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Exhibit 10.109
 EXECUTION COPY
 EXCLUSIVE LICENSE AND COLLABORATION AGREEMENT
 Agreement Execution Date Hoffmann-La Roche Inc. Roche Nutley F.Hoffmann-La Roche Ltd Roche Basel Roche InterMune,
Inc. InterMune
 RECITALS:
 WHEREAS
 WHEREAS,
 WHEREAS
 NOW, THEREFORE,
 ARTICLE 1  DEFINITIONS
  1.1
    
    AAAshall have the meaning ascribed to it in Section 13.6.1 hereof.1.2
    
    Actshall mean, as applicable, the United States Federal Food, Drug, and Cosmetic Act, 21
U.S.C. §§ 301 et seq., and/or the Public Health Service Act, 42 U.S.C. §§ 262 et seq., as such
may be amended from time to time.1.3
    
    Additional Compound Notice shall have the meaning ascribed to it in Section 5.3.3 hereof.1.4
    
    Additional Third Party Patent Licenses shall have the meaning ascribed to it in Section
8.3.3 hereof. [*]
    
    Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portions.
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EXECUTION COPY
 1.5
    
    Adjusted Gross Salesshall mean the amount of gross sales of a Product invoiced by Roche,
its Affiliates and its sub-licensees to independent third parties less deductions of returns
and [***] (including [***]), rebates [***], [***]), volume (quantity) discounts, taxes (value
added or sales taxes, government mandated exceptional taxes and other taxes directly linked to
the [***]).1.6
    
    Affiliateshall mean any corporation or non-corporate business entity which controls, is
controlled by, or is under common control with a Party to this Agreement. A corporation or
non-corporate business entity shall be regarded as in control of another corporation if it
owns or directly or indirectly controls at least fifty percent (50%) of the voting stock of
the other corporation or such lesser maximum percentage permitted in those jurisdictions where
majority ownership by foreign entities is prohibited, or (a) in the absence of the ownership
of at least fifty percent (50%) of the voting stock of a corporation, or (b) in the case of a
non-corporate business entity, if it possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the corporation or non-corporate
business entity, as applicable, whether through the ownership or control of voting securities,
by contract or otherwise. Anything to the contrary in this paragraph notwithstanding,
Genentech, Inc., a Delaware corporation (Genentech), and Chugai Pharmaceutical Co., Ltd., a
Japanese corporation (Chugai),(each, a Roche Entity), shall not be deemed an Affiliate of
Roche unless Roche provides written notice to InterMune of its desire to include a particular
Roche Entity as an Affiliate of Roche. Notwithstanding such written notice, if any Roche
Entity does not agree to be bound by the terms and conditions of this Agreement, then such
Roche Entity shall have none of the rights and obligations of an Affiliate of Roche under this
Agreement. Notwithstanding the preceding provisions, once an entity ceases to be an Affiliate,
then such entity shall, without any further action, cease to have any rights, including
license and sublicense rights, under this Agreement that it has by reason of being an
Affiliate1.7
    
    Agreementshall have the meaning given such term in the preamble to this document.1.8
    
    Anticipated First Commercial Saleshall mean, with respect to a Product, the date projected
by Roche as the expected date of First Commercial Sale of such Product in a country.1.9
    
    Antitrust Division shall have the meaning ascribed to it in Section 9.4.1 hereof.1.10
    
    [***] Agreement shall mean that [***], as amended, by and between InterMune and [***], as
the same may be amended from time to time.1.11
    
    Calendar Quartershall mean the respective periods of three (3) consecutive calendar months
ending on March 31, June 30, September 30 and December 31.1.12
    
    Calendar Yearshall mean each successive period of twelve (12) months commencing on January
1 and ending on December 31. [*]
    
    Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portions.
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 1.13
    
    Change of Controlshall mean with respect to a Party: (1) the sale of all or substantially
all of such Partys assets; (2) a merger, reorganization or consolidation (other than a
reorganization which is effected primarily for tax purposes) involving such Party in which the
voting securities of such Party outstanding immediately prior thereto cease to represent at
least fifty percent (50%) of the combined voting power of the surviving entity immediately
after such merger, reorganization or consolidation; or (3) a person or entity, or group of
persons or entities, acting in concert (other than a trustee or other fiduciary holding
securities under an employee benefit plan) acquire more than fifty percent (50%) of the voting
equity securities or management control of such Party.1.14
    
    [***] Licenseshall mean that certain [***] by and between InterMune and [***] dated [***],
as the same may be amended from time to time.1.15
    
    Chronic Toxicology Study shall mean any toxicology study in any animal model that is longer
than thirteen (13) weeks.1.16
    
    Chugai shall have the meaning ascribed to it in Section 1.6 hereof.1.17
    
    Claims shall have the meaning ascribed to it in Section 11.1 hereof.1.18
    
    Clinical Trialshall mean a Phase I Clinical Trial, Phase II Clinical Trial, Phase III
Clinical Trial, and/or Phase IV Clinical Trial.1.19
    
    Closing Dateshall mean, as the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR
Act) applies to transactions contemplated hereunder, the date of expiration or termination of
all applicable waiting periods under the HSR Act.1.20
    
    Co-Commercializationshall mean the joint Commercialization of a Product by the Parties in
the Co-Commercialization Country, and Co-Commercialize shall have a corresponding meaning.1.21
    
    Co-Commercialization Budgetshall mean, as to a Product, the annual budget(s) included in a
Co-Commercialization Plan for the Co-Commercialization Country.1.22
    
    Co-Commercialization Countryshall mean the United States of America and its possessions
and territories, including Puerto Rico.1.23
    
    Co-Commercialization Planshall mean, as to a Product in the Co-Commercialization Country,
the plan for Co-Commercialization, including the related Co-Commercialization Budget,
developed and approved by the Joint Development and Commercialization Committee for each
Product in the Co-Commercialization Country.1.24
    
    Co-Commercialization Profit Splitshall mean, as to a Product in the Co-Commercialization
Country, for a Calendar Quarter, (a) [***] for such Product in the Co-Commercialization
Country and for such Calendar Quarter less (b) aggregate [***] (as defined in[***] for such
Product and for such Calendar Quarter, with the result of such calculation being multiplied by
0.50. [*]
    
    Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portions.
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EXECUTION COPY
 1.25
    
    Co-Funded Developmentshall mean the joint Development of a Product by the Parties in the
Co-Funded Development Territory, and Co-Develop shall have a corresponding meaning.1.26
    
    Co-Funded Development Budgetshall mean, upon commencement of the first Phase II Clinical
Trial, as to a Product, the annual budget(s) for joint Development activities in the Co-Funded
Development Territory included in the Co-Funded Development Plan.1.27
    
    Co-Funded Development Planshall mean, upon commencement of the first Phase II Clinical
Trial, as to a Product, the plan for Co-Funded Development, including the related Co-Funded
Development Budget, developed and approved by the Joint Development and Commercialization
Committee for each Product in the Co-Funded Development Territory.1.28
    
    Co-Funded Development Territoryshall mean Europe and the United States of America and its
possessions and territories, including Puerto Rico.1.29
    
    Codeshall have the meaning ascribed to it in Section 12.4.3 hereof.1.30
    
    Collaboration Compoundshall mean any [***] in the Field (together with its salts and
esters), other than ITMN-191, which is Controlled by InterMune as of the Effective Date or
during the Research Program Term.1.31
    
    Collaboration Compound Opt-In shall have the meaning ascribed to it in Section
4.3.7(a)(iii) hereof.1.32
    
    Combination Productshall mean either a single pharmaceutical formulation containing as its
active ingredients both a Licensed Compound and one or more other therapeutically or
prophylactically active ingredients, or a combination therapy comprised of a Product and one
or more other therapeutically or prophylactically active products priced and sold in a single
package containing such multiple products, in each case, in all dosage forms, formulations,
presentations, line extensions, and package configurations. All references to Product in this
Agreement shall be deemed to include Combination Product.1.33
    
    Combination Toxicology Studyshall mean a study conducted in primates to evaluate the
safety of a Licensed Compound or Product in combination with one or more other products
approved for or in development for the treatment and/or prevention of [***].1.34
    
    Commercializeor Commercializationshall mean any and all activities directed to
marketing (including any pre-launch marketing activities (including market research and
analysis, and health economics) performed prior to First Commercial Sale), promoting,
Detailing, distributing, importing, exporting, commercializing, conducting medical affairs
activities, offering for sale, having sold and/or selling a Product, including sampling, and
conducting Post-Approval Clinical Trials. [*]
    
    Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portions.
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 1.35
    
    Commercially Reasonable Effortsshall mean that level, caliber and quality of efforts and
resources reasonably and normally used in the research, development and commercialization by
biopharmaceutical companies (as to [***]) and by pharmaceutical companies (as to [***]) for a
product or compound, which is of similar market potential and at a similar stage in its
development or product life, taking into account, without limitation, with respect to the
Licensed Compounds and Products, issues of safety, efficacy, product profile and proprietary
position of the Licensed Compounds and Products, and other relevant scientific, technical,
business, marketing, return on investment and other commercial factors. Without limiting the
foregoing, (i) Commercially Reasonable Efforts as it applies to the Development of Licensed
Compounds hereunder shall mean adherence to the activities and timelines (to the extent
adherence to such activities and timelines are controllable by the Party responsible for
performing such activities) set forth in the then most current version of the [***], [***]
and/or [***], as applicable, and the respective budgets included therein, subject to delays
caused by issues of safety and efficacy and other technical and scientific issues that may
arise or by any other factor outside of the reasonable control of the responsible Party; and
(ii) Commercially Reasonable Efforts as it applies to the Co-Commercialization of Products
hereunder shall mean adherence to the activities and timelines (to the extent adherence to
such activities and timelines are controllable by the Party responsible for performing such
activities) set forth in the then most current version of the Co-Commercialization Plan (and
the related budget included therein). Notwithstanding the foregoing, to the extent that the
performance of a Partys responsibilities hereunder is adversely affected by the other Partys
failure to perform its responsibilities hereunder, such Party shall not be deemed to have
failed to use its Commercially Reasonable Efforts in performing such responsibilities.1.36
    
    Committeesshall have the meaning ascribed to it in Section 3.1 hereof.1.37
    
    Competing Pharma Change of Control shall have the meaning ascribed to it in Section 13.2.2
hereof.1.38
    
    Competing Productshall mean a compound whose [***] results solely from [***], and which is
not owned or Controlled by InterMune.1.39
    
    Co-Promoteor Co-Promotionshall mean the joint promotion of Products by the Parties (or
their respective Affiliates) wherein only one Party sells Product in the given country under
the same trademark in the Co-Promotion Country pursuant to the applicable Co-Promotion Plan,
following the exercise by InterMune of the Co-Promotion Option under Section 4.9.1.40
    
    Co-Promotion Countryshall mean the United States of America and its possessions and
territories, including Puerto Rico.1.41
    
    Co-Promotion Agreementshall have the meaning ascribed to it in Section 4.9.1 hereof. [*]
    
    Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portions.
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 1.42
    
    Co-Promotion Exercise Dateshall have the meaning ascribed to it in Section 4.9.3 hereof.1.43
    
    Co-Promotion Optionshall have the meaning ascribed to it in Section 4.9.1 hereof.1.44
    
    Confidential Informationshall mean all non-public or proprietary information, whether in
oral, graphic, electronic or any other form or medium including, but not limited to, any: use
process, method, raw materials, compound, formulations, clinical data, test results, formulas,
models, flow charts, software in various stages of development, source codes, object codes,
research and development procedures, marketing and development plans, price lists, pricing
policies, business plans, information relating to customers and/or suppliers identities,
characteristics and agreements, financial information and projections, employee files,
technical reports, specifications, drawings, diagrams, research project, work in process,
future development, scientific, engineering, manufacturing, processing information, technique,
marketing plan, business plan, financial plan, personnel matters relating to the disclosing
party, its present or future products, research, process and technology development programs,
sales programs, marketing techniques, suppliers, pricing, customers, employees and investors.1.45
    
    Contract Yearshall mean the period beginning on the Effective Date and ending on December
31, 2006, and each succeeding twelve (12) month period thereafter during the Term.1.46
    
    Control, Controlsor Controlled byshall mean, with respect to any item of or right
under InterMune Patent Rights, Roche Patent Rights, Joint Patent Rights, InterMune Know-How,
Roche Know-How or Joint Know-How, the possession of (whether by ownership or license, other
than pursuant to this Agreement) the ability of a Party to grant access to, or a license or
sublicense of, such items or right as provided for herein without violating the terms of any
agreement or other arrangement with any Third Party existing at the time such Party would be
required hereunder to grant the other Party such access or license or sublicense.1.47
    
    Coveror Coveringshall mean the making, using, selling, offering for sale, importation
or exportation of a Licensed Compound or Product would infringe a Valid Claim but for the
licenses granted under this Agreement.1.48
    
    Deliverablesshall have the meaning ascribed to it in Section 4.3.3(c) hereof.1.49
    
    Detailshall mean a product presentation consistent with approved product labeling in a
face-to-face meeting in an individual or group practice setting, including a hospital setting,
between a professional sales representative and a Target Prescriber in which one or more key
product benefits are presented in a balanced manner. A Detail does not include a reminder or
sample drop. Detailingshall mean the act of presenting a Detail. [*]
    
    Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portions.
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 1.50
    
    Developor Developmentshall mean (a) activities directly and specifically relating to
the pre-clinical and clinical drug development of a Product, including test method development
and stability testing, assay development, toxicology, formulation, quality assurance/quality
control development, technology transfer, statistical analysis, process development,
pharmacokinetic studies, Clinical Trials (including research to design Clinical Trials and
develop target product profiles), regulatory affairs, drug safety surveillance activities, and
required Marketing Authorizations and (b) any other research and development activities with
respect to a Product.1.51
    
    Development and Commercialization Exclusivity Period shall have the meaning ascribed to it
in Section 6.2.2 hereof.1.52
    
    Development Cost Project Account shall have the meaning ascribed to it in Section 4.3.7(c).1.53
    
    Development Expensesshall have the
meaning set forth in Exhibit A.1.54
    
    Development Planshall have the meaning ascribed to it in Section 4.3.2 hereof.1.55
    
    Dispute shall have the meaning ascribed to it in Section 13.6.1 hereof.1.56
    
    Effective Dateshall mean the later of the Execution Date or, if applicable, the Closing
Date.1.57
    
    Europeshall mean Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Germany,
Greece, Finland, France, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the
Netherlands, Poland, Portugal, Russia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey
and United Kingdom and such other countries which are included in the European Union after the
Effective Date.1.58
    
    Event Paymentshall have the meaning ascribed to it in Section 8.2 hereof.1.59
    
    Excluded Claim shall have the meaning ascribed to it in Section 13.6.5 hereof.1.60
    
    Executiveshall mean for Roche, the CEO of the Roche Pharmaceuticals Division (or such
individuals designee), and, for InterMune, the Chief Executive Officer of InterMune (or such
individuals designee). If either position is vacant or either position does not exist, then
the person having the most nearly equivalent position (or such individuals designee) shall be
deemed to be the Executive Officer of the relevant Party.1.61
    
    Fieldshall mean the treatment and/or prevention of acute or chronic [***] infection in
humans by administering a compound whose [***] results solely from [***].1.62
    
    Filingof an NDA shall mean the acceptance by a Regulatory Authority of an NDA for filing. [*]
    
    Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portions.
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 1.63
    
    First Commercial Saleshall mean, with respect to any Product, the first sale for end use
or consumption of such Product (provided that such Product is one which has received Marketing
Authorization in the country) in a country, excluding, however, any sale or other distribution
for compassionate use or for use in a Clinical Trial, for test marketing or for compassionate
or similar use.1.64
    
    First Opt-In Noticeshall have the meaning ascribed to it in Section 5.3.5 hereof.1.65
    
    First Opt-In Reportshall have the meaning ascribed to it in Section 5.3.5 hereof.1.66
    
    Full-Time Equivalentor FTEshall mean the equivalent of a full-time individuals work
time based upon a total of 1,880 hours per year of scientific, technical or managerial work on
the Research Program. The portion of an FTE year devoted by an individual to the Research
Program shall be determined by dividing: (a) the number of hours during any twelve-month
period devoted by such employee to the Research Program by (b) 1,880.1.67
    
    FTC shall have the meaning ascribed to it in Section 9.4.1 hereof.1.68
    
    Gap Period Expenses shall have the meaning ascribed to it in Section 4.3.7 hereof.1.69
    
    Genentechshall have the meaning ascribed to it in Section 1.6 hereof.1.70
    
    Generic Productmeans a Third Party product that contains the same Licensed Compound as the
active pharmaceutical ingredient and that has received Marketing Authorization for use in a
particular indication through an expedited regulatory approval process governing approval of
generic pharmaceuticals; provided, however, that Generic Products shall not include Products
sold by a Partys sublicensees or distributors pursuant to this Agreement. For the avoidance
of doubt, in the United States, such Generic Product would be set forth in the Orange Book
(i.e., the APPROVED DRUG PRODUCTS WITH THERAPEUTIC EQUIVALENCE EVALUATIONS published by the
U.S. Department of Health and Human Services).1.71
    
    HCVshall mean the hepatitis C virus.1.72
    
    HSR Act shall have the meaning ascribed to it in Section 1.19 hereof.1.73
    
    INDshall mean an Investigational New Drug application, Clinical Study Application,
Clinical Trial Exemption, or similar application or submission for approval to conduct human
clinical investigations filed with or submitted to a Regulatory Authority in the Territory in
conformance with the requirements of such Regulatory Authority.1.74
    
    Indemnified Partyshall have the meaning ascribed to it in Section 11.5 hereof.1.75
    
    Indemnifying Partyshall have the meaning ascribed to it in Section 11.5 hereof. [*]
    
    Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portions.
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 1.76
    
    Initiates, Initiatedor Initiationshall mean, with respect to a Clinical Trial, the
administration of the first dose by Roche or InterMune to the first volunteer or patient in
such Clinical Trial, and, with respect to a Combination Toxicology Study or Chronic Toxicology
Study, the administration of the first dose by Roche or InterMune to an animal in such study.1.77
    
    InterMuneshall have the meaning given such term in the preamble to this Agreement.1.78
    
    InterMune Indemnitees shall have the meaning ascribed to it in Section 11.2 hereof.1.79
    
    InterMune Know-Howshall mean all Confidential Information which is Controlled by InterMune
during the term of the Agreement and: (i) is used in the course of performing any activity
permitted under this Agreement, or (ii) is proposed by InterMune to be so used; or (iii) is
conceived or created by InterMune in connection with or at least partially as a result of
activities conducted or disclosures made or received in connection with this Agreement; or
(iv) is necessary to make, use, sell, offer to sell, export or import Lead Compound, Licensed
Compounds or Products, regardless of whether such Confidential Information was previously
created for or applied to a different purpose.1.80
    
    InterMune Patent Rightsshall mean any and all patents and patent applications, including
those listed on Schedule 1.80, in the Field in the Territory which are Controlled by InterMune
during the term of this Agreement which Cover any activity permitted under this Agreement,
including, but not limited to, the making, using, selling, offering to sell, exporting or
importing Lead Compound, Licensed Compounds or Products. For the purposes of this Agreement,
patents and patent applications shall be deemed to include certificates of invention and
applications for certificates of invention, as well as divisions, continuations,
continuations-in-part, reissues, renewals, extensions, supplementary protection certificates,
and the like of any such patents and patent applications and foreign equivalents thereof.1.81
    
    ITMN-191shall mean that [***] identified within InterMune as ITMN-191, together with its
salts and esters, which is hereby designated a Licensed Compound.1.82
    
    ITMN-191 Transition Planshall have the meaning ascribed to it in Section 4.3.3 hereof,
including the related ITMN-191 Transition Plan Budget.1.83
    
    ITMN-191 Transition Plan Budget shall mean, as of the Effective Date, as to ITMN-191, the
budget(s) for joint Development activities described in the ITMN-191 Transition Plan as
further described in Section 4.3.3.1.84
    
    Joint Development and Commercialization Committeeor JDCCshall mean the joint
development and commercialization committee established for any Co-Funded Development and
Co-Commercialization efforts hereunder, as more fully described in Section 3.4. [*]
    
    Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portions.
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 1.85
    
    Joint Finance Committeeor JFCshall mean the joint finance committee established in
connection with the establishing of a Joint Development and Commercialization Committee or
Joint Co-Promotion Committee, as more fully described in Sections 3.1 and 3.5.1.86
    
    Joint Know-Howshall mean all Confidential Information which is jointly Controlled by both
Parties during the term of the Agreement and is used in the course of performing any activity
permitted under this Agreement or is reasonably needed to perform any activity permitted under
this Agreement.1.87
    
    Joint Patent Rightsshall mean any and all patents and patent applications in the Field in
the Territory which are invented jointly during the term of this Agreement by employees of
both Parties according to the U.S. laws pertaining to joint inventorship. For the purposes of
this Agreement, patents and patent applications shall be deemed to include certificates of
invention and applications for certificates of invention, as well as divisions, continuations,
continuations-in-part, reissues, renewals, extensions, supplementary protection certificates,
and the like of any such patents and patent applications and foreign equivalents thereof.1.88
    
    Joint Research Committeeor JRCshall mean the joint research committee established to
facilitate the Research Program as more fully described in Sections 3.1 and 3.3.1.89
    
    Joint Steering Committeeor JSCshall have the meaning ascribed to it in Section 3.2.1.90
    
    Key Tables and Listings or KTLshall mean, with respect to a Clinical Trial, those key
tables and listings created from raw datasets from a Clinical Trial.1.91
    
    Launch Plan/Budgetshall have the meaning ascribed to in Section 4.4.3(a)(i) hereof.1.92
    
    Lead Compoundshall mean any Collaboration Compound which meets the requirements set forth
in Schedule 1.92 (as the same may be subsequently amended from time to time by the
JRC).1.93
    
    Licensed Compoundshall mean (a) ITMN-191 and (b) Collaboration Compounds properly included
by [***] under [***] as Licensed Compounds; provided however, [***] may substitute a Lead
Compound for an existing Licensed Compound as set forth in this Agreement; provided further
there shall not be more than [***] at any time during the Term unless [***] shall have
exercised its option to expand the number of Licensed Compounds pursuant to [***].1.94
    
    Licensed Compound Claim shall mean a claim in the InterMune Patent Rights or Joint Patent
Rights that Covers a Licensed Compound or formulation or composition thereof or a method of
making or using the same, that defines the Licensed Compound (including salts, hydrates,
enantiomers, or esters thereof) by particularly naming the [*]
    
    Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portions.
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 Licensed Compound or by [***] that is specific to [***] or that is a [***] which [***]
explicitly include groups that, if selected, [***]. For purposes of clarity, a claim that
sets forth [***] but that has more than [***] is not [***] but a claim dependent thereon
reducing the variable substituent groups to no more than [***] is a Licensed Compound Claim
to the extent that the structure it defines encompasses the [***] and such dependent claim
Covers the [***] or a method of making or using the same.1.95
    
    Licensed Compound Payment shall have the meaning ascribed to it in Section 5.3.3.1.96
    
    Loss shall have the meaning ascribed to it in Section 11.1.1.97
    
    [***]shall mean any cyclic macromolecule in the [***] containing a [***] and optional
[***] [***] [***] groups as part of the [***] and supporting the [***] of [***] [***] [***]
groups.1.98
    
    MAD Study shall mean the Phase I Clinical Trial [***] originally designed by [***] and
subject to modification by the JDCC to evaluate the safety, pharmacokinetics, [***] and [***]
of [***] of ITMN-191 in patients with [***].1.99
    
    Major European Marketshall mean any one of the following countries: the United Kingdom,
France, Germany, Italy, Spain or Europe as an entity (or, for patent purposes, the European
Patent Office).1.100
    
    Major Marketshall mean each of the United States, Japan and Major European Market.1.101
    
    Marketing Authorizationshall mean all approvals necessary from the relevant Regulatory
Authority to market and sell a Product in any country (including all applicable pricing and
governmental reimbursement approvals to the extent legally required to sell Product in a
country).1.102
    
    Mechanism of Action shall have the meaning ascribed to it in Section 6.1.1 hereof.1.103
    
    More Advanced Competing Productshall mean a Competing Product that is in substantially
the same or in a more advanced stage of development or commercialization than any Licensed
Compound or Product.1.104
    
    NDAshall mean a New Drug Application, Biologics License Application, Worldwide Marketing
Application, Marketing Application Authorization, filing pursuant to Section 510(k) of the
Act, or similar application or submission for Marketing Authorization of a Product filed with
a Regulatory Authority in the Territory to obtain marketing approval to sell commercially a
biological, pharmaceutical or diagnostic product in that country or in that group of
countries, together with all subsequent submissions, supplements and amendments thereto.1.105
    
    Net Salesshall mean the amount calculated by subtracting from the amount of Adjusted
Gross Sales a lump sum deduction of the applicable Sales Related Deductions [*]
    
    Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portions.
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EXECUTION COPY
 for the territory in which such Adjusted Gross Sales occurred. For purposes of this
Section, Sales Related Deductions shall mean (a) [***]percent ([***]%) of Adjusted Gross
Sales in [***] or (b) [***] percent ([***]%) of Adjusted Gross Sales in the [***]. The
Parties acknowledge that such Sales Related Deductions are in lieu of those sales related
deductions which are not accounted for within [***] on a product by product basis ([***]).With respect to sales of Combination Products, Net Sales shall be calculated by multiplying
the total Net Sales of such Combination Product by the fraction A/A+B where A is the actual
invoice price of the Product in the same dosage amount in the applicable country if sold
separately and B is the sum of the actual invoice prices of all other active ingredients or
products in the same dosage amount in the Combination Product in the applicable country if
sold separately during the applicable quarter. If A or B cannot be determined because values
for the Product or the other active ingredients sold alone are not available in a particular
country then Roche and InterMune will discuss an appropriate allocation for the fair market
value of the Product and other active ingredients in the Combination Product to determine
Net Sales for such Combination Product. The deductions set forth in Adjusted Gross Sales
shall be applied in calculating Net Sales for a Combination Product.1.106
    
    Operating Expensesshall have the meaning set forth in Exhibit A.1.107
    
    Operating Expenses Cost Account shall have the meaning ascribed to it in Section 4.4.3(c)
hereof.1.108
    
    Opt-In Option shall have the meaning ascribed to it in Section 5.3.5 hereof.1.109
    
    Opt-Outshall mean (i) failure by InterMune to exercise a Collaboration Compound Opt-In
pursuant to Section 4.3.7(a)(iii), (ii) a deemed Opt-Out pursuant to Section 4.4.3(a)(iii), or
(iii) exercise by InterMune of its Opt-Out with respect to ITMN-191 pursuant to Section 4.8.1.110
    
    Opt-Out Productshall mean a Product for which an Opt-Out has occurred.1.111
    
    Partyshall mean Roche or InterMune, and Partiesshall mean Roche and InterMune.1.112
    
    Passed Compoundshall mean a compound that falls into at least one of the following: (a)
[***] for which [***] under this Agreement is [***] during the [***], whether before or after
a determination that such [***] is a [***]; (b) [***] synthesized by or on behalf of [***]
under this Agreement but never screened during the [***] to determine if such [***] meet the
[***] definition; (c) [***] synthesized by or on behalf of [***] during the [***] which are
not [***] by definition; (d) Lead Compounds that are not nominated as a [***]; or (e) [***]
that are nominated as a [***], but not subsequently selected by [***] as a [***] pursuant to
[***]. For purposes of clarification, a [***] cannot be or have been a [***]. [*]
    
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 1.113
    
    Passive Developmentshall mean development activities with any [***] that involve one or
more of the following types of support from [***] or a [***]: (i) provision by [***] of [***]
to a [***] for use in a [***] to study the [***] of such [***] products with such [***] for
the [***] or [***] of [***]; (ii) provision by [***] of [***] input and advice to such [***],
solely with respect to the appropriate [***] and [***] of such [***] products in such [***]
(including assessment of such [***] product related aspects of proposed designs and protocols
of such [***]); or (iii) provision by [***] of [***] support to a [***] for use in a [***] to
study the [***] of such [***] products with such [***] for the treatment or prevention of
[***], provided that the sole purpose of such [***] support by [***] is to enhance the use of
such [***] products with such [***] (for example, by enabling regulatory approval of the [***]
use of [***] together with such [***]) and not to directly facilitate further development and
approval of such [***] independent of such [***] trial with such [***] products.1.114
    
    Phase I Clinical Trialshall mean the first phase of human clinical trials of a drug
required by the FDA or other equivalent regulatory authority to gain evidence of safety in
enrollees, as described in 21 C.F.R. Part 312, as it may be amended.1.115
    
    Phase II Clinical Trialshall mean the second phase of human clinical trials of a drug
required by the FDA or other equivalent regulatory authority to gain evidence of efficacy in
the target population, determine optimal dosage, obtain expanded evidence of safety, as
described in 21 C.F.R. Part 312, as it may be amended, and such clinical trial contemplates an
interim assessment which could be used to decide whether to initiate a Phase III Clinical
Trial in the Field.1.116
    
    Phase III Clinical Trialshall mean the third phase of human clinical trials of a drug
required by the FDA or other equivalent regulatory authority to gain evidence of efficacy in
the target population and obtain expanded evidence of safety, as described in 21 C.F.R. Part
312, as it may be amended.1.117
    
    Phase IV Clinical Trialshall mean either a post-marketing human clinical trial that would
satisfy the requirement of 21 C.F.R. 312.85, as it may be amended, and the foreign equivalent
thereof, or any Phase I Clinical Trial, Phase II Clinical Trial or Phase III Clinical Trial
required as a condition for the maintenance of the Marketing Authorization of a Product by the
relevant Regulatory Authority.1.118
    
    Post-Approval Clinical Trialshall mean any clinical trial in an indication, other than a
Clinical Trial, to be conducted after receipt of Marketing Authorization for such indication.1.119
    
    Potential[***] Development Candidateor PRDCshall mean any Lead Compound that has been
nominated by the [***] or [***] for consideration by [***] as a [***]. [*]
    
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 1.120
    
    Prescribershall mean a medical or health care professional authorized to prescribe any
medication under the laws of the jurisdiction in which such medical or health care
professional is practicing, as mutually agreed by the Parties.1.121
    
    Product(s)shall mean any pharmaceutical preparation containing a Licensed Compound for
any and all uses in humans, including any Combination Product.1.122
    
    PCTshall mean the Patent Cooperation Treaty.1.123
    
    Regulatory Authorityshall mean any applicable government regulatory authority involved in
granting approvals for the manufacturing, marketing, reimbursement and/or pricing of a Product
in the Territory, including, in the United States, the United States Food and Drug
Administration and any successor governmental authority having substantially the same
function.1.124
    
    Related Partyshall mean a Party, its Affiliates, and their respective sublicensees (which
term does not include distributors), as applicable.1.125
    
    Research Exclusivity Periodshall have the meaning ascribed to it in Section 6.1.1.1.126
    
    Research Planshall have the meaning ascribed to it in Section 2.1 hereof.1.127
    
    Research Programshall mean the research activities undertaken by the Parties as set forth
in Article 2 and Schedule 2.1.1.128
    
    Research Program Termshall have the meaning ascribed to it in Section 2.4 hereof.1.129
    
    Reverted Compound shall mean (i) a former [***] that has been [***] with another [***]
pursuant to Section [***] or is [***] from [***] under Section [***]; provided that such [***]
shall not be deemed a Reverted Compound [***] of the [***]; or (ii) any [***] for which [***]
under Section [***](d) or Section [***](c) or for which the [***] has been terminated under
Section [***].1.130
    
    Right of First Negotiation shall have the meaning ascribed to it in Section 6.3.2 hereof.1.131
    
    Right of First Negotiation Exclusivity Period shall have the meaning ascribed to it in
Section 6.3.2 hereof.1.132
    
    Right of First Negotiation Notice shall have the meaning ascribed to it in Section 6.3.2
hereof.1.133
    
    Right of First Negotiation Report shall have the meaning ascribed to it in Section 6.3.2
hereof.1.134
    
    Rocheshall have the meaning given such term in the preamble to this Agreement. [*]
    
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 1.135
    
    Roche Entityshall have the meaning ascribed to it in Section 1.6 hereof.1.136
    
    Roche Indemnitees shall have the meaning ascribed to it in Section 11.3 hereof.1.137
    
    Roche Know-Howshall mean all Confidential Information which is Controlled by Roche during
the term of the Agreement and: (i) is used in the course of performing any activity permitted
under this Agreement, or (ii) )is proposed by Roche to be so used; (iii) is conceived or
created by Roche in connection with or at least partially as a result of activities conducted
or disclosures made or received in connection with this Agreement; or (iv) is necessary to
make, use, sell, offer to sell, export or import Lead Compound, Licensed Compounds, Products,
Passed Compounds or Reverted Compounds, regardless of whether such Confidential Information
was previously created for or applied to a different purpose.1.138
    
    Roche Patent Rightsshall mean any and all patents and patent applications in the Field in
the Territory which are Controlled by Roche during the term of this Agreement which Cover any
activity permitted under this Agreement, all to the extent that the subject matter claimed
therein is used in the course of performing any activity permitted under this Agreement,
including, but not limited to, the making, using, selling, offering to sell, exporting or
importing Lead Compound, Licensed Compounds, Products, Passed Compounds or Reverted Compounds.
For the purposes of this Agreement, patents and patent applications shall be deemed to
include certificates of invention and applications for certificates of invention, as well as
divisions, continuations, continuations-in-part, reissues, renewals, extensions, supplementary
protection certificates, and the like of any such patents and patent applications and foreign
equivalents thereof.1.139
    
    ROW Territoryshall mean the Territory excluding the Co-Commercialization Country.1.140
    
    Royalty Periodshall have the meaning ascribed to it in Section 8.3.1(b) hereof.1.141
    
    SAD Trial shall mean the Phase I Clinical Trial [***] originally designed by [***] and
subject to modification by the [***] to evaluate the safety, tolerability and pharmacokinetics
of [***] of ITMN-191 in [***] [***].1.142
    
    Second Opt-In Notice shall have the meaning ascribed to it in Section 5.3.6 hereof.1.143
    
    Second Opt-In Report shall have the meaning ascribed to it in Section 5.3.6 hereof.1.144
    
    Sensitive Informationshall have the meaning ascribed to it in Section 13.2.2(c) hereof.1.145
    
    Substitution Notice shall have the meaning ascribed to it in Section 5.3.2 hereof.1.146
    
    Target Prescribershall mean a Prescriber as a member of the target audience to whom a
Detail of Product shall be directed. [*]
    
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 1.147
    
    Territoryshall mean all of the countries in the world, and their territories and
possessions.1.148
    
    Third Partyshall mean an entity other than Roche, InterMune and their respective
Affiliates.1.149
    
    Third Party Licenseshall mean (a) any of the license agreements set forth on Exhibit
B and (b) any license agreement entered into by a Party with a Third Party after the
Effective Date that the Parties agree in writing is necessary for the Development or
Commercialization of one or more Products in the applicable territory under this Agreement.1.150
    
    Third Party License Feesshall mean license fees, royalties and other amounts payable or
paid to any Third Party under a Third Party License after the Effective Date.1.151
    
    Transition Plan Deliverables shall have the meaning ascribed to it in Section 4.3.3(c)
hereof.1.152
    
    Valid Claimshall mean a claim in any (i) unexpired and issued patent in the InterMune
Patent Rights, Joint Patent Rights or Roche Patent Rights that has not been (a) held
permanently revoked, unenforceable or invalid by a final unappealable decision of a court or
government agency of competent jurisdiction over such claim or (b) admitted to be invalid or
unenforceable through disclaimers, consent decrees or otherwise, or (ii) pending patent
application in the InterMune Patent Rights, Joint Patent Rights or Roche Patent Rights that
has been on file with the applicable patent office for not more than [***]years and for which
there has been [***] to advance to issuance of a patent; provided that such time period shall
be tolled during any period of opposition, interference or appeal.1.153
    
    Valuationshall have the meaning ascribed to it in Section 6.3.2(b) hereof.1.154
    
    Valuation Priceshall have the meaning ascribed to it in 6.3.2(b) hereof.1.155
    
    Interpretation.
 (a)
    
    Whenever any provision of this Agreement uses the term including (or
includes), such term shall be deemed to mean including without limitation and
including but not limited to (or includes without limitations and includes but
is not limited to) regardless of whether the words without limitation or but
not limited to actually follow the term including (or includes);(b)
    
    Herein, hereby, hereunder, hereof and other equivalent words
shall refer to this Agreement in its entirety and not solely to the particular
portion of this Agreement in which any such word is used; [*]
    
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 (c)
    
    All definitions set forth herein shall be deemed applicable whether the
words defined are used herein in the singular or the plural;(d)
    
    Wherever used herein, any pronoun or pronouns shall be deemed to
include both the singular and plural and to cover all genders;(e)
    
    The recitals set forth at the start of this Agreement, along with the
Attachments to this Agreement, and the terms and conditions incorporated in such
recitals and Attachments shall be deemed integral parts of this Agreement and all
references in this Agreement to this Agreement shall encompass such recitals and
Attachments and the terms and conditions incorporated in such recitals and
Attachments; provided, that in the event of any conflict between the terms and
conditions of this Agreement and any terms and conditions set forth in the recitals
or Attachments, the terms of this Agreement shall control;(f)
    
    In the event of any conflict between the terms and conditions of this
Agreement and any terms and conditions that may be set forth on any order, invoice,
verbal agreement or otherwise, the terms and conditions of this Agreement shall
govern;(g)
    
    The Agreement shall be construed as if both Parties drafted it jointly,
and shall not be construed against either Party as principal drafter;(h)
    
    Unless otherwise provided, all references to Sections, Articles and
Schedules in this Agreement are to Sections, Articles and Schedules of and to this
Agreement;(i)
    
    Any reference to any federal, national, state, local or foreign statute
or law shall be deemed to also refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise; and(j)
    
    Wherever used, the word shall and the word will are each understood
to be imperative or mandatory in nature and are interchangeable with one another.
 ARTICLE 2  RESEARCH PROGRAM; EXCHANGE OF INFORMATION2.1
    
    Conduct of Research.In furtherance of the Research Program, InterMune and Roche have
developed and attached hereto an initial overview of the Research Program, which includes the
goals and objectives for the Research Program during the Research Program Term as Schedule
2.1 (Research Plan). Within ninety (90) days of the Effective Date, the Parties shall
prepare a more detailed Research Plan setting forth the objectives, planned tasks,
responsibilities of the Parties, and associated timelines, including, subject to Section 2.3,
the allocation of InterMune FTEs and Roche FTEs and other Roche resource commitments, under
the Research Program. Schedule 2.1 may be further
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 revised and amended by the agreement of the Parties (and not by the JRC decision-making
process) during the Research Program Term.
 2.1.1
    
    InterMune and Roche shall use [***] to proceed with the work set out
in the Research Program.2.1.2
    
    InterMune and Roche each shall conduct the Research Program in good
scientific manner and in compliance with all applicable laws, rules and
regulations. Each Party shall notify the other in writing of any material
deviations from applicable regulatory or legal requirements with respect to work
under this Agreement. Each Party hereby certifies that it has not employed or
otherwise used and shall not employ and otherwise use in any capacity the services
of any person debarred under United States law, including 21 U.S.C. § 335a, in
performing any portion of the Research Program.2.1.3
    
    If animals are used in the Research Program, each Party shall comply
with the Animal Welfare Act or any other applicable local, state, national and
international laws and regulations relating to the care and use of laboratory
animals. Any animals which are used in the course of the Research Program, or
products derived from those animals, such as eggs or milk, shall not be used for
food purposes, nor shall these animals be used for commercial breeding purposes.
 2.2
    
    Research Program: The more detailed Research Plan setting forth the objectives, planned
tasks, responsibilities of the Parties, and associated timelines shall reflect, among other
things, the following:
 (a)
    
    [***] shall be responsible for evaluating Collaboration
Compounds up to and including [***]including performing [***].
Collaboration Compounds that meet the Lead Compound criteria will be
presented to the [***] as candidates for advancement;(b)
    
    If [***] decides to further conduct preclinical
evaluation of a Lead Compound presented to the [***], then [***] will be
responsible for all such subsequent preclinical evaluation through to
nomination of the Lead Compound to [***] status, [***].(c)
    
    Subject to Section 4.2, the [***] shall nominate Lead
Compounds to [***] to evaluate as potential Licensed Compounds;(d)
    
    For Lead Compounds that are advanced to [***] status,
[***] will be responsible for all subsequent Development activities; and(e)
    
    [***] and [***] shall conduct such other activities as
the [***] may determine are appropriate, subject to Section 3.3.3(b).
 
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 2.3
    
    FTE Commitments.
 2.3.1
    
    For each twelve (12)-month period in the Research Program Term, [***]
and [***] shall commit the appropriate number of FTEs to carry out their
respective obligations under the Research Program. The Parties shall ensure that
all FTEs and all other of their personnel, employees, and agents involved in the
Research Program comply with the confidentiality provisions of this Agreement. For
purposes of this Section 2.3, Roche acknowledges that InterMune FTEs include FTEs
contracted by InterMune under the [***] to perform funded research, and that unless
InterMune, using Commercially Reasonable Efforts, is able to extend the funded
research being performed by [***] FTEs under the [***] or execute an agreement with
a Third Party contract research organization to assume such research activities
comparable to those being performed by [***] FTEs under the [***], then InterMunes
FTE commitment under this Agreement will expire on June 30, 2007, with respect to
FTE efforts provided under the [***]; provided, however, that InterMune shall only
be required to use [***] to extend the funded research being performed by [***]
FTEs under the [***] or execute an agreement with a Third Party contract research
organization to perform such comparable research activities if InterMune determines
in its sole discretion that doing so is necessary for InterMune to perform its
obligations under the Research Plan.
 2.4
    
    Research Program Term.Except as otherwise provided herein, the term of the Research Program
shall commence on the Effective Date and continue for a period of [***]years, unless earlier
terminated pursuant to Section 12.2 (the Research Program Term).2.5
    
    Permitted Subcontractors.Each Party may perform their respective obligations under the
Research Program and the Research Plan through one or more Affiliates or Third Party
subcontractors, provided that (a) none of the rights of InterMune hereunder are diminished or
otherwise adversely affected as a result of Roches use of such Affiliates or subcontractors
and (b) the Affiliate or subcontractor undertakes obligations of confidentiality and non-use
regarding Confidential Information which are substantially the same as those undertaken by the
Parties pursuant to Article 7 hereof, which shall be in writing with respect to
subcontractors. Both Parties shall remain at all times fully liable for its respective
responsibilities under the Research Program.
 ARTICLE 3  COLLABORATION MANAGEMENT AND COMMITTEES
 3.1
    
    General.The Parties agree to establish, for the purposes specified herein, a Joint Steering
Committee, a Joint Research Committee, a Joint Development and Commercialization Committee and
a Joint Finance Committee (collectively, the JSC, the JRC, the JDCC and the JFC shall be
referred to herein as the Committees). Notwithstanding anything to the contrary contained
herein, the Parties acknowledge and agree that none of the Committees shall have the power to
amend, modify or waive any of the terms or conditions of this Agreement and that the Agreement
can only be
 
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 amended by mutual agreement of the Parties as set forth in Section 13.7. Each Party shall
bear its own costs associated with its participation in each of the Committees.
 3.1.1
    
    Meetings.Following its establishment, except as set forth in this
Article 3, each Committee shall meet in accordance with a schedule established by
mutual written agreement of the Parties, with the location for such meetings
alternating between InterMune and Roche facilities (or such other location as may
be determined by the Committee). Alternatively, each Committee may meet by means
of teleconference, videoconference or other similar communications equipment.
Additional representatives or consultants may from time to time, by mutual consent
of the Parties, be invited to attend Committee meetings, subject to such
representatives or consultants written agreement to comply with confidentiality
requirements at least as restrictive as those contained in this Agreement and any
additional confidentiality or other requirements as the Committee may reasonably
require for attendance.3.1.2
    
    Voting.Each Committee will take action by unanimous vote with each
Party having a single vote, irrespective of the number of representatives a Party
has on a Committee. The Parties agree that, in voting on matters as described in
this Article 3, it shall be conclusively presumed that each representative voting
on behalf of each Party in a Committee has the authority and approval of such
members respective senior management in casting his or her vote.3.1.3
    
    Exchange of Information.
 (a)
    
    Each Calendar Quarter InterMune and Roche shall provide
to the other through their participation in the relevant Committees updates
on the work performed under the [***] by or on their behalf, or work
performed by or on their behalf in the [***] or [***] of a [***],
including, without limitation, [***] of [***] with respect to [***], [***]
in the [***] and [***] in the [***].(b)
    
    Roche and InterMune will, on an ongoing basis through
their participation in the relevant Committee(s), identify and notify the
other Party of any [***] that constitute Roche or InterMune [***] or Roche
or InterMune [***].(c)
    
    InterMune will, every six (6) months, through its
participation in the JRC, share with Roche general, [***] information on
InterMunes [***] program solely for purposes of Roches internal planning
relating to its Right of First Negotiation set forth in Section 6.3.2.(d)
    
    With respect to permitted subcontractors under Section
2.5 and permitted sublicensees under Section 4.7, each Party shall keep the
other Party informed of [***] and [***] within the appropriate Committee
meetings and each Party shall use [***] to add the other
 
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 Party as a third party beneficiary under such [***] or [***], as
applicable, and shall update the other Party on whether it was able to do
so.(e)
    
    The Parties will exchange with one another any [***] by
such Parties for purposes of the exchange of information during the
Committee meetings.
 3.1.4
    
    Minutes.Each Committee chair shall designate a recording secretary to
prepare written minutes of each Committee meeting and written records of all
Committee decisions, whether made at a Committee meeting or otherwise. Such minutes
shall provide a description, in reasonable detail, of the discussions at the
meeting and a list of any actions, decisions, or determinations approved by the
Committee. The Committee chair will distribute draft minutes to all Committee
members within ten (10) business days after each meeting for comments and
revisions. Minutes will be finalized no later than twenty (20) business days after
the meeting to which the minutes pertain. Finalized minutes will be distributed to
the Parties after approval of the drafts by the members of the Committee.
 3.2
    
    Joint Steering Committee.The Parties shall promptly following the Effective Date establish
a JSC, which shall be comprised of up to three (3) representatives from each Party, none of
whom may participate as members of any other Committee. These representatives shall maintain
ongoing familiarity with the Development and Commercialization and the strategic direction of
the collaborative efforts under this Agreement. In addition, the Alliance Managers shall
participate in JSC meetings as members. Each Party may change its representatives to the JSC
from time to time in its sole discretion, effective upon notice to the other Party of such
change.
 3.2.1
    
    Meetings.The JSC shall meet at least two (2) times a year in
accordance with a schedule established by mutual written agreement of the Parties
or as otherwise required.3.2.2
    
    Chair.The JSC shall be chaired by a representative of [***]. The
JSC chair shall have no voting rights or decision-making authority over that vested
in any JSC member. The JSC chair shall have responsibility for calling JSC
meetings, circulating agendas and meeting minutes, and performing administrative
tasks required to assure the efficient operation of the JSC.3.2.3
    
    Responsibilities.The JSC shall have the following specific
responsibilities:
 (a)
    
    Facilitate the overall strategic direction of the
activities under this Agreement, including Co-Funded Development,
Co-Commercialization or Co-Promotion, as the case may be, and [***] input
into strategic elements of [***] of ITMN-191, and, if additional
 
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 [***] are selected as Licensed Compounds pursuant to the terms of this
Agreement, such additional Licensed Compounds;(b)
    
    In such case where the [***] does not exist or has been
disbanded under this Agreement, consider and advise on any [***] provided
by [***]; provided that [***] shall have ultimate decision-making authority
on changes to the [***] and respective budget;(c)
    
    Discuss presentations on the compounds covered by this
Agreement to be made to [***] decision-making [***], which [***] shall be
the [***] and [***] in the case of [***] and the [***] and [***] in the
case of [***];(d)
    
    Oversee the [***] of Confidential Information between
the Parties related to Development and Commercialization of the Licensed
Compounds, including ensuring [***] from [***] on such Development and
Commercialization pursuant to Sections 4.3.7 and 4.4.3; and(e)
    
    Perform such other functions as the Parties may agree
in writing or as otherwise assigned by this Agreement.
 3.2.4
    
    Decision-Making.The JSC shall decide [***] on those matters referred
to for its decision in Sections 3.3, 3.4, and 3.5.2, unless otherwise agreed upon
by the Parties in writing.3.2.5
    
    Existence.The JSC shall exist throughout the term of this Agreement.
 3.3
    
    Joint Research Committee.The Research Program shall be conducted under the direction of the
JRC, which shall be comprised of two (2) representatives of Roche and two (2) representatives
of InterMune. These representatives shall maintain ongoing familiarity with the Research
Program. Each Party may change its representatives to the JRC from time to time in its sole
discretion, effective upon notice to the other Party of such change.
 3.3.1
    
    Chair.The JRC shall be chaired by a JRC representative of [***].
The JRC chair shall have no voting rights or decision-making authority over that
vested in any JRC member. The JRC chair shall have responsibility for calling JRC
meetings, circulating agendas and meeting minutes, and performing administrative
tasks required to assure the efficient operation of the JRC.3.3.2
    
    Responsibilities.The JRC shall have the following specific
responsibilities:
 (a)
    
    Confer regarding the status and progress of the
Research Program and the Research Programs results;(b)
    
    Discuss the overall strategy for the Research Program;
 
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 (c)
    
    Monitor and assess the status and progress of the
Research Program and the Research Programs research results, including
without limitation discuss any updates on [***] efforts;(d)
    
    Oversee the exchange of Confidential Information under
the Research Program between the Parties;(e)
    
    Discuss presentations and publications proposed to be
made by a Party with respect to the Research Program and its results; and(f)
    
    Consider issues of priority in the Research Program.
 3.3.3
    
    Decision-Making.The JRC shall exercise its decision-making authority
solely regarding the following matters:
 (a)
    
    Adjustments to the [***], including determining the
general allocation of InterMune and Roche FTEs dedicated to the [***],
consistent with the provisions of Article 2, and providing input into the
ongoing [***] efforts necessary for the execution of the Research Plan; and(b)
    
    Determine which [***] are [***].
 If the JRC cannot or does not, after good faith efforts, reach agreement on an
issue as to which it has decision-making authority, then the disputed matter
shall be referred to the JSC. If the JSC cannot or does not, after good faith
efforts, reach agreement on an issue referred to it by the JRC, then the issue
will be decided by [***], except with respect to (i) deciding which [***] are
either advanced for further [***] or are nominated as [***], in which case [***]
will decide the matter; and (ii) adjusting either the number of [***] FTEs
committed to the [***] or the allocation of such FTEs, which may not be done
without [***] prior written consent.
 3.3.4
    
    Existence.The JRC shall exist until the expiration of the Research
Program Term.
 3.4
    
    Joint Development and Commercialization Committee.The Parties shall establish a JDCC to (i)
direct and facilitate a [***] and a [***] suitable to produce a global registration package
and (ii) beginning no later than twenty-four (24) months prior to the Anticipated First
Commercial Sale of a Product and assuming InterMune has not exercised its Opt-Out, consider
and discuss strategic options related to Commercialization and facilitate the development of a
Co-Commercialization Plan. The JDCC shall be comprised of up to three (3) representatives of
Roche and up to three (3) representatives of InterMune. These representatives shall maintain
ongoing familiarity with the development program and strategic options related to
Commercialization. Each Party may change its representatives to the JDCC from time to time in
its sole discretion,
 
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  3.4.1
    
    Chair.The JDCC shall be chaired by a representative of [***]. The
JDCC chair shall have no voting rights or decision-making authority over that
vested in any JDCC member. The JDCC chair shall have responsibility for calling
JDCC meetings, circulating agendas and drafting meeting minutes, and performing
administrative tasks required to assure the efficient operation of the JDCC.3.4.2
    
    Responsibilities.The JDCC shall have the following specific
responsibilities:
 (a)
    
    Discuss and oversee all matters relating to [***] of
Products, including trial sizes, CROs used, patient populations,
protocols, and enrollment;(b)
    
    Review data relevant to the [***];(c)
    
    Consider and advise on any technical issues that arise
in the [***];(d)
    
    Consider issues of priority in the [***];(e)
    
    Review and advise on any budgetary and economic matters
relating to the [***];(f)
    
    Oversee the exchange of Confidential Information
between the Parties related to [***] of the applicable Product(g)
    
    Discuss [***] proposed to be made by a Party with
respect to the [***] of the applicable Product and the results thereof;(h)
    
    Discuss accommodations that allow both Parties to be
informed of adverse conditions or events relating to the safety of the
Licensed Compound and/or Product in the Field;(i)
    
    Review [***] progress with respect to Passed Compounds
during the period in which [***] may exercise rights under Sections 5.3.5
or 5.3.6;(j)
    
    Review the Co-Commercialization Plan and strategy in
order to coordinate [***] and implementation of [***];(k)
    
    Prepare the [***] to be provided to [***] pursuant to
Section 4.4.3; and(l)
    
    Following the [***] period covered by the [***] prepare
and recommend to the JSC the Co-Commercialization Plan and the related
Co-Commercialization budget.
 
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 3.4.3
    
    Decision-Making.The JDCC shall decide [***] on (1) the
recommendation of the [***], ITMN-191[***] and the related budgets, (2) the
tactical implementation of the approved [***] and ITMN-191[***], (3) the
recommendation of a [***] and the related [***], (4) the tactical implementation of
the approved [***] and, thereafter, the [***], (5) use of [***] and [***] or other
personnel if [***] is providing the same or similar, and (6) overall [***]. If the
JDCC cannot or does not, after good faith efforts, reach agreement on (1) a
recommendation of a [***], ITMN-191[***] and/or the related budgets, (2) the
tactical implementation of the approved [***] and ITMN-191[***], (3) a
recommendation of a [***] and/or recommendation of the budget to support such
[***], (4) the tactical implementation of the approved [***] and, thereafter, the
[***] (5) use of [***] and/or [***] or other personnel or (6) overall [***], then
the such matter shall be referred to the JSC. If the JSC cannot or does not, after
good faith efforts, reach agreement on such issue referred to it by the JDCC, then
the Executives of each Party shall promptly meet and endeavor to come to an
agreement in a timely manner. If such Executive mediation does not resolve the
issue, then [***] shall decide the matter, except when the matter relates to either
the [***], the [***] or the [***] in which case the ITMN-191 [***] shall govern.3.4.4
    
    Existence.The JDCC shall exist throughout the term of Co-Funded
Development and Co-Commercialization under this Agreement.
 3.5
    
    Joint Finance Committee.The Parties shall establish a JFC which shall operate under the
direction of the JSC to provide services to and consult with the JDCC in order to address the
financial, budgetary and accounting issues that arise in connection with the ITMN-191
Transition Plan, Co-Funded Development Plans, Co-Commercialization Plans and updates thereto.
Additionally, the JFC will lead the reporting and reconciliation processes outlined in
Exhibit A. The JFC shall operate by the procedures set forth in this Section 3.6 and
in Section 3.1.
 3.5.1
    
    Membership.Each Party shall designate up to two (2) employees of
such Party or an Affiliate of such Party. Each Party may replace any or all of its
representatives at any time upon prior written notice to the other Party. Such
representatives will include individuals with expertise and responsibilities in the
areas of accounting, cost allocation, budgeting and financial reporting. Each
representative may serve on more than one Committee as appropriate in view of the
individuals expertise.3.5.2
    
    Decision-Making.It is anticipated that the JFC shall not be
responsible for [***], but instead shall be a mechanism to address financial,
budgetary and accounting issues.3.5.3
    
    Meetings.The JFC shall meet as frequently as members of the JSC
determine is required (but in no event, less frequently than twice every Calendar
Year), on such dates and at such times as agreed to by the Parties.
 
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 3.6
    
    Alliance Manager.Each Party shall appoint an Alliance Manager, who shall serve on as a
non-voting member of the JSC in addition to their other duties. Each Alliance Manager shall
be responsible for supporting the teams and Committees involved in the activities hereunder by
providing a preferred channel of communication between the Parties, ensuring monitoring and
continuous improvement of the overall performance of the activities hereunder as well as early
identification of opportunities and issues and support for resolution of difficulties within
the activities hereunder. Each Party shall notify the other Party as soon as practicable upon
the changing of the Alliance Manager.3.7
    
    Timing of Decision-Making Processes.If a Committee is unable to reach agreement on any
issue as to which it has decision-making authority as set forth in this Article 3 and such
issue is then to be referred to the JSC, such referral to the JSC shall occur within thirty
(30) days of the Committees initial consideration of any such issue. If the JSC cannot reach
consensus on any issue referred to it for resolution or any issue arising from its own
deliberations and any such issue is then to be referred to the Executives, such referral shall
occur within ten (10) business days of the JSCs initial consideration of any such issue. The
Executives shall have fifteen (15) business days to agree upon the resolution of any such
issue.
 ARTICLE 4  DEVELOPMENT AND COMMERCIALIZATION
 4.1
    
    Development Generally.From and after the Effective Date, subject to the terms and
conditions of this Agreement, including the Opt-Out and the ITMN-191 [***], [***] shall assume
primary responsibility for and conduct a Development program for the Development of Products
as guided by the Development Plan, except as otherwise provided in the ITMN-191[***]. In each
[***], [***], through itself or an Affiliate, shall use [***] to Develop Licensed Compound(s).4.2
    
    Selection as Licensed Compounds.[***] shall have the exclusive right to determine whether
it wishes to (a) substitute any [***] or [***] as [***] of the [***] permitted Licensed
Compounds pursuant to Section [***]; (b) [***] any [***] or [***] as an [***] pursuant to
Section [***]; or (c) decline to make any [***] a Licensed Compound. Such determination shall
be made in writing to the JRC and [***] during the time periods set forth in Section 5.3,
setting forth the option selected, within ninety (90) days of its determination under this
Section 4.2.4.3
    
    Development and Regulatory Matters.
 4.3.1
    
    Responsibility for Development.[***] shall have responsibility for
the Development of Licensed Compounds and Products within the scope of the rights
granted to it and [***] hereunder.4.3.2
    
    Development Plan.Within ninety (90) days following substitution of
or addition of a new Licensed Compound, [***] shall, in accordance with its regular
business practices, develop a reasonably detailed [***] suitable to produce a [***]
(as amended from time to time, the Development Plan).
 
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 The Development Plan shall include a Co-Funded Development Plan (as generated
and approved by the JDCC) for activities within the Co-Funded Development
Territory, at the appropriate time. [***] shall have the right to amend the
Development Plan; provided that the Co-Funded Development Plan may only be
amended on the approval of the JDCC. [***] shall promptly provide [***] with a
copy of the initial Development Plan and any such amended Development Plan. Upon
the mutual written agreement of the Parties, [***] may make available FTEs to
assist [***] in any Development activities conducted pursuant to this Agreement
and [***] shall grant to [***] any licenses necessary for it to conduct such
activities. [***] shall use Commercially Reasonable Efforts to proceed with the
work under the [***] and each Party shall use Commercially Reasonable Efforts to
proceed with the work under the [***] (as such plans may be amended from time to
time in accordance with this Agreement).
 4.3.3
    
    ITMN-191 Transition Plan: Within ninety (90) of the Effective Date (as
to ITMN-191), the Parties shall, in accordance with its regular business practices,
develop a reasonably detailed transition plan (as amended from time to time, the
ITMN-191 Transition Plan) and a draft Development Plan for ITMN-191. The ITMN-191
Transition Plan shall include all activities until the planned Initiation of the
first Phase II Clinical Trial for ITMN-191. The Parties shall have the right to
amend the ITMN-191 Transition Plan. Subject to the guidelines set forth below in
this Section 4.3.3, the Parties shall each use [***] to proceed with the work under
the ITMN-191 Transition Plan.In addition to such other responsibilities which the
JDCC or JSC may determine are appropriate with respect to ITMN-191 the Parties
agree as follows:
 (a)
    
    [***] shall use [***] to proceed with the conduct of
the [***] and the [***];(b)
    
    [***] shall transfer all data and manufacturing
Confidential Information (including that obtained by [***] from Third Party
contract manufacturing organizations) related to ITMN-191 to [***] no later
than sixty (60) days after the Effective Date;(c)
    
    [***] shall use [***] to deliver a [***] kilogram
([***] Kg) lot of cGMP material (the Transition Plan Deliverables) of
ITMN-191 by December 31, 2006. After such date, [***] shall be responsible
for all aspects of manufacturing of ITMN-191;(d)
    
    If necessary, [***] and [***] shall work together to
develop a plan for the transfer of manufacturing of ITMN-191 to Roche or a
Third Party designated by [***];(e)
    
    [***] shall conduct formulation development of
ITMN-191;
 
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 (f)
    
    [***] shall transfer to [***] responsibility for
regulatory matters (including appropriate regulatory documents, filings
(e.g., any existing INDs) and safety data) with respect to ITMN-191 as soon
as is appropriate;(g)
    
    [***] shall be responsible for all Clinical Trials of
ITMN-191, excluding the [***] and the [***], including, but not limited to,
[***];(h)
    
    [***], at its discretion, may conduct site monitoring
for the [***] and [***];(i)
    
    [***] shall conduct the appropriate [***] experiments
for the [***]. [***] shall be responsible for [***] experiments after
completion of the [***]; and(j)
    
    Prior to the Effective Date, [***] shall initiate
necessary activities to permit the delivery of a [***] kilogram ([***] Kg)
lot of [***] or [***] suitable for [***] of ITMN-191 by [***] and a
delivery of an additional [***] kilogram ([***] Kg) lot of [***] ITMN-191
by [***].
 4.3.4
    
    Clinical Studies.Subject to Sections 2.1 and 4.3.3 with respect to
ITMN-191, [***] shall have the discretion and authority to make all decisions with
respect to all protocols and all other matters relating to Development of the
Products, subject to the oversight and approval of Co-Funded Development activities
by the JDCC and JSC in the Co-Funded Development Territory.4.3.5
    
    Marketing Authorizations.[***] shall have the right to obtain
Marketing Authorizations for the Products in the Territory. To the extent
reasonably practicable and permitted under applicable law, [***] shall notify [***]
of any material meeting with any Regulatory Authority for a Product. To the extent
permitted under applicable law (and with respect to non-Major Markets, to the
extent reasonably practicable), [***] shall give [***] reasonable access to a copy
of the NDA (other than the [***] section of the NDA [***]) submitted by [***] to
the Regulatory Authority and to a copy of Marketing Authorizations received by
[***]. Notwithstanding the foregoing, in the Co-Funded Development Territory,
[***] shall, to the extent allowed by applicable law, have a right to attend any
scheduled meeting or phone conference with any Regulatory Authority as an observer,
and [***] shall [***] a copy of Marketing Authorizations therein.4.3.6
    
    Adverse Event Reporting.[***] will be responsible for reporting
Adverse Events to the appropriate Regulatory Authorities in the Territory through
the [***], after which regulatory responsibility shall be transferred to [***] and
[***] will thereafter be responsible for reporting such Adverse Events, in both
cases, in accordance with the appropriate laws and regulations of the relevant
countries.
 
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 4.3.7
    
    Development Expenses Sharing in Co-Funded Development Territory.
[***] and [***] shall share Development Expenses incurred in connection with the
Co-Funded Development of a Product including the [***] as set forth in this Section
4.3.7 and Exhibit A. With respect to ITMN-191, such expense sharing shall
terminate upon the availability of the [***] for the [***]; provided, however that
in the event [***] does not exercise its right to Opt-Out set forth in Section 4.8,
[***] shall share in the expenses incurred for activities taking place following
the date that the [***] for the [***] are available and prior to Initiation of the
Phase II Clinical Study (Gap Period Expenses) as well as those expenses incurred
under the [***] for ITMN-191, subject to this Section 4.3.7. With respect to
Collaboration Compounds, subject to Section 4.3.7(a)(iii), [***] shall Develop such
compounds at its sole expense.
 (a)
    
    Payment of Development Expenses.
 (i)
    
    All Development Expenses incurred in the
Co-Funded Development Territory from and after the Effective Date
shall be shared between Roche and InterMune as provided below and in
accordance with Exhibit A, so that Roche bears sixty seven
percent (67%) of such costs and InterMune bears thirty three percent
(33%) of such costs, provided that such costs were part of (i) the
ITMN-191[***], (ii) a Co-Funded Development Budget, or (iii) were
incurred pursuant to the Co-Funded Development Plans, or were
otherwise approved by the JSC.(ii)
    
    [***] shall be required to share
Development Expenses incurred in the ITMN-191[***] in the Co-Funded
Development Territory up to a maximum of [***] million U.S. dollars
(U.S. [***]. Notwithstanding the foregoing, [***] shall not be
required to make any payments in excess of [***]million dollars
($[***]) in the Calendar Year [***] towards the Co-Funded
Development Expenses. Any remaining balance owed but unpaid shall be
paid during Calendar Year [***] at the earlier of [***]ITMN-191 or
(B) [***].(iii)
    
    At least [***] prior to the anticipated
Initiation of a Phase II Clinical Trial for a Licensed Compound,
[***] shall provide to [***] a Co-Funded Development Plan, including
a Co-Funded Development Budget, for such Licensed Compound. The
Co-Funded Development Plan with respect to the Co-Funded Development
Territory shall (i) be prepared by [***] in [***] from [***], (ii)
be commercially reasonable taking into consideration industry
standards, effort of competition, and
 
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 scientific, business and marketing and return on investment
issues, and (iii) set forth the proposed activities, allocation
of resources between the Parties and the associated Co-Funded
Development Expenses and other budgetary and financial matters
for the advancement of such Licensed Compound through receipt of
Marketing Authorization. [***] shall have a period of [***]days
following receipt of such Co-Funded Development Plan (including a
reasonably detailed Co-Funded Development Budget) to elect to (i)
exercise its Opt-out rights under Section 4.8 with respect to
ITMN-191 or (ii) opt-in to [***] with respect to a Collaboration
Compound that is a Licensed Compound (the Collaboration Compound
Opt-In). If InterMune does not Opt-Out with respect to a
ITMN-191 as set forth in Section 4.8, or exercises its
Collaboration Compound Opt-In right with respect to a
Collaboration Compound, then with respect to the relevant
Collaboration Compound all [***] or [***] incurred in the [***]
from and after Initiation of a Phase II Clinical Trial for such
Product shall be [***] as provided below and in accordance with
Exhibit A, so that [***] bears [***] percent ([***]%) of
such costs and [***] bears [***] percent ([***]%) of such costs,
provided however that in the event that such costs are more than
[***] percent ([***]%) in total of the initial Co-Funded
Development Budget, [***] shall bear the costs associated with
any amount over such [***] percent ([***]%) cushion set forth in
this Section; and provided, further that costs shall be further
subject to calendar year budgets as discussed in Exhibit
A. In the event [***] does not exercise its Collaboration
Compound Opt-In with respect to a Collaboration Compound, [***],
upon [***] reasonable request from time to time, shall provide
[***] with updates on [***] Development efforts with respect to
such Opt-Out Product.(iv)
    
    If InterMune does not Opt-Out with
respect to ITMN-191 pursuant to Section 4.8 hereof, [***] shall be
responsible for [***] percent ([***]%) of the [***] subject to the
following payment schedule:
 (1)
    
    [***] percent ([***]%)
shall be paid on or before [***]; and(2)
    
    Remaining [***] percent
([***]%) shall be paid on or before [***].
 (b)
    
    Reconciliation Statement.There shall be a
Reconciliation Statement, prepared by the JFC as set forth in Exhibit
A, of such costs which are
 
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 to be shared and which are incurred during a reporting period by each
Party, with a payment by one Party to the other, pursuant to Exhibit
A, to the extent necessary so that each Party bears its appropriate
percentage of such shared Development Expenses.(c)
    
    Development Cost Accounts.For purposes of Exhibit
A,each Party shall charge all Development Expenses so incurred by it
or its Affiliates on its books and records to enable the tracking of
expenses incurred in connection with each Co-Funded Development Plan and
each Co-Funded Development Budget (each, a Development Cost Project
Account).
 4.4
    
    Commercialization.
 4.4.1
    
    Marketing Efforts in the Territory.Upon receipt of all Marketing
Authorizations, [***] shall have sole responsibility for the promotion, marketing,
selling and commercialization of Products in the ROW Territory and Opt-Out Products
in the Territory. In the Co-Commercialization Country, [***] shall have primary
responsibility for the promotion, marketing, selling and commercialization of
Products. In each Major Market, [***], through itself or an Affiliate, shall use
Commercially Reasonable Efforts to Commercialize Product(s).4.4.2
    
    [***] Post-Approval Clinical Trials.To the extent that [***]
performs Post-Approval Clinical Trials in the ROW Territory or for Opt-Out Products
[***] will bear the cost of all such Post-Approval Clinical Trials.4.4.3
    
    Co-Commercialization Budget.[***] shall [***] Operating Expenses
incurred in connection with the Co-Commercialization of a Product as set forth in
this Section 4.4.4 and Exhibit A. Such expense sharing shall terminate
upon InterMunes exercise of the Opt-Out set forth in Section 4.9 or as set forth
herein.
 (a)
    
    Preparation and Agreement on Co-Commercialization
Budget.
 (i)
    
    No later than [***] months prior to the
Anticipated First Commercial Sale of a Product, [***] shall (with
input from [***] and JDCC) prepare and recommend in good faith to
the JSC a [***] Co-Commercialization Plan, including a
Co-Commercialization Budget, which plan shall be commercially
reasonable taking into consideration industry standards, effort of
competition, and scientific, business and marketing and return on
investment issues (the Launch Plan/Budget). The Launch
Plan/Budget, when setting out the roles and responsibilities of each
Party thereunder, shall leverage (A) each [***] and (B) each [***]
to maximize the success of the
 
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 Product, taking into account the size, structure and target
audience of each [***] and [***] in existence at the time the
Parties begin joint promotion of such Product and shall contain
the same or substantially the same rights and obligations under
Sections (c), (d), (e) and (f) of the co-promotion terms set
forth in Schedule 4.9 hereof. It is the intention of the
Parties that the [***] sales force shall have the lead activities
and that the [***] sales force role shall: (i) not be marginal or
incidental in relation to the capabilities of the [***] sales
force, and (ii) be consistent with the [***] sales force lead.
The Launch Plan/Budget shall be prepared by [***] in good faith
and be commercially reasonable and set forth in reasonable detail
the [***], [***] between the Parties and the associated [***] and
other [***] for the first [***] years following launch of the
Product.(ii)
    
    Following the approval of such Launch
Plan/Budget by each Party, such Launch Plan/Budget shall govern the
Operating Expenses to be shared in the Co-Commercialization Country
for the first [***] years following launch of the Product. Each of
the Parties shall be responsible for [***] percent ([***]%) of the
Operating Expenses as set forth in Exhibit A; provided,
however that in the event, on an aggregate basis, the Operating
Expenses incurred for any Calendar Year covered by the Launch
Plan/Budget are more than [***] percent ([***]%) [***] than the
Operating Expenses approved by the Parties hereunder, [***] shall
bear the costs associated with any amounts [***] such [***] percent
([***]%) [***] set forth in this Section 4.4.4(a)(ii).(iii)
    
    If the JDCC or JSC are unable to reach
agreement on the Launch Plan/Budget following the escalation of any
such dispute as set forth in Section 3.4.3, or [***] does not
approve such Launch Plan/Budget (in its sole discretion) no later
than twelve (12) months prior to the Anticipated First Commercial
Sale of the Product, InterMune shall be deemed to have exercised an
Opt-Out with respect to such Product; provided, however, that, for
purposes of clarity, in the event of any dispute by [***] that such
Launch Plan/Budget was not prepared by [***] in accordance with
Section 4.4.3(a)(i) above, InterMune shall not be deemed to exercise
an Opt-Out with respect to such Product unless and until such
dispute is resolved in accordance with Section 13.6 hereof and the
decision is that [***] did comply with Section 4.4.3(a)(i) when
preparing the Launch Plan/Budget; provided, however that [***] shall
have the right to proceed with the Development and
 
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 Commercialization of such Product without [***] participation in
the JDCC with respect to such Product unless and until such
dispute is resolved in favor of [***]. Following such deemed
exercise of an Opt-Out: (a) [***] shall thereafter pay to [***]
filing and Marketing Authorization milestones for such Product as
set forth in note 1 of Section 8.2; (b) [***] shall no longer be
eligible to receive a [***]and shall not be responsible for any
sharing of [***] associated with such Product; (c) [***] shall
pay [***] royalties as set forth in Sections 8.3.1(a)(iii); and
(d) such Product shall be an [***].
 (b)
    
    Reconciliation Statement.There shall be a
Reconciliation Statement, prepared by the JFC as set forth in Exhibit
A, of such costs which are to be shared and which are incurred during a
reporting period by each Party, with a payment by one Party to the other,
pursuant to Exhibit A, to the extent necessary so that each Party
bears its appropriate percentage of such shared Operating Expenses.(c)
    
    Operating Expense Cost Accounts.For purposes of
Exhibit A,each Party shall charge all Operating Expenses so
incurred by it or its Affiliates on its books and records to enable the
tracking of expenses incurred in connection with each Co-Commercialization
Plan and each Co-Commercialization Budget (each, a Operating Expenses Cost
Account).
 4.4.4
    
    Co-Commercialization Profit Split in the Co-Commercialization Country.
InterMune and Roche shall each receive the Co-Commercialization Profit Split. Such
[***] shall [***] upon [***] exercise of the Opt-Out set forth in [***].
 4.5
    
    Manufacturing and Supply.Subject to InterMunes responsibilities under the [***], [***]
shall have sole responsibility to manufacture or have manufactured by an Affiliate or a Third
Party the Products for use in Clinical Trials and for sale in the Territory.4.6
    
    Final Decision-Making Authority following Opt-Out.Following the exercise by [***] of the
Opt-Out, the resulting Opt-Out Product shall no longer be within the purview of the JDCC
(assuming such a Committee exists) and [***] shall have final decision-making authority on all
issues relating to the Development, regulatory approval, Commercialization and manufacturing
of the applicable Opt-Out Product, subject to its compliance with all other terms of this
Agreement, provided that [***] shall have such final decision-making authority at all times
with respect to the ROW Territory so long as such decisions do not adversely impact ongoing or
planned Co-Funded Development or Co-Commercialization activities.4.7
    
    Licenses/Sublicenses.Neither Party may license its responsibilities under this Article 4
nor grant sublicenses under the licenses granted under Article 5 without the prior written
 
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 consent of the other Party, such consent not to be unreasonably withheld, except as follows:
 4.7.1
    
    Either Party may grant sublicenses under any of its rights to any of
its Affiliates for so long as such entity remains an Affiliate;4.7.2
    
    Either Party may use CROs and other Third Parties which it reasonably
believes are competent to perform portions of the Development of the Products to
the extent consistent with its normal business practices;4.7.3
    
    [***] may engage Third Parties to assist in the physical distribution
of the Products to the extent consistent with its normal business practices;4.7.4
    
    [***] may use Third Parties, including contract manufacturers, which
it reasonably believes are competent to manufacture, label and package the
Products; and4.7.5
    
    [***] may grant licenses or sublicenses to sell the Products to local
distributors in any country in accordance with [***] normal business practices,
other than the Co-Commercialization Country,
  4.8
    
    InterMunes Opt-Out.With respect to ITMN-191, InterMune shall retain a one-time right to
Opt-Out of the Development on the terms and conditions set forth in this Section 4.8. No
later than [***] ([***]) days following completion of the [***] and receipt of the Co-Funded
Development Plan, InterMune may provide to Roche a written notice of its intent to Opt-Out
with respect to ITMN-191, which Opt-Out shall be effective upon such written notice.
Following exercise of an Opt-Out, with respect to ITMN-191: (a) ITMN-191 shall no longer be
within the purview of the JDCC (assuming such Committee exists); (b) InterMune shall retain
its Co-Promotion Option; (c) [***] shall no longer be responsible for [***] sharing as set
forth in Section [***] above; (d) [***] shall thereafter pay to [***] filing and [***] [***]
for ITMN-191 as set forth in note 1 of Section 8.2; (e) [***] shall no longer be eligible to
receive a [***] and shall not be responsible for any sharing of Operating Expenses associated
with ITMN-191; and (f) [***] shall pay [***] royalties as set forth in Sections [***].4.9
    
    InterMunes Co-Promotion Option.If and only if an Opt-Out has occurred with respect to a
Product:
 
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 4.9.1
    
    On an Opt-Out Product-by-Opt-Out Product basis, [***] shall retain a
one-time option right to co-promote each Opt-Out Product in the [***] on a fee per
Detail basis (each, a Co-Promotion Option), subject to the provisions of this
Section 4.9 and Schedule 4.9, and conditioned on InterMune and Roche or
their respective Affiliates entering into a co-promotion agreement consistent with
this Section 4.9 and Schedule 4.9 (Co-Promotion Agreement).4.9.2
    
    [***] shall determine the proposed [***] of each Opt-Out Product in
the [***] and shall notify [***] of such proposed launch date at least [***] months
in advance of such proposed launch date.4.9.3
    
    [***] shall notify [***] in writing of its intent to exercise the
Co-Promotion Option no less than twelve (12) months prior to the expected launch
date of each Opt-Out Product in the Co-Promotion Country (the Co-Promotion
Exercise Date).4.9.4
    
    If [***] exercises the Co-Promotion Option in accordance with Section
4.9.3, then [***] shall enter into a Co-Promotion Agreement consistent with the
terms and conditions set forth in Schedule 4.9 no later than [***]) months
prior to the proposed launch date for the applicable Product.4.9.5
    
    Unless otherwise explicitly set forth in this Agreement, all
Commercialization decisions (including decisions with respect to marketing and
promotion) concerning the Opt-Out Product reside solely with [***]. Upon [***]
exercising the Co-Promotion Option in accordance with this Section 4.9, the Parties
shall coordinate all sales efforts and field activities in the U.S. under the
direction of the JDCC (or, if no such Committee exists, the appropriate governance
committee established under the Co-Promotion Agreement consistent with Section (h)
of Schedule 4.9 where [***] shall have final decision-making authority
provided that the Parties agree that such committee shall have no power to amend,
modify or waive any of the terms of the Co-Promotion Agreement), and such efforts
and activities shall be more fully described in the Co-Promotion Agreement to be
entered into by the Parties.4.9.6
    
    Other than in connection with the assignment to an [***] Affiliate,
[***] may not assign, sublicense, delegate or otherwise transfer its Co-Promotion
Option to a Third Party.
 ARTICLE 5 LICENSES
 5.1
    
    Reciprocal Research Licenses.
 5.1.1
    
    For the duration of the Research Program Term, InterMune hereby grants
to Roche the exclusive (except as to InterMune and its permitted subcontractors as
set forth in Section 2.5) license to permit it or them to conduct activities
 
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 under the Research Program license in the Territory, with the right to
sublicense to Affiliates and to Permitted Subcontractors, under the InterMune
Know-How, InterMune Patent Rights and InterMunes rights in Joint Know-How and
Joint Patent Rights, to conduct the Research Program in accordance with the
Research Plan.
 5.1.2
    
    For the duration of the Research Program Term, Roche hereby grants to
InterMune the exclusive (except as to Roche and its permitted subcontractors to
permit it to conduct activities under the Research Program) license in the
Territory, with the right to sublicense to Affiliates and to Permitted
Subcontractors, under Roche Know-How, Roche Patent Rights and Roches rights in
Joint Know-How and Joint Patent Rights, to conduct the Research Program in
accordance with the Research Plan.5.1.3
    
    The licenses granted pursuant to this Section 5.1 include the right of
each licensee to use its Affiliates in exercising such rights and carrying out its
obligations under this Agreement.
 5.2
    
    Development and Commercialization License Grants.
 5.2.1
    
    Subject to the obligations, conditions, and termination rights set
forth herein, InterMune hereby grants to Roche the exclusive (except as to
InterMune to permit it conduct its Co-Funded Development and/or
Co-Commercialization activities and those activities under the ITMN-191 Transition
Plan hereunder) license under the InterMune Know-How and InterMune Patent Rights
and under InterMunes rights in Joint Know-How and Joint Patent Rights to develop,
make, have made, use, import, export, offer for sale and sell Licensed Compounds
and Products in the Territory. Roche may grant sublicenses under this Section 5.2
in accordance with Section 4.7.5.2.2
    
    Subject to the obligations, conditions, and termination rights set
forth herein, Roche hereby grants to InterMune the exclusive (except as to Roche)
license under the Roche Know-How and Roche Patent Rights and under Roches rights
in Joint Know-How and Joint Patent Rights to develop, make, have made, use, import,
export, offer for sale and sell Licensed Compounds and Products only to the extent
necessary for InterMune to conduct its Co-Funded Development and/or
Co-Commercialization activities and those activities under the ITMN-191 Transition
Plan hereunder.5.2.3
    
    Subject to the obligations, conditions and termination rights set
forth herein, Roche, as of the date a Licensed Compound, Product or Passed Compound
becomes a Reverted Compound, hereby grants to InterMune an exclusive worldwide
royalty-free license to Roche Know-How, Roche Patent Rights and Roches interest in
the Joint Know-How and Joint Patent Rights to develop, make, have made, use,
import, export, offer for sale and sell such Reverted Compound and products
containing such Reverted Compound in the Field and
 
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 in the Territory. Such license grant is to Roche Know-How, Roche Patent Rights
and Roches interest in the Joint Know-How and Joint Patent Rights Controlled by
Roche as of the date such Licensed Compound, Product or Passed Compound becomes
a Reverted Compound (and not to Roche Know-How, Roche Patent Rights and Roches
interest in the Joint Know-How and Joint Patent Rights which Roche may acquire
Control of after such date).
 5.2.4
    
    Subject to the obligations, conditions, and termination rights set
forth herein, Roche hereby grants to InterMune a non-exclusive, sublicensable
license under the Roche Know-How and Roche Patent Rights and under Roches rights
in Joint Know-How and Joint Patent Rights to develop, make, have made, use, import,
export offer for sale and sell Passed Compounds and products containing such Passed
Compounds in the Territory.
 5.3
    
    Licensed Compounds.
 5.3.1
    
    Number of Licensed Compounds.Subject to Sections 5.3.3, 5.3.4, 5.3.5
and 6.3, there shall be no more than [***] Licensed Compounds at any time during
the term of this Agreement.5.3.2
    
    Substitution of Licensed Compounds.[***] shall have the exclusive
right to substitute a [***] that is not a Passed Compound for an existing Licensed
Compound at any time through the end of the Research Program Term, for [***] by
[***]. Upon [***] determination that it wishes to substitute a [***] for an
existing Licensed Compound, it shall provide [***] with written notice of such
determination (the Substitution Notice), setting forth the Licensed Compound to
be excluded from this Agreement and the [***] to be substituted therefore.
Effective upon receipt of such Substitution Notice by [***], the Licensed
Compound definition shall automatically be amended to delete the existing Licensed
Compound and substitute the [***], which shall thereafter be subject to the terms
and conditions of this Agreement, including the license grant set forth in Section
5.2.5.3.3
    
    Addition of Licensed Compounds.[***] shall have the exclusive
option, at any time through the end of the Research Program Term, to include
additional [***] as Licensed Compounds on the terms and conditions set forth in
this Section 5.3.3 and this Agreement. No later than the end of the Research
Program Term, [***] may provide [***] with written notice of its intent to include
a specified [***] as an additional Licensed Compound pursuant to the terms and
conditions of this Agreement (the Additional Compound Notice). Within [***]
([***]) days of delivery of the Additional Compound Notice by [***], [***] shall
pay to [***] an amount equal to [***] Dollars ($U.S. [***]) per additional Licensed
Compound (Licensed Compound Payment) in excess of [***] ([***]) Licensed
Compounds. Upon receipt of such Licensed Compound Payment, the Licensed Compound
definition shall automatically be amended to include such additional Licensed
 
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 Compound which shall thereafter be subject to the terms and conditions of this
Agreement, including the license grant set forth in Section 5.2.5.3.4
    
    Passed Compounds.Subject to [***] rights set forth in this Section
5.3, [***] shall have the right to Develop and/or Commercialize any Passed Compound
at any time following the Effective Date.5.3.5
    
    Roche First Opt-In on a Passed Compound.Roche shall have the first
right (before any Third Party) to opt-in on the development and commercialization
of each Passed Compound which InterMune develops in the Field (the Opt-In
Option), as set forth in this Section 5.3.5 and Sections 5.3.6 and 5.3.7. Within
[***] ([***]) days following delivery by InterMune to Roche of a report setting
forth (i) [***] and (ii) the [***] delivery of the report (the First Opt-In
Report), Roche shall conduct and complete due diligence and provide InterMune with
written notice (the First Opt-In Notice) of its intent as set forth in (b), (c)
or (d) below.
 (a)
    
    Roches due diligence may include, but is not limited
to, the following: (i) a full pre-clinical and manufacturing audit of
InterMune, at Roches expense, (ii) the right to reasonably request all
relevant data, including raw data, obtained to date relating to the Passed
Compound, (iii) the right to inspect InterMunes facilities and, to the
extent within the reasonable control of InterMune, the facilities of its
clinicians and manufacturers (and InterMune agrees to use its Commercially
Reasonable Efforts to ensure that Roche can inspect the facilities of such
Third Parties), and (iv) to review a detailed report of the development
costs related to the Passed Compound.(b)
    
    In the event Roche determines to exercise its Opt-In
Option with respect to such Passed Compound, Roche shall pay to InterMune
within [***] ([***]) days of delivery of the First Opt-In Notice an amount
equal to [***] percent ([***]%) of the associated pre-clinical and clinical
development expenses incurred by or on behalf of InterMune for such Passed
Compound through the date of exercise of the Opt-In Option. Upon receipt
of such payment, the Passed Compound shall be added as an additional
Licensed Compound and the Licensed Compound definition shall
automatically be amended to add the Passed Compound as a Licensed Compound,
and such Passed Compound shall thereafter be subject to the terms and
conditions of this Agreement, including the license grant set forth in
Section 5.2 and subject to the payment of any Development Milestones which
occur following the delivery of the First Opt-In Notice.(c)
    
    In the event Roche determines not to exercise its
Opt-In Option but wishes to maintain its Opt-In Option with respect to such
Passed
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 Compound, Roche shall pay to InterMune an amount equal to [***] Dollars
($U.S. [***]) within [***] ([***] days of delivery of the First Opt-In
Notice and the Opt-In Option shall remain in full force and effect
through [***] ([***]) days following the delivery of the Second Opt-In
Notice (as defined in Section 5.3.6 below).(d)
    
    In the event Roche determines to relinquish its Opt-In
Option with respect to such Passed Compound (including by not making timely
payment to InterMune under this Section 5.3.5), such Passed Compound shall
automatically be deemed a [***] for purposes of this Agreement and
InterMune shall be free to continue the research, development, manufacture
and commercialization of such Passed Compound in the Field worldwide
without any obligation to compensate Roche.
 5.3.6
    
    Roche Second Opt-in on a Passed Compound.Within [***] ([***]) days
following delivery by InterMune to Roche of a report (i) setting forth the [***]
and (ii) the [***] of the report (the Second Opt-In Report), and provided Roche
has maintained its Opt-In Option under Section 5.3.5(c), Roche shall conduct and
complete due diligence and provide InterMune with written notice (the Second
Opt-In Notice) of its intent as set forth in (b) or (c) below.
 (a)
    
    Roches due diligence may include, but is not limited
to, the following: (i) a full pre-clinical, clinical and manufacturing
audit of InterMune, at Roches expense, (ii) the right to reasonably
request all relevant data, including raw data, obtained to date relating to
the Passed Compound, (iii) the right to inspect InterMunes facilities and,
to the extent within the reasonable control of InterMune, the facilities of
its clinicians and manufacturers (and InterMune agrees to use its
Commercially Reasonable Efforts to ensure that Roche can inspect the
facilities of such Third Parties), and (iv) a detailed report of the
Development Expenses related to the Passed Compound.(b)
    
    In the event Roche determines to exercise its Opt-In
Option with respect to such Passed Compound, Roche shall pay to InterMune
within [***] ([***]) days of delivery of the Second Opt-In Notice an amount
equal to [***] percent ([***]%) of the associated pre-clinical and clinical
development expenses incurred by or on behalf of InterMune for such Passed
Compound through the date of exercise. Upon receipt of such payment, the
Passed Compound shall be added as an additional Licensed Compound and the
Licensed Compound definition shall automatically be amended to add the
Passed Compound as a Licensed Compound, and such Passed Compound shall
thereafter be subject to the terms and conditions of this Agreement,
including the license grant set forth in Section 5.2 and
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 subject to the payment of any Development Milestones which occur
following the delivery of the Second Opt-In Notice.(c)
    
    In the event Roche determines to relinquish its Opt-In
Option with respect to such Passed Compound (including by not making timely
payment to InterMune under this Section 5.3.6), such Passed Compound shall
automatically be deemed a [***] for purposes of this Agreement and
InterMune shall be free to continue the research, development, manufacture
and commercialization of such Passed Compound in the Field worldwide
without any obligation to compensate Roche, other than the rights of Roche
set forth in Section 5.3.7.
 5.3.7
    
    Right of Audit of Associated Expenses Incurred by InterMune. Roche
shall have the right, at its sole expense, to request, on [***] ([***]) days prior
written notice to InterMune, that the nationally recognized, independent accounting
firm then-engaged by InterMune perform an audit or interim review of InterMunes
books and records as they relate to the associated pre-clinical and clinical
development expenses associated with the first Opt-In Option set forth in Section
5.3.5 and the second Opt-In Option set forth in Section 5.3.6, as applicable. The
accounting firm shall be provided access to such books and records at InterMunes
facility(ies) and/or the facilities of its Affiliates or sublicensees where such
books and records are normally kept. Upon completion of the audit, the accounting
firm shall provide both Parties a written report disclosing whether the
pre-clinical and clinical development expenses associated with the first Opt-In
Option set forth in Section 5.3.5 and the second Opt-In Option set forth in Section
5.3.6, as applicable are correct or incorrect and the specific details and
supporting analysis for any discrepancies.
 5.3.8
    
    Delivery of Development Plan. Upon Roches exercise of its Opt-In
Option with respect to a Passed Compound under Section 5.3.5 or Section 5.3.6,
[***] shall present to [***] a Development Plan, as may be amended pursuant to this
Agreement.
 5.4
    
    No Implied Licenses.Except as specifically set forth in this Agreement, and except for an
implied right to use that flows to an end user, neither Party shall acquire any license or
other intellectual property interest, by implication or otherwise, in any Roche Patent Rights,
Roche Know-How, InterMune Patent Rights, InterMune Know-How, Joint Patent Rights or Joint
Know-How, as the case may be, disclosed to it under this Agreement by the other Party or under
any other Confidential Information or other patents or patent applications owned or Controlled
by the other Party or its Affiliates.
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 5.5
    
    Third Party Licenses.
 5.5.1
    
    The licenses to Roche of rights obtained by InterMune under the [***]
and [***] are limited by the scope of rights obtained by InterMune thereunder, such
that InterMunes license to Roche shall not be more extensive than the rights that
InterMune obtains and retains under the terms of such agreements. This Section
5.5.1 does not limit or narrow the representation and warranty provided by
InterMune pursuant to Section 9.1.6.5.5.2
    
    As set forth in Section 9.1.6, InterMune will maintain and keep in
full force and effect the [***] and [***] if necessary to perform its material
obligations hereunder; provided, however that in the event InterMune requires any
action by Roche (or requires Roche to refrain from taking any action) to prevent a
breach by InterMune under the [***] or [***], as applicable, InterMune shall notify
Roche in writing or such action. After such notification, Roche shall cooperate
and work with InterMune in good faith taking into account the consequence if Roche
does not take such action or refrain from taking such action, as applicable. In
the event Roche chooses not to take such action or refrain from taking such action,
as applicable, and Roches choice not to do so causes the termination of the [***]
or [***], as applicable, then InterMune shall not be deemed in breach of this
Section 5.5 or Section 9.1.6 for purposes of this Agreement.5.5.3
    
    If InterMune receives a notice of breach of the [***] from [***] or a
notice of breach of the [***] from [***], which breach does not require any action
or inaction by Roche to cure such breach, then InterMune shall promptly inform
Roche of the notice and of the plan to cure the breach. If InterMune does not plan
to, or can not, cure such breach within the time period allowed, then Roche shall
have the right to cure the breach on InterMunes behalf.5.5.4
    
    In addition, upon a Collaboration Compound being deemed a Licensed
Compound under this Agreement, InterMune shall use Commercially Reasonable Efforts
to acquire in accordance with the terms of the [***] all right, title and license
to those patents and patent applications that are the subject of the [***] that
Cover such Licensed Compound from [***].5.5.5
    
    Prior to any termination of the [***] or [***] by InterMune, InterMune
shall, in accordance with the terms of the [***] or [***], as applicable, use
Commercially Reasonable Efforts to obtain all rights (including but not limited to
obtaining ownership of patents and patent applications that are subject to the
[***]) necessary for the Parties to perform the activities pursuant to this
Agreement.
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 ARTICLE 6 EXCLUSIVITY
 6.1
    
    Research.
 6.1.1
    
    Research Exclusivity Period.During the Research Program Term
(Research Exclusivity Period), except as provided elsewhere in this Agreement,
neither Party shall independently or collaboratively with any Third Party engage in
the discovery research and/or pre-clinical development of compounds whose mechanism
of activity results solely from [***] (Mechanism of Action).6.1.2
    
    After the Research Exclusivity Period.Following the expiration of
the Research Exclusivity Period, either Party is free to engage in the discovery
research and/or preclinical development of compounds with the same Mechanism of
Action, either independently or in collaboration with any Third Parties.6.1.3
    
    Passed Compounds.Notwithstanding this Article 6, and subject to
Roches Opt-In Option described in Section 5.3.5, InterMune will be free to
research, develop, or commercialize Passed Compounds in the Field or outside the
Field. In addition, nothing in this Article 6 shall be construed to restrict in
any way InterMunes right to research, develop or commercialize, on its own or with
any Third Party, (i) Reverted Compounds; (ii) Licensed Compounds or Products for
which Roche has terminated rights to under Section 12.3; or (iii) Licensed
Compounds and Products for purposes of a country in the Territory for which Roche
has terminated rights under Section 12.3, whether within or outside the Field.
 6.2
    
    Development and Commercialization.
 6.2.1
    
    [***].[***] by [***] is permitted at any time during the term of
this Agreement.6.2.2
    
    Development and Commercialization Exclusivity Period. During the
period commencing on the Effective Date and ending on the earlier of (i) [***]
([***]) years following the end of the Research Exclusivity Period and (ii) [***]
([***]) years following the Effective Date (the Development and Commercialization
Exclusivity Period), except as provided elsewhere in this Agreement, neither Party
may independently or collaboratively with any Third Party engage in the clinical
development or commercialization of compounds with the same Mechanism of Action.6.2.3
    
    Exception to Development and Commercialization Exclusivity. In the
event that, at any point in time [***] ([***]) months after the Effective Date and
during the Development and Commercialization Exclusivity Period, there is no
Licensed Compound or Product in clinical Development by the Parties under this
Agreement, then [***] may engage in the clinical development of a More Advanced
Competing Product or obtain rights to commercialize a More Advanced Competing
Product (e.g., rights to market, sell or co-promote a More Advanced Competing
Product), whether such rights are obtained by
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 way of contract, option or license, [***] shall provide written notice to [***]
and the Parties shall meet to permit [***] to present to [***] its plans for the
Licensed Compounds and/or Products in light of its clinical development or
commercialization of such More Advanced Competing Product. If [***], after
reviewing such plans, believes that the clinical development cannot proceed
without adversely affecting the goals and the intentions of the Parties under
this Agreement, the Executives shall promptly meet. Following the meeting of
the Executives, [***] may then, at its sole discretion, terminate the Agreement
immediately upon written notice to [***], subject to Section [***] hereof6.2.4
    
    Expiration of Development and Commercialization Exclusivity Period.
Upon the expiration of the Development and Commercialization Exclusivity Period, in
the event [***] engages in the clinical development of a More Advanced Competing
Product or [***] obtains rights to commercialize a More Advanced Competing Product
(e.g., rights to market, sell or co-promote a More Advanced Competing Product),
whether such rights are obtained by way of contract, option or license, [***] shall
provide written notice to [***] and the Parties shall meet to permit [***] to
present to [***] its plans for the Licensed Compounds and/or Products in light of
its clinical development or commercialization of such More Advanced Competing
Product. If [***], after reviewing such plans, believes that the clinical
development cannot proceed without adversely affecting the goals and the intentions
of the Parties under this Agreement, the Executives shall promptly meet. Following
the meeting of the Executives, [***] may then, at its sole discretion, terminate
the Agreement immediately upon written notice to [***], subject to Section [***]
hereof.
 6.3
    
    InterMune [***] Programs
 6.3.1
    
    Retained Rights for [***].Roche agrees and understands that
InterMune has an early stage discovery program in the Field directed at discovering
compounds that are [***] [***], and that such [***]-[***] compounds are not part of
this Agreement. Consequently, and notwithstanding Sections 6.1 and 6.2 above or
anything else in this Agreement, and subject to [***]will be free to engage in the
discovery, research, pre-clinical development, clinical development, and/or
commercialization either alone of with a Third Party, of any compound in the
[***]that is [***] [***].6.3.2
    
    Right of First Negotiation.At any time between the completion of the
IND-enabling GLP toxicology studies and the availability of the Key Listings and
Tables from the first Phase I Clinical Trial with multiple ascending dose proof of
concept within the Field conducted independently by or on behalf of InterMune for
any given [***] compound but no later than [***] from the Effective Date hereof,
provided such [***] compound has the properties that would meet the Lead Compound
Requirements set forth in Schedule 1.92 and
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 that IND-enabling GLP toxicology studies have been completed, InterMune shall
provide Roche with written notice and Roche shall have the right of first
negotiation to enter into negotiations with InterMune for a separate agreement
for the further research, development and/or commercialization of such [***]
compound in the Field as described in this Section 6.3.2 (Right of First
Negotiation).Such notice shall include a reasonable confidentiality agreement
for the Parties to execute no later than fifteen (15) business days of such
notice to enable Roche to conduct due diligence. Upon execution of such
confidentiality agreement, InterMune shall provide Roche all the available and
relevant data from the studies for such [***] compound (Right of First
Negotiation Report). Commencing on the date that Roche receives the Right of
First Negotiation Report, Roche shall have the right to conduct initial due
diligence related to the [***] compound for a period of up to [***] following
delivery by InterMune of the First Right of Negotiation Report. Roches due
diligence may include, but is not limited to, the following: (i) a full
pre-clinical or clinical (as applicable) and manufacturing audit of InterMune,
at Roches expense, (ii) the right to reasonably request all relevant data,
including raw data, obtained to date relating to the [***] Compound, and (iii)
the right to inspect InterMunes facilities and, to the extent within the
reasonable control of InterMune, the facilities of its clinicians and
manufacturers (and InterMune agrees to use its [***] to ensure that Roche can
inspect the facilities of such Third Parties). In the event Roche determines to
exercise its Right of First Negotiation, upon conclusion of its initial due
diligence, Roche shall provide written notice of its intent to InterMune (Right
of First Negotiation Notice) and the Parties shall negotiate in good faith
using Commercially Reasonable Efforts to enter into an amendment to this
Agreement, subject to subsections (a), (b) and (c) below, for a period of [***]
following the date of receipt of the Right of First Negotiation Notice (the
Right of First Negotiation Exclusivity Period).
 (a)
    
    The Parties agree that such amendment shall provide
that such [***] compound will be added to this Agreement as a Licensed
Compound to be governed under this Agreement, including, but not limited
to, being subject to the payments provisions set forth in Sections [***]
(inclusive); provided, however that Section [***] shall not apply. In
addition, such amendment will provide for a separate and additional [***]
payment in return for rights to such [***] compound and the development
plan therefor, including the associated budget (which development plan will
constitute the Development Plan for such [***] Compound once it becomes a
Licensed Compound for purposes of this Agreement), which [***] payment
and development plan will be negotiated by the Parties in good faith using
Commercially Reasonable Efforts taking into consideration most recent
comparable transactions involving compounds or products in substantially
the same stage of development and competitive space,
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 industry standards and scientific, business and marketing and return on
investment issues.(b)
    
    If the Parties cannot agree on the amount of the [***]
payment upon the expiration of the Right of First Negotiation Exclusivity
Period, within thirty (30) days thereafter, the Parties shall engage a
mutually agreeable independent investment banking firm of national
reputation to decide on the amount of the [***] payment (Valuation Price)
and each Party shall submit to such investment banking firm an appraisal
prepared by such Party as to its assessment of the fair market value of the
collaboration (each such appraisal, a Valuation). In the event of a
Partys failure to submit its Valuation by the end of the aforementioned
thirty (30) day time period, the Valuation Price will be equal to the
Valuation submitted by the other Party. If both Parties submit Valuations
within the thirty (30) day time period, within ten (10) days thereafter,
the investment banking firm will select one of the Valuations which will
then be the Valuation Price. The investment banking firm when making its
selection shall take into account the value of the patent rights, know-how
and other assets, the potential market and return on investment for the
[***] compound(s), and the most recent comparable transactions involving
compounds or products in substantially the same stage of development
(including the transactions covered by this Agreement) and competitive
space. In addition, the investment banking firm when making its selection
shall take into account any additional value InterMune may have contributed
towards the development of the [***] compound between the date Roche
receives the Right of First Negotiation Report from InterMune and the time
the Valuation Price is finally resolved in accordance with the procedure
set forth above. The Parties shall equally share in the cost of the
engagement of such investment banking firm.(c)
    
    If the Parties cannot agree on the appropriateness of
the development plan for such [***] compound, the dispute will be resolved
pursuant to Section 13.6; provided, however, that the arbitrators shall
only have the power and authority to arbitrate the matter of the
appropriateness of the development plan (taking into consideration the most
recent comparable transactions involving compounds or products in
substantially the same stage of development (including the transactions
covered by this Agreement), industry standards and scientific, business and
marketing and return on investment issues).
 ARTICLE 7  CONFIDENTIALITY AND PUBLICATION
 7.1
    
    Nondisclosure Obligation.All Confidential Information disclosed by one Party to the other
Party hereunder shall be maintained in confidence by the receiving Party and shall
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 not be disclosed to any Third Party, except to an Affiliate, or used for any purpose except
as set forth in this Agreement without the prior written consent of the disclosing Party,
except to the extent that such Confidential Information:
 7.1.1
    
    is known by the receiving Party or its Affiliates at the time of its
receipt, and not through a prior disclosure by the disclosing Party, as documented
by the receiving Partys or its Affiliates records;7.1.2
    
    is properly in the public domain by use and/or publication before its
receipt from the disclosing Party, or thereafter enters the public domain through
no fault of the receiving Party or its Affiliates;7.1.3
    
    is subsequently disclosed to the receiving Party or its Affiliates by
a Third Party who may lawfully do so and is not under an obligation of
confidentiality to the disclosing Party; and7.1.4
    
    is developed by the receiving Party or its Affiliates independently of
Confidential Information received from the disclosing Party, as documented by the
receiving Partys or its Affiliates records.
 7.2
    
    Permitted Disclosure of Information.Notwithstanding anything to the contrary contained in
Section 7.1, a Party receiving Confidential Information of the other Party may disclose such
information to the extent that such Confidential Information:
 7.2.1
    
    is disclosed to governmental or other regulatory agencies in order to
obtain patents or to gain or maintain approval to conduct clinical trials or
Marketing Authorizations for a Product, but such disclosure may be only to the
extent reasonably necessary to obtain patents or authorizations and reasonable
steps are taken to assure confidential treatment of such information;7.2.2
    
    is disclosed in prosecuting or defending litigation pursuant to a
protective order;7.2.3
    
    is deemed necessary by either Party to be disclosed to Affiliates,
agents, consultants, and/or other Third Parties to the extent reasonably necessary
for the research, development, manufacturing and/or commercialization of the
Product (or for such entities to determine their interest in performing such
activities) in accordance with this Agreement on the condition that such
disclosures may only be to the extent reasonably necessary for such activities and
any Affiliates, agents, consultants and/or Third Parties agree to be bound by
confidentiality and non-use obligations that substantially are no less stringent
than those confidentiality and non-use provisions contained in this Agreement; or7.2.4
    
    is required to be disclosed by law or court order; provided
that notice is promptly delivered to the other Party in order to provide an
opportunity to
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 challenge or limit the disclosure obligation; and provided
further the Party required to disclose cooperates with the other Party
in limiting disclosure to the extent so required. Confidential Information that
is disclosed by judicial or administrative process shall remain otherwise
subject to the confidentiality and non-use provisions of Sections 7.1 and 7.2
and the Party disclosing Confidential Information pursuant to law or court order
shall take all steps reasonably necessary, including obtaining an order of
confidentiality, to ensure the continued confidential treatment of such
Confidential Information.
 Any combination of features or disclosures as set forth in Sections 7.1 and 7.2 shall not be
deemed to fall within the foregoing exclusions merely because individual features are
published or available to the general public or in the rightful possession of the receiving
Party unless the combination itself and principle of operation are published or available to
the general public or in the rightful possession of the receiving Party.7.3
    
    Disclosures In Connection with Financing.Each Party shall have the further right to
disclose the material financial terms of this Agreement under confidentiality obligations no
less protective than those set forth in this Agreement, to any bona fide potential acquiror,
merger partner or potential providers of financing and their advisors (which shall be in
writing if disclosed to any such potential acquiror or merger partner); provided, a Party may
not disclose Confidential Information to Third Parties engaged in research, development or
commercialization activities which may be competitive with the other Partys activities
without prior written consent of the Party whose information is being disclosed.7.4
    
    Disclosures Required by Applicable Law.Nothing in this Agreement shall impair either
Partys compliance with any requirements of: (i) governmental agencies to the extent required
or desirable to secure government approval for the development, manufacture or sale of
Products in the Territory; (ii) the U.S. Securities and Exchange Commission or the national
securities exchange or other stock market on which such Partys securities are trades; (iii)
or any other applicable law. In connection with any filing by either Party of a copy of this
Agreement with the U.S. Securities and Exchange Commission (or the national securities
exchange or other stock market on which such Partys securities are traded), the filing Party
shall endeavor to obtain confidential treatment of economic and trade secret information.
Reasonably in advance of any filing under this Section (whether or not this Agreement is
included in the filing), the filing Party shall provide to the other Party a copy of the
proposed filing and the Parties shall work cooperatively in good faith, taking into
consideration the other Partys suggestions, regarding the information for which the filing
Party will seek to obtain confidential treatment. However, in the event of any disagreements
that cannot be amicably resolved, the Party which is making the filing shall, together with
input from their own legal counsel, have the ultimate authority to make the filing in the
fashion in which it feels the filing must be made.7.5
    
    Press Releases. The Parties will issue the initial press releases attached hereto as
Exhibit C on or after the Effective Date. Roche shall issue press releases in
accordance with its
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 internal policy that typically does not issue a second press release until proof of concept
has been achieved for a particular Licensed Compound. Roche shall provide InterMune with a
copy of any draft press release related to the activities contemplated by this Agreement at
least two (2) weeks prior to its intended publication for InterMunes review. InterMune may
provide Roche with suggested modifications to the draft press release and Roche shall
consider InterMunes suggestions in good faith in issuing its press release. InterMune
shall only issue press releases related to activities contemplated by this Agreement that
have either been approved by Roche or are required to be issued by InterMune as a matter of
law. In all circumstances, InterMune shall provide Roche with a draft press release at
least two (2) weeks prior to its intended publication for Roches review. During such
period, Roche shall (i) approve the draft press release and permit InterMune to issue the
press release, (ii) contact InterMune to discuss reasonable modifications to the draft press
release, or (iii) contact InterMune to disapprove the draft press release. If Roche asks
for modifications, then InterMune shall either make the modification or work with Roche to
arrive at a press release that Roche approves.7.6
    
    Publication.Roche and InterMune each acknowledge the other Partys interest in publishing
the results of its research and/or development in order to obtain recognition within the
scientific community and to advance the state of scientific knowledge. Each Party also
recognizes the mutual interest in obtaining valid patent protection and in protecting business
interests and trade secret information. Consequently, except for disclosures permitted
pursuant to Sections 7.1 through 7.5, inclusive, either Party, its employees or consultants
wishing to make a publication disclosing any Roche Know-How, InterMune Know-How, Joint
Know-How, InterMune Patent Rights, Roche Patent Rights, or Joint Patent Rights shall deliver
to the other Party a copy of the proposed written publication in substantially the final form
at least thirty (30) days prior to submission for publication and a copy of the proposed
outline of an oral disclosure or presentation at least thirty (30) days prior to presentation.
The reviewing Party shall have the right to: (a) propose modifications to the publication for
reasonable patent, trade secret or business reasons; or (b) request a reasonable delay in
publication or presentation in order to protect Roche Know-How, InterMune Know-How, Joint
Know-How, InterMune Patent Rights, Roche Patent Rights, and/or Joint Patent Rights as the case
may be, and patentable Confidential Information. If the reviewing Party requests
modifications to the publication or presentation, the publishing Party shall edit such
publication to prevent disclosure of trade secret or proprietary business Confidential
Information prior to submission of the publication or presentation. If the reviewing Party
requests a delay to file a patent application, then the publishing Party shall not publish any
information related to the patent application prior to the filing of the application, which
filing shall occur within a reasonable time from the request.7.7
    
    Publicity/Use of Names.Except as expressly set forth in this Agreement, no disclosure of
the existence, or the terms, including the financial terms, of this Agreement may be made by
either Party, and no Party shall use the name, trademark, trade name or logo of the other
Party, its Affiliates or their respective employees in any publicity, promotion, news release
or disclosure relating to this Agreement or its subject matter, without the prior express
written permission of the other Party, except as may be required by law.
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 7.8
    
    Clinical Trial Registry.Roche, in accordance with its internal policies and procedures,
shall have the right to publish all studies, clinical trials and results thereof related to
the Licensed Compounds on the clinical trial registries which are maintained by or on behalf
of Roche. InterMune shall not publish any studies, clinical trials or results thereof related
to the Licensed Compounds on its clinical trial registry, provided however, that Roches
clinical trial registry can be accessed via a link from InterMunes clinical trial registry.
 ARTICLE 8  UPFRONT FEE, EVENT PAYMENTS, ROYALTIES AND
REPORTS
 8.1
    
    Upfront Fee and Deliverables Payment.In consideration for the licenses granted herein under
the InterMune Patent Rights and InterMune Know-How, for the Development work performed on
ITMN-191 by InterMune and other related [***]s or on behalf of InterMune by Third Parties
prior to the Effective Date and for InterMunes agreeing to the terms and conditions of this
Agreement, Roche shall pay to InterMune a non-refundable amount equal to Sixty Million U.S.
Dollars ($U.S. 60,000,000) within [***] business days of the Effective Date and Roches
receipt of invoice from InterMune. Such payment shall be made by Roche to InterMune via wire
transfer to an account designated by InterMune in the invoice.
 8.2
    
    Event Payments.Subject to the terms and conditions of this Agreement, Roche shall pay to
InterMune the non-refundable milestone event payments in the amounts specified below, on a
Product-by-Product basis (or Licensed Compound-by-Licensed Compound basis, as applicable)
(each an Event Payment) no later than [***] after Roche receives an invoice from InterMune
and the following events have occurred:
 Event
    
    AmountUpon release by InterMune in
good faith of the [***]
kilogram ([***] Kg) lot of cGMP
material of
ITMN-191(1)
    
    Ten Million U.S. Dollars ($U.S.
10,000,000)Upon Successful Completion of
the first Combination
Toxicology Study conducted by
or on behalf of Roche for
ITMN-191(1)
    
    [***] U.S. Dollars ($U.S. [***])Upon Initiation by or on behalf
of Roche of the first Chronic
Toxicology Study For any
Licensed Compound (other than
ITMN-191)(2)
    
    [***] U.S. Dollars ($U.S. [***])
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 Event
    
    AmountUpon Successful Completion of
the [***] or first Phase I
Clinical Trial (which Phase I
Clinical Trial was conducted by
or on behalf of Roche) for each
Collaboration Compound that is
a Licensed Compound with
multiple ascending dose proof
of concept (POC)
    
    [***] U.S. Dollars ($U.S. [***])Upon Initiation by or on behalf
of Roche of the first Phase II
Clinical Trial
    
    [***] U.S. Dollars ($US [***])Upon Successful Completion of a
Phase II Clinical Trial in the
non-responder population
conducted by or on behalf of
Roche
    
    [***] U.S. Dollars ($US [***])Upon Initiation by or on behalf
of Roche of a Phase III
Clinical Trial
    
    [***] U.S. Dollars ($U.S. [***])Upon Filing by or on behalf of
Roche of an NDA in the
[***](3)
    
    [***] U.S. Dollars ($U.S. [***])Upon Filing by or on behalf of
Roche of an NDA equivalent in a
[***]
    
    [***] U.S. Dollars ($U.S. [***])Upon Filing by or on behalf of
Roche of an NDA equivalent in
[***]
    
    [***] U.S. Dollars ($U.S. [***])Upon receipt by or on behalf of
Roche of Marketing
Authorization in the
[***](3)
    
    [***] U.S. Dollars ($U.S. [***])Upon receipt by or on behalf of
Roche of Marketing
Authorization in a [***]
    
    [***] U.S. Dollars ($U.S. [***])Upon receipt by or on behalf of
Roche of Marketing
Authorization in [***]
    
    [***] U.S. Dollars ($U.S. [***])
 
 (1)
    
    For purposes of clarification, these Event Payments shall only apply for
ITMN-191.(2)
    
    For purposes of clarification, these Event Payments shall only apply for
Licensed Compounds other than ITMN-191.(3)
    
    The events set forth above with respect to Filing of an NDA in the United
States and receipt of Marketing Authorization in the United States shall, in the
event of an [***] Opt-Out for a particular Product, be [***] U.S. Dollars ($U.S. [***])
and [***] Million U.S. Dollars ($U.S. [***]), respectively.[*]
    
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 Roche shall notify InterMune promptly after the achievement of each of the foregoing
events.
 8.2.1
    
    Credit for ITMN-191.
 (a)
    
    With respect to ITMN-191 (or the related Product
comprising ITMN-191), each of the above Event Payments shall be paid only
once, for the first occurrence of the triggering event, regardless of how
many times such event is subsequently achieved for ITMN-191 (or the related
Product). If [***] advances a [***] (or the related Product comprising
such [***]), then Event Payments for such [***] (or the related Product)
would be the same as ITMN-191 (or the related Product) so long as ITMN-191
(or the related Product) remains under development and/or commercialization
at the time the Event Payments are achieved for such Collaboration Compound
(or the related Product).(b)
    
    However, if ITMN-191 (or the related Product) is
dropped from development or if ITMN-191 (or the related Product) does not
receive Marketing Authorization, then the first Collaboration Compound (or
the Product comprising such Collaboration Compound) that is advanced will
receive Event Payments only for those events that were not achieved by
ITMN-191 (or the related Product) prior to ITMN-191 (or the related
Product) being dropped from development or not receiving Marketing
Authorization. For example, if ITMN-191 received Event Payments for the
Successful Completion of the [***] and was subsequently dropped from
Development, then for the first Collaboration Compound to be advanced,
InterMune would not receive the Event Payments already achieved by ITMN-191
but would be eligible to receive all other unpaid Event Payments for such
Collaboration Compound. For purposes of clarification, in the event
InterMune receives Event Payments for ITMN-191 for the events release by
InterMune in good faith of the Transition Plan Deliverables and
Successful Completion of the first Combination Toxicology Study conducted
by or on behalf of Roche for ITMN-191 described in this Section 8.2
(ITMN-191 Events) and ITMN-191 is subsequently dropped from Development,
then the first Collaboration Compound to be advanced shall not be subject
to the Event Payment for the Initiation by or on behalf of Roche of the
first Chronic Toxicology Study for any Licensed Compound event as such
event is in lieu of the ITMN-191 Events for Licensed Compounds other
than[***]ITMN-191.(c)
    
    Furthermore, in the event any subsequent Collaboration
Compound (or the related Product comprising such subsequent Collaboration
Compound), is advanced following the first Collaboration Compound
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 (or the related Product) described in subsection (b) above, then any
Event Payment set forth in this Section 8.2 for events achieved by such
subsequent Collaboration Compound (or the related Product) will be
reduced by [***] percent ([***]%). For example, assuming ITMN-191 (or
the related Product) is dropped from Development or does not receive
Marketing Authorization and that Compound X is the first Collaboration
Compound being advanced under subsection (b) above and Compound Y is the
second Collaboration Compound being advanced under this subsection (c),
the Event Payments for events achieved by Compound Y under this Section
8.2 will be paid at [***]percent ([***]%) of the amounts set forth for
such events.
 8.2.2
    
    Definition of Successful Completion. For purposes of this Section
8.2, the following shall apply:
 (a)
    
    With respect to the [***] or first [***] for each
Collaboration Compound that is a Licensed Compound with multiple ascending
dose proof of concept (POC), Successful Completion shall mean [***] which
leads to the [***] (which decision shall be made within [***] ([***]) days
of the availability of the [***] and [***] for such study). Any decision
to be made under this subsection (a) shall be made by [***] delivering to
[***] written notice of such decision within the applicable timeframe
described above. In the event [***] delivers written notice to [***] that
it has determined not to move forward with the Development of the Licensed
Compound or [***] does not deliver written notice of its decision within
the applicable timeframe, [***] shall be deemed to have made the decision
not to move forward with the Development of such Licensed Compound and
[***] shall terminate all rights with respect to such Licensed Compound for
the entire Territory pursuant to Section [***] hereof.(b)
    
    With respect to the Combination Toxicology Study,
Successful Completion shall mean the determination by [***] in good faith
that no [***] or other [***] of the [***] that do not allow [***] to [***]
[***] have been [***] with ITMN-191 in such study (which determination
shall be made no later than the earlier of (i) [***] ([***]) days after
Initiation of such study; and (ii) [***] provided that [***] has delivered
to [***] sufficient quantities of ITMN-191 by [***]). Any determination to
be made under this subsection (b) shall be made by [***] delivering to
[***] written notice of such determination within the applicable timeframe
described above. In the event [***] does not deliver notice of its
determination within the specified timeframe, [***] shall be deemed to have
made the determination that Successful Completion has occurred for purposes
of this Section 8.2. In the event [***] makes the determination in good
faith that Successful Completion has not occurred (and delivers notice
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 to [***] thereof within the specified timeframe), [***] may (but is not
obligated to) terminate this Agreement with respect to ITMN-191 for the
[***] [***] or in its [***] pursuant to Section 12.3 hereof. In the
event [***] the Combination Toxicology Study and terminates the Agreement
with respect to ITMN-191 or in its [***] prior to the availability of
data to enable the determination of whether such [***] (or other [***]
that do not [***] [***] [***] [***]) are [***] with ITMN-191 in such
study and [***] was not the [***] of any [***] [***] finding in [***] for
ITMN-191, then [***] shall pay the Event Payment as if Successful
Completion of the Combination Toxicology Study has been achieved.(c)
    
    With respect to the Phase II Clinical Trial in the
non-responder population, Successful Completion shall mean that [***] or,
if such [***] subsequently decides to move forward with or continue
Development of such Licensed Compound in a non-responder population.
 8.2.3
    
    Sales Performance Milestones.Upon achievement of an event listed
below with respect to the first occurrence, Roche shall pay the following amounts
once and once only:
 Event
    
    AmountUpon the first occurrence of aggregate
annual Net Sales in the Territory over
$[***] million during a 12 month period
    
    [***] U.S. Dollars ($U.S. [***])Upon the first occurrence of aggregate
annual Net Sales in the Territory over
$[***] during a 12 month period
    
    [***] U.S. Dollars ($U.S. [***])Upon the first occurrence of aggregate
annual Net Sales in the Territory over
$[***] during a 12 month period
    
    [***] U.S. Dollars
($U.S. [***])Upon the first occurrence of aggregate
annual Net Sales in the Territory over
$[***] during a 12 month period
    
    [***] U.S. Dollars ($US [***]0)
 8.3
    
    Royalties.
 8.3.1
    
    Royalties Payable By Roche.Subject to the terms and conditions of
this Agreement, including InterMunes Opt-Out right, Roche shall pay InterMune
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 royalties, calculated on a Product-by-Product basis, as set forth in this
Section 8.3.
 (a)
    
    Product Royalties.
 (i)
    
    Royalty Tiers if No Exercise of Opt-Out.
In the event that InterMune has not exercised its Opt-Out for a
Product, Roche shall pay InterMune royalties in an amount equal to
the following percentage of Net Sales in the ROW Territory of such
Product by Roche, its Affiliates and its permitted sublicensees (on
a Product-by-Product basis):
 (1)
    
    [***] percent ([***]%)of
Net Sales in the ROW Territory in each Calendar Year up to
and including [***] U.S. Dollars ($U.S. [***]).(2)
    
    [***] percent ([***]%)of
Net Sales in the ROW Territory in each Calendar Year for the
portion of Net Sales exceeding [***] U.S. Dollars ($U.S.
[***])up to and including [***] U.S. Dollars ($U.S. [***]).(3)
    
    [***] percent ([***]%)of
Net Sales in the ROW Territory in each Calendar Year for the
portion of Net Sales exceeding [***] U.S. Dollars ($U.S.
[***]).
 (ii)
    
    Royalty Tiers if Exercise of Opt-Out
during Development.In the event that InterMune has exercised its
Opt-Out during Development for a Product, Roche shall pay InterMune
royalties in an amount equal to the following percentage of
aggregate Net Sales in the Territory of such Product by Roche, its
Affiliates and its permitted sublicensees (on a Product-by-Product
basis) in the relevant territories:
 (1)
    
    [***] percent ([***]%)of
Net Sales in the Territory in each Calendar Year up to and
including [***] U.S. Dollars ($U.S. [***]).(2)
    
    [***] percent ([***]%)of
Net Sales in the Territory in each Calendar Year for the
portion of Net Sales exceeding [***] U.S. Dollars ($U.S.
[***])up to and including [***] U.S. Dollars ($U.S. [***]).(3)
    
    [***] percent ([***]%)of
Net Sales in the Territory in each Calendar Year for the
portion of Net Sales exceeding [***] U.S. Dollars ($U.S.
[***]).
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 (iii)
    
    Royalty Tiers if Exercise of Opt-Out
During Preparation of Co-Commercialization Plan/Budget.In the event
that Opt-Out occurs during preparation of a Co-Commercialization
Plan/Budget for a Product under Section 4.4.3(a)(iii), Roche shall
pay InterMune royalties in an amount equal to the following
percentage of aggregate Net Sales in the Territory of such Product
by Roche, its Affiliates and its permitted sublicensees (on a
Product-by-Product basis) in the relevant territories:
 (1)
    
    [***] percent ([***]%)of
Net Sales in the Territory in each Calendar Year up to and
including [***] U.S. Dollars ($U.S. [***]).(2)
    
    [***] percent ([***]%)of
Net Sales in the Territory in each Calendar Year for the
portion of Net Sales exceeding [***] U.S. Dollars ($U.S.
[***])up to and including [***] U.S. Dollars ($U.S. [***]).(3)
    
    [***] percent ([***]%)of
Net Sales in the Territory in each Calendar Year for the
portion of Net Sales exceeding [***] U.S. Dollars ($U.S.
[***]).
 (b)
    
    Royalties on each Product at the rates set forth above
shall continue on a country-by-country basis until the expiration of the
later of: (i) the last-to-expire Valid Claim covering the making, using,
selling, offering for sale, importation or exportation of the Licensed
Compound or Product; or (ii) for a period of [***] ([***]) years after
First Commercial Sale of such Product in such country (the Royalty
Period).(c)
    
    All royalties are subject to the following conditions:
 (i)
    
    no royalties shall be due upon the sale
or other transfer among Roche or its Affiliates, but in such cases
the royalty shall be due and calculated upon Roches or its Related
Partys Net Sales to the first independent Third Party;(ii)
    
    no royalties shall accrue on the sale or
other disposition of Product by Roche or its Affiliates for use in a
Clinical Trial; and(iii)
    
    no royalties shall accrue on the
disposition of Product in reasonable quantities by Roche or its
Affiliates as samples (promotion or otherwise) or as donations
(e.g., to non-profit
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 institutions or government agencies for a non-commercial
purpose).
 (d)
    
    In the event that there is no Valid Claim covering the
making, using, selling, offering for sale, importation or exportation of
the Licensed Compound or Product in a country, the royalties on each
Product shall be decreased by [***] percent. Royalties payable upon such
Products shall be in consideration of the InterMune Know-How provided under
this Agreement.(e)
    
    If, during the Royalty Period, a Third Party receives
Marketing Authorization for and commences commercial sale of a Generic
Product in a country in which a royalty is payable under this Section 8.3
and such Generic Product represents [***] percent ([***]%) or more of the
units sold during such Calendar Quarter for such Product as evidenced by
data from IMS Health or another data service acceptable to both Parties,
then Roche shall have the right to reduce any royalties due under Section
8.3 on account of the sale of such Products for the Generic Product
indication by [***] percent ([***]%) beginning on the first date of the
applicable Calendar Quarter and for so long as such Third Party continues
sales of such Generic Product in such country above the threshold level.
For the avoidance of doubt, the reduction in royalties pursuant to this
Section 8.3.1(e) for generic competition or Section 8.3.1(d) for lack of a
Valid Claim, shall not, in the aggregate, exceed [***] percent ([***]%).(f)
    
    Any royalty reduction shall only be made after taking
into account royalties due by InterMune under the [***]. By way of
example, if Roche were to pay InterMune a royalty of $[***] and InterMune
owed a royalty of $[***] under the [***], the maximum Roches royalty paid
to InterMune may be reduced is by [***]. Roche shall have the right to
audit the royalties due and paid by InterMune under the [***] in accordance
with Section 8.6.
 8.3.2
    
    Compulsory Licenses.If a compulsory license is granted to a Third
Party, through the order, decree or grant of a governmental authority having
competent jurisdiction, authorizing such Third Party to manufacture, use, sell,
offer for sale, import or export a Product in any country in the Territory with a
royalty rate lower than the royalty rate provided by Section 8.3.1 then the royalty
rate to be paid by Roche on Net Sales in that country under Section 8.3.1 shall be
reduced [***] [***].8.3.3
    
    Third Party Licenses. In the event that one or more Third Party
Licenses (other than the Third Party Licenses under the [***] and [***]) are
required by Roche or its Affiliates in order to make, have made, use, offer to
sell, sell import and/or export Licensed Compound or Product(s) (hereinafter
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 Additional Third Party Patent Licenses), Roche shall be obligated to make any
payments thereunder with no right of credit or offset against the royalty
payments due InterMune by Roche under Section 8.3.1 above.8.3.4
    
    Pre-Existing Royalty Obligations to [***] and [***].As of the
Effective Date, the royalty-based [***] and the [***] are in full force and effect.
InterMune has provided a complete copy of both the [***] and the [***] to Roche
prior to the Effective Date. InterMune shall be solely responsible for payments
under the [***] and the [***]. If InterMune is not required or does not make a
royalty based payment to [***] as a result of (i) any Third Party action against
[***] or (ii) the natural expiration of the royalty term set forth in the [***] as
of the Effective Date hereof (and, for purposes of clarification, not due to any
action taken by InterMune to curtail or shorten such royalty term or to pay down or
pay off such royalty to [***]), then any applicable royalty rate due to InterMune
pursuant to this Agreement shall be reduced by [***] percent ([***]%).
 8.4
    
    Co-Commercialization Profit Split; Operating Expenses.The Parties shall calculate the
Co-Commercialization Profit Split and Operating Expenses as set forth in attached Exhibit
A, unless InterMune shall have exercised the Opt-Out. Sections 8.5 and 8.6 shall not be
applicable to the Co-Commercialization Profit Split and Operating Expenses calculations and
reports and audit rights related to such calculations shall be as set forth in attached
Exhibit A.8.5
    
    Reports; Payment of Royalty.During the term of this Agreement following the First
Commercial Sale of a Product and in addition to any reports which are due under Exhibit
A, Roche shall furnish to InterMune a quarterly written report for the Calendar Quarter
showing (a) the Adjusted Gross Sales and the Net Sales of the Product sold by Roche or its
Affiliates during such quarter on a country-by-country basis; (b) the date of any First
Commercial Sale of the Product in each country during such quarter; (c) the Net Sales of all
Products subject to royalty payments sold by Roche and its Affiliates during the reporting
period; (d) the royalties payable under this Agreement; and (e) any Sales Milestones due based
on the cumulative aggregate annual Net Sales under Section 8.2.3. In addition, Roche shall
furnish InterMune with sufficient additional information so as to meet its reporting and
payment obligations under the [***]. Reports shall be due on the sixtieth (60th) day
following the close of each Calendar Quarter. Royalties shown to have accrued by each royalty
report shall be due and payable on the date such royalty report is due. Roche shall keep
records in sufficient detail to enable the royalties payable hereunder to be determined.8.6
    
    Audits.Roche and its Affiliates shall keep, and shall require its licensees and
sublicensees to keep, full, true and accurate books of accounts containing all particulars
that may be necessary for the purpose of calculating all royalties payable under this
Agreement.
 
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 Such books of accounts shall be kept at their principal place of business. At the expense of
InterMune, InterMune has the right to engage Roches officially appointed worldwide
independent public accountant to perform, on behalf of InterMune an audit of such books and
records of Roche and its Affiliates, its licensees and sublicensees, that are deemed
necessary by Roches independent public accountant to report on Net Sales of Product for the
period or periods requested by InterMune and the correctness of any report or payments made
under this Agreement.Upon timely request and at least sixty (60) working days prior written notice from
InterMune, such audit shall be conducted in the countries specifically requested by
InterMune, during regular business hours in such a manner as to not unnecessarily interfere
with Roches normal business activities, and shall be limited to results in the two (2)
calendar years prior to audit notification.Such audit shall not be performed more frequently than once per calendar year nor more
frequently than once with respect to records covering any specific period of time.
All information, data documents and abstracts herein referred to shall be used only for the
purpose of verifying royalty statements or compliance with this Agreement, shall be treated
as Roche Confidential Information subject to the obligations of this Agreement and need
neither be retained more than one (1) year after completion of an audit hereof, if an audit
has been requested; nor more than two (2) years from the end of the calendar year to which
each shall pertain; nor more than one (1) year after the date of termination of this
Agreement.Audit results and findings shall be shared by Roche and InterMune. If the audit reveals an
overpayment, InterMune shall reimburse Roche for the amount of the overpayment within thirty
(30) days. If the audit reveals an underpayment, Roche shall make up such underpayment
within thirty (30) days and reimburse InterMune for audit fees incurred by InterMune in
conducting such audit provided the underpayment is greater than [***] percent ([***]%).The failure of InterMune to request verification of any royalty calculation within the
period during which corresponding records must be maintained will be deemed to be acceptance
of the royalty reporting.8.7
    
    Payment Exchange Rate.All payments to be made under this Agreement shall be made in United
States dollars and may be paid by bank wire transfer in immediately available funds to such
bank account in the United States as may be designated in writing by a Party from time to
time. In the case of sales outside the United States, the rate of exchange to be used in
computing the amount of currency equivalent in United States dollars due InterMune shall be
made at the average year-to-date rate of exchange as retrieved from the Reuters system (or
with respect to Roche any other source then routinely used by Roche) for the applicable time
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 8.8
    
    Income Tax Withholding.If laws, rules or regulations require withholding of income taxes or
other taxes imposed upon payments set forth in Article 8, a Party shall make such withholding
payments as may be required and shall subtract such withholding payments from the payments set
forth in Article 8. Such Party shall submit appropriate proof of payment of the withholding
taxes to the other Party within a reasonable period of time.
 ARTICLE 9  REPRESENTATIONS, WARRANTIES AND COVENANTS
 9.1
    
    Representations and Warranties of Each Party.Each Party represents and warrants to the
other Party that, as of the Effective Date:
 9.1.1
    
    it is duly organized, validly existing and in good standing under the
laws of the jurisdiction of incorporation;9.1.2
    
    it has the full right, power and authority to enter into this
Agreement and to perform its obligations hereunder;9.1.3
    
    this Agreement has been duly-executed by it and is legally binding
upon it, enforceable in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors rights generally
and except that the availability of the equitably remedy of specific performance or
injunctive relief is subject to the discretion of the court or other tribunal
before which any proceeding may be brought);9.1.4
    
    the execution, delivery and performance of this Agreement by it does
not conflict with any agreement, instrument or understanding, oral or written, to
which it is a party or by which it may be bound, nor violate any material law or
regulation of any court, governmental body or administrative or other agency having
jurisdiction over it;9.1.5
    
    it has not previously assigned, transferred, conveyed or otherwise
encumbered its right, title and interest in, as to InterMune, the InterMune Patent
Rights or InterMune Know-How or, as to Roche, the Roche Patent Rights or the Roche
Know-How, and will not do so during the term of this Agreement other than with the
prior written consent of the other Party; and9.1.6
    
    it has (or will have at the time performance is due) maintained and
will maintain and keep in full force and effect all material agreements (including
license agreements) and filings (including patent filings) necessary to perform its
material obligations hereunder.
 9.2
    
    Additional Representations, Warranties and Covenants of InterMune.InterMune hereby further
represents and warrants to Roche that:
 
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 9.2.1
    
    as of the Effective Date, to InterMunes knowledge, there are no
claims, judgments or settlements against or owed by InterMune and no pending or
threatened claims or litigation relating to the InterMune Patent Rights and
InterMune Know-How; and9.2.2
    
    as of the Effective Date, InterMune has taken reasonable measures to
protect the confidentiality of the InterMune Know-How and will continue to take
such measures during the term of the Agreement; and9.2.3
    
    it has not granted, and will not grant (except as otherwise permitted
by the terms of this Agreement) during the term of this Agreement, any Third Party,
including any academic organization or agency, any rights to make, have made, use,
sell, offer for sale, import or export Licensed Compounds or Products.
 9.3
    
    Additional Representations, Warranties and Covenants of Roche.Roche hereby further
represents, warrants and covenants to InterMune that:
 9.3.1
    
    as of the Effective Date, to Roches knowledge, there are no claims,
judgments or settlements owed by Roche and no pending claims or litigation relating
to the Roche Patent Rights and Roche Know-How;9.3.2
    
    as of the Effective Date, Roche has taken reasonable measures to
protect the confidentiality of the Roche Know-How and will continue to take such
measures during the term of the Agreement; and9.3.3
    
    it has not granted, and will not grant (except as otherwise permitted
by the terms of this Agreement) during the term of this Agreement, any Third Party,
including any academic organization or agency, any rights to Reverted Compounds,
Passed Compounds , Licensed Compounds or Products.
 9.4
    
    HSR Act.
 9.4.1
    
    InterMune and Roche shall make all necessary initial filings under the
HSR Act as promptly as practicable but in no event more than five (5) business days
following the execution of this Agreement. Subject to the terms and conditions of
this Agreement, each of InterMune and Roche will use all Commercially Reasonable
Efforts to do, or cause to be done, all things necessary, proper or advisable to,
as promptly as practicable, (i) obtain all consents, approvals or actions of, make
all filings with and give all notices to governmental or regulatory authorities or
any other public or private third parties required of either Party to consummate
the transactions contemplated by this Agreement, and (ii) provide such other
information and communications to such governmental or regulatory authorities as
the other party or such governmental or regulatory authorities may reasonably
request. In addition to and not in limitation of the foregoing, each of the
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 (x) take promptly all actions necessary to make the filings required of
InterMune and Roche or their respective Affiliates under the HSR Act and under
any similar or comparable foreign antitrust statute or regulation, (y) request
early termination with the Federal Trade Commission (the FTC) and comply at
the earliest practicable date with any request for additional information
received by such Party or its Affiliates from the FTC or the Antitrust Division
of the Department of Justice (the Antitrust Division") pursuant to the HSR Act
or from similar or comparable foreign governmental authorities, and (z)
cooperate with the other Party in connection with such Partys filings under the
HSR Act and comparable foreign statutes and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement commenced by the FTC, the Antitrust Division, or state attorneys
general or comparable foreign authorities. Each party shall give the other
party reasonably prior notice of any communication with or any proposed
communication, understanding or agreement with any governmental or regulatory
authority with respect to the transactions contemplated by this Agreement.
None of the parties shall independently participate in any meeting, or engage in
any substantive conversation, with any such governmental or regulatory authority
in respect of any filings or inquiry without giving the other party prior notice
of the meeting and, unless prohibited by such governmental or regulatory
authority, the opportunity to attend and/or participate. Notwithstanding the
foregoing, neither Party nor any of their respective Affiliates shall be
required to divest or hold separate or otherwise take or commit to take any
action that limits its freedom of action with respect to, or its ability to
retain, any of its businesses, assets or product lines or that otherwise could
materially adversely affect such Party or its Affiliates.9.4.2
    
    If the transactions contemplated by this Agreement are subject to the
notification requirements of the HSR Act or any other applicable governmental law,
then the effectiveness of this Agreement and the transactions contemplated
hereunder shall be subject to and contingent upon the expiration or termination of
all applicable waiting periods under the HSR Act or other applicable law. Subject
to the terms and conditions of this Agreement, each Party shall use all reasonable
efforts to take, or cause to be taken, all reasonable actions and to do, or cause
to be done, all things necessary and appropriate to satisfy the condition
subsequent and to consummate the transactions contemplated by this Agreement. Each
Party shall cooperate with the other Party in the preparation, execution and filing
of all documents that are required or permitted to be filed on or before the
Closing Date for the purpose of consummating this transaction, including, filings
pursuant to the HSR Act or other governmental filing. Each Party shall bear its
own costs (including counsel or other expert fees) with respect to preparing,
executing and filing such documents.
 
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 9.4.3
    
    Either Party may terminate this Agreement in its entirety, upon ten
(10) days prior written notice to the other Party if the condition subsequent under
this Section 9.4 has not been fulfilled within three (3) months after the Execution
Date, in which case, upon termination, there shall be no liabilities for
obligations on the part of either Party except if there has been a breach of this
Section 9.4.
 9.5
    
    Disclaimer of Warranties.EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT OR
MANDATED BY APPLICABLE LAW (WITHOUT THE RIGHT TO WAIVE OR DISCLAIM), NEITHER PARTY MAKES ANY
REPRESENTATION OR WARRANTY WITH RESPECT TO A LICENSED COMPOUND, PRODUCT, ANY PATENT RIGHTS,
KNOW-HOW, GOODS, SERVICES, RIGHTS, OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY
DISCLAIMS ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF
PERFORMANCE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OF THIRD
PARTY INTELLECTUAL PROPERTY RIGHTS.
 ARTICLE 10 INTELLECTUAL PROPERTY RIGHTS
 10.1
    
    Research Information and Inventions.The entire right, title and interest in:
 10.1.1
    
    InterMune Know-How shall be owned solely by InterMune;10.1.2
    
    Roche Know-How shall be owned solely by Roche; and10.1.3
    
    Joint Know-How shall be owned jointly by InterMune and Roche.
 Determination of whether an invention was made by one Party or jointly by the Parties shall
be made in accordance with the principles of inventorship under the United States patent
laws. InterMune shall promptly disclose to Roche in writing the development, making,
conception and/or reduction to practice of InterMune Know-How and Joint Know-How at the time
when InterMune is ready to file a patent application. Roche shall promptly disclose to
InterMune in writing the development, making, conception and/or reduction to practice of
Roche Know-How and Joint Know-How at the time when Roche is ready to file a patent
application.
 10.2
    
    Filing, Prosecution and Maintenance of Patents
 10.2.1
    
    By InterMune.InterMune shall have the first right to file, prosecute and
maintain in the Territory, upon appropriate consultation with Roche, patents and
patent applications Covering the InterMune Patent Rights licensed to Roche under
this Agreement and Joint Patent Rights. In the event InterMune does elect to
prosecute or maintain such InterMune Patent Rights or Joint Patent Rights,
InterMune shall do so in good faith. InterMune may elect not to prosecute or
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 and, if so, InterMune shall promptly notify Roche and Roche shall have the right
to prosecute or maintain such patent applications and patents, in which case, if
Roche elects to prosecute or maintain such patent applications and patents,
Roche shall do so in good faith.10.2.2
    
    By Roche.Roche shall have the first right to file, prosecute and maintain in
the Territory, upon appropriate consultation with InterMune, patents and patent
applications Covering the Roche Patent Rights licensed to InterMune under this
Agreement. In the event Roche does elect to prosecute or maintain such Roche
Patent Rights, Roche shall do so in good faith. Roche may elect not to prosecute
or maintain such Roche Patent Rights and, if so, Roche shall promptly notify
InterMune and InterMune shall have the right to prosecute or maintain such patent
applications and patents, in which case, if InterMune elects to prosecute or
maintain such patent applications and patents, InterMune shall do so in good faith.10.2.3
    
    Procedures Under Sections 10.2.1 and 10.2.2.
 (a)
    
    In each case under Sections 10.2.1 and 10.2.2, the
Party with first right to file, prosecute or maintain shall give notice to
the other Party of any desire to cease prosecution and/or maintenance of
the applicable patent rights on a country-by-country basis in the Territory
and, in such case, shall permit the other Party, in such other Partys sole
discretion, to continue prosecution or maintenance of such patent rights at
the other Partys own expense. If the other Party elects to continue
prosecution or maintenance based on the Party with the first rights
election not to file pursuant to Section 10.2.1 or 10.2.2, the initial
Party shall execute such documents and perform such acts at such initial
Partys expense as may be reasonably necessary to permit the other Party to
continue such prosecution or maintenance. The other Party may, at its
discretion, seek input from the initial Party, including technical
information and assistance, in the prosecution or maintenance of the patent
applications or patents, and the initial Party shall provide such input as
it is reasonably able to provide in a timely manner and at its own expense.(b)
    
    The Party assuming responsibility for prosecution or
maintenance of the patent applications or patents shall keep the
non-responsible Party advised of the status of the patent applications or
patents in the Territory. The Party assuming responsibility for
prosecution or maintenance of the patent applications or patents in a Major
Market country shall provide copies of any papers related to the filing,
prosecution and maintenance of such patent applications or patents, so that
the non-responsible Party shall have at least [***] ([***]) calendar days
(or in the event of a deadline that does not reasonably permit such [***]
([***]) days, a reasonable period) to comment on
 
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 any prosecution document being filed in a [***]. In the event of such
comment, the responsible Party shall give [***] consideration to such
comment, [***] as set forth [***] in this Section 10.2.3, the [***]
regarding any prosecution matter shall rest with the [***]. The
responsible Party shall promptly give notice to the non-responsible Party
of the grant, lapse, revocation, surrender, invalidation or abandonment
of any patent applications or patents for which they have prosecution or
maintenance responsibility pursuant to this Article 10.(a)
    
    With respect to any patent or application in the [***]
or [***] being prosecuted or maintained by [***] in a [***] that includes a
[***], [***] shall have the following enhanced rights of participation:
 (i)
    
    In the event that [***] proposes to take
action that would abandon, terminate, or cancel a [***] or narrow a
[***] to exclude from its scope a [***] (or a method of making or
using the same) without [***] any other [***] of comparable scope in
that [***], [***] shall seek the written consent of [***] at least
[***] calendar days prior to taking the proposed action (or in the
event of a deadline that does not reasonably permit such [***] days,
a reasonable period), which written consent shall not unreasonably
be withheld. Failure of [***] to respond to such a request within
such [***] (or in the event of a deadline that does not reasonably
permit such [***], a reasonable period) shall be taken as written
consent, and any written opposition to the proposed action shall be
accompanied by a reasoned statement in support thereof, and [***]
shall additionally make a good faith effort to suggest alternative
actions that would address the relevant objectives. [***] and [***]
each agree to respond in good faith to discussions initiated by the
other party relating to such issues to seek an amicable resolution.(ii)
    
    In the event that [***] terminates this
Agreement for cause under Section [***], or in the event of a [***],
upon the written request of [***] shall: engage outside counsel to
prosecute any application pending or to be filed in a [***] that
includes a [***] (to the extent such application is not already
being prosecuted by outside counsel); and (to the extent permitted
under local law) prepare and file at [***] expense (or lend all
necessary cooperation and execute all necessary documents to allow
[***] to prepare and file) one or more continuing applications in
[***] which [***] may prosecute in [***] sole discretion, which are
and shall continue to be expressly limited to one or both [***]
(including salts, hydrates, enantiomers, and esters thereof),
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 and/or methods of making or using the same. With respect to
these continuing applications which [***] chooses to prosecute,
[***] shall, as the responsible Party in filing, prosecuting and
maintaining such applications, do so in good faith and provide
[***] the right to comment on any prosecution document being
filed as set forth in Section 10.2.3 hereof; provided, however
that in the event [***] chooses to prosecute such continuing
applications as a result of a [***], [***] shall provide [***]
the right to comment only on applications that are [***] or
otherwise [***] for [***] which [***] shall consider in good
faith. In the event that [***] proposes to take action that
would abandon, terminate or cancel a [***] or narrow a [***] to
exclude from its scope a [***] (or a method of making or using
the same) without filing or maintaining any other [***] of
comparable scope in that [***], [***] may do so provided that
such action would have no impact on the [***] due to [***] under
[***] hereunder.
 10.2.4
    
    With respect to all patent applications or patents hereunder, the responsible
Party shall bear the cost and expenses related to such patent applications and
patents.
 10.3
    
    Interference, Opposition, Reexamination and Reissue.
 10.3.1
    
    Each Party shall promptly inform the other Party of learning of any patent office
instituted or Third Party request for, or filing or declaration of, any
interference, opposition or reexamination relating to the InterMune Patent Rights,
Roche Patent Rights or Joint Patent Rights. InterMune shall be the lead Party on
any InterMune Patent Rights and Joint Patent Rights, and Roche shall be the lead
Party on any Roche Patent Rights. Roche and InterMune shall thereafter consult and
cooperate fully to determine a course of action with respect to any such
proceeding. The Parties shall have the right to review and comment on any
submission to be made in connection with such proceeding.10.3.2
    
    Neither Party shall initiate or request any interference, opposition,
reexamination or reissue proceeding relating to patent applications or patents
licensed to the other Party under this Agreement without the prior written consent
of the other Party, which consent shall not be unreasonably withheld.10.3.3
    
    In connection with any interference, opposition, reexamination or reissue
proceeding relating to patent applications or patents licensed to the other Party
under this Agreement, Roche and InterMune shall cooperate fully and shall provide
each other with any information or assistance that either may reasonably request.
The Parties shall keep each other informed of developments in any such action or
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 permissible by law, consultation on and approval of any settlement, the status
of any settlement negotiations and the terms of any offer related thereto.10.3.4
    
    Each Party shall bear the expense of any interference, opposition, reexamination,
or reissue proceeding relating to its respective patent applications or patents
licensed to the other Party under this Agreement.
 10.4
    
    Enforcement and Defense.
 10.4.1
    
    Each Party shall give notice to the other Party of (i) any infringement of
InterMune Patent Rights, Roche Patent Rights, or Joint Patent Rights, or (ii) any
misappropriation or misuse of InterMune Know-How, Roche Know-How or Joint Know-How,
that may come to that Partys attention. Roche and InterMune shall thereafter
consult and cooperate fully to determine a course of action, including the
commencement of legal action by either or both Roche and InterMune to terminate any
such infringement or any misappropriation or misuse. With regard to InterMune
Patent Rights, InterMune Know-How and Joint Patent Rights, InterMune, upon notice
to Roche, shall have the first right to initiate and prosecute such legal action at
its own expense and in the name of InterMune and Roche, or to control the defense
of any declaratory judgment action relating to InterMune Patent Rights, InterMune
Know-How or Joint Patent Rights if the litigation is not directed at an accused
compound or product that is the same as a Licensed Compound(s) or Product(s). With
regard to InterMune Patent Rights, InterMune Know-How and Joint Patent Rights,
Roche, upon notice to InterMune, shall have the first right to initiate and
prosecute such legal action at its own expense and in the name of InterMune and
Roche, or to control the defense of any declaratory judgment action relating to
InterMune Patent Rights, InterMune Know-How or Joint Patent Rights if the
litigation is directed at an accused compound or product that is the same as a
Licensed Compound(s) or Product(s). Each Party shall promptly inform the other
party if it elects not to exercise such first right and the other party shall
thereafter have the right to either initiate and prosecute such action or to
control the defense of such declaratory judgment action in the name of Roche and
InterMune. With regard to Roche Patent Rights and Roche Know-How, Roche, upon
notice to InterMune, shall have the first right to initiate and prosecute such
legal action at its own expense and in the name of Roche and InterMune, or to
control the defense of any declaratory judgment action relating to Roche Patent
Rights or Roche Know-How. Roche shall promptly inform InterMune if it elects not
to exercise such first right and InterMune shall thereafter have the right to
either initiate and prosecute such action or to control the defense of such
declaratory judgment action in the name of InterMune and, if necessary, Roche.
Each Party shall have the right to be represented by counsel of its own choice.10.4.2
    
    In the event that a Party elects not to initiate and prosecute an action as
provided in Section 10.4.1, and the other Party elects to do so, the costs of any
 
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 agreed-upon course of action to terminate infringement or misappropriation or
misuse, including the costs of any legal action commenced or the defense of any
declaratory judgment, shall be paid by the Party initiating and prosecuting such
action.10.4.3
    
    For any action as provided in Section 10.4.1, in the event that either Party is
unable to initiate or prosecute such action solely in its own name, the other Party
shall join such action voluntarily and shall execute and cause its Affiliates to
execute all documents necessary for such other Party to initiate litigation to
prosecute and maintain such action. In connection with any action, Roche and
InterMune shall cooperate fully and shall provide each other with any information
or assistance that either may reasonably request. Each Party shall keep the other
informed of developments in any action or proceeding, including, to the extent
permissible by law, consultation on and approval of any settlement, the status of
any settlement negotiations and the terms of any offer related thereto.10.4.4
    
    Any recovery obtained by either or both Roche and InterMune in connection with or
as a result of any action contemplated by this Section 10.4, whether by settlement
or otherwise, shall be shared in order as follows:
 (a)
    
    the Party which initiated and prosecuted the action
shall recoup all of its reasonable costs and expenses incurred in
connection with the action;(b)
    
    the other Party shall then, to the extent possible,
recover its reasonable costs and expenses incurred in connection with the
action;(c)
    
    the amount of any recovery remaining shall then be
allocated between the Parties as follows: (i) any compensatory damages
shall be treated as Net Sales hereunder; and (ii) any punitive damages
shall be awarded to the Party initiating the action.
 10.4.5
    
    The Parties shall inform each other of any certification regarding their
respective patents and patent applications licensed under this Agreement it has
received pursuant to either 21 U.S.C. §§355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) or
its successor provisions, or any similar provisions in a country in the Territory
other than the United States, and shall provide the other Party with a copy of such
certification within five (5) days of receipt. InterMunes and Roches rights with
respect to the initiation and prosecution of any legal action as a result of such
certification or any recovery obtained as a result of such legal action shall be as
defined in Sections 10.4.1 through 10.4.4 hereof; provided, that the
respective Party may exercise its first right to initiate and prosecute any action
and shall inform the other Party of such decision within ten (10) days of receipt
of the certification, after which time the other Party shall have the right to
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 Party has the right to initiate and prosecute such action, both Parties shall,
as soon as practicable after receiving notice of such certification, convene and
consult with each other regarding the appropriate course of conduct for such
action. The non-initiating Party shall have the right to be kept fully informed
and participate in decisions regarding the appropriate course of conduct for
such action, and the right to join and participate in such action.
 10.5
    
    Patent Term Restoration.The Parties hereto shall cooperate with each other, including
providing necessary information, documents and assistance as the other Party may reasonably
request, in obtaining patent term restoration or supplemental protection certificates or their
equivalents in any country in the Territory where applicable to InterMune Patent Rights, Roche
Patent Rights and Joint Patent Rights. In the event that elections with respect to obtaining
such patent term restoration or supplemental protection certificates or their equivalents are
to be made, Roche shall have the right to make the election and InterMune agrees to abide by
such election; provided that in the event Roche elects not to file a patent term restoration
or supplemental protection certificate or their equivalents, Roche shall (a) promptly inform
InterMune of its intention not to file and (b) grant to InterMune the right to file such
patent term extension and provide necessary information, documents and assistance as InterMune
may reasonably request.
 ARTICLE 11  INDEMNIFICATION; LIMITATION OF LIABILITY
 11.1
    
    Mutual Indemnification.Each Party shall indemnify, defend and hold harmless the other Party,
its Affiliates, and its licensors, and all of their respective officers, directors, employees
and agents from and against any and all claims, suits, actions, demands, damages and
liabilities, including reasonable legal costs and fees and other expenses of litigation
(collectively, Claims") brought by a Third Party (any of the foregoing, a Loss") arising out
of or resulting from directly or indirectly (a) the breach by the indemnifying Party of any
warranty, representation or covenant by or obligation of such Party in this Agreement, or (b)
the gross negligence, recklessness or intentional acts or omissions of the indemnifying Party,
its Affiliates or agents and their respective officers, directors, employees and agents with
respect to this Agreement and the transactions contemplated hereby.
 11.2
    
    Indemnification by Roche.Except to the extent InterMune is required to indemnify Roche
under Sections 11.1 or 11.3, Roche agrees to indemnify, defend and hold harmless InterMune,
its Affiliates, and its licensors, and all of their respective officers, directors, employees
and agents (collectively, the InterMune Indemnitees") from and against any and all Losses to
which any InterMune Indemnitee may become subject to arising out of or resulting from directly
or indirectly: (a) the negligence, recklessness, bad faith, intentional wrongful acts or
omissions of Roche or its Affiliates (or, to the extent permitted under this Agreement, their
respective agents, contractors, distributors, representatives or other persons or entities
working on their behalf), including in connection with Development, Co-Funded Development,
Commercialization, Co-Commercialization, Co-Promotion or manufacture of the Licensed Compounds
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 Products (including any patent infringement or product liability claims including any
manufacturing or other product defects, failure to comply with regulatory and other legal
requirements, failure to provide adequate warnings and misuse of the Products), except to
the extent Losses arise out of the negligence, recklessness, bad faith, intentional wrongful
acts or omissions of InterMune or its Affiliates (or, to the extent permitted under this
Agreement, their respective agents, contractors, distributors, representatives or other
persons or entities working on their behalf); and (b) material breach by Roche (or conduct
or omission by any of its Affiliates, which if performed or failed to be performed by Roche
would be a breach by Roche) of the terms of, or the representations and warranties made by
it in, this Agreement.11.3
    
    Indemnification by InterMune.Except to the extent Roche is required to indemnify InterMune
under Sections 11.1 or 11.2, InterMune agrees to indemnify, defend and hold harmless Roche,
its Affiliates, and all of their respective officers, directors, employees and agents
(collectively, the Roche Indemnitees") from and against any and all Losses to which any Roche
Indemnitee may become subject to arising out of or resulting from directly or indirectly: (a)
the negligence, recklessness, bad faith, intentional wrongful acts or omissions of InterMune
or its Affiliates (or, to the extent permitted under this Agreement, their respective agents,
contractors, distributors, representatives or other persons or entities working on their
behalf), including in connection with Development, Co-Funded Development, Co-Commercialization
or Co-Promotion of the Licensed Compounds and Products (including any patent infringement or
product liability claims including any manufacturing or other product defects, failure to
comply with regulatory and other legal requirements, failure to provide adequate warnings and
misuse of the Products), except to the extent Claims arise out of the negligence,
recklessness, bad faith, intentional wrongful acts or omissions of Roche or its Affiliates
(or, to the extent permitted under this Agreement, their respective agents, contractors,
distributors, representatives or other persons or entities working on their behalf); (b) the
negligence, recklessness, bad faith, intentional wrongful acts or omissions of InterMune or
its Affiliates (or, to the extent permitted under this Agreement, their respective agents,
contractors, distributors, representatives or other persons or entities working on their
behalf), including in connection with Development or Commercialization of the Reverted
Compounds, Passed Compounds and products containing such Reverted Compounds or Passed
Compounds (including any patent infringement or product liability claims including any
manufacturing or other product defects, failure to comply with regulatory and other legal
requirements, failure to provide adequate warnings and misuse of the Products), except to the
extent Losses arise out of the negligence, recklessness, bad faith, intentional wrongful acts
or omissions of Roche or its Affiliates (or, to the extent permitted under this Agreement,
their respective agents, contractors, distributors, representatives or other persons or
entities working on their behalf)and (c) material breach by InterMune (or conduct or omission
by any of its Affiliates, which if performed or failed to be performed by InterMune would be a
breach by InterMune) of the terms of, or the representations and warranties made by it in,
this Agreement.11.4
    
    Indemnification in Connection with Co-Commercialization.In the event of any product
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 which neither Party is entitled to indemnification hereunder, the Parties shall treat Losses
therefrom as Operating Expenses.11.5
    
    Control of Defense.In the event of any Claim against the InterMune Indemnitees or the Roche
Indemnitees (individually, the Indemnified Party"), the Indemnified Party shall promptly
notify to the other Party (the Indemnifying Party") in writing of the Claim. Such Claim for
indemnity shall indicate the nature of the Claim and the basis therefor. Promptly after a
Claim is made for which the Indemnified Party seeks indemnity, the Indemnified Party shall
permit the Indemnifying Party, at its option and expense, to assume the complete defense of
such Claim, provided that (i) the Indemnified Party will have the right to participate in the
defense of any such Claim at its own cost and expense, (ii) the Indemnifying Party will
conduct the defense of any such Claim with due regard for the business interests and potential
related liabilities of the Indemnified Party, and (iii) the Indemnifying Party will not agree
to any settlement that would admit liability on the part of the Indemnified Party or involve
relief other than payment of money, without the approval of the Indemnified Party, not to be
unreasonably withheld; and provided, further, that if it is reasonably likely that the Parties
may have conflicting interests or if it is otherwise not advisable under applicable legal and
ethical requirements for the Indemnifying Partys defense counsel to represent both Parties,
separate independent counsel shall be retained for each Party at its own expense. The
Indemnified Party shall have the right, at its election, to release and hold harmless the
Indemnifying Party from its obligations hereunder with respect to such Claim and assume the
complete defense of the same in return for payment by the Indemnifying Party to the
Indemnified Party of the amount of the Indemnifying Partys settlement offer. The Indemnifying
Party will not, in defense of any such Claim, except with the consent of the Indemnified
Party, consent to the entry of any judgment or enter into any settlement which does not
include, as an unconditional term thereof, the giving by the claimant or plaintiff to the
Indemnified Party of a release from all liability in respect thereof. After notice to the
Indemnified Party of the Indemnifying Partys election to assume the defense of such Claim,
the Indemnifying Party shall be liable to the Indemnified Party for such legal or other
expenses subsequently incurred by the Indemnified Party in connection with the defense thereof
at the request of the Indemnifying Party. As to those Claims with respect to which the
Indemnifying Party does not elect to assume control of the defense, the Indemnified Party will
afford the Indemnifying Party an opportunity to participate in such defense at the
Indemnifying Partys own cost and expense, and will not settle or otherwise dispose of any of
the same without the consent of the Indemnifying Party.
 11.6
    
    Exclusive Remedy
  
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 11.7
    
    Limitation of LiabilityIN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER THIS AGREEMENT FOR
ANY LOSS OF PROFITS, LOSS OF BUSINESS OR INTERRUPTION OF BUSINESS, OR FOR ANY OTHER
INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND, EVEN If SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES PROVIDED, THAT THIS
LIMITATION SHALL NOT LIMIT THE INDEMNIFICATION OBLIGATION OF SUCH PARTY UNDER THE PROVISIONS
OF ARTICLE 11 FOR SUCH DAMAGES CLAIMED BY A THIRD PARTY AND NOTHING IN THIS SECTION 11.7 IS
INTENDED TO LIMIT ROCHES PAYMENT OBLIGATIONS UNDER ARTICLE 8. IN NO CASE SHALL EITHER
PARTY BE LIABLE FOR ANY REPRESENTATION OR WARRANTY MADE BY THE OTHER PARTY TO ANY THIRD
PARTY. THE FOREGOING LIMITATION OF LIABILITY SHALL NOT APPLY TO THE EXTENT OF A PARTYS
GROSS NEGLIGENCE, RECKLESSNESS OR INTENTIONAL ACTS OR OMISSIONS.11.8
    
    Insurance.Each Party agrees to self-insure or to obtain and maintain at its cost and
expense, while this Agreement is in effect, including any surviving obligations: (i)
commercial general liability insurance including contractual liability insurance; (ii)
products liability insurance; (iii) property damage insurance; (iv) professional liability
insurance; (v) workers compensation insurance; and (vi) automobile insurance in amounts
appropriate to the conduct of such Partys activities under this Agreement.
 ARTICLE 12  TERM AND TERMINATION
 12.1
    
    Term and Expiration.This Agreement shall be effective as of the Effective Date and unless
terminated earlier pursuant to this Article 12, this Agreement shall continue in effect until
expiration of all royalty obligations hereunder. Upon expiration of this Agreement, Roches
and InterMunes licenses pursuant to Section 5.2 shall become irrevocable, fully paid-up,
perpetual licenses.12.2
    
    Early Termination of Research Program Term.
 12.2.1
    
    Termination of Research Program at Roches Discretion. Roche shall have the
option, in its sole discretion, to terminate the Research Program prior to the
expiration of the Research Program Term (i.e., prior to the expiration of the [***]
([***]) year period from the Effective Date hereof), upon not less than [***] days
prior written notice to InterMune.12.2.2
    
    Termination of Research Program Upon Agreement by Parties.Upon agreement by
both Parties in writing, the Parties may terminate the Research Program prior to
the expiration of the Research Program Term at any time.
 
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 12.2.3
    
    Consequences of Early Termination of Research Program.
 (a)
    
    Upon Roches early termination of the Research Program pursuant to
Section 12.2.1, Roches Opt-In Option for Passed Compounds described in
Section 5.3.5 and 5.3.6 and Roches Right of First Negotiation for [***]
compounds described in Section 6.3.2 shall automatically terminate and be
of no further force or effect and this Agreement shall otherwise remain in
full force and effect.(b)
    
    In the event both Parties agree in writing to the early
termination of the Research Program pursuant to Section 12.2.2, Roches
Right of First Negotiation for [***] compounds in Section 6.3.2 shall not
be impacted by such termination and this Agreement shall otherwise remain
in full force and effect.
 12.3
    
    Termination in Roches Discretion.Roche shall have the option, in its sole discretion, at
any time after the [***]-month anniversary of the Effective Date, to terminate this Agreement
(i) on a Licensed Compound-by-Licensed Compound (i.e., Roche terminating rights to a Licensed
Compound for purposes of the entire Territory); (ii) Product-by-Product (i.e., Roche
terminating rights to a Product for purposes of the entire Territory); (iii)
country-by-country basis, subject to Section 12.3.1 below (i.e., Roche terminating rights for
one or more Licensed Compounds or Products for purposes of a country within the Territory) or
(iv) in its entirety, upon not less than one hundred eighty (180) days prior written notice to
InterMune subject to the following:
 12.3.1
    
    Limitations on Termination on a Country-By-Country Basis.
 (a)
    
    Notwithstanding anything to the contrary contained
herein, with respect to Roches termination rights on a country-by-country
basis within the Major Markets without terminating the entire Agreement,
Roche may only terminate this Agreement with respect to (i) no more than
one (1) country within the Major European Market after Marketing
Authorization is received therein in the event Roche terminates this
Agreement with respect to Japan as specified herein and (ii) no more than
two (2) countries within the Major European Market after Marketing
Authorization is received therein in the event this Agreement is not
terminated with respect to Japan as specified herein. Any termination of
this Agreement by Roche with respect to a country within the Major European
Market as permitted herein may only be done with twelve (12) months prior
written notice to InterMune, and Roche, during the twelve (12) month notice
period, shall reasonably assist in the transition of all rights and
obligations for such terminated country to InterMune.(b)
    
    Notwithstanding the foregoing, in the event Chugai
issues to Roche or InterMune a termination notice with respect to the
rights granted to Roche
under this Agreement for Japan or Chugai is not designated as an Affiliate
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 Phase III Clinical Trial for a Product, within sixty (60) days of either
the termination notice from Chugai or non-designation of Chugai as a Roche
Affiliate, as applicable, Roche shall deliver to InterMune either a reasonably
detailed plan for engaging another Third Party reasonably acceptable to
InterMune to perform Development and Commercialization efforts in Japan pursuant
to this Agreement or a written notice terminating this Agreement with respect to
Japan (in which case termination of this Agreement with respect to Japan shall
be effective immediately upon delivery of termination notice by Roche). In the
event Roche delivers to InterMune a plan to engage another Third Party
reasonably acceptable to InterMune to perform Development and Commercialization
efforts in Japan, then Roche shall use Commercially Reasonable Efforts to
execute on such plan and engage such a Third Party no later than six (6) months
after the delivery of such plan to InterMune. At any time during such six (6)
month period, in the event Roche is unable to engage another Third Party
reasonably acceptable to InterMune after using Commercially Reasonable Efforts,
then Roche may terminate this Agreement with respect to Japan upon written
notice to InterMune; provided, however, that this Agreement will be deemed
automatically terminated with respect to Japan in the event that Roche has not
engaged another Third Party to perform its Development and Commercialization
efforts in Japan upon the expiration of such six (6) month period.
 12.3.2
    
    Consequences of Termination of Agreement (i) on a Licensed Compound-by-Licensed
Compound basis, (ii) on a Product-by-Product basis or (iii) on a country-by-country
basis. With respect to termination by Roche of this Agreement on a Licensed
Compound-by-Licensed Compound, Product-by-Product and/or country-by-country basis
in accordance with Section 12.3 hereof, the following consequences shall apply:
 (a)
    
    InterMunes license grants to Roche pursuant to Article
5 shall terminate as of the termination date with respect to such
terminated Licensed Compound, Product and/or country only, and Roche shall
cease all research, development, commercialization or manufacture of such
terminated Licensed Compound or Product in the terminated country or in the
Territory, as applicable only, except with respect to Roches fulfilling
its obligations under subsections (f) and (g) below.(b)
    
    Roche hereby grants to InterMune an irrevocable,
exclusive, fully paid-up, royalty-free, perpetual license under the Roche
Know-How and Roche Patent Rights and under Roches rights in the Joint
Know-How and Joint Patent Rights to develop, make, have made, use, import,
export, offer for sale and sell (i) the terminated Licensed Compound or
Product in the Territory and/or (ii) the Licensed Compound and/or Product
in the terminated country, as applicable.
 
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 (c)
    
    Except with respect to the terminated Licensed Compound or Product
and/or the terminated country, as applicable, this Agreement shall
otherwise remain in full force and effect.(d)
    
    For each terminated Licensed Compound or Product,
Roche: (a) shall transfer to InterMune all rights to such Licensed Compound
or Product and the related Development programs (including all rights to
any IND or other filing related to the Marketing Authorization and the
right to reference the relevant Drug Master File with respect to such
terminated Licensed Compound or Product); and shall promptly provide to
InterMune access to all the related material clinical and preclinical data
at no cost to InterMune (other than the direct costs of assembling,
reproducing and transmitting such data). In the case where Roche has
terminated its rights to one or more Licensed Compounds and Products only
for a certain country in the Territory, Roche: (a) shall transfer to
InterMune all rights to all Licensed Compound and/or Product for purposes
of such terminated country and the related Development programs in such
terminated country (including all rights to any IND or other filing related
to the Marketing Authorizations and the right to reference the relevant
Drug Master File with respect to the License Compounds and/or Products for
such terminated country); and shall promptly provide to InterMune access to
all the related material clinical and preclinical data at no cost to
InterMune (other than the direct costs of assembling, reproducing and
transmitting such data).(e)
    
    Roche shall within a reasonable amount of time after
termination return or cause to be returned to InterMune with respect to a
terminated Licensed Compound, Product and/or country only, all related and
reasonably available InterMune Know-How, InterMune Patent Rights, Joint
Patent Rights and Joint Know-How in tangible form, as well as any other
material provided by InterMune to Roche in any medium; provided that Roche
may retain: (a) a single archival copy solely for the purpose of
determining the extent of disclosure hereunder and assuring compliance with
the surviving provisions of this Agreement; (b) any portion which is
contained in laboratory notebooks (subject to the continued confidentiality
obligations of this Agreement); and (c) any portion which Roche is required
by applicable law to retain. Notwithstanding the foregoing, with respect
to Joint Know-How and Joint Patent Rights, Roche shall have the right, as a
joint owner thereof, to use and to keep a copy of the Joint Know-How and
Joint Patent Rights for any purpose, subject to any continuing licenses to
InterMune under this Agreement.(f)
    
    In the case where Roche has terminated its rights with
respect to a Licensed Compound or Product for purposes of the entire
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 the extent Roche (or an Affiliate of Roche) is manufacturing (on its own or
through any Third Party contract manufacturer) any such terminated Licensed
Compound or Product, Roche (or its Affiliate) shall continue, for a period up to
[***] ([***]) years, to manufacture (or have manufactured) such Licensed
Compounds and Products and shall supply such Licensed Compounds and Products to
InterMune in quantities sufficient to satisfy InterMunes requirements under the
manufacturing transfer and transition plan (described in subsection (g) below)
and for InterMune to assume all Development and Commercialization activities
which supply shall be at Roches Fully Burdened Manufacturing Cost plus [***]
percent ([***]%). In the case where Roche has terminated its rights to a
Licensed Compound or Product only with respect to a country within the Territory
in accordance with Section 12.3, so long as Roche (or an Affiliate of Roche) is
manufacturing (on its own or through any Third Party contract manufacturer) such
Licensed Compound or Product for the remaining countries within the Territory,
InterMune shall have the right to purchase from Roche such Licensed Compound or
Product for Development and Commercialization within such terminated country at
Roches Fully Burdened Manufacturing Cost plus [***] ([***]%). Any
manufacturing and supply by Roche for InterMune will be conducted pursuant to a
manufacturing and supply agreement which will be negotiated by the Parties in
good faith and using Commercially Reasonable Efforts.(g)
    
    In the case where Roche has terminated this Agreement
with respect to a Licensed Compound or Product for the entire Territory,
for a period of time to be agreed upon by the Parties up to twenty-four
(24) months, Roche shall assist InterMune as reasonably requested in (i)
causing the assignment to InterMune of any and all applicable Third Party
manufacturing and supply agreements for such terminated Licensed Compound
or Product, to the extent possible, and/or (ii) transferring the
manufacturing process for such terminated Licensed Compound or Product to
InterMune or a Third Party contract manufacturer engaged by InterMune.
Such assistance shall include assisting InterMune in developing and
executing a reasonable transfer and transition plan and providing
reasonable technical and regulatory assistance and documentation relating
to the manufacture, testing and supply of such terminated Licensed Compound
or Product as necessary for InterMune to assume rights under the applicable
Third Party manufacturing and supply agreements assigned to InterMune or,
as applicable, for InterMune to be qualified or to qualify a Third Party
for the manufacturing of such terminated Licensed Compound or Product.
Roche shall also reasonably assist InterMune with the working up and use of
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 InterMunes personnel to the extent which may reasonably be necessary in
relation to the Development and Commercialization, including the manufacture of
such terminated Licensed Compound or Product by InterMune. In this regard,
Roche will receive InterMunes scientific and manufacturing staff in its
premises for certain reasonable periods, the term of which will be agreed by the
parties. In the case of a manufacturing transfer to InterMune or a Third Party
designated by InterMune, if despite using Commercially Reasonable Efforts
InterMune is not able to complete the qualification of an alternative
manufacturer within the agreed upon time period, then Roche shall continue to
reasonably assist InterMune for a period of time up to an addition six (6) month
period at the FTE rate specified in Exhibit A.(h)
    
    Roche shall provide InterMune with any technical data
incorporated in the Roche Know-How, including but not limited to, access to
the CMC section (in the case of any manufacturing transfer) to give effect
to the provisions of this Sections 12.3.2.
 12.3.3
    
    Consequences of Termination of Agreement in its Entirety. With respect to
termination by Roche of this Agreement in its entirety in accordance with Section
12.3 hereof, the following consequences shall apply:
 (a)
    
    InterMunes license grants to Roche pursuant to Article
5 shall terminate as of the termination date with respect to all Licensed
Compounds and Products, and Roche shall cease all research, development,
commercialization or manufacture of such Licensed Compounds and Products,
except with respect to Roches fulfilling its obligations under subsections
(e) and (f) below.(b)
    
    Roche hereby grants to InterMune an irrevocable,
exclusive, fully paid-up, royalty-free, perpetual license under the Roche
Know-How and Roche Patent Rights and under Roches rights in the Joint
Know-How and Joint Patent Rights to develop, make, have made, use, import,
export, offer for sale and sell Licensed Compounds and Products in the
Territory.(c)
    
    For each Licensed Compound and Product, Roche: (a)
shall transfer to InterMune all rights to such Licensed Compound or Product
and the related Development programs (including all rights to any IND or
other filing related to the Marketing Authorization and the right to
reference the relevant Drug Master File with respect to such Licensed
Compound or Product); and shall promptly provide to InterMune access to all
material clinical and preclinical data at no cost to InterMune (other than
the direct costs of assembling, reproducing and transmitting such data).
 
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 (d)
    
    Roche shall within a reasonable amount of time after termination return
or cause to be returned to InterMune with respect to all Licensed Compounds
and Products, all reasonably available InterMune Know-How, InterMune Patent
Rights, Joint Patent Rights and Joint Know-How in tangible form, as well as
any other material provided by InterMune to Roche in any medium; provided
that Roche may retain: (a) a single archival copy solely for the purpose of
determining the extent of disclosure hereunder and assuring compliance with
the surviving provisions of this Agreement; (b) any portion which is
contained in laboratory notebooks (subject to the continued confidentiality
obligations of this Agreement); and (c) any portion which Roche is required
by applicable law to retain. Notwithstanding the foregoing, with respect
to Joint Know-How and Joint Patent Rights, Roche shall have the right, as a
joint owner thereof, to use and to keep a copy of the Joint Know-How and
Joint Patent Rights for any purpose, subject to any continuing licenses to
InterMune under this Agreement.(e)
    
    To the extent Roche (or an Affiliate of Roche) is
manufacturing (on its own or through any Third Party contract manufacturer)
any Licensed Compounds or Products, Roche (or its Affiliate) shall
continue, for a period up to [***], to manufacture (or have manufactured)
such Licensed Compounds and Products and shall supply such Licensed
Compounds and Products to InterMune in quantities sufficient to satisfy
InterMunes requirements under the manufacturing transfer and transition
plan (described in subsection (f) below) and for InterMune to assume all
Development and Commercialization activities which supply shall be at
Roches Fully Burdened Manufacturing Cost plus [***] percent ([***]%). Any
manufacturing and supply by Roche for InterMune will be conducted pursuant
to a manufacturing and supply agreement which will be negotiated by the
Parties in good faith and using Commercially Reasonable Efforts.(f)
    
    Roche shall provide InterMune with any technical data
incorporated in the Roche Know-How, including but not limited to, access to
the CMC section, to give effect to the provisions of this Section 12.3.3.
For a period of time to be agreed upon by the Parties up to [***], Roche
shall assist InterMune as reasonably requested in (i) causing the
assignment to InterMune of any and all applicable Third Party manufacturing
and supply agreements for all Licensed Compounds and Products, to the
extent possible, and/or (ii) transferring the manufacturing process for
such Licensed Compounds and Products to InterMune or a Third Party contract
manufacturer engaged by InterMune. Such assistance shall include assisting
InterMune in developing and executing a reasonable transfer and
transition plan and providing reasonable technical and regulatory assistance
and
 
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 documentation relating to the manufacture, testing and supply of such
Licensed Compounds and Products as necessary for InterMune to assume rights
under the applicable Third Party manufacturing and supply agreements assigned to
InterMune or, as applicable, for InterMune to be qualified or to qualify a Third
Party for the manufacturing of such Licensed Compounds and Products. Roche shall
also reasonably assist InterMune with the working up and use of the technology
and with the training of InterMunes personnel to the extent which may
reasonably be necessary in relation to the Development and Commercialization,
including the manufacture of such Licensed Compounds and Products by InterMune.
In this regard, Roche will receive InterMunes scientific and manufacturing
staff in its premises for certain reasonable periods, the term of which will be
agreed by the parties. In the case of a manufacturing transfer to InterMune or
a Third Party designated by InterMune, if despite using Commercially Reasonable
Efforts InterMune is not able to complete the qualification of an alternative
manufacturer within the agreed upon time period, then Roche shall continue to
reasonably assist InterMune for a period of time up to an addition [***] at the
FTE rate specified in Exhibit A.(g)
    
    Roches license grant to InterMune pursuant to Section
5.2.3 shall continue with respect to the Reverted Compounds and become
fully paid-up, irrevocable and perpetual licenses.(h)
    
    Roches license grant to InterMune pursuant to Section
5.2.4 shall continue with respect to such Passed Compounds and become fully
paid-up, irrevocable and perpetual licenses.
 12.4
    
    Termination for Cause or Upon Bankruptcy Event.
 12.4.1
    
    Termination for Cause. This Agreement may be terminated at any time during the
term of this Agreement upon written notice by either Party if the other Party is in
breach of its material obligations hereunder by causes and reasons within its
control and has not cured such breach within ninety (90) days after notice
requesting cure of the breach; provided, however, the notice shall describe the
alleged breach with sufficient particularity to allow the other Party to remedy or
otherwise respond; provided further, the ninety (90) day cure period shall be
tolled until such time as the existence of a material breach is determined pursuant
to Section 13.6.12.4.2
    
    Termination for Bankruptcy. This Agreement may be terminated at any time during
the term of this Agreement by either Party upon the filing or institution of
bankruptcy, reorganization, liquidation or receivership proceedings, or upon an
assignment of a substantial portion of the assets for the benefit of creditors by
the other Party; provided, however, that in the case
 
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 of any involuntary bankruptcy proceeding such right to terminate shall only become
effective if the Party consents to the involuntary bankruptcy or such proceeding is not
dismissed within ninety (90) days after the filing thereof.12.4.3
    
    Bankruptcy Effect Under Bankruptcy Code.If this Agreement is terminated by a
Party pursuant to Section 12.4.2 due to the rejection of this Agreement by or on
behalf of the other Party under Section 365 of the United States Bankruptcy Code
(the Code), all licenses and rights to licenses granted under or pursuant to this
Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n)
of the Code, licenses of rights to intellectual property as defined under Section
101(35A) of the Code. The Parties agree that a licensee of such rights under this
Agreement shall retain and may fully exercise all of its rights and elections under
the Code, and that upon commencement of a bankruptcy proceeding by or against a
Party under the Code, the other Party shall be entitled to a complete duplicate of
or complete access to (as the first Party deems appropriate), any such intellectual
property and all embodiments of such intellectual property. Such intellectual
property and all embodiments thereof shall be promptly delivered to the other Party
(i) upon any such commencement of a bankruptcy proceeding upon written request
therefore by such other Party, unless the first Party elects to continue to perform
all of its obligations under this Agreement or (ii) if not delivered under (i)
above, upon the rejection of this Agreement by or on behalf of the first Party upon
written request therefore by the other Party.12.4.4
    
    Consequences of Termination by InterMune. Upon InterMunes termination of the
Agreement pursuant to Sections 12.4.1 or 12.4.2, the following provisions shall
apply:
 (a)
    
    InterMunes license grants to Roche pursuant to Article
5 shall terminate as of the termination date with respect to all Licensed
Compounds and Products, and Roche shall cease all research, development,
commercialization or manufacture of such Licensed Compounds and Products,
except with respect to Roches fulfilling its obligations under subsections
(e) and (f) below.(b)
    
    Roche hereby grants to InterMune an irrevocable,
exclusive, fully paid-up, royalty-free, perpetual license under the Roche
Know-How and Roche Patent Rights and under Roches rights in the Joint
Know-How and Joint Patent Rights to develop, make, have made, use, import,
export, offer for sale and sell Licensed Compounds and Products in the
Territory.(c)
    
    For each Licensed Compound and Product, Roche: (a)
shall transfer to InterMune all rights to such Licensed Compound or Product
and the
related Development programs (including all rights to any IND or other
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 reference the relevant Drug Master File with respect to such Licensed
Compound or Product); and shall promptly provide to InterMune access to all
material clinical and preclinical data at no cost to InterMune (other than the
direct costs of assembling, reproducing and transmitting such data).(d)
    
    Roche shall within a reasonable amount of time after
termination return or cause to be returned to InterMune with respect to all
Licensed Compounds and Products, all reasonably available InterMune
Know-How, InterMune Patent Rights, Joint Patent Rights and Joint Know-How
in tangible form, as well as any other material provided by InterMune to
Roche in any medium; provided that Roche may retain: (a) a single archival
copy solely for the purpose of determining the extent of disclosure
hereunder and assuring compliance with the surviving provisions of this
Agreement; (b) any portion which is contained in laboratory notebooks
(subject to the continued confidentiality obligations of this Agreement);
and (c) any portion which Roche is required by applicable law to retain.
Notwithstanding the foregoing, with respect to Joint Know-How and Joint
Patent Rights, Roche shall have the right, as a joint owner thereof, to use
and to keep a copy of the Joint Know-How and Joint Patent Rights for any
purpose, subject to any continuing licenses to InterMune under this
Agreement.(e)
    
    To the extent Roche (or an Affiliate of Roche) is
manufacturing (on its own or through any Third Party contract manufacturer)
any Licensed Compounds or Products, Roche (or its Affiliate) shall
continue, for a period up to [***] ([***]) years, to manufacture (or have
manufactured) such Licensed Compounds and Products and shall supply such
Licensed Compounds and Products to InterMune in quantities sufficient to
satisfy InterMunes requirements under the manufacturing transfer and
transition plan (described in subsection (f) below) and for InterMune to
assume all Development and Commercialization activities which supply shall
be at Roches Fully Burdened Manufacturing Cost plus [***] percent
([***]%). Any manufacturing and supply by Roche for InterMune will be
conducted pursuant to a manufacturing and supply agreement which will be
negotiated by the Parties in good faith and using Commercially Reasonable
Efforts.(f)
    
    Roche shall provide InterMune with any technical data
incorporated in the Roche Know-How, including but not limited to, access to
the CMC section, to give effect to the provisions of this Sections 12.4.4.
For a period of time to be agreed upon by the Parties up to twenty-four
(24)
months, Roche shall assist InterMune as reasonably requested in (i) causing
the assignment to InterMune of any and all applicable Third
 
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 Party manufacturing and supply agreements for all Licensed Compounds and
Products, to the extent possible, and/or (ii) transferring the manufacturing
process for such Licensed Compounds and Products to InterMune or a Third Party
contract manufacturer engaged by InterMune. Such assistance shall include
assisting InterMune in developing and executing a reasonable transfer and
transition plan and providing reasonable technical and regulatory assistance and
documentation relating to the manufacture, testing and supply of such Licensed
Compounds and Products as necessary for InterMune to assume rights under the
applicable Third Party manufacturing and supply agreements assigned to InterMune
or, as applicable, for InterMune to be qualified or to qualify a Third Party for
the manufacturing of such Licensed Compounds and Products. Roche shall also
reasonably assist InterMune with the working up and use of the technology and
with the training of InterMunes personnel to the extent which may reasonably be
necessary in relation to the Development and Commercialization, including the
manufacture of such Licensed Compounds and Products by InterMune. In this
regard, Roche will receive InterMunes scientific and manufacturing staff in its
premises for certain reasonable periods, the term of which will be agreed by the
parties. In the case of a manufacturing transfer to InterMune or a Third Party
designated by InterMune, if despite using Commercially Reasonable Efforts
InterMune is not able to complete the qualification of an alternative
manufacturer within the agreed upon time period, then Roche shall continue to
reasonably assist InterMune for a period of time up to an addition six (6) month
period at the FTE rate specified in Exhibit A.(g)
    
    Roches license grant to InterMune pursuant to Section
5.2.3 shall continue with respect to the Reverted Compounds and become
fully paid-up, irrevocable and perpetual licenses.(h)
    
    Roches license grant to InterMune pursuant to Section
5.2.4 shall continue with respect to such Passed Compounds and become fully
paid-up, irrevocable and perpetual licenses.
 12.4.5
    
    Consequences of Termination by Roche. Upon Roches termination of the Agreement
pursuant to Sections 12.4.1 or 12.4.2, the following provisions shall apply:
 (a)
    
    Roches license grants to InterMune pursuant to Article
5 shall terminate as of the termination date, subject to Section 12.4.5(b)
and Section 12.4.5(c).(b)
    
    If, on the date that Roche provides InterMune with
written notice of a material breach, InterMune has acquired rights and
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 Reverted Compounds pursuant to the terms and conditions of this Agreement,
Roches license grant to InterMune pursuant to Section 5.2.3, shall continue
with respect to the Reverted Compounds and become fully paid-up, irrevocable and
perpetual licenses.(c)
    
    If, on the date that Roche provides InterMune with
written notice of a material breach, InterMune is developing Passed
Compounds, Roches license grant to InterMune pursuant to Section 5.2.4
shall continue with respect to such Passed Compounds and become fully
paid-up, irrevocable and perpetual licenses.(d)
    
    InterMunes license grants to Roche pursuant to Article
5 shall become irrevocable, perpetual licenses (and the financial
provisions of Sections 8.2 through 8.8 shall continue).(e)
    
    InterMune shall within a reasonable amount of time
after such termination return or cause to be returned to Roche all
reasonably available Roche Know-How, Roche Patent Rights, Joint Patent
Rights and Joint Know-How in tangible form, as well as any other material
provided by Roche to InterMune in any medium; provided that InterMune may
retain: (a) a single archival copy solely for the purpose of determining
the extent of disclosure hereunder and assuring compliance with the
surviving provisions of this Agreement; (b) any portion which is contained
in laboratory notebooks (subject to the continued confidentiality
obligations of this Agreement); and (c) any portion which InterMune is
required by applicable law to retain. Notwithstanding the foregoing, with
respect to Joint Know-How and Joint Patent Rights, InterMune shall have the
right, as a joint owner thereof, to use and to keep a copy of the Joint
Know-How and Joint Patent Rights for any purpose, subject to any continuing
licenses to Roche under this Agreement.(f)
    
    [***] shall have rights to prosecute continuing patent
applications as set forth in Section [***].
 12.5
    
    Consequences of InterMunes Termination Pursuant to Section 6.2.3 or Section 6.2.4.
 12.5.1
    
    InterMunes license grants to Roche pursuant to Article 5 shall terminate as of
the termination date with respect to all Licensed Compounds and Products, and Roche
shall cease all research, development, commercialization or manufacture of such
Licensed Compounds and Products, except with respect to Roches fulfilling its
obligations under Sections 12.5.5 and 12.5.6 below.12.5.2
    
    Roche hereby grants to InterMune an irrevocable, exclusive, fully paid-up,
royalty-free, perpetual license under the Roche Know-How and Roche Patent
 
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 Rights and under Roches rights in the Joint Know-How and Joint Patent Rights to
develop, make, have made, use, import, export, offer for sale and sell Licensed
Compounds and Products in the Territory.12.5.3
    
    For each Licensed Compound and Product, Roche: (a) shall transfer to InterMune
all rights to such Licensed Compound or Product and the related Development
programs (including all rights to any IND or other filing related to the Marketing
Authorization and the right to reference the relevant Drug Master File with respect
to such Licensed Compound or Product); and shall promptly provide to InterMune
access to all material clinical and preclinical data at no cost to InterMune (other
than the direct costs of assembling, reproducing and transmitting such data).12.5.4
    
    Roche shall within a reasonable amount of time after termination return or cause
to be returned to InterMune with respect to all Licensed Compounds and Products,
all reasonably available InterMune Know-How, InterMune Patent Rights, Joint Patent
Rights and Joint Know-How in tangible form, as well as any other material provided
by InterMune to Roche in any medium; provided that Roche may retain: (a) a single
archival copy solely for the purpose of determining the extent of disclosure
hereunder and assuring compliance with the surviving provisions of this Agreement;
(b) any portion which is contained in laboratory notebooks (subject to the
continued confidentiality obligations of this Agreement); and (c) any portion which
Roche is required by applicable law to retain. Notwithstanding the foregoing, with
respect to Joint Know-How and Joint Patent Rights, Roche shall have the right, as a
joint owner thereof, to use and to keep a copy of the Joint Know-How and Joint
Patent Rights for any purpose, subject to any continuing licenses to InterMune
under this Agreement.12.5.5
    
    To the extent Roche (or an Affiliate of Roche) is manufacturing (on its own or
through any Third Party contract manufacturer) any Licensed Compounds or Products,
Roche (or its Affiliate) shall continue, for a period up to [***] ([***]) years, to
manufacture (or have manufactured) such Licensed Compounds and Products and shall
supply such Licensed Compounds and Products to InterMune in quantities sufficient
to satisfy InterMunes requirements under the manufacturing transfer and transition
plan (described in Section 12.5.6 below) and for InterMune to assume all
Development and Commercialization activities which supply shall be at Roches Fully
Burdened Manufacturing Cost plus [***]percent[***]. Any manufacturing and supply
by Roche for InterMune will be conducted pursuant to a manufacturing and supply
agreement which will be negotiated by the Parties in good faith and using
Commercially Reasonable Efforts.
 12.5.6
    
    Roche shall provide InterMune with any technical data incorporated in the Roche
Know-How, including but not limited to, access to the CMC section, to give effect
to the provisions of this Sections 12.5. For a period of time to be
 
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 agreed upon by
the Parties up to twenty-four (24) months, Roche shall assist InterMune as
reasonably requested in (i) causing the assignment to InterMune of any and all
applicable Third Party manufacturing and supply agreements for all Licensed
Compounds and Products, to the extent possible, and/or (ii) transferring the
manufacturing process for such Licensed Compounds and Products to InterMune or a
Third Party contract manufacturer engaged by InterMune. Such assistance shall
include assisting InterMune in developing and executing a reasonable transfer and
transition plan and providing reasonable technical and regulatory assistance and
documentation relating to the manufacture, testing and supply of such Licensed
Compounds and Products as necessary for InterMune to assume rights under the
applicable Third Party manufacturing and supply agreements assigned to InterMune
or, as applicable, for InterMune to be qualified or to qualify a Third Party for
the manufacturing of such Licensed Compounds and Products. Roche shall also
reasonably assist InterMune with the working up and use of the technology and with
the training of InterMunes personnel to the extent which may reasonably be
necessary in relation to the Development and Commercialization, including the
manufacture of such Licensed Compounds and Products by InterMune. In this regard,
Roche will receive InterMunes scientific and manufacturing staff in its premises
for certain reasonable periods, the term of which will be agreed by the parties.
In the case of a manufacturing transfer to InterMune or a Third Party designated by
InterMune, if despite using Commercially Reasonable Efforts InterMune is not able
to complete the qualification of an alternative manufacturer within the agreed upon
time period, then Roche shall continue to reasonably assist InterMune for a period
of time up to an addition [*** month period at the FTE rate specified in
Exhibit A.12.5.7
    
    Roches license grant to InterMune pursuant to Section 5.2.3 shall continue with
respect to the Reverted Compounds and become fully paid-up, irrevocable and
perpetual licenses.12.5.8
    
    Roches license grant to InterMune pursuant to Section 5.2.4 shall continue with
respect to such Passed Compounds and become fully paid-up, irrevocable and
perpetual licenses.
 12.6
    
    Effect of Expiration or Termination; Survival.Expiration or termination of this Agreement
shall not relieve the Parties of any obligation accruing prior to such expiration or
termination. Roche will pay its share of costs and expenses (but not Event Payments) planned
prior to the termination notice but incurred or accrued before or during the notice period and
not reasonably cancelable thereafter. Any expiration or termination of this Agreement shall be
without prejudice to the rights of either Party against the other accrued or accruing under
this Agreement prior to expiration or termination, including
the obligation to pay royalties for Product(s) or Licensed Compound sold prior to such
expiration or termination. The provisions of Article 7 shall survive the expiration or
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  ARTICLE 13  MISCELLANEOUS
 13.1
    
    Force Majeure.Neither Party shall be held liable to the other Party nor be deemed to have
defaulted under or breached this Agreement for failure or delay in performing any obligation
under this Agreement to the extent such failure or delay is caused by or results from causes
beyond the reasonable control of the affected Party, including embargoes, war, acts of war
(whether war be declared or not), acts of terrorism, insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, fire, floods, or other acts of God, or acts,
omissions or delays in acting by any governmental authority or the other Party. The affected
Party shall notify the other Party of such force majeure circumstances as soon as reasonably
practical, and shall promptly undertake all reasonable efforts necessary to cure such force
majeure circumstances.
 Assignment/Change of Control.
 13.2.1
    
    Assignment.Subject to Section 13.2.2, each Party without the consent of the
other Party, may assign this Agreement and any or all of its rights and obligations
hereunder (i) to an Affiliate, or (ii) to an entity that merges with or acquires a
controlling interest in such Party in connection with a Change of Control. Any
permitted assignee shall assume all assigned obligations of its assignor under this
Agreement. The assigning Party shall promptly notify the other Party of any such
Change of Control and any such assignment and shall use all reasonable efforts to
provide such notification at least twenty (20) days before the completion of the
Change of Control and before the assignment. Except as specifically provided in
this Section 13.2.1, this Agreement may not be assigned or otherwise transferred,
nor may any right or obligation hereunder be assigned or transferred, by either
Party without the consent of the other Party. Any attempted assignment not in
accordance with this Section 13.2.1 shall be void.13.2.2
    
    InterMune Change of Control.In the event InterMune undergoes a Competing Pharma
Change of Control during the term of this Agreement, InterMune (or the surviving
entity of the Change of Control transaction, as applicable) shall have a period of
[***] ([***]) days following the closing of such Competing Pharma Change of Control
transaction, at its discretion, to [***] or [***] its [***] to the research or
development program in the [***] or its commercial rights to a [***] with [***] in
the [***], as applicable. In the event InterMune (or the surviving entity of the
Change of Control transaction, as applicable) chooses not to [***] or [***] such
[***], upon the expiration of the aforementioned [***]([***]) day period, Roche
shall have the right, at any
time, and at its sole discretion, to elect in writing some or all of the
following, provided such election is made within [***] ([***]) days after the
expiration of the [***]([***]) day [***] period:
 
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 (a)
    
    Article 3 (providing for the participation of [***] in
decision-making through the Committees) shall be of no further force and
effect.(b)
    
    upon sixty (60) days prior written notice, [***] may
terminate [***] if [***] has previously elected such arrangement pursuant
to [***]; or, if [***] has not previously exercised such [***], then the
[***] shall thereafter be of no further force and effect.(c)
    
    upon sixty (60) days prior written notice, [***] may
terminate any [***] efforts by [***] FTEs; provided, however, for purposes
of clarity, [***] shall not be deemed to have exercised an [***] with
respect to any Product or Licensed Compound and [***] shall continue to
receive the same [***], milestones and royalties as if [***] is continuing
with such [***].(d)
    
    Roche shall have the right to require InterMune,
including the Change of Control party, to adopt reasonable procedures to be
agreed upon in writing with Roche to control the dissemination of all
Confidential Information of Roche and other confidential or proprietary
information with respect to the development and commercialization of
Licensed Compounds and Products (collectively Sensitive Information")
after such Change of Control. The purposes of such procedures shall be to
strictly limit such disclosures to only those personnel having a
need-to-know Sensitive Information in order for InterMune to perform its
obligations under this Agreement and to prohibit the use of Sensitive
Information in the Field for competitive reasons against Roche and its
Affiliates, including the use of Sensitive Information for the development
or commercialization of competing products in the Field.(e)
    
    [***] will have the right to prosecute continuing
applications as set forth in Section [***].(f)
    
    In the event that the Change of Control party is
engaged in the discovery research and/or pre-clinical development of a More
Advanced Competing Product, then the [***] shall be deemed terminated. In
the event that the Change of Control party is engaged in the clinical
development or commercialization of a More Advanced Competing Product, then
the [***] shall be deemed terminated.
 Competing Pharma Change of Control
 13.3
    
    Severability.If any one or more of the provisions contained in this Agreement is held
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of
 
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 the remaining provisions contained herein shall not in any way be affected or impaired
thereby, unless the absence of the invalidated provision(s) adversely affects the substantive
rights of the Parties. The Parties shall in such an instance use their best efforts to
replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable
provision(s) which, insofar as practical, implement the purposes of this Agreement.13.4
    
    Notices.All notices which are required or permitted hereunder shall be in writing and
sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal
delivery or overnight courier) or sent by nationally-recognized overnight courier, addressed
as follows:
 if to InterMune, to:
    
    InterMune, Inc.3280 Bayshore Blvd.Brisbane, CA 94005Attention: [***]and:
    
    Attention: [***]and:
    
    Latham & Watkins LLP12636 High Bluff Drive, Suite 400San Diego, CA 92130Attention: [***]if to Roche, to:
    
    Hoffmann-La Roche Inc.340 Kingsland StreetNutley, NJ 07110Attention: [***]And
    
    F.Hoffmann-La Roche Ltd.Grenzacherstrasse 124CH-4070Basel, SwitzerlandAttention: [***]
  
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 next business day);
or (b) on the business day after dispatch if sent by nationally-recognized overnight
courier.13.5
    
    Applicable Law.This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware and the patent laws of the United States without reference to
any rules of conflict of laws.13.6
    
    Dispute Resolution.
 13.6.1
    
    With respect to any dispute, controversy or claim arising from or related to this
Agreement or the breach thereof (Dispute"), such Dispute shall first be referred
to an Executive from each Party for attempted resolution by good faith
negotiations. Any such Dispute shall be submitted to such senior executives no
later than thirty (30) days following such request by either Party. Such
Executives shall attempt in good faith to resolve any such Dispute within thirty
(30) days after submission of the Dispute. In the event the Executives are unable
to resolve the Dispute, the Parties shall otherwise negotiate in good faith and use
reasonable efforts to settle. If the Parties do not fully settle, and a Party
wishes to pursue the matter, each such Dispute that is not an Excluded Claim shall
be finally resolved by binding arbitration in accordance with the Commercial
Arbitration Rules and Supplementary Procedures for Large Complex Disputes of the
American Arbitration Association (AAA), and judgment on the arbitration award may
be entered in any court having jurisdiction thereof.13.6.2
    
    The arbitration shall be conducted by a panel of three persons experienced in the
pharmaceutical business: within thirty (30) days after initiation of arbitration,
each Party shall select one person to act as arbitrator and the two Party-selected
arbitrators shall select a third arbitrator within thirty (30) days of their
appointment. If the arbitrators selected by the Parties are unable or fail to
agree upon the third arbitrator, the third arbitrator shall be appointed by the
AAA. The place of arbitration shall be San Francisco, California if Dispute is
submitted by Roche and New Jersey if Dispute is submitted by InterMune, and all
proceedings and communications shall be in English.13.6.3
    
    Either Party may apply to the arbitrators for interim injunctive relief until the
arbitration award is rendered or the controversy is otherwise resolved. Either
Party also may, without waiving any remedy under this Agreement, seek from any
court having jurisdiction any injunctive or provisional relief necessary to protect
the rights or property of that Party pending the arbitration award. The
arbitrators shall have no authority to award punitive or any other type of damages
not measured by a Partys compensatory damages. Each Party shall bear its own
costs and expenses and attorneys fees and an equal share of the arbitrators fees
and any administrative fees of arbitration.
 
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 13.6.4
    
    Except to the extent necessary to confirm an award or as may be required by law,
neither a Party nor an arbitrator may disclose the existence, content, or results
of an arbitration without the prior written consent of both Parties. In no event
shall an arbitration be initiated after the date when commencement of a legal or
equitable proceeding based on the dispute, controversy or claim would be barred by
the applicable Delaware statute of limitations.13.6.5
    
    As used in this Section, the term Excluded Claim shall mean a Dispute that
concerns (a) the validity or infringement of a patent, trademark or copyright; or
(b) any antitrust, anti-monopoly or competition law or regulation, whether or not
statutory.
 13.7
    
    Entire Agreement; Amendments.This Agreement, together with the Schedules and Exhibits
hereto, contains the entire understanding of the Parties with respect to the subject matter
hereof and supersedes and cancels all previous express or implied agreements and
understandings, negotiations, writings and commitments, either oral or written, in respect to
the subject matter hereof. The Schedules and Exhibits to this Agreement are incorporated
herein by reference and shall be deemed a part of this Agreement. This Agreement may be
amended, or any term hereof modified, only by a written instrument duly executed by authorized
representatives of both Parties hereto.
 13.8
    
    Headings.The captions to the several Articles, Sections and subsections hereof are not a
part of this Agreement, but are merely for convenience to assist in locating and reading the
several Articles and Sections hereof.
 13.9
    
    Independent Contractors.It is expressly agreed that the Parties (including all entities and
persons working on its behalf, including subcontractors), shall be independent contractors and
that the relationship between InterMune and Roche shall not constitute a partnership, joint
venture or agency. Neither Party shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall be binding on
the other Party, without the prior written consent of such Party.
 13.10
    
    Waiver.The waiver by either Party hereto of any right hereunder, or of any failure of the
other Party to perform, or of any breach by the other Party, shall not be deemed a waiver of
any other right hereunder or of any other breach by or failure of such other Party whether of
a similar nature or otherwise.
 13.11
    
    Cumulative Remedies.No remedy referred to in this Agreement is intended to be exclusive,
but each shall be cumulative and in addition to any other remedy referred to in this Agreement
or otherwise available under law.
 13.12
    
    Waiver of Rule of Construction.Each Party has had the opportunity to consult with counsel
in connection with the review, drafting and negotiation of this Agreement. Accordingly, the
rule of construction that any ambiguity in this Agreement shall be construed against the
drafting Party shall not apply.
 
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 13.13
    
    Business Day Requirements.In the event that any notice or other action or omission is
required to be taken by a Party under this Agreement on a day that is not a business day then
such notice or other action or omission shall be deemed required to be taken on the next
occurring business day.
 13.14
    
    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.
 [Signature Page Follows]
 
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 IN WITNESS WHEREOF
 HOFFMANN-LA ROCHE INC.
    
    
    
    INTERMUNE, INC.BY:
    
    /s/ FREDERICK C. KENTZ, III
    
    
    
    BY:
    
    /s/ DANIEL G. WELCHNAME:
    
    Frederick C. Kentz, III
    
    
    
    NAME:
    
    Daniel G. WelchTITLE:
    
    Vice President
    
    
    
    TITLE:
    
    President and Chief Executive OfficerF.HOFFMANN-LA ROCHE LTDBY:
    
    /s/ DR. PETER HUGNAME:
    
    Peter HugTITLE:
    
    Executive Vice President, Pharma PartneringBY:
    
    /s/ STEFAN ARNOLDNAME:
    
    Stefan ArnoldTITLE:
    
    Str. Director
 
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 SCHEDULE 1.80
 
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 SCHEDULE 1.92
 LEAD COMPOUND REQUIREMENTS
 
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 SCHEDULE 2.1
  
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 EXHIBIT A
FINANCIAL APPENDIX
 
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 EXHIBIT B
 Third Party License Agreements
 
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 EXHIBIT C
 [See Attached Initial Press Releases]
 
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