Document:

<PAGE>
                                                                    EXHIBIT 10.6

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                            ADMINISTRATION AGREEMENT

                                      among

                        WFS FINANCIAL 2003-  OWNER TRUST,
                                   as Issuer,

                               WFS FINANCIAL INC,
                                as Administrator,

                         WFS RECEIVABLES CORPORATION 3,
                                   as Seller,

                                       and

                              as Indenture Trustee

                          Dated as of          ,  200

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                              Page
                                                                              ----
<S>                                                                           <C>
Section 1.  Duties of the Administrator....................................      1

Section 2.  Records........................................................      7

Section 3.  Compensation...................................................      8

Section 4.  Additional Information to be Furnished to the Issuer...........      8

Section 5.  Independence of the Administrator..............................      8

Section 6.  No Joint Venture...............................................      8

Section 7.  Other Activities of Administrator..............................      8

Section 8.  Term of Agreement; Resignation and Removal of Administrator....      8

Section 9.  Action upon Termination, Resignation or Removal................      9

Section 10.  Notices.......................................................     10

Section 11.  Amendments....................................................     10

Section 12.  Successors and Assigns........................................     11

Section 13.  Governing Law.................................................     11

Section 14.  Headings......................................................     11

Section 15.  Counterparts..................................................     11

Section 16.  Severability..................................................     11

Section 17.  Not Applicable to WFS in Other Capacities.....................     11

Section 18.  Limitation of Liability of Owner Trustee and Indenture Trustee     11

Section 19.  Third-Party Beneficiary.......................................     12

Section 20.  Capitalized Terms.............................................     12

Exhibit A  [FORM OF POWER OF ATTORNEY].....................................    A-1
</TABLE>

                                       i
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      This ADMINISTRATION AGREEMENT, dated as of           , 200  (the
"Agreement"), is among WFS FINANCIAL 2003-  OWNER TRUST (the "Issuer"), WFS
FINANCIAL INC ("WFS" or, in its capacity as administrator, the "Administrator"),
WFS RECEIVABLES CORPORATION 3, as seller (the "Seller"), and
                , not in its individual capacity but solely as indenture trustee
(the "Indenture Trustee").

                              W I T N E S S E T H :

      WHEREAS, the Issuer is issuing     % Class A-1 Notes,     % Class A-2
Notes,     % Class A-3 Notes,     % Class A-4 Notes,     % Class B Notes,     %
Class C Notes and     % Class D Notes (collectively, the "Notes"), pursuant to
the indenture, dated as of the date hereof (the "Indenture"), between the Issuer
and the Indenture Trustee;

      WHEREAS, the Issuer has entered into certain agreements in connection with
the issuance of the Notes and of certain beneficial ownership interests of the
Issuer, including (i) the Indenture, (ii) a sale and servicing agreement, dated
as of the date hereof (the "Sale and Servicing Agreement"), among the Issuer,
the Seller and WFS, as master servicer (in such capacity, the "Master Servicer")
and (iii) a Letter of Representations, dated            , 200  (the "Depository
Agreement" and, together with the Basic Documents, the "Related Agreements"),
among the Issuer, the Indenture Trustee and The Depository Trust Company ("DTC")
relating to the Notes;

      WHEREAS, pursuant to the Related Agreements, the Issuer and Chase
Manhattan Bank USA, National Association, as owner trustee (the "Owner
Trustee"), are required to perform certain duties in connection with (i) the
Notes and the collateral therefor pledged pursuant to the Indenture and (ii) the
beneficial ownership interests in the Issuer;

      WHEREAS, the Issuer and the Owner Trustee desire to have the Administrator
perform certain of the duties of the Issuer and the Owner Trustee referred to in
the preceding clause and to provide such additional services consistent with the
terms of this Agreement and the Related Agreements as the Issuer and the Owner
Trustee may from time to time request; and

      WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Owner Trustee on the terms set forth herein.

      NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

      Section 1. Duties of the Administrator.

      (a) Duties with Respect to the Depository Agreement and the Indenture.

            (i) The Administrator agrees to perform all its duties as
      Administrator and the duties of the Issuer and the Owner Trustee under the
      Depository Agreement. In addition, the Administrator shall consult with
      the Owner Trustee regarding the duties of the Issuer
<PAGE>

      or the Owner Trustee under the Indenture and the Depository Agreement. The
      Administrator shall monitor the performance of the Issuer and shall advise
      the Owner Trustee when action is necessary to comply with the respective
      duties of the Issuer and the Owner Trustee under the Indenture and the
      Depository Agreement. The Administrator shall prepare for execution by the
      Issuer, or shall cause the preparation by other appropriate persons, of
      all such documents, reports, filings, instruments, certificates and
      opinions that it shall be the duty of the Issuer or the Owner Trustee to
      prepare, file or deliver pursuant to the Indenture and the Depository
      Agreement. In furtherance of the foregoing, the Administrator shall take
      (or, in the case of the immediately preceding sentence, cause to be taken)
      all appropriate action that the Issuer or the Owner Trustee is required to
      take pursuant to the Indenture including, without limitation, such of the
      foregoing as are required with respect to the following matters under the
      Indenture (references are to Sections of the Indenture):

                  (A) the preparation of or obtaining of the documents and
            instruments required for execution and authentication of the Notes
            and delivery of the same to the Indenture Trustee (Section 2.02);

                  (B) the duty to cause the Note Register to be kept and to give
            the Indenture Trustee notice of any appointment of a new Note
            Registrar and the location, or change in location, of the Note
            Register (Section 2.04);

                  (C) the notification of Noteholders and the Rating Agencies of
            the final principal payment on the Notes (Section 2.07(b));

                  (D) the fixing or causing to be fixed of any special record
            date and the notification of the Indenture Trustee and Noteholders
            with respect to special payment dates, if any (Section 2.07(d));

                  (E) the preparation of Definitive Notes in accordance with the
            instructions of the Clearing Agency (Section 2.11);

                  (F) the preparation, obtaining or filing of the instruments,
            opinions and certificates and other documents required for the
            release of Collateral (Section 2.12);

                  (G) the maintenance of an office in the Borough of Manhattan,
            The City of New York, for registration of transfer or exchange of
            Notes (Section 3.02);

                  (H) the duty to cause newly appointed Paying Agents, if any,
            to deliver to the Indenture Trustee the instrument specified in the
            Indenture regarding funds held in trust (Section 3.03);

                  (I) the direction to the Indenture Trustee to deposit monies
            with Paying Agents, if any, other than the Indenture Trustee
            (Section 3.03);

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                  (J) the obtaining and preservation of the Issuer's
            qualification to do business in each jurisdiction in which such
            qualification is or shall be necessary to protect the validity and
            enforceability of the Indenture, the Notes, the Collateral and each
            other instrument and agreement included in the Trust Estate (Section
            3.04);

                  (K) the preparation of all supplements and amendments to the
            Indenture and all financing statements, continuation statements,
            instruments of further assurance and other instruments and the
            taking of such other action as is necessary or advisable to protect
            the Trust Estate (Section 3.05);

                  (L) the delivery of the Opinion of Counsel on the Closing Date
            and the annual delivery of Opinions of Counsel as to the Trust
            Estate, and the annual delivery of the Officer's Certificate and
            certain other statements as to compliance with the Indenture
            (Sections 3.06 and 3.09);

                  (M) the identification to the Indenture Trustee in an
            Officer's Certificate of a Person with whom the Issuer has
            contracted to perform its duties under the Indenture (Section
            3.07(b));

                  (N) the notification of the Indenture Trustee and each Rating
            Agency of a Servicer Default under the Sale and Servicing Agreement
            and, if such Servicer Default arises from the failure of the Master
            Servicer to perform any of its duties or obligations under the Sale
            and Servicing Agreement with respect to the Contracts, the taking of
            all reasonable steps available to remedy such failure (Section
            3.07(d));

                  (O) the duty to cause the Master Servicer to comply with the
            Sale and Servicing Agreement, including Section 5.07 and Articles
            Four and Seven thereof (Section 3.14);

                  (P) the preparation and obtaining of documents and instruments
            required for the release of the Issuer from its obligations under
            the Indenture (Section 3.10(b));

                  (Q) the delivery of written notice to the Indenture Trustee
            and each Rating Agency of each Event of Default under the Indenture
            and each default by the Master Servicer or the Seller under the Sale
            and Servicing Agreement (Section 3.18);

                  (R) the monitoring of the Issuer's obligations as to the
            satisfaction and discharge of the Indenture and the preparation of
            an Officer's Certificate and the obtaining of the Opinion of Counsel
            and the Independent Certificate relating thereto (Section 4.01);

                  (S) the compliance with any written directive of the Indenture
            Trustee with respect to the sale of the Trust Estate in a
            commercially reasonable manner if an Event of Default shall have
            occurred and be continuing (Section 5.04);

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                  (T) the notification of the Rating Agencies of any waiver of a
            Default or an Event of Default (Section 5.13);

                  (U) the preparation and delivery of notice to Noteholders of
            the removal of the Indenture Trustee and the appointment of a
            successor Indenture Trustee (Section 6.08);

                  (V) the preparation of any written instruments required to
            confirm more fully the authority of any co-trustee or separate
            trustee and any written instruments necessary in connection with the
            resignation or removal of the Indenture Trustee or any co-trustee or
            separate trustee (Sections 6.08 and 6.10);

                  (W) maintaining the effectiveness of the sales finance company
            licenses required under the Maryland Code and the licenses required
            under the Pennsylvania Motor Vehicle Sales Finance Act (Section
            6.14);

                  (X) the furnishing of the Indenture Trustee with the names and
            addresses of Noteholders during any period when the Indenture
            Trustee is not the Note Registrar (Section 7.01);

                  (Y) the preparation and, after execution by the Issuer, the
            filing with the Commission, any applicable state agencies and the
            Indenture Trustee of documents required to be filed on a periodic
            basis with, and summaries thereof as may be required by rules and
            regulations prescribed by, the Commission and any applicable state
            agencies and the transmission of such summaries, as necessary, to
            the Noteholders (Section 7.03);

                  (Z) the opening of one or more accounts in the Issuer's name,
            the preparation and delivery of Issuer Orders, Officer's
            Certificates and Opinions of Counsel and all other actions necessary
            with respect to investment and reinvestment of funds in the Trust
            Accounts (Sections 8.02 and 8.03);

                  (AA) the preparation of an Issuer Request and Officer's
            Certificate and the obtaining of an Opinion of Counsel and
            Independent Certificates, if necessary, for the release of the Trust
            Estate (Sections 8.04 and 8.05);

                  (BB) the preparation of Issuer Orders and the obtaining of
            Opinions of Counsel with respect to the execution of supplemental
            indentures and the mailing to the Noteholders of notices with
            respect to such supplemental indentures (Sections 9.01, 9.02 and
            9.03);

                  (CC) the execution, authentication and delivery of new Notes
            conforming to any supplemental indenture (Section 9.06);

                  (DD) the duty to notify Noteholders and the Rating Agencies of
            redemption of the Notes or to cause the Indenture Trustee to provide
            such notification (Section 10.02);

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                  (EE) the preparation and delivery of all Officer's
            Certificates, Opinions of Counsel and Independent Certificates with
            respect to any requests by the Issuer to the Indenture Trustee to
            take any action under the Indenture (Section 11.01(a));

                  (FF) the preparation and delivery of Officer's Certificates
            and the obtaining of Independent Certificates, if necessary, for the
            release of property from the lien of the Indenture (Section
            11.01(b));

                  (GG) the notification of the Rating Agencies, upon the failure
            of the Issuer, the Owner Trustee or the Indenture Trustee to give
            such notification, of the information required pursuant to Section
            11.04 of the Indenture (Section 11.04);

                  (HH) the preparation and delivery to Noteholders and the
            Indenture Trustee of any agreements with respect to alternate
            payment and notice provisions (Section 11.06); and

                  (II) the recording of the Indenture, if applicable (Section
            11.15).

            (ii) The Administrator will:

                  (A) pay the Indenture Trustee from time to time reasonable
            compensation for all services rendered by the Indenture Trustee
            under the Indenture (which compensation shall not be limited by any
            provision of law in regard to the compensation of a trustee of an
            express trust);

                  (B) except as otherwise expressly provided in the Indenture,
            reimburse the Indenture Trustee upon its request for all reasonable
            expenses, disbursements and advances incurred or made by the
            Indenture Trustee in accordance with any provision of the Indenture
            (including the reasonable compensation, expenses and disbursements
            of its agents and counsel), except any such expense, disbursement or
            advance as may be attributable to its negligence or bad faith;

                  (C) indemnify the Indenture Trustee and its agents for, and
            hold them harmless against, any loss, liability or expense incurred
            without negligence or bad faith on their part, arising out of or in
            connection with the acceptance or administration of the transactions
            contemplated by the Indenture, including the reasonable costs and
            expenses of defending themselves against any claim or liability in
            connection with the exercise or performance of any of their powers
            or duties under the Indenture; and

                  (D) indemnify the Owner Trustee and its agents for, and hold
            them harmless against, any loss, liability or expense incurred
            without negligence or bad faith on their part, arising out of or in
            connection with the acceptance or administration of the transactions
            contemplated by the Trust Agreement, including the reasonable costs
            and expenses of defending themselves against any claim or liability
            in connection with the exercise or performance of any of their
            powers or duties under the Trust Agreement.

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      (b) Additional Duties.

            (i) In addition to the duties set forth in Section 1(a)(i), the
      Administrator shall perform such calculations and shall prepare or cause
      to be prepared by other appropriate persons, and shall execute on behalf
      of the Issuer or the Owner Trustee, all such documents, reports, filings,
      instruments, certificates and opinions that the Issuer or the Owner
      Trustee are required to prepare, file or deliver pursuant to the Related
      Agreements or Section 5.05 of the Trust Agreement, and at the request of
      the Owner Trustee shall take all appropriate action that the Issuer or the
      Owner Trustee are required to take pursuant to the Related Agreements. In
      furtherance thereof, the Owner Trustee shall, on behalf of itself and of
      the Issuer, execute and deliver to the Administrator and to each successor
      Administrator appointed pursuant to the terms hereof, one or more powers
      of attorney substantially in the form of Exhibit A hereto, appointing the
      Administrator the attorney-in-fact of the Owner Trustee and the Issuer for
      the purpose of executing on behalf of the Owner Trustee and the Issuer all
      such documents, reports, filings, instruments, certificates and opinions.
      Subject to Section 5, and in accordance with the directions of the Owner
      Trustee, the Administrator shall administer, perform or supervise the
      performance of such other activities in connection with the Collateral
      (including the Related Agreements) as are not covered by any of the
      foregoing provisions and as are expressly requested by the Owner Trustee
      and are reasonably within the capability of the Administrator.

            (ii) Notwithstanding anything in this Agreement or the Related
      Agreements to the contrary, the Administrator shall be responsible for
      promptly notifying the Owner Trustee in the event that any withholding tax
      is imposed on the Trust's payments (or allocations of income) to an Owner
      as contemplated in Section 5.02(c) of the Trust Agreement. Any such notice
      shall specify the amount of any withholding tax required to be withheld by
      the Owner Trustee pursuant to such provision.

            (iii) Notwithstanding anything in this Agreement or the Related
      Agreements to the contrary, the Administrator shall be responsible for
      performance of the duties of the Owner Trustee set forth in Section 5.05
      of the Trust Agreement with respect to, among other things, accounting and
      reports to Owners; provided, however, that the Owner Trustee shall retain
      responsibility for the distribution of any Schedule K-1s necessary to
      enable each Owner to prepare its federal and state income tax returns.

            (iv) The Administrator shall satisfy its obligations with respect to
      clauses (ii) and (iii) above by retaining, at the expense of the Trust
      payable by the Administrator, a firm of independent public accountants
      (the "Accountants") acceptable to the Owner Trustee, which shall perform
      the obligations of the Administrator thereunder. In connection with
      paragraph (ii) above, the Accountants will provide prior to December 31,
      200  , a letter in form and substance satisfactory to the Owner Trustee if
      any tax withholding is then required and the procedures to be followed
      with respect thereto to comply with the requirements of the Code. The
      Accountants shall be required to update the letter in each instance that
      any additional tax withholding is subsequently required or any previously
      required tax withholding shall no longer be required.

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<PAGE>

            (v) The Administrator shall perform the duties of the Administrator
      specified in Section 10.02 of the Trust Agreement required to be performed
      in connection with the resignation or removal of the Owner Trustee and any
      other duties expressly required to be performed by the Administrator under
      the Trust Agreement.

            (vi) In carrying out the foregoing duties or any of its other
      obligations under this Agreement, the Administrator may enter into
      transactions or otherwise deal with any of its Affiliates; provided,
      however, that the terms of any such transactions or dealings shall be in
      accordance with any directions received from the Issuer and shall be, in
      the Administrator's opinion, no less favorable to the Issuer than would be
      available from unaffiliated parties.

      (c) Non-Ministerial Matters.

            (i) With respect to matters that in the reasonable judgment of the
      Administrator are non-ministerial, the Administrator shall not take any
      action unless within a reasonable time before the taking of such action,
      the Administrator shall have notified the Owner Trustee of the proposed
      action and the Owner Trustee shall not have withheld consent or provided
      an alternative direction. For the purpose of the preceding sentence,
      "non-ministerial matters" shall include, without limitation:

                  (A) the amendment of or any supplement to the Indenture;

                  (B) the initiation of any claim or lawsuit by the Issuer and
            the compromise of any action, claim or lawsuit brought by or against
            the Issuer (other than in connection with the collection of the
            Contracts);

                  (C) the amendment, change or modification of the Related
            Agreements;

                  (D) the appointment of successor Note Registrars, successor
            Paying Agents and successor Indenture Trustees pursuant to the
            Indenture or the appointment of successor Administrators or a
            successor Master Servicer, or the consent to the assignment by any
            of the Note Registrar, the Paying Agent or the Indenture Trustee of
            its obligations under the Indenture; and

                  (E) the removal of the Indenture Trustee.

            (ii) Notwithstanding anything to the contrary in this Agreement, the
      Administrator shall not be obligated to, and shall not, (A) make any
      payments to the Noteholders under the Related Agreements, (B) sell the
      Trust Estate pursuant to clause (iv) of Section 5.04 of the Indenture, (C)
      take any other action that the Issuer directs the Administrator not to
      take on its behalf or (D) take any other action which may be construed as
      having the effect of varying the investment of the Holders.

      Section 2. Records. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be

                                       7
<PAGE>

accessible for inspection by the Issuer and the Company at any time during
normal business hours.

      Section 3. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to an annual
payment of compensation which shall be solely an obligation of the Company.

      Section 4. Additional Information to be Furnished to the Issuer. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.

      Section 5. Independence of the Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Administrator shall
have no authority to act for or represent the Issuer or the Owner Trustee in any
way and shall not otherwise be deemed an agent of the Issuer or the Owner
Trustee.

      Section 6. No Joint Venture. Nothing contained in this Agreement shall (i)
constitute the Administrator and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) be construed to impose
any liability as such on any of them or (iii) be deemed to confer on any of them
any express, implied or apparent authority to incur any obligation or liability
on behalf of the others.

      Section 7. Other Activities of Administrator. Nothing herein shall prevent
the Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other Person or entity even though such person or entity may engage in business
activities similar to those of the Issuer, the Owner Trustee or the Indenture
Trustee.

      Section 8. Term of Agreement; Resignation and Removal of Administrator.
This Agreement shall continue in force until the dissolution of the Issuer, upon
which event this Agreement shall automatically terminate.

      (a) Subject to Section 8(e), the Administrator may resign its duties
hereunder by providing the Issuer with at least 60 days' prior written notice.

      (b) Subject to Section 8(e), the Issuer may remove the Administrator
without cause by providing the Administrator with at least 60 days' prior
written notice.

      (c) Subject to Section 8(e), at the sole option of the Issuer, the
Administrator may be removed immediately upon written notice of termination from
the Issuer to the Administrator if any of the following events shall occur:

            (i) the Administrator shall default in the performance of any of its
      duties under this Agreement and, after notice of such default, shall not
      cure such default within

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<PAGE>

      ten days (or, if such default cannot be cured in such time, shall not give
      within ten days such assurance of cure as shall be reasonably satisfactory
      to the Issuer);

            (ii) a court having jurisdiction in the premises shall enter a
      decree or order for relief, and such decree or order shall not have been
      vacated within 60 days, in respect of the Administrator in any involuntary
      case under any applicable bankruptcy, insolvency or other similar law now
      or hereafter in effect or appoint a receiver, liquidator, assignee,
      custodian, trustee, sequestrator or similar official for the Administrator
      or any substantial part of its property or order the winding-up or
      liquidation of its affairs; or

            (iii) the Administrator shall commence a voluntary case under any
      applicable bankruptcy, insolvency or other similar law now or hereafter in
      effect, shall consent to the entry of an order for relief in an
      involuntary case under any such law, or shall consent to the appointment
      of a receiver, liquidator, assignee, trustee, custodian, sequestrator or
      similar official for the Administrator or any substantial part of its
      property, shall consent to the taking of possession by any such official
      of any substantial part of its property, shall make any general assignment
      for the benefit of creditors or shall fail generally to pay its debts as
      they become due.

      The Administrator agrees that if any of the events specified in clauses
(ii) or (iii) above shall occur, it shall give written notice thereof to the
Issuer and the Indenture Trustee within seven days after the occurrence of such
event.

      (d) No resignation or removal of the Administrator pursuant to this
Section shall be effective until (i) a successor Administrator shall have been
appointed by the Issuer and (ii) such successor Administrator shall have agreed
in writing to be bound by the terms of this Agreement in the same manner as the
Administrator is bound hereunder.

      (e) The appointment of any successor Administrator shall be effective only
after satisfaction of the Rating Agency Condition with respect to the proposed
appointment.

      (f) Subject to Sections 8(d) and 8(e), the Administrator acknowledges that
upon the appointment of a Successor Master Servicer pursuant to the Sale and
Servicing Agreement, the Administrator shall immediately resign and such
Successor Master Servicer shall automatically become the Administrator under
this Agreement; provided, however, that this subsection (f) shall not apply at
such times as the Indenture Trustee shall be the Successor Master Servicer.

      Section 9. Action upon Termination, Resignation or Removal. Promptly upon
the effective date of termination of this Agreement pursuant to the first
sentence of Section 8 or the resignation or removal of the Administrator
pursuant to Section 8(a), (b) or (c), respectively, the Administrator shall be
entitled to be paid all fees and reimbursable expenses accruing to it to the
date of such termination, resignation or removal. The Administrator shall
forthwith upon such termination pursuant to the first sentence of Section 8
deliver to the Issuer all property and documents of or relating to the
Collateral then in the custody of the Administrator. In the event of the
resignation or removal of the Administrator pursuant to Section 8(a), (b) or
(c), respectively, the Administrator shall cooperate with the Issuer and take
all reasonable steps requested to assist the Issuer in making an orderly
transfer of the duties of the Administrator.

                                       9
<PAGE>

      Section 10. Notices. Any notice, report or other communication given
hereunder shall be in writing and addressed as follows:

      (a) if to the Issuer or the Owner Trustee, to:

          WFS Financial 2003-  Owner Trust
          Chase Manhattan Bank USA, National Association
          c/o JP Morgan Chase
          500 Stanton Christiana Rd., OPS4 /3rd Floor
          Newark, Delaware  19713
          Attention:  Institutional Trust Services

      (b) if to the Administrator, to:

          WFS Financial Inc
          23 Pasteur
          Irvine, California  92618
          Attention:  Guy Du Bose, Esq.

      (c) if to the Indenture Trustee, to:

          Attention:

or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.

      Section 11. Amendments. This Agreement may be amended from time to time by
a written amendment duly executed and delivered by the parties hereto, with the
written consent of the Owner Trustee but without the consent of the Noteholders
and the Certificateholders, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders or Certificateholders;
provided that such amendment will not, in the Opinion of Counsel satisfactory to
the Indenture Trustee, materially and adversely affect the interest of any
Noteholder or Certificateholder. This Agreement may also be amended by the
parties hereto with the written consent of the Owner Trustee and the holders of
Notes evidencing at least a majority of the Outstanding Amount of the Notes and
the holders of Certificates evidencing at least a majority of the Certificate
Percentage for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of Noteholders or the Certificateholders; provided, however,
that no such amendment may (i) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, collections of payments on the Contracts
or distributions that are required to be made for the benefit of the Noteholders
or Certificateholders or (ii) reduce the aforesaid percentage of the holders of
Notes and Certificates which are required to consent to any such amendment,
without the consent of the holders of all outstanding Notes and Certificates.

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<PAGE>

Notwithstanding the foregoing, the Administrator may not amend this Agreement
without the permission of the Seller, which permission shall not be unreasonably
withheld.

      Section 12. Successors and Assigns. This Agreement may not be assigned by
the Administrator unless such assignment is previously consented to in writing
by the Issuer and the Owner Trustee and subject to the satisfaction of the
Rating Agency Condition in respect thereof. An assignment with such consent and
satisfaction, if accepted by the assignee, shall bind the assignee hereunder in
the same manner as the Administrator is bound hereunder. Notwithstanding the
foregoing, this Agreement may be assigned by the Administrator without the
consent of the Issuer or the Owner Trustee to a corporation or other
organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator; provided that such successor organization executes
and delivers to the Issuer, the Owner Trustee and the Indenture Trustee an
agreement, in form and substance reasonably satisfactory to the Owner Trustee
and the Indenture Trustee, in which such corporation or other organization
agrees to be bound hereunder by the terms of said assignment in the same manner
as the Administrator is bound hereunder. Subject to the foregoing, this
Agreement shall bind any successors or assigns of the parties hereto.

      Section 13. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS, EXCEPT THAT THE DUTIES OF THE INDENTURE TRUSTEE SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.

      Section 14. Headings. The section and subsection headings hereof have been
inserted for convenience of reference only and shall not be construed to affect
the meaning, construction or effect of this Agreement.

      Section 15. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same agreement.

      Section 16. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

      Section 17. Not Applicable to WFS in Other Capacities. Nothing in this
Agreement shall affect any obligation WFS may have in any other capacity.

      Section 18. Limitation of Liability of Owner Trustee and Indenture
Trustee.

      (a) Notwithstanding anything contained herein to the contrary, this
instrument has been countersigned by Chase Manhattan Bank USA, National
Association not in its individual capacity but solely in its capacity as Owner
Trustee of the Issuer and in no event shall Chase Manhattan Bank USA, National
Association in its individual capacity or any beneficial owner of the Issuer
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder, as to all of which recourse shall be
had solely to the assets of

                                       11
<PAGE>

the Issuer. For all purposes of this Agreement, in the performance of any duties
or obligations of the Issuer hereunder, the Owner Trustee shall be subject to,
and entitled to the benefits of, the terms and provisions of Articles Six, Seven
and Eight of the Trust Agreement.

      (b) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by                                      not in
its individual capacity but solely as Indenture Trustee and in no event shall
                                     have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer.

      (c) In no event shall the Indenture Trustee be liable for any indirect,
special, punitive or consequential loss or damage of any kind whatsoever,
including lost profits, even if the Indenture Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.

      (d) In no event shall the Indenture Trustee be liable for any failure or
delay in the performance of its obligations hereunder because of circumstances
beyond its control, including, but not limited to, acts of God, flood, war
(whether declared or undeclared), terrorism, fire, riot, embargo, government
action, including any laws, ordinances, regulations, governmental action or the
like which delay, restrict or prohibit the providing of the services
contemplated by this Agreement.

      Section 19. Third-Party Beneficiary. The Owner Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.

      Section 20. Capitalized Terms. Except as otherwise specified herein or as
the context may otherwise require, capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Indenture or
the Sale and Servicing Agreement, as the case may be.

                                       12
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.

                           WFS FINANCIAL 2003-1 OWNER TRUST

                           By:  CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
                                not in its individual capacity but solely as
                                Owner Trustee

                           By:  _______________________________________________
                                Name:
                                Title:

                           WFS FINANCIAL INC,
                                as Administrator

                           By:  _______________________________________________
                                Name:
                                Title:

                           WFS RECEIVABLES CORPORATION 3,
                                as Seller

                           By:  _______________________________________________
                                Name:
                                Title:

                                                               , not in its
                             individual capacity but solely as Indenture Trustee

                           By:  _______________________________________________
                                Name:
                                Title:

                                                        Administration Agreement
<PAGE>

                                                                       EXHIBIT A

                           [FORM OF POWER OF ATTORNEY]

                                      A-1exv10w20

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

EXHIBIT 10.20

AMENDED AND RESTATED RESEARCH,

DEVELOPMENT AND MARKETING

COLLABORATION AGREEMENT

     THIS AMENDED AND RESTATED RESEARCH, DEVELOPMENT AND MARKETING
COLLABORATION AGREEMENT (the “Agreement”) is made and entered into by and
between ONYX PHARMACEUTICALS, INC., a California corporation located at 3031
Research Drive, Richmond, California 94806 (“Onyx”), and WARNER-LAMBERT
COMPANY, a Delaware corporation located at 201 Tabor Road, Morris Plains, New
Jersey 07950 (“Warner”). This Agreement is executed on July 31, 1997 but is
deemed by the parties to be effective as of May 2, 1995 and shall supersede and
replace the original Research, Development and Marketing Agreement between Onyx
and Warner dated as of May 2, 1995.

W I T N E S S E T H:

     WHEREAS, Onyx and Warner each has certain expertise in the discovery and
development of agents acting in the field of cell cycle control; and

     WHEREAS, Warner and Onyx each wish to enter into a collaborative effort to
share such expertise, to develop new expertise in the field of cell cycle
control, to research together potential applications thereof and, if
successful, to market certain of such applications (the “Collaboration”); and

     WHEREAS, Warner and Onyx entered into that certain Research, Development
and Marketing Agreement dated as of May 2, 1995, and they now wish to amend and
restate the terms of such agreement by entering into this Agreement, thereby
superseding and replacing such earlier agreement;

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, covenants and conditions contained herein, Onyx and Warner agree as
follows:

ARTICLE 1

DEFINITIONS

1.

 

     The following capitalized terms shall have the meanings indicated for
purposes of this Agreement:

     “Affiliate” shall mean any corporation, association or other entity which
directly or indirectly controls, is controlled by or is under common control
with the party in question. As used herein the term “control” means possession
of the power to direct, or cause the direction of, the management and policies
of a corporation, association or other entity.

     “Collaboration Compound” shall mean any compound identified by either
party during the Research Term or one year thereafter as showing sufficient
activity against targets in the Field identified by the Research Management
Committee in assays contributed to or developed under the Collaboration such
that further research on such compound for such target is pursued, and any
analogs or derivatives of such compounds whenever identified.

     “Collaboration Lead Compound” shall mean any Collaboration Compound
selected by Warner for further development as provided in Section 5.1.

     “Collaboration Product” shall mean any Collaboration Lead Compound for
which an IND or foreign equivalent application has been filed, as provided in
Section 5.2.

     “Collaboration Product Exclusive Period” shall have the meaning set forth
in Section 5.3.

     “Co-Promotion Country” shall mean the United States of America and its
territories and possessions, including the Commonwealth of Puerto Rico.

     “Effective Date” shall mean May 2, 1995.

     “FDA” shall mean the United States Food and Drug Administration.

     “Field” shall mean research, drug discovery and development collaboration
aimed at therapeutic agents to restore control of, or otherwise intervene in,
misregulated cell cycle transitions in tumor cells, vascular smooth muscle
cells, or other pathological conditions, in each case insofar as it relates to
the targets listed below. Such agents may restore growth control and/or result
in death of cells with aberrant control.

The Collaboration will seek to identify agents that modulate biological targets
within the Field. The Collaboration will include all therapeutic benefits of
such agents.

The Field will consist initially of [*] The Field shall also include the [*]
The Field will also include [*]

2.

 

The parties may agree during the Term of the Research Collaboration to expand
the Field by designating additional targets, and it is their intention to do so
in the event logical extensions of the Field are identified and may be
accommodated within the resource commitment of the parties. Such expansion
will be in writing signed by all members of the Research Development Committee.
However, neither party shall be obligated to agree to expand the Field.

Notwithstanding the general description of the Field provided above, the Field
will exclude:

          (a)     All molecular entitles that are part of or that regulate [*] This
includes but is not restricted to [*] This also includes molecules that
directly or indirectly regulate the aforementioned molecules, [*] This also
includes [*] This exception shall not include (by way of example and not
limitation) [*]

     [*] shall mean therapeutics where the active agent is [*] [*]
specifically excludes [*]

     “IND” shall mean an Investigational New Drug Application.

     “Invention” shall mean any invention, idea, data, know-how or material
that is discovered or reduced to practice during the Term of this Agreement [*]
and that relates to the discovery, design, synthesis, delivery, development,
testing, use, manufacture or sale of agents acting in the Field.

     “Know-How” shall mean Onyx Know-How and/or Warner Know-How, as the case
may be.

     “MHW” shall mean the Ministry of Health and Welfare of Japan.

     “NDA” shall mean a New Drug Application.

     “Net Sales” shall mean the gross amount invoiced by a party hereto or one
of its Affiliates to customers who are not Affiliates of the selling party for
all Products sold to such customers, less the following deductions calculated
in accordance with United States generally accepted accounting principles and
Warner’s (or Onyx’s, as the case may be) normal internal accounting standards
consistently applied: (i) trade, quantity and cash discounts or rebates; (ii)
credits, rebates, charge-back rebates, reimbursements or similar payments
granted or given to wholesalers and other distributors, buying groups,
healthcare insurance carriers, governmental agencies and other institutions,
provided that such provisions will not grant a preference or otherwise favor
other products of Warner or Onyx, as the case may be, if based on the fact that
a royalty may be payable hereunder; (iii) credits or allowances for rejection
or return of such Product previously sold; (iv) any tax, tariff, duty or other
governmental charge (other than an income tax) levied on the

3.

 

sale, transportation or delivery of a Product and borne by the seller
thereof; (v) payments or rebates paid in connection with state or federal
Medicare, Medicaid or similar programs; (vi) any charge for freight or
insurance; and (vii) allowance for bad debt expense. Any such deductions, if
not for amounts actually incurred or allowed with respect to the specific
Products sold, shall be no greater than the pro rata amount allocable to such
Product, based on the invoices for similar pharmaceutical products sold by the
selling party, of the total amount of such deductions allowed or incurred for
all such similar products. In the event that the selling party recognizes
revenue due to excess balance sheet reserves associated with the net sales
deductions described above, the pro rata amount of such revenue allocable to
the Product shall be deemed Net Sales hereunder, at the time such revenue is
recognized.

     “Onyx Know-How” shall mean all technology, inventions, information, data,
know-how, compounds and materials that (i) are not Onyx Patents, (ii) Onyx owns
or otherwise has the right to license to Warner and (iii) relate to the
discovery, design, synthesis, delivery, development, testing, use, manufacture
or sale of agents with activity in the Field. Excluded from “Onyx Know-How”
are compounds and information relating to compounds that have been identified
by Onyx as candidates for cGLP/cGMP studies on or before the Effective Date, or
are hereafter so identified without material application of information
provided by Warner or developed by either party pursuant to the Collaboration.

     “Onyx Lead Compound” shall mean a Collaboration Compound that Onyx obtains
the right to develop independently as provided in Section 5.3.

     “Onyx Patents” shall mean all United States and foreign patents that are
owned by Onyx or that Onyx otherwise has the right to license to Warner and
that relate to the discovery, design, synthesis, delivery, development,
testing, use, manufacture or sale of agents with activity in the Field,
including, without limitation, all reissues, extensions, substitutions,
confirmations, registrations, revalidations, additions, continuations,
continuations-in-part, and divisions thereof. Excluded from “Onyx Patents” are
patents and patent applications that claim compounds and information relating
to compounds that have been identified by Onyx as candidates for cGLP/cGMP
studies on or before the Effective Date, or are hereafter so identified without
material application of information provided by Warner or developed pursuant to
the Collaboration.

     “Onyx Product” shall have the meaning set forth in Section 5.3.

     “Onyx Product Exclusive Period” shall have the meaning set forth in
Section 5.4.

     “Patents” shall mean, Onyx Patents and/or Warner Patents, as the case may
be.

4.

 

     “Products” shall mean Collaboration Products and/or Onyx Products, as
applicable.

     “Research Management Committee” shall mean that entity organized and
acting pursuant to Section 3.1.

     “Research Plan” shall have the meaning set forth in Section 2.1.

     “Term of Co-Promotion” for a Collaboration Product shall mean the period
beginning upon the first commercial sale of a Collaboration Product in the
Co-Promotion Country and [*]

     “Term of this Agreement” shall mean the period from the Effective Date
until the expiration of all licenses granted pursuant to this Agreement or
until this Agreement is otherwise terminated pursuant to its terms.

     “Term of the Research Collaboration” shall have the meaning set forth in
Section 1.3.

     “Warner Know-How” shall mean all technology, inventions, information,
data, know-how, compounds and materials that (i) are not Warner Patents, (ii)
Warner owns or otherwise has the right to license to Onyx and (iii) relate to
the discovery, design, synthesis, delivery, development, testing, use,
manufacture or sale of agents with activity in the Field. Excluded from
“Warner Know-How” are (i) Warner’s high-volume screening technology and (ii)
compounds and information relating to compounds that have been identified by
Warner as candidates for cGLP/cGMP studies on or before the Effective Date, or
are hereafter so identified without material application of information
provided by Onyx or developed by either party pursuant to the Collaboration.

     “Warner Patents” shall mean all United States and foreign patents that are
owned by Warner or that Warner otherwise has the right to license to Onyx and
that relate to the discovery, design, synthesis, delivery, development,
testing, use, manufacture or sale of agents with activity in the Field,
including, without limitation, all reissues, extensions, substitutions,
confirmations, registrations, revalidations, additions, continuations,
continuations-in-part, and divisions thereof. Excluded from “Warner Patents”
are patents and patent applications that claim (i) Warner’s high volume screen
technology and (ii) compounds and information relating to compounds that have
been identified by Warner as candidates for cGLP/cGMP studies on or before the
Effective Date, or are hereafter so identified without material application of
information provided by Onyx or developed pursuant to the Collaboration.

5.

 

ARTICLE 2

RESEARCH PROGRAM

     2.1     Undertaking and Scope. From time to time the Research Management
Committee will agree on the general direction of the research to be performed
hereunder. The correspondence and other material documenting such agreement
are collectively referred to herein as the “Research Plan.” Each party agrees
to use its best efforts to perform the activities detailed in the Research
Plan, in a professional and timely manner. Onyx agrees to use its best efforts
at its cost [*] to (i) develop and transfer to Warner [*] screening assays [*]
of the Term of the Research Collaboration for specific targets in the Field
selected by the Research Management Committee, (ii) supply protein required to
run such screens and (iii) provide for the testing of substantially all of
Onyx’s compound library in such screens. Onyx shall not knowingly provide or
perform research on any compounds the use of which would require a royalty or
other payment to any third party, unless the Research Management Committee
agrees that such compound should be provided and the parties agree in writing
how such royalty or other payment will be paid. Warner agrees to use its best
efforts at its cost (including the cost of any royalties or other amounts
payable by Warner to third parties) to (i) screen substantially all of its
compound library with such screens provided by Onyx and (ii) conduct medicinal
chemistry and animal pharmacology as the Research Management Committee deems
appropriate. Promptly after the Effective Date, Onyx and Warner will disclose
to each other all information possessed by it relevant to the Field and
necessary or helpful to perform the work described in the Research Plan (except
to the extent precluded by the pre-existing confidentiality obligations
described on Schedule 1 hereto). During the Term of the Research
Collaboration, or one year thereafter, the Research Management Committee and
either party individually may from time to time declare any compound that meets
the definition therefor in Article 1 to be a Collaboration Compound.
Notwithstanding the foregoing, neither party will be required to offer the
other party any compounds or information relating to compounds that have been
identified as candidates for cGLP/cGMP studies on or before the Effective Date,
or are hereafter so identified without material application of information
provided by the other party or developed pursuant to the Collaboration.
Neither party shall be required to screen under this Collaboration or to offer
to the other party any information regarding any compounds identified as having
activity in pathways expressly excluded from the Field, if so identified prior
to being designated a “Collaboration Compound” hereunder.

     2.2     Personnel and Resources. Each party agrees to commit the personnel,
facilities, expertise and other resources needed to perform this Agreement in
accordance with its terms; provided, however, that neither party warrants that
the Collaboration shall achieve any of the research objectives contemplated by
them. During the Term of the Research Collaboration, Warner and Onyx will each maintain at its cost an average
of 15

6.

 

full-time equivalents (“FTEs”) devoted to cooperative work under the
Research Plan. During the first-year of the Term of the Research Collaboration
Warner need maintain only 10 such FTEs; provided however, that Warner will
staff at higher levels in later periods to achieve an average of 15 FTEs during
the Term of the Research Collaboration, unless such term is terminated early as
permitted hereunder. The scientific priorities and direction of such staff of
both parties will be determined by the Research Management Committee. Such
staff will include, as appropriate, scientists in the areas of mass screening,
molecular biology, biochemistry, biochemical pharmacology, cancer and
cardiovascular pharmacology, synthetic chemistry (including peptide synthesis),
computer-assisted drug design, and analytical chemistry (e.g., NMR
spectroscopy).

     2.3     Term of the Research Collaboration. Work under the Research Plan will
commence as of the date of this Agreement and, unless terminated earlier by
either party pursuant to the terms of this Agreement or extended by mutual
agreement of the parties, will terminate on the third anniversary hereafter (as
terminated, expired or extended, the “Term of the Research Collaboration”).

     2.4     Rights to Know-How and Patents for Research. Each party hereby grants
and agrees to grant to the other a non-exclusive, royalty-free license to use
such party’s Know-How and Patents that are conceived or reduced to practice
prior to the [*] anniversary of the end of the Term of the Research
Collaboration for (a) research and development purposes in the Field and (b),
beginning [*] after termination of the Term of the Research Collaboration,
research and development outside of the Field; provided, however, that the
granting party may terminate such licenses granted by it immediately upon its
termination of this Agreement for cause. Notwithstanding the foregoing,
neither party is granted any interest in the other’s compounds (or analogs or
derivatives thereof) except as specifically set forth in this Agreement. In
the event that one party does nonetheless conceive or reduce to practice any
invention that is comprised of the other party’s compound (or analog or
derivative thereof) and if such invention is not in the Field, such party will
promptly assign its entire interest therein exclusively to the other party
without charge and will not be entitled to any milestones, royalties or other
consideration in connection therewith.

     2.5     Collaboration Expenses. [*] the costs and expenses of work done
pursuant to the Collaboration at [*]

     2.6     New Zealand Research Work. Onyx acknowledges that Warner has amended
its existing agreement with the Auckland Division, Cancer Society of New Zealand, Inc. (“CSNZ”), dated December 15, 1988 (as amended, the
“Warner/CSNZ Agreement”), to expand the field of research to be jointly
conducted by Warner and CSNZ to include the research in the cell cycle field
which is the focus of the collaborative research project being conducted
pursuant to this Agreement. Onyx is willing to permit

7.

 

Warner to conduct such
research under the Warner/CSNZ Agreement, subject to the following terms:

		
	 	     (a)     As used in this Section 2.6, the term “Additional Research”
shall have the meaning set forth in Section 1.04a of the Warner/CSNZ
Agreement.

		
	 	     (b)      The term “Collaboration Compounds” as used in this Agreement
shall also include any compounds identified as a result of the Additional
Research conducted by CSNZ or Warner in collaboration with CSNZ pursuant
to the Warner/CSNZ Agreement. Any work performed by CSNZ and Warner
under such Additional Research shall be considered to be work performed
by the parties pursuant to this Agreement.

		
	 	     (c)     For the avoidance of doubt, and notwithstanding any other
interpretation of the Agreement, Warner and Onyx hereby agree that the
royalties payable by Warner under Section 6.3 shall not be reduced by any
royalty or other payments payable by Warner to CSNZ pursuant to the
Warner/CSNZ Agreement, whether by offset, credit or otherwise.

ARTICLE 3

COMMITTEES

     3.1     Research Management Committee. Warner and Onyx will each appoint up
to 4 representatives to a research management committee (the “Research
Management Committee”), which will oversee the operational aspects of
performing the Research Plan. The Research Management Committee will assure
that agendas and minutes are prepared for each of its meetings. The personnel,
facilities, expertise and other resources of each party to be used in
performance of the Research Plan shall be established by the Research
Management Committee. The Research Management Committee will meet quarterly,
or more frequently if mutually agreed. Warner’s and Onyx’s initial
representatives to the Research Management Committee will be appointed by each
of them promptly after the date of this Agreement. All actions taken and
decisions made by the Research Management Committee shall be by unanimous
agreement. A party may change any of its appointments to the Research
Management Committee at any time upon giving written notice to the other party.

     3.2     Marketing Committee. At the time that Warner appoints a committee to
plan the marketing of a Collaboration Product (the “Marketing Committee”), it
shall promptly inform Onyx and for so long as Onyx has the right to co-promote
such Collaboration Product, Onyx shall have the authority to appoint one of its
employees as a non-voting member of such committee. Onyx’s non-voting member
of the Marketing Committee will have the right to attend all meetings of the
Marketing Committee and will

8.

 

be kept current on the plans and proceedings of
the Marketing Committee. All actions taken and decisions made by the Marketing
Committee shall be under the direction and control of Warner. A party may
change any of its appointments to the Marketing Committee at any time upon
giving written notice to the other party.

     3.3     Meetings. The Research Management Committee and the Marketing
Committee may meet by telephone or in person at such times as are agreeable to
the members of each such committee. Attendance at meetings shall be at the
respective expense of the participating parties. Warner and Onyx shall
alternate the right to determine the location of each meeting of the Research
Management Committee, with Onyx determining the location of the first meeting
of such committee. Warner shall determine the location of all meetings of the
Marketing Committee.

     3.4     SAB Attendance. During the Term of this Agreement, Warner will be
entitled to have up to three of its representatives attend all meetings of
Onyx’s Scientific Advisory Board that relate directly to the Field and such
other general symposia that do not contain confidential information outside the
Field of Onyx or of any third party to which Onyx owes a duty of
confidentiality that would be breached by Warner’s attendance. Onyx will
provide Warner reasonable advance notice of all such meetings and will provide
Warner copies of all written material given to the members of the Scientific
Advisory Board in connection with such meetings. Attendance at such meetings
by Warner’s representatives will be at Warner’s expense. As a condition of
such attendance and access to such written material, Warner will execute
appropriate confidentiality agreements with respect to information disclosed at
such meetings and in such written material.

ARTICLE 4

PATENTS, KNOW-HOW, RIGHTS AND INVENTIONS

     4.1     Rights to Inventions.

          (a)     Ownership of all Inventions and any other technology, information,
data, know-how, compounds and material developed, discovered or made hereunder
shall be determined in accordance with United States laws of inventorship. The
owner (the “Inventor”) of any Invention shall have the right, at its option and
expense, to prepare, file and prosecute in its own name any patent applications
with respect to any Invention owned by it and to maintain any patents issued.
In connection therewith, the non-Inventor party agrees to cooperate with the
Inventor at the Inventor’s expense in the preparation and prosecution of all
such patent applications and in the maintenance of any patents issued. This
obligation shall survive the expiration or termination of this Agreement.

9.

 

          (b)     The parties will co-own technology, inventions, information, data,
know-how, compounds and materials (whether or not patentable) that relate to
[*] and that are developed in connection with performance of the Research Plan
(“[*] Inventions”). The parties will cooperate in the joint filing of patent
applications claiming [*] Inventions. The parties will negotiate in good faith
regarding the collaborative commercial exploitation of the [*] Inventions;
provided, however, that each party will retain an undivided ownership interest
in the [*] Inventions and will be free to exploit the same without obligation
to the other party.

     4.2     Joint Inventions. Inventions that are jointly invented by Onyx and
Warner will be jointly owned by them; however, [*] will have the rights and
responsibilities of the “Inventor” as described in this Article 4 in respect of
any such patentable, jointly owned Inventions and [*] shall have the rights and
responsibilities of a non-Inventor therein. [*] shall pay all expenses in
connection with its preparation, filing and prosecution of patent applications
that claim patentable, jointly owned Inventions. [*] shall from time to time
notify [*] of the amount of such expenses and [*] shall promptly thereafter pay
[*] of its out-of-pocket expenses. As used in the preceding sentence
“out-of-pocket expenses” shall mean direct costs, excluding internal labor
costs. Onyx may elect in writing to disclaim all interest in any jointly
invented Invention, in which case (i) such Invention will be solely owned by
Warner and Onyx will co-operate to assure Warner’s sole ownership, (ii) Onyx
will have no further interest in such Invention, by ownership, license or
otherwise and (iii) [*] the date that Warner receives Onyx’s written
disclaimer. Warner may elect in writing to disclaim all interest in any
jointly invented Inventions, in which case (i) such Invention will be solely
owned by Onyx and Warner will co-operate to assure Onyx’s sole ownership, (ii)
Warner will have no further interest in such Invention, by ownership, license
or otherwise and (iii) [*]

     4.3     Protection
of Patent Rights.
 (a)      The Inventor shall keep the other
party currently informed of all steps to be taken in the preparation,
prosecution and maintenance of all of its patents and patent applications which
claim an Invention and shall furnish the other party with copies of patents and applications, amendments thereto and other related
correspondence relating to such Invention to and from patent offices and permit
the other party to offer its comments thereon before the Inventor makes a
submission to a patent office which could materially affect the scope or
validity of the patent coverage that may result. The non-Inventor party shall
offer its comments promptly. Onyx and Warner shall each promptly notify the
other of any infringement and/or unauthorized use of an Invention which comes
to its attention.

          (b)     The non-Inventor party may request in writing that the Inventor take
specific, reasonable actions to (i) prepare, file or prosecute a patent
application with respect to an Invention, (ii) maintain any patents issued with
respect to an Invention, (iii) protect against abandonment of a patent or
application which claims an Invention or (iv)

10.

 

obtain a discontinuance of an
infringement or unauthorized use of such patent or application. If such
actions are not undertaken within thirty days of the Inventor’s receipt of such
written request and timely pursued thereafter, the Inventor shall permit, and
the non-Inventor party at its option and expense may undertake, such actions.
The party not undertaking such actions shall fully cooperate with the other
party and shall provide to the other party whatever assignments and other
documents that may be needed in connection therewith. The party not
undertaking such actions may require a suitable indemnity against all damages,
costs and expenses and impose such other reasonable conditions as such party’s
advisors may require.

          (c)      If either party commences any actions or proceedings (legal or
otherwise) pursuant to this Section, it shall prosecute the same vigorously at
its expense and shall not abandon or compromise them or fail to exercise any
rights of appeal without giving the other party the right to take over their
conduct at its own expense. The party finally conducting legal actions or
proceedings against an alleged infringer or other party shall be entitled to
any damages or costs awarded against such infringer or other party.

     4.4     Allegations of Infringement by Third Parties. In the event that
Warner or Onyx receives notice that any action by either of them under this
Agreement is alleged to be a violation of the patent or other intellectual
property rights of a third party, it shall notify the other party to this
Agreement, and they shall jointly determine an appropriate response and course
of action. The costs of such defense, and any damages, costs or expenses
resulting from such action, shall be paid [*] The Research Management
Committee will decide whether or not to continue any activity following notice
that such activity may be a violation of the patent or other intellectual
property rights of a third party.

ARTICLE 5

DESIGNATION OF LEAD COMPOUNDS AND MARKETING RIGHTS

     5.1     Designation of Lead Compound. From time to time, Warner may formally
designate one or more Collaboration Compounds for further development, and such
designated compounds shall be deemed Collaboration Lead Compounds. Such
designation shall be made under Warner’s then current standards for declaring
one of its own compounds a “lead compound.” Such designation generally
indicates that Warner has identified such compound as a candidate for cGLP/cGMP
studies. Warner will pursue the research and development of each Collaboration
Lead Compound at its own expense and under its sole direction. Warner will
provide Onyx quarterly, written updates regarding the status of each
Collaboration Lead Compound.

     5.2     Collaboration Product. Each Collaboration Lead Compound shall be
referred to herein as a “Collaboration Product” from and after filing of an IND
in respect

11.

 

of such compound with the FDA or the filing of its equivalent in any
foreign country other than Japan. The preparation, filing and prosecution of
IND’s, NDA’s and other regulatory filings required to be filed with the FDA and
its foreign equivalents (other than in Japan) in regard to any Collaboration
Product will be at the sole expense of, in the name of and under the direction
of Warner. Warner does not warrant that any regulatory filings will actually
be filed or, if filed, will be approved.

     5.3     Independent Development. From time to time, Onyx may request Warner
in writing to undertake specific research and development regarding a
Collaboration Compound or to declare a Collaboration Compound to be a
Collaboration Lead Compound. Warner will notify Onyx within [*] of receiving
Onyx’s written request if it determines before such date that it will not
undertake such specific research and development (or declare such Collaboration
Compound to be a Collaboration Lead Compound) within [*] of such request
(“Warner’s Notice to Decline”). If Warner does not so notify Onyx within such
[*] period, it will periodically review Onyx’s request and if it determines not
to undertake such specific research and development (or declare such
Collaboration Compound to be a Collaboration Lead Compound) then it shall
promptly so notify Onyx (also, “Warner’s Notice to Decline”). After either (i)
receipt of Warner’s Notice to Decline, or (ii) if Warner does not so notify
Onyx and if Warner does not itself undertake the requested action within [*] of
Onyx’s written request, then the date [*] after Warner’s receipt of Onyx’s
written request, then Onyx shall undertake continued research and development
(including the specific research and development requested by Onyx in its
request to Warner) of such Collaboration Compound independently (an “Onyx Lead
Compound”), at its sole cost and under its sole direction. Onyx may not utilize the
services of the personnel committed to the Collaboration pursuant to Section
2.2 in performance of research or development of an Onyx Lead Compound. Onyx
may declare no more than [*] Onyx Lead Compounds during the Term of this
Agreement. Onyx will keep Warner currently informed of all material
information in its research and development of each Onyx Lead Compound and will
allow Warner to comment on the direction of such research and development.
Each Onyx Lead Compound is referred to herein as an “Onyx Product” from and
after filing of an IND in respect of such compound with the FDA or the filing
of its equivalent in any foreign country other than Japan. Onyx will provide
Warner a complete and accurate copy of the proposed filing, together with any
additional information that Warner may request regarding the relevant Onyx Lead
Compound, at least [*] prior to submitting such filing to the FDA or its
foreign equivalent. Onyx will be entitled to commercialize any Onyx Product at
its sole direction, alone or with another partner, subject to Section 5.4 and
the other terms of this Agreement.

     5.4     Warner’s Re-engagement Option. Warner may elect in writing to Onyx to
resume the research and development of an Onyx Lead Compound at its own cost
and under its sole direction at any time prior to [*] in respect of such
compound. In such

12.

 

event, such Onyx Lead Compound shall immediately become a
Collaboration Lead Compound for all purposes under this Agreement. Promptly
after Warner makes such election, Warner will pay Onyx [*] Onyx’s costs
incurred for research and development of such Onyx Lead Compound. For purposes
of this Section, Onyx’s cost for research and development will mean (i) Onyx’s
“Burdened Cost” (as defined below) for each professional research and
development FTE (not including the personnel committed to the Collaboration
pursuant to Section 1.2) dedicated to the research and development of such Onyx
Lead Compounds (with appropriate adjustment for staff members not fully
dedicated to such work or not working a full year) and (ii) payments made to
unaffiliated third parties, each to the extent incurred in connection with the
relevant compound on or after its declaration as an Onyx Lead Compound and to
the extent reasonably supported by invoices, time sheets or other appropriate
records. The “Burdened Cost” for each Onyx FTE shall mean [*] for work
performed during 1995, and will be revised for work performed during each
succeeding calendar year by the change in the Consumer Price Index (as
determined by the United States of America Department of Labor) during the
preceding calendar year (except that the Burdened Cost for work performed
during 1996 will be revised only by the change in the Consumer Price Index from
the Effective date to December 31, 1995).

ARTICLE 6

LICENSES AND ROYALTIES

     6.1     Grant by Onyx. Onyx hereby grants and agrees to grant to Warner
exclusive, worldwide (except for Japan) licenses under the Onyx Patents solely
to make, have made, use and sell (with the right to sublicense) each compound
designated as a Collaboration Lead Compound or as a Collaboration Product.
Such licenses with respect to a Collaboration Lead Compound are co-exclusive
between Onyx and Warner. Such licenses with respect to a Collaboration Product
are exclusive even as to Onyx.

     6.2     Grant by Warner. Warner hereby grants and agrees to grant to Onyx
exclusive, worldwide (except for Japan) licenses under the Warner Patents
solely to make, have made, use and sell (with the right to sublicense) each
compound designated as an Onyx Lead Compound or as an Onyx Product. Such
licenses with respect to an Onyx Lead Compound are co-exclusive between Onyx
and Warner. Such licenses with respect to an Onyx Product are exclusive even
as to Warner.

     6.3     Royalties Payable by Warner. In part consideration for all rights
granted to Warner and efforts undertaken by Onyx hereunder, Warner will pay
Onyx [*] of Net Sales as a royalty on worldwide sales (except for Japan) of
Collaboration Products. If at the time of the first commercial sale of such
Product in such country a Patent exists that is necessary to sell such Product
in such country, or if at any time after such sale a composition of matter
Patent necessary to sell such Collaboration Product issues in such

13.

 

country,
such [*] royalty shall be payable in respect of sales in such country until the
later of (a) the expiration of the last such Patent to expire and (b) the date
such [*] royalty would expire under the provisions of the following sentence
assuming that such Patent did not exist. Subject to the terms of the preceding
sentence, if in a particular country there is never an issued Patent that is
necessary to sell such Product in such country, then such [*] royalty will be
payable, for sales of such Product in such country, until the earliest of (x)
the later to occur of (i) the [*] anniversary of such first sale in such
country and (ii) expiration of the last Patent necessary to make or use such
Product in such country, which Patent was in existence on the date of such
first commercial sale, (y) the first calendar quarter in which the sale in such
country by any one entity (together with its Affiliates), other than Warner or
its Affiliates or licensees, of one or more products containing the same active
ingredient as such Product, constitutes [*] or more of all units sold in such
country containing such active ingredient and (z) the first calendar quarter in
which the sale in such country by any entities (taken in the aggregate), other
than Warner or its Affiliates or licensees, of one or more products containing
the same active ingredient as the Product, constitutes [*] or more of all units
sold in such country containing such active ingredient (the period from first
commercial sale in each country until the earlier of (x), (y) and (z) above is
referred to herein as the “Collaboration Product Exclusive Period”). In the
case of (y) and (z) above, the [*] royalty will terminate as to Net Sales of
Product sold on or
after the day following the end of the triggering calendar quarter.
Warner will pay Onyx [*] and [*] of Net Sales as a royalty on sales of
Collaboration Products in each country (except for Japan) for the [*],
respectively, following (a) such final Patent expiration (in the event that the
required Patent necessary to sell such Product in such country existed on the
date of first commercial sale or issued thereafter) or (b) the end of the
Collaboration Product Exclusive Period (if no such Patent existed or issued
thereafter, and provided that the Collaboration Product Exclusive Period lasted
at least [*] years); provided, however, that no such royalty will be payable in
respect of Collaboration Products sold without the use of one or more
trademarks developed by Warner for such Product during the time that the [*]
royalty was applicable.

     6.4     Royalties Payable by Onyx. Onyx will pay Warner [*] of Net Sales as a
royalty on worldwide sales (except for Japan) of Onyx Products. If at the time
of the first commercial sale of such Product in such country a Patent exists
that is necessary to sell such Product in such country, or if at any time after
such sale a composition of matter Patent necessary to sell such Collaboration
Product issues in such country, such [*] royalty shall be payable in respect of
sales in such country until the later of (a) the expiration of the last such
Patent to expire and (b) the date such [*] royalty would expire under the
provisions of the following sentence assuming that such Patent did not exist.
Subject to the terms of the preceding sentence, if in a particular country
there is never an issued Patent that is necessary to sell such Product in such
country, then such [*] royalty will be payable, for sales of such Product in
such country, until the earliest of (x) the later

14.

 

to occur of (i) the [*]
anniversary of such first sale in such country and (ii) expiration of the last
Patent necessary to make or use such Product in such country, which Patent was
in existence on the date of such first commercial sale, (y) the first calendar
quarter in which the sale in such country by any one entity (together with its
Affiliates), other than Warner or its Affiliates or licensees, of one or more
products containing the same active ingredient as the Product, constitutes [*]
or more of all units sold in such country containing such active ingredient and
(z) the first calendar quarter in which the sale in such country by any
entities (taken in the aggregate), other than Onyx or its Affiliates or
licensees, of one or more products containing the same active ingredient as the
Product, constitutes [*] or more of all units sold in such country containing
such active ingredient (the period from first commercial sale in each country
until the earliest of (x), (y) and (z) above is referred to herein as the “Onyx
Product Exclusive Period”). In the case of (y) and (z) above, the [*] royalty
will terminate as to Net Sales of Product sold on or after the day following
the end of the triggering calendar quarter. Onyx will pay Warner [*] of Net
Sales as a royalty on sales of Onyx Products in each country (except for Japan)
for the [*], respectively, following (a) such final Patent expiration (in the
event that the required Patent necessary to sell such Product in such country
existed on the date of first commercial sale or issued thereafter) or (b) the
end of the Onyx Product Exclusive Period (if no such Patent existed or issued
thereafter, and provided that the Onyx Product Exclusive Period lasted at least
[*] years); provided, however, that no such royalty will be payable in
respect of an Onyx Product sold without the use of one or more trademarks
developed by Onyx for such Product during the time that the [*] royalty was
applicable.

     6.5     Currency of Payment. All payments to be made under this Agreement
shall be made in United States dollars in the United States to a bank account
designated by the party to be paid. Royalties earned shall first be determined
in the currency of the country in which they are earned and then converted to
its equivalent in United States currency. Such conversion shall be based on
the average buying rates of exchange for the currencies involved into the
currency of the United States quoted by Citibank (or its successor in interest)
in New York, New York at the close of business on each business day of the
quarterly period in which the royalties were earned.

     6.6     Payment and Reporting. The royalties due under Section 6.3 or Section
6.5 shall be paid quarterly, within 45 days after the close of each calendar
quarter immediately following each quarterly period in which such royalties are
earned, or earlier if practical. With each such quarterly payment, the payor
shall furnish the payee a royalty statement, setting forth on a
country-by-country basis the total number of units and Net Sales of each
royalty-bearing Product made, used and/or sold hereunder for the quarterly
period for which the royalties are due. In addition, the payor shall furnish
such a royalty statement on a country-by-country basis for the first quarter
during which payor makes sales of Product for which no royalty payment in
respect of such country is due hereunder, and shall state the basis for such
sales then being free of royalty obligations

15.

 

hereunder. The payor shall
thereafter have no further obligation to report the number of units or Net
Sales of such Product made, used and/or sold in such country.

     6.7     Records. The royalty paying party shall keep accurate books and
accounts of record in connection with the manufacture, use and/or sale by or
for it of the Products hereunder in sufficient detail to permit accurate
determination of all figures necessary for verification of royalty obligations
set forth in this Article 6. Such records shall be maintained for a period of
3 years from the end of each year in which sales occurred. The payee, at its
expense, through a certified public accountant, shall have the right to access
such books and records for the sole purpose of verifying the royalty
statements; such access shall be conducted after reasonable prior notice by the
payee to the payor during the payor’s ordinary business hours and shall not be
more frequent than once during each calendar year. Said accountant shall not
disclose to the payee or any other party any information except that which
should properly be contained in a royalty report required under this Agreement.
If such accounting determines that a party’s error resulted in the other party
receiving at least 5% less than properly due in respect of any quarter, then
the party in
error will reimburse such amount and reimburse the other party for the
costs of such accounting (including the fees and expenses of the certified
public accountant).

     6.8     Taxes Withheld. Any income or other tax that one party hereunder, its
Affiliates or sublicensees is required to withhold (the “Withholding Party”)
and pay on behalf of the other party hereunder (the “Withheld Party”) with
respect to the royalties payable under this Agreement shall be deducted from
and offset against said royalties prior to remittance to the Withheld Party;
provided, however, that in regard to any tax so deducted, the Withholding Party
shall give or cause to be given to the Withheld Party such assistance as may
reasonably be necessary to enable the Withheld Party to claim exemption
therefrom or credit therefor, and in each case shall furnish the Withheld Party
proper evidence of the taxes paid on its behalf.

     6.9     Computation of Royalties. All sales of Onyx Products between Onyx and
any of its Affiliates and sublicensees shall be disregarded for purposes of
computing royalties under this Article 6, but in such instances royalties shall
be payable only upon sales to unlicensed third parties. Nothing herein
contained shall obligate Onyx to pay Warner more than one royalty on any unit
of an Onyx Product. All sales of Collaboration Products between Warner and any
of its Affiliates and sublicensees shall be disregarded for purposes of
computing royalties under this Article 6, but in such instances royalties shall
be payable only upon sales to unlicensed third parties. Nothing herein
contained shall obligate Warner to pay Onyx more than one royalty on any unit
of a Collaboration Product or a Warner Product.

     6.10     Licenses to Affiliates. Each party shall, at the other party’s
request, sign license and/or royalty agreements directly with the other party’s
Affiliates and sublicensees in those situations where such agreements would not
decrease the amount of

16.

 

royalties which would be owed hereunder. Such
agreements shall contain the same language as contained herein with appropriate
changes in parties and territory. No such license and/or royalty agreement
will relieve Warner or Onyx, as the case may be, of its obligations hereunder,
and such party will guarantee the obligations of its Affiliate or sublicensee
in any such agreement. Royalties received directly from one party’s Affiliates
and sublicensees shall be credited towards such party’s royalty obligations
under Section 6.3 or 6.5 hereof, as applicable.

     6.11     Restrictions on Payment. The obligation to pay royalties under this
Agreement shall be waived and excused to the extent that statutes, laws, codes
or government regulations in a particular country prevent such royalty payments
by the seller of Products; provided, however, that if legally permissible, the
seller of Products shall pay the royalties owed to
the other party hereto by depositing such amounts in a bank account in
such country that has been designated by the party owed such royalties.

ARTICLE 7

CO-PROMOTION OF COLLABORATION PRODUCTS

     7.1     Co-Promotion Rights. Onyx will have the right to co-promote each
Collaboration Product in the Co-Promotion Country during the Term of
Co-Promotion pursuant to the terms and conditions hereof.

     7.2     Election or Revocation of Co-Promotion Right. Warner will give Onyx
at least [*] prior written notice of the anticipated first commercial sale of a
Collaboration Product in the Co-Promotion Country. Onyx will notify Warner in
writing at least [*] prior to such anticipated first commercial sale whether it
elects to exercise its right to co-promote such Collaboration Product in such
Co-Promotion Country beginning with the date of first commercial sale. If Onyx
fails timely to give such notice to Warner, it shall be deemed to have waived
its rights to co-promote. Onyx may terminate the Term of Co-Promotion at any
time following [*] month’s written notice to Warner. The Term of Co-Promotion
can not be reinstated after delivery of such notice.

     7.3     Onyx’s Promotional Percentage. If Onyx elects to exercise its
co-promotion rights pursuant to Section 7.2, the Marketing Committee will meet
and determine procedures whereby Onyx will supply up to [*] but not less than
[*] of the sales efforts (including details, if determined to be an appropriate
sales activity) for the relevant Collaboration Product in the Co-Promotion
Country. Warner will compensate Onyx for such effort at the lesser of (i) [*]
and (ii) [*] Prior to initiation of the Term of Co-Promotion in the
Co-Promotion Country, the parties will negotiate in good faith and agree on
appropriate accounting procedures and payment terms to (i) confirm each party’s
performance of its required sales effort, (ii) calculate the costs for each
party to provide its sales effort and (iii) compensate Onyx as required by this
Section.

17.

 

     7.4     Marketing and Marketing Plans. Each Collaboration Product will be
marketed with one label and will bear one or more trademarks owned by Warner.
The Marketing Committee will be responsible for developing and approving
marketing plans and the advertising and other promotional materials to be used
in co-promoting each Collaboration Product. Warner will be responsible for
obtaining acceptance of each Collaboration Product on formularies, if
applicable. Warner will keep Onyx informed of and will solicit and
consider in good faith Onyx’s opinions regarding strategies for obtaining
formulary acceptance.

     7.5     Promotional Materials. Onyx shall not create any promotional or
advertising materials for Collaboration Products. Onyx shall disseminate only
those promotional and advertising materials which have been provided or
approved for Onyx’s use by Warner. Warner shall supply timely to Onyx, at
Warner’s cost, quantities of promotional materials needed by Onyx to exercise
its rights under this Agreement. Onyx shall not, and shall cause its
employees, representatives and agents not, to make any claims or
representations in respect of the Collaboration Products that have not been
approved by Warner.

     7.6     No Delegation. Onyx may use only its own employees or the employees
of one or more of its subsidiaries in the course of exercising its co-promotion
rights under this Agreement.

     7.7     Returns. Warner shall be responsible for handling all returns
relating to Collaboration Products. Any Collaboration Product returned to Onyx
shall be shipped by Onyx to the address designated by Warner with shipping
costs authorized by Warner to be paid by Warner.

     7.8     Orders. All customer orders for Collaboration Products shall be
received and executed by Warner. Onyx shall transmit any such orders that it
receives to Warner no later than the following business day.

     7.9     Samples. Each of the parties will keep accurate records as to the
distribution of samples of Collaboration Products and comply with all
applicable laws, rules and regulations dealing with the distribution of
samples.

     7.10     Completion of Sales. All sales of Collaboration Products will be
completed, distributed, accounted for, billed and booked by Warner at prices
established by Warner.

     7.11     Training. Consistent with the marketing plans established by the
Marketing Committee, but not less than [*] prior to the commencement of the
Term of Co-Promotion for each Collaboration Product, Warner shall provide, at
Onyx’s expense,

18.

 

reasonable access to its sales training staff and facilities
for appropriate, initial training of the Onyx sales force.

     7.12     Exchange of Marketing Information. From time-to-time the Marketing
Committee will
develop call lists, schedules, and other appropriate information for the
purpose of determining the physicians and other persons involved in the drug
purchase decision-making process to whom Onyx and Warner, respectively, may
detail each Collaboration Product. The parties agree to cooperate in finding
an inexpensive and expeditious way to provide a call list and other information
indicating the identity of those physicians and other persons involved in the
decision-making process regarding the purchase of pharmaceuticals.

ARTICLE 8

FDA

     8.1     Side Effects. Each party shall promptly advise the other by telefax
or overnight delivery service addressed to the attention of its Vice President,
Medical Affairs (or, in Onyx’s case, the party with similar responsibilities),
of any unexpected side effect, adverse reaction or injury which has been
brought to that party’s attention at any place and which is alleged to have
been caused by a Collaboration Product. Warner shall have all rights and
responsibility to report such side effect, adverse reaction or injury to
regulatory authorities and others as appropriate.

     8.2     Regulatory and other Inquiries. Upon being contacted by the FDA or
any drug regulatory agency for any regulatory purpose pertaining to this
Agreement or to a Collaboration Product, Onyx and Warner shall immediately
notify and consult with one another and Warner shall provide a response as it
deems appropriate. Warner shall have sole responsibility for responding to all
inquiries to Warner or Onyx regarding the benefits, side effects and other
characteristics of Collaboration Products.

     8.3     Product Recall. In the event that Warner or Onyx determines that an
event, incident or circumstance has occurred which may result in the need for a
recall or other removal of any Collaboration Product or any lot or lots thereof
from the market, it shall advise and consult with the other party with respect
thereto. Warner shall make the final determination to recall or otherwise
remove the Collaboration Product or any lot or lots thereof from the market and
shall be responsible for the cost and expense of notifying customers and the
cost and expense associated with return of the recalled Collaboration Product
from a customer. Onyx shall have no such rights or responsibilities in respect
of territories outside of the Co-Promotion Country.

19.

 

     8.4     Responsibility if not Co-Promoting. Onyx will have the rights and
responsibilities referred to in this Article 8 only during the Term of
Co-Promotion and for [*] thereafter.

ARTICLE 9

RESEARCH FUNDING AND MILESTONES

     9.1     Research Funding. Warner will pay Onyx the following amounts on the
following dates during the Term of the Research Collaboration in consideration
for work performed by Onyx prior to the Effective Date and to provide support
for Onyx’s work under the Research Plan:

	 	 	 	 
	The Effective Date
	 	$	250,000
	Three month anniversary of the Effective Date
	 	$	250,000
	Six month anniversary of the Effective Date
	 	$	750,000
	Nine month anniversary of the Effective Date
	 	$	250,000
	Twelve month anniversary of the Effective Date
	 	$	1,000,000
	Fifteen month anniversary of the Effective Date
	 	$	250,000
	Eighteen month anniversary of the Effective Date
	 	$	250,000
	Twenty-one month anniversary of the Effective Date
	 	$	500,000
	Twenty-four month anniversary of the Effective Date
	 	$	1,500,000
	Twenty-seven month anniversary of the Effective Date
	 	$	250,000
	Thirty month anniversary of the Effective Date
	 	$	250,000
	Thirty-three month anniversary of the Effective Date
	 	$	666,667
	 
	 	 	

	 
	 	$	6,166,667

     9.2     Milestones. (a) Warner will pay Onyx the following amounts with
respect to the first Collaboration Product to achieve each stated milestone:

	 	 	 	 	 
	Commencement of Phase I clinical trials by or on behalf
of Warner anywhere in the world
	 	 	[*]	 
	 
	 	 	 	 
	Commencement of Phase II clinical trials by or on behalf
of Warner anywhere in the world
	 	 	[*]	 
	 
	 	 	 	 
	Commencement of Phase III clinical trials by or on behalf
of Warner anywhere in the world
	 	 	[*]	 
	 
	 	 	 	 
	The FDA’s acceptance for filing of an NDA
	 	 	[*]	 

20.

 

	 	 	 	 	 
	Acceptance for filing of an MAA applicable to any of the
following countries: (i) United Kingdom, (ii) Spain,
(iii) Italy, (iv) France and (v) Germany (each a
“Major European Country”)
	 	[*] country, up to
	 
	 	[*] total
	 
	 	 	 	 
	Approval by the FDA of an NDA
	 	 	 	[*]
	 
	 	 	 	 
	Approval of an MAA applicable to a Major European Country
	 	[*] country, up to
	 
	 	[*] total

          (b)      Warner will pay Onyx [*] upon the approval by the FDA of an NDA for
the second and each subsequent Collaboration Product so approved and [*] upon
the approval of an MAA applicable to each Major European Country, up to [*],
for the second and each subsequent Collaboration Product so approved.

          (c)     Onyx will pay Warner [*] upon the approval by the FDA of an NDA for
each Onyx Product and [*] upon the approval of an MAA applicable to each Major
European Country, up to [*] for each Onyx Product.

ARTICLE 10

CONFIDENTIALITY

     10.1     Confidentiality. (a) Except as specifically permitted hereunder,
each party hereby agrees to hold in confidence and not use on behalf of itself
or others all data, samples, technical and economic information (including the
economic terms hereof), commercialization, clinical and research strategies and
know-how provided by the other party (the “Disclosing Party”) during the Term
of this Agreement and all data, results and information developed pursuant to
the Collaboration and solely owned by the other party (collectively the
“Confidential Information”), except that the term “Confidential Information”
shall not include:

               (i)      information that is or becomes part of the public domain through no
fault of the non-Disclosing Party or its Affiliates;

               (ii)     information that is obtained after the date hereof by the
non-Disclosing Party or one of its Affiliates from any third party which is
lawfully in possession of such Confidential Information and not in violation of
any contractual or legal obligation to the Disclosing Party with respect to
such Confidential Information;

21.

 

               (iii)     Information that is known to the non-Disclosing Party or one or more
of its Affiliates prior to disclosure by the Disclosing Party, as evidenced by
the non-Disclosing Party’s written records; and

               (iv)      information that is necessary to be disclosed to any governmental
authorities or pursuant to any regulatory filings, provided that in such case
the non-Disclosing Party notifies the Disclosing Party reasonably in advance of
such disclosure and cooperates with the Disclosing Party to minimize the scope
or content of such disclosure.

          (b)      The obligations of this Section 10.1 shall survive the expiration or
termination of this Agreement.

     10.2     Publicity. All publicity, press releases and other announcements
relating to this Agreement or the transactions contemplated hereby shall be
reviewed in advance by, and subject to the approval of, both parties; provided,
however, that either party may (i) publicize the existence and general subject
matter of this Agreement without the other party’s approval and (ii) disclose
the terms of this Agreement insofar as required to comply with applicable
securities laws, provided that in the case of such securities disclosures the
disclosing party notifies the other party reasonably in advance of such
disclosure and cooperates to minimize the scope and content of such disclosure.

     10.3     Publication. The parties shall cooperate in appropriate publication
of the results of research and development work performed pursuant to this
Agreement, but subject to the predominating interest to obtain patent
protection for any patentable subject matter. To this end, it is agreed that
prior to any public disclosure, the party proposing disclosure shall send the
other party a copy of the information to be disclosed, and shall allow the
other party [*] from the date of receipt in which to determine whether the
information to be disclosed contains subject matter for which patent protection
should be sought prior to disclosure. If notification is not received during
the [*] period, the party proposing disclosure shall be free to proceed with
the disclosure. If due to a valid business reason or a belief by the
nondisclosing party that the disclosure contains subject matter for which a
patentable invention should be sought, then prior to the expiration of the [*]
period, the nondisclosing party shall so notify the disclosing party, who shall
then delay public disclosure of the information for an additional period of up
to [*] to permit the preparation and filing of a patent application on the
subject matter to be disclosed or other action to be taken. The party
proposing disclosure shall thereafter be free to publish or disclose the
information. The determination of authorship for any paper shall be in
accordance with accepted scientific practice. In no event may any publication
or other
disclosure contain a party’s Confidential Information without such party’s
prior written consent.

22.

 

ARTICLE 11

JAPAN

     11.1     Japanese Company. Neither party may license any of its Patents or
Know-How to, or otherwise collaborate in the Field with, any person or other
entity for use in Japan, except pursuant to an agreement mutually acceptable to
Onyx and Warner (the “Japanese Company Agreement”). Onyx and Warner will work
together to select a Japanese company to collaborate with (the “Japanese
Company”) and to hold negotiations with the Japanese Company regarding the
terms of the Japanese Company Agreement.

     11.2     Japanese Company Agreement. Warner agrees that it will accept any
proposed Japanese Company Agreement that includes the following provisions:
(i) [*] provided, however, that [*] (ii) [*] (iii) [*] (iv) [*] (v) [*] (vi)
[*] provided, however, that this provision shall not apply to (a) any compound
identified by the Japanese Company as a candidate for cGLP/cGMP studies before
the effective date of the Japanese Company Agreement, or analogs or derivatives
thereof not identified pursuant to any collaboration between Onyx and the
Japanese Company or (b) any compound identified after the [*] anniversary of
the term of the research collaboration under such agreement; and further
provided that this provision will apply to compounds identified during the term
of the research collaboration under such agreement or [*] thereafter, and any
derivatives or analogs of such compounds whenever identified, and (vii) [*]
For purposes of clause (i) of this section, any dispute about the [*] that
cannot be resolved by good faith negotiations between senior executive officers
of Onyx and Warner will be resolved by the decision of an investment bank
familiar with valuations of privately-held biotechnology companies selected by
the parties in good faith agreement, with the cost of performing such valuation
borne equally by the parties.

     11.3     Absence of Agreement. If Onyx does not execute an agreement in the
Field with a Japanese company pursuant to Sections 11.1 or 11.2, then neither
party shall market or license others to market any Collaboration Compounds in
the Field in Japan without the consent of the other party.

ARTICLE 12

REPRESENTATIONS AND WARRANTIES

     12.1     Legal Authority. Each party represents and warrants to the other
that it has the legal power, authority and right to enter into this Agreement
and to perform its respective obligations set forth herein.

     12.2     No Conflicts. Each party represents and warrants that as of the date
of this Agreement it is not a party to any agreement or arrangement with any
third party or under

23.

 

any obligation or restriction, including pursuant to its
Certificate of Incorporation or By-Laws, which in any way limits or conflicts
with its ability to fulfill any of its obligations under this Agreement.

     12.3     Others Bound. Each party represents and warrants that anyone
performing services under this Agreement on its behalf shall be bound by all of
the conditions of this Agreement, to the extent necessary to give full effect
to this Agreement.

     12.4     Third Party Rights. Each party represents and warrants that to the
best of its knowledge its performance of the work under the Collaboration as
contemplated by this Agreement will not infringe the patent, trade secret or
other proprietary rights of any third party except insofar as any infringement
may relate to technology, data or information provided by the other party
hereunder.

     12.5     Survival. The foregoing representations and warranties shall survive
the execution, delivery and performance of this Agreement, notwithstanding any
investigation by or on behalf of either party.

     12.6     Disclaimer. Except as otherwise expressly stated herein, Warner
hereby disclaims any warranty expressed or implied as to any Onyx Product sold
or placed in commerce by or on behalf of Onyx. Except as otherwise expressly
stated herein, Onyx hereby disclaims any warranty expressed or implied as to
any Collaboration Product sold or placed in commerce by or on behalf of Warner.

     12.7     Exclusivity. Except pursuant to the Japanese Company Agreement,
during the Term of the Research Collaboration and for one year thereafter (i)
neither party will conduct any research or development in the Field except
pursuant to this Agreement, (ii) neither party will license (or otherwise
permit access to) any of its Patents or Know-How for research or development in
the Field to (or otherwise collaborate on research or development in the Field
with) any other person or entity and (iii) Onyx will not license (or otherwise
permit access to) any assay developed by it pursuant to the Collaboration to
any other person or entity. In respect of (i), above, each party shall have
the right to conduct its own research
and development in the Field during the one year following the end of the
Term of the Research Collaboration, provided that all results of such work
discovered during such period (including without limitation compounds and
assays), and analogs and derivatives of compounds identified during such period
whenever identified, are promptly disclosed to the other party and are covered
by the licenses granted under Sections 1.4, 5.1 and 5.2, as applicable.

ARTICLE 13

TERMINATION

24.

 

     13.1     Termination for Breach. In the event of a material breach of the
provisions of this Agreement described below, the breaching party shall have 30
days after receipt of written notice from the non-breaching party to cure such
breach.

          (a)      In the event of an uncured material breach of Article 2, the
non-breaching party may terminate the Term of the Research Collaboration.

          (b)      In the event of an uncured material breach of Section 6.3 by Warner in
respect of a Collaboration Product, Onyx may (i) terminate the licenses granted
by it pursuant to Section 6.1 in respect of such Product and (ii) require
Warner to grant it an exclusive (even as to Warner), worldwide license (with
the right to sublicense) under the Patents relating to such Product and owned
or controlled by Warner, to the extent necessary to make, use or sell such
Product.

          (c)      In the event of an uncured material breach of Section 6.5 by Onyx in
respect of an Onyx Product, Warner may (i) terminate the licenses granted by it
pursuant to Section 6.2 in respect of such Product and (ii) require Onyx to
grant it an exclusive (even as to Onyx), worldwide license (with the right to
sublicense) under the Patents relating to such Product and owned or controlled
by Onyx, to the extent necessary to make, use or sell such Product.

          (d)     In the event of an uncured material breach by Onyx of any provision of
Article 7, Warner may immediately terminate the Term of Co-Promotion.

     13.2     Effect of Bankruptcy. If either party files a voluntary petition in
bankruptcy, is adjudicated a bankrupt, makes a general assignment for the
benefit of creditors, admits in writing that it is insolvent or fails to
discharge within 15 days an involuntary petition in bankruptcy filed against
it, then the other party will have 60 days to determine whether or not (a) the
Term of the Research Collaboration shall immediately terminate and/or (b) the
Term of Co-Promotion shall immediately terminate.

     13.3     Termination of Co-Promotion Rights. Warner may terminate Onyx’s
right to co-promote Collaboration Products hereunder if (i) any entity or
person in the pharmaceutical industry directly or indirectly acquires ownership
or control of more than 50% of Onyx’s voting capital stock or substantially all
of its assets or (ii) Onyx develops or acquires a financial interest in any
product that could compete with any Collaboration Product as to which product
an NDA has been filed with or approved by the FDA.

     13.4     Remedies. In the event of any breach of any provision of this
Agreement, in addition to the termination rights set forth herein, each party
shall have all other rights and remedies at law or equity to enforce this
Agreement.

25.

 

     13.5     Voluntary Termination. Warner may terminate this Agreement by
providing written notice thereof to Onyx on the eighteen month anniversary of
the Effective Date. In such event, the Term of this Agreement will
automatically terminate, and Warner’s obligation to purchase stock on the
second anniversary of the Effective Date under the Preferred Stock Purchase
Agreement dated the date hereof will also terminate. Notwithstanding the
termination of the Term of this Agreement, (i) Warner will make all research
payments to Onyx that are due before the second anniversary of the Effective
Date pursuant to Section 9.1 (payable on the dates that such payments are due)
and shall make a termination payment of [*] on the second anniversary of the
Effective Date, (ii) Warner will grant Onyx an exclusive (even as to Warner),
world-wide, fully-paid, perpetual license under Warner’s Patents and Warner’s
Know-How discovered or reduced to practice prior to the one year anniversary of
the termination of the Term of this Agreement that are necessary to make, use
and sell any Collaboration Compound for therapeutic or diagnostic use in the
Field, (iii) the licenses granted under Section 6.1 will terminate and (iv) the
licenses granted to Warner under Section 2.4 will terminate.

ARTICLE 14

GENERAL PROVISIONS

     14.1     Indemnification. Each of Warner and Onyx agrees to indemnify and
hold harmless the other party and its Affiliates and their respective
employees, agents, officers, directors and permitted assigns (such party’s
“Indemnified Group”) from and against any claims, judgments, expenses
(including reasonable attorney’s fees), damages and awards (collectively a
“Claim”) arising out of or resulting from (i) its negligence or misconduct in
regard to any Product, (ii) a breach of any of its representations or warranties hereunder or
(iii) the manufacture, use or sale of a Collaboration Product (in the case of
Warner) or an Onyx Product (in the case of Onyx), except to the extent that
such Claim arises out of or results from the negligence or misconduct of a
party seeking to be indemnified and held harmless or the negligence or
misconduct of a member of such party’s Indemnified Group. A condition of this
obligation is that, whenever an indemnified party has information from which it
may reasonably conclude an incident has occurred which could give rise to a
Claim, such indemnified party shall immediately give notice to the indemnifying
party of all pertinent data surrounding such incident and, in the event claim
is made or suit is brought, all indemnified parties shall assist the
indemnifying party and cooperate in the gathering of information with respect
to the time, place and circumstances and in obtaining the names and addresses
of any injured parties and available witnesses. No indemnified party shall,
except at its own cost, voluntarily make any payment or incur any expense in
connection with any such Claim or suit without the prior written consent of the
indemnifying party. The obligations set forth in this Section shall survive
the expiration or termination of this Agreement.

26.

 

     14.2     Assignment. This Agreement shall not be assignable by either party
without the prior written consent of the other party, such consent not to be
unreasonably withheld. In no event will any assignment relieve the assigning
party of its obligations hereunder. This Agreement shall be binding upon and,
subject to the terms of the foregoing sentence, inure to the benefit of the
parties’ successors, legal representatives and assigns. Notwithstanding the
foregoing, Warner may assign this Agreement to any of its wholly-owned
subsidiaries or any entity succeeding to a majority of its Parke-Davis
business, and either party may assign this Agreement to its successor in
connection with any merger, consolidation or sale of all or substantially all
of its assets.

     14.3     Non-Waiver. The waiver by either of the parties of any breach of any
provision hereof by the other party shall not be construed to be a waiver of
any succeeding breach of such provision or a waiver of the provision itself.

     14.4     Research Dispute Resolution. The parties recognize that the
collaborative research program under the Research Plan may require the
resolution of certain issues or the negotiation of additional agreements in the
future. In the event the Research Management Committee is unable to resolve a
dispute under the Research Plan, either party may have the dispute referred to
the President of Onyx and the senior officer of Warner’s pharmaceutical
business for good faith resolution.

     14.5     Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of New York, other than those provisions
governing conflicts of law.

     14.6     Partial Invalidity. If and to the extent that any court or tribunal
of competent jurisdiction holds any of the terms or provisions of this
Agreement, or the application thereof to any circumstances, to be invalid or
unenforceable in a final nonappealable order, the parties shall use their best
efforts to reform the portions of this Agreement declared invalid to realize
the intent of the parties as fully as practical, and the remainder of this
Agreement and the application of such invalid term or provision to
circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby, and each of the remaining terms and provisions
of this Agreement shall remain valid and enforceable to the fullest extent of
the law.

     14.7     Notice. Any notice to be given to a party under or in connection
with this Agreement shall be in writing and shall be (i) personally delivered,
(ii) delivered by a nationally recognized overnight courier or (iii) delivered
by certified mail, postage prepaid, return receipt requested to the party at
the address set forth below for such party:

27.

 

	 	 	 	 	 
	 	 	
To Warner:
	 	To Onyx:
	 	 	 	 	 
	 	 	
Senior Vice President, Research

Parke-Davis Pharmaceutical
    Research
Division,

Warner-Lambert Company

2800 Plymouth Road 

Ann Arbor, MI 48105 

	 	Hollings Renton

President & CEO

Onyx Corporation

3031 Research Drive

Building A

Richmond, CA 94806
	 	 	 	 	 
	 	 	
with a copy to:
	 	with a copy to:
	 	 	 	 	 
	 	 	
President, Parke-Davis 

United States and Mexico 

Warner-Lambert Company 

201 Tabor Road 

Morris Plains, NJ 07950 

	 	Robert L. Jones, Esq.

Cooley Godward LLP

5 Palo Alto Square

4th Floor

Palo Alto, CA 94306
	 	 	 	 	 
	 	 	
and a copy to:	 	 
	 	 	 	 	 
	 	 	
Vice President and General Counsel

Warner-Lambert Company

201 Tabor Road

Morris Plains, NJ 07950
	 	 

or to such other address as to which the party has given notice thereof. Such
notices shall be deemed given upon receipt.

     14.8     Vaccines and Diagnostics. Pursuant to an Agreement, between Chiron
Corporation (“Chiron”) and Onyx, dated April 24, 1992, Chiron has certain
rights to Vaccines and Diagnostics developed by Onyx. Warner and Onyx agree
that, notwithstanding any other term or provision of this Agreement to the
contrary, neither party shall license to the other any Patents or Know-How to
make, use or sell Vaccines or Diagnostics. Furthermore, each party hereto may
make, use or sell Vaccines and Diagnostics in the Field without obligation to
the other party, including as relates to payment of milestones and royalties.
As used in this Section, (i) “Vaccines” shall mean [*] and (ii) “Diagnostics”
shall mean [*]

     14.9     Headings. The headings appearing herein have been inserted solely
for the convenience of the parties hereto and shall not affect the
construction, meaning or interpretation of this Agreement or any of its terms
and conditions.

28.

 

     14.10     No Implied Licenses or Warranties. No right or license under any
patent application, issued patent, know-how or other proprietary information is
granted or shall be granted by implication. All such rights or licenses are or
shall be granted only as expressly provided in the terms of this Agreement.
Neither party warrants the success of any clinical or other studies undertaken
by it.

     14.11     Force Majeure. No failure or omission by the parties hereto in the
performance of any obligation of this Agreement shall be deemed a breach of
this Agreement nor shall it create any liability if the same shall arise from
any cause or causes beyond the reasonable control of the affected party,
including, but not limited to, the following, which for purposes of this
Agreement shall be regarded as beyond the control of the party in question:
acts of nature; acts or omissions of any government; any rules, regulations, or
orders issued by any governmental authority or by any officer, department,
agency or instrumentality thereof; fire; storm; flood; earthquake; accident; war; rebellion; insurrection;
riot; invasion; strikes; and lockouts or the like; provided that the party so
affected shall use its best efforts to avoid or remove such causes or
nonperformance and shall continue performance hereunder with the utmost
dispatch whenever such causes are removed.

     14.12     Survival. The representations and warranties contained in this
Agreement as well as those rights and/or obligations contained in the terms of
this Agreement which by their intent or meaning have validity beyond the term
of this Agreement shall survive the termination or expiration of this
Agreement.

     14.13     Entire Agreement. This Agreement constitutes the entire
understanding between the parties with respect to the subject matter contained
herein and supersedes any and all prior agreements, understandings and
arrangements whether oral or written between the parties relating to the
subject matter hereof. This Agreement will control in the event of any
conflict between this Agreement and the Research Plan.

     14.14     Amendments. No amendment, change, modification or alteration of the
terms and conditions of this Agreement shall be binding upon either party
unless in writing and signed by the party to be charged.

     14.15     Independent Contractors. It is understood that both parties hereto
are independent contractors and engage in the operation of their own respective
businesses, and neither party hereto is to be considered the agent or partner
of the other party for any purpose whatsoever. Neither party has any authority
to enter into any contracts or assume any obligations for the other party or
make any warranties or representations on behalf of the other party.

29.

 

     14.16     Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and both of which together shall
constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.

	 	 	 	 	 
	 	ONYX PHARMACEUTICALS, INC.	 	 	WARNER-LAMBERT COMPANY
	 
	 	
	 	 	

	By:	/s/ Hollings C. Renton	 	By:	
/s/ Ronald M. Cresswell
	 	
	 	 	

	Name:   	Hollings C. Renton	 	Name:   	
Ronald M. Cresswell
	 	
	 	 	

	Title:	President & CEO

	 	Title:	
Vice President and Chairman
Parke-Davis Pharmaceutical Research
Warner-Lambert Company

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

30.

 

AMENDED AND RESTATED

RESEARCH, DEVELOPMENT AND MARKETING

COLLABORATION AGREEMENT

DATED AS OF MAY 2, 1995

BETWEEN

ONYX PHARMACEUTICALS, INC.

AND

WARNER-LAMBERT COMPANY

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	PAGE
	ARTICLE 1.
	 	     DEFINITIONS
	 	 	1	 
	ARTICLE 2.
	 	     RESEARCH PROGRAM
	 	 	5	 
	2.1  
	 	Undertaking and Scope
	 	 	5	 
	2.2  
	 	Personnel and Resources
	 	 	6	 
	2.3  
	 	Term of the Research Collaboration
	 	 	7	 
	2.4  
	 	Rights to Know-How and Patents for Research
	 	 	7	 
	2.5  
	 	Collaboration Expenses
	 	 	7	 
	ARTICLE 3.
	 	     COMMITTEES
	 	 	7	 
	3.1  
	 	Research Management Committee
	 	 	7	 
	3.2  
	 	Marketing Committee
	 	 	8	 
	3.3  
	 	Meetings
	 	 	8	 
	3.4  
	 	SAB Attendance
	 	 	8	 
	ARTICLE 4.
	 	     PATENTS, KNOW-HOW, RIGHTS AND INVENTIONS
	 	 	9	 
	4.1  

	 	Rights to Inventions
	 	 	9	 
	4.2  
	 	Joint Inventions
	 	 	9	 
	4.3  
	 	Protection of Patent Rights
	 	 	10	 
	4.4  
	 	Allegations of Infringement by Third Parties
	 	 	10	 
	ARTICLE 5.
	 	     DESIGNATION
OF LEAD COMPOUNDS AND

     MARKETING RIGHTS
	 	 	11	 
	5.1  
	 	Designation of Lead Compound
	 	 	11	 
	5.2  
	 	Collaboration Product
	 	 	11	 
	5.3  
	 	Independent Development
	 	 	11	 
	5.4  
	 	Warner’s Re-engagement Option
	 	 	12	 
	ARTICLE 6.
	 	     LICENSES AND ROYALTIES
	 	 	13	 
	6.1  
	 	Grant by Onyx
	 	 	13	 
	6.2  
	 	Grant by Warner
	 	 	13	 
	6.3  
	 	Royalties Payable by Warner
	 	 	13	 
	6.4  
	 	Royalties Payable by Onyx
	 	 	14	 
	6.5  
	 	Currency of Payment
	 	 	15	 
	6.6  
	 	Payment and Reporting
	 	 	15	 
	6.7  
	 	Records
	 	 	15	 
	6.8  
	 	Taxes Withheld
	 	 	16	 
	6.9  
	 	Computation of Royalties
	 	 	16	 
	6.10
	 	Licenses to Affiliates
	 	 	16	 

i.

 

TABLE OF CONTENTS

(CONTINUED)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	PAGE
	 	6.11	 	 	Restrictions on Payment
	 	 	16	 
	ARTICLE 7.	 	 	     CO-PROMOTION OF COLLABORATION PRODUCTS
	 	 	17	 
	 	7.1	 	 	Co-Promotion Rights
	 	 	17	 
	 	7.2	 	 	Election or Revocation of Co-Promotion Right
	 	 	17	 
	 	7.3	 	 	Onyx’s Promotional Percentage
	 	 	17	 
	 	7.4	 	 	Marketing and Marketing Plans
	 	 	17	 
	 	7.5	 	 	Promotional Materials
	 	 	18	 
	 	7.6	 	 	No Delegation
	 	 	18	 
	 	7.7	 	 	Returns
	 	 	18	 
	 	7.8	 	 	Orders
	 	 	18	 
	 	7.9	 	 	Samples
	 	 	18	 
	 	7.10	 	 	Completion of Sales
	 	 	18	 
	 	7.11	 	 	Training
	 	 	18	 
	 	7.12	 	 	Exchange of Marketing Information
	 	 	18	 
	ARTICLE 8.	 	 	     FDA
	 	 	19	 
	 	8.1	 	 	Side Effects
	 	 	19	 
	 	8.2	 	 	Regulatory and other Inquiries
	 	 	19	 
	 	8.3	 	 	Product Recall
	 	 	19	 
	 	8.4	 	 	Responsibility if not Co-Promoting
	 	 	19	 
	ARTICLE 9.	 	 	     RESEARCH FUNDING AND MILESTONES
	 	 	20	 
	 	9.1	 	 	Research Funding
	 	 	20	 
	 	9.2	 	 	Milestones
	 	 	20	 
	ARTICLE 10.	 	 	     CONFIDENTIALITY
	 	 	21	 
	 	10.1	 	 	Confidentiality
	 	 	21	 
	 	10.2	 	 	Publicity
	 	 	22	 
	 	10.3	 	 	Publication
	 	 	22	 
	ARTICLE 11.	 	 	     JAPAN
	 	 	23	 
	 	11.1	 	 	Japanese Company
	 	 	23	 
	 	11.2	 	 	Japanese Company Agreement
	 	 	23	 
	 	11.3	 	 	Absence of Agreement
	 	 	24	 
	ARTICLE 12.	 	 	     REPRESENTATIONS AND WARRANTIES
	 	 	24	 
	 	12.1	 	 	Legal Authority
	 	 	24	 
	 	12.2	 	 	No Conflicts
	 	 	24	 

ii.

 

TABLE OF CONTENTS

(CONTINUED)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	PAGE
	 	12.3	 	 	Others Bound
	 	 	24	 
	 	12.4	 	 	Third Party Rights
	 	 	24	 
	 	12.5	 	 	Survival
	 	 	25	 
	 	12.6	 	 	Disclaimer
	 	 	25	 
	 	12.7	 	 	Exclusivity
	 	 	25	 
	ARTICLE 13	 	 	 	 	 	25	 
	 	13.1	 	 	Termination for Breach
	 	 	25	 
	 	13.2	 	 	Effect of Bankruptcy
	 	 	26	 
	 	13.3	 	 	Key Personnel
	 	 	26	 
	 	13.4	 	 	Termination of Co-Promotion Rights
	 	 	26	 
	 	13.5	 	 	Remedies
	 	 	27	 
	 	13.6	 	 	Voluntary Termination
	 	 	27	 
	ARTICLE 14.	 	 	     GENERAL PROVISIONS
	 	 	27	 
	 	14.1	 	 	Indemnification
	 	 	27	 
	 	14.2	 	 	Assignment
	 	 	28	 
	 	14.3	 	 	Non-Waiver
	 	 	28	 
	 	14.4	 	 	Research Dispute Resolution
	 	 	28	 
	 	14.5	 	 	Governing Law
	 	 	28	 
	 	14.6	 	 	Partial Invalidity
	 	 	28	 
	 	14.7	 	 	Notice
	 	 	29	 
	 	14.8	 	 	Vaccines and Diagnostics
	 	 	29	 
	 	14.9	 	 	Headings
	 	 	30	 
	 	14.10	 	 	No Implied Licenses or Warranties
	 	 	30	 
	 	14.11	 	 	Force Majeure
	 	 	30	 
	 	14.12	 	 	Survival
	 	 	30	 
	 	14.13	 	 	Entire Agreement
	 	 	30	 
	 	14.14	 	 	Amendments
	 	 	31	 
	 	14.15	 	 	Independent Contractors
	 	 	31	 
	 	14.16	 	 	Counterparts
	 	 	31	 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

iii.

 

SCHEDULE 1

PRE-EXISTING CONFIDENTIALITY OBLIGATIONS

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

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