Exhibit 10.1


 


ICOS CORPORATION

MANUFACTURING AGREEMENT


 


THIS
MANUFACTURING AGREEMENT (this “Agreement”) between ICOS Corporation, a
Washington corporation, having its principal offices at 22021 20th
Avenue, Bothell, WA 98021 (“ICOS”), and Protein Design Labs, Inc., a Delaware
corporation, having its principal offices at34801 Campus Drive, Fremont, CA
94555 (“PDL”), is effective as of August 29, 2003.


 


RECITALS


 


A.                                   PDL
is engaged in the discovery, development, and commercialization of new
pharmaceutical candidates;


 


B.                                     ICOS
is in the business of providing biological development and manufacturing
services; and


 


C.                                     PDL
has discussed certain of its areas of interest with ICOS and is familiar with
ICOS’s facilities and expertise and, as a result, wishes to retain ICOS to
provide certain services associated with manufacturing and/or supplying certain
quantities of specific product(s) for use in clinical trials, as more fully set
forth in various Work and Quality Statements (as defined herein) to be attached
to this Agreement, and ICOS is willing to so perform, all in accordance with
the applicable Work and Quality Statements and subject to the terms of this
Agreement.


 


NOW, THEREFORE, the
parties agree as follows:


 


AGREEMENT


 


1.                                      Definitions


 


1.1                                 “Acceptance
Criteria” means the composition, quality, purity, identity and strength of
a Product to be set forth in Work and Quality Statements and which must be met
by ICOS in Processing the Product.


 


1.2                                 “Affiliate”
means any entity that controls, is controlled by, or is under common control
with a party.  A corporation or other
entity shall be deemed to control a corporation or entity if it directly or
indirectly owns or controls at least fifty percent (50%) of the voting stock or
other ownership interest of that corporation or entity.


 


1.3                                 “CMC”
means Chemistry Manufacturing and Control information required by the FDA for
the filing of an IND, as set forth in 21 CFR 312.23(a)(7), et. seq., as amended or any
successor information.


 

















 


1.4                                 “Confidential
Information” means any business or
technical information, trade secrets, know-how, techniques, data or other
information, disclosed by the disclosing party to the receiving party in
writing and marked “confidential” or that is disclosed orally and confirmed in
writing as confidential within thirty (30) days following such disclosure.  Confidential Information shall not include
any information that is: (a) already known to the receiving party at the
time of disclosure hereunder (other than from the other party hereto) as
demonstrated by its written records; (b) now or hereafter becomes publicly
known other than through acts or omissions of the receiving party, or anyone to
whom the receiving party disclosed such information; (c) disclosed to the
receiving party on a nonconfidential basis by a third party under no obligation
of confidentiality to the disclosing party; or (d) independently developed by
the receiving party without reliance on the Confidential Information of the
disclosing party as shown by its written records.  All PDL Materials, PDL Trade Secrets, and all results of the
services shall be deemed Confidential Information of PDL, except to the extent
any such information falls within any of the categories described in clauses
(a) through (d) above.


 


1.5                                 “cGMP”
means the current Good Manufacturing Practices and General Biologics Products
Standards as promulgated under each of the following as in effect on the date
of this Agreement and as amended or revised after the date of this Agreement:


 


(a)                                  the
U.S. Food, Drug & Cosmetics Act (21 U.S.C. Sect. 301 et seq.) and related U.S.
regulations, including 21 Code of Federal Regulations (Chapters 210, 211, 600
and 610) and other FDA regulations, policies, or guidelines in effect at a
particular time for the manufacture, testing and quality control of
investigational drugs; and


 


(b)                                 the
ICH guide Q7a, “ICH Good Manufacturing Practice Guide for Active Pharmaceutical
Ingredients,” as applied to investigational drugs (Section 19).


 


1.6                                 “PDL
Materials” means those materials supplied by PDL to ICOS (if any) pursuant
to this Agreement or a particular Work or Quality Statement, except those
materials provided by PDL to ICOS that are both (a) not proprietary to PDL and
(b) paid for by ICOS.


 


1.7                                 “PDL
Patent Rights” means patents and patent applications owned by PDL, and all
divisions, continuations, continuations-in-part, and substitutions thereof; all
foreign patent applications corresponding to the preceding applications; and
all U.S. and foreign patents issuing on any of the preceding applications,
including extensions, reissues and re-examinations (including, without
limitation, all claims and causes of action for infringement, misappropriation
or violation thereof).


 


1.8                                 “PDL
Trade Secrets” means unpatented and/or unpatentable trade-secret
information and proprietary technology of any kind or nature owned by PDL
(including, without limitation, all claims and causes of action for
infringement, misappropriation or violation thereof), which is disclosed by or
on behalf of PDL for purposes of assisting ICOS in performing the Services.


 


1.9                                 “FDA”
means the United States Food and Drug Administration, or its successor agency,
and or its European counterpart(s) (currently, the European Medicines
Evaluation Agency, or “EMEA”), as the case may be.


 


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1.10                           “IND”
means an Investigational New Drug application to begin studies of a new drug or biologic for humans that is filed with
the FDA, as set forth in 21 CFR 312.22, et. seq., as amended, or its European
counterpart(s) (currently, EMEA), as the case may be, or any successor
application.


 


1.11                           “Intellectual
Property Rights” means any patent, copyright, trademark, trade secret or
other intellectual or industrial property rights or proprietary rights arising
under the laws of any jurisdiction (including, without limitation, all claims
and causes of action for infringement, misappropriation or violation thereof
and all rights in any registrations and renewals).


 


1.12                           “Manufacture
and Release Requirements” means those specifications, methodologies,
analytical tests, process parameters, acceptance criteria, and cGMP
requirements necessary to manufacture and release to PDL the Product in
conformity with a particular set of agreed on Acceptance Criteria.  All Manufacture and Release Requirements are
set forth in the Work and Quality Statements.


 


1.13                           “Price
and Payment Terms” means the amounts, as stated in a Work Statement, that
are payable by PDL to ICOS in consideration for ICOS performing the Services
pursuant to such Work Statement.


 


1.14                           “Process,”
“Processed” or “Processing” means those activities associated with the
Product as described in the Work and Quality Statements, which ICOS will
perform for and on behalf of PDL in accordance with this Agreement.


 


1.15                           “Product”
means the Product defined in the Work and Quality Statements.


 


1.16                           “Quality
Statement” means the Quality Statement executed by the parties and attached
hereto as Appendix E, and incorporated hereing by this reference, as revised by
the written agreement of the parties from time to time, which shall describe
the regulatory and compliance roles and responsibilities of both PDL and ICOS.


 


1.17                           “Schedule”
means the estimated, target or required timeline for Processing the Product as
agreed on by the parties and set forth in a Work Statement.


 


1.18                           “Services”
means the services to be provided by ICOS for the benefit of PDL, including
Processing specific Product, pursuant to the particular Work and Quality
Statements, which services shall be performed subject to the terms and
conditions of this Agreement.


 


1.19                           “Work
Statement” means each Work Statement executed by the parties and attached
hereto as an Exhibit (including the Quality Statement described above), and
incorporated herein by this reference, as revised by the written agreement of
the parties from time to time, which shall contain at a minimum (a) a
description of all the Services to be performed, (b) a description of the
Product, Acceptance Criteria, Process, and the Manufacture and Release
Requirements, (c) the Price and Payment Terms, (d) the quantity of Product to
be delivered, and (e) an estimated Schedule.


 


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2.                                      Work
and Quality Statements


 


Except
as provided in Section 3.3, ICOS shall have no obligation to perform any
services except in accordance with any Work and Quality Statements.  From time to time with respect to the
manufacture, analysis and/or supply of the M200 Product, they will execute and
attach to this Agreement Work and Quality Statements describing the Services to
be performed and related information. 
This Agreement and each specific Work or Quality Statement, as the same
shall be completed, shall collectively, independent from any other Work or
Quality Statement, constitute the entire agreement for the specific Services
identified in such Work or Quality Statement. 
No Work or Quality Statement shall be binding unless executed by both
parties.


 


Subject
to Section 3.2C, by unanimous written decision of the Project Leaders (as
defined in Section 3.5), the parties may revise the Work or Quality
Statements at any time.


 


With
respect to all services provided by ICOS from time to time that are agreed on
by the parties but are outside the scope of the Services (“Additional Services”),
PDL shall pay to ICOS [CONFIDENTIAL TREATMENT REQUESTED] as described in the
Work Statement.  Such Additional
Services and PDL’s payment obligations will be governed by the terms of this
Agreement.  ICOS will invoice PDL
monthly for all Additional Services performed, with each such invoice
containing a reference to the services performed and the personnel used.  All such invoices will be payable under the
terms described in Section 7. 
Notwithstanding the foregoing, and subject to the terms of this
Agreement, ICOS must complete all the tasks necessary to complete the Services
that are within the scope of the Work and Quality Statements to ensure that the
Product is Processed in compliance with the applicable Manufacturing and
Release Requirements in all material respects, and PDL shall compensate ICOS in
performing such Services at the rate specified in the Work Statement.


 


Promptly
following conclusion of the Services, if PDL reasonably determines that further
services are required beyond the Services (as described in the Work and Quality
Statements) to permit PDL to complete the CMC section of documents
necessary to file an IND or IND Amendment with the FDA with respect to the
Product, ICOS shall consider performing any such further services provided that
(i) such further services are within ICOS’s then current manufacturing services
offerings, and (ii) ICOS has resources available (during normal working hours)
to provide such further services.  ICOS
reserves the right to request further compensation prior to agreeing to perform
such further services, considering other commercial opportunities.  Such written description of supplemental
services and compensation shall be an amendment to the pertinent Work and Quality
Statements and shall be governed by the terms of this Agreement.


 


3.                                      Scope
of Services


 


3.1                               Processing
Services


 


Subject to the terms of this Agreement and pursuant to
each Work or Quality Statement, ICOS will perform the Services as set forth in
each Work or Quality Statement and, as applicable, use commercially reasonable
best efforts (based on biologics manufacturing industry standards) to (a)
Process the Product in accordance with the related Manufacture and Release
Requirements, including without limitation cGMP, so that when released to PDL
the Product will conform in all material respects with the applicable
Acceptance Criteria, (b) maintain all records


 


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regarding the Process and the Product as agreed to
from time to time by the parties and in conformity with cGMP, (c) subject to
the last paragraph of Section 2, provide suitable CMC support
documentation to allow PDL to file an IND or IND Amendment with the FDA and
(d) supply the Product to PDL in accordance with the applicable Schedule.


 


The parties agree that the Services, as described in
the Work and Quality Statements, may not be changed without both parties’ prior
written agreement.  PDL acknowledges
that ICOS is given flexibility to conduct such activities, although not
expressly stated in the Work and Quality Statements, at the time and in the
manner that ICOS deems necessary as an independent contractor to fulfill its
obligations in completing the Services.


 


3.2                               Changes
to Schedules and Specifications


 


A.                                   Due
to the unpredictable nature of the biological processes, the Schedules set down
for the performance of the Services (including without limitation the dates for
production and delivery of Product) set out in the Work Statement are best
current estimates only.  ICOS
[CONFIDENTIAL TREATMENT REQUESTED] shall keep PDL regularly informed of any
changes to the Schedules.  ICOS
understands that any such changes to the Schedules may have a material impact
on PDL’s business and agrees that the effect on the Schedules caused by any
changes to the Schedules will be made to the minimum extent reasonably
necessary.


 


B.                                     The
Acceptance Criteria and the Manufacturing and Release Requirements may be
amended from time to time only as described in Section 3.2C or as dictated
by the FDA and applicable laws.


 


C.                                     ICOS
will not implement any Material Changes relating to any agreed on Acceptance
Criteria or Manufacture and Release Requirements without PDL’s prior written
approval of such changes.  ICOS may,
however, make non-Material Changes without PDL’s prior written approval, but
with timely notification to PDL.  For
purposes of this Section 3.2C, a “Material Change” is defined as any
variation in the written procedures currently in place that (i) impacts the
regulatory commitments for the Product, (ii) may affect the quality, purity,
identity or strength of the Product, or (iii) would necessarily result in
changing, altering or modifying the Acceptance Criteria and/or the Manufacture
and Release Requirements.


 


D.                                    With
respect to (i) amendments dictated by the FDA or applicable laws and (ii)
Material Changes, as described in this Section 3.2, PDL shall be
responsible for (a) the costs specific to the Product in making such amendments
to the Acceptance Criteria and/or Manufacturing and Release Requirements,
including without limitation capital costs specific to the Product  (but excluding [CONFIDENTIAL TREATMENT
REQUESTED]), (b) the costs in validating the Process after such amendment, and
(c) any increases in cost of manufacturing the Product as a result of such
amendment.  With respect to amendments
dictated by the FDA or applicable laws, the parties will promptly meet to
discuss the actions necessary to comply with such amendments and the costs
associated therewith.  ICOS shall
invoice PDL in accordance with Section 7.2 for all cost that PDL is
responsible to pay pursuant to this Section 3.2.D.


 


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3.3                               Technical
Difficulties


 


If it becomes apparent to either ICOS or PDL at any
stage in the provision of any Services that, as a result of scientific or
technical reasons out of the reasonable control of either party, it will not be
possible to complete the Services in the manner described in this Agreement or
the applicable Work and Quality Statements, the parties shall [CONFIDENTIAL
TREATMENT REQUESTED] to resolve such problems in a commercially reasonable
manner.


 


3.4                               Safety
Procedures


 


ICOS will have
responsibility for adopting and enforcing safety procedures for ICOS’s internal
handling and production of each Product, which procedures will comply in all
material respects with applicable federal, state and local environmental and
occupational safety and health requirements.


 


3.5                               Project
Leaders


 


Each party will, within ten (10) days of signing this
Agreement, select an individual to serve as its Project Leader (collectively,
the “Project Leaders”) and inform the other party of such selection.  Each party’s Project Leader will (a) be
authorized to manage the relationship of the parties under this Agreement, (b) oversee
the performance of the Services, (c) take the actions specifically
delegated to them under this Agreement, and (d) be the principal contact of
such party for matters relating to this Agreement.  Each party may change its Project Leader at any time on written
notice to the other party.  The Project
Leaders shall meet on request of either party, but in any event no less
frequently than monthly.  Meetings may
be held by telephone conference call and may be attended by other
representatives of each party, in addition to the Project Leader, as the
applicable Project Leader may desire. 
Decisions of the Project Leaders must be unanimous.


 


3.6                               Ownership
of Products; License to Know-How


 


PDL will own all rights, title and interest to all
Products, PDL Materials, PDL Intellectual Property Rights, PDL Patent Rights
and PDL Trade Secrets including, without limitation, all in process materials
used to produce Products and paid for by PDL, cell lines, cell banks, data,
marketing plans, product lines, product plans and records (except to the extent
the data or records contain ICOS’s Intellectual Property Rights or Confidential
Information) produced pursuant to such Work and Quality Statements and all
Intellectual Property Rights in and to all of the foregoing (collectively, “PDL
Property”); provided, however, that PDL Property will not include any right,
title or interest in or to any Intellectual Property Rights or Confidential
Information owned by ICOS, including without limitation [CONFIDENTIAL TREATMENT
REQUESTED].  ICOS grants to PDL a
non-exclusive, non-sublicensable (except to third parties for purposes of
manufacturing as described in the last sentence of this Section 3.6),
royalty free license, to use ICOS’s Intellectual Property Rights developed only
as a result of performing the Services for PDL under the Work and Quality
Statements, including but not limited to batch records and other such
information (the “ICOS Project Related IP”), solely for the purpose of
permitting PDL to perform clinical trials and file for an IND or an IND
Amendment with the FDA.  PDL shall have
the right to sublicense its rights in ICOS Project Related IP granted


 


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pursuant to this Section 3.6 for the sole purpose
of permitting the third party sublicensees to perform manufacturing services
that are substantially similar to the Services and related to such PDL
Property, provided that each sublicensee agrees in writing to be bound by the
provisions of Section 10 to the same extent as PDL is bound.  In the event that PDL’s license rights
granted under this Section 3.6 are terminated at any time for any reason,
all such sublicenses shall terminate. 
PDL shall include in all of its sublicense agreements granted hereunder
provisions for such termination.


 


3.7                               Assistance
with Transfer of PDL Property.


 


ICOS agrees that during or after the term of this
Agreement, PDL, at its option, may elect to engage a third party to perform the
same services or services substantially similar to the Services at any time
during or after the term of this Agreement. 
Subject to both (a) the availability of ICOS personnel, which shall not
be unreasonably or unduly withheld, and (b) PDL compensating ICOS for its time
spent in complying with its obligations under this paragraph [CONFIDENTIAL
TREATMENT REQUESTED] in connection with such obligations, ICOS agrees to
provide all necessary assistance to PDL in transferring PDL Property to such
third parties that PDL engages to perform such services.  In addition, ICOS agrees that in connection
with such transfer, PDL may [CONFIDENTIAL TREATMENT REQUESTED] that is directly
related to the PDL Property and necessary for such third parties to perform
manufacturing services that are substantially similar to the Services and related
to such PDL Property and the ICOS Project Related IP licensed to PDL under
Section 3.6, on behalf of PDL under a confidentiality agreement containing
provisions at least as protective as those of Article 10, provided that
PDL [CONFIDENTIAL TREATMENT REQUESTED].


 


4.                                      PDL
Supply of Information


 


4.1                               Proprietary
Information to Provide Services


 


As soon as practicable after the parties’ execution of
Work and Quality Statements, PDL shall supply to ICOS all PDL Materials and
shall disclose to ICOS all PDL Trade Secrets necessary for ICOS to perform the
Services to be provided under such Work and Quality Statements.  PDL hereby grants ICOS during the term of
the applicable Work and Quality Statements the non-exclusive right to use such
PDL Patent Rights, PDL Trade Secrets and PDL Materials as are necessary for
ICOS to perform the Services for the sole purpose of providing the related
Services.  ICOS acknowledges it may not
use any such rights, information or materials for any purpose other than as
required to perform the Services.


 


4.2                               Information
Regarding Hazards


 


PDL shall also provide to ICOS on an ongoing basis
throughout the term of this Agreement prompt notice of any information it
receives involving the PDL Materials or Product that relates to any hazards to
the health or safety of any personnel of ICOS or the possibility of
cross-contamination of any other products being manufactured or stored by
ICOS.  ICOS shall promptly notify PDL of
any information it receives relating to (a) the safety of the PDL Materials or
Product, including any confirmed or unconfirmed information on adverse,
serious, or unexpected events, including health or safety risks, associated
with the use or toxicity of the


 


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Product, or (b) the possibility that
cross-contamination has occurred with other Products manufactured or stored by
ICOS.


 


5.                                      Shipping


 


ICOS
agrees to work with PDL to deliver and transfer title to the Product in such
locations and in such a manner as directed by PDL, provided that any such
arrangement shall not materially alter ICOS’s obligations, or expose ICOS to
any additional liabilities, under or arising out of this Agreement.  Notwithstanding, all Product that ICOS
Processes pursuant to this Agreement shall be packaged and shipped FOB ICOS’s
facilities and in accordance with PDL’s written instructions and in compliance
with all applicable shipping regulations. 
The parties acknowledge that, according to the Quality Statement, ICOS
may not ship the Product to PDL until PDL has authorized such shipment.  In the event PDL does not grant such
shipping authorization within [CONFIDENTIAL TREATMENT REQUESTED] following the
date that ICOS has provided notice to PDL that it is prepared to ship the
Product, the Product will be deemed to have been delivered to PDL upon the
expiration of such [CONFIDENTIAL TREATMENT REQUESTED] period for all purposes
under this Agreement (including, without limitation, to determine whether ICOS
has timely delivered the Product to PDL, to begin the evaluation period of the
Product as described in Section 6.1A, and to transfer the title and risk
of loss in the Product to PDL).  All
risk in and title to the Product shall pass to PDL on delivery by ICOS.  Unless the parties agree otherwise in the applicable
Work Statement, PDL shall designate a shipping company, coordinate with such
shipping company for the shipment of the Product, and be billed directly by the
shipping company for all related shipping costs.  Notwithstanding the foregoing, shipment may, on agreement of the
parties, be arranged by ICOS and at terms and with a carrier reasonably
acceptable to PDL.


 


6.                                      Inspection
and Acceptance


 


6.1                               Evaluation
Period


 


A.                                   All
Product shipped from ICOS to PDL shall comply in all material respects with the
applicable Acceptance Criteria and Manufacture and Release Requirements and
shall be accompanied by a certificate of analysis in a form to be agreed on by
the parties.  PDL shall
have[CONFIDENTIAL TREATMENT REQUESTED] from the date the Product is delivered
to PDL to evaluate the Product and reject the acceptance thereof; provided,
however, that PDL may reject any Product only if (i) ICOS fails to deliver a
certificate of analysis, (ii) the Product does not meet the Acceptance Criteria
as of the date of delivery in any material respect, (iii) the Product was not
Processed according to the Manufacture and Release Specifications in any
material respect, or (iv) the Product was not manufactured according to cGMPs
in any material respect.  In the absence
of PDL notifying ICOS of rejection within the above described [CONFIDENTIAL
TREATMENT REQUESTED] period, PDL will be deemed to have accepted the Product as
delivered.


 


B.                                     In
the event that the Schedules in a particular Work Statement are estimates only,
PDL shall not be entitled to cancel any unfulfilled part of the Services or
refuse acceptance of Product related to such Work Statement on grounds of
reasonably late performance


 


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of the Services or reasonably late delivery of the
Product, as described in section 3.2.A. 
In such event, and notwithstanding Section 12, ICOS shall not be
liable for any loss, damage, costs or expenses of any nature, whether direct or
consequential, arising out of any delay in performance or delivery howsoever
caused; or arising out of any failure to produce the estimated quantities of
Product for delivery on the estimated schedule.


 


6.2                               Rejection
of Product


 


A.                                   If
PDL rejects any of the Product pursuant to Section 6.1A, PDL shall (i) immediately
provide to ICOS written notice of rejection which shall state in reasonable
detail the reasons for such rejection and (ii) provide ICOS with the
opportunity to conduct its own tests on such rejected Product.  PDL shall return all remaining unused Product
to ICOS and require that ICOS replace such rejected Product; provided, however,
that PDL may retain only that portion of the rejected Product that is then
being used for laboratory testing, and may use such retained portion solely to
complete such tests but in no event may PDL use any of the rejected Product for
any human clinical testing or trials after becoming aware of the basis for such
rejection (and PDL shall indemnify ICOS for all liabilities, costs and damages
incurred by ICOS resulting from PDL’s breach of this limitation on use).  ICOS shall replace the Product (as mutually
agreed) as soon as practicable.  In no
case shall ICOS take more than [CONFIDENTIAL TREATMENT REQUESTED] to replace
such Product.


 


B.                                     Notwithstanding
the foregoing, if PDL rejects the Product for the reasons stated in
Section 6.1A(ii) or (iii) and the parties disagree on whether PDL is
entitled to so reject such Product, then (i) analysts from both parties shall
promptly meet to determine that the methods of analysis are the same and are
being executed in the same manner, (ii) carefully controlled and split samples
shall be sent from one site to another for testing in an attempt to reach
agreement, and (iii) the parties shall use good faith efforts for a period of
[CONFIDENTIAL TREATMENT REQUESTED] after completing such tests to resolve
whether PDL is entitled to reject such Product.  In the event that the parties cannot resolve their dispute in the
manner described, an independent laboratory acceptable to both parties shall be
qualified and shall utilize agreed on test methods to test the Product in
dispute (“Disputed Product”).  The costs
of such independent laboratory shall be borne by the parties equally; provided,
however, that the party that is determined to be incorrect in the dispute shall
be responsible for all such costs and shall reimburse the correct party for its
share of such costs incurred.  The
decision of such independent laboratory shall be in writing and shall be binding
on both ICOS and PDL.


 


C.                                     If
PDL properly rejects Product pursuant to Section 6.1A and 6.2B, or if ICOS
breaches its warranty stated in Section 10.1B subject to the time
limitation regarding notice of breach as stated therein, and ICOS cannot
replace the Product with conforming Product within the time period set forth in
Section 6.2A, then ICOS [CONFIDENTIAL TREATMENT REQUESTED]; provided,
however, that ICOS will not wait for the time period in Section 6.2A to
expire before [CONFIDENTIAL TREATMENT REQUESTED] if ICOS has earlier knowledge
that it will be unable to replace the Product [CONFIDENTIAL TREATMENT
REQUESTED].  Nothing in this
Section shall permit ICOS to cancel its remaining obligations under the
Work and Quality Statements (e.g., obligations regarding transfer of PDL
Property and confidentiality) or terminate this Agreement as it relates to
other Work Statements.  The


 


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provisions of this Section 6.2 shall be the sole
remedies available to PDL with respect to Product that PDL properly rejects.


 


7.                                      Fees
and Invoices


 


7.1                               Fees


 


In consideration for ICOS performing the
Services, PDL shall pay to ICOS such amounts as described in the Price and
Payment Terms section of the applicable Work Statement.  All fees are exclusive of sales tax or of
any other applicable taxes, levies, duties and fees of whatever nature imposed
by or under the authority of any governmental authority, which shall be paid by
PDL (other than taxes based on ICOS’s income).


 


7.2                               Invoices


 


ICOS shall invoice PDL as provided in the Price and
Payment Terms section of the applicable Work Statement.  PDL shall pay the total amount of each
invoice within [CONFIDENTIAL TREATMENT REQUESTED] of receipt of the invoice.  If ICOS has not received full payment prior
to the expiration of such [CONFIDENTIAL TREATMENT REQUESTED] period, ICOS shall
provide written notice to PDL of such non-payment.  In the event PDL fails to make payment within [CONFIDENTIAL
TREATMENT REQUESTED] of the date of such notice, then (a) all unpaid amounts
shall accrue interest from the date of the applicable invoice at a monthly rate
equal to the lower of [CONFIDENTIAL TREATMENT REQUESTED] percent ([CONFIDENTIAL
TREATMENT REQUESTED]%) or the highest rate permitted by law, and (b) ICOS may
terminate this Agreement as set forth in Section 14.2A upon written notice
to PDL (unless PDL’s failure to pay is due to its rejection of Product pursuant
to Section 6.2A and the parties are within the dispute resolution
procedures set forth in Section 6.2B) provided that such termination will
not forgive PDL’s obligation to pay all amounts owing to ICOS.


 


8.                                      Raw
Materials


 


ICOS
will be responsible for procuring, testing, releasing and maintaining
sufficient inventory of all raw materials necessary to Process the Product in
accordance with this Agreement and the applicable Work and Quality Statements;
provided, however, that PDL shall reimburse ICOS for the purchase of unusual or
special raw materials, which are to be identified on the applicable Work
Statement as the “PDL Raw Materials,” in such amount and in the manner as
described in such Work Statement.


 


9.                                      Confidentiality


 


9.1                               Non-disclosure


 


Each party agrees (a) to take all reasonable
precautions and to use its commercially reasonable efforts (provided such
efforts shall be no less than what such party uses to protect its own
confidential information, but in no event less than reasonable care) to
maintain the confidentiality of all Confidential Information that such party
(the “Recipient”) obtains in respect to the other party (the “Disclosing
Party”) and (b) not to use or disclose to any third


 


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parties Confidential Information of the Disclosing
Party other than as permitted by Section 9.2.  The Disclosing Party’s disclosure of Confidential Information to
the Recipient shall not constitute a grant of any license or any other rights
or generate any business arrangements unless specifically set forth herein or
in another written agreement between the parties.


 


9.2                               Permitted
Disclosures


 


A Recipient may disclose Confidential Information of
the Disclosing Party only (a) to its employees solely for purposes of
performing the Services, (b) with the prior written consent of the Disclosing
Party and subject to any non-disclosure agreement that the Disclosing Party
wishes to execute with the third party recipient of the Confidential
Information, or (c) to appropriate regulatory authorities, attorneys and
accountants and pursuant to any order of a court, administrative agency or
other governmental authority, provided that the Disclosing Party has been
provided with reasonable prior notice so that the Disclosing Party can take
actions to prevent such disclosure or mitigate the effect of such disclosure on
the Disclosing Party, and (d) to its attorneys, advisors, investors,
prospective acquirors and investors, lenders and other financing sources, and
to strategic partners or licensees of the Products, provided that such
disclosure shall be made under terms of confidentiality at least as protective
as those herein.


 


9.3                               Terms
of This Agreement


 


Except as required by law and disclosure to each
party’s respective accountants and legal counsel, neither party shall disclose
to any third party any information about this Agreement other than the existence
of this Agreement, without the other party’s prior written consent.  Each party shall give the other at least ten
(10) business days advance written notice, unless such number of days must be
shortened to comply with a legal request, of a disclosure required by
applicable law and will cooperate with the other party to minimize the scope
and content of such disclosure.


 


9.4                               Press
Release


 


The text and timing of any press release or other
communication to be published publicly in any manner by either party concerning
the subject matter of this Agreement shall require the prior written approval
of the other party, which shall not be unreasonably withheld.


 


10.                               Representations
and Warranties; Disclaimers


 


10.1                       ICOS


 


ICOS represents and warrants to PDL the following:


 


A.                                   As
of the date of this Agreement, ICOS has all requisite corporate power and
authority to enter into and perform all of its obligations under this
Agreement.  The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action in
respect thereof on the part of ICOS.  As
of the date of this Agreement, neither the execution and delivery of this Agreement
nor the performance of the transactions contemplated hereby, nor


 


11

















 


compliance by ICOS with the provisions hereof, shall
(i) conflict with or result in a breach of any provision of the certificate of
incorporation or by-laws of ICOS, (ii)  violate any order, writ,
injunction, decree, statute, rule or regulation applicable to ICOS, or
(iii)  conflict with any obligations or agreements of ICOS to any person,
contractual or otherwise;


 


B.                                     The
Product will have been manufactured in all material respects with the
Manufacturing and Release Requirements and cGMP; [CONFIDENTIAL TREATMENT
REQUESTED] and


 


C.                                     ICOS
is not debarred and has not and, in providing the Services, will not knowingly
use in any capacity the services of any person debarred under subsections
306(a) or (b) of the Generic Drug Enforcement Act of 1992 or any comparable law
of any foreign jurisdiction, as each may be amended from time to time;


 


D.                                    EXCEPT
AS EXPRESSLY WARRANTED IN THIS SECTION 10.1, ICOS MAKES NO REPRESENTATION
OR WARRANTY WITH RESPECT TO THE SERVICES OR PRODUCT, EXPRESS OR IMPLIED, IN ANY
MANNER AND EITHER IN FACT OR BY OPERATION OF LAW, AND SPECIFICALLY DISCLAIMS
ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, COURSE OF
DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR NONINFRINGEMENT.  Without limiting the foregoing, PDL
acknowledges that it has not and is not relying upon any implied warranty of
any kind or upon any representation or warranty whatsoever by ICOS as to the
commercial exploitability of the Product, the prospects (financial, regulatory
or otherwise) or likelihood of commercial success of the Product after the date
of this Agreement, or the need for third party licenses to commercialize the
Product.


 


10.2                        PDL


 


PDL represents and warrants to ICOS the following:


 


A.                                   As
of the date of this Agreement, PDL has all requisite power and authority to
enter into and perform all of its obligations under this Agreement.  The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of PDL.  Neither the execution and
delivery of this Agreement nor the performance of the transactions contemplated
hereby, nor compliance by PDL with the provisions hereof, shall (i) conflict
with or result in a breach of any provision of the certificate of incorporation
or by-laws of PDL, (ii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to PDL, or (iii) conflict with any
obligations or agreements of PDL to any person, contractual or otherwise;


 


B.                                     PDL
is entitled to supply the applicable PDL Patent Rights, PDL Trade-Secrets and
PDL Materials to ICOS for the performance of the related Services;


 


C.                                     PDL
shall use all Product supplied by ICOS pursuant to this Agreement solely for
conducting clinical trials (and research and development activities related
thereto) for


 


12

















 


the purpose of collecting clinical data necessary to
meet North American and European regulatory filing requirements; and


 


D.                                    EXCEPT
AS EXPRESSLY WARRANTED IN THIS SECTION 10.2, PDL MAKES NO REPRESENTATION
OR WARRANTY WITH RESPECT TO THE PDL PATENT RIGHTS, PDL TRADE-SECRETS, PDL
MATERIALS OR THE PRODUCT, EXPRESS OR IMPLIED, IN ANY MANNER AND EITHER IN FACT
OR BY OPERATION OF LAW, AND SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR
STATUTORY WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, COURSE OF DEALING, COURSE OF
PERFORMANCE, USAGE OF TRADE OR NONINFRINGEMENT.


 


11.                               Limitation
on Liability


 


A.                                   EXCEPT
FOR BREACHES OF SECTION 9, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR ANY INCIDENTAL, INDIRECT, PUNITIVE, CONSEQUENTIAL (INCLUDING,
WITHOUT LIMITATION, LOST PROFITS) OR SPECIAL DAMAGES OF ANY TYPE OR AMOUNT
ARISING OUT OF ITS BREACH OF ANY PROVISION IN THIS AGREEMENT (INCLUDING WITHOUT
LIMITATION, THE PERFORMANCE OR FAILURE TO PERFORM HEREUNDER) EVEN IF SUCH
DAMAGES WERE FORESEEABLE AND WHETHER SUCH DAMAGES ARISE IN TORT, IN CONTRACT OR
OTHERWISE.


 


B.                                    ICOS’s
sole liability to PDL for delivering Product that PDL is entitled to reject
pursuant to Section 6.2 or breaching its warranty made in
Section 10.1B, is to perform the obligations in accordance with
Section 6.2.


 


C.                                    Without
expanding (i) PDL’s liability as described in Section 7.2 for the failure
to make timely payments as described therein or (ii) ICOSs’ liability as
described in Section 11.B for the happening of the events described
therein, each party’s liability to the other for any loss suffered by such
other party arising as a direct result of a breach of this Agreement or of any
other liability of any kind or nature, including without limitation,
misrepresentation and negligence, arising out of this Agreement shall be
limited to the payment of damages which shall not exceed in US Dollars an
amount equal to [CONFIDENTIAL TREATMENT REQUESTED]; provided, however, if and
only to the extent that such damages are caused by the party’s willful or
intentional misconduct, then [CONFIDENTIAL TREATMENT REQUESTED].


 


12.                               Indemnification


 


12.1                        Indemnification
of ICOS


 


Except to the extent any of the following Liabilities
(defined as follows) are as a result of ICOS’s negligence or willful
misconduct, PDL shall defend, indemnify and hold harmless ICOS, its officers,
agents, employees and Affiliates from and against any liabilities, damages,
losses, expenses and costs (including reasonable attorneys’ fees) (collectively
“Liabilities”) as a result of any third party claims or actions arising out of
(a) PDL’s breach, violation or nonfulfillment of any of its covenant,
agreements, representations or warranties


 


13

















 


under this Agreement, (b) PDL’s gross negligence or
willful misconduct, (c) the handling, possession, marketing and distribution,
sale or use of the Product following delivery by ICOS to PDL, including without
limitation any claim alleging breach of warranty or product liability, (d) any
claims alleging ICOS’s use of the PDL Patent Rights, PDL Trade-Secrets and PDL
Materials infringes any third party’s rights, or (e) any claim of infringement
arising out of the composition of matter of the Product, Processing of the
Product or use of the Product.


 


12.2                        Indemnification
of PDL


 


Except to the extent any of the following Liabilities
are as a result of PDL’s negligence or willful misconduct, ICOS shall defend,
indemnify and hold harmless PDL, its officers, agents, employees and Affiliates
from and against any Liabilities (as defined in Section 12.1) as a result
of any third party claims or actions arising out of (a) ICOS’s breach, violation
or nonfulfillment of any of its covenant, agreements, representations or
warranties under this Agreement, (b) ICOS’s gross negligence or willful
misconduct, (c) ICOS’s handling, possession, or use of the Product and PDL
Materials (except for claims of infringement based on ICOS’s Processing the
Product) in ICOS’s possession and prior to delivery by ICOS to PDL, and (d)
claims alleging that ICOS’s operations constitute an infringement of
third-party proprietary rights, if infringement arises from technical information
and know-how provided by ICOS, unless developed by ICOS on PDL’s behalf.


 


12.3                        Indemnification
Procedures


 


Each party agrees it shall give to the party that is
obligated to indemnify such party (a) prompt notice of any claim coming within
the purview of the indemnities contained in this Section 12, (b) all
relevant facts in its possession or control, (c) the right to exclusive control
of the defense of any action unless a conflict of interest exists with respect
to defending such action, and (d) its cooperation in the defense of any such
action.  In addition, each party agrees
that the indemnified party will not settle any Liabilities without the prior
written consent of the indemnifying party, not to be unreasonably withheld.


 


12.4                        Product
Liability and Worker’s Compensation Insurance


 


Each Party shall maintain, during the term of this
Agreement and for a period of one (1) year thereafter, product liability in an
amount not less than [CONFIDENTIAL TREATMENT REQUESTED] per occurrence and
aggregate and shall maintain worker’s compensation insurance as required under
applicable laws.


 


14

















 


13.                               Term
and Termination


 


13.1                        Term


 


Unless terminated early according to this Agreement
(a) this Agreement shall continue for a period of five (5) years from the date
hereof and may be extended by the parties’ mutual written agreement and (b)
each Work or Quality Statement shall commence on the date of execution by the
parties and shall terminate on the completion of the Services described
therein.  The termination of this
Agreement for any reason shall automatically terminate any and all Work and
Quality Statements, unless the parties otherwise agree in writing.  In any event, each Work or Quality Statement
is and shall remain subject to the terms and conditions of this Agreement.


 


13.2                        Termination


 


PDL is entitled to terminate this Agreement at any
time and for any reason on sixty (60) days prior written notice to ICOS,
subject to the Effects of Termination as described in Section 13.3
including, without limitation, the obligation to make such payments to ICOS as
described in Section 13.3C.


 


In addition to the termination rights stated in
foregoing paragraph and in Section 7.2, either party may terminate this
Agreement by written notice to the other party on the occurrence of any of the
following events:


 


A.                                   if
the other commits a material breach of this Agreement which (in the case of a
breach capable of remedy) is not remedied within sixty (60) days of the receipt
by the other of written notice identifying the breach with specificity and
requiring its remedy; provided, however, if the breach is as a result of
non-payment of any amounts owed, following the expiration of any applicable
grace period, the breaching party must remedy the breach within ten (10) days
after receiving such written notice; or


 


B.                                     a
petition is filed against the other party for an involuntary proceeding under
any applicable bankruptcy or other similar law, and (i) such petition has not
been dismissed within sixty (60) days of filing; or (ii) a court having
jurisdiction has appointed a receiver, liquidator, trustee or similar official
of such other party for any substantial portion of its property, or ordered the
winding up or liquidation of its affairs; or


 


C.                                     the
other party commences a voluntary proceeding under applicable bankruptcy or
other similar law, has made any general assignment for the benefit of
creditors, or has failed generally to pay its debts as they become due.


 


D.                                    ICOS
may terminate this Agreement by providing written notice to PDL if (i) PDL or
ICOS is unable to perform or is substantially impaired from performing its
respective obligations in a timely manner under this Agreement and the Work and
Quality Statements due to court rulings related to third-party claims of
intellectual property infringement against PDL covered under
Section 12.1(d) and (ii) the parties cannot reach agreement about how to
proceed within twenty (20) days of ICOS’s written notice to PDL.


 


15

















 


E.                                      PDL
may terminate this Agreement by providing written notice to ICOS if (i) PDL or
ICOS is unable to perform or is substantially impaired from performing its
respective obligations in a timely manner under this Agreement and the Work and
Quality Statements due to court rulings related to third-party claims of
intellectual property infringement against ICOS described under
Section 12.2(d) and (ii) the parties cannot reach agreement about how to
proceed within twenty (20) days of PDL’s written notice to ICOS.


 


13.3                        Effect
of Termination


 


A.                                   On
termination of this Agreement for any reason (whether due to breach of either
party or otherwise), ICOS will furnish to PDL a complete inventory of all work
in progress and an inventory of all Processed Product.


 


B.                                     By
no later than the date on which the termination of this Agreement becomes
effective, each party will return to the other all Confidential Information
that it possesses or controls that belongs to the other, except that each may
retain a copy in its law department or with its outside counsel for
record-keeping purposes. 
Notwithstanding the foregoing, the license rights granted to PDL under
Sections 3.6 and 3.7 shall survive the termination of this Agreement unless
this Agreement is terminated pursuant to the events described in
Section 13.3C.


 


C.                                     In
the event this Agreement is terminated (i) by PDL for any reason other than
pursuant to Section 13.2.A, B, C or E, or Section 15 or (ii) by ICOS
pursuant to Section 13.2.A, B, C or D, PDL will pay ICOS a sum equal to
[CONFIDENTIAL TREATMENT REQUESTED], the payment for which shall be due to ICOS
on or before the date of termination of this Agreement.  With respect to the manufacturing capacity
that would have otherwise been used to perform the Services, [CONFIDENTIAL
TREATMENT REQUESTED].


 


D.                                    If
this Agreement is terminated pursuant to Section 13.2.E, ICOS shall
[CONFIDENTIAL TREATMENT REQUESTED].


 


E.                                      On
termination of this Agreement, neither party shall use or exploit in any manner
whatsoever any Intellectual Property Rights of any kind or nature of the other
party, except for the express rights granted in other Agreements between the
parties and in Section 3.6 of this Agreement.  Without limitation to the foregoing, on termination of this
Agreement, ICOS shall not use or exploit the PDL Patent Rights, PDL
Trade-Secrets, PDL Confidential Information or PDL Materials in any way.


 


F.                                      Termination
of this Agreement for any reason will not relieve the parties of any obligation
accruing prior thereto.


 


G.                                     The
following Sections will survive the termination of this Agreement for whatever
reason:  3.6, 3.7, 6.2, 7, 8, 9 through
13, and 17 through 24.


 


16

















 


14.                               Facility
Inspection


 


PDL
has the right on [CONFIDENTIAL TREATMENT REQUESTED] days’ notice and during
business hours to visit ICOS (i.e., person in the plant) to observe the Process
and the progress of the work and to inspect related records and data for the
purpose of making quality control inspections so as to assure compliance with
the applicable Work and Quality Statements; provided, however, that if another
party’s product is being manufactured during the time that PDL intends to
visit, such visit, as mutually agreed, (i) may be reasonably delayed until only
PDL’s Product is being manufactured or (ii) take place subject to the provision
that PDL’s representatives will not enter areas of any ICOS facility at times
when third parties’ products are being manufactured.  The form, participants and procedures of all such inspections
shall be subject to ICOS’s reasonable approval.  PDL representatives will follow such security and facility access
procedures as are reasonably designated by ICOS.  During all such inspections, PDL shall use good faith efforts to
avoid disrupting ICOS’s operations.


 


On no less than [CONFIDENTIAL TREATMENT REQUESTED] days’ notice to
ICOS, PDL shall also be entitled to conduct a reasonable annual multi-day
quality assurance site audit, the form, participants and procedure of which
shall be subject to ICOS’s reasonable approval.  When conducting an inspection or audit as described, each of
PDL’s representatives will (a) be subject to a nondisclosure obligation
comparable in scope to Section 9, (b) follow such security and facility
access procedures as are reasonably designated by ICOS, (c) be accompanied by
an ICOS representative, and (d) not enter areas of any ICOS facility at times
when third parties’ products are being manufactured to assure protection of
ICOS’s or a third party’s Confidential Information.


 


15.                               Force
Majeure


 


Neither
party hereto shall be liable to the other party for any delay or default in
such party’s performance hereunder if such delay or default is caused by
conditions beyond such party’s reasonable control including, but not limited
to, delays by the FDA or other governmental agency which are not due to serious
violations of law by ICOS, acts of God, war, insurrection, civil commotion,
destruction of production facilities or materials by earthquake, fire, flood or
storm, labor disturbances including strikes or lockouts or epidemic (“Force
Majeure”).  Each party hereto agrees to
promptly notify the other party of any event of Force Majeure and to employ all
reasonable efforts toward prompt resumption of its performance hereunder when
possible if such performance is delayed or interrupted by reason of such
event.  If an event of Force Majeure
affecting ICOS continues for a period of sixty (60) days, ICOS shall notify PDL
as to how long ICOS expects the Force Majeure delay will last.  If ICOS expects that the Force Majeure delay
will last six (6) months or more, PDL shall have the right to terminate this
Agreement.  If ICOS expects that the
Force Majeure delay will last less than six (6) months, and after such six (6)
month period ICOS can still not perform under this Agreement, ICOS shall be in
material breach of this Agreement and PDL shall have the right to terminate
this Agreement.


 


16.                               Assignment


 


This
Agreement will be binding on and will inure to the benefit of the parties
hereto and their respective successors and assigns; provided, however, that
neither party may assign any of its rights or obligations under this Agreement
or the Work and Quality Statements to any third


 


17

















 


party without the other party’s prior written consent,
which consent will not be unreasonably withheld; provided, however, that either
party may assign its rights and obligations hereunder without the other party’s
consent to a third party that is acquiring or merging with such party or that
is purchasing all or substantially all of such party’s assets that are the
subject matter of this Agreement, provided that the assignee assumes all of
such party’s rights and obligations under this Agreement.


 


17.                               Use
of Intellectual Property Rights


 


Except
as expressly stated in this Agreement, no Intellectual Property Rights of any
kind or nature are conveyed by this Agreement and neither party shall have any
right, title or interest in or to the other party’s Intellectual Property
Rights for any purpose whatsoever without such other party’s prior written
consent.  Neither party shall use or
disclose the name of the other in any advertising, sales, marketing or other
promotional material, without the prior written consent of the other.


 


18.                               Entire
Agreement; Amendments


 


Unless
otherwise agreed to in a writing signed by both parties, this Agreement and the
applicable Work and Quality Statements represent the entire understanding of
the parties.  There are no promises,
terms or conditions, oral or written, expressed or implied, other than those
contained in this Agreement and/or in a Work or Quality Statement.  The terms of this Agreement shall supersede
all previous and contemporaneous agreements between ICOS and PDL relating to
the subject matter contained herein.  To
the extent any terms of a Work or Quality Statement (or any Appendices attached
thereto) conflict with the terms of this Agreement, the terms of this Agreement
shall control unless the parties expressly state in the Work or Quality
Statement (or in the Appendices) that specific terms contained therein control
over the applicable conflicting terms in this Agreement.  If PDL chooses to issue a purchase order
(“PO”) for the delivery of Product, such PO should reference this Agreement and
the specific Work and Quality Statements and shall be issued solely for the
convenience of PDL and to provide subject matter description.  Except as expressly provided in this
Agreement, this Agreement and each Work or Quality Statement may be modified or
amended only by the parties’ written agreement.


 


19.                               Waiver;
Severability


 


No
delay or waiver (or single or partial exercise) on the part of either party on
any one or more occasions in exercising any right, power or privilege hereunder
will operate as a waiver thereof or of any other right, power or privilege
hereunder.  Any such waiver must be made
in writing.  If any provision of this
Agreement or any Work or Quality Statement is held to be illegal, invalid, or
unenforceable under present or future laws effective while this Agreement
remains in effect, the legality, validity and enforceability of the remaining
provisions will not be affected thereby.


 


18

















 


20.                               Construction;
Headings


 


This
Agreement and all Work and Quality Statements will be deemed to have been
drafted by both PDL and ICOS and will not be construed against either party as
the draftsperson hereof.  All
section titles or headings contained in this Agreement and any Work and
Quality Statements are for convenience only, will not be deemed a part hereof
or thereof and will not affect the meaning or interpretation of this Agreement
or the Work and Quality Statements.


 


21.                               Attorneys’
Fees


 


If
either party is reasonably required to initiate legal action to enforce its
rights and the other party’s obligations under this Agreement, the prevailing
party in such action shall be entitled to recover its reasonably attorneys’
fees and costs.


 


22.                               Notices


 


Any notices,
demand, invoices, payments or statements required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed to have been
delivered when personally delivered, when sent by fax or email (with
confirmation of delivery), or on the third business day following its mailing
by registered or certified mail (return receipt requested), to the parties at
their respective addresses stated in the opening paragraph of this Agreement,
or to such other address as designated in writing.


 


23.                               Independent
Contractor


 


The
parties hereto are independent contractors and nothing contained in this
Agreement shall be construed to place them in the relationship of partners,
principal and agent, employer/employee or joint venturer.  The parties agree that neither shall have
power or right to bind or obligate the other, nor shall either hold itself out
as having such authority.


 


24.                               Counterparts


 


This
Agreement and any Work or Quality Statements may be executed in counterparts,
each of which will be deemed an original but all of which together will
constitute a single instrument.


 


[signatures on following
page]


 


19

















 


IN WITNESS WHEREOF,
the parties hereto have signed this Agreement as of the date first written
above.


 


 


	
  PROTEIN
  DESIGN LABS, INC.

  	
   

  	
  ICOS
  CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By 

  	
   

  	
   

  	
  By 

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
  Title 

  	
   

  	
   

  
										



 


20

















 


EXHIBIT


 


WORK STATEMENT

TO MANUFACTURING AGREEMENT

BETWEEN

ICOS CORPORATION AND PROTEIN DESIGN LABS, INC.

DATED
             


 


Date of Work
Statement:                   


 


 


I.                                         Product


 


“Product” means M200.


 


II.                                     Scope
of Services


 


Attached as Appendix A


 


III.                                 PDL
Materials


 


 


IV.                                Manufacture
and Release Requirements


 


A.                                   Manufacturing
Procedure and Requirements


 


 


B.                                     QA/QC
Tests


 


 


C.                                     Handling
and Storage Requirements


 


 


D.                                    Packaging
Requirements


 


 


E.                                      Record
Keeping Requirements


 


21

















 


V.                                    Acceptance
Criteria


 


Attached as Appendix B.


 


VI.                                Estimated
Timeline


 


Attached as Appendix C.


 


VII.                            Price
and Payment Terms


 


Attached as Appendix D.


 


VIII.                        Quality
Statement


 


Attached as Appendix E.


 


 


	
  PROTEIN
  DESIGN LABS, INC.

  	
  ICOS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
  Title

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Dated:

  	
   

  	
   

  
												



 


22

















 


APPENDIX A

SCOPE OF SERVICE


 


[CONFIDENTIAL TREATMENT
REQUESTED]


 


23

















 


APPENDIX B

ACCEPTANCE CRITERIA


 


[CONFIDENTIAL TREATMENT REQUESTED]


 


24

















 


APPENDIX C

ESTIMATED TIMELINE


 


[CONFIDENTIAL TREATMENT REQUESTED]


 


25

















 


APPENDIX
D

PRICE AND PAYMENT TERMS


 


[CONFIDENTIAL TREATMENT
REQUESTED]


 


26

















 


APPENDIX E

QUALITY STATEMENT


 


[CONFIDENTIAL TREATMENT REQUESTED]


 


27