties
to PDL on Excluded Product Sales.


 


(i)                                     Royalty
Rate.  Roche shall pay PDL royalties on Roche Net Sales of Excluded
Products at a royalty rate determined by annual Roche Net Sales of Excluded
Products as follows, as measured on a calendar year basis:


 


28

















 




	
  Annual Roche Net Sales of Excluded

  Products (US$)

  	
   

  	
  Royalty
  Rate

  
	
   

  	
   

  	
   

  
	
  Up to and including
  [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  Amount in excess of
  [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  






 


(ii)                                  Term
of Royalty Obligations.  Roche’s obligation to pay royalties to PDL
under Section 7.2(b)(i) with respect to any Excluded Product shall expire,
on a country-by-country basis, on the later of (A) the last date on which the
manufacture, use, sale, or importation in such country in the Roche Territory,
by Roche, its Affiliates, or sublicensees (other than PDL, its Affiliates, and
sublicensees) of such Excluded Product is covered under a Valid Claim of a PDL
Patent (which determination, if not otherwise covered by a Valid Claim in the
country of use, sale, or importation shall be based on whether or not covered
by a Valid Claim in the country of manufacture), or (B) the [CONFIDENTIAL
TREATMENT REQUESTED] of the first commercial sale by Roche, its Affiliates, or
sublicensees (other than PDL, its Affiliates, or sublicensees) of such Excluded
Product in such country.


 


(c)                                  Royalties
to Roche.


 


(i)                                     Royalty
Rate.  PDL shall pay Roche royalties on PDL Net Sales at a royalty
rate determined by annual PDL Net Sales as follows, as measured on a calendar
year basis:


 




	
  Annual PDL Net Sales (US$)

  	
   

  	
  Royalty
  Rate

  
	
   

  	
   

  	
   

  
	
  Up to and including
  [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  
	
   

  	
   

  	
   

  
	
  Amount in excess of
  [CONFIDENTIAL TREATMENT REQUESTED]

  	
   

  	
  [CONFIDENTIAL

  TREATMENT REQUESTED]

  






 


(ii)                                  Term
of PDL’s Royalty Obligations Where Transplant Reversion Exercised. 
PDL’s obligation to pay royalties pursuant to Section 7.2(c)(i) shall
expire on the earlier of the Put Right Effective Date or the Reversion
Effective Date.


 


(iii)                               Term
of PDL’s Royalty Obligations Where No Transplant Reversion Exercised. 
In the event PDL does not exercise the Transplant Reversion and Roche does not
exercise the Roche Put Right, PDL’s obligation to pay royalties to Roche under
Section 7.2(c)(i) shall expire, on a country-by-country basis, on the
later of (A) the last date on which the manufacture, use, sale, or importation
in such country in the Roche Territory, by PDL, its


 


29

















 


Affiliates, or sublicensees (other than Roche, its Affiliates, and
sublicensees) of Daclizumab is covered under a Valid Claim of a Roche Patent
(which determination, if not otherwise covered by a Valid Claim in the country
of use, sale or importation, shall be based on whether or not covered by a
Valid Claim in the country of manufacture), or (B) the [CONFIDENTIAL TREATMENT
REQUESTED] of the first commercial sale by PDL, its Affiliates, or sublicensees
(other than Roche, its Affiliates, or sublicensees) of Daclizumab in such
country.


 


(d)                                 Payment
to Roche in Event of Roche Put Right Exercise.  In the event Roche
exercises the Roche Put Right, following the Put Right Effective Date, and until
[CONFIDENTIAL TREATMENT REQUESTED]. PDL shall pay Roche (i) for commercial
supply of finished and packaged Daclizumab from Roche as set forth in
Section 4.5(c), a transfer price equal to the [CONFIDENTIAL TREATMENT
REQUESTED] and (ii) an amount determined by the parties in good faith to be
equal to [CONFIDENTIAL TREATMENT REQUESTED] for its [CONFIDENTIAL TREATMENT
REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED] efforts that are
[CONFIDENTIAL TREATMENT REQUESTED]; provided that, PDL’s payment obligation
under this Section 7.2(d) for any given calendar quarter shall in no event
exceed a maximum (the “Payment Ceiling”) calculated as follows:


 


Payment Ceiling = [CONFIDENTIAL TREATMENT REQUESTED]


 


7.3                                 Foreign
Filing Expenses Credited Against Royalties.  Roche shall have the
right to credit [CONFIDENTIAL TREATMENT REQUESTED] of all Transplant Foreign
Filing Expenses actually paid to PDL, less credits already taken under the 1989
and 1999 Agreements, against future royalties due to PDL on sales of Daclizumab
pursuant to this Article VII, provided that such credits, when added to
the offset provided for in Section 7.4 below, may not in the aggregate
reduce the royalties to be paid to PDL to less than [CONFIDENTIAL TREATMENT
REQUESTED] of the amount that would otherwise be due pursuant to
Section 7.2(a) hereof.


 


7.4                                 Offset
for Third Party Licenses.


 


(a)                                  Appendix
B  sets forth the allocation
between the parties of the costs associated with each Third Party License
entered into prior to the Effective Date. 
Such costs include license fees and any other fixed costs associated
with the Third Party License as well as any royalties.  After the
Effective Date, the parties shall, within [CONFIDENTIAL TREATMENT REQUESTED] of
the end of each [CONFIDENTIAL TREATMENT REQUESTED], reimburse each other in
accordance with this Section 7.4 to effect the agreed-on sharing of such
license fees and other fixed costs.  Both parties hereby acknowledge that
[CONFIDENTIAL TREATMENT REQUESTED] has obtained a required license from the
[CONFIDENTIAL TREATMENT REQUESTED] to use the [CONFIDENTIAL TREATMENT
REQUESTED] in order to carry out the activities anticipated by this Amended and
Restated Worldwide Agreement and that [CONFIDENTIAL TREATMENT REQUESTED] has
reimbursed [CONFIDENTIAL TREATMENT REQUESTED] under the 1989 Agreements so that
the license fees and other fixed costs of the [CONFIDENTIAL TREATMENT
REQUESTED] license have been shared [CONFIDENTIAL TREATMENT REQUESTED].


 


30

















 


(b)                                 If
PDL and Roche agree in writing, after the Effective Date, that either party
must obtain an additional license from an independent Third Party in order for
Roche or PDL to manufacture, use, import, offer for sale or sell Daclizumab and
if PDL and Roche agree on the terms of such license, then such license shall be
deemed a Third Party License and the parties shall, subject to Sections 2.3,
7.4(c) and 7.4(d), share the cost of such Third Party License [CONFIDENTIAL
TREATMENT REQUESTED].  Such cost includes license fees and any other fixed
costs associated with such Third Party License as well as any royalties. 
The parties shall, within [CONFIDENTIAL TREATMENT REQUESTED] of the end of each
[CONFIDENTIAL TREATMENT REQUESTED], reimburse each other in accordance with this
Section 7.4 to effect a [CONFIDENTIAL TREATMENT REQUESTED] of such license
fees and other fixed costs.


 


(c)                                  Notwithstanding
anything to the contrary herein, the following mechanism shall apply to the
royalty portion of any Third Party Licenses to the extent such royalties arise
due to sales of Daclizumab by Roche or its Affiliates or sublicensees during
the time that Roche is obligated to pay royalties to PDL pursuant to
Section 7.2(a):  (i) PDL’s share of
such Third Party royalties shall be accrued against and deducted from any
amounts due to PDL from Roche pursuant to Section 7.2(a) if Roche pays the
royalties due under the Third Party License to such Third Party, and (ii)
Roche’s share of the royalties portion of the cost of any Third Party License
shall be accrued in favor of and added to any amounts due to PDL from Roche
pursuant to Section 7.2(a) if PDL pays the royalties due under the Third
Party License to such Third Party; provided, however, that the total amounts of
all deductions made by Roche pursuant to clause (i) above (without taking into
account any additions made pursuant to clause (ii)) shall not exceed
[CONFIDENTIAL TREATMENT REQUESTED] of the amount that would otherwise be due to
PDL, pursuant to Section 7.2(a), in any calendar quarter if no adjustments
were permitted to account for payments made pursuant to Third Party
Licenses;  provided further that the sum
of Roche’s royalty obligations to PDL under Section 7.2(a) in any calendar
quarter, plus Roche’s share of those royalties payable for such calendar
quarter to Third Parties pursuant to Third Party Licenses shall not exceed
[CONFIDENTIAL TREATMENT REQUESTED] of the amount that would otherwise be due to
PDL, pursuant to Section 7.2(a), in such calendar quarter if no
adjustments were permitted to account for payments made pursuant to Third Party
Licenses.  Royalty payments made by
Roche or PDL pursuant to Third Party Licenses that, due to the limitations set
forth in the preceding sentence, cannot be deducted from, or added to, the
amount to be paid to PDL by Roche under Section 7.2(a), may be carried
forward to subsequent calendar quarters. 
An example of the foregoing principles is set forth in Appendix D.


 


(d)                                 Notwithstanding
anything to the contrary herein, the following mechanism shall apply to the
royalty portion of any Third Party Licenses to the extent such royalties arise
due to sales of Daclizumab by PDL or its Affiliates or sublicensees during the
time that PDL is obligated to pay royalties to Roche, pursuant to
Section 7.2(c):  (i) Roche’s share
of such Third Party royalties shall be accrued against and deducted from any
amounts due to Roche from PDL pursuant to Section 7.2(c) if PDL pays the
royalties due under the Third Party License to such Third Party, and (ii) PDL’s
share of such Third Party royalties shall be accrued in favor of and added to
any amounts due to Roche from PDL pursuant to Section 7.2(c) if Roche pays
the royalties due under the Third Party License to such Third Party; provided,
however, that the royalty payments made by PDL to Roche pursuant to
Section 7.2(c) shall not, as a result of the adjustments set forth in this
Section 7.4(d), be reduced to less than [CONFIDENTIAL


 


31

















 


TREATMENT REQUESTED] of PDL Net Sales. 
Royalty payments made by Roche or PDL pursuant to Third Party Licenses
that, due to the maximum royalty rate set forth in the preceding sentence,
cannot be deducted from, or added to, the amount to be paid to PDL by Roche
under Section 7.2(c), may be carried forward to subsequent calendar years.


 


(e)                                  If
PDL exercises the Transplant Reversion or Roche exercises the Roche Put Right,
then commencing on the Reversion Effective Date or the Put Right Effective Date
(as applicable): (i) Roche shall not have any further obligation pursuant to
this Section 7.4 to share the costs of, or pay directly, any royalties
pursuant to any Third Party Licenses on account of sales of Daclizumab by PDL
or its Affiliates or sublicensees, and (ii) PDL shall thereafter have sole
responsibility for paying such royalties.


 


(f)                                    If
the Exercise Period expires without PDL exercising the Transplant Reversion or
Roche exercising the Roche Put Right, then:


 


(i)                                     commencing
on [CONFIDENTIAL TREATMENT REQUESTED], with respect to sales of Daclizumab in
the [CONFIDENTIAL TREATMENT REQUESTED] by Roche and its Affiliates and
sublicensees, or [CONFIDENTIAL TREATMENT REQUESTED], with respect to sales of
Daclizumab in the [CONFIDENTIAL TREATMENT REQUESTED] by Roche and its
Affiliates and sublicensees, (A) PDL shall not have any further obligation
pursuant to this Section 7.4 to share the costs of, or pay directly, any
royalties pursuant to any Third Party Licenses on account of sales of
Daclizumab by Roche or its Affiliates or sublicensees, and (B) Roche shall
thereafter have sole responsibility for paying such royalties.


 


(ii)                                  commencing
on, a country-by-country basis, with the expiration of PDL’s obligations to pay
royalties to Roche, pursuant to Section 7.2(c), in such country with
respect to the sale of Daclizumab by PDL and its Affiliates and sublicensees,
(A) Roche shall not have any further obligation pursuant to this
Section 7.4 to share the costs of, or pay directly, any royalties pursuant
to any Third Party Licenses on account of sales of Daclizumab by PDL or its
Affiliates or sublicensees, and (B) PDL shall thereafter have sole
responsibility for paying such royalties.


 


7.5                                 Royalties
on Termination.  If this Amended and Restated Worldwide Agreement is
terminated pursuant to Sections 13.2, 13.3 or 13.4, then Roche shall continue
to pay PDL, and PDL shall continue to pay Roche, as the case may be, any
royalties earned pursuant to this Article VII prior to the date of
termination.


 


7.6                                 Sublicenses.


 


(a)                                  Any
Roche Net Sales or Roche Net Sales of Excluded Products by a Roche sublicensee
shall be treated as Roche Net Sales or Roche Net Sales of Excluded Products of
Roche, as the case may be, for the purposes of payments under
Article VII.  If Roche, in accordance
with Section 2.5(a) or (b), shall grant any sublicenses under this Amended
and Restated Worldwide Agreement, then Roche shall obtain the written
commitment of such sublicensees to abide by all applicable terms and conditions
of this Amended and Restated


 


32

















 


Worldwide Agreement and Roche shall remain responsible to PDL for the
performance by such sublicensee of any and all terms.  All such sublicenses to any Excluded Products shall provide that
such license terminates on any termination of the license granted pursuant to
Section 2.5(b).  Any sublicense
granted under the license in Section 2.5(a) shall expire as set forth in
that Section 2.5(a).


 


(b)                                 Any
PDL Net Sales by a PDL sublicensee shall be treated as PDL Net Sales of PDL for
the purposes of payments under Article VII.  If PDL, in accordance with Section 2.1, shall grant any
sublicenses under this Amended and Restated Worldwide Agreement, then PDL shall
obtain the written commitment of such sublicensees to abide by all applicable
terms and conditions of this Amended and Restated Worldwide Agreement and PDL
shall remain responsible to Roche for the performance by such sublicensee of
any and all terms.


 


VIII.  PAYMENTS,
REPORTS, AND ACCOUNTING


 


8.1                                 Roche
Quarterly Royalty Payments and Reports.


 


(a)                                  Promptly after the Effective Date, the parties shall work
in good faith to establish procedures for (a) compiling a final accounting,
pursuant to the 1999 Agreements, for all sales of Daclizumab made during 2003
prior to the Effective Date and (b) Roche to make all royalty payments owed to
PDL, pursuant to the 1999 Agreements, with respect to such sales.


 


(b)                                 Beginning
with the report for the last calendar quarter of 2003 and for each calendar
quarter thereafter, Roche agrees to make payments and written reports to PDL
within [CONFIDENTIAL TREATMENT REQUESTED] after the end of each calendar
quarter covering all sales of the Roche Products  in the Roche Territory
by Roche, its Affiliates or sublicensees (except PDL, its Affiliates and
sublicensees) for which invoices were sent during such calendar quarter, each
such written report stating for the period in question:


 


(i)                                     for
Roche Products disposed of by sale, the quantity and description of Roche
Products and the calculation of Roche Net Sales or Roche Net Sales of Excluded
Products,


 


(ii)                                  for
Roche Products disposed of other than by sale, the quantity, description, and
nature of the disposition, and


 


(iii)                               the
calculation of the amount due to PDL for such quarter pursuant to
Article VII.


 


(c)                                  The
information contained in each report under Section 8.1(b) shall be
considered confidential and PDL agrees not to disclose such information to any
Third Party, other than its Affiliates and sublicensees or except as may be
required by law, rule or regulation.  Concurrent with the making of each
quarterly report, Roche shall include payment due PDL hereunder for the
calendar quarter covered by such report.


 


(d)                                 It
is understood that only one royalty payment under Article VII shall be
payable on a given unit of Roche Product disposed of under this Amended and
Restated


 


33

















 


Worldwide Agreement.  In the case of transfers or sales of any
Roche Product between Roche and an Affiliate or sublicensee of Roche, only one
royalty payment under Article VII shall be due, and such royalty shall be
payable with respect to, the sale of such Roche Product to (i) an independent
Third Party not an Affiliate of the seller or (ii) if the end user is an
Affiliate of the seller, then such end user.


 


8.2                                 PDL
Quarterly Royalty Payments and Reports.


 


(a)                                  Until
the expiration of PDL’s royalty obligations under Section 7.2(c), PDL
agrees to make payments and written reports to Roche within [CONFIDENTIAL
TREATMENT REQUESTED] after the end of each calendar quarter covering all sales
of Daclizumab in the Roche Territory by PDL for which invoices were sent during
such calendar quarter, or, in the case of royalties from the PDL Net Sales of
PDL’s Affiliates or sublicensees (except Roche, its Affiliates and
sublicensees), within [CONFIDENTIAL TREATMENT REQUESTED] following the end of
the quarter in which PDL receives the royalty report from the Affiliate or
sublicensee.  Each report shall state for the period in question:


 


(i)                                     for
Daclizumab disposed of by sale, the gross sales by PDL of  Daclizumab and
PDL Adjusted Gross Sales and the calculation of PDL Net Sales,


 


(ii)                                  for
Daclizumab disposed of other than by sale, the quantity, description, and
nature of the disposition, and


 


(iii)                               the
calculation of the amount due to Roche for such quarter pursuant to
Article VII.


 


(b)                                 The
information contained in each report under Section 8.2(a) shall be
considered confidential and Roche agrees not to disclose such information to
any Third Party, other than its Affiliates and sublicensees or except as may be
required by law, rule or regulation.  Concurrent with the making of each
quarterly report, PDL shall include payment due Roche hereunder for the
calendar quarter covered by such report.


 


(c)                                  It
is understood that only one royalty payment under Article VII shall be
payable on a given unit of Licensed Product disposed of under this Amended and
Restated Worldwide Agreement.  In the case of transfers or sales of any
Licensed Product between PDL and an Affiliate or sublicensee of PDL, only one
royalty payment under Article VII shall be due, and such royalty shall be
payable with respect to the sale of such Licensed Product to (i) an independent
Third Party not an Affiliate of the seller or (ii) if the end user is an Affiliate
of the seller, then such end user.


 


8.3                                 Termination
Report.  Roche agrees to make a written report to PDL within
[CONFIDENTIAL TREATMENT REQUESTED] after the date on which Roche, or its
Affiliates or sublicensees last sell Daclizumab, stating in each such report
the same information called for in each quarterly report by Section 8.1(b)
for all Daclizumab made, sold or otherwise disposed of and which was not
previously reported to PDL.  Roche further agrees to make a written report
to PDL within [CONFIDENTIAL TREATMENT REQUESTED] after the date on


 


34

















 


which Roche, or its Affiliates or sublicensees last sell all Excluded
Products, stating in each such report the same information called for in each
quarterly report by Section 8.1(b) for all Excluded Product made, sold or
otherwise disposed of and which was not previously reported to PDL.  PDL
agrees to make a written report to Roche within [CONFIDENTIAL TREATMENT
REQUESTED] after the date on which PDL, or its Affiliates or sublicensees last
sell Daclizumab, stating in such report the same information called for in each
quarterly report by Section 8.2(a) for all Daclizumab made, sold or
otherwise disposed of and which was not previously reported to Roche; provided,
however, that PDL need not file such report if such date of last sale of
Daclizumab occurs after the expiration of PDL’s royalty under
Section 7.2(c)).


 


8.4                                 Accounting. 
Each Party (the “Royalty Paying Party”)
agrees to keep full, clear and accurate records for a period of at least
[CONFIDENTIAL TREATMENT REQUESTED], setting forth the manufacturing, sales and
other disposition of Daclizumab, Roche Products (as the case may be), and
Combination Products sold or otherwise disposed of under the license herein
granted in sufficient detail to enable royalties and compensation payable to
the other Party (the “Royalty Receiving
Party”) hereunder to be determined.  Each Royalty Paying Party
further agrees to permit its books and records to be examined by an independent
accounting firm selected by the Royalty Receiving Party to verify reports
provided for in this Article VIII.  Unless the Royalty Receiving
Party obtains the prior written consent of the Royalty Paying Party, such
accounting firms must be selected from among the four largest U.S. accounting
firms.  Such audit shall not be performed more frequently that
[CONFIDENTIAL TREATMENT REQUESTED] per calendar year nor more frequently than
[CONFIDENTIAL TREATMENT REQUESTED] with respect to records covering any
specific period of time.  Such examination is to be made at the expense of
the Royalty Receiving Party, except in the event that the results of the audit
reveal a discrepancy in favor of the Royalty Paying Party of [CONFIDENTIAL
TREATMENT REQUESTED] or more over the period being audited, in which case
reasonable audit fees for such examination shall be paid by the Royalty Paying
Party.


 


8.5                                 Methods
of Payments.  All payments due to either PDL or Roche under this
Amended and Restated Worldwide Agreement shall be paid in United States dollars
by wire transfer to a bank in the United States designated in writing by the
party to which the payment is due.


 


8.6                                 Taxes. 
If provision is made in law or regulation of any country of the Roche Territory
or the Territory (as applicable) for withholding of taxes of any type, levies
or other charges with respect to the any amounts payable hereunder to a party,
the other party (“Withholding Party”)
shall promptly pay such tax, levy or charge for and on behalf of the party to
the proper governmental authority, and shall promptly furnish the party with
receipt of such payment.  The Withholding Party shall have the right to
deduct any such tax, levy or charge actually paid from payment due the party or
be promptly reimbursed by the party if no further payments are due the
party.  Each Withholding Party agrees to assist the other party in
claiming exemption from such deductions or withholdings under double taxation
or similar agreement or treaty from time to time in force and in minimizing the
amount required to be so withheld or deducted.


 


35

















 


IX.  CELL
LINES


 


9.1                                 Cell
Lines.


 


(a)                                  The
parties acknowledge that PDL has delivered all cell lines to Roche as  required under the 1989 Agreements. 
Roche agrees to deliver back to PDL viable samples of such cell lines as may be
requested by PDL.


 


(b)                                 Ownership
of any cell lines developed under Article VI of the 1989 Agreements or
delivered to Roche under Milestone #1 of Section 3.1 of the 1989
Agreements, together with their progeny and derivatives, shall remain vested at
all times in PDL.


 


(c)                                  Roche
may use the cell lines delivered to it under the 1989 Agreements, or their
progeny or derivatives or the plasmids contained therein (the “Cell Line Derivatives”) solely to perform
the Roche Commercialization Activities.  Furthermore, the Cell Line
Derivatives may be used by Roche solely in connection with the genes encoding
antibodies developed or provided by PDL.


 


(d)                                 On the earliest to occur of [CONFIDENTIAL
TREATMENT REQUESTED] in the Roche
Territory as permitted under this Amended and Restated Worldwide Agreement,
Roche shall, on request by PDL, promptly return to PDL all cell lines provided
by PDL under the 1989 Agreements and all Cell Line Derivatives.


 


(e)                                  PDL
MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED, WITH RESPECT TO ANY CELL LINES DELIVERED UNDER THE 1989 AGREEMENTS
OR CELL LINE DERIVATIVES USED HEREUNDER, INCLUDING WITHOUT LIMITATION, ANY EXPRESS
OR IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NONINFRINGEMENT.  FOR CLARITY, PDL MAKES
NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND THAT THE USE OF THE
CELL LINES DELIVERED TO ROCHE OR THE CELL LINE DERIVATIVES WILL NOT INFRINGE
ANY PATENT OR OTHER RIGHTS OF ANY THIRD PARTY.


 


X.  OWNERSHIP
OF TECHNOLOGY AND INTELLECTUAL PROPERTY


 


10.1                           PDL
Technology.  Ownership of the PDL Know-How and PDL Patents shall
remain vested at all times in PDL.  PDL expressly reserves under this
Amended and Restated Worldwide Agreement (i) all rights to use the PDL
Know-How, PDL’s rights under any Joint Roche-PDL Patents, and PDL Patents to
make, have made, use, import, offer to sell and sell anywhere in the world all
products within the Field that are other than Daclizumab for use in the
Transplant Indications (unless and until the Roche Put Right or the Transplant
Reversion is exercised) and other than any Excluded Product or any other
product in the Excluded Field; and (ii) for all uses outside of the
Field.  Following exercise of the Transplant Reversion or the Roche Put
Right, PDL shall have the right to use such technology for any and all purposes
other than products in the Excluded Field, which right shall be exclusive to Roche
except as provided in Section 10.2.


 


36

















 


10.2                           Joint
Inventions and Joint Roche-PDL Patents.  Subject to Article XI,
ownership of Joint Inventions and Joint Roche-PDL Patents shall be vested
jointly in PDL and Roche. Both parties shall at all times have the co-exclusive
right within the Territory to practice, or to make, have made, use, import,
offer for sale or sell any Joint Invention outside the Field under any Joint
Roche-PDL Patent, and neither party shall be obligated to account to the
other.  On the earlier of (i) the Reversion Effective Date,
or (ii) the Put Right Effective Date, the following shall occur: (a) PDL shall
have the exclusive right to practice, and to make, have made, use, import,
offer for sale or sell any Joint Invention in the Field (but not in the
Excluded Field) under any Joint Roche-PDL Patent, and (b) Roche shall have the
exclusive right to practice, and to make, have made, use, import, offer for
sale or sell any Joint Invention solely in the Excluded Field, in each case,
without restriction and without any obligation to account to the other
party.  As used herein, a right to practice any Joint Roche-PDL Patent for
a particular purpose without any obligation to account shall include the right
to grant licenses for such purpose without the consent of the other
party.  To the extent either party needs the consent of the other party to
exploit its co-exclusive or exclusive rights with respect to Joint Roche-PDL
Patents, including the right to sublicense or enforce such Joint Roche-PDL
Patents, the other party shall cooperate with the party making such a request
and promptly supply all needed consents, signatures and the like.  In the
event the Roche Put Right and the Transplant Reversion both expire unexercised,
each party shall have the co-exclusive right to practice, and to make, have
made, use, import, offer for sale or sell any Joint Invention in the Field
under any Joint Roche-PDL Patent, subject to the license grants set forth in
Article II.


 


10.3                           Roche
Technology.  PDL hereby acknowledges that, except as expressly
provided herein, this Amended and Restated Worldwide Agreement does not grant
PDL any ownership rights in the Roche Inventions, Roche Patents and Roche
Know-How.  Roche hereby confirms the rights of PDL to certain license
grants to Roche Patents and Roche Know-How as provided in Section 2.1 of
this Amended and Restated Worldwide Agreement.


 


10.4                           Trademarks.


 


(a)                                  Until
the Reversion Effective Date or Put Right Effective Date, Roche shall
exclusively own all Trademarks, and the exclusive right to use them in the
Roche Territory in connection with the marketing and promotion of
Daclizumab.  Roche shall have no right to use the Trademarks, or any other
marks confusingly similar to the Trademarks, in connection with the promotion,
sale or marketing of any other product, including any Excluded Product.


 


(b)                                 PDL
shall have the right to select any and all AI Trademarks; provided such AI
Trademarks are not confusingly similar to the Trademarks (unless otherwise
agreed), and PDL shall retain ownership of the AI Trademarks and the exclusive
right to use them in connection with the promotion, marketing and sale of
Daclizumab for AI or any Other Indications.


 


(c)                                  Each
party shall be responsible for selection, prosecution, maintenance and
enforcement of its own trademarks, and shall indemnify and defend the other
from any Third Party claims arising from the indemnifying party’s use of such
marks.  At the request [CONFIDENTIAL
TREATMENT REQUESTED] of PDL, Roche shall file trademark registration
applications for, and procure and maintain registration of, the trademark
“Zenapax®” in any


 


37

















 


country in the Territory in which Roche, as of the Effective Date, has
not made such application or procured such registration.  All such applications and registrations
shall be deemed to be Trademarks.


 


(d)                                 Roche
shall assign the Trademarks to PDL upon exercise of either the Transplant
Reversion or the Roche Put Right, as provided for in Section 5.4(f).


 


XI.  PATENT
PROSECUTION


 


11.1                           Sole
PDL Patents and Roche Owned Patents.


 


(a)                                  PDL
agrees to prosecute and reasonably maintain all of the patents and applications
included within the Sole PDL Patents, to the extent it has the rights to do so,
and Roche agrees to prosecute and reasonably maintain the Roche Owned Patents,
to the extent it has the rights to do so from any co-owner of such Roche Owned
Patents.  The parties agree and acknowledge that the Roche Owned Patents listed
on Schedule 2.8(a) are co-owned by Roche and a Third Party, and are
governed by the [CONFIDENTIAL TREATMENT REQUESTED] (the “Joint Patent
Agreement”) which provides, among other things, that Roche undertake certain
obligations in order to continue to maintain its [CONFIDENTIAL TREATMENT
REQUESTED] in the Roche Owned Patent.  Promptly after the Effective Date,
to the extent that Roche is permitted to do so, Roche shall provide to PDL a
copy of the Joint Patent Agreement, and the Roche Owned Patent for PDL’s review
such that PDL may determine whether and to what extent, it intends that such
Joint Patent Agreement and Roche Owned Patent be assigned to PDL in the event
of the Transplant Reversion or the exercise of the Roche Put Right.


 


(b)                                 The
party responsible for such patent (“Responsible
Party”) shall bear all costs and expenses for such prosecution and
maintenance. On the reasonable request of the Responsible Party, the other
party shall cooperate, in all reasonable ways, in connection with the prosecution
of all patent applications included within the Sole PDL Patents or Roche Owned
Patents, as the case may be.  Should the Responsible Party decide that it
is no longer interested in maintaining or prosecuting a Sole PDL Patent or
Roche Owned Patent, as the case may be, it shall promptly advise the other
party thereof and, at the request of such other party, PDL and Roche shall
negotiate in good faith to determine an appropriate course of action in the
interests of both parties.  If any Sole PDL Patents are assigned to Roche,
Roche will thereafter prosecute and reasonably maintain such Sole PDL Patents
at Roche’s own cost to the extent that Roche desires to do so, provided that to
the extent such Sole PDL Patent contains claims outside the Field (or, following
either the Reversion Effective Date or the Put Right Effective Date, outside
the Excluded Field only), PDL and its Affiliates shall have a worldwide
immunity from suit thereunder.  If Roche’s interest in any Roche Owned
Patents is assigned to PDL, PDL will thereafter prosecute and reasonably
maintain such Roche Owned Patent at PDL’s own cost to the extent that PDL
desires to do so, provided that to the extent such Roche Owned Patent contains
claims outside the Field (or following either the Reversion Effective Date or
the Put Right Effective Date, outside the Excluded Field only), Roche and its
Affiliates shall have a worldwide immunity from suit thereunder.   In the event Roche’s interest in the
Roche Owned Patents is assigned to PDL pursuant to Section 5.4(e), Roche
shall have no further rights with respect thereto under this Section 11.1
except those set forth in the penultimate sentence of this Section 11.1.


 


38

















 


11.2                           Joint
Inventions.


 


(a)                                  PDL
will have the first right of election to file priority patent applications for
Joint Inventions in any country in the world.  If PDL declines to file
such applications then Roche may do so.


 


(b)                                 The
party not performing the priority patent filings for Joint Inventions pursuant
to this Section 11.2 undertakes without cost to the filing party to obtain
all necessary assignment documents for the filing party, to render all
signatures that shall be necessary for such patent filings and to assist the
filing party in all other reasonable ways that are necessary for the issuance
of the patents involved as well as for the maintenance and prosecution of such
patents.  The party not performing the patent filings shall on request be
authorized by the other party to have access to the files concerning such
patents in any patent offices in the world.


 


(c)                                  The
party performing the priority patent filings for Joint Inventions pursuant to
this Section 11.2 undertakes to perform, at its cost and expense, the
corresponding convention filings from case to case, after having discussed the
countries for foreign filings with the other party.


 


(d)                                 Should
the Responsible Party decide that it is no longer interested in maintaining or
prosecuting a Joint Roche-PDL Patent, it shall promptly advise the other party
thereof.  On the written request of such other party, such Joint Roche-PDL
Patent shall be assigned to the other party at no cost to the assignee. 
If any such patents or patent applications are assigned to Roche, they shall
then be deemed to be a Sole Roche Patent and, to the extent such Joint
Roche-PDL Patent contains claims outside the Field (or, following the Reversion
Effective Date or the Put Right Effective Date, outside the Excluded Field),
PDL and its Affiliates shall have a worldwide immunity from suit
thereunder.  If any such patents or patent applications are assigned to
PDL, they shall then be deemed to be a Sole PDL Patent and, to the extent such
Joint Roche-PDL Patents contain claims outside the Field, Roche and its Affiliates
shall have a worldwide immunity from suit thereunder.


 


11.3                           General
Procedures.  Until the Reversion Effective Date, the Put Right
Effective Date or the expiration of the Exercise Period without PDL exercising
the Transplant Reversion, the parties shall observe the following procedures
for patent applications for inventions arising from this Amended and Restated
Worldwide Agreement:


 


(a)                                  As
soon as one of the parties concludes that it wishes to file a patent
application covering an invention in the Field, it shall immediately inform the
other party thereof and consult about the filing procedures concerning such
patent application.  For this purpose, such party will provide the other
party with the determination of inventors and scope of claims as early as
possible.  Should a party be faced with possible loss of rights, such
communications may take place promptly after filing a convention application.


 


(b)                                 The
party performing any priority patent filings as described above shall be
obliged to prosecute and reasonably maintain such applications and any patents
resulting therefrom and will have to bear the costs associated therewith. 
On request of the party performing


 


39

















 


the filing, the other party will cooperate, in all reasonable ways, in
connection with the prosecution of all such patent applications relating to
inventions.  The party performing the filing shall advise the other party
of any substantial action or development in the prosecution of its patent
applications and patents, in particular of the question of scope, the issuance
of, or the rejection of, an interference involving or an opposition to any
respective patent application or patent.


 


(c)                                  Inventions
and other intellectual property made by either party outside the Field shall be
excluded from the provisions of this Amended and Restated Worldwide Agreement
and shall belong solely to the party having made the invention or other
intellectual property.


 


11.4                           Reimbursement
for Costs of Patent Applications for Transplant Indications.


 


(a)                                  No Reimbursement.  As of the Effective
Date, PDL shall be responsible for all ex parte out-of-pocket expenses incurred
by PDL after the Effective Date in connection with the prosecution and
maintenance in the Territory of patent applications and patents included within
the PDL Patents or Joint Roche-PDL Patents for which PDL makes filings with
respect to Transplant Indications pursuant to Article XI of this Amended
and Restated Worldwide Agreement.


 


(b)                                 PDL Control.  After either the Reversion Effective Date or
the Put Right Effective Date, PDL shall have full control over the strategy and
decisions with respect to the filing of any patent applications and patents
related to Transplant Indications in the Territory.  Roche agrees to cooperate with and reasonably assist PDL in the
preparation of any patent applications and the maintenance of any patents.  Prior to the Reversion Effective Date or the
Put Right Effective Date, PDL shall consult Roche with respect to its patent
prosecution strategy and decisions, as follows:  Prior to the filing of a patent application in the Territory for
Transplant Indications, PDL shall inform Roche concerning such proposed filing
and shall consult with Roche concerning the proposed filing procedures,
including specifically the determination of scope of any such patent and
countries in which such application is to be filed.  PDL shall regularly advise Roche of any substantial action or
development in the prosecution of its patent applications and patents in the
Territory related to the Transplant Indications, in particular of the question
of scope of, the issuance of, the rejection of, or an opposition to any
respective patent application or patent.


 


(c)                                  Accrued Transplant Foreign Filing Expenses. 
Transplant Foreign Filing Expenses accrued prior to [CONFIDENTIAL TREATMENT
REQUESTED] shall remain creditable against royalties payable by Roche to PDL in
the Territory (excluding the U.S., including its territories and possessions),
as provided in Section 7.3 of this Amended and Restated Worldwide
Agreement.


 


11.5                           Reimbursement
for Costs of Patent Applications for Autoimmune Indications.


 


(a)                                  No Reimbursement.  PDL shall be
responsible for all ex parte out-of-pocket expenses incurred by PDL after the
Effective Date in connection with the prosecution and maintenance in the
Territory of patent applications and patents included within the PDL Patents or


 


40

















 


Joint Roche-PDL Patents for which PDL makes filings with respect to
Autoimmune Indications pursuant to Article XI of this Amended and Restated
Worldwide Agreement.


 


(b)                                 PDL Control. 
PDL shall have full control over the strategy and decisions with respect to the
filing of any patent applications and patents related to Autoimmune Indications
in the Territory.  Roche agrees to cooperate with and reasonably assist
PDL in the preparation of any patent applications and the maintenance of any
patents.


 


11.6                           No
Reimbursement for Roche’s Costs of Patent Applications.  Roche shall be responsible for all ex parte
out-of-pocket expenses incurred by Roche after the Effective Date in connection
with the prosecution and maintenance in the Territory of patent applications
and patents included within the Roche Owned Patents or Joint Roche-PDL Patents
for which Roche makes filings pursuant to this Article XI of this Amended
and Restated Worldwide Agreement.


 


XII.    ENFORCEMENT AND DEFENSE OF PATENTS


 


12.1                           Sole
Patents.


 


(a)                                  Except
for enforcement or revocation actions involving Sole PDL Patents or Roche Owned
Patents outside the Field, in the event of any action against a Third Party for
infringement of any claim in any issued patent within the Sole PDL Patents or
Roche Owned Patents, as the case may be, or the institution by a Third Party of
any proceedings for the revocation of any such claim, each party will notify
the other promptly and, following such notification, the parties shall
confer.  [CONFIDENTIAL TREATMENT REQUESTED] shall have the right, but not
the obligation, to prosecute such actions or to defend such proceedings
involving the Sole PDL Patents at its own expense, in its own name and entirely
under its own direction and control. 
[CONFIDENTIAL TREATMENT REQUESTED] shall have the right, but not the
obligation, to prosecute such actions or to defend such proceedings involving
the Roche Owned Patents at its own expense, in its own name and entirely under
its own direction and control.


 


(b)                                 If
a party with the first right hereunder elects not to prosecute any action for
infringement or to defend any proceeding for revocation of any claims in any
issued patent within the Sole PDL Patents (other than those Sole PDL Patents
for which PDL [CONFIDENTIAL TREATMENT REQUESTED]) or Roche Owned Patents (other
than those Roche Owned Patents [CONFIDENTIAL TREATMENT REQUESTED]), as the case
may be, within [CONFIDENTIAL TREATMENT REQUESTED] of being requested by the
other party to do so, the other party may prosecute such action or defend such
proceeding at its own expense, in its own name and entirely under its own
direction and control.  This
Section 12.1(b) shall expire on the Reversion Effective Date or the Put
Right Effective Date.


 


(c)                                  In
any event, the party bringing an action (“Acting
Party”) pursuant to this Section 12.1 shall solicit, and
seriously consider in good faith the non-acting party’s input with respect to
all material aspects of such action, including without limitation, the
development of the litigation strategy and the execution thereof.  In
furtherance and not in limitation of the foregoing, the Acting Party shall keep
the other party promptly and fully informed of the status of any such


 


41

















 


action, and the non-acting party shall have the right to review and
comment on the Acting Party’s activities related thereto. The obligations of
this Section 12.1(c) shall not apply to PDL as the Acting Party after
either the Reversion Effective Date or the Put Right Effective Date.


 


(d)                                 Each
party will reasonably assist the Acting Party in any such action or proceeding
being prosecuted or defended by the Acting Party, if so requested by the Acting
Party or required by law.  Without limiting the generality of the
foregoing, the non-acting party agrees to join such action or proceeding if
required by law to maintain such action or proceeding.  The Acting Party
will pay or reimburse the assisting party for all costs, expenses and
liabilities that the assisting party may incur or suffer in affording
assistance to such actions or proceedings.  No settlement of any such
action or defense that restricts the scope or affects the enforceability of PDL
Know-How or Sole PDL Patents may be entered into by either PDL (if it would
affect Roche’s rights under this Agreement) or Roche without the prior consent
of the other party hereto, [CONFIDENTIAL TREATMENT REQUESTED].  No
settlement of any such action or defense that restricts the scope or affects
the enforceability of Roche Know-How or Roche Owned Patents may be entered into
by either PDL or Roche without the prior consent of the other party hereto (if
it would affect the other party’s rights under this Agreement, [CONFIDENTIAL
TREATMENT REQUESTED].  The consent obligations of this
Section 12.1(d) shall not apply to PDL as the Acting Party after either
the Reversion Effective Date or the Put Right Effective Date.


 


(e)                                  If
either party elects to prosecute an action for infringement or to defend any
proceedings for revocation of any claims pursuant to this Section 12.1 and
subsequently ceases to continue or withdraws from such action or defense, it
shall forthwith so notify the other party in writing and the other party may
substitute itself for the withdrawing party and the parties’ respective rights
and obligations under this Section 12.1 shall be reversed. The obligations
of this Section 12.1(e) shall not apply to PDL as the Acting Party after
either the Reversion Effective Date or the Put Right Effective Date.


 


12.2                           Joint
Roche-PDL Patents.  In the event of any action against a Third Party
for infringement of any claim in any issued patent within the Joint Roche-PDL
Patents, or the institution by a Third Party of any proceedings for the
revocation of any such claim, each party will notify the other promptly and,
following such notification, the parties shall confer to determine whether
either or both parties shall control the prosecution or defense of such action
or proceeding and who shall bear the costs thereof.  If both parties wish
to control the prosecution or defense of such action or proceeding and the
parties are unable to reach agreement within [CONFIDENTIAL TREATMENT REQUESTED]
of the notification referred to above, then (a) with respect to alleged
infringement in the [CONFIDENTIAL TREATMENT REQUESTED], [CONFIDENTIAL TREATMENT
REQUESTED] shall have the exclusive right to bring such action or defend such
proceeding at its own expense, in its own name and entirely under its own
direction, (b) with respect to alleged infringement in the [CONFIDENTIAL
TREATMENT REQUESTED], [CONFIDENTIAL TREATMENT REQUESTED] shall have the
exclusive right to bring such action or defend such proceeding at its own
expense, in its own name and entirely under its own direction; and (c) with
respect to alleged infringement [CONFIDENTIAL TREATMENT REQUESTED],
[CONFIDENTIAL TREATMENT REQUESTED] shall have the right to bring such action or
defend such proceeding at its own expense, in its own name and entirely under
its own direction and control; provided, however, that if both parties elect to


 


42

















 


prosecute or defend, each party shall bear its own expenses but both
parties shall have equal control over such prosecution or defense.  No
settlement of any action or defense that restricts the scope or affects the enforceability
of Joint Roche-PDL Patents may be entered into by either PDL or Roche without
the prior consent of the other party hereto, which consent shall not be
unreasonably withheld.  In any event, the Acting Party pursuant to this
Section 12.2 shall solicit, and seriously consider in good faith the other
party’s input with respect to all material aspects of such action, including
without limitation, the development of the litigation strategy and the
execution thereof.  In furtherance and not in limitation of the foregoing,
the Acting Party shall keep the other party promptly and fully informed of the
status of any such action, and the other party shall have the right to review
and comment on the Acting Party’s activities related thereto.


 


12.3                           Distribution
of Proceeds.  In the event either party exercises the rights conferred
in Section 12.1 or 12.2 hereof, and recovers any damages or other sums in
such action, suit or proceeding or in settlement thereof, such damages or other
sums recovered shall first be applied to reimburse the parties for all costs
and expenses incurred in connection therewith, including reasonable attorneys’
fees necessarily involved in the prosecution and/or defense of any suit or
proceeding and, if after such reimbursement any funds shall remain from such
damages or other sums recovered, said remaining recovery shall belong to
[CONFIDENTIAL TREATMENT REQUESTED]; provided, however, that any remaining
recovery by the party exercising its rights for a Joint Roche-PDL Patent with
respect to alleged infringement outside the Field shall be shared, with
[CONFIDENTIAL TREATMENT REQUESTED] of such remaining recovery to Roche and
[CONFIDENTIAL TREATMENT REQUESTED] of such remaining recovery to PDL.


 


12.4                           Defense
of Infringement Actions.


 


(a)                                  Roche
shall defend at its own cost any infringement suit that may be brought against
PDL or Roche on account of the development, manufacture, production, use,
importation, offer for sale, or sale of Daclizumab or Excluded Products by
Roche, and shall indemnify and hold PDL
harmless against any such patent or other infringement suits, and any claims,
losses, damages, liabilities, expenses, including reasonable attorneys’ fees
and cost, that may be incurred by PDL therein or in settlement thereof. 
Any and all settlements that restrict the scope or enforceability of PDL
Know-How or PDL Patents must be approved by PDL, in its sole and absolute
discretion, before execution by Roche.  Any and all settlements that
restrict the scope or enforceability of Joint Roche-PDL Patents or Sole Roche
Patents (other than those Sole Roche Patents co-owned by a Third Party) must be
approved by PDL before execution by Roche, such approval not to be unreasonably
withheld.  PDL shall not be required to
approve any settlement that does not include as a condition thereof the
granting to PDL of a full and unconditional release of claims.


 


(b)                                 PDL
shall defend at its own cost any infringement suit that may be brought against
Roche or PDL on account of the development, manufacture, production, use,
importation, offer for sale, or sale of Licensed Products  by PDL, and shall indemnify and hold Roche harmless against any
such patent or other infringement suits, and any claims, losses, damages,
liabilities, expenses, including reasonable attorneys’ fees and cost, that may
be incurred by Roche therein or in settlement thereof.  Any and all
settlements that restrict the scope or enforceability of Roche


 


43

















 


Know-How or Roche Patents must be approved by Roche, in its sole and
absolute discretion, before execution by PDL.  Any and all settlements
that restrict the scope or enforceability of Joint Roche-PDL Patents must be
approved by Roche before execution by PDL, such approval not to be unreasonably
withheld.  Roche shall not be required to approve any settlement that does
not include as a condition thereof the granting to Roche of a full and
unconditional release of claims.  [CONFIDENTIAL TREATMENT REQUESTED]


 


12.5                           Right
to Counsel.  Each party to this Amended and Restated Worldwide
Agreement shall always have the right to be represented by counsel of its own
selection and its own expense in any suit or other action instituted by the
other for infringement, under the terms of this Amended and Restated Worldwide
Agreement.


 


XIII.  TERM AND TERMINATION


 


13.1                           Term. 
Unless earlier terminated pursuant to the terms of this Article XIII, this
Amended and Restated Worldwide Agreement shall go into effect on the Effective
Date and shall remain in effect until the latest of (i) expiration of the last
to expire PDL Patents; (ii) expiration of the last to expire Roche Patents;
(iii) expiration of PDL’s payment obligations hereunder; or (iv) expiration of
Roche’s payment obligations hereunder. 
On expiration of this Amended and Restated Worldwide Agreement, any
exclusive licenses then in effect under any Roche Know-How or PDL Know-How will
convert to fully paid, non-exclusive licenses.


 


13.2                           Termination
by Mutual Agreement.  This Amended and Restated Worldwide Agreement
may be terminated by the written agreement of both parties.


 


13.3                           Termination
by PDL on Roche Default.  If, during the period commencing on the
Effective Date and terminating on the earlier of Reversion Effective Date or
the Put Right Effective Date, Roche defaults in the performance of, or fails to
be in compliance with, any material agreement, condition or covenant of this
Amended and Restated Worldwide Agreement with respect to either (a) the rights
PDL grants to Roche under Article II of this Amended and Restated
Worldwide Agreement, including royalties and consideration due from Roche to
PDL under Article VII, or (b) the Transplant Reversion granted under
Article V, then PDL may terminate any or all of the rights and licenses
granted to Roche under Section 2.5 of this Amended and Restated Worldwide
Agreement at its option, at which time Roche’s right to promote, distribute and
sell Daclizumab in the Roche Territory shall terminate as though PDL had
exercised its Transplant Reversion, with all the same effect as though that
were the case, but without the need for any payment of the Reversion Exercise
Fee.  PDL shall have such right to so terminate Roche’s rights under this
Section 13.3 only if such default or noncompliance shall not have been
remedied, or steps initiated to remedy the same to PDL’s reasonable
satisfaction, within [CONFIDENTIAL TREATMENT REQUESTED] after receipt by Roche
of a written notice thereof from PDL.  It is expressly understood that
PDL’s rights to terminate under this Section 13.3 are in effect only until
the earlier of the Reversion Effective Date or the Put Right Effective Date,
and that such rights expire with the expiration, without exercise, of the Transplant Reversion
and the Roche Put Right.


 


44

















 


13.4                           Voluntary
Termination Of License by Roche.


 


(a)                                  Roche
shall have the right, in the event the Transplant Reversion and the Roche Put
Right expire unexercised, to voluntarily terminate its licenses under
Section 2.5(a), on six (6) months written notice.  On notice of such
voluntary termination, Roche shall notify PDL of the amount of Daclizumab that
Roche, its Affiliates, sublicensees and distributors then have on hand (“Inventory”).  Roche and its
Affiliates, sublicensees and distributors shall thereupon be permitted to sell
the Inventory, provided that PDL shall have the first option for a period not
to exceed [CONFIDENTIAL TREATMENT REQUESTED] to purchase all or part of the
Inventory at [CONFIDENTIAL TREATMENT REQUESTED].  If PDL fails to exercise
its option to purchase all of the Inventory or for that part of the Inventory
with respect to which the option is not exercised, then Roche will be free to
sell such Inventory to Third Parties for a period not to exceed [CONFIDENTIAL TREATMENT
REQUESTED] from the termination of PDL’s option.  In any event, Roche
shall pay the royalties or other consideration due, if any, on the sale of such
Inventory in the amounts and manner provided for in Articles VII and VIII.


 


(b)                                 Roche
shall have the right at any time during the term of this Amended and Restated
Worldwide Agreement, to voluntarily terminate its license granted under
Section 2.5(b), on [CONFIDENTIAL TREATMENT REQUESTED] written notice to
PDL.  In the event of such unilateral
termination, Roche agrees to negotiate with PDL, on PDL’s request, for the
transfer and/or license of any Roche owned or licensed intellectual property or
technology relevant to the development and/or commercialization of the Excluded
Products, in return for [CONFIDENTIAL TREATMENT REQUESTED].


 


13.5                           Return
of Materials.  On termination of this Amended and Restated Worldwide
Agreement in whole by both parties pursuant to Section 13.2, by PDL
pursuant to Section 13.3, or by Roche pursuant to Section 13.4, Roche
forthwith shall (a) return to PDL all cell lines and their progeny, antibodies
and other biological materials provided by PDL under the 1989 Agreements; and
(b) subject to Section 13.4, at PDL’s cost, shall deliver to PDL then
available supplies of Daclizumab.


 


13.6                           Rights
and Obligations on Termination or Expiration.  Unless expressly
provided to the contrary, the provisions of Sections 2.1(g), 2.3, 2.7, 3.4,
5.7, 7.4, 7.5, 9.1(c), 9.1(e), 13.4, 13.5, 13.6, 13.7, 17.4, 17.5, 17.6, 17.8,
and 17.11, and Articles VIII, X, XI, XII, XIV and XV shall survive the
termination of this Amended and Restated Worldwide Agreement and shall expire
on their own terms, or if no expiration is expressly indicated therein, shall
continue indefinitely.


 


XIV.  CONFIDENTIALITY, DISCLOSURE AND PUBLICATIONS


 


14.1                           Confidentiality.


 


(a)                                  Generally. 
During the term of this Amended and Restated Worldwide Agreement and for a
period of [CONFIDENTIAL TREATMENT REQUESTED] following expiration or
termination of this Amended and Restated Worldwide Agreement, each party shall
maintain in confidence all information and materials including, but not limited
to, cell lines, their progeny, and antibodies, disclosed by the other party
hereto that such party knows or has reason to know are or contain trade secrets
or other proprietary information of the other, including, without


 


45

















 


limitation, information relating to the PDL Know-How, PDL Patents,
Roche Know-How, Roche Patents, Joint Roche-PDL Patents, Joint Inventions and
inventions of the other party, and the business plans of the other party,
including, without limitation, information provided by either party to the
other party hereto prior to the Effective Date, and shall not use such trade
secrets or proprietary information for any purpose, including, without
limitation, for the purpose of developing products in the Field except as
permitted by this Amended and Restated Worldwide Agreement or disclose the same
to anyone other than those of its Affiliates, sublicensees, prospective
sublicensees, employees, consultants, agents or subcontractors as are necessary
in connection with such party’s activities as contemplated in this Amended and
Restated Worldwide Agreement.  Each party shall be responsible for ensuring
compliance with these obligations by such party’s Affiliates, sublicensees,
prospective sublicensees, employees, consultants, agents and
subcontractors.  Each party shall use a similar effort to that which it
uses to protect its own [CONFIDENTIAL TREATMENT REQUESTED] trade secrets or
proprietary information to ensure that its Affiliates, sublicensees, employees,
consultants, agents and subcontractors do not disclose or make any unauthorized
use of trade secrets or proprietary information of the other party
hereto.  Each party shall notify the other promptly on discovery of any
unauthorized use or disclosure of the other’s trade secrets or proprietary
information.


 


(b)                                 Additional
Roche Obligations.  During the period commencing on the Effective Date
and terminating on the earlier of Reversion Effective Date or the Put Right
Effective Date, Roche agrees to maintain in confidence the Roche Know-How
related to Daclizumab in a manner consistent with Roche’s maintenance of
confidentiality with respect to know-how and trade secrets related to its other
products and technologies and consistent with Roche’s past practices with
respect to such Roche Know-How.


 


14.2                           Exceptions. 
The obligation of confidentiality contained in this Amended and Restated
Worldwide Agreement shall not apply to the extent that (a) either party
(the “Recipient”) is required to
disclose information by order or regulation of a governmental agency or a court
of competent jurisdiction or (b) the Recipient can demonstrate that
(i) the disclosed information was at the time of such disclosure by the
Recipient already in the public domain other than as a result of actions of the
Recipient, its Affiliates, employees, licensees, agents or subcontractors, in
violation hereof; (ii) the disclosed information was rightfully known by
the Recipient or its Affiliates (as shown by its written records) prior to the
date of disclosure to the Recipient in connection with the negotiation,
execution or performance of this Amended and Restated Worldwide Agreement; or
(iii) the disclosed information was received by the Recipient or its
Affiliates on an unrestricted basis from a source unrelated to any party to
this Amended and Restated Worldwide Agreement and not under a duty of
confidentiality to the other party, or (c) the Recipient can demonstrate
that disclosure to a regulatory authority is required by its product license
approval process.


 


14.3                           Publications.


 


(a)                                  Scientific
Publications.  Prior to public disclosure or submission for
publication of a manuscript describing the results of any scientific activity
or collaboration between PDL and Roche in the Field, the party disclosing or
submitting such a manuscript (“Disclosing
Party”) shall send the other party (“Responding Party”) by expedited delivery a


 


46

















 


copy of the manuscript to be submitted and shall allow the Responding
Party a reasonable time period (not to exceed forty-five (45) days  from the date of confirmed receipt) in
which to determine whether the manuscript contains subject matter of which
patent protection should be sought (prior to publication of such manuscript)
for the purpose of protecting an invention, or whether the manuscript contains
confidential information belonging to the Responding Party.  After the
expiration of forty-five (45) days from the date of confirmed receipt of such
manuscript, the Disclosing Party shall be free to submit such manuscript for
publication and publish or otherwise disclose to the public such research
results.  Should the Responding Party believe the subject matter of the
manuscript contains confidential information or a patentable invention of
substantial commercial value to the Responding Party, then prior to the
expiration of forty-five (45) days from the date of confirmed receipt of such
manuscript by the Responding Party, the Responding Party shall notify the
Disclosing Party in writing of its determination that such manuscript contains
such information or subject matter for which patent protection should be sought. 
On receipt of such written notice from the Responding Party, the Disclosing
Party shall delay public disclosure of such information or submission of the
manuscript for an additional period of sixty (60) days to permit preparation
and filing of a patent application on the disclosed subject matter.  The
Disclosing Party shall thereafter be free to publish or disclose such
information, except that the Disclosing Party may not disclose any confidential
information of the Responding Party in violation of Sections 14.1 and 14.2
hereof.  Determination of authorship for any paper or patent shall be in
accordance with accepted scientific practice.  Should any questions on
authorship arise, this will be determined by good faith consultation between
the respective heads of research for each of the parties.


 


(b)                                 Clinical
Studies.  At any time prior to PDL’s exercise of the Transplant
Reversion or Roche’s exercise of the Roche Put Right, if a party intends to
publicly disclose or submit for publication a manuscript describing the results
of any permitted scientific, preclinical or clinical study involving Daclizumab
conducted by or on behalf of such party (the “Publishing
Party”) or its Affiliates, the Publishing Party shall send the other
party by expedited delivery a copy of the manuscript to be submitted and shall
allow the other party a reasonable time period (such period to be stated in the
transmittal and not to exceed forty-five (45) days from the date of confirmed
receipt by the other party) to review the manuscript, including for the purpose
of determining whether the manuscript contains information which is reasonably
likely to have a material adverse impact on Daclizumab for either Transplant
Indications or Autoimmune Indications, as the case may be, in the Territory or
confidential information belonging to the other party.  After the
expiration of such stated reasonable period from the date of confirmed receipt
by the other party of such manuscript, the Publishing Party shall be free to
submit such manuscript for publication and publish or otherwise disclose to the
public such research results.  During such stated reasonable period, if
the other party believes the manuscript contains information that is reasonably
likely to have a material adverse impact on Daclizumab for Transplant
Indications or Autoimmune Indications, as the case may be, in the Territory,
then prior to the expiration of the stated period above, the other party shall
notify the Publishing Party in writing of its determination and the reasons therefor. 
On receipt of such written notice from the other party, the Publishing Party
shall confer with the other party and shall attempt in good faith to resolve
such concerns before the Publishing Party makes any public disclosure of such
information or submission of the manuscript.   After the Reversion
Effective Date or the Put Right Effective Date, PDL shall have


 


47

















 


the sole right to publish or otherwise publicly disclose, without the
consent of Roche, the results of any scientific, preclinical and clinical data
involving Daclizumab conducted by or on behalf of PDL or Roche or their
Affiliates.


 


XV.  DISPUTE RESOLUTION


 


15.1                           Arbitration. 
Except as expressly provided herein, any claim, dispute or controversy arising
out of or in connection with or relating to this Amended and Restated Worldwide
Agreement or the breach or alleged breach thereof shall be submitted by the
parties to arbitration by the American Arbitration Association (“AAA”) in Santa
Clara County, California, under the commercial rules
then in effect for that AAA except as provided herein.  All proceedings
shall be held in English and a transcribed record prepared in English. 
The parties shall choose, by mutual agreement, one arbitrator within
thirty (30) days of receipt of notice of the intent to arbitrate.  If
no arbitrator is appointed within the times herein provided or any extension of
time that is mutually agreed on, the AAA shall make such appointment within
thirty (30) days of such failure.  The award rendered by the
arbitrator shall include costs of arbitration, reasonable attorneys’ fees and
reasonable costs for expert and other witnesses, and judgment on such award may
be entered in any court having jurisdiction thereof.  The parties shall be
entitled to discovery as provided in Sections 1283.05 and 1283.1 of the
Code of Civil Procedure of the State of California, whether or not the
California Arbitration Act is deemed to apply to said arbitration. 
Nothing in this Amended and Restated Worldwide Agreement shall be deemed as
preventing either party from seeking injunctive relief (or any other
provisional remedy) from any court having jurisdiction over the parties and the
subject matter of the dispute as necessary to protect either party’s name,
proprietary information, trade secrets, know-how or any other proprietary
right.  If the issues in dispute involve scientific or technical matters,
any arbitrator chosen hereunder shall have educational training and/or
experience sufficient to demonstrate a reasonable level of knowledge in the
field of biotechnology.  Judgment on the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof.


 


XVI.  FORCE MAJEURE


 


16.1                           No
Control.  If either party shall be delayed, interrupted in or
prevented from the performance of any obligation hereunder by reason of force
majeure including an act of God, fire, flood, earthquake, war (declared or
undeclared), public disaster, act of terrorism, strike or labor differences,
governmental enactment, rule or regulation, or any other cause beyond such
party’s control, such party shall not be liable to the other therefor; and the
time for performance of such obligation shall be extended for a period equal to
the duration of the force majeure which occasioned the delay, interruption or
prevention.  The party invoking such force majeure rights of this
Section 16.1 must notify the other party by courier or overnight dispatch
(e.g., Federal Express)
within a period of fifteen (15) days of both the first and last day of the
force majeure unless the force majeure renders such notification impossible in
which case notification will be made as soon as possible.  If the delay
resulting from the force majeure exceeds six (6) months, both parties shall
consult together to find an appropriate solution.


 


48

















 


XVII.  MISCELLANEOUS


 


17.1                           Representations. 
Each party represents and warrants to the other party hereto that, except as
may otherwise be disclosed in writing to such party:


 


(a)                                  each
party has the full right and authority to enter into this Amended and Restated
Worldwide Agreement; and


 


(b)                                 to
the best knowledge of the party after reasonable investigation, no Third Party
has any right, title or interest in the PDL Patents or PDL Know-How, Roche
Know-How or Roche Patents, as the case may be, or in the Joint PDL-Roche
Patents, as the result of such Third Party’s former employment of any employee
of that party.


 


17.2                           Assignment. 
Either party may assign this Amended and Restated Worldwide Agreement and the
licenses herein granted (a) to any Affiliate of such party without the consent
of the other party, provided that such party remains fully liable for the
performance of such party’s obligations hereunder by such Affiliate, or (b) to
any Third Party, on the prior written consent of the other party, not to be
unreasonably withheld; and (c) without the consent of the other party, to any
Third Party purchaser of all or substantially all of the business unit to which
this Amended and Restated Worldwide Agreement relates, which in the case of
PDL, shall mean the Daclizumab business, and in the case of Roche, shall mean
Roche’s therapeutic antibody business or transplant therapeutic business. 
The parties agree that it would be reasonable for a party to withhold consent
to the other party’s proposed assignment of this Amended and Restated Worldwide
Agreement to an entity, that is, as of the time of such proposed assignment,
[CONFIDENTIAL TREATMENT REQUESTED] (in at least one [CONFIDENTIAL TREATMENT
REQUESTED] with [CONFIDENTIAL TREATMENT REQUESTED]), or [CONFIDENTIAL TREATMENT
REQUESTED] in any [CONFIDENTIAL TREATMENT REQUESTED] any [CONFIDENTIAL
TREATMENT REQUESTED] for the [CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL
TREATMENT REQUESTED] in any [CONFIDENTIAL TREATMENT REQUESTED].  This Amended and Restated Worldwide
Agreement shall be binding on and shall inure to the benefit of the permitted
successors and assigns of the parties hereto.


 


17.3                           Entire
Agreement.  This Amended and Restated Worldwide Agreement, the
Reversion Agreement between F. Roche and PDL dated March 4, 2002 (“Japan Reversion Agreement”), the
Pharmacovigilance Agreement, and the Joint Defense Agreement dated
June 20, 2000, constitute the entire agreement between the parties hereto
with respect to the subject matter herein and, effective on the Effective Date,
supersede all previous agreements (including the 1999 Agreements), whether
written or oral, such superseding resulting in, among other things, the
licenses granted thereunder having no further force or effect and being
replaced by the licenses set forth in Article II of this Amended and
Restated Worldwide Agreement. 
Notwithstanding the foregoing, (a) certain provisions of the 1999 Agreements
shall remain in force and effect, to the extent this Amended and Restated
Worldwide Agreement so indicates by specific reference, and (b) any royalties
or other payments accruing under the 1999 Agreements prior to the Effective
Date shall remain due and payable.  This Amended and Restated Worldwide
Agreement shall not be changed or modified orally, but only by an instrument in
writing signed by both parties.


 


49

















 


17.4                           Releases. 
The parties hereby confirm the releases contained in Section 15.4 of the
1999 PDL/Roche Agreement and in Section 11.4 of the F. Roche
Agreement.


 


17.5                           Severability. 
If any provision of this Amended and Restated Worldwide Agreement is declared
invalid by an arbitrator pursuant to Section 15.1 or by a court of last
resort or by any court or other governmental body from the decision of which an
appeal is not taken within the time provided by law, then and in such event,
this Amended and Restated Worldwide Agreement will be deemed to have been
terminated only as to the portion thereof that relates to the provision
invalidated by that decision and only in the relevant jurisdiction, but this
Amended and Restated Worldwide Agreement, in all other respects and all other
jurisdictions, will remain in force; provided, however, that if the provision
so invalidated is essential to the Amended and Restated Worldwide Agreement as
a whole, then the parties shall negotiate in good faith to amend the terms
hereof as nearly as practical to carry out the original intent of the parties,
and, failing such amendment, either party may submit the matter to arbitration
for resolution pursuant to Section 15.1.


 


17.6                           Indemnification.


 


(a)                                  Roche
agrees to defend, indemnify and hold harmless PDL, its trustees, officers,
agents and employees from and against any and all Third Party suits, claims,
acts, liabilities, demands, damages, expenses, and losses of any kind,
including those resulting from death, personal injury, illness or property
damage arising (i) out of the manufacture, distribution, use, testing,
promotion, marketing or sale or other disposition, by Roche, an Affiliate of
Roche, or any distributor, customer, sublicensee or representative of Roche or
anyone in privity therewith (other than PDL), of (A) any Licensed Product, as
defined in the 1999 Agreements, prior to the Effective Date, (B) Daclizumab or
any Excluded Product on or after the Effective Date, or (C) any cell lines,
their progeny, or other biological materials, method, process, device or apparatus
licensed or provided by PDL pursuant to the 1989 Agreements, the 1999
Agreements or this Amended and Restated Worldwide Agreement; (ii) as a result
of practicing a Joint Invention, or using PDL Know-How or PDL Patents licensed
to Roche under this Amended and Restated Worldwide Agreement, except where such
claim is based on the negligent acts of commission or omission of PDL; (iii)
out of any breach by Roche of any representation, warranty or covenant of this
Amended and Restated Worldwide Agreement; (iv) out of any violation of
applicable law by an action, policy or procedure of Roche or its Affiliates; or
(v) out of any negligence or willful misconduct of Roche or its Affiliates.


 


(b)                                 PDL
agrees to defend, indemnify and hold harmless Roche, its trustees, officers,
agents and employees harmless from and against any and all Third Party suits,
claims, actions, liabilities, demands, damages, expenses, and losses of any
kind, including those resulting from death, personal injury, illness or
property damage arising (i) out of the manufacture, distribution, use,
testing, promotion, marketing or sale or other disposition, by PDL, an
Affiliate of PDL, or any distributor, customer, sublicensee or representative
of PDL or anyone in privity therewith (other than Roche), of (A) Daclizumab
prior to the Effective Date, or (B) Daclizumab or any Other Licensed Product on
or after the Effective Date, or (C) any biological materials, method, process,
device or apparatus licensed or provided by Roche pursuant to this Amended and
Restated Worldwide Agreement; (ii) as a result of practicing a Joint
Invention, or using Roche


 


50

















 


Know-How or Roche Patents licensed to PDL under this Amended and
Restated Worldwide Agreement, except where such claim is based on the negligent
acts of commission or omission of Roche; (iii) out of any breach by PDL of any
representation, warranty or covenant of this Amended and Restated Worldwide
Agreement; (iv) out of any violation of applicable law by an action, policy or
procedure of PDL or its Affiliates; (v) out of any negligence or willful
misconduct of PDL or its Affiliates; or (vi) from any claim for failure to pay
any license fee, royalty or other payment due on sales of Daclizumab or any Other
Licensed Product by PDL or its Affiliates or sublicensees under any license
agreement for any Roche Controlled Patents between Roche and any Third Party
licensor that PDL elected not to take a sublicense under as provided in
Section 2.8(b).


 


(c)                                  Procedure. 
In the event of a claim by a Third Party against a party entitled to
indemnification under this Amended and Restated Worldwide Agreement (“Indemnified Party”), the Indemnified Party
shall promptly notify the other party (“Indemnifying
Party”) in writing of the claim and the Indemnifying Party shall
undertake and solely manage and control, at its sole expense, the defense of
the claim and its settlement.  The Indemnified Party shall cooperate with
the Indemnifying Party, including, as requested by the Indemnifying Party and
at the Indemnifying Party’s cost, entering into a joint defense
agreement.   The Indemnified Party may, at its option and expense, be
represented in any such action or proceeding by counsel of its choice. 
The Indemnifying Party shall not be liable for any litigation costs or expenses
incurred by the Indemnified Party without the Indemnifying Party’s written
consent.  The Indemnifying Party shall not settle any such claim unless
such settlement fully and unconditionally releases the Indemnified Party from
all liability relating thereto, unless the Indemnified Party otherwise agrees
in writing.


 


17.7                           Notices. 
Any notice or report required or permitted to be given under this Amended and
Restated Worldwide Agreement shall be in writing and shall be mailed by
certified or registered mail, or telexed or telecopied and confirmed by
mailing, as follows and shall be effective five (5) days after such
mailing:


 


	
  If to PDL:

  	
   

  	
  Protein Design Labs,
  Inc.

  34801 Campus Drive

  Fremont, California U.S.A. 94555

  Attention:  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
  Protein Design Labs,
  Inc.

  34801 Campus Drive

  Fremont, California U.S.A. 94555

  Attention:  General Counsel

  
	
   

  	
   

  	
   

  
	
  If to Roche:

  	
   

  	
  Hoffmann-La Roche
  Inc.

  340 Kingsland Street

  Nutley, New Jersey 07110

  Attention:  Corporate Secretary

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
  F. Hoffmann-La Roche
  Ltd

  



 


51

















 


	
   

  	
   

  	
  Grenzacherstrasse 124

  
	
   

  	
   

  	
  CH-4002 Basel,
  Switzerland

  
	
   

  	
   

  	
  Attention:  Law
  Department

  



 


17.8                           Choice
of Law.  The validity, performance, construction, and effect of this
Amended and Restated Worldwide Agreement shall be governed by the laws of the
State of California, U.S.A, without regard to conflicts of law principles that
would provide for application of the law of a jurisdiction outside California and
excluding the United Nations Convention on Contracts for the International
Sales of Goods.


 


17.9                           Publicity. 
The parties agree to issue press releases in an agreed-on form and format
concerning their entry into this Amended and Restated Worldwide Agreement, with
the content of such releases to be approved in advance by the
parties.    In all other respects, no party to this Amended and
Restated Worldwide Agreement shall use the name of the other parties in any
publicity release without the prior written permission of such other party,
which shall not be unreasonably withheld.  The other party shall have a
reasonable opportunity to review and comment on any such proposed publicity
release.  Except as required by law, no party hereto shall publicly
disclose the terms of this Amended and Restated Worldwide Agreement, the 1989
Agreements, the 1999 Agreements, the Japan Reversion Agreement, or their terms
and conditions unless expressly authorized to do so by the other party which
authorization shall not be unreasonably withheld.  In the event that
disclosure is authorized, the parties will work together to develop a mutually
acceptable disclosure.  Notwithstanding anything to the contrary herein,
if not otherwise disclosed by Roche, PDL shall not disclose to any Third Party
the amount of sales of Roche, or royalties or consideration paid by Roche with
respect to, Daclizumab or Excluded Products without the prior written consent
of Roche, except that PDL shall have the right to disclose the terms of this
Amended and Restated Worldwide Agreement to any bona fide investors, advisors,
investment banking representatives, or prospective strategic partners or
collaborators, under binder of confidentiality.  If not otherwise
disclosed by PDL, Roche shall not disclose to any Third Party the amount of
sales of PDL, or royalties or consideration paid by PDL with respect to,
Daclizumab without the prior written consent of PDL, which consent shall not be
unreasonably withheld.


 


17.10                     Further
Assurances.  The parties agree to reasonably cooperate with each other
in connection with any actions required to be taken as part of their respective
obligations under this Amended and Restated Worldwide Agreement, and shall (a)
furnish to each other such further information; (b) execute and deliver to each
other such other documents; and (c) do such other acts and things (including
working collaboratively to correct any clerical, typographical, or other
similar errors in this Amended and Restated Worldwide Agreement), all as the
other party may reasonably request for the purpose of carrying out the intent
of this Amended and Restated Worldwide Agreement.


 


17.11                     Tax Treatment and Tax Structure Disclosure. 
Notwithstanding anything herein to the contrary, any party to this
Amended and Restated Worldwide Agreement (and any employee,
representative, or other agent of any party to this Amended and Restated
Worldwide Agreement) may disclose to any and all persons, without limitation of
any kind, the tax treatment and tax structure of the transactions contemplated
by this Amended and Restated Worldwide Agreement


 


52

















 


and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax structure;
provided however, that such
disclosure may not be made to the extent a lack of disclosure is reasonably
necessary to comply with any applicable federal or state securities laws.  For the purposes of the foregoing sentence,
(a) the “tax treatment” of a transaction means the purported or claimed federal
income tax treatment of the transaction, and (b) the “tax structure” of a
transaction means any fact that may be relevant to understanding the purported
or claimed federal income tax treatment of the transaction.


 


17.12                     Agency. 
Neither party is, nor will be deemed to be an employee, agent or representative
of the other party for any purpose.  Each party is an independent
contractor, not an employee or partner of the other party.  Neither party
shall have the authority to speak for, represent or obligate the other party in
any way without prior written authority from the other party.


 


17.13                     No Waiver.  Any omission or delay by either party at any
time to enforce any right or remedy reserved to it, or to require performance
of any of the terms, covenants or provisions hereof, by the other party, shall
not constitute a waiver of such party’s rights to the future enforcement of its
rights under this Amended and Restated Worldwide Agreement.  Any waiver by a party of a particular breach
or default by the other party shall not operate or be construed as a waiver of
any subsequent breach or default by the other party.


 


17.14                     No Strict
Construction.  This Amended and
Restated Worldwide Agreement has been prepared jointly by the parties and shall
not be strictly construed against either party.


 


17.15                     Headings. 
The captions used herein are inserted for convenience of reference only and
shall not be construed to create obligations, benefits, or limitations.


 


17.16                     Counterparts. 
This Amended and Restated Worldwide Agreement may be executed in counterparts,
all of which taken together shall be regarded as one and the same instrument.


 


53

















 


IN WITNESS
WHEREOF, the parties have executed this Amended and Restated Worldwide
Agreement through their duly authorized representatives to be effective as of
the Effective Date.


 


	
  PROTEIN DESIGN LABS,
  INC.

  	
  HOFFMANN-LA ROCHE INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:  

  	
  Chief Executive Officer

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  F. HOFFMANN-LA ROCHE
  LTD

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
										



 


54

















 


Appendix
A


 


PDL Patent Rights


 


The following are patents and patent applications (also known as the
“Queen et al. patents”) issued and filed in certain countries in the world and
licensed as part of the PDL Patent Rights under the Agreement. (As of:
March 5, 2003)


 


1.  The following issued U.S.
patents and pending U.S. patent applications:


 


Patent No. 5,585,089, “Humanized Immunoglobulins,”
issued December 17, 1996.


 


Patent No. 5,693,761, “Polynucleotides Encoding
Improved Humanized Immunoglobulins,” issued December 2, 1997.


 


Patent No. 5,693,762, “Humanized Immunoglobulins,”
issued December 2, 1997.


 


Patent No. 6,180,370 
“Humanized Immunoglobulins and Method of Making the Same”, issued
January 30, 2001.


 


[CONFIDENTIAL TREATMENT REQUESTED]


 


2.  The following patents and
patent applications outside the U.S.:


 


	
   

  	
   

  	
   

  	
   

  	
  Patent No.

  	
   

  	
  Country

  	
   

  	
  Title*

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Issued

  	
   

  	
  9/29/00

  	
   

  	
  AR 254487 V1

  	
   

  	
  Argentina

  	
   

  	
  “Novel Immunoglobulins,
  Their Production and Use”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  AT  0451216

  	
   

  	
  Austria

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  0451216

  	
   

  	
  Belgium

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/25/99

  	
   

  	
  0682040

  	
   

  	
  Belgium

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/14/03

  	
   

  	
  1101125-4

  	
   

  	
  Brazil

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  10/27/97

  	
   

  	
  61095

  	
   

  	
  Bulgaria

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/13/02

  	
   

  	
  2328851

  	
   

  	
  Canada

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/20/02

  	
   

  	
  2006865

  	
   

  	
  Canada

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  4/11/00

  	
   

  	
  40279

  	
   

  	
  Chile

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  7/21/00

  	
   

  	
  58770

  	
   

  	
  China

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  11/4/99

  	
   

  	
  P920500A

  	
   

  	
  Croatia

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  12/02/02

  	
   

  	
  174317

  	
   

  	
  Denmark

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  0451216B1

  	
   

  	
  Europe(1)

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/25/99

  	
   

  	
  0682040 B1

  	
   

  	
  Europe(1)

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  3/28/02

  	
   

  	
  108797

  	
   

  	
  Finland

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  FR0451216

  	
   

  	
  France

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/25/99

  	
   

  	
  FR0682040

  	
   

  	
  France

  	
   

  	
  ”

  



 


55

















 


	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  DE 68925536.5

  	
   

  	
  Germany

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/25/99

  	
   

  	
  DE 68929061.6

  	
   

  	
  Germany

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  DD 296 964

  	
   

  	
  East Germany

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  GB 0451216

  	
   

  	
  Great Britain

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/25/99

  	
   

  	
  GB 0682040

  	
   

  	
  Great Britain

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/5/93

  	
   

  	
  1001050

  	
   

  	
  Greece

  	
   

  	
  ”

  
	
  Regist.

  	
   

  	
  7/14/00

  	
   

  	
  0682040

  	
   

  	
  Hong Kong

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  3/22/96

  	
   

  	
  211174

  	
   

  	
  Hungary

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  2/3/03

  	
   

  	
  82755

  	
   

  	
  Ireland

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  IT 0451216

  	
   

  	
  Italy

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/25/99

  	
   

  	
  IT 0682040

  	
   

  	
  Italy

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  LU 0451216

  	
   

  	
  Luxembourg

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/25/99

  	
   

  	
  LU 0682040

  	
   

  	
  Luxembourg

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  2/18/92

  	
   

  	
  92.2146

  	
   

  	
  Monaco

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  NL 0451216

  	
   

  	
  Netherlands

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/25/99

  	
   

  	
  NL 0682040

  	
   

  	
  Netherlands

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  10/20/97

  	
   

  	
  231984

  	
   

  	
  New Zealand

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  6/8/00

  	
   

  	
  314793

  	
   

  	
  New Zealand

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  7/9/01

  	
   

  	
  19912385

  	
   

  	
  Norway(3)

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  12/26/91

  	
   

  	
  132068

  	
   

  	
  Pakistan

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  5/17/96

  	
   

  	
  29729

  	
   

  	
  Philippines

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  10/20/95

  	
   

  	
  92758

  	
   

  	
  Portugal

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  2/10/99

  	
   

  	
  2126046

  	
   

  	
  Russia

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  SG 0451216

  	
   

  	
  Singapore

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  5/22/01

  	
   

  	
  78258

  	
   

  	
  Singapore

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  2/28/99

  	
   

  	
  8912489

  	
   

  	
  Slovenia

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  10/31/90

  	
   

  	
  89/9956

  	
   

  	
  South Africa

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  11/23/98

  	
   

  	
  178385

  	
   

  	
  South Korea

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  2081974 T3

  	
   

  	
  Spain

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/25/99

  	
   

  	
  0682040

  	
   

  	
  Spain

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  SE 0451216

  	
   

  	
  Sweden

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/25/99

  	
   

  	
  SE 0682040

  	
   

  	
  Sweden

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  1/24/96

  	
   

  	
  CH 0451216

  	
   

  	
  Switzerland

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  8/25/99

  	
   

  	
  CH 0682040

  	
   

  	
  Switzerland

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  12/2/91

  	
   

  	
  50034

  	
   

  	
  Taiwan

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  5/19/93

  	
   

  	
  13349

  	
   

  	
  Uruguay

  	
   

  	
  ”

  
	
  Issued

  	
   

  	
  2/9/96

  	
   

  	
  56455

  	
   

  	
  Venezuela

  	
   

  	
  ”

  



 


[CONFIDENTIAL TREATMENT REQUESTED]


 


56

















 












* Exact titles may differ in different countries.


(1) and corresponding European national patents issued
therefrom.


(2) registration date


[CONFIDENTIAL TREATMENT REQUESTED]


 


57

















 


Appendix
B


 


Third
Party Licenses as of the Effective Date


 


[CONFIDENTIAL TREATMENT REQUESTED]


 


58

















 


Appendix
C


 


PDL Sole
Territory:  Countries or Jurisdictions in which All Rights Have Reverted
to PDL


 


[CONFIDENTIAL TREATMENT REQUESTED]


 


59

















 


Appendix
D


 


Example
of Section 7.4(c) Royalty Adjustments


 


[CONFIDENTIAL TREATMENT REQUESTED]


 


60

















 


Schedule 2.8(a)


 


Certain
Roche Owned Patents


 


[CONFIDENTIAL
TREATMENT REQUESTED]


 


61

















 


Schedule 2.8(b)


 


Certain
Roche Controlled Patents


 


All patents and
patent applications licensed to Roche in the following agreements:


 


[CONFIDENTIAL
TREATMENT REQUESTED]


 


62

















 


Schedule 2.8(e)


 


Notices
of Third Party IP Rights


 


[CONFIDENTIAL
TREATMENT REQUESTED]


 


63

















 


Schedule 2.8(f)


 


Third
Party Licenses


 


[CONFIDENTIAL
TREATMENT REQUESTED]


 


64