exv10w5






Exhibit 10.5




Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.




SECOND AMENDED AND RESTATED

COLLABORATION AGREEMENT




GENENTECH, INC. AND

BIOGEN IDEC INC.



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COLLABORATION AGREEMENT



THIS SECOND AMENDED AND RESTATED COLLABORATION AGREEMENT (this “Agreement) is made effective as of
the 18th day of October, 2010 (the “Second Restated Effective Date”) by and between Biogen Idec
Inc. (formerly IDEC Pharmaceuticals Corporation), a Delaware corporation having its principal place
of business at 133 Boston Post Road, Weston, Massachusetts 02493 (“IDEC”) and GENENTECH, INC., a
Delaware corporation having its principal place of business at 1 DNA Way, South San Francisco,
California 94080 (“Genentech”), each on behalf of itself and its Affiliates. IDEC and Genentech
are sometimes referred to herein individually as a “Party” and collectively as the “Parties,” and
references to “IDEC” and “Genentech” shall include their respective Affiliates.




RECITALS




     1. Genentech and IDEC entered into that certain Collaboration Agreement dated as of March 16,
1995 related to the development and commercialization of Licensed Products, including without
limitation C2B8 (the “Original Agreement”).



     2. In the Original Agreement, IDEC granted to Genentech, and Genentech obtained, rights to
co-promote Licensed Products in the United States and Canada and to develop and market Licensed
Products in the rest of the world (excluding certain Asian countries, which were added to the
Original Agreement by amendment at a later date).



     3. Simultaneously with the execution of the Original Agreement, IDEC and Genentech entered
into a Preferred Stock Purchase Agreement (the “Stock Purchase Agreement”) of even date therewith,
pursuant to which Genentech purchased $5 million of Preferred Stock of IDEC in accordance with the
terms and conditions thereof.



     4. Simultaneously with the execution of the Original Agreement, IDEC and Genentech entered
into the Expression Technology License of even date therewith granting Genentech rights to certain
enabling technology (the “Expression Technology License”).



     5. Following the execution of the Original Agreement, the Parties entered into a first
amendment to the Collaboration Agreement of November 30, 1995 (the “First Amendment”) expanding
Genentech’s rights to develop and market Licensed Products in the world to include certain Asian
countries.



     6. Following the execution of the Original Agreement, the parties entered into an amendment of
June 15, 1998 (the “Second Amendment”) approving the assignment of certain rights of Genentech in
Canada with respect to C2B8 to F. Hoffmann La Roche Ltd.



     7. On June, 19 2003 (the “Restated Effective Date”), the Parties amended and restated the
Original Agreement to include certain additional products (“New Products”, as defined below) whose
mechanism of action is initiated by interaction with the CD20 B-cell determinant, including





 




			
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without limitation the humanized molecule created by Genentech known as G2H7 (the “2003 Restated
Agreement”).




     8. In an effort to be efficient in the drafting of this Agreement, the Parties have elected to
preserve substantial portions of the historical content of the Original Agreement, the First
Amendment, the Second Amendment, and the 2003 Restated Agreement in this Agreement (with the
expressed understanding that such content is not given any renewed or additional meaning by its
inclusion herein).



     9. The Parties desire to change certain aspects of their collaboration, including (i)
adjusting certain financial terms applicable to Licensed Products, and (ii) providing Genentech the
sole right to develop and market OCR throughout the world, and the sole right to make decisions
with respect thereto, and to modify the financial and other terms that apply to the sale of OCR in
the Co-Promotion Territory.



     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties agree as follows:



ARTICLE 1.

DEFINITIONS




     Capitalized terms not otherwise defined herein have the meaning given them in the Schedule of
Master Definitions attached hereto as Appendix 1.



ARTICLE 2.

SCOPE OF COLLABORATION; DEVELOPMENT COSTS




     2.1 Initial Licensed Product. The Parties will focus their initial efforts on the development
of C2B8 in the Field.



     2.2 Y2B8 and In2B8 Option and Phase II Trial. If IDEC decides, or the Parties mutually agree,
to commence a Phase II Clinical Trial of IDEC’s [**] (“Y2B8”) and IDEC’s [**] (“In2B8”) (the
“Y2B8 Phase II Trial”), IDEC shall give notice, including the number of evaluable patients, of such
proposed Y2B8 Phase II Trial (the “Y2B8 Phase II Notice”) to Genentech. If Genentech notifies IDEC
within sixty (60) days of receipt of the Y2B8 Phase II Notice that it intends to participate with
IDEC in the Y2B8 Phase II Trial, then Genentech shall bear [**] of the costs of the Y2B8 Phase II
Trial up to a maximum Genentech contribution of [**]. Once Genentech has reached its maximum
contribution, [**] for the Y2B8 Phase II Trial in excess of this amount shall be borne 100% by
IDEC. If IDEC does not receive timely notice from Genentech of its intention to participate in the
Y2B8 Phase II Trial, then IDEC may proceed with the Y2B8 Phase II Trial provided that IDEC shall
bear the cost of the Y2B8 Phase II Trial. Upon completion of the Y2B8 Phase II Trial and delivery
to Genentech of a final report with respect thereto, Genentech shall have 120 days to exercise an
option to include Y2B8 and In2B8 as Licensed Products (the “Y2B8 Option”). The Y2B8 Option shall
be exercisable by written notice to IDEC (“Notice of Y2B8/In2B8





 




			
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Exercise”) together with payment in the amount of [**] (the “Option Fee”). Notwithstanding the
foregoing, if Genentech shall have elected to participate with IDEC in the Y2B8 Phase II Trial and
contribute up to [**] toward the costs of such Y2B8 Phase II Trial, then the Option Fee shall be
reduced to [**]. Within 60 days of the Notice of Y2B8/1n2B Exercise, the Parties shall agree upon
the terms and conditions governing the development and commercialization of products derived from
Y2B8 and In2B8, taking into account the commercial value of Y2B8 and In2B relative to C2B8. In any
event, no later than publication of the Pivotal Phase III Clinical Trial results of C2B8, the
Parties shall discuss in good faith the initiation of the Y2B8 Phase II Trial.




     2.3 Development Costs for C2B8.



     (a) Except as set forth below, or unless otherwise agreed to in writing by Genentech, IDEC
shall bear all costs for development and obtaining Regulatory Approval of C2B8 in the Field in the
Co-Promotion Territory through the date of Regulatory Approval of C2B8 in the United States,
including but not limited to certain manufacturing process improvements for the current production
process and using the existing cell line. Genentech agrees, however, that it shall bear the costs
of the following development activities incurred in connection with C2B8 through the date of the
first Regulatory Approval in the United States:



          (i) accelerated product stability studies conducted by Genentech as set forth in Appendix I of
the Development Plan and, if a replacement formulation is deemed necessary by the JDC, reasonable
assistance for development of such formulation and attendant studies;



          (ii) assistance with assays as set forth in Appendix I to the Development Plan;



          (iii) assistance provided by [**] or equivalents from Genentech, deployed at the direction of
the persons designated by the JDC to supervise the Pivotal Phase III Clinical Trial; and



          (iv) the process development and manufacturing approvals of a reamplified cell-line or the
current cell-line if a reamplified cell-line scale-up is not feasible as specified in Section 8.1.



     (b) Subject to Section 2.7 and Section A.11 of Exhibit A, all Development Costs for Licensed
Products incurred by the Parties for development or marketing in the Co-Promotion Territory after
the first Regulatory Approval for C2B8 in the United States shall be charged against Operating
Profits (or Losses).



     (c) Subject to Section A.11 of Exhibit A, Genentech shall bear all Development Costs for
Licensed Products for development or marketing in the Field in the Licensed Territory, unless
otherwise agreed in writing by the Parties.



     2.5 IDEC’s Rights Regarding New Products Other Than G2H7.



     (a) Opt-in Notice for New Products Other Than G2H7. For so long as the Parties are entitled
to receive a share of Operating Profits or Losses on any Franchise Product hereunder,





 




			
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Genentech agrees to keep IDEC informed as to the existence of research and/or development
activities regarding Potential New Products other than G2H7. With respect to [**] Potential New
Products and Genentech Potential New Products, within thirty (30) days of the date that
Genentech’s portfolio planning committee (or successor committee or process thereto, “PPC”) makes a
formal decision, as recorded in the minutes of the relevant PPC meeting, to commence clinical
development of such a Potential New Product (or a similar development decision is made as part of
any successor process), Genentech shall provide IDEC with the same development assessment package
that was provided to the PPC as the basis of its development decision (or otherwise reviewed in
connection with such decision), including an identification as to whether such product is a [**]
Potential New Product [**] Potential New Product. Without limiting the foregoing, such development
assessment package shall include a summary of the preclinical data and the proposed Development
Plan including proposed clinical study designs, manufacturing cost estimates, timelines, program
cost, target product profile(s), and market forecast. With respect to [**] Potential New
Products, [**], Genentech will provide to IDEC a summary of Genentech’s rights (and IDEC’s
potential rights) to develop and commercialize such [**] Potential New Product, as well as relevant
information about the product, including preclinical and clinical data and reports [**].




     (b) Exercise of Opt-In by IDEC. IDEC shall have sixty (60) days from the date of Genentech’s
notice to IDEC of the availability of a Potential New Product to provide written notice to
Genentech that it elects to participate in the development and commercialization of such Potential
New Product. In order for IDEC to preserve any rights under Section 2.5(c) with respect to
Genentech Potential New Products, notice of an election to not opt-in with respect to such
product under this Section 2.5(b) must be provided to Genentech within such sixty (60) day period.



          (i) Genentech Potential New Products. Within ten (10) days following an election to
participate in a Genentech Potential New Product, IDEC shall pay Genentech the opt-in fee set forth
in Section 7.1(b)(ii) or (iii), as the case may be. From and after the date of the payment of such
fee, such Genentech Potential New Product shall be deemed a New Product under this Agreement, and
IDEC shall have the right to participate with Genentech with respect to such product [**] New
Product.



          (ii) [**] Potential New Products. For a period of thirty (30) days following an election by
IDEC to participate in an [**] Potential New Product, Genentech and IDEC shall use good faith
efforts to agree upon the amount of the opt-in fee IDEC shall pay in order to obtain the right to
include such [**] Potential New Product as a New Product hereunder; such amount to be in any event
[**] cost of such product attributable to rights in the United States. In determining such cost,
the Parties shall take into consideration [**] in developing such product to such stage, including
without limitation [**]. If the Parties are unable to agree upon the amount of the opt-in fee for
such [**] Potential New Product, either Party may, by written notice to the other, have such matter
referred to an independent investment banker, mutually agreeable to both Parties, to determine the
amount of such opt-in fee; such determination to be binding upon both Parties. Within ten (10)
days following the Parties agreement upon, or the independent investment banker’s determination of,
such opt-in fee, IDEC shall pay Genentech such amount. From and after the date





 




			
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of the payment of such fee, such Potential New Product shall be deemed a New Product under
this Agreement, and:




          (1) IDEC shall have the right to participate with Genentech with respect to such product in
the United States [**]; or



          (2) to the extent that Genentech was able at the time of Genentech’s [**] in the development
and commercialization activities with [**] to participate in the development and commercialization
[**].


Notwithstanding anything to the contrary in this Agreement, it is understood and agreed that, with
respect to [**] Potential New Products for which IDEC has timely opted-in and paid the opt-in fee
hereunder, Genentech is under no obligation under this Agreement to offer or grant to IDEC any
rights to such [**] Potential New Products outside the United States, or make any payments to IDEC
with respect to Genentech’s development and commercialization of such [**] Potential New Products
outside the United States.



Failure by IDEC under this Section 2.5(b) to provide a timely election notice or to timely pay the
opt-in fee, or rejection by IDEC of a independent investment banker’s determination of the amount
of the opt-in fee (when provided in the manner set forth above with respect to [**] Potential New
Products), will be deemed to be an election not to participate in such Potential New Product (and
following any such failure or rejection, Genentech shall (except as provided in Section 2.5(c) with
respect to Genentech Potential New Products) have no further obligation to offer such Potential New
Product to IDEC and IDEC shall have no further rights under this Agreement with respect to such
Potential New Product).




     (c) [**] With respect to each Genentech Potential New Product for which IDEC was provided the
opportunity to opt-in pursuant to Section 2.5(a) before the same shall have [**], and for which
IDEC pursuant to Section 2.5(b) timely elected to not opt-in (but not including a failure to elect
to opt-in), promptly following [**] for such Genentech Potential New Product, Genentech shall
provide IDEC with [**] data package for such Genentech Potential New Product that summarizes the
clinical data and the proposed Development Plan going forward, including proposed clinical study
designs, timelines and program costs. IDEC shall have sixty (60) days from the date of Genentech’s
notice to IDEC of such development assessment package to provide written notice to Genentech that
it elects to participate in the development and commercialization of such Genentech Potential New
Product. Within ten (10) days following an election to participate in such Genentech Potential New
Product, IDEC shall pay Genentech the opt-in fee set forth in Section 7.1(b)(iv). From and after
the date of the payment of such fee, such Genentech Potential New Product shall be deemed a New
Product under this Agreement, and the Parties shall [**] New Product as provided herein. Failure
by IDEC under this Section 2.5(c) to provide a timely election notice or to timely pay the opt-in
fee will be deemed to be an election not to participate in such Genentech Potential New Product,
and following any such failure, Genentech shall have no further obligation to offer such Genentech
Potential New Product to IDEC and IDEC shall have no further rights under this Agreement with
respect to such Genentech Potential New Product.



     2.6 IDEC Right of Negotiation for Third Party Anti-CD20 Products.





 




			
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     (a) Right of Negotiation. If Genentech decides to seek a license to develop and/or
commercialize a Third Party Anti-CD20 Product, Genentech shall promptly notify IDEC of such
decision in writing (such occurrence to “seek a license” shall be deemed to have occurred no later
than the date that [**]. IDEC shall have thirty (30) days to elect in writing to participate in
negotiations, and a failure to timely so elect shall be deemed a decision not to participate in
such negotiations (and following any such failure, Genentech shall have no further obligation to
offer such Third Party Anti-CD20 Product to IDEC and IDEC shall have no further rights under this
Agreement with respect to such Third Party Anti-CD20 Product). In the event that IDEC timely
notifies Genentech of its desire to participate in such negotiations, then for a period of ninety
(90) days, Genentech and IDEC shall use good faith efforts to agree upon terms with the Third Party
for a license to such Third Party Anti-CD20 Product that includes the participation of IDEC and
Genentech, vis-à-vis each other, in the United States [**]; provided, at Genentech’s reasonable
discretion, Genentech may choose to negotiate with such Third Party alone (but to the extent
reasonably possible, on terms and conditions reasonably acceptable to IDEC). In the event that
IDEC and Genentech have not agreed upon terms with such Third Party within ninety (90) days of
IDEC’s election to participate, or if the Parties have not entered into a definitive agreement with
such Third Party within one hundred and eighty (180) days of IDEC’s election to participate, then
Genentech may enter into a definitive agreement on its own and at its sole discretion with such
Third Party for such Third Party Anti-CD20 Product; provided, Genentech will use its commercially
reasonable and diligent efforts to obtain the right for IDEC to participate with Genentech with
respect to such product in the United States.



     (b) Third Party Anti-CD20 Product In-licensed After the Restated Effective Date.



          (i) Notice. If, following IDEC’s timely notification to Genentech pursuant to Section 2.6(a)
to participate in negotiations with a Third Party for a Third Party Anti-CD20 Product, Genentech
enters into a definitive agreement with such Third Party for such Third Party Anti-CD20 Product
without IDEC, then Genentech shall promptly notify IDEC of the existence of such definitive
agreement and provide IDEC with a summary of the terms, including any data package provided by such
Third Party to Genentech, under which IDEC may participate with Genentech in the United States for
such Third Party Anti-CD20 Product (such terms, vis-à-vis each other, other than the amount of the
opt-in fee to be paid by IDEC to Genentech pursuant to this Section 2.6(b), to the extent
reasonably possible under such Third Party agreement, to be on [**].



          (ii) Opt-in Fee. The opt-in fee under Section 2.6(b)(i) above, to be determined by Genentech
[**], shall be based on the terms of the agreement with such Third Party attributable to rights in
the United States, and shall be intended to compensate Genentech for [**] of Genentech’s costs in
acquiring the rights in the United States to such product under such agreement with such Third
Party [**]. The Parties shall seek to agree on the amount of such opt-in fee, and to the extent
the Parties are unable to agree within a twenty (20) day period, such dispute shall be subject to
Section 17.2.



     (c) Third Party Anti-CD20 Product In-licensed Prior to the Restated Effective Date.





 




			
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          (i) Notice. With respect to any Third Party Anti-CD20 Products for which Genentech obtained a
license to develop and commercialize such product from a Third Party prior to the Restated
Effective Date, within thirty (30) days of the date that Genentech’s PPC makes a formal decision,
as recorded in the minutes of the relevant PPC meeting, [**], Genentech shall provide IDEC with the
same development assessment package that was provided to the PPC as the basis of its [**],
including a summary of the terms of the license from such Third Party under which IDEC may
participate with Genentech in the United States for such Third Party Anti-CD20 Product, (such
terms, other than the amount of the opt-in fee to be paid by IDEC to Genentech pursuant to this
Section 2.6(c)(i), to the extent reasonably possible under such Third Party agreement, to be on
[**]. Without limiting the foregoing, such development assessment package shall include a summary
of the preclinical data and the proposed Development Plan including proposed clinical study
designs, manufacturing cost estimates, timelines, program cost, target product profile(s), and
market forecast, and any data package provided by such Third Party to Genentech.



          (ii) Opt-in Fee. The opt-in fee under Section 2.6(c)(i) above, to be determined by Genentech
[**], shall be [**] cost of such product attributable to rights in the United States. [**]. The
Parties shall seek to agree on the amount of such opt-in fee, and to the extent the Parties are
unable to agree within a twenty (20) day period, such dispute shall be subject to Section 17.2.



     (d) Election. IDEC shall have thirty (30) days from the date of Genentech’s notice under
Section 2.6(b)(i) or 2.6(c)(i) above to elect in writing to participate with Genentech on such
terms under such definitive agreement, including without limitation the opt-in fee (and to the
extent the amount of the opt-in fee is not agreed upon at the time of such election, the amount of
the opt-in fee as determined by the arbitration panel under Section 17.2; such amount to be paid
upon the earlier of agreement by the Parties on such amount, or final determination by such
arbitration panel of such amount), and a failure to so elect shall be deemed a decision not to
participate with Genentech with respect to such Third Party Anti-CD20 Product, and following any
such failure, Genentech shall have no further obligation to offer such Third Party Anti-CD20
Product to IDEC and IDEC shall have no further rights under this Agreement with respect to such
Third Party Anti-CD20 Product.



     (e) Any agreement which IDEC and Genentech enter into under this Section 2.6 to develop and
commercialize a Third Party Anti-CD20 Product in the United States shall provide for licenses from
each Party to the other Party necessary to develop and commercialize such product under such
agreement; such licenses, to the extent permissible under the terms of the license from such
related Third Party, to be commensurate in scope with the licenses granted under Section 9.2.



     (f) Notwithstanding anything to the contrary in this Agreement, it is understood and agreed
that Genentech is under no obligation to offer or grant to IDEC any rights to any Third Party
Anti-CD20 Product outside the United States, or make any payments to IDEC with respect to
Genentech’s development and commercialization of any Third Party Anti-CD20 Product outside the
United States.



     (g) Genentech represents and warrants that, to the best of its knowledge, it has not, prior to
the Restated Effective Date initiated clinical development with (i) any proteins or peptides that
meet the definition of Potential New Products (other than G2H7), or (ii) any Third Party Anti-CD20





 




			
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Product for which Genentech obtained a license to develop and commercialize such product from a
Third Party prior to the Restated Effective Date, in each case as recorded in the minutes of its
PPC.




     2.7 Development Costs for New Products. Unless otherwise agreed in writing by the Parties,
from and after the Restated Effective Date, and notwithstanding a Party’s share in Operating
Profits (or Losses), all Development Costs for New Products for development or marketing in the
Co-Promotion Territory shall be shared by the Parties, [**] by Genentech and [**] by IDEC until
[**]. After [**], the Parties will share in the Development Costs for New Products for development
or marketing in the Co-Promotion Territory commensurate with the profit/loss sharing relationship
specified in Section A.9.3 and the guidelines for charging costs specified in Section A.11 of
Exhibit A for such products. Genentech shall bear [**] Development Costs for New Products for
development or marketing in the Licensed Territory, unless otherwise agreed in writing by the
Parties.



ARTICLE 3.

MANAGEMENT OF THE COLLABORATION




     3.1 Management Committee.



     (a) Within thirty (30) days of the Original Effective Date, the Parties will establish a
Management Committee to oversee and manage the collaboration in the Co-Promotion Territory
contemplated by this Agreement. The Management Committee will be composed of three representatives
appointed and replaced by IDEC and three representatives appointed and replaced by Genentech. All
such representatives will be senior officers and/or managers of IDEC or Genentech. Either Party
may replace any or all of its representatives at any time upon prior written notice to the other
Party. The Management Committee will meet at least once each calendar quarter, or more frequently,
as agreed by the Management Committee, and will operate by consensus, except as expressly set forth
herein. If the Management Committee is unable to resolve a dispute regarding any issue presented
to it, such dispute shall be resolved in accordance with Article 17 below.



     (b) The Management Committee shall perform the following functions:



          (i) determine the overall strategy for the collaboration in the manner contemplated by this
Agreement, including without limitation, overseeing and determining the strategy for the
coordination, development and commercialization of Licensed Products and New Products so as to
maximize the Operating Profits of all Franchise Products subject to and in accordance with Section
4.1.



          (ii) coordinate the activities of the Parties hereunder;



          (iii) establish a governance structure for the collaboration including overseeing the
establishment and organization of one or more Operating Committees, or other structure to implement
this Agreement. The establishment of certain Operating Committees is provided for in Sections 3.2,
3.3 and 3.4 of this Agreement. Each Operating Committee contemplated by this





 




			
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Agreement shall be subordinate to the Management Committee. If any Operating Committee
contemplated by this Agreement is not constituted or continued, any reference to such Committee in
this Agreement shall be deemed to be a reference to the Management Committee or such other
committees or structures to which the Management Committee may delegate responsibility;




          (iv) settle disputes or disagreements that are unresolved by an Operating Committee unless
otherwise indicated in this Agreement; and



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



     (c) Notwithstanding the foregoing, or anything else in this agreement to the contrary, the
Management Committee shall have no oversight of, involvement in or authority over any aspect of
OCR.



     3.2 Joint Development Committee.



     (a) Within thirty (30) days of the Original Effective Date, the Parties will establish the
Joint Development Committee to oversee and control all development of Franchise Products in the
Co-Promotion Territory, in the Field, including pre-clinical research, clinical research,
manufacturing, regulatory filings and post-approval development studies. The JDC will be composed
of three representatives appointed by each of IDEC and Genentech. Each representative will have
one vote on all matters within the JDC’s purview. Such representatives will include individuals
with expertise and responsibilities in the areas of preclinical development, clinical development,
process sciences, manufacturing or regulatory affairs. Either Party may replace any or all of its
representatives at any time upon written notice to the other Party. The JDC will meet at least
once each calendar quarter, or more frequently, as agreed by the JDC. The JDC will operate by
consensus, except as expressly set forth herein. If the JDC is unable to resolve a dispute
regarding any issue presented to it, such dispute shall be resolved in accordance with Article 17
below.



     (b) The JDC shall coordinate, expedite and guide the development of Franchise Products,
including review and approval of Development Plans for New Products, to obtain Regulatory Approvals
in the Co-Promotion Territory, and in a manner consistent with maximizing the Operating Profits for
all Franchise Products subject to and in accordance with Section 4.1. The JDC will update the
Development Plans from time to time as it deems necessary.



     (c) The JDC shall also be the forum for exchange of information on Genentech’s substantive
development of Franchise Products in the Licensed Territory, unless an IDEC representative is
permitted to attend meetings of a Genentech development committee as set forth in Section 6.4.
While the IDEC representatives may comment on such development, Genentech shall have the final say.



     (d) If any Genentech European development partner so requests, IDEC will consider in good
faith allowing a representative of such partner to attend the JDC meetings.





 




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



     (f) For clarity, the JDC shall have no oversight of, involvement in or control over any aspect
of the development of OCR, which shall reside solely with and in the discretion of Genentech.



     3.3 Joint Commercialization Committee.



     (a) Within thirty (30) days of the Original Effective Date, the Parties will establish the
Joint Commercialization Committee. When established, the JCC shall be composed of two
representatives appointed by each of IDEC and Genentech. Either Party may replace any or all of
its representatives at any time upon prior written notice to the other Party. The JCC will be an
operational committee made up of individuals with expertise and responsibilities in the areas of
product development and marketing, sales management or market research. The JCC will meet on a
quarterly basis, except that from submission of a BLA for a Franchise Product in the Co-Promotion
Territory until the end of the second year of sales for such Franchise Product in the Co-Promotion
Territory, the JCC shall meet more frequently in order to prepare for and oversee the launch of
such Franchise Product. The JCC will operate by consensus, except as expressly set forth herein.
Each representative will have one vote. If the JCC is unable to resolve a dispute regarding any
issue presented to it, such dispute shall be resolved in accordance with Section 17.1.



     (b) The purposes of the JCC shall be to (i) monitor, review and approve commercialization
plans with regard to the commercialization of Franchise Products in the Co-Promotion Territory,
including, in accordance with Section 5.4, top-line annual marketing and sales budgets (as
described in Section A.1(a) of Exhibit A), annual forecasts of sales and production requirements,
the annual marketing plan, broad product positioning, initial product pricing, and Phase IV
clinical strategy (e.g. overall plans for investigator sponsored trials and publication studies) as
well as (ii) select trademarks for Franchise Products.



     (c) The JCC shall have no involvement in the commercialization of Licensed Products in the
Licensed Territory or of OCR in either the Licensed Territory or Co-Promotion Territory, which
shall be solely the responsibility of Genentech at its expense.



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



     (e) For clarity, the JCC shall have no oversight of, involvement in or control over any aspect
of the commercialization of OCR, which shall reside solely with and in the discretion of Genentech.



     3.4 Joint Finance Committee.



     (a) Within thirty (30) days of the Original Effective Date, the Parties will establish the
Joint Finance Committee to be composed of two representatives appointed by each of IDEC and
Genentech. Either Party may replace any or all of its representatives at any time upon prior
written





 




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






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notice to the other Party. Such representatives will include individuals with expertise and
responsibilities in the areas of accounting, cost allocation, budgeting and financial reporting.
The JFC will operate by consensus, except as expressly set forth herein. If the JFC is unable to
resolve a dispute regarding any issue presented to it, such dispute shall be resolved in accordance
with Article 17.




     (b) The JFC shall operate under the direction of the Management Committee to provide services
to and consult with the JDC and the JCC in order to address the financial, budgetary and accounting
issues which arise in connection with the Development Plans and updates thereto as described in
Exhibit A, as well as commercialization plans and updates thereto.



      (c) The JFC shall have no involvement in the development of Licensed Products in the
Licensed Territory or of OCR in either the Licensed Territory or Co-Promotion Territory, which
shall be the responsibility of Genentech, subject to the terms and conditions of this Agreement.



     (d) The JFC will cease operating and have no further function hereunder on the date on which
the Parties are no longer sharing Operating Profits or Losses with respect to any Franchise Product
in the Co-Promotion Territory.



     (e) For clarity, the JFC shall have no oversight of, involvement in or control over any aspect
of OCR, including any financial, budgetary and accounting issues in connection with OCR, which
shall reside solely with and in the discretion of Genentech.



     3.5 Collaboration Co-Chairpersons. Within sixty (60) days of the Restated Effective Date,
each Party shall designate a Collaboration Co-Chairperson. Each such Collaboration Co-Chairperson
shall be a vice president, unless otherwise agreed, and shall serve as a member or an ex-officio
member of the Management Committee and each Operating Committee and shall be responsible (together,
or as the Collaboration Co-Chairpersons may elect to divide responsibilities) to set the agenda of,
call and take minutes of meetings of each Committee. In the event of any reasonable dispute
between the Collaboration Co-Chairpersons as to any matter to include in the agenda of a meeting,
such matter shall by default be included in the agenda.



ARTICLE 4.

DEVELOPMENT IN THE CO-PROMOTION TERRITORY




     4.1 Development Efforts for C2B8. IDEC and Genentech each agree to collaborate diligently in
the development of C2B8 in the Field and to use commercially reasonable and diligent efforts to
develop and bring C2B8 to market in the Field as soon as practicable. The Parties further agree to
execute and substantially perform the Development Plan for C2B8 and to cooperate with the other in
carrying out such Development Plan. It is anticipated that the Parties may develop and
commercialize one or more New Products, and Genentech may develop and commercialize GA101 and/or
OCR, each in a manner that might adversely affect the development and commercialization of C2B8,
but in any event such efforts shall be directed towards maximizing the Operating Profits of
Franchise Products and GA101 in the aggregate; provided that Genentech





 




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





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shall remain free, in its sole discretion, but subject to the limitations enumerated in Section
4.8, to determine how to develop OCR. As used in this Agreement, the term commercially reasonable
and diligent efforts will mean those efforts consistent with the exercise of prudent scientific and
business judgment, as applied to other pharmaceutical products of similar potential and market size
by the Party in question. IDEC acknowledges and agrees that Genentech’s failure to agree to the
development of C2B8 in an indication for which OCR is then currently being developed is not a
breach of any obligation to diligently develop C2B8, use commercially reasonable and diligent
efforts to develop and bring C2B8 to market, or to direct efforts toward maximizing the Operating
Profits of Franchise Products and GA101 in the aggregate.




     4.2 Drug Approval Applications for C2B8. Consistent with the Development Plan, IDEC (or
Genentech, if appropriate) shall file Drug Approval Applications and seek Regulatory Approvals for
C2B8 in the Co-Promotion Territory. Prior to submitting any Drug Approval Application, the
Parties, through the JDC, shall consult, cooperate in preparing and mutually agree on such
Applications and their content and scope. Each Party shall own all regulatory submissions
including all Drug Approval Applications for C2B8 that such Party files in the Co-Promotion
Territory. The Parties will endeavor to include on all package labels and inserts for C2B8 sold in
the Co-Promotion Territory, where appropriate (i.e., to the extent such materials identify or
otherwise make reference to either of the Parties), the names and logos of each of IDEC and
Genentech with equal prominence, to the extent permitted by the applicable regulatory authorities.



     4.3. Development Efforts for New Products. IDEC and Genentech each agree to collaborate
diligently in the development of New Products in the Co-Promotion Territory in the Field and to use
commercially reasonable and diligent efforts to develop and bring each New Product to market in the
Co-Promotion Territory in the Field as soon as practicable so as to maximize the potential
Operating Profits as to Franchise Products in the aggregate in the Co-Promotion Territory subject
to and in accordance with Section 4.1. The Parties further agree to execute and substantially
perform the Development Plan for each New Product and to cooperate with the other in carrying out
each such Development Plan.



     4.4 Drug Approval Applications for New Products. Consistent with the Development Plans for
New Products, unless otherwise agreed in writing, Genentech shall file Drug Approval Applications
and seek Regulatory Approvals for New Products in the Co-Promotion Territory. Prior to submitting
any Drug Approval Application, the Parties, through the JDC, shall consult, cooperate in preparing
and mutually agree upon such Application and its content and scope. Each Party shall own all
regulatory submissions including all Drug Approval Applications for New Products that such Party
files in the Co-Promotion Territory. The Parties will endeavor to include on all package labels
and inserts for New Products sold in the Co-Promotion Territory, when appropriate (i.e., to the
extent such materials identify or otherwise make reference to either of the Parties), the names and
logos of each of IDEC and Genentech with equal prominence, to the extent permitted by the
applicable regulatory authorities.



     4.5 Development Activities for Franchise Products. With regard to the development of New
Products, including, without limitation, G2H7, and with regard to all Franchise Products
(including, without limitation, C2B8) [**], Genentech will be responsible for proposing strategic





 




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





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plans (including plans to initiate a company sponsored trial), as well as Development Plans, for
such Franchise Products. Such Development Plans shall include, where appropriate and without
limitation, clinical development plans, timelines, and overall budgets (consisting of aggregate
estimated annual expenditures and top line expenses for clinical development) for such Franchise
Products. Such strategic plans and Development Plans and other materials shall be delivered to the
JDC for review and approval by unanimous consent. Once a Development Plan has been approved by the
JDC, Genentech shall be responsible for implementing such Development Plans, except to the extent
that the JDC allocates particular activities, by unanimous consent, to IDEC. In addition, and
notwithstanding the dispute resolution provisions of Sections 3.1 through 3.4, with regard to the
development of New Products, including without limitation G2H7, and with regard to all Franchise
Products (including without limitation C2B8) [**], Genentech shall have final decision-making
control over the implementation of each such Development Plan, including without limitation,
clinical development, provided, however, that Genentech shall not have the right to (i) exceed the
annual aggregate budget approved with a Development Plan by [**] without the unanimous approval of
the JDC, (ii) assign tasks to IDEC that were not otherwise approved by unanimous consent of the
JDC, or (iii) materially amend a Development Plan without the unanimous approval of the JDC. For
the avoidance of doubt, it is understood and agreed that Genentech’s implementation of a
Development Plan shall not be deemed a material amendment to such Development Plan, unless such
implementation would (x) materially modify the strategic direction agreed upon by the Parties
thereunder, or (y) result in an agreed upon timeline thereunder being [**].




     4.6 Clinical Trials Not Approved by the JDC. In the event that Genentech proposes a
particular clinical trial as part of a Development Plan (other than a clinical trial proposed for
C2B8 prior to the First New Product FDA Approval) and such trial is not approved by the JDC within
thirty (30) days of the date that such trial was proposed to the JDC (or in the event such trial
was proposed to the JDC other than at a meeting of the JDC, within thirty (30) days of the date
that the JDC first meets (whether in person or by teleconference) following the date such trial was
proposed to the JDC), then Genentech shall have the right to conduct such trial at its own expense.
During such thirty (30) day period, Genentech shall timely provide all information reasonably
requested by any member of the JDC that would be material to making a determination as whether such
proposed clinical trial should be approved. If in such circumstance, Genentech elects to conduct
such trial within a reasonable period of time thereafter, and such trial meets all of its primary
endpoints, then IDEC shall reimburse Genentech for [**] of the Development Costs related to such
trial that IDEC would otherwise have been responsible for if the JDC had approved such trial (i.e.,
[**] the total Development Costs).



     4.7 Development of OCR. Notwithstanding anything in this Agreement to the contrary, but
except as specifically set forth in Section 4.8, as between the Parties, Genentech shall be solely
responsible for and shall have sole control over, at its sole expense (except for IDEC’s share of
the costs and losses specified in Sections 12.10(e) and 16.2), the development (including, but not
limited to, the initiation and conduct of clinical trials) of OCR in the Co-Promotion Territory and
the Licensed Territory. As between the Parties, Genentech shall have the sole authority to file,
in its own name, at its sole expense, all regulatory submissions and filings, including all Drug
Approval Applications, for OCR in the Co-Promotion Territory and the Licensed Territory.





 




			
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Genentech shall have the sole authority and control over communications with any regulatory
authority (including FDA) regarding any development activities (including any clinical trials)
related to a OCR, Drug Approval Application for a OCR, or any Regulatory Approval of OCR once
granted. Promptly following the Second Restated Effective Date, the Parties’ regulatory
departments shall review the existing agreements between the Parties regarding pharmacovigilance
and global safety reporting for OCR, and make amendments to such agreements to account for the fact
that Genentech has sole control over the development of OCR and sole authority and control of
communications with regulatory authorities with respect to OCR.




     4.8 Restrictions on Genentech’s Development of OCR. Neither Genentech nor any Genentech
sublicensee of rights under this Agreement shall conduct in the Co-Promotion Territory a clinical
trial in humans of OCR in the following indications: chronic lymphocytic leukemia, non-Hodgkin’s
lymphoma and rheumatoid arthritis. In addition , neither Genentech nor any Genentech sublicensee
of rights under this Agreement shall file a Drug Approval Application in the Co-Promotion Territory
or seek Regulatory Approval in the Co-Promotion Territory for OCR in rheumatoid arthritis.



ARTICLE 5.

COMMERCIALIZATION IN THE CO-PROMOTION TERRITORY




     5.1 Commercialization Efforts




          (a) Commercialization Efforts for Licensed Products. IDEC and Genentech each agree to (i)
collaborate diligently in the commercialization of C2B8 and (ii) use commercially reasonable and
diligent efforts to commercialize C2B8 promptly and in such a manner as to maximize Operating
Profits as to Franchise Products in the aggregate in the Co-Promotion Territory subject to and in
accordance with Section 4.1. The Parties agree that Genentech will play the primary role and IDEC
the secondary role in all sales, marketing and product launch activities and tactical execution of
marketing and sales promotional programs in the Co-Promotion Territory. The Parties shall be
guided by a standard of reasonableness in economic terms and of fairness to each of the Parties,
striving to balance as best they can the legitimate interests and concerns of the Parties and to
realize the economic potential of C2B8.




          (b) Commercialization Efforts for New Products. IDEC and Genentech each agree to (i)
collaborate diligently in the commercialization of New Products in the Co-Promotion Territory and
(ii) use commercially reasonable and diligent efforts to commercialize New Products promptly and in
such a manner as to maximize Operating Profits as to Franchise Products in the aggregate in the
Co-Promotion Territory subject to and in accordance with Section 4.1. The Parties agree that, as
to New Products, Genentech will be responsible for all marketing and product launch activities and
tactical execution of marketing and sales promotional programs in the Co-Promotion Territory.
Genentech and IDEC shall deploy a co-promotion sales force according to section 5.2 below. The
Parties shall be guided by a standard of reasonableness in economic terms and of fairness to each
of the Parties, striving to balance as best they can the legitimate interests and concerns of the
Parties and to realize the economic potential of New Products in the Co-Promotion Territory.






 




			
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     5.2 Sales Efforts in the Co-Promotion Territory.



     (a) Although Genentech has the primary marketing role, IDEC shall have the right to deploy a
co-promotion sales force in the Co-Promotion Territory; such IDEC sales force shall comprise [**]
Sales Representatives consistent with [**] between IDEC and Genentech, or as otherwise determined
by the unanimous consent of the JCC. As of [**], such sales forces deployed by Genentech and/or
IDEC shall be solely dedicated to selling (i) Franchise Products and (ii) products that are not
Franchise Products [**].



     (b) In addition, Genentech shall have the right, at its election, to [**] as follows:



          (i) Genentech shall provide written notice to IDEC of the specific date upon which [**] (such
notice to be provided at least [**]);




          (ii) To the extent [**]; and




          (iii) To the extent [**].



IDEC shall timely provide Genentech with invoices for any [**] incurred under this Section 5.2(b),
and Genentech shall pay such invoices within sixty (60) days thereof. Genentech shall have the
right to audit such invoiced [**] no more than once a calendar year, such audit to be conducted in
accordance with Section A.6 of Exhibit A.



As used herein:




          [**];




          “IDEC Sales Force FTEs” means that number of additional incremental IDEC FTEs actually
allocated by IDEC to its sales force in a given calendar year to convert a portion of such sales
force to a sales force dedicated to selling [**] (“Y2B8”) (and to the extent IDEC elects to
allocate any of such sales force dedicated to selling [**] to also selling non-Franchise Products
[**], it is understood that [**]; provided such FTE’s shall not include that portion of any FTEs
allocated by IDEC to selling [**] prior to the date of Genentech’s written notice to IDEC under
Section 5.2(b)(i) above nor as of the Restated Effective Date;




          “FTE” means the equivalent of a full-time employee (or [**]) assigned to selling, supporting
or overseeing the sale activity of [**] in the Co-Promotion Territory over a calendar year
(including normal vacation, sick days and holidays), and in the case of less than a full-time
employee (or [**]), the portion of an FTE year devoted by an employee (or [**]) to the [**] sales
force shall be determined by dividing the number of days (or partial days) during any calendar year
devoted by such employee (or [**]) to the [**] sales force by the total number of working days of a
full-time employee (or [**]) during such calendar year; and




          “FTE Rate” means [**] per FTE per calendar year.






 




			
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     (c) Unless the JCC shall otherwise unanimously agree: (i) each Party shall be entitled to
assign its respective sales force to such markets and accounts as it shall determine in its
reasonable discretion, and (ii) there shall be no prohibition on the sales forces of both Parties
calling on any individual customer; provided in each case, such sales force shall conduct such
activities in accordance with coordinated messages approved by the JCC.



     (d) The Parties shall recover their Sales Costs in accordance with Exhibit A.



     5.3 Sales and Distribution. Unless otherwise agreed in writing, Genentech shall have the sole
responsibility with respect to the following:



     (a) Booking sales for and distributing Franchise Products. If IDEC receives any orders for
Franchise Products, it shall refer such orders to Genentech.



     (b) Handling all returns of Franchise Products. If Franchise Products are returned to IDEC,
it shall promptly be shipped to the facility responsible for shipment of Franchise Products in the
country in question to the attention of the Returned Goods Department or another location as may be
designated by Genentech.



     (c) Handling all recalls of Franchise Products. IDEC will make available to Genentech, upon
request, all of its pertinent records which Genentech may reasonably request to assist Genentech in
effecting any recall.



     (d) Handling all aspects of order processing, invoicing and collection, Franchise Products
distribution, warehousing, inventory and receivables, and collection of data of sales to hospitals
and other end users (e.g., DDD data).



     (e) Handling all other customer service related functions.



     5.4 Commercialization Plans and Materials.



     (a) Marketing and Promotional Materials for Licensed Products. All marketing and promotional
materials related to Licensed Products shall be prepared by Genentech, and all marketing and
promotional strategies and campaigns for Licensed Products shall be subject to review and approval
by the JCC. Genentech shall be entitled to select any Third Parties involved in the preparation of
such materials. With respect to written and visual promotional or educational materials, to the
extent such materials identify or otherwise make reference to either of the Parties, IDEC and
Genentech shall both be presented and described with equal prominence and emphasis as having joined
and participated in the development and joint commercialization of Licensed Products, as permitted
by the applicable laws and regulations of each country in which such materials are to be presented.
All documentary information, promotional materials and oral presentations (where practical)
regarding the detailing and promoting of Licensed Products shall maximize the brand equity of the
products and state this arrangement and display, where appropriate (i.e., to the extent such
materials identify or otherwise make reference to either of the Parties), the names and logos of
each of IDEC and Genentech, with equal prominence.





 




			
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     (b) Commercialization Plans and Materials for Franchise Products. With regard to the
commercialization of New Products, including without limitation G2H7, and with regard to all
Franchise Products (including, without limitation, C2B8) [**], Genentech will be responsible for
proposing strategic plans and strategies, as well as commercialization plans, for such Franchise
Products. Such commercialization plans shall include, where appropriate and without limitation,
life cycle plans, long range plans, three year brand plans, pricing strategies and Annual
Commercial Operating Budgets for such Franchise Products. Such commercialization plans shall be
delivered to the JCC for review and approval by unanimous consent (such delivery to take place upon
completion of such plan or upon completion of an updated plan, as the case may be, regardless of
when such completion occurs during the calendar year). Once a commercialization plan has been
approved by the JCC, Genentech shall be responsible for implementing such commercialization plan,
except to the extent that the JCC allocates particular activities, by unanimous consent, to IDEC.
In addition, and notwithstanding the dispute resolution provisions of Sections 3.1 through 3.4,
with regard to the commercialization of New Products, including without limitation G2H7, and with
regard to all Franchise Products (including, without limitation, C2B8) [**], Genentech shall have
final decision-making control over the implementation of each such commercialization plan,
including without limitation, marketing and promotional activities and materials (e.g., medical
education, medical information, public relations, investigator sponsored studies, publication
planning, sales resource analysis and key opinion leader development), provided, however, that
Genentech shall not have the right to (i) exceed (in the aggregate) the Annual Commercial Operating
Budget approved with such commercialization plan by [**] without the unanimous approval of the JCC,
(ii) assign tasks to IDEC that were not otherwise approved by unanimous consent of the JCC, (iii)
assign an initial pricing for a Franchise Product, unless such initial pricing is within [**] of
the current price for C2B8, or (iv) materially amend a commercialization plan without the unanimous
approval of the JCC. For the avoidance of doubt, it is understood and agreed that Genentech’s
implementation of a commercialization plan shall not be deemed a material amendment to such
commercialization plan, unless such implementation would materially modify the strategic direction
agreed upon by the Parties thereunder. All documentary information, promotional materials and oral
presentations (where practical) regarding the detailing and promoting of New Products shall
maximize the brand equity of the products and display, where appropriate (i.e., to the extent such
materials identify or otherwise make reference to either of the Parties), the names and logos of
each of IDEC and Genentech with equal prominence.



     5.5 Training Program. Genentech shall develop training programs relating to Franchise
Products for the sales forces of each respective Party and for any Third Parties engaged in selling
or promotion, and shall assign responsibility to itself, IDEC or a Third Party for the preparation
of materials and conduct of training. The Parties agree to utilize such training programs on an
ongoing basis to assure a consistent, focused promotional strategy. The initial training as to any
Franchise Product shall be carried out at a time which is mutually acceptable to the Parties, and
which is prior to but reasonably near the date on which the first Regulatory Approval for such
Franchise Product is expected in the Co-Promotion Territory. As additional members are added to
the Parties’ respective sales forces, training will be given to groups of the newly selected
members.





 




			
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     5.6 Commercialization of OCR. Notwithstanding anything in this Agreement to the contrary, as
between the Parties, Genentech shall be solely responsible for (except for IDEC’s share of the
costs and losses specified in Sections 12.10(e) and 16.2), and shall have sole control over, the
commercialization (including sales, pricing, marketing and distribution) of OCR in the Co-Promotion
Territory and the Licensed Territory.



ARTICLE 6.

DEVELOPMENT AND COMMERCIALIZATION IN LICENSED TERRITORY




     6.1 Development Efforts. Genentech will use commercially reasonable and diligent efforts to
develop C2B8, including pursuing preclinical development and clinical development of C2B8 and
obtaining Regulatory Approvals therefor in all countries in the Licensed Territory, taking into
account the scientific and commercial potential of C2B8, including, without limitation, each of the
potential indications in the Field for C2B8. Within ninety (90) days of the Original Effective
Date, Genentech agrees to provide IDEC with a written development strategy for C2B8 in the Licensed
Territory indicating (i) whether Genentech will develop C2B8 alone or with a partner in Europe,
(ii) the identity of its European partner (if any), and (iii) a list of clinical trials which
Genentech would conduct for C2B8 approval in Europe assuming adequate quantities of C2B8 are
available.



     6.2 Marketing Efforts. Genentech will use commercially reasonable and diligent efforts to
commercialize C2B8 in each country in which Regulatory Approval is granted, taking into account the
scientific and commercial potential for C2B8, including without limitation each of the potential
indications therefor.



     6.3 Development Costs and Marketing Costs. Genentech shall bear all Development Costs and
Marketing Costs for C2B8 for development or marketing in the Licensed Territory. Genentech shall
have the sole responsibility for, and right to make all decisions regarding, all development and
marketing activities in the Licensed Territory.



     6.4 Cooperation on Development Efforts. To facilitate cooperation between the Parties on the
worldwide development and marketing of C2B8, Genentech shall keep IDEC informed of all substantive
development activities in the Licensed Territory, and agrees to use its good faith efforts to have
an IDEC representative attend meetings of any development committee or similar body governing
development activities of Licensed Products in the Licensed Territory. Genentech shall consider in
good faith any comments made by such IDEC representative. The Parties agree that they will do
nothing during C2B8 development activities to imperil early Regulatory Approvals in any country in
any territory. Genentech further agrees that its European development plan for Licensed Products
will not specify clinical trials on a time line that would delay or slow Regulatory Approval in the
United States.





 




			
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ARTICLE 7.

MILESTONES, PROFIT SHARING, ROYALTIES AND OTHER PAYMENTS




     7.1 (a) Payments by Genentech upon Execution of Original Agreement. Genentech made the
following payments to IDEC at the times set forth herein or in the operative agreement:




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







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





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




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





     7.2 Additional Equity Purchases. Genentech shall make certain additional equity purchases in
accordance with the terms and conditions of the Stock Purchase Agreement.



     7.3 Special Pre-Approval Debt or Equity Purchase. Genentech shall, at the election of IDEC,
make an additional investment or loan in accordance with the terms and conditions of an Option
Agreement of even date of the Original Effective Date between IDEC and Genentech (the “Option
Agreement”).



     7.4 Milestone Payments. Subject to the terms of the equity purchases set forth in the Stock
Purchase Agreement and the credit as provided in the Option Agreement, Genentech made or shall make
the following payments to IDEC, within 30 days after the first achievement of each of the following
milestones for C2B8:





 




			
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	MILESTONE	 	Payment
	(a) Upon Regulatory Approval in the United States

	 	[**]
	 
	 	 
	(b) Upon Regulatory Approval in the First
Major European Country

	 	[**]
	 
	 	 
	(c) Patent Milestone Event

	 	[**]






     7.5 Share of Operating Profits or Losses. Upon the first Regulatory Approval in the United
States, IDEC and Genentech shall share in Operating Profits or Losses from sales of Franchise
Products other than OCR in the Co-Promotion Territory as provided in Exhibit A.



     7.6 Term of Operating Profits or Losses. The Parties shall share Operating Profits or Losses
hereunder in the Co-Promotion Territory until the earlier of the date the Parties mutually agree to
terminate the collaboration in the Co-Promotion Territory, or as provided in Section 15.2.



     7.7 Royalties.



     (a) OCR in Co-Promotion Territory. Genentech shall pay IDEC a royalty on Royalty-Bearing
Sales in the Co-Promotion Territory of OCR as follows:




(i) a 13.5% royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory up to and including [**];




(ii) a [**] royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory above [**] and up to and including [**];




(iii) a
[**] royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory above [**] and up to and including [**];




(iv) a [**] royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory above [**] and up to and including [**];




(v) a [**] royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory above [**] and up to and including [**];




(vi) a [**] royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory above [**] and up to and including [**]; and




(vii) a 24% royalty on the portion of annual Royalty-Bearing Sales of OCR in the
Co-Promotion Territory above [**].



     Upon the first entry in the Co-Promotion Territory of a biosimilar for OCR, the foregoing
royalty rates shall be reduced by [**]. For the purposes of the preceding sentence, a “biosimilar”





 




			
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for OCR means a product developed by an entity other than Genentech, a Genentech Affiliate or
F. Hoffman-La Roche AG, which product either: (i) has been deemed a biosimilar or interchangeable
product pursuant to Section 351(k) of the Public Health Service Act or Section 505(b)(2) of the
Food, Drug and Cosmetic Act, or successor provisions of either, or any implementing legislation or
regulations thereof, wherein OCR was the reference product relied upon in making such
determination; or (ii) has been approved for marketing in the Co-Promotion Territory as a
biosimilar or generic version of OCR pursuant to similarly purposed legislation as described in (i)
above which may be enacted following the Second Restated Effective Date.




     (b) Licensed Products. Genentech shall pay IDEC a royalty on Royalty-Bearing Sales of
Licensed Products in the Licensed Territory as follows: (i) the royalty rate shall be [**] of
Royalty-Bearing Sales in the Licensed Territory in any calendar year, and (ii) the royalty rate
shall be [**] of Royalty-Bearing Sales in the Licensed Territory in any calendar year.



     (c) New Products and OCR in Licensed Territory. Genentech shall pay IDEC a [**] royalty on
Royalty-Bearing Sales in the Licensed Territory of (i) G2H7 and each other New Product and (ii)
OCR; provided however, that no such royalty shall be due on any [**] Potential New Product that was
deemed a New Product pursuant to Section 2.5(b)(ii), nor on any Third Party Anti-CD20 Product for
which IDEC enters into a written agreement with Genentech pursuant to Section 2.6.



     (d) Third Party Royalties on Franchise Products in Co-Promotion Territory. Royalties owed to
any Third Party on account of sales of Franchise Products in the Co-Promotion Territory will be
charged against Co-Promotion Profits, except that IDEC will pay any payments owed to ML/MS Partners
on account of any sales of Licensed Products in any territory.



     (e) Third Party Royalties on Franchise Products and on OCR in the Licensed Territory.
Genentech shall pay any Third Party royalties (except to ML/MS Partners) owed on account of sales
of Franchise Products and OCR in the Licensed Territory, including royalties owed due to the
manufacture of Franchise Products by Genentech or IDEC. Genentech shall receive a credit of [**]
of the royalties it pays on account of the manufacture, use or sale of Licensed Products against
royalties it owes to IDEC. Prior to the Original Effective Date, Genentech discussed with IDEC the
significant Third Party royalties that it believed at such time would be payable on sales of
Licensed Products. In addition, Genentech shall receive a credit of [**] of the royalties it pays
on account of the manufacture, use or sale of G2H7 and each other New Product and OCR in the
Licensed Territory against royalties it owes to IDEC; provided, however that the royalty that would
otherwise be due under Section 7.7(c) shall not be reduced below a [**] royalty.



     (f) Third Party Royalties on OCR in the Co-Promotion Territory. Genentech shall pay any Third
Party royalties owed on account of sales of OCR in the Co-Promotion Territory, which shall not be
creditable against any royalty or other payment owed by Genentech to IDEC.



     (g) The Parties (i) shall, within ninety (90) days following the Original Effective Date,
amend the Cabilly license dated December 7, 1993 between Genentech and IDEC (the “Cabilly





 




			
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License”) to waive any royalties owed by IDEC to Genentech on manufacture, use or sale of Licensed
Products covered by the Cabilly License in the Co-Promotion Territory, and (ii) to the extent IDEC
would be obligated to pay royalties (if any) under the Cabilly License in order to manufacture, use
or sell any New Products in the Co-Promotion Territory, Genentech agrees to amend such license to
waive any such royalties; provided, however, that any payment Genentech must make to any Third
Party on account of the development, manufacture, use or sale of Franchise Products covered by the
patents included in the Cabilly License shall be included in Cost of Sales of such Franchise
Products.




     (h) If the Parties mutually agree to develop an anti-CD19 protein under this Agreement covered
by a claim of a Patent included in the Cabilly License, Genentech will make available a license for
CD19 antigens to Patents included in the Cabilly License as part of the commercial terms for the
development of such product.



     7.8 Royalty Payment Reports. Royalty payments under this Agreement shall be made to IDEC or
its designee quarterly within sixty (60) days following the end of each calendar quarter for which
royalties are due. Each royalty payment shall be accompanied by a report summarizing the
Royalty-Bearing Sales during the relevant three-month period.



     7.9 Term of Royalty Obligations.



     (a) Genentech shall pay royalties hereunder with respect to Franchise Products and OCR in each
country in the Licensed Territory for eleven (11) years from the date of first commercial sale of
such Franchise Product or OCR, respectively, in such country. Genentech shall pay royalties
hereunder with respect to OCR in the Co-Promotion Territory until [**].



     (b) Upon expiration of the royalty term for a Licensed Product in a country as described
above, Genentech shall thereafter have an exclusive, fully paid-up, irrevocable license under the
IDEC Patents, IDEC Know-how and IDEC regulatory submissions to make, use, sell, offer for sale,
have sold and import that Licensed Product in that country. Upon expiration of the royalty term
for a New Product or OCR in a country as described above, Genentech shall thereafter have an
non-exclusive, fully paid-up, irrevocable license under the IDEC Patents, IDEC Know-how and IDEC
regulatory submissions to make, use, sell, offer for sale, have sold and import OCR and/or that New
Product, as applicable, in that country.



     7.10 Taxes. IDEC shall pay any and all taxes levied on account of, or measured exclusively
by, any payment including royalties it receives under this Agreement. If laws or regulations
require that taxes be withheld, Genentech will (i) deduct those taxes from the remittable royalty,
(ii) timely pay the taxes to the proper taxing authority, and (iii) send proof of payment to IDEC
within sixty (60) days following that payment.



     7.11 Blocked Currency. In each country where the local currency is blocked and cannot be
removed from the country, at the election of Genentech, royalties accrued in that country shall be
paid to IDEC in the country in local currency by deposit in a local bank designated by IDEC.





 




			
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     7.12 Foreign Exchange. For the purpose of computing Royalty-Bearing Sales for Franchise
Products sold in a currency other than United States Dollars, such currency shall be converted into
United States Dollars in accordance with Genentech’s customary and usual translation procedures
consistently applied.



     7.13 Payments to or Reports by Affiliates. Any payment required under any provision of this
Agreement to be made to either Party or any report required to be made by any Party shall be made
to or by an Affiliate of that Party if designated by that Party as the appropriate recipient or
reporting entity.



     7.14 Sales By Sublicensees. In the event Genentech grants licenses or sublicenses to others
to make or sell Franchise Products in the Licensed Territory, or OCR in the Co-Promotion Territory
or in the Licensed Territory, such licenses or sublicenses shall include an obligation for the
licensee or sublicensee to account for and report its Royalty-Bearing Sales of such Franchise
Products and/or OCR (as applicable) on the same basis as if such sales were Royalty-Bearing Sales
by Genentech, and Genentech shall pay royalties to IDEC as if the Royalty-Bearing Sales of the
licensee or sublicensee were Royalty-Bearing Sales of Genentech.



ARTICLE 8.

MANUFACTURE AND SUPPLY




     8.1 Process Development, Manufacturing Approvals of C2B8. IDEC shall be responsible for, at
its own expense, process development, scale-up, validation and FDA licensure of its existing
C2B8-producing CHO cell line to the 2,750 liter fermenter scale. As soon as practicable after the
Original Effective Date, IDEC will transfer to Genentech a re-amplified CHO C2B8-producing cell
line, and, within 30 days of the Original Effective Date, transfer the technology to be licensed to
Genentech under the terms and conditions of the Expression Technology License of even date
herewith, and provide reasonable training of Genentech personnel as requested by Genentech
necessary to allow Genentech to scale up C2B8 process with the re-amplified cell line. Immediately
after receipt of IDEC’s re-amplified CHO C2B8 producing cell line by Genentech, Genentech will
begin work, at its own expense, on the scale-up of a re-amplified cell line in optimal growth media
to produce C2B8 at commercial scale. If Genentech determines that such scale up is not
commercially feasible, it will so notify the JDC. Upon the decision of the JDC to go forward,
Genentech will, at its own expense, attempt to scale up another cell line selected by the JDC or
the cell line used for 2,750 liter fermenter scale production. If Genentech has successfully
scaled up a cell line to its commercial scale and IDEC is then manufacturing C2B8, Genentech will,
at its own expense, transfer the optimized cell line and information sufficient to allow IDEC to
manufacture C2B8 by essentially the same process used by Genentech except for the size of the
fermentation vessel. If bridging or any other studies are required to permit the use or sale of
C2B8 produced by Genentech by the optimized process, the costs of such clinical studies shall be
paid by Genentech, but shall be charged against Operating Profits over the first three years after
the first commercial sale of C2B8 produced by the optimized process. IDEC will otherwise be
responsible, at its own expense, for all expenses incurred in obtaining Regulatory Approvals for
the manufacturing process used to produce C2B8, except that Genentech, at its own expense, will pay
the expenses incurred to receive FDA licensure of Genentech facilities. Notwithstanding





 




			
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anything to the contrary in this Section 8.1, costs incurred by either Party under this Section 8.1
after Regulatory Approval in the United States shall be charged to Operating Profits.




     8.2 Manufacture and Supply of C2B8. IDEC shall, pursuant to a Supply Agreement to be entered
into between the Parties prior to the date of the first submission of an application or
registration for Regulatory Approval, supply all requirements for C2B8 in final vial form for
commercial sale in all territories for the first two years after the first Regulatory Approval in
the United States or Europe, whichever comes earlier (the “Initial Commercial Period”). The
average annual Cost of Goods Sold of C2B8 packaged in final vial form during the Initial Commercial
Period shall be the lower of (i) [**] or (ii) [**]. IDEC may continue to supply, at its option,
commercial requirements for C2B8 up to the capacity of its current manufacturing plant [**] in San
Diego (the “Supply Option”). The Supply Option shall be exercised, if at all, by written notice on
or before the date of the first Regulatory Approval including a good faith estimate of IDEC’s
planned production levels. If the parties determine that the FDA will not grant establishment
licenses to two manufacturing facilities using different scales of production, then the parties
will use best efforts to develop a manufacturing capacity plan by the first Regulatory Approval.
Subsequent to the Initial Commercial Period, if both Parties are manufacturing Licensed Product at
the same time, the Cost of Goods Sold for both Parties used for calculation of Operating Profits
shall be the lower of Genentech’s or IDEC’s actual cost of Goods Sold for commercial production of
C2B8 packaged in final vial form. After the Initial Commercial Period, Genentech shall manufacture
all requirements of C2B8 for commercial sale in excess of that which IDEC has agreed to produce.



     8.3 Transfer of Materials and Know-how for C2B8.



     (a) IDEC shall on Genentech’s request at any time transfer to, and fully enable Genentech
with, the then most current version of all biological materials, know-how, reagents and expertise
necessary for Genentech to undertake the manufacture of C2B8. IDEC shall periodically update
biological materials and information related to C2B8 previously transferred to Genentech. All
transfers of materials and information to Genentech shall be free of charge to Genentech; provided,
however, IDEC’s obligation to train Genentech personnel in the use of such material and information
shall be limited to [**] person hours.



     (b) At the time Genentech completes the commercialization scale-up described in Section 8.1,
if IDEC continues to manufacture commercial quantities of C2B8, Genentech will transfer to, and
fully enable IDEC with, the then most current version of all biological materials, know-how,
reagents and expertise applicable to the actual manufacturing process in use by IDEC necessary for
IDEC to undertake the manufacture of C2B8 provided that IDEC uses such biological materials,
know-how, reagents and expertise solely to manufacture C2B8. Genentech’s obligation to train IDEC
personnel in the use of such materials or information shall be limited to [**] person hours.



     (c) IDEC agrees to allow Genentech to audit, at its expense, any Regulatory Approval
documentation in the possession of IDEC concerning products other than the Licensed Products to
determine if such products utilize Genentech Patents or Genentech Know-how. Such audit(s) shall





 




			
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be conducted by an independent party to be mutually agreed upon by Genentech and IDEC, and shall be
limited to one audit during any twelve month period.




     8.4 Transfer Price of Products for C2B8. The transfer price for C2B8 supplied to Genentech
for sale in the Licensed Territory will be [**]. IDEC will invoice Genentech within 10 days after
each shipment of C2B8 to the Licensed Territory on a shipment by shipment basis. Genentech shall
pay each invoice within thirty (30) days of receipt of both of C2B8 and invoice.



     8.5 Manufacture of C2B8 for Clinical Trials.



     (a) IDEC will supply at no cost all quantities of C2B8 for pre-clinical studies and clinical
trials in the Co-Promotion Territory directed toward obtaining the first Regulatory Approval in the
Co-Promotion Territory.



     (b) IDEC shall supply to Genentech, at IDEC’s [**] until the beginning of the Initial
Commercial Period and at [**] thereafter, all quantities of C2B8 for preclinical studies and
clinical trials in the Licensed Territory or for expanded needs beyond those set forth in the
original Development Plan.



     8.6 Manufacture and Supply of Franchise Products (other than C2B8). Genentech shall be
responsible, and have complete decision making control for all process development, scale-up,
validation and FDA licensure for the manufacture of all Franchise Products (other than C2B8) in the
Co-Promotion Territory, the cost of which shall be considered Development Costs pursuant to this
Agreement. In addition, Genentech, either itself or through a third party manufacturer, shall be
responsible for the manufacture and supply of clinical and commercial supply of New Products for
the Co-Promotion Territory (Genentech shall use commercially reasonable and diligent efforts to
maintain a reasonable Cost of Goods Sold for manufacture and supply of all Franchise Products).
Genentech shall be responsible, and have complete decision making control, for all process
development, scale-up, validation and FDA licensure for the manufacture of (i) OCR in the
Co-Promotion Territory and Licensed Territory and (ii) all Franchise Products in the Licensed
Territory.



     8.7 Right of First Negotiation for Manufacture and Supply of Franchise Products in the
Co-Promotion Territory. In the event Genentech decides to seek a Third Party (other than F.
Hoffmann La Roche AG) to manufacture and supply a particular Franchise Product, in the Co-Promotion
Territory, Genentech shall promptly notify IDEC in writing. IDEC shall have thirty (30) days from
the date of Genentech’s notice to IDEC to provide written notice to Genentech that it elects to
negotiate with Genentech the rights under which it may manufacture and supply such Franchise
Product in the Co-Promotion Territory, and a failure to timely so elect shall be deemed a decision
not to negotiate for such rights. In the event that IDEC timely notifies Genentech of its desire
to engage in such negotiations, then for a period of ninety (90) days, Genentech and IDEC shall use
good faith efforts to agree upon terms under which IDEC would manufacture and supply such Franchise
Product in the Co-Promotion Territory. In the event that IDEC and Genentech have not entered into
a definitive agreement within ninety (90) days of IDEC’s election to negotiate, then





 




			
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Genentech shall be free to grant to any Third Party the right to manufacture and supply such
Franchise Product in the Co-Promotion Territory on any terms that Genentech considers appropriate.




ARTICLE 9.

LICENSES




     9.1 Licensed Products




          (a) Licenses To Genentech Within The Field. IDEC grants to Genentech a worldwide license
(including Asia, pursuant to the First Amendment) under the IDEC Patents and IDEC Know-how and IDEC
regulatory submissions in the Field to develop, make, have made, use, sell, offer for sale, have
sold and import Licensed Products. Such license shall be co-exclusive with IDEC in the
Co-Promotion Territory and exclusive even as to IDEC in the Licensed Territory.




          (b) Nonexclusive License To IDEC. Genentech grants IDEC a nonexclusive license in the United
States and Canada to use Genentech Know-how and Genentech Patents in the Field solely for the
purposes of developing, manufacturing, having manufactured, using, selling, offering for sale,
having sold and importing C2B8 and such additional Licensed Products as the Parties mutually agree
to develop in the Co-Promotion Territory. IDEC covenants and agrees not to develop, make, have
made, use, sell, offer for sale, have sold or import any product using any of the Genentech
Know-how or Genentech Patents outside of the Field. If Genentech is sublicensing any Third Party
patents under this grant, IDEC shall pay any royalties owed to any such Third Party on account of
the manufacture, use or sale of any Licensed Products by IDEC. Genentech further grants to IDEC a
co-exclusive (with Genentech) license to use Genentech regulatory submissions in the Field solely
for the purposes of developing, manufacturing, having manufactured, using, selling, offering for
sale, having sold and importing C2B8 and such additional Licensed Products as the Parties mutually
agree to develop in the Co-Promotion Territory.




     9.2 New Products




          (a) Nonexclusive License to Genentech. IDEC grants to Genentech a worldwide, nonexclusive
license under the IDEC Patents, IDEC Know-how and IDEC regulatory submissions in the Field to
develop, make, have made, use, sell, offer for sale, have sold and import G2H7 and each other New
Product.




          (b) License to IDEC in the Co-Promotion Territory. Genentech grants to IDEC a co-exclusive
(with Genentech) license under the Genentech Patents, Genentech NP Patents, Genentech Know-how and
Genentech regulatory submissions in the Field in the United States to develop, use, sell, offer for
sale, have sold and import G2H7 and each other New Product. Genentech does not grant any license
or rights to IDEC regarding development or commercialization of New Products outside the Field or
outside of the United States, and nothing in this Agreement shall be construed as granting IDEC any
license or right to control the






 




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




     9.2a OCR. IDEC hereby grants to Genentech an exclusive (even as to IDEC) license, under the
IDEC Patents, IDEC Know-How, IDEC’s interests in Joint Patents and Joint Know-How, and IDEC
regulatory submissions in the Field, to develop, make, have made, use, sell, offer for sale, have
sold and import OCR in the Co-Promotion Territory and Licensed Territory.



     9.3 Sublicensing. Genentech may grant sublicenses to its rights under this Agreement with the
prior written consent of IDEC, such consent not to be unreasonably withheld; except that the
consent of IDEC is not required for Genentech to grant sublicenses regarding the development or
commercialization of OCR which sublicenses do not also include a sublicense for a Franchise Product
        . IDEC hereby consents to such a sublicense to F. Hoffmann La Roche or any of its affiliates.
Unless otherwise agreed, each sublicensee shall be subject to all of the obligations of Genentech
hereunder applicable to that part of the territory being licensed.



     9.4 Inclusion of Asia in the Licensed Territory. If a license in Asia becomes available on an
exclusive basis with respect to C2B8, IDEC shall notify Genentech in writing. If such notification
is prior to or on December 31, 1995, then Genentech shall pay IDEC [**] upon signing of an
amendment to this Agreement to include such territory in the Licensed Territory. After December
31, 1995, Genentech shall have the option to include Asia in the Licensed Territory, if available,
on sixty (60) days written notice, for the [**] license issue fee payable pursuant to this Section.
IDEC agrees to use its best efforts within 90 days of the Original Effective Date to obtain at
least a co-exclusive license for Genentech in the Asian territory. The consideration to IDEC for a
co-exclusive license involving Genentech in the Asian territory shall not be less than [**], of
which Genentech shall pay no more than [**]. If Asia is added to the Licensed Territory, it shall
be subject to the same terms and conditions set forth in this Agreement, provided that Genentech
shall have no obligation to make any additional payments with respect to such added Asian territory
other than royalties as specified in this Agreement. Notwithstanding the foregoing provisions of
this Section 9.4, the Parties acknowledge that Asia, pursuant to the First Amendment, is included
within the Licensed Territory.



     9.5 Shared Information. All of the information described in Section 14.1 below shall be
deemed IDEC Know-how and Genentech Know-how for purposes of this Article 9 and the licenses granted
herein.



     9.6 Third Party Rights. In the event that IDEC or Genentech becomes aware of any Third Party
rights that may be relevant to development, manufacture or commercialization of the Franchise
Products in the Co-Promotion Territory, that Party shall promptly notify the other Party. To the
extent that the Parties mutually agree that such rights are necessary to develop, manufacture or
commercialize the Franchise Products in the Co-Promotion Territory, the Parties shall discuss an
appropriate course of action to obtain a license to such rights in order to further the objectives
of the Parties under this Agreement.





 




			
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ARTICLE 10.

TRADEMARKS




     10.1 (a) Product Trademarks for Licensed Products. All Licensed Products shall be sold in the
Co-Promotion Territory under trademarks selected by the JCC and owned jointly by Genentech and IDEC
in the Co-Promotion Territory and Licensed Territory. The JCC shall use best efforts to select a
worldwide trademark. Each Party hereby grants the other a fully-paid co-exclusive license to use
its trademarks in the Co-Promotion Territory for the Co-Promotion activities provided for in this
Agreement. IDEC shall control preparation, prosecution and maintenance of applications related to
such trademarks and the costs in the Co-Promotion Territory (“Trademark Costs”) shall (i) prior to
Regulatory Approval in the United States, be paid by IDEC, and (ii) after Regulatory Approval in
the United States, be included in Other Operating Income/Expense pursuant to Exhibit A. Genentech
shall control preparation, prosecution, maintenance and applications related to trademarks in the
Licensed Territory and shall pay all costs incurred with respect thereto, and will notify IDEC if
Genentech believes in good faith that sole ownership of the trademark in a particular country in
the Licensed Territory is the best method to protect the trademark, in which case Genentech shall
be the sole owner of such trademark.



     (b) Trademarks for New Products. G2H7 and each other New Product shall be sold in the
Co-Promotion Territory under trademarks selected by the JCC and owned jointly by Genentech and IDEC
in the Co-Promotion Territory. The JCC shall use best efforts to select a worldwide trademark.
Each Party hereby grants the other a fully-paid co-exclusive license to use its trademarks in the
Co-Promotion Territory for the Co-Promotion activities provided for in this Agreement. Genentech
shall control preparation, prosecution and maintenance of applications related to such trademarks
and the Trademark Costs associated with New Products in the Co-Promotion Territory shall be
included in Other Operating Income/Expense pursuant to Exhibit A. Genentech shall solely own, and
control preparation, prosecution, maintenance and applications related to such trademarks outside
the United States and shall pay all costs incurred with respect thereto.



     (c) Trademarks for OCR. Genentech shall own all right, title and interest in and to all OCR
Trademarks, and Genentech shall have sole authority and responsibility, at its expense, for the
selection, prosecution and maintenance of, all OCR Trademarks. Any and all right, title or
interest in, to or under any OCR Trademark, including any goodwill which has accrued or may accrue
to the benefit of IDEC shall hereby be assigned to and inure to the sole benefit of Genentech.
IDEC shall not, at any time, apply for any trademarks or other protection that would affect
Genentech’s ownership or use of any rights in the OCR Trademarks, or file any document with any
government authority or take any other action that would affect Genentech’s ownership or use of the
OCR Trademarks, or assist any Third Party in doing so. The costs and expenses for the preparation,
prosecution and maintaince of OCR Trademarks shall be the sole responsibility of Genentech.



     10.2 Infringement of Trademarks. Each Party shall notify the JCC promptly upon learning of
any actual, alleged or threatened infringement of a trademark applicable to a Franchise Product
(the “Trademark”) in the Co-Promotion Territory or of any unfair trade practices, trade dress
imitation, passing off of counterfeit goods, or like offenses in the Co-Promotion Territory. Upon





 




			
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learning of such offenses from a Party regarding a jointly owned Trademark, the JMC shall confer
with the Parties regarding which Party and counsel should be assigned to defend the Trademark. The
Party defending the Trademark shall take all reasonable and appropriate steps to protect, defend
and maintain the Trademark for use by the Parties in connection with the Franchise Product. Upon
learning of such an offense from a Party regarding a Trademark owned solely by one of the Parties,
and not provided for above in this Section, the JCC shall confer with the Parties regarding the
defense of such Trademark. The decision whether and how to defend such a Trademark owned solely by
one Party will rest with such Party.




     10.3 Costs of Defense for Trademarks. All of the costs, expenses and legal fees in bringing,
maintaining and prosecuting any action to maintain, protect or defend a jointly owned Trademark in
the Co-Promotion Territory, and any recovery shall be included in the Other Operating
Income/Expense. All of the costs, expenses and legal, fees in bringing, maintaining and
prosecuting any action to maintain, protect or defend a Trademark in the Licensed Territory or a
OCR Trademark in either the Licensed Territory or Co-Promotion Territory shall be paid by, and any
recovery shall be paid to, Genentech.



ARTICLE 11.

CONFIDENTIALITY




     11.1 Confidentiality; Exceptions. Except to the extent expressly authorized by this Agreement
or otherwise agreed in writing, the Parties agree that, for the term of this Agreement and for
seven (7) years thereafter, the receiving Party shall keep confidential and shall not publish or
otherwise disclose or use for any purpose other than as provided for in this Agreement any
Information and other information and materials furnished to it by the other Party pursuant to this
Agreement (collectively, “Confidential Information”), except to the extent that it can be
established by the receiving Party that such Confidential Information:



     (a) was already known to the receiving Party, other than under an obligation of
confidentiality, at the time of disclosure by the other Party;



     (b) was generally available to the public or otherwise part of the public domain at the time
of its disclosure to the receiving Party;



     (c) became generally available to the public or otherwise part of the public domain after its
disclosure and other than through any act or omission of the receiving Party in breach of this
Agreement;



     (d) was disclosed to the receiving Party, other than under an obligation of confidentiality,
by a Third Party who had no obligation to the disclosing Party not to disclose such information to
others; or.



     (e) was subsequently developed by the receiving Party without use of the Confidential
Information as demonstrated by competent written records.





 




			
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     11.2 Authorized Disclosure. Each Party may disclose Confidential Information hereunder to the
extent such disclosure is reasonably necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with applicable governmental regulations or
conducting preclinical or clinical trials, provided that if a Party is required by law or
regulation to make any such disclosure of the other Party’s Confidential Information it will,
except where impracticable for necessary disclosures, for example in the event of medical
emergency, give reasonable advance notice to the other Party of such disclosure requirement and,
except to the extent inappropriate in the case of patent applications, will use its reasonable
efforts to secure confidential treatment of such Confidential Information required to be disclosed.
In addition, each Party shall be entitled to disclose, under a binder of confidentiality
containing provisions as protective as those of this Article 11, Confidential Information to
consultants and other Third Parties only for any purpose provided for in this Agreement. Nothing
in this Article 11 shall restrict any Party from using for any purpose any Information developed by
it during the course of the collaboration hereunder.



     11.3 Survival. This Article 11 shall survive the termination or expiration of this Agreement
for a period of seven (7) years.



     11.4 Termination of Prior Agreement. This Agreement supersedes the Confidentiality Agreement
between the Parties dated September 9, 1994. All Information exchanged between the Parties under
that Agreement shall be deemed Confidential Information and shall be subject to the terms of this
Article 11.



     11.5 Publications. Prior to the end of Phase II Clinical Trials of each Franchise Product in
the Co-Promotion Territory and subject to the applicable publication provisions of any Clinical
Trial Agreements with investigators, the JDC with appropriate input from the JCC will determine the
overall strategy for publication in support of such Franchise Product in the Co-Promotion
Territory. Except as required by law, each Party agrees that it shall not publish or present the
results of studies carried out as part of the collaboration without the approval of the JDC and the
opportunity for prior review by the other Party. Each Party shall provide to the other the
opportunity to review any proposed abstracts, manuscripts or presentations (including information
to be presented verbally) which relate to any Franchise Product at least thirty (30) days prior to
their intended submission for publication and such submitting Party agrees, upon written request
from the other Party, not to submit such abstract or manuscript for publication or to make such
presentation until the other Party is given a reasonable period of time to seek patent protection
for any material in such publication or presentation which it believes is patentable. Genentech
may, without IDEC’s consent or prior review, publish or present the results of studies carried out
with OCR, provided such publication or presentation does not disclose Confidential Information of
IDEC.



ARTICLE 12.

OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS




     12.1 Modified Definitions. For purposes of this Article 12, IDEC Patents, Genentech Patents
and Genentech NP Patents shall not include Patents owned jointly by the Parties. “Joint





 




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




     12.2 Ownership of Intellectual Property. IDEC shall own all inventions made under this
Agreement solely by it or its employees. Genentech shall own all inventions made under this
Agreement solely by its employees. All inventions made under this Agreement jointly by employees
of IDEC and Genentech will be owned jointly by IDEC and Genentech and each Party shall retain full
ownership under any Patents resulting therefrom, with full ownership rights in any field and
subject to the licenses granted in Article 9, the right to sublicense without the consent of the
other Party, without accounting. The laws of the United States with respect to joint ownership of
inventions shall apply in all jurisdictions giving force and effect to this Agreement. The Parties
shall jointly own Joint Know-how.



     12.3 Disclosure of Patentable Inventions. In addition to the disclosures required under
Article 14, each Party shall provide to the other, any written invention disclosure submitted to a
Party’s legal department in the normal course which discloses an invention made under this
Agreement that is useful in the Field, except that Genentech shall not be required to disclose to
IDEC inventions made following the Second Restatement Date related solely to OCR made solely by
employees of Genentech and/or its collaboration partners other than IDEC. Such invention
disclosures shall be provided to the other Party within thirty (30) days after the Party commences
preparation of a patent application based on such disclosure.



     12.4 Coordination. The Parties intend to prosecute and manage IDEC Patents, Genentech Patents
and Genentech NP Patents for the purpose of providing the broadest protection for Franchise
Products and OCR. The Parties will share information and each Party will consider the views of the
other Party with respect to the scope of claims and decisions regarding the prosecution and
maintenance of such Patents as necessary to achieve such purpose.



     12.5 Prosecution of Existing Patents.



     (a) IDEC shall disclose to Genentech the complete texts of all IDEC Patents filed by IDEC
prior to the Restated Effective Date which claim the manufacture, use or sale of Franchise Products
as well as all information received concerning the institution or possible institution of any
interference, opposition, reexamination, reissue, revocation, nullification or any official
proceeding involving an IDEC Patent anywhere in the Co-Promotion Territory or Licensed Territory.
Genentech shall have the right to review all such IDEC Patents and all proceedings related thereto
and make recommendations to IDEC concerning them and their conduct and IDEC shall consider in good
faith for the Co-Promotion Territory and take into account for the Licensed Territory Genentech’s
reasonable comments related thereto. IDEC agrees to keep Genentech promptly and fully informed of
the course of patent prosecution or other proceedings of such IDEC Patents including by providing
Genentech with copies of substantive communications, search reports and third party observations
submitted to or received from patent offices within the Co-Promotion Territory or Licensed
Territory. Genentech shall provide such patent consultation to IDEC related to such IDEC Patents
at no cost to IDEC. All reasonable costs that IDEC incurs after the Original Effective Date in
filing, prosecuting and maintaining IDEC Patents in the Co-Promotion Territory shall be borne by
IDEC until the date of Regulatory Approval and thereafter





 




			
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shall be charged to Other Operating Income/Expense. All such reasonable costs which IDEC will
incur in the Licensed Territory shall be reimbursed by Genentech; provided, however, that Genentech
shall have the right to determine which countries within the Licensed Territory in which to file,
prosecute and maintain IDEC Patents. Genentech shall hold all information disclosed to it under
this Article 12 as confidential subject to the provisions of Article 11 of this Agreement.
Genentech shall have the right to assume responsibility for any IDEC Patent or any part of any such
Patent which IDEC intends to abandon or otherwise cause or allow to be forfeited provided that the
claims of such IDEC Patent covers Franchise Product or formulations, methods of manufacture or
methods of use thereof.




     (b) Genentech shall have the right, using in-house or outside legal counsel selected at
Genentech’s sole discretion, to prepare, file, prosecute, maintain and obtain extensions of
Genentech Patents, Genentech NP Patents or Joint Patents filed prior to the Restated Effective Date
in countries of Genentech’s choice throughout the Licensed Territory and in such countries within
the Co-Promotion Territory as agreed by the Parties with appropriate credit to IDEC
representatives, including the naming of such parties as inventors where appropriate. Genentech
shall bear the costs relating to such activities in the Licensed Territory at all times and in the
Co-Promotion Territory until Regulatory Approval in the United States. Such costs in the
Co-Promotion Territory after Regulatory Approval in the United States shall be included in Other
Operating Income/Expense pursuant to Exhibit A. Genentech shall disclose to IDEC the complete text
of, and shall use reasonable efforts to solicit IDEC’s advice and review of the nature and text of,
all Genentech Patents, Genentech NP Patents and Joint Patents and material prosecution matters
related thereto in reasonably sufficient time prior to filing thereof, and Genentech shall consider
in good faith for the Co-Promotion Territory and take into account for the Licensed Territory
IDEC’s reasonable comments related thereto.



     12.6 Prosecution of New Patents.



     (a) Genentech shall have the first right, using in-house or outside legal counsel selected at
Genentech’s sole discretion, to prepare, file, prosecute, maintain and obtain extensions of
Genentech Patents, Genentech NP Patents or Joint Patents filed after the Restated Effective Date in
countries of Genentech’s choice throughout the Licensed Territory and in such countries within the
Co-Promotion Territory as agreed by the Parties with appropriate credit to IDEC
representatives, including the naming of such parties as inventors where appropriate. Genentech
shall bear the costs relating to such activities in the Licensed Territory at all times and in the
Co-Promotion Territory until Regulatory Approval in the United States. Such costs in the
Co-Promotion Territory after Regulatory Approval in the United States shall be included in Other
Operating Income/Expense pursuant to Exhibit A. Genentech shall disclose to IDEC the complete text
of, and shall use reasonable efforts to solicit IDEC’s advice and review of the nature and text of,
all Genentech Patents, Genentech NP Patents and Joint Patents and material prosecution matters
related thereto in reasonably sufficient time prior to filing thereof, and Genentech shall consider
in good faith IDEC’s reasonable comments related thereto.



     (b) IDEC shall have the first right, using in-house or outside legal counsel selected at
IDEC’s sole discretion, to prepare, file, prosecute, maintain and obtain extensions of IDEC Patents





 




			
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filed after the Restated Effective Date in countries agreed to by the Parties within the
Co-Promotion Territory and in countries of Genentech’s choice within the Licensed Territory. IDEC
shall disclose to Genentech the complete text of, and shall use reasonable efforts to solicit
Genentech’s advice and review of the nature and text of, such IDEC Patents and material prosecution
matters related thereto in reasonably sufficient time prior to filing thereof, and IDEC shall (i)
in the Co-Promotion Territory consider in good faith Genentech’s reasonable comments related
thereto and (ii) in the Licensed Territory take into account Genentech’s reasonable comments
related thereto. All reasonable costs related to preparing, filing, prosecuting, maintaining and
extending IDEC Patents shall be (i) prior to Regulatory Approval in the United States, paid by IDEC
and (ii) after Regulatory Approval in the United States, included in Other Operating Income/Expense
pursuant to Exhibit A for activities within the Co-Promotion Territory and reimbursed by Genentech
to IDEC for activities within the Licensed Territory.




     (c) If Genentech, prior or subsequent to filing any Genentech Patents, Genentech NP Patents or
Joint Patents, elects not to file, prosecute or maintain such Patents or certain claims encompassed
by such Patents, Genentech shall give IDEC notice thereof within a reasonable period prior to
allowing such Patents or certain claims encompassed by such Patents to lapse or become abandoned or
unenforceable, and IDEC shall thereafter have the right, at its sole expense, to prepare, file,
prosecute and maintain Patents or certain claims encompassed by such Patents that claim Franchise
Products or formulations, methods of manufacture or methods of use thereof in countries of its
choice throughout the world. If IDEC, prior or subsequent to filing IDEC Patents, elects not to
file, prosecute or maintain such Patents or certain claims encompassed by such Patents that claim
Franchise Products or OCR, or formulations, methods of manufacture or methods of use thereof, IDEC
shall give Genentech notice thereof within a reasonable period prior to allowing such Patents or
certain claims encompassed by such Patents to lapse or become abandoned or unenforceable, and
Genentech shall thereafter have the right, at its sole expense, to prepare, file prosecute and
maintain such Patents or certain claims encompassed by such Patents in countries of its choice
throughout the world.



     (d) The Party filing Joint Patents shall do so in the name of and on behalf of both Genentech
and IDEC. Each of IDEC and Genentech shall hold all information it presently knows or acquires
under this Paragraph which is related to all such Patents as confidential subject to the provisions
of Article 11 of this Agreement.



     12.6a Prosecution of Genentech OCR Patents. Genentech shall have the sole right, using
in-house or outside legal counsel selected at Genentech’s sole discretion, to prepare, file,
prosecute, maintain and obtain extensions of Genentech OCR Patents in countries of Genentech’s
choice throughout the Licensed Territory and the Co-Promotion Territory. Genentech shall bear the
costs relating to such activities in the Licensed Territory and the Co-Promotion Territory
incurred.



     12.7 Waiver.



     (a) IDEC on behalf of itself and its directors, employees, officers, shareholders, agents,
successors and assigns hereby waives any and all actions and causes of action, claims and demands





 




			
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whatsoever, in law or equity of any kind it or they may have against Genentech, its officers,
directors, employees, shareholders, agents, successors and assigns, which may arise in any way
except as a result of Genentech’s gross negligence, recklessness, or willful misconduct in
performance of its rights or obligations under Section 12.5 or Section 12.6 of this Agreement.




     (b) Genentech on behalf of itself and its directors, employees, officers, shareholders,
agents, successors and assigns hereby waives any and all actions and causes of action, claims and
demands whatsoever, in law or equity of any kind it or they may have against IDEC, its officers,
directors, employees, shareholders, agents, successors and assigns, which may arise in any way
except as a result of IDEC’s gross negligence, recklessness, or willful misconduct in performance
of its rights or obligations under Section 12.5 or Section 12.6 of this Agreement.



     12.8 Further Assurances. Notwithstanding the provisions of Section 12.5 or Section 12.6 or
12.6a of this Agreement, each Party shall, at its own expense, provide reasonable assistance to the
other Party to facilitate filing of all Patents covering inventions referred to in Section 12.2 of
this Agreement and shall execute all documents deemed necessary or desirable therefor.



     12.9 Initial Filings If Made Outside of the United States. The Parties agree to use
reasonable efforts to ensure that any IDEC Patent, Genentech Patent, Genentech NP Patent or Joint
Patent filed outside of the United States prior to a U.S. filing will be in a form sufficient to
establish the date of original filing as a priority date for the purposes of a subsequent U.S.
filing and that the requisite foreign filing license will be obtained.



     12.10 Patent Enforcement.



     (a) Notice. In the event that IDEC or Genentech becomes aware of actual or threatened
infringement of a patent related to Franchise Product, anywhere in the world, that Party shall
promptly notify the other Party in writing.



     (b) IDEC Patents. IDEC shall have the first right but not the obligation to bring an
infringement action or file any other appropriate action or claim directly related to infringement
of an IDEC Patent , wherein such infringement relates to a Franchise Product, against any Third
Party. The costs of patent enforcement and related recoveries associated with the Co-Promotion
Territory incurred by IDEC shall be included in Other Operating Income/Expense. Such patent
enforcement costs in the Licensed Territory shall be borne by IDEC. If IDEC does not commence a
particular infringement action within ninety (90) days after it received such written notice,
Genentech, after notifying IDEC in writing, shall be entitled to bring such infringement action or
any other appropriate action or claim at its own expense. The Party conducting such action shall
consider in good faith the other Party’s comments on the conduct of such action. Recovery from any
settlement or judgment from such action in the Licensed Territory shall go first to reimburse the
expenses of the Parties and the remainder shall be shared by the Parties in proportion to their
respective economic interests. In any event, IDEC and Genentech shall assist one another and
reasonably cooperate in any such litigation at the other’s request without expense to the
requesting Party.





 




			
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     (c) Genentech Patents and Genentech NP Patents. Genentech shall have the first right but
not the obligation to bring an infringement action or file any other appropriate action or claim
directly related to infringement of a Genentech Patent or Genentech NP Patent, wherein such
infringement relates to Franchise Product, against any Third Party. The costs of patent
enforcement and related recoveries associated with the Co-Promotion Territory incurred by Genentech
shall be charged to Other Operating Income/Expense. Such patent enforcement costs in the Licensed
Territory shall be borne by Genentech. Recovery from any settlement or judgment from such action
in the Licensed Territory shall go first to reimburse the expenses of the Parties and the remainder
shall be shared by the Parties in proportion to their respective economic interests.



     (d) Joint Patents. Upon notice of an alleged infringement of a Joint Patent, the Parties will
discuss in good faith an appropriate course of action to further the objectives of the Parties
under this Agreement.



     (e) Genentech OCR Patents and OCR Related Infringement. Genentech shall have the sole right,
but not the obligation, to bring an infringement action or file any other appropriate action or
claim directly related to infringement of (i) a Genentech OCR Patent in both the Co-Promotion
Territory and Licensed Territory and (ii) a Genentech Patent or Genentech NP Patent, wherein such
infringement relates to OCR. IDEC shall be responsible for [**] of the costs of enforcement of a
Genentech OCR Patent associated with the Co-Promotion Territory incurred by Genentech, such amounts
to be paid to Genentech within thirty (30) days of receipt by IDEC of an invoice for such amounts.
All monies recovered upon the final judgment or settlement of any patent enforcement of a Genentech
OCR Patent associated with the Co-Promotion Territory shall be used: (i) first, to reimburse each
party for their respective share of out-of-pocket expenses relating to the action; and (ii) second,
any remaining balance shall be shared by the Parties with IDEC receiving [**] and Genentech
receiving [**] of such remaining balance. The costs of patent enforcement of a Genentech OCR
Patent associated with the Licensed Territory incurred by Genentech shall be borne by Genentech.
Recovery from any settlement or judgment from such enforcement in the Licensed Territory shall go
first to reimburse the expenses of the Parties and the remainder shall be shared by the Parties in
proportion to their respective economic interests in OCR in the Licensed Territory.



     12.11 Infringement Defense.



     (a) Defense in the Co-Promotion Territory. If a Third Party asserts that a patent or other
right owned by it is infringed by any Franchise Product in the Co-Promotion Territory, the JMC
shall establish a plan for a common defense and select the Party responsible for managing such
plan. The costs of any such action incurred by one or both of the Parties at the direction of the
JMC (including the costs of any judgment, award, decree or settlement) will be chargeable to the
collaboration as Other Operating Income/Expense pursuant to Exhibit A.



     (b) Defense in the Licensed Territory. If a Third Party asserts that a patent or other right
owned by it is infringed by any Franchise Product in the Licensed Territory, Genentech will be
solely responsible for deciding how and whether to defend against any such assertions at its cost
and expense. If Genentech is required to pay royalties to such Third Party as a result of such
action, it





 




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





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




     (c) Defense of OCR. If a Third Party asserts that a patent or other right owned by it is
infringed by OCR, Genentech will be solely responsible for deciding how and whether to defend
against any such assertions at its cost and expense. If Genentech is required to pay royalties to
such Third Party as a result of such action, it will be entitled to deduct a percentage of such
royalties against royalties owing to IDEC under, but only to the extent permitted by, Section
7.7(e).



ARTICLE 13.

REPRESENTATIONS AND WARRANTIES




     13.1 Representations and Warranties. Each of the Parties hereby represents and warrants, as
of the Restated Effective Date, as follows:



     (a) This Agreement is a legal and valid obligation binding upon such Party and enforceable in
accordance with its terms. The execution, delivery and performance of the Agreement by such Party
does not conflict with any agreement, instrument or understanding, oral or written, to which it is
a party or by which it is bound, nor violate any law or regulation of any court, governmental body
or administrative or other agency having jurisdiction over it.



     (b) Such Party has not, and during the term of the Agreement will not, grant any right to any
Third Party relating to its respective Patents and Know-how in the Field which would conflict with
the rights granted to the other Party hereunder.



     (c) Each Party represents and warrants that it has the right to grant the licenses granted
herein.



     (d) Except as set forth on Exhibit D of the Original Agreement, IDEC is not obligated under
any agreement as of the Original Effective Date to pay any Third Party royalties with respect to
C2B8


As used in this Section 13.1, “Patents” means IDEC Patent with respect to IDEC, and Genentech
Patents and Genentech NP Patents with respect to Genentech; and “Know-how” means IDEC Know-how with
respect to IDEC, and Genentech Know-how with respect to Genentech.




     13.2 Performance by Affiliates. The Parties recognize that each may perform some or all of
its obligations under this Agreement through Affiliates, provided, however, that each Party shall
remain responsible and be guarantor of the performance by its Affiliates and shall cause its
Affiliates to comply with the provisions of this Agreement in connection with such performance.




 




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



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ARTICLE 14.

INFORMATION AND REPORTS




     14.1 Information. Genentech and IDEC will disclose and make available to each other all
preclinical, clinical, regulatory, commercial and other information with respect to Franchise
Products, including without limitation all information relevant to the joint promotion of Franchise
Products, developed by Genentech or IDEC concerning Franchise Products at any time during the term
of this Agreement. Each Party will use commercially reasonable and diligent efforts to disclose to
the other Party all
such significant information promptly after it is learned or its significance is appreciated. Each
Party shall own and maintain its own database of clinical trial data accumulated from all clinical
trials of Franchise Products for which it was responsible and of adverse drug event information for
all Franchise Products. At the option of the requesting Party, such data shall be provided in a
computer readable format by the providing Party, to the extent available, which shall also assist
in the transfer and validation of such data to the receiving Party.



     14.2 Complaints. Each Party shall maintain a record of all complaints it receives with
respect to any Franchise Product. Each Party shall notify the other of any complaint received by
it in respect of a Franchise Product in sufficient detail and within five (5) business days after
the event, and in any event in sufficient time to allow the responsible Party to comply with any
and all regulatory requirements imposed upon it in any country. IDEC shall notify Genentech of any
complaint received by it in respect of OCR in sufficient detail and within five (5) business days
after the event, and in any event in sufficient time to allow Genentech to comply with any and all
regulatory requirements imposed upon it in any country.



     14.3 Adverse Drug Events. The Parties recognize that the holder of a Drug Approval
Application may be required to submit information and file reports to various governmental agencies
on compounds under clinical investigation, compounds proposed for marketing, or marketed drugs.
Information must be submitted at the time of initial filing for investigational use in humans and
at the time of a request for market approval of a new drug. In addition, supplemental information
must be provided on compounds at periodic intervals and adverse drug experiences must be reported
at more frequent intervals depending on the severity of the experience. Consequently, each Party
agrees to:



     (a) provide to the other for initial and/or periodic submission to government agencies
significant information on the drug from preclinical laboratory, animal toxicology and pharmacology
studies, as well as adverse drug experience reports from clinical trials and commercial experiences
with the compound;



     (b) in connection with investigational drugs, report to the other within three (3) days of the
initial receipt of a report of any unexpected or serious experience with the drug, or sooner if
required for either Party to comply with regulatory requirements; and



     (c) in connection with marketed drugs, report to the other within five (5) business days of
the initial receipt of a report of any adverse experience with the drug that is serious and
unexpected or sooner if required for either Party to comply with regulatory requirements. Serious
adverse




 




			
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request. An unredacted version of this exhibit has been filed separately with the Commission.



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experiences mean any experience that suggests a significant hazard, contraindication, side
effect or precaution, or any experience that is fatal or life threatening, is permanently
disabling, requires or prolongs inpatient hospitalization, or is a congenital anomaly, cancer, or
overdose. An unexpected adverse experience is one not identified in nature, specificity, severity
or frequency in the current investigator brochure or the U.S. labeling for the drug. Each Party
also agrees that if it contracts with a Third Party for research to be performed by such Third
Party on the drug, that Party agrees to require such Third Party to report to contracting Party the
information set forth in subparagraph (a), (b), and (c) above.



     14.4 Records of Net Sales and Costs. Each Party will maintain complete and accurate records
which are relevant to costs, expenses, sales and payments under this Agreement and such records
shall be open during reasonable business hours for a period of three (3) years from creation of
individual records for examination at the other Party’s expense, and, with respect to the audit
provisions of Section A.6.1 and A.6.2 of Exhibit A, such examination shall not be conducted more
often than once each year by an independent public accountant selected by the other Party as
described in A.6 of Exhibit A. Any records or accounting information received
from the other Party shall be Confidential Information for purposes of Article 11. Results of any
such audit shall be provided to both Parties, subject to Article 11.



     14.5 Publicity Review. The Parties agree that the public announcement of the execution of
this Agreement shall be in the form of a press release to be agreed upon on or before the Restated
Effective Date and thereafter each Party shall be entitled to make or publish any public statement
consistent with the contents thereof. Thereafter, IDEC and Genentech will jointly discuss and
agree, based on the principles of this Section 14.5, on any statement to the public regarding this
Agreement or any aspect of this Agreement subject in each case to disclosure otherwise required by
law or regulation as determined in good faith by each Party. The principles to be observed by IDEC
and Genentech in such public disclosures will be: accuracy, the requirements for confidentiality
under Article 11, the advantage a competitor of IDEC or Genentech may gain from any public
statements under this Section 14.5, and the standards and customs in the biotechnology and
pharmaceutical industries for such disclosures by companies comparable to IDEC and Genentech. The
terms of this Agreement may also be disclosed to (i) government agencies where required by law, or
(ii) Third Parties with the prior written consent of the other Party, which consent shall not be
unreasonably withheld, so long as such disclosure is made under a binder of confidentiality and so
long as highly sensitive terms and conditions such as financial terms are extracted from the
Agreement or not disclosed upon the request of the other Party.



ARTICLE 15.

TERM AND TERMINATION




     15.1 Term. This Agreement, which shall commence as of the Second Restated Effective Date,
shall continue the collaboration contemplated by the Parties under the 2003 Restated Agreement, and
the Original Agreement, including the First Amendment and Second Amendment thereto, as modified
hereby. The Parties have specifically provided elsewhere in this Agreement





 




			
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request. An unredacted version of this exhibit has been filed separately with the Commission.



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the term during which
certain rights and obligations hereunder shall apply. Unless sooner terminated as provided herein
and except as provided in Section 15.2 below, (a) the remaining provisions of this Agreement
relating to activities in the Co-Promotion Territory shall continue in effect until the date on
which the Parties are no longer entitled to receive a share of Operating Profits or Losses on any
Franchise Product, (b) the remaining provisions of this Agreement relating to activities in the
Licensed Territory, or with respect to OCR, shall continue in effect until the date on which
Genentech is no longer required to pay a royalty on Royalty-Bearing Sales in the Licensed Territory
or on OCR, and (c) the remaining provisions of this Agreement relating to activities with respect
to OCR shall continue in effect until the date on which Genentech is no longer required to pay a
royalty on Royalty-Bearing Sales of OCR. Those provisions shall govern the term of the rights and
obligations specifically covered thereby. Upon the expiration, but not an earlier termination, of
this Agreement, all licenses granted by either Party to the other Party hereunder shall become
fully paid up and irrevocable.



     15.2 Sale or Purchase of Co-Promotion Rights on Change of Control.



     (a) Purchase Option with respect to all Franchise Products and Third Party Anti-CD20 Products.
Genentech may, by written notice by certified mail, return receipt requested, to IDEC (the
“Auction Notice”), indicate a single price (the “Auction Price”) at which Genentech would be
willing to purchase from IDEC all of the rights held by IDEC hereunder with respect to all Licensed
Products in the Co-Promotion Territory (the “Purchase Option”). This right will be exercisable at
any time if (i) a single stockholder or group of affiliated stockholders, other than Genentech or
an Affiliate, who would be required to file a Schedule 13D under the Securities Exchange Act of
1934, as amended, acquires or obtains the right to acquire voting stock of IDEC so that its total
holdings of such stock equal or exceed fifty percent (50%) of
the then outstanding voting stock of IDEC, or (ii) a Third Party acquires or obtains the right to
acquire all or substantially all of the assets of IDEC, in which case Genentech must exercise such
right within ninety (90) days after the date on which such stockholder or group of stockholders
passes the fifty percent (50%) threshold or the date of such acquisition. Either such event shall
be referred to as a “Change of Control Event.” IDEC shall promptly notify Genentech upon IDEC’s
receipt of written notice that such Change of Control Event will be occurring and shall use best
efforts to ensure that such notice is given to Genentech at least ninety (90) days before the
occurrence of such Change of Control Event. The Auction Price may be in the form of (i) cash, (ii)
a royalty on sales of the Licensed Products in the Co-Promotion Territory or (iii) some combination
of the foregoing. Concurrent with the initiation of an Auction Notice by Genentech under this
Section 15.2, a royalty price (the “Royalty Price”) at which Genentech will purchase from IDEC all
of the rights held by IDEC hereunder with respect to all New Products (including G2H7), OCR, and
Third Party Anti-CD20 Products for which IDEC entered into a written agreement with Genentech
pursuant to Section 2.6 prior to such date, in the United States shall be set. The Royalty Price
with respect to such New Products, OCR and Third Party Anti-CD20 Products shall be based on the
[**] of such product at the time of Genentech’s written notice to IDEC under this Section 15.2 as
follows:




 




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



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	Stage of Product	 	Royalty Price
	Prior to completion of the [**] for
the product:

	 	Compensation equivalent to [**]
of such product in the United
States; provided, IDEC (or its
successor) timely reimburses
Genentech, on a calendar quarter
basis, [**] of its Development
Costs for developing or
marketing such product in the
Co-Promotion Territory through
[**] for such product.
Genentech shall timely provide
IDEC (or its successor) with
quarterly invoices for
Development Costs incurred under
this section, and IDEC (or its
successor) shall pay such
invoices within sixty (60) days
thereof. IDEC (or its
successor) shall have the right
to audit such invoices no more
than once a calendar year, such
audit to be conducted as
provided in accordance with
Section 15.2(c)(iii).
	 
	 	 
	After completion of the [**] for the
product, but prior to [**] of such
product:

	 	Compensation equivalent to [**]
of such product in the United
States.
	 
	 	 
	After [**] of the product:

	 	With respect to (i) such New
Products, compensation to IDEC
or payment by IDEC to Genentech
equivalent to [**] for such New
Product in the United States,
(ii) OCR the royalty on
Royalty-Bearing Sales of OCR in
the United States set forth in
Section 7.7(a).
	 
	 	 
	 

	 	With respect to such Third Party
Anti-CD20 Products, compensation
to IDEC or payment by IDEC to
Genentech equivalent to the
amount otherwise specified to be
paid on such product in the
United States [**], as
established pursuant to the
provisions of Section 2.6.





It is understood and agreed that Genentech shall only be required to make Royalty Price payments on
such New Products or Third Party Anti-CD20 Products (which were opted in by IDEC pursuant to
Section 2.6 prior to the Auction Notice) which were under development pursuant to an approved or
proposed
Development Plan or being commercially sold at the time of such Auction Notice, and that subsequent
development of any products incorporating any protein or peptide, other than the proteins or
peptides that were incorporated into such New Products or Third Party Anti-CD20 Products, shall not
be subject to such Royalty Price payments.




     (b) Sales Option with respect to all Licensed Products. Within thirty (30) days of receipt of
the Auction Notice, IDEC shall notify Genentech in writing whether it elects to accept the Auction
Price for its rights with respect to all Licensed Products or pay Genentech the Profit Sharing
Ratio times the Auction Price for such Licensed Products (where “the Profit Sharing Ratio” [**], to
purchase all of the rights held by Genentech hereunder with respect to Licensed Products in the
Co-Promotion Territory (the “Sales Option”); provided, however, if IDEC does not notify Genentech
of its election within such period, IDEC shall be deemed to have sold its rights hereunder with
respect to the Licensed Products in the Co-Promotion Territory at the




 




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



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Auction Price under the
Purchase Option. If Genentech has not received a response within twenty (20) days after Genentech
sends its initial notice hereunder, Genentech shall on the twentieth (20th) day after sending such
initial notice, deliver a second notice by certified mail, return receipt requested. For the
avoidance of doubt, it is understood and agreed that IDEC shall have no right under this Agreement
to purchase any of the rights held by Genentech hereunder with respect to New Products, and/or
Third Party Anti-CD20 Products for which IDEC entered into a written agreement with Genentech
pursuant to Section 2.6 prior to such date.



     (c) On that date which is thirty (30) days after receipt of the Auction Notice:



          (i) all rights held by IDEC (including any successor in interest) under Section 2.5 and 2.6,
other than with respect to New Products and/or Third Party Anti-CD20-Products for which IDEC
entered into a written agreement with Genentech pursuant to Section 2.6 prior to such date, shall
terminate;




          (ii) all rights held by IDEC (including any successor in interest) hereunder with respect to
New Products and OCR in the United States, and Third Party Anti-CD20 Products for which IDEC
entered into a written agreement with Genentech pursuant to Section 2.6 prior to such date,
including the right to receive further payments from Genentech shall terminate and Genentech shall
thereafter pay IDEC the Royalty Price for each such product in the United States, without offset of
any kind; such obligation to continue, on a product-by-product basis, for eleven (11) years from
the date of first commercial sale of such product in the United States (for avoidance of doubt, a
sale for “compassionate use” shall not be deemed a first commercial sale);




          (iii) Genentech or its designee shall make its Royalty Price payments to IDEC or its designee
quarterly within sixty (60) days following the end of each calendar quarter for which such payments
are due. Each Royalty Price payment shall be accompanied by a report summarizing the Net Sales or
Operating Profits (or Losses), as applicable, for such New Product, OCR or Third Party Anti-CD20
Product, during the relevant calendar quarter. IDEC shall have the right, upon written notice to
Genentech, and not more often than once each calendar year, to have an independent accounting firm,
selected by IDEC and reasonably approved by Genentech, inspect Genentech’s books of accounts for
the sole purpose of verifying the correctness of calculations or such costs, expenses or payments
made under this Section 15.2 with respect to sales of such products. Such audits will be conducted
at the expense of IDEC; provided, however, that if the audit results in an adjustment of greater
than [**] of Net Sales or Operating Profits (or Losses), as applicable, in any period, the cost of
the audit will be borne by Genentech. Audit results will be shared with both Parties. Audits are
limited to results in the two (2) years prior to audit notification;




          (iv) if the Purchase Option was elected (or deemed to be elected) pursuant to Section 15.2(b)
with respect to all Licensed Products, all rights held by IDEC hereunder with respect to the
Licensed Products in the Co-Promotion Territory including the right to receive further payments
from Genentech shall terminate and Genentech shall pay IDEC [**] of the Auction Price that is
payable in cash on such date;





 




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




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          (v) if the Sales Option was elected pursuant to Section 15.2(b) with respect to all Licensed
Products, all rights held by Genentech hereunder with respect to the Licensed Products in the
Co-Promotion Territory shall terminate and IDEC shall pay Genentech [**] of the price [**] that is
payable in cash on such date;




          (vi) the purchasing Party’s rights under the selling Party’s Patents and Know-how shall become
exclusive (with right of sublicense) and non-revocable with respect to all Licensed Products in the
Field and in the Co-Promotion Territory (and to the extent not already included on such date, such
rights shall include the right to manufacture and have manufactured under the selling Party’s
Patents and Know-How), and the selling Party’s license under the purchasing Party’s Patents and
Know-how with respect to all Licensed Products in the Field and in the Co-Promotion Territory shall
terminate;




          (vii) the selling Party shall (x) extend to the purchasing Party the opportunity to acquire a
non-exclusive license under any Third Party rights Controlled by the selling Party as of such date,
such terms, to the extent reasonably practicable, to be on the same financial terms as the selling
Party has with respect to such Third Party rights; and (y) to the extent the selling Party is
licensed under any Third Party rights not Controlled by the selling Party on such date, use its
commercially reasonable and diligent efforts to assist the purchasing Party in obtaining a license
for such Third Party rights under the same financial terms, to the extent reasonably practicable,
as the selling Party has with respect to such Third Party rights, in each case, to the extent such
rights are necessary for the purchasing Party to develop, manufacture or commercialize the
Franchise Products purchased by the purchasing Party as of such date.




          (viii) the selling Party shall use commercially reasonable and diligent efforts to transfer to
the purchasing Party any technology, materials, data and regulatory submissions, existing and
utilized in the development, manufacture and commercialization of the Franchise Product as of such
date, so as to fully enable the purchasing Party to develop, manufacture and commercialize the
Franchise Product, with the costs of such transfer to be borne by the purchasing Party;




          (ix) the selling Party shall make its personnel and other resources reasonably available to
the purchasing Party as necessary to effect an orderly transition of development, manufacturing and
commercialization responsibilities, with the cost of making such personnel and resources to be
borne by the purchasing Party; and




          (x) the remaining [**] of the Auction Price that is payable in cash shall be paid upon the
later to occur of (A) thirty (30) days of the date thereafter on which the purchasing Party
manufactures and sells any Licensed Product in the Co-Promotion Territory or (B) the date on which
such technology transfer (including data and regulatory submissions) is substantially complete.



As used in this Section 15.2(c), “Patents” means IDEC Patent with respect to IDEC, and Genentech
Patents and Genentech NP Patents with respect to Genentech; and “Know-how” means IDEC Know-how with
respect to IDEC, and Genentech Know-how with respect to Genentech.




     (d) In the event of a buy-out of a Franchise Product pursuant to this Sections 15.2:





 




			
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request. An unredacted version of this exhibit has been filed separately with the Commission.



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          (i) the Party selling its rights to the Franchise Product shall continue to supply the amounts
of such Franchise Product it was obligated to supply at the time of such buy-out for a [**] to
allow the purchasing Party to obtain an alternate source of supply, if necessary;




          (ii) the Party purchasing the rights to the Franchise Product going forward shall also receive
from the selling Party an exclusive license to use any and all jointly-owned trademarks pursuant to
Section 10.1; and




          (iii) the Party purchasing the rights to a Franchise Product shall, to the extent Third Party
rights are passed by the selling Party to the purchasing Party, pay any and all Third Party
royalties.




     15.3 Accrued Rights, Surviving Obligations. Termination, relinquishment or expiration of the
Agreement for any reason shall be without prejudice to any rights which shall have accrued to the
benefit of either Party prior to such termination (including paid up irrevocable licenses),
relinquishment or expiration, including damages arising from any breach hereunder. Such
termination, relinquishment or expiration shall not relieve either Party from obligations under
Articles 11, 12, 16 and 18 herein, and any other obligations which are expressly indicated to
survive termination or expiration of the Agreement.



ARTICLE 16.

INDEMNIFICATION




     16.1 Indemnification in the Licensed Territory.



     (a) Genentech hereby agrees to save, defend and hold IDEC and its agents and employees
harmless from and against any and all suits, claims, actions, demands, liabilities, expenses and/or
loss, including reasonable legal expense and attorneys’ fees (“Losses”) resulting directly from the
manufacture, use, handling, storage, sale or other disposition of chemical agents or Franchise
Products sold or used in the Licensed Territory by Genentech, its Affiliates, agents or
sublicensees except to the extent such Losses result from the negligence of IDEC.



     (b) In the event that IDEC is seeking indemnification under Section 16.1(a), it shall inform
Genentech of a claim as soon as reasonably practicable after it receives notice of the claim, shall
permit Genentech to assume direction and control of the defense of the claim (including the right
to settle the claim solely for monetary consideration), and shall cooperate as requested (at the
expense of Genentech) in the defense of the claim.



     (c) IDEC hereby agrees to save, defend and hold Genentech and its agents and employees
harmless from and against any and all suits, claims, actions, demands, liabilities, expenses and/or
loss, including reasonable legal expense and attorneys’ fees (“Losses”) resulting directly from the
manufacture by IDEC of Licensed Products sold or used in the Licensed Territory by Genentech, its
Affiliates, agents or sublicensees.





 




			
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request. An unredacted version of this exhibit has been filed separately with the Commission.



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     (d) In the event Genentech is seeking indemnification under Section 16.1(c), it shall inform
IDEC of a claim as soon as reasonably practicable after it receives notice of the claim, shall
permit IDEC to assume direction and control of the defense of the claim (including the right to
settle the claim solely for monetary consideration), and shall cooperate as requested (at the
expense of IDEC) in the defense of the claim.



     16.2 Indemnification in the Co-Promotion Territory.



     (a) Each Party hereby agrees to save, defend and hold the other Party and its agents and
employees harmless from and against any and all losses resulting directly or indirectly from the
manufacture, use, handling, storage, sale or other disposition of chemical agents or Franchise
Products and OCR sold or used in the Co-Promotion Territory by the indemnifying Party, its
Affiliates, agents or sublicensees, but only to the extent such losses result from the negligence
or willful misconduct of the indemnifying Party or its employees and agents and do not also result
from the negligence or willful misconduct of the Party seeking indemnification. Any other losses
resulting directly or indirectly from the manufacture, use, handling, storage, sale or other
disposition of (i) chemical agents or Franchise Products in the Co-Promotion Territory shall be
charged to the collaboration as an Other Operating Income/Expense at the time such claim is finally
determined, whether by judgment, award, decree or settlement; and (ii) OCR shall be borne by
Genentech, at the time such claim is finally determined, whether by judgment, award, decree or
settlement, provided that Genentech may deduct [**] of such losses from royalties owed to
IDEC pursuant to Section 7.7(a) as long as such deduction in any given payment period does not
result in IDEC receiving less than [**] of the royalty amount that would otherwise be owed to IDEC
pursuant to Section 7.7(a) for such period. Genentech may carry forward any losses not utilized as
a result of the cap on deductions to future periods, not to exceed [**] from the relevant claim’s
final determination, until any such losses not utilized are fully deducted.



     (b) In the event that either Party receives notice of a claim with respect to a Franchise
Product in the Co-Promotion Territory, such Party shall inform the other Party as soon as
reasonably practicable. The Parties shall confer how to respond to the claim and how to handle the
claim in an efficient manner.



ARTICLE 17.

DISPUTE RESOLUTION




     17.1 Disputes. The Parties recognize that disputes as to certain matters may from time to
time arise during the term of this Agreement which relate to either Party’s rights and/or
obligations hereunder. It is the objective of the Parties to establish procedures to facilitate
the resolution of disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation. To accomplish this objective, the Parties agree to
follow the procedures set forth in this Article 17, if and when a dispute arises under this
Agreement. Unless otherwise specifically recited in this Agreement, disputes among members of each
Operating Committee will be resolved as recited in this Article 17. Any disputes among members of
Operating Committees formed hereunder relating to the collaboration, and which are within the




 




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



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scope
of such Operating Committee’s responsibilities, shall be first referred to the Management Committee
by either Party at any time after such dispute has arisen and such Party believes that there has
been sufficient discussion of the matter at the Operating Committee level. If the Management
Committee is unable to resolve such a dispute within thirty (30) days of being requested by a Party
to resolve an Operating Committee dispute, any Party may, by written notice to the other, have such
dispute referred to their respective chief executive officers, for attempted resolution by good
faith negotiations within fourteen (14) days after such notice is received. In the event the
designated executive officers are not able to resolve such dispute, such dispute shall be resolved
as follows:



     (a) [**], if such dispute relates to issues of commercialization of Franchise Products that
are within the scope of the JCC’s responsibilities (including post-marketing and investigator
sponsored trails), Genentech shall have final decision making authority with respect to such
dispute; provided however, that Genentech may not make a final decision which decision would: (i)
establish or amend an Annual Commercial Operating Budget; (ii) result in the Annual Commercial
Operating Budget approved with a commercialization plan being exceeded [**] (and to the extent such
budget is not exceeded [**], such activities shall not be deemed an amendment to the budget for
purposes of 17.1(a)(i) above); (iii) assign tasks
to IDEC that were not otherwise approved by unanimous consent of the JCC; (iv) restrict a
Party’s rights under Section 5.2(c), or with respect to the first sentence of Section 5.2(a)
restrict a Party’s rights to deploy a co-promotion sales force in the Co-Promotion Territory as
specified in Section 5.2(a)(except as modified by Section 5.2(b)), in each case, unless the JCC
unanimously agrees otherwise, (v) assign an initial pricing for a Franchise Product, unless such
initial pricing is within [**] of the current price for C2B8; (vi) materially amend a
commercialization plan without the unanimous approval of the JCC (where “materially amend” means to
materially modify the strategic direction agreed upon by the Parties under such commercialization
plan ); or (vii) result in the cessation of development and/or commercialization of a Franchise
Product in the Co-Promotion Territory without the consent of IDEC (such consent not to be
unreasonably withheld); and



     (b) with respect to all other disputes, either Party may at anytime after the 14-day period
invoke the provisions of Section 17.2 hereinafter.



     For clarity, any dispute, controversy or claim relating to OCR, as it is not subject to the
oversight, involvement or control of any Operating Committee or the Management Committee, shall not
be subject Section 17.1, but shall (except as to any issue relating to intellectual property owned
in whole or in part by IDEC or Genentech) be resolved by binding arbitration in accordance with
Section 17.2.



     17.2 Arbitration. The parties agree that any dispute, controversy or claim (except as to any
issue relating to intellectual property owned in whole or in part by IDEC or Genentech) arising out
of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall be
resolved through negotiation and/or binding arbitration. If a dispute arises between the parties,
and if said dispute cannot be resolved pursuant to Section 17.1, the Parties agree that any
unresolved controversy or claim between the parties shall be resolved by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration Association, except as
modified herein. The Company and Buyer shall each select one arbitrator and the two arbitrators




 




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



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so
selected shall choose a third arbitrator to resolve the dispute. The arbitration decision shall be
rendered in a writing stating the basis on which the decision was made within six months of
conclusion of arbitration and shall be binding and not be appealable to any court in any
jurisdiction. The prevailing Party may enter such decision in any court having competent
jurisdiction. The arbitration proceeding shall be conducted at the location of the Party not
originally requesting the resolution of the dispute. The Parties agree that they shall share
equally the cost of the arbitration filing and hearing fees, and the cost of the arbitrator. Each
Party must bear its own attorney’s fees and associated costs and expenses.



     17.3 Jurisdiction. For the purposes of this Article 17, the Parties agree to accept the
jurisdiction of the federal courts located in the Northern District of California for the purposes
of enforcing awards entered pursuant to this Article and for enforcing the agreements reflected in
this Article.



     17.4 Determination of Patents and Other Intellectual Property. Any dispute relating to the
determination of validity of a Party’s Patents or other issues relating solely to a Party’s
intellectual property shall be submitted exclusively to the federal court located in the location
of the defendant, and the Parties hereby consent to the jurisdiction and venue of such court.



ARTICLE 18.

MISCELLANEOUS




     18.1 Assignment.



     (a) With respect to: (i) Licensed Products, either Party may assign any of its rights under
this Agreement in any country to any Affiliates and, with the prior written consent of the other
Party, may delegate its obligations under this Agreement in any country to any Affiliates; and (ii)
New Products, IDEC may, with the prior written consent of Genentech, assign and/or delegate any of
its rights under this Agreement in any country to any Affiliates; provided, however, that such
assignment shall not relieve the assigning Party of its responsibilities for performance of its
obligations under this Agreement. Genentech may assign and/or delegate its rights with respect to
any New Product or OCR in any country to any Affiliates.



     (b) Either Party may assign all of its rights and obligations under this Agreement in
connection with a merger or similar reorganization or the sale of all or substantially all of its
assets, or otherwise with the prior written consent of the other Party; provided, however, that
IDEC may not so assign its rights and obligations if it is in breach of the provisions of Section
7.7. This Agreement shall survive any such merger or reorganization of either Party with or into,
or such sale of assets to, another party and no consent (except as otherwise set forth above) for
such merger, reorganization or sale shall be required hereunder.



     (c) This Agreement shall be binding upon and inure to the benefit of the successors and
permitted assigns of the Parties. Any assignment not in accordance with this Agreement shall be
void.




 




			
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request. An unredacted version of this exhibit has been filed separately with the Commission.



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     18.2 Non-Solicitation. The Parties recognize that each Party has a substantial interest in
preserving and maintaining confidential its Confidential Information hereunder. Each Party
recognizes that certain of the other Party’s employees, including those engaged in development,
marketing and sale of any Franchise Product, may have access to such Confidential Information of
the other Party. The Parties therefore agree not to solicit or otherwise induce or attempt to
induce for purposes of employment, any employees from the other Party involved in the development,
marketing or sales of any Franchise Product during the period in which any Party is developing or
commercializing a Franchise Product in the Co-Promotion Territory hereunder and for a period of two
years thereafter.



     18.3 Consents Not Unreasonably Withheld. Whenever provision is made in this Agreement for
either Party to secure the consent or approval of the other, that consent or approval shall not
unreasonably be withheld, and whenever in this Agreement provision is made for one Party to object
to or disapprove a matter, such objection or disapproval shall not unreasonably be exercised.



     18.4 Retained Rights. Nothing in this Agreement shall limit in any respect the right of
either Party to conduct research and development with respect to and market products outside the
Field using such Party’s technology.



     18.5 Force Majeure. Neither Party shall lose any rights hereunder or be liable to the other
Party for damages or losses on account of failure of performance by the defaulting Party if the
failure is occasioned by government action, war, earthquake, fire, explosion, flood, strike,
 lockout, embargo, mycoplasmal contamination, act of God, or any other cause beyond the control of
the defaulting Party, provided that the Party claiming force majeure has exerted all reasonable
efforts to avoid or remedy such force majeure; provided however, that in no event shall a Party be
required to settle any labor dispute or disturbance.




     18.6 Further Actions. Each Party agrees to execute, acknowledge and deliver such further
instruments, and to do all such other acts, as may be necessary or appropriate in order to carry
out the purposes and intent of this Agreement.



     18.7 No Right to Use Names. Except as otherwise provided herein, no right, express or
implied, is granted by the Agreement to use in any manner the name “IDEC,” “Genentech” or any other
trade name or trademark of the other Party or its Affiliates in connection with the performance of
the Agreement.



     18.8 Notices. All notices hereunder shall be in writing and shall be deemed given if
delivered personally or by facsimile transmission (receipt verified), telexed, mailed by registered
or certified mail (return receipt requested), postage prepaid, or sent by express courier service,
to the Parties at the following addresses (or at such other address for a Party as shall be
specified by like notice; provided, that notices of a change of address shall be effective only
upon receipt thereof).




 




			
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request. An unredacted version of this exhibit has been filed separately with the Commission.



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	If to IDEC,
	 	 
	addressed to:

	 	Biogen Idec Inc.
	 

	 	133 Boston Post Road
	 

	 	Weston, MA 02493
	 

	 	Attention:      Corporate Secretary
	 

	 	Telephone:     (858) 431-8500
	 

	 	Telecopy:       (858) 431-8755
	 
	 	 
	If to Genentech,
	 	 
	addressed to:

	 	GENENTECH. INC.
	 

	 	1 DNA Way
	 

	 	South San Francisco, CA 94080
	 

	 	Attention:      Corporate Secretary
	 

	 	Telephone:      (650) 225-1000
	 

	 	Telecopy:       (650) 952-9881





     18.9 Waiver. Except as specifically provided for herein, the waiver from time to time by
either of the Parties of any of their rights or their failure to exercise any remedy shall not
operate or be construed as a continuing waiver of same or of any other of such Party’s rights or
remedies provided in this Agreement.



     18.10 Severability. If any term, covenant or condition of this Agreement or the application
thereof to any Party or circumstance shall, to any extent, be held to be invalid or unenforceable,
then (i) the remainder of this Agreement, or the application of such term, covenant or condition to
Parties or circumstances other than those as to which it is held invalid or unenforceable, shall
not be affected thereby and each term, covenant or condition of this Agreement shall be valid and
be enforced to the fullest extent permitted by law; and (ii) the Parties hereto covenant and agree
to renegotiate any such term, covenant or application thereof in good faith in order to provide a
reasonably acceptable alternative to the term, covenant or condition of this Agreement or the
application thereof that is invalid or unenforceable, it being the intent of the Parties that the
basic purposes of this Agreement are to be effectuated.



     18.11 Governing Law. This Agreement shall be governed by and construed in accordance with,
the laws of the State of California without giving effect to principles of conflict of laws.



     18.12 Ambiguities. Ambiguities, if any, in this Agreement shall not be construed against any
Party, irrespective of which Party may be deemed to have authorized the ambiguous provision.



     18.13 Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.



     18.14 Entire Agreement. This Agreement, including all Exhibits and the Appendix attached
hereto which are hereby incorporated herein by reference, sets forth all the covenants, promises,
agreements, warranties, representations, conditions and understandings between the




 




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



     IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their
proper officers as of the date and year first above written.



	 	 	 	 	 	 	 	 	 

	BIOGEN IDEC INC.	 	GENENTECH, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ George Scangos
 

	 	By:
	 	/s/ Steve Krognes
 

	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	Chief Executive Officer
	 	Title:
	 	Chief Financial Officer	 	 







 




			
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Appendix 1




Schedule of Master Definitions





 




			
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APPENDIX 1




TO THE



SECOND AMENDED AND RESTATED COLLABORATION AGREEMENT



BETWEEN BIOGEN IDEC INC AND GENENTECH, INC.



SCHEDULE OF MASTER DEFINITIONS



     1. “Administration Costs” shall have the meaning set forth in Exhibit A to the Collaboration
Agreement.



     2. “Affiliate” means an entity that, directly or indirectly, through one or more
intermediaries, is controlled by IDEC or Genentech. As used herein, the term “control” will mean
the direct or indirect ownership of fifty percent (50%) or more of the stock having the right to
vote for directors thereof or the ability to otherwise control the management of the corporation or
other business entity. For the avoidance of doubt, as of the Restated Effective Date, F. Hoffman-La
Roche AG shall not be considered an Affiliate of Genentech.



     3. “Allocable Overhead” shall have the meaning set forth in Exhibit A to the Collaboration
Agreement.



     4. “Ancillary Agreements” shall mean the License Agreements, Preferred Stock Purchase
Agreement, Option Agreement, Registration Rights Agreement and Standstill Agreement.



     5. “Annual Commercial Operating Budget” means an annual top line budget with respect to
commercialization activities in any one fiscal year in respect of Franchise Products in the form
attached hereto as Section A.1(a) of Exhibit A.



     6. “Approvable Process Event” means a determination by the JDC that the formulation of C2B8
and the process for C2B8 recovery are commercially viable as more fully described in Appendix I to
the Development Plan.



     7. “Asia” means Japan, Bangladesh, Myanmar, Cambodia, Indonesia, People’s Republic of China,
Hong Kong, Republic of Korea, Laos, Malaysia, Papua New Guinea, Philippines, Singapore, Sri Lanka,
Republic of China (Taiwan) and Thailand and the territories and possessions of each.



     8. “Business Day” means a day on which banking institutions are open for business in
California.



     9. “C2B8” means that certain monoclonal antibody to B cells more particularly described on
Exhibit B to the Collaboration Agreement.





 




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





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     10. “Certificate of Determination of Preferred Stock” means the Certificate of Determination
of Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4
Preferred Stock, Series A-5 Preferred Stock, Series A-6 Preferred Stock and Series A-7 Preferred
Stock, to be filed with the Secretary of State of the State of California.



     11. “Collaboration Agreement” shall mean the Collaboration Agreement dated the Restated
Effective Date between IDEC and Genentech.



     12. “Combination Product Adjustment” means the following: in the event a Franchise Product or
OCR is sold in the form of a combination product containing one or more active ingredients in
addition to a Franchise Product or OCR, respectively, Royalty-Bearing Sales or Net Sales for such
combination product will be adjusted by multiplying actual Royalty-Bearing Sales, or Net Sales as
applicable, of such combination product by the fraction A/(A + B) where A is the invoice price of
the Franchise Product or OCR, as applicable, if sold separately, and B is the invoice price of any
other active component or components in the combination, if sold separately. If, on a
country-by-country basis, the other active component or components in the combination are not sold
separately in said country, Royalty-Bearing Sales or Net Sales shall be calculated by multiplying
actual Royalty-Bearing Sales or Net Sales of such combination product by the fraction A/C where A
is the invoice price of the Franchise Product or OCR, as applicable, if sold separately, and C is
the invoice price of the combination product. If, on a country-by-country basis, neither the
Franchise Product or OCR, as applicable, nor the other active component or components of the
combination product is sold separately in said country, Royalty-Bearing Sales or Net Sales shall be
determined by the Parties in good faith.



     13. “Control” or “Controlled” means possession of the ability to grant a license or sublicense
as provided for herein without violating the terms of any agreement or other arrangement with any
Third Party.



     14. “Co-Promote” means to promote jointly Franchise Products through Genentech, IDEC and their
respective sales forces under a single trademark in a given country in the Co-Promotion Territory.



     15. “Co-Promotion Profits” shall have the same meaning as Operating Profits or Losses.



     16. “Co-Promotion Territory” means, with regard to Licensed Products, the United States and
Canada, and with regard to OCR and New Products, the United States only.



     17. “Cost of Goods Sold” shall have the meaning set forth in Exhibit A to the Collaboration
Agreement.



     18. “Cost of Sales” shall have the meaning set forth in Exhibit A to the Collaboration
Agreement.



     19. “Delay Option” means the option exercisable by IDEC upon written notice to Genentech at
least thirty (30) days prior to the First Anniversary Date that IDEC elects to delay [**] of
Genentech’s investment on the First Anniversary Date such that either (i) IDEC shall receive in





 




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





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lieu of such delayed portion of the investment, a [**] payment upon the occurrence of the
Patent Milestone Event or instead issue shares of Series A Preferred Stock, or if the Patent
Milestone Event does not occur prior to the Third Anniversary Date, then (ii) IDEC shall receive
the delayed investment in accordance with Section 2(d) of the Preferred Stock Purchase Agreement;
provided that this Delay Option will not be exercisable by IDEC if the Approvable Process Event
does not occur on or prior to the First Anniversary Date.




     20. “Development Costs” shall have the meaning set forth in Exhibit A to the Collaboration
Agreement.



     21. “Development Plan” means the comprehensive plan for the development of a Franchise
Product, designed to generate the preclinical, process development, manufacturing scale-up,
clinical and regulatory information required to obtain Regulatory Approval in the Co-Promotion
Territory, and which may be modified from time to time by the JDC. Development shall refer to all
activities related to preclinical testing, toxicology, formulation, process development,
manufacturing scale-up, quality assurance/quality control, clinical studies and regulatory affairs
for a Franchise Product in connection with obtaining Regulatory Approvals of such Franchise
Product.



     22. “Distribution Costs” shall have the meaning set forth in Exhibit A to the Collaboration
Agreement.



     23. “Drug Approval Application” means an application for Regulatory Approval required for
commercial sale or use of a Franchise Product as a drug in the Field in a regulatory jurisdiction.



     24. ’’Excluded Patent” means the rights under any Patent within the following, as defined in
Exhibit G: the Cabilly Patents and the Itakura/Riggs Patents.



     25. “First Anniversary Date” means the date which is twelve (12) calendar months following the
Original Effective Date.



     26. “First New Product FDA Approval” means the date upon which the first approval is received
from the United States Food and Drug Administration with respect to the first New Product
(immediately following which such New Product may be manufactured and commercially sold in the
United States).



     27. “First GA101 FDA Approval” means the date upon which the first approval is received from
the United States Food and Drug Administration with respect to GA101 (immediately following which
GA101 may be commercially sold in the United States).



     28. “First Non-CLL GA101 FDA Approval” means the date upon which the first approval is
received from the United States Food and Drug Administration with respect to GA101 in an indication
other than chronic lymphocytic leukemia (immediately following which GA101 may be commercially sold
in the United States).



     27. “FDA Approval Date” means the date on which the United States Food and Drug Administration
grants Regulatory Approval of C2B8 for manufacture and sale in the United States.





 




			
	[**] =	 	 Portions of this exhibit have been omitted pursuant to a confidential treatment
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     29. “FDA Approval Event” means the FDA Approval Date occurs on or before the Fifty-Four Month
Anniversary Date.



     30. “FDA Review Event” means the date on which the relevant United States Food and Drug
Administration public advisory committee meets to determine whether to recommend approval of the
manufacture and sale in the United States of C2B8.



     31. “Field” means the use of Franchise Product in humans.



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



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



     34. “GA101” means “Licensed Products” as defined in the GA101 License and Collaboration
Agreement made and entered on September 23, 2008 by and between F. Hoffmann-La Roche Ltd and
GlycArt Biotechnology AG and Genentech.



     35. “GA101 CLL Sales Trigger” means the first day of the first calendar quarter following the
first date cumulative Gross Sales of GA101 (calculated only with respect to GA101 in the United
States) within any consecutive 12 month period reaches $500,000,000.



     36. “G2H7” means [**].



     37. “Genentech” means Genentech, Inc., a Delaware corporation, and its Affiliates.



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



     39. “Genentech NP Patent” means the rights under any Patent, other than a Genentech Patent or
Excluded Patent, which covers a method, apparatus, material, manufacture, use, treatment, process,
compound, composition, or product-by-process necessary to develop, make, use or sell a New Product
in the Field in the Co-Promotion Territory, which Patent is Controlled by Genentech, including its
interest in any Patents owned jointly by the Parties as provided hereunder.



     40. “Genentech OCR Patent” means the rights under any Patent, filed after the Second Restated
Effective Date, other than a Genentech Patent, Genentech NP Patent or Excluded Patent, which covers
a method, apparatus, material, manufacture, use, treatment, process, compound, composition, or
product-by-process necessary to develop, make, use or sell OCR in the Field, which Patent is
Controlled by Genentech, including its interest in any Patents owned jointly by the Parties as
provided hereunder.



     41. “Genentech Patent” means the rights under any Patent, other than an Excluded Patent, which
covers a method, apparatus, material, manufacture, use, treatment, process, compound, composition,
or product-by-process necessary to develop, make, use or sell a Licensed Product in the Field,
which Patent is Controlled by Genentech, including its interest in any Patents owned jointly by the
Parties as provided hereunder.





 




			
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request.
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     42. “Gross Sales” shall have the meaning set forth in Exhibit A to the Collaboration
Agreement.



     43. “IDEC” means IDEC Pharmaceuticals Corporation, a Delaware corporation, and its Affiliates.



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



     45. “IDEC Patent” means the rights under a Patent which covers a method, apparatus, material,
manufacture, use, treatment, process, compound, composition or product-by-process (i) useful in the
development, manufacture, use or sale of Licensed Products, or (ii) necessary to develop, make, use
or sell a New Product or OCR, in each case which Patent is Controlled by IDEC, including its
interest in any Patents owned jointly by the Parties as provided hereunder.



     46. “ln2B8” shall have the meaning set forth in Section 2.2. of the Collaboration Agreement.



     47. “Information” means techniques and data relating to the Franchise Products and/or OCR,
including, but not limited to, biological materials, inventions, practices, methods, knowledge,
know-how, skill, experience, test data (including pharmacological, toxicological and clinical test
data), analytical and quality control data, marketing, pricing, distribution, cost, sales,
manufacturing, patent data or descriptions.



     48. “Joint Commercialization Committee” or “JCC” means that committee established
pursuant to Section 3.3 of the Collaboration Agreement.



     49. “Joint Development Committee” or “JDC” means that committee established pursuant to
Section 3.2 of the Collaboration Agreement.



     50. “Joint Finance Committee” or “JFC” means that committee established pursuant to Section
3.4 of the Collaboration Agreement.



     51. “Joint Know-how” means Information developed by or on behalf of a Party hereunder and
which is co-funded by the Parties, including without limitation being charged against Operating
Profits (or Losses).



     52. “Licensed Product(s)” means any compound or composition of matter [**] (including C2B8,
but excluding Y2B8 and In2B8 unless the option set forth in Section 2.3 of the Collaboration
Agreement is exercised) (a) developed by IDEC or (b) the intellectual property rights to which are
owned or Controlled, in whole or in part, by IDEC, in either (a) or (b) as of the Original
Effective Date or during the term of the Collaboration Agreement. Notwithstanding the foregoing,
Licensed Products shall not be considered OCR, New Products or Third Party Anti-CD20 Products.



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





 




			
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     54. “Major European Country” means the United Kingdom, Italy, Germany, France or Spain.



     55. “Management Committee” means that committee established pursuant to Section 3.1 of the
Collaboration Agreement.



     56. “Marketing Costs” shall have the meaning set forth m Exhibit A to the Collaboration
Agreement



     57. “ML/MS Agreement” means the Preferred and Common Stock Purchase Agreement dated March 16,
1995 by and between ML/MS Associates, L.P. and IDEC, whereby IDEC reacquired the rights to certain
technologies for the treatment of B-cell lymphomas funded and developed by ML/MS Partners pursuant
to a Development Agreement and related agreements, dated as of February 17, 1988 and October 27,
1988.



     58. “ML/MS Partners” shall mean ML Technology Ventures, L.P. and Morgan Stanley Ventures,
L.P., and any assignee or successor to ML/MS Partners.



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



     60. “Net Sales” shall have the meaning set forth in Exhibit A to the Collaboration
Agreement.



     61. “New Product” means (i) G2H7 (from and after the date of payment pursuant to Section
7.1(b)(i) of the Collaboration Agreement) and (ii) any Potential New Product for which IDEC has
exercised an opt-in pursuant to Section 2.5 of the Collaboration Agreement (from and after the date
of payment pursuant to Section 7.1(b)(ii), (iii) or (iv), as applicable, of the Collaboration
Agreement). At the time a Potential New Product becomes a New Product, such New Product shall be
defined to include [**] was (were) the subject of such Potential New Product, as well as (x) any
modifications to [**] which result from [**] are not required to obtain Regulatory Approval, and
(y) modifications or derivatives to [**] which result from activities specified in the Development
Plan [**].



     62. “OCR” means [**].



     63. “OCR Trademarks” means trademarks, service marks, trade dress, logos, names, slogans and
domain names used or to be used in connection with the marketing and commercialization of OCR (and
all translations, adaptations, derivations, and combinations thereof), together will all goodwill
associated therewith, and all applications, registrations, and renewals in connection therewith.



     64. “Operating Committee” means a committee established by the Management Committee, including
but not limited to, the Joint Development Committee, Joint Commercialization Committee and the
Joint Finance Committee.





 




			
	[**] =	 	 Portions of this exhibit have been omitted pursuant to a confidential treatment
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     65. “Operating Profits or Losses” shall have the meaning set forth in Exhibit A of the
Collaboration Agreement.



     66. “Option Agreement” means the Option Agreement to be dated as of the Original Effective
Date between Genentech and IDEC.



     67. “Original Agreement” shall mean that certain collaboration agreement by and between the
Parties dated March 16, 1995.



     68. “Original Effective Date” means March 16, 1995.



     69. “Party” means IDEC or Genentech, as applicable.



     70. “Parties” means IDEC and Genentech.



     71. “Patent(s)” means (i) valid and enforceable letters patent, including any extension,
registration, confirmation, reissue, re-examination or renewal thereof and (ii) pending
applications for letters patent, including any continuation, division or continuation-in-part.



     72. “Patent Costs” means the fees and expenses paid to outside legal counsel and experts, and
filing and maintenance expenses, (i) incurred after the Original Effective Date in connection with
the establishment and maintenance of rights under Patents covering any Licensed Product, and (ii)
incurred after the Restated Effective Date in connection with the establishment and maintenance of
rights under Patents covering OCR or any New Product, including, in each case, costs of patent
interference, reexamination, reissue, opposition and revocation proceedings.



     73. “Patent Milestone Event” means the notice of grant in the European Patent Office or
issuance in a Major European Country of the first valid and enforceable letters patent covering
C2B8.



     74. “Phase II Clinical Trial” means such studies in humans of the safety, dose ranging and
efficacy of a Franchise Product which have generated sufficient data to commence a Phase III
Clinical Trial.



     75. “Phase III Clinical Trial” means a study in humans of the efficacy and safety of a
Franchise Product which is prospectively designed to demonstrate statistically whether the
Franchise Product is effective for use in a particular indication in a manner sufficient to obtain
Regulatory Approval to market that Franchise Product and which the Joint Development Committee
designates as a Phase III Clinical Trial.



     76. “Phase III Milestone Event” means completion of the Pivotal Phase III Clinical Trial and
presentation of the results of the entire Pivotal Phase III Clinical Trial in a peer-reviewed
journal or public forum.



     77. “Pivotal Phase III Clinical Trial” means IDEC Protocol #102-05, as amended, and as further
amended by the agreement of the JDC or as otherwise agreed by the JDC.





 




			
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     78. “Potential New Product” means any protein(s) or peptide(s) (other than G2H7 and OCR) [**],
and such protein(s) or peptide(s):



          (a) was (were) acquired by [**] from a Third Party [**] (such Potential New Product a “ [**]
Potential New Product”); or




          (b) was (were) acquired by [**] from a Third Party [**] (such Potential New Product a “[**]
Potential New Product”) (collectively, [**] Potential New Products and [**] Potential New Products
may be referred to herein as “[**] Potential New Products”); or




          (c) was (were) developed by Genentech (including any protein(s) or peptide(s) acquired by [**]
(such Potential New Product a “[**] Potential New Product”)).



As used in this Collaboration Agreement, “protein” or “peptide” means any protein or peptide having
a [**]; and “acquired” means, in addition to the direct acquisition of rights to a product, the
indirect acquisition of rights to a product through the acquisition of [**]. Notwithstanding the
foregoing, [**], and Potential New Products and New Products shall not be considered Third Party
Anti-CD20 Products.




     79. “Preferred Stock Purchase Agreement” means the Preferred Stock Purchase Agreement dated
the Original Effective Date between IDEC and Genentech.



     80. “Proceed with Formulation Event” means the affirmative decision by the JDC to proceed with
the current formulation (including modified formulations, if any, not requiring a halt in current
clinical trials) of C2B8 more fully described in Appendix I to the Development Plan.



     81. “Product License Application Filing Event” shall mean the date on which the first product
license application is filed with the United States Food and Drug Administration for approval of
the manufacture and sale of C2B8 in the United States.



     82. “Regulatory Approval” means any approvals (including pricing and reimbursement approvals),
licenses, registrations or authorizations of any federal, state or local regulatory agency,
department, bureau or other governmental entity, necessary for the manufacture and sale of a
Franchise Product in a regulatory jurisdiction.



     83. “Registration Rights Agreement” means the 1995 Registration Rights Agreement dated as of
the Original Effective Date between Genentech, ML/MS Associates, L.P. and IDEC.



     84. “Royalty-Bearing Sales” means, as to each Franchise Product in the Licensed Territory or
OCR in the Co-Promotion Territory and Licensed Territory, the gross amount invoiced by Genentech or
its permitted sublicensees for sales to an unrelated Third Party of a Franchise Product in the
Licensed Territory or OCR in the Co-Promotion Territory or Licensed Territory (as applicable), less
(i) trade, cash and quantity discounts or rebates, (ii) credits or allowances given or made for
rejection or return of, and for uncollectible amounts on, previously sold products or for
retroactive price reductions (including rebates similar to Medicare), (iii) taxes, duties or other
governmental charges levied on or measured by the billing amount, as adjusted for rebates and
refunds, (iv) charges for freight and insurance directly related to the distribution of Franchise





 




			
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Products and OCR, as applicable (to the extent not paid by the Third Party customer), and (v)
credits or allowances given or made for wastage replacement, indigent patient and similar programs
(but only to the extent such amounts were included in the gross amount invoiced). The amount
obtained by deducting (i) through (v) from the gross amount invoiced shall then be adjusted by the
Combination Product Adjustment, if applicable. For the avoidance of doubt, Royalty-Bearing Sales
will, following the Restated Effective Date, be determined in a manner consistent with the practice
immediately prior to the Restated Effective Date, unless otherwise agreed to in writing by the
Parties.




     85. “Sales Costs” shall have the meaning set forth in Exhibit A to the Collaboration
Agreement.



     86. “Sales Returns and Allowances” shall have the meaning set forth in Exhibit A to the
Collaboration Agreement.



     87. “Sales Representative” means an employee of either Party or its Affiliates (i) who is
responsible for contacting customers and others who can buy or influence the buying decision on the
applicable Franchise Product in the applicable country in the Co-Promotion Territory, and (ii)
whose success at such activities is a significant factor in the ongoing employment of the
individual, and shall exclude an employee of either Party or an Affiliate engaged in telemarketing,
professional education, and similar indirect activities in support of direct selling.



     88. “Stability Benchmark Date” means the date on which the accelerated stability study has
been completed and data has been reviewed by the JDC as more fully described on Appendix I to the
Development Plan.



     89. “Standstill Agreement” means the Standstill Agreement to be dated as of the Original
Effective Date between Genentech and IDEC.



     90. “Third Anniversary Date” means that date which is thirty-six months following the Original
Effective Date.



     91. “Third Party” means any entity other than IDEC or Genentech.



     92. “Third Party Anti-CD20 Products” means any protein or peptide [**] that is controlled
(either before or after Genentech decides to seek a license to the same) by any Third Party. As
used in the previous sentence, “controlled” means that such Third Party had the ability to grant a
license or sublicense to develop and commercialize such product without violating the terms of any
agreement or other arrangement it had with any other Third Party. Notwithstanding the foregoing,
Third Party Anti-CD20 Products shall not be considered Potential New Products or New Products.



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



     94. “Y2B8” shall have the meaning set forth in Section 2.2 of the Collaboration Agreement.





 




			
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Exhibit A




Financial Planning, Accounting and Reporting





 




			
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EXHIBIT A




FINANCIAL PLANNING, ACCOUNTING AND REPORTING

FOR THE

SECOND AMENDED AND RESTATED COLLABORATION AGREEMENT



     This Exhibit A to the Second Amended and Restated Collaboration Agreement (the “Collaboration
Agreement”) dated as of October 18, 2010, between Biogen Idec Inc. (“IDEC”) and Genentech, Inc.
(“Genentech”) addresses the financial planning, accounting policies and procedures to be followed
in determining Operating Profits or Losses and related sharing of revenue and expenses in the
Co-Promotion Territory. Terms not defined in this Exhibit shall have the meanings set forth in the
Schedule of Master Definitions which is attached as Appendix 1 to the Collaboration Agreement, or
to the extent not in the Schedule of Master Definitions, in the Collaboration Agreement.



     This Exhibit sets forth the principles for reporting actual results and budgeted plans of the
combined operations in the Co-Promotion Territory, the frequency of reporting, the use of a single
functional currency for reporting, and the methods of determining payments to the Parties and
auditing of accounts.



     For purposes of this Exhibit only, the consolidated accounting of operations for the
collaboration in the Co-Promotion Territory shall be referred to as GenIDEC. GenIDEC is not a legal
entity and has been defined for identification purposes only.



A.1. Principles of Reporting





The results of operations of GenIDEC will be presented in the following format (as to
all Franchise Products and also on a product-by-product basis), with the categories as
defined in Section A.4 below:




A.1(a) Income Statement



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








 




			
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     It is the intention of the Parties that the interpretation of these definitions will be
consistent with generally accepted accounting principles in the United States.



     A.1(b) Subcomponent Reporting




     For reporting purposes only, expenses will be identified for the budget, forecast, and
quarterly actuals reporting events within this Section A.1 by the following detail sub-components
within the aggregate Income Statement expense components specified
under Section A.l(a):



     Cost of Sales — cost of goods sold (COGS), cost of sales royalties, freight & other



     Marketing — marketing promotion, market research, marketing headcount



     Sales — sales headcount, sales promotion & sales operations



     Development — by indication label-enabling activities & trials, by indication post-marketing
activities & trials



     The requirement defined within Section 4.5, 5.4 (b) and 17.1(a) not to exceed budget by [**]
without unanimous JDC or JCC approval, as applicable, shall not apply to these reporting detail
sub-components, but shall only apply to the aggregate expense components specified within the
Income Statement format specified within Section A.l(a).



A.2. Frequency of Reporting




     The fiscal year of GenIDEC will be a calendar year.



     Reporting by each Party for GenIDEC revenues and expenses will be performed as follows (with
copies provided to the JFC and to the other Party):



	 	 	 	 	 	 	 	 	 
	Reporting Event	 	Frequency	 	Timing of Submission	 	 	 	 
	Actuals

	 	Quarterly
	 	Q1-Q3:
	 	+30 days	 	 
	 

	 	 	 	Q4:
	 	+45 days	 	 
	 
	 	 	 	 	 	 	 	 
	Forecasts

	 	Quarterly
	 	Mid Quarter	 	 	 	 
	(rest of year — by month)
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Budgets

	 	Annually
	 	October 31	 	 	 	 
	(one year — by month)
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Long Range Plan

	 	Annually
	 	July 31	 	 	 	 
	(current year plus 5 years)
	 	 	 	 	 	 	 	 












 




			
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Genentech will be responsible for the preparation of consolidated reporting (actuals, budgets,
forecasts, and long range plans), calculation of the profit/loss sharing and determination of the
cash settlement. Genentech will provide the JFC (and IDEC) within five working days of the
submission date shown above, a statement showing the consolidated results (and forecasts) and
calculations of the profit/loss sharing and cash settlement required in a format agreed to by the
Parties.



Reports of actual results compared to budget (as to all Franchise Products and also on a product-
by-product basis) will be made to the Operating Committees on a quarterly basis. After approval by
the JFC as to amounts, the JFC will forward the report to the Management Committee for its
approval. Line item variances from budgets judged to be significant by the JFC will only be
included in calculation of Operating Profit and Loss when approved by the JCC and the Management
Committee.



On a monthly basis Genentech will supply IDEC with Gross Sales (as to all Franchise Products and
also on a product-by-product basis) in units, local currency and U.S. dollars by country of each
month’s sales according to Genentech’s sales reporting system, which shall be consistent with the
definitions in Section A.4.



The Joint Finance Committee will meet as appropriate to review and approve the following (as to all
Franchise Products and also on a product-by-product basis):





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





A.3. Budget and Long Range Plan



Responsibility for the Budget and Long Range Plan with regard to Licensed Products, [**], will rest
with the JCC and the JDC, who will develop budgets for development and commercialization in
coordination with the Joint Finance Committee, subject to final approval by the Management
Committee.



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









 




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





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Budgets will be prepared annually for the following full calendar year containing monthly
details/numbers.



Budgets will be supplemented with high level business plans and costs for clinical trials,
registration applications, and plans for product introduction, sales efforts and promotion as
approved by the Joint Development Committee and Joint Commercialization Committee. Budgets, once
ratified by the Management Committee, can only be changed with the approval of the Management
Committee (with the exception of the provisions outlined in Sections 4.5 and 5.4(b) of the
Collaboration Agreement).



A five-year Long Range Plan for GenIDEC will be established on a yearly basis under the direction
of the Management Committee and submitted to Genentech and IDEC by July 31st.




A.4. Definitions




     A.4.1 “Administration Costs” means, as to each Franchise Product in the Co- Promotion
Territory, costs chargeable to GenIDEC equal to [**] of the sum of each Party’s own Marketing Costs
and Sales Costs and Development Costs (each, only to the extent chargeable to GenIDEC), subject to
a cap for each Party, as to all Franchise Products, in each calendar year of [**] (subject to
annual increases per the PPI).



     A.4.2 “Allocable Overhead” means costs incurred by a Party or for its account which are
attributable to a Party’s supervisory, services, occupancy costs, corporate bonus (to the extent
not charged directly to department), and its payroll, information systems, human relations or
purchasing functions and which are allocated to company departments based on space occupied or
headcount or other activity-based method. Allocable Overhead shall not include any costs
attributable to general corporate activities including, by way of example, executive management,
investor relations, business development, legal affairs and finance.



     A.4.3. “Cost of Goods Sold” means, as to each Franchise Product in the Co- Promotion
Territory, the fully burdened cost of such Franchise Product in final therapeutic form as limited
by Section 8.2 or Section 8.6. The fully burdened cost of each Franchise Product will be determined
in accordance with generally accepted accounting principles in the United States as applied by the
Party performing or contracting for each stage of the manufacturing process and will include direct
labor, material, product testing costs and Allocable Overhead.



     A.4.4. “Cost of Sales” means, as to each Franchise Product in the Co-Promotion Territory, Cost
of Goods Sold, Third Party Royalties (except to ML/MS Partners) (i.e., any allocable intellectual
property acquisition and licensing costs) and outbound freight on sales if borne by the seller.



     A.4.5. “Development Costs” means, as to each Franchise Product in the Co- Promotion Territory,
costs, including Allocable Overhead, required to obtain the authorization and/or ability to
manufacture, formulate, fill, ship and/or sell such Franchise Product in the Field in commercial
quantities in the Co-Promotion Territory. Development Costs shall include but are not limited to
the





 




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





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cost of studies on the toxicological, pharmacokinetic, metabolic or clinical aspects of such
Franchise Product conducted internally or by individual investigators, or consultants necessary for
the purpose of obtaining and/or maintaining approval of such Franchise Product in the Field by a
government organization in a country of the Co-Promotion Territory, and costs for preparing,
submitting, reviewing or developing data or information for the purpose of a submission to a
governmental authority to obtain and/or maintain approval of such Franchise Product in the Field in
a country of the Co-Promotion Territory as well as costs of process development scale-up and
recovery (including plant costs). In addition, Development Costs in the Co-Promotion Territory
shall include the cost of post-launch clinical studies in support of such Franchise Product in the
Field in the Co-Promotion Territory. Development Costs in the Co-Promotion Territory shall include
expenses for compensation, benefits and travel and other employee-related expenses, as well as data
management, statistical designs and studies, document preparation, and other expenses associated
with the clinical testing program. Development Costs that are to be paid solely by one but not both
of the Parties as set forth in Section 2.3 of the Collaboration Agreement shall not be included in
the determination of Operating Profits (Losses).




     A.4.6. “Distribution Costs” means, as to each Franchise Product in the Co-Promotion Territory,
the costs, including Allocable Overhead, specifically identifiable to the distribution of such
Franchise Product including customer services, collection of data of sales to hospitals and other
end users (e.g. DDD sales data), order entry, billing, credit and collection and other activities
described in Section 5.3 of the Agreement. For the purpose of this Agreement, only Genentech will
charge GenIDEC for Distribution Costs an amount of [**] of Net Sales in a lump sum.



     A.4.7. “Gross Sales” means, as to each Franchise Product in the Co-Promotion Territory, the
gross amount invoiced by either Party or their Affiliates or permitted sublicensees for sales of
such Franchise Product to Third Parties in the Co-Promotion Territory.



     A.4.8. “Marketing Costs” means, as to each Franchise Product in the Co-Promotion Territory,
the costs, excluding Allocable Overhead, of marketing, promotion, advertising, professional
education, product related public relations, relationships with opinion leaders and professional
societies, market research, healthcare economics studies and other similar activities directly
related to such Franchise Product and approved by the Joint Commercialization Committee. Such costs
will include both internal costs (e.g., salaries, benefits, supplies and materials, etc.) as well
as outside services and expenses (e.g., consultants, agency fees, meeting costs, etc.). Marketing
Costs shall also include activities related to obtaining reimbursement from payers and costs of
sales and marketing data. Marketing Costs will specifically exclude the costs of activities which
promote (i) either Party’s business as a whole without being product specific (such as corporate
image advertising), or (ii) non-Franchise Products.



     A.4.9. “Net Sales” means Gross Sales less Sales Returns and Allowances.



     A.4.10. “Operating Profit or Loss” means, as to all Franchise Products (or, where applicable,
on a product-by-product basis), GenIDEC’s Net Sales less the following items: Cost of Sales,
Marketing Costs, Sales Costs, Development Costs, (to the extent chargeable to GenIDEC), Other
Operating Income/Expense, Distribution Costs and Administrative Costs, for a given period.





 




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





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




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





     A.4.12. “Sales Costs” means, as to each Franchise Product in the Co-Promotion Territory (to
the extent practicable and without being overly burdensome to provide, Sales Costs will be
identified on a product -by-product basis, otherwise such Sales Costs shall be attributed between
the products in a reasonable manner as determined by the JFC), costs, including Allocable Overhead,
approved by the JCC and the annual budget and specifically identifiable to the sales of such
Franchise Product to all markets in the Co-Promotion Territory including the managed care market.
Sales Costs shall include costs associated with Sales Representatives, including compensation,
benefits and travel, supervision and training of the Sales Representatives, sales meetings, and
other sales expenses. Sales Costs will not include the startup costs associated with either Party’s
sales force, including recruiting, relocation and other similar costs.



     A.4.13. “Sales Returns and Allowances” means, as to each Franchise Product in the Co-Promotion
Territory, the sum of (a), (b) and (c) where (a) is a provision, determined under generally
accepted accounting principles in the United States, for (i) trade, cash and quantity discounts or
rebates (other than price discounts granted at the time of invoicing and which are included in the
determination of Gross Sales), (ii) credits or allowances given or made for rejection or return of,
and for uncollectible amounts on, previously sold products or for retroactive price reductions
(including Medicare and similar types of rebates), (iii) taxes, duties or other governmental
charges levied on or measured by the billing amount, as adjusted for rebates and refunds, (iv)
charges for freight and insurance directly related to the distribution of such Franchise Product,
and (v) credits or allowances given or made for wastage replacement, indigent patient and any other
sales programs agreed to by the Parties, (b) is a periodic adjustment of the provision determined
in (a) to reflect amounts actually incurred for (i), (ii), (iii), (iv) and (v), and (c) is the
Combination Product Adjustment as defined in the Collaboration Agreement, if any. Provisions
allowed in (a) and adjustments made in (b) and (c) will be reviewed by the Joint Finance Committee.



A.5. Foreign Exchange



The functional currency for accounting for operating profit will be U.S. Dollars.



The statement of operations will be translated into U.S. dollars using the average exchange rate
for the reporting period.








 




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





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A.6 Audit and Interim Reviews




     A.6.1 Either Party shall have the right to request that an independent accounting firm
selected by such requesting Party, and approved by the other Party (such approval not to be
unreasonably withheld), perform an audit or interim review of the other Party’s books (as to all
Franchise Products and also on a product-by-product basis) in order to express an opinion regarding
said Party’s compliance with generally accepted accounting principles. Such audits or review will
be conducted at the expense of the requesting Party.



     A.6.2 Either Party shall have the right to request that an independent public accounting firm
selected by such requesting Party, and approved by the other Party (such approval not to be
unreasonably withheld), perform an audit of the other Party’s books of accounts (as to all
Franchise Products and OCR, and also on a product -by-product basis) for the sole purpose of
verifying compliance with the Agreement. Such audits will be conducted at the expense of the
requesting Party; provided, however, that if the audit results in an adjustment of greater that
[**] of Operating Losses or Profits in any period, the cost of the audit will be borne by the Party
audited. Audit results will be shared with both Parties. Audits are limited to results in the two
(2) years prior to audit notification.



     A.6.3 Each Party shall provide the other Party, as reasonably requested, sharable work product
generated by such Party or its accountants with respect to Franchise Products and OCR in
preparation of such providing Party’s obligation to comply with the reporting obligations mandated
under the Sarbanes Oxley Act of 2002 (including implemented federal regulations thereunder);
provided, such providing Party shall have the right to redact such work product to (i) remove any
reference to any products other than a Franchise Product and OCR, and (ii) to preserve any right of
confidentiality not otherwise governed by the terms of Article 11 of the Collaboration Agreement;
provided further, such receiving Party shall only use such information disclosed hereunder to
assist it in complying with the reporting obligations mandated under the Sarbanes Oxley Act of
2002. All costs incurred by the providing Party in complying with such request shall be reimbursed
by the receiving Party.



     A.6.4 At either Party’s written request, the other Party shall, to the extent commercially
reasonable and practicable, commission, facilitate, support, and/or assist an independent
accounting firm with the execution of an agreed-upon procedures engagement (and written report
thereon), whose scope, frequency and timing will be mutually agreed upon by the Parties, to support
the requesting Party’s relevant internal control understanding and compliance assertions. All costs
incurred by the other Party in complying with such request shall be reimbursed by the requesting
Party.



A.7. Payments between the Parties



Balancing payments between the Parties will be approved by the Management Committee based on
Operating Profit or Loss. Payments will be made quarterly based on actual results within 60 days








 




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





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after the end of each quarter, adjusted for reimbursement of the net expenses or income incurred or
received by each Party.




A.8. Accounting for Development Costs, Marketing Costs and Sales Costs



All Development Costs, Marketing Costs and Sales Costs will be based on the appropriate costs
definition stated in Section A.4 of this Exhibit.



Each party shall report Development Costs in a manner consistent with its Project Cost System. In
general, these project cost systems report actual time spent on specific projects, apply the actual
labor costs, capture actual costs of specific projects and allocate other expenses to projects. For
Marketing Costs, the Parties will report costs based on spending in Marketing departments. The
Parties acknowledge that the methodologies used will be based on systems in place and consistent
with Section A.11 of this Exhibit.



For the purpose of determining Sales Costs, the Parties, through the JCC and JFC shall determine
the number of Sales Representatives selling Franchise Products during the period and develop a
method consistent with Sections A.4 and A.11 of this Exhibit to allocate Sales Costs to those Sales
Representatives.




A.9. Sharing of Operating Profits and Losses



The Parties agree to share the Operating Profit or Loss resulting from the collaborative
arrangement in the Co-Promotion Territory according to the following manner:




     A.9.1 Licensed Products. With regard to Licensed Products, including without limitation, C2B8,
for each calendar year or portion thereof prior to the earlier of the GA101 CLL Sales Trigger,
First Non-CLL GA101 FDA Approval or First New Product FDA Approval, IDEC and Genentech shall
receive 30% and 70%, respectively, of the first $50 million in Operating Profits (calculated solely
with respect to Licensed Products) and 40% and 60%, respectively, of Operating Profits (calculated
solely with respect to Licensed Products) in excess of $50 million. To the extent there is an
Operating Loss (calculated solely with respect to Licensed Products) on sales of Licensed Product
in the Co-Promotion Territory in any calendar year, IDEC shall absorb 30% and Genentech 70% of such
loss; provided, however, that: (i) Genentech shall finance the cost of building inventory necessary
for product launch, bridging or other studies required under Section 8.1 of the Collaboration
Agreement and other pre-launch marketing or commercial activities approved by the Joint
Commercialization Committee and the Joint Finance Committee, and (ii) IDEC shall repay its 30%
share of such costs following product approvals from the Operating Profits allocated to IDEC in any
calendar quarter. If repayment is not complete three years following first approval, IDEC shall
complete repayment in a lump sum at the end of the next calendar quarter. Interest on any such
repayment will be charged at a rate equal to the sum of [**].



     A.9.2 New Products Prior to the GA101 CLL Sales Trigger, First Non-CLL GA101 FDA Approval or
First New Product FDA Approval. With regard to New Products (including without limitation G2H7),
prior to the earlier of the GA101 CLL Sales Trigger, First GA101 Non-





 




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





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CLL FDA Approval or First New Product FDA Approval, in each calendar year IDEC and Genentech
shall pay [**], respectively, of all Operating Losses (calculated solely with respect to New
Products).




     A.9.3 All Franchise Products following the GA101 CLL Sales Trigger, First Non-CLL GA101 FDA
Approval or First New Product FDA Approval.



     A.9.3a With regard to all Franchise Products, including without limitation C2B8 and G2H7,
following the GA101 CLL Sales Trigger, but prior to either the First Non-CLL GA101 FDA Approval or
the First New Product FDA Approval, for each calendar year or portion thereof, IDEC and Genentech
shall receive (or pay):




     (i) 30% and 70%, respectively, of the first $50 million in Operating Profits
(calculated with respect to all Franchise Products); except that for the calendar year in
which the GA101 CLL Sales Trigger occurs, this first $50 million Operating Profits tier
shall only apply with respect to Operating Profits of all Franchise Products if this first
$50 million Operating Profits tier has not been completely achieved, and then only to the
extent it has not been achieved, with respect to Operating Profits of Licensed Products (as
defined within A.9.1) prior to the GA101 CLL Sales Trigger; and




     (ii) 35% and 65%, respectively, of the Operating Profits (calculated with respect to
all Franchise Products) in excess of the first $50 million in Operating Profits (calculated
with respect to all Franchise Products); and




     (iii) 35% and 65%, respectively, of any Operating Losses, calculated with respect to
all Franchise Products.


For clarity, on and after the First Non-CLL GA101 FDA Approval or the First New Product FDA
Approval this section A.9.3a shall no longer apply and the Parties respective share of Operating
Profit or Loss for all Franchise Products shall be determined in accordance with section A.9.3b or
A.9.3c, as applicable, below.




     A.9.3b With regard to all Franchise Products, including without limitation C2B8 and G2H7,
following the First Non-CLL GA101 FDA Approval, but prior to the First New Product FDA Approval,
for each calendar year or portion thereof, IDEC and Genentech shall receive (or pay):




(i) 30% and 70%, respectively, of the first $50 million in Operating Profits
(calculated with respect to all Franchise Products); except that for the calendar
year in which the First GA101 FDA Approval occurs, this first $50 million Operating
Profits tier shall only apply with respect to Operating Profits of all Franchise
Products if this first $50 million Operating Profits tier has not been completely
achieved, and then only to the extent it has not been achieved, with respect to
Operating Profits of Licensed Products (as defined within A.9.1) prior to the First
GA101 FDA Approval; and





 




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





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(ii) If the GA101 CLL Sales Trigger has not occurred prior to the First Non-CLL
GA101 FDA Approval, then




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




(y) 37.5% and 62.5%, respectively, of the Operating Profits (calculated with
respect to all Franchise Products) in excess of the first $50 million in
Operating Profits (calculated with respect to all Franchise Products)
following the First GA101 Threshold Date and until the Second GA101 Threshold
Date (as used herein the “Second GA101 Threshold Date” means first day of the
first calendar quarter following the first date the cumulative Gross Sales
(calculated only with respect to GA101 in the United States) within any
consecutive 12 month period reaches $500,000,000); and




(z) 35% and 65%, respectively, of the Operating Profits (calculated with
respect to all Franchise Products) following the Second GA101 Threshold Date;




(iii) If the GA101 CLL Sales Trigger has occurred prior to the First Non-CLL
GA101 FDA Approval, then 35% and 65%, respectively, of the Operating
Profits (calculated with respect to all Franchise Products) in excess of the
first $50 million in Operating Profits (calculated with respect to all Franchise
Products); and




(iv) 35% and 65%, respectively, of any Operating Losses, calculated with respect
to all Franchise Products.





 




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





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Within a calendar month that the First GA101 Threshold Date or the Second GA101 Threshold Date is
met, Operating Profits shall be calculated by (x) pro-rating the expenses in such month on a
straight line basis to pre and post threshold time frames, (y) identifying daily product sales
within such calendar month by the pre and post threshold timeframes and (z) allocating their
related Cost-of-Sales by the proper product sales proportions for pre and post threshold
timeframes.



For clarity, on and after the First New Product FDA Approval this section A.9.3b shall no longer
apply and the Parties respective share of Operating Profit or Loss for all Franchise Products shall
be determined in accordance with section A.9.3c below.




     A.9.3.c With regard to all Franchise Products, including without limitation C2B8, following
the First New Product FDA Approval, for each calendar year or portion thereof, IDEC and Genentech
shall receive (or pay):




(i) 30% and 70%, respectively, of the first $50 million in Operating Profits
(calculated with respect to all Franchise Products); except that for the calendar
year in which the First New Product FDA Approval occurs, this first $50 million
Operating Profits tier shall only apply with respect to Operating Profits of all
Franchise Products if this first $50 million Operating Profits tier has not been
completely achieved, and then only to the extent it has not been achieved, with
respect to Operating Profits of Licensed Products (as defined within A.9.1) prior to
the First New Product FDA Approval; and




(ii) prior to the First GA101 Threshold Date 38% and 62%, and after the First GA101
Threshold Date 37.5% and 62.5%, respectively, of the Operating Profits (calculated
with respect to all Franchise Products) in excess of the first $50 million in
Operating Profits (calculated with respect to all Franchise Products) until the First
Threshold Date (as used herein the “First Threshold Date” means the earlier of (1)
the GA101 CLL Sales Trigger, (2) the Second GA101 Threshold Date and (3) the later of
(x) the first date the Gross Sales in any calendar year (calculated only with respect
to New Products in the United States) reaches $150,000,000, and (y) January 1 of the
calendar year following the calendar year in which the First New Product FDA Approval
occurs if Gross Sales of New Products reached $150,000,000 within the same calendar
year in which the First New Product FDA Approval occurred); and




(iii) 35% and 65%, respectively, of the Operating Profits (calculated with respect to
all Franchise Products) in excess of the first $50 million in Operating Profits
(calculated with respect to all Franchise Products) following the First Threshold
Date and until the Second Threshold Date (as used herein the “Second Threshold Date”
means the later of (x) the first date the Gross Sales in any calendar year
(calculated only with respect to New Products in the United States) reaches
$350,000,000, and (y) January 1 of the calendar year following the calendar year in
which the First Threshold Date occurs); and





 




			
	[**] =	 	 Portions of this exhibit have been omitted pursuant to a confidential treatment
request.
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(iv) 30% and 70%, respectively, of the Operating Profits (calculated with respect to
all Franchise Products) following the Second Threshold Date; and




(v) 30% and 70%, respectively, of any Operating Losses, calculated with respect to
all Franchise Products.


Within a calendar month that the First Threshold Date or the Second Threshold Date is met,
Operating Profits shall be calculated by (x) pro-rating the expenses in such month on a straight
line basis to pre and post threshold time frames, (y) identifying daily product sales within such
calendar month by the pre and post threshold timeframes and (z) allocating their related Cost-of
Sales by the proper product sales proportions for pre and post threshold timeframes.



The Parties’ respective share of Operating Profit or Loss in the Co-Promotion Territory for
Licensed Products and other Franchise Products, as described in this Section A.9, is summarized in
the table attached as Appendix A-1 to this Exhibit.




A.10. Start of Operations



Operation of GenIDEC will be deemed to have commenced on April 1, 1995. Costs incurred prior to
April 1, 1995, are not chargeable to GenIDEC. Costs incurred with respect to a Potential New
Product prior to the time such product becomes a New Product under the Collaboration Agreement are
not chargeable to GenIDEC.




A.11. Guidelines for Charging Costs



The following guidelines shall be used in determining amounts chargeable to GenIDEC subject to the
cost definitions in Section A.4 of this Exhibit. Disputes over the allocation of costs are not
subject to Genentech’ s tie breaking vote under Section 17.1.





A.11.1 If an expense is specifically and exclusively (i.e., for no other product)
used for the development or commercialization of a Franchise Product in the Field in
the Co-Promotion Territory, then 100% of the expense will be charged to GenIDEC.




A.11.2 If an expense is specifically and exclusively (i.e., for no other product)
used for the development or commercialization of a Franchise Product in the Field in
both the Co-Promotion Territory and the Licensed Territory, then the following shall
apply:




(a) If the portion of that expense used for the development or commercialization of
such Franchise Product in the Field in the Licensed Territory can be objectively
determined through specific means (e.g., man hours of effort, amounts consumed,
etc.), then the amount so used will be charged to Genentech and the remaining portion
will be charged to GenIDEC.





 




			
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(b) If the Franchise Product is a Licensed Product and if the portion of that expense
used for the development or commercialization of such Franchise Product in the Field
in the Licensed Territory cannot be objectively determined through specific means,
then only the direct and incremental costs related to such Franchise Product in the
Field in the Licensed Territory will be charged to Genentech and the remaining
portion will be charged to GenIDEC.




(c) If the Franchise Product is a New Product and if the portion of that expense used
for the development or commercialization of such Franchise Product in the Field in
the Licensed Territory cannot be objectively determined through specific means, then
only the direct and incremental costs related to such Franchise Product in the Field
in the Co-Promotion Territory will be charged to GenIDEC and the remaining portion
will be charged to Genentech.




A.11.3 If an expense within the Co-Promotion Territory is not specifically and
exc1usively (i.e., for other products in addition to a Franchise Product) used for
the development or commercialization of a Franchise Product in the Field in the
Co-Promotion Territory, then the following shall apply:




(a) If the portion of that expense used for the development or commercialization of a
Franchise Product in the Field in the Co-Promotion Territory can be objectively
determined through specific means (e.g., man hours of effort, amounts consumed,
etc.), then the amount so used will be charged to GenIDEC.




(b) If the portion of that expense used for the development or commercialization of a
Franchise Product in the Field in the Co-Promotion Territory cannot be objectively
determined through specific means, then only the direct and incremental costs related
to the Franchise Product in the Field shall be charged to GenIDEC.





 




			
	[**] =	 	 Portions of this exhibit have been omitted pursuant to a confidential treatment
request.
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Appendix A-1




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



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Profit Split	 	 	 	 
	 	 	 	 	 	 	for all	 	 	 	 
	 	 	 	 	 	 	Franchise	 	 	 	 
	First:	 	 	 	 	 	Products	 	 	 	 
	Approvals:	 	 	 	 	 	(including	 	 	 	 
	GA-101 CLL,	 	 	 	Products used	 	Rituxan) after	 	Earliest date	 	 
	GA-101 non-	 	Gross Sales	 	to calculate	 	the first $50M	 	the profit split	 	Share of
	CLL, or New	 	Thresholds	 	Gross Sales	 	of operating	 	change can be	 	Operating
	Products (NP)	 	($ million)	 	Thresholds	 	profit *	 	effective	 	Losses
	No approvals

	 	n/a
	 	n/a
	 	40:60 Rituxan
	 	n/a
	 	40:60 Rituxan
	 

	 	 	 	 	 	 	 	 	 	[**] New Products
	 
	 	 	 	 	 	 	 	 	 	 
	GA-101 CLL

	 	< 500
	 	GA-101
	 	40:60
	 	n/a
	 	35:65
	(not non-CLL or NP)

	 	3 500
	 	(in any consecutive 12 months period)
	 	35:65
	 	First day of following quarter
	 	35:65
	 
	 	 	 	 	 	 	 	 	 	 
	First GA-101

	 	< 150
	 	GA-101
	 	39:61
	 	(see A.9.3)
	 	35:65
	non-CLL (but not NP)

	 	3 150 and < 500
	 	(in any consecutive 12 months period)
	 	37.5:62.5
	 	 	 	35:65
	 

	 	3 500
	 	 	35:65
	 	 	 	35:65
	 
	 	 	 	 	 	 	 	 	 	 
	First New Product

	 	< 150
	 	New Products (in any calendar year)
	 	38:62 (but unchanged if already at 37.5:62.5 or 35:65)
	 	 	 	30:70
	 

	 	3 150 and < 350
	 	 	35:65
	 	Jan 1 of the year after New Product approval
	 	30:70
	 

	 	3 350
	 	 	 	30:70
	 	Jan 1 if the year after prior profit split change
	 	30:70








 




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




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









 




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





-75-









 








Exhibit B




C2B8


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









 




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





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Exhibit D




IDEC — Third Party License Agreements


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








 




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





-77-









 








Exhibit G




Excluded Patents



Cabilly Patents



“Cabilly Patents” shall mean the “Licensed Patents” as defined in Section 1.09 of the Cabilly
License (as defined in the Collaboration Agreement).




Itakura/Riggs Patents



“Itakura/Riggs Patents” shall mean any of the U.S. patents listed below and any and all
divisionals, continuations, continuations-in-part, reissues, reexaminations or extensions of these
patents or of any application from which these U.S patents claim priority, as well as foreign
counterparts of the foregoing.




U.S. 4,356,270

U.S. 4,366,246

U.S. 4,425,437

U.S. 4,431,739

U.S. 4,563,424

U.S. 4,571,421

U.S. 4,704,362

U.S. 4,812,554

U.S. 5,221,619

U.S. 5,420,020

U.S. 5,583,013







 




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





-78-