Exhibit 10.2

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Double asterisk denote omissions.

COLLABORATION

AND LICENSE AGREEMENT

by and between

AGIOS INTERNATIONAL SARL

and

CELGENE INTERNATIONAL II SARL

Re:

AGI-23088

for the

ROW Territory

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

         PAGE  

Article I Definitions

     1   

Article II Governance; Collaboration

     14   

Section 2.1

 

General.

     14   

Section 2.2

 

Joint Steering Committee.

     15   

Section 2.3

 

Joint Development Committee.

     16   

Section 2.4

 

Joint Commercialization Committee.

     17   

Section 2.5

 

Joint Patent Committee.

     18   

Section 2.6

 

Alliance Managers.

     19   

Section 2.7

 

General Committee Membership and Procedures.

     19   

Section 2.8

 

Decision Making.

     20   

Section 2.9

 

Finance Working Group.

     21   

Section 2.10

 

Scope of Governance.

     23   

Section 2.11

 

Agios Participation.

     23   

Section 2.12

 

Agios Opt-Out.

     24   

Article III Development

     26   

Section 3.1

 

Development of Licensed Products.

     26   

Section 3.2

 

Development Costs.

     27   

Section 3.3

 

Additional Development Activities.

     27   

Section 3.4

 

Companion Diagnostics.

     29   

Section 3.5

 

Records; Tech Transfer.

     30   

Article IV Manufacture and Supply

     31   

Section 4.1

 

Pre-Clinical, Clinical and Commercial Supply.

     31   

 

- i -

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Section 4.2

 

Third Party Manufacturers.

     32   

Section 4.3

 

Transfer of Manufacturing Responsibility.

     32   

Section 4.4

 

Manufacturing Efforts.

     32    Article V Regulatory Matters      33   

Section 5.1

 

Lead Responsibility for Regulatory Interactions.

     33   

Section 5.2

 

Participation Rights.

     34   

Section 5.3

 

Global Safety Database; Pharmacovigilance Agreement.

     34   

Section 5.4

 

Recalls, Market Withdrawals or Corrective Actions.

     34    Article VI Commercialization      35   

Section 6.1

 

Commercialization Responsibilities for Licensed Products.

     35   

Section 6.2

 

Commercialization Plan.

     36   

Section 6.3

 

Field-Based Marketing Activities.

     37   

Section 6.4

 

Trademarks.

     38    Article VII Diligence      39   

Section 7.1

 

Collaboration Activities.

     39   

Section 7.2

 

Diligence Obligations.

     39   

Section 7.3

 

Day-to-Day Responsibility.

     39    Article VIII Grant of Rights; Exclusivity      40   

Section 8.1

 

License Grants.

     40   

Section 8.2

 

Sublicense Rights.

     40   

Section 8.3

 

Sublicense Requirements.

     41   

Section 8.4

 

Affiliates and Third Party Contractors.

     42   

Section 8.5

 

Existing Third Party Agreement.

     42   

Section 8.6

 

Exclusivity.

     44   

Section 8.7

 

Retained Rights.

     45   

Section 8.8

 

Section 365(n) of the Bankruptcy Code.

     46   

 

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Article IX Financial Provisions

     46   

Section 9.1

 

Initial Payment.

     46   

Section 9.2

 

Development Costs.

     46   

Section 9.3

 

Milestone Payments.

     48   

Section 9.4

 

ROW Territory Profit or Loss.

     49   

Section 9.5

 

Royalty Payments Following Agios Opt-Out.

     49   

Section 9.6

 

Third Party Payments.

     51   

Section 9.7

 

Financial Records.

     52   

Section 9.8

 

Audits.

     52   

Section 9.9

 

Tax Matters.

     54   

Section 9.10

 

Currency Exchange.

     55   

Section 9.11

 

Late Payments.

     55   

Article X Intellectual Property Ownership, Protection and Related Matters

     55   

Section 10.1

 

Ownership of Inventions.

     55   

Section 10.2

 

Prosecution of Patent Rights.

     56   

Section 10.3

 

Third Party Infringement of Agios Patent Rights and Collaboration Patent Rights.

     60   

Section 10.4

 

Claimed Infringement; Claimed Invalidity.

     62   

Section 10.5

 

Patent Term Extensions.

     64   

Section 10.6

 

Patent Marking.

     64   

Section 10.7

 

CREATE Act Application.

     64   

Section 10.8

 

Challenges to Patent Rights.

     64   

Section 10.9

 

Celgene Intellectual Property.

     65   

Article XI Confidentiality

     65   

Section 11.1

 

Confidential Information.

     65   

 

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Section 11.2

 

Permitted Disclosure.

     66   

Section 11.3

 

Publicity; Terms of this Agreement; Non-Use of Names.

     66   

Section 11.4

 

Publications.

     69   

Section 11.5

 

Term.

     69   

Section 11.6

 

Return of Confidential Information.

     70   

Article XII Representations and Warranties

     71   

Section 12.1

 

Mutual Representations.

     71   

Section 12.2

 

Additional Agios Representations.

     71   

Section 12.3

 

Additional Celgene Representations.

     73   

Section 12.4

 

Employee Obligations.

     73   

Section 12.5

 

No Warranties.

     73   

Article XIII Indemnification; Product Liabilities

     73   

Section 13.1

 

By Celgene.

     73   

Section 13.2

 

By Agios.

     74   

Section 13.3

 

Product Liability Costs.

     75   

Section 13.4

 

Conduct of Product Liability Claims.

     75   

Section 13.5

 

Limitation of Liability.

     76   

Section 13.6

 

Insurance.

     76   

Article XIV Term and Termination

     76   

Section 14.1

 

Term.

     76   

Section 14.2

 

Termination.

     77   

Section 14.3

 

Effects Of Termination.

     77   

Article XV Miscellaneous

     82   

Section 15.1

 

Dispute Resolution.

     82   

Section 15.2

 

Submission to Court for Resolution.

     84   

 

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Section 15.3

 

Governing Law.

     84   

Section 15.4

 

Assignment.

     84   

Section 15.5

 

Certain Additional Matters Relating to Change of Control of a Party.

     85   

Section 15.6

 

Force Majeure.

     89   

Section 15.7

 

Notices.

     89   

Section 15.8

 

Waiver.

     90   

Section 15.9

 

Severability.

     90   

Section 15.10

 

Entire Agreement.

     90   

Section 15.11

 

Modification.

     90   

Section 15.12

 

Independent Contractors; No Intended Third Party Beneficiaries.

     91   

Section 15.13

 

Interpretation; Construction.

     91   

Section 15.14

 

Performance by Affiliates.

     91   

Section 15.15

 

Counterparts.

     91   

Section 15.16

 

Certain U.S. Federal Income Tax Treatment.

     91   

Section 15.17

 

Agios Guarantee and Related Covenants.

     92   

Section 15.18

 

Celgene Guarantee and Related Covenants.

     94   

 

- v -

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Exhibits

 

Exhibit A   AGI-23088 Exhibit B   Agios Patent Rights and Agios Collaboration
Patent Rights Exhibit C   [Exhibit no longer used.] Exhibit D   Existing Third
Party Agreement Exhibit E   Certain Financial Definitions Exhibit F   Countries
for Filing Agios Patent Rights and Collaboration Patent Rights Exhibit G   Press
Release Exhibit H   Initial JSC, JDC and JPC Appointments Exhibit I  
Partnership Tax Matters

 

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COLLABORATION AND LICENSE AGREEMENT

(AGI-23088 for the ROW Territory)

This Collaboration and License Agreement (this “Agreement”) is entered into as
of April 27, 2015 (the “Effective Date”), by and between Agios International
Sarl, a limited liability company organized and existing under the laws of
Switzerland (“Agios”), and Celgene International II Sarl, a limited liability
company organized and existing under the laws of Switzerland and having its
principal office in the Canton of Neuchatel, Switzerland (“Celgene”).

INTRODUCTION

 

1. Agios Pharmaceuticals, Inc., a Delaware corporation (“Agios USA”), and
Celgene Corporation, a Delaware corporation (“Celgene USA”), are parties to the
Discovery and Development Collaboration and License Agreement, dated as of
April 14, 2010, as amended (the “2010 Agreement”).

 

2. Pursuant to the 2010 Agreement, Agios USA has discovered and is developing a
compound referred to as AGI-23088 and as AG-881, which Agios USA and Celgene USA
believe to be a potent inhibitor of IDH1 and IDH2 mutants and wild type, with
the potential for penetration of the blood brain barrier.

 

3. Agios USA and Celgene USA, along with Agios and Celgene, have agreed that the
further Development and Commercialization of AGI-23088, which has potential
overlaps with other programs currently being undertaken pursuant to the 2010
Agreement, should be conducted pursuant to the terms of this Agreement between
the Parties for the ROW Territory and another agreement between Celgene USA and
Agios USA for the US Territory (“AGI-23088 US Agreement”) and that all further
such activities related to AGI-23088 should cease under the 2010 Agreement.

NOW, THEREFORE, in consideration of the respective representations, warranties,
covenants and agreements contained herein, and for other valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Agios and Celgene
hereby agree as follows:

Article I

Definitions

When used in this Agreement, each of the following terms shall have the meanings
set forth in this Article I:

Section 1.1 “Affiliate” means, as to any Person, any other Person that, directly
or indirectly through one or more intermediaries, controls, is controlled by or
is under common control with such Person, as the case may be, for so long as
such control exists. As used in this Section 1.1, “control” means: (a) to
possess, directly or indirectly, the power to direct the management and policies
of a Person, whether through ownership of voting securities or by contract
relating to voting rights or corporate governance; or (b) direct or indirect
beneficial ownership of at least fifty percent (50%) (or such lesser percentage
that is the maximum allowed to be owned by a foreign Person in a particular
jurisdiction) of the voting share capital in a Person.

--------------------------------------------------------------------------------

Section 1.2 “AGI-23088” means the compound described on Exhibit A to this
Agreement. Such compound may also be referred to from time to time as AG-881.

Section 1.3 “Agios Collaboration Intellectual Property,” “Agios Collaboration
Know-How” and “Agios Collaboration Patent Rights” means, respectively, the
Collaboration Intellectual Property Controlled by Agios or Agios USA, the
Collaboration Know-How Controlled by Agios or Agios USA, and the Collaboration
Patent Rights Controlled by Agios or Agios USA.

Section 1.4 “Agios Intellectual Property” means Agios Know-How and Agios Patent
Rights, collectively.

Section 1.5 “Agios Know-How” means any Know-How that is (a) Controlled by Agios
or Agios USA as of the Effective Date or during the Term, and (b) necessary or
useful for the Development, Manufacture and/or Commercialization of the Licensed
Products, but excluding Collaboration Know-How.

Section 1.6 “Agios Opt-Out Date” has the meaning set forth in the AGI-23088 US
Agreement.

Section 1.7 “Agios Opt-Out Notice” has the meaning set forth in the AGI-23088 US
Agreement.

Section 1.8 “Agios Patent Rights” means any Patent Rights that (a) are
Controlled by Agios or Agios USA as of the Effective Date or during the Term,
and (b) Cover, or are otherwise necessary or useful for the Development,
Manufacture and/or Commercialization of, the Licensed Products (including the
composition of matter, manufacture or any use thereof); but excluding
Collaboration Patent Rights. Agios Patent Rights as of the Effective Date are as
set forth on Exhibit B to this Agreement.

Section 1.9 “Business Day” means a day other than a Saturday or Sunday or
federal holiday in Cambridge, Massachusetts or Summit, New Jersey.

Section 1.10 “Calendar Quarter” means a calendar quarter ending on the last day
of March, June, September or December; provided, however, that the first
Calendar Quarter shall begin on the Effective Date and end on the last day of
June following the Effective Date.

Section 1.11 “Calendar Year” means a period of time commencing on January 1 and
ending on the following December 31; provided, however, that the first Calendar
Year shall begin on the Effective Date and end on December 31, 2015.

Section 1.12 “Celgene Collaboration Intellectual Property”, “Celgene
Collaboration Know-How” and “Celgene Collaboration Patent Rights” means,
respectively, the Collaboration Intellectual Property Controlled by Celgene or
Celgene USA, the Collaboration Know-How Controlled by Celgene or Celgene USA and
the Collaboration Patent Rights Controlled by Celgene or Celgene USA.

 

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Section 1.13 “Celgene Intellectual Property” means Celgene Know-How and Celgene
Patent Rights, collectively.

Section 1.14 “Celgene Know-How” means any Know-How that is (a) Controlled by
Celgene or Celgene USA as of the Effective Date or during the Term;
(b) necessary for the Development, Manufacture and/or Commercialization of the
Licensed Products; and (c) contributed by Celgene or Celgene USA, in Celgene’s
or Celgene USA’s sole discretion, to the Collaboration, as evidenced by written
notice from Celgene or Celgene USA to Agios; but excluding Collaboration
Know-How.

Section 1.15 “Celgene Patent Rights” means any Patent Rights that (a) are
Controlled by Celgene or Celgene USA as of the Effective Date or during the
Term; (b) Cover the Licensed Products (including the composition of matter,
manufacture or any use thereof); and (c) are contributed by Celgene or Celgene
USA, in Celgene’s or Celgene USA’s sole discretion, to the Collaboration, as
evidenced by written notice from Celgene or Celgene USA to Agios; but excluding
Collaboration Patent Rights.

Section 1.16 “Clinical Trial” means a Phase I Study, a Phase II Study, a Phase
III Study, a Phase IV Study or a combination of any of the foregoing studies.

Section 1.17 “Code” means the United States Internal Revenue Code of 1986, as
amended.

Section 1.18 “Collaboration” means the activities performed or to be performed
by a Party or Parties, as the case may be, relating to the Development,
Manufacturing and Commercialization of the Licensed Products under this
Agreement, the AGI-23088 US Agreement, and the activities performed by a Party
or the Parties relating to the Development and Manufacturing of AGI-23088 under
the 2010 Agreement before the Effective Date, collectively.

Section 1.19 “Collaboration Intellectual Property” means Collaboration Know-How
and Collaboration Patent Rights, collectively.

Section 1.20 “Collaboration Know-How” means any Know-How or interest therein
that was, before the Effective Date, or is, on or after the Effective Date,
developed or generated, either solely by or on behalf of Celgene, Celgene USA,
Agios or Agios USA or jointly by or on behalf of any of such Persons in the
conduct of the Collaboration, including Joint Inventions.

Section 1.21 “Collaboration Patent Rights” means any Patent Rights or interest
therein that was, before the Effective Date, or is, on or after the Effective
Date, Controlled solely by Celgene, Celgene USA, Agios or Agios USA or
Controlled jointly by any of such Persons and that Cover Collaboration Know-How,
including Joint Patents and any such Patent Rights filed before or after the
Effective Date.

 

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Section 1.22 “Commercialization” or “Commercialize” means any activities
directed to using, marketing, promoting, distributing, importing, offering to
sell, and/or selling a product, after or in expectation of receipt of Regulatory
Approval for such product (but excluding Development and any Phase IV Studies).

Section 1.23 “Commercially Reasonable Efforts” means, with respect to the
performing Party, the carrying out of obligations of such Party in a diligent,
expeditious and sustained manner, including the allocation of a commercially
reasonable level of personnel and financial resources, but in no event less than
such level of resources that an established biopharmaceutical company typically
devotes to products of similar market potential at a similar stage in its
development or product life, taking into account scientific and commercial
factors, including commercial Manufacturing, issues of safety and efficacy,
product profit, difficulty in developing or manufacturing the Licensed Products,
competitiveness of alternative Third Party products in the marketplace, the
patent or other proprietary position of the Licensed Products, the regulatory
requirements involved and the potential profitability for the performing Party
of the Licensed Products, marketed or to be marketed.

Section 1.24 “Companion Diagnostic” means a biomarker or diagnostic test that
may be used with a Licensed Product, or may be developed by the Parties pursuant
to Section 3.4, to generate a result for the purposes of diagnosing a disease or
condition, or to facilitate the application of the Licensed Product that is used
in the cure, mitigation, treatment, or prevention of disease, including a
biomarker or diagnostic test used to diagnose the likelihood that a specific
patient will contract a certain type of cancer or to predict which patients are
suitable candidates for a specific form of chemotherapy.

Section 1.25 “Compound” means AGI-23088 and any polymorph, isotopologue,
stereoisomer, prodrug, solvate, co-crystal or salt of AGI-23088.

Section 1.26 “Confidential Information” means (a) all confidential or
proprietary information relating to the Collaboration, and (b) all other
confidential or proprietary documents, technology, Know-How or other information
(whether or not patentable) actually disclosed by one Party to the other
pursuant to this Agreement, the AGI-23088 US Agreement or the 2010 Agreement
relating to the Licensed Products and all proprietary biological materials of a
Party.

Section 1.27 “Control” or “Controlled” means, with respect to any (a) Know-How
or other information or materials, (b) compound, or (c) intellectual property
right, the possession (whether by license (other than a license granted under
this Agreement) or ownership) by a Party of the ability to grant to the other
Party access and/or a license, as provided herein, without violating the terms
of any agreement with any Third Party existing as of the Effective Date or
thereafter during the Term.

Section 1.28 “Core Patent Rights” means Patent Rights comprising [**] claims.

Section 1.29 “Cover,” “Covering” or “Covered” means that, with respect to a
product or technology, but for a Person’s ownership of Patent Rights or a
license granted to a Person under a Valid Claim included in the Patent Rights
under which such license is granted, the Development, Manufacture,
Commercialization and/or other use of such product or practice of

 

- 4 -

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such technology by such Person would infringe any Valid Claim of any patent
included in such Patent Rights or, with respect to a Valid Claim included in any
patent application, would infringe such Valid Claim if such patent application
were to issue as a patent.

Section 1.30 “Data” means any and all research data, results, pharmacology data,
medicinal chemistry data, preclinical data, market research, clinical data
(including investigator reports (both preliminary and final), statistical
analysis, expert opinions and reports, safety and other electronic databases),
in any and all forms, including files, reports, raw data, source data (including
patient medical records and original patient report forms, but excluding
patient-specific data to the extent required by applicable Laws) and the like,
in each case directed to, or used in, the Development, Manufacture or
Commercialization of the Licensed Products.

Section 1.31 “Develop” or “Development” means research, preclinical,
non-clinical and clinical development activities, including activities relating
to assays, test method development and stability testing, toxicology,
pharmacology, formulation, quality assurance/quality control development,
Clinical Trials (including any Phase IV Study), technology transfer, statistical
analysis, process development and scale-up, pharmacokinetic studies, data
collection and management, report writing, and other pre-Regulatory Approval
activities.

Section 1.32 “Development Plan” means a development plan and related budget
approved by the JSC by Mutual Consent after the Effective Date, as amended from
time to time by the JSC by Mutual Consent.

Section 1.33 “Excess Amount” has the meaning set forth in the AGI-23088 US
Agreement.

Section 1.34 “Executive Officers” means Celgene’s Chief Executive Officer (or
the officer or employee of Celgene then serving in a substantially equivalent
capacity) or his designee and Agios’ Chief Executive Officer (or the officer or
employee of Agios then serving in a substantially equivalent capacity) or his
designee; provided that any such designee must have decision-making authority on
behalf of the applicable Party.

Section 1.35 “Existing Third Party Agreement” means any agreement listed on
Exhibit D to this Agreement.

Section 1.36 “FDA” means the United States Food and Drug Administration, or any
successor agency thereof.

Section 1.37 “FDCA” means the United States Federal Food, Drug, and Cosmetic
Act, and the regulations promulgated thereunder, each as amended from time to
time.

Section 1.38 “Field” means the treatment, control, mitigation, prevention or
cure or diagnosis of any Indications.

Section 1.39 “First Commercial Sale” means the first commercial sale of a
Licensed Product by a Party, its Affiliates, distributors and/or agents in a
country in an arms’ length transaction to a Third Party following receipt of
applicable Regulatory Approval of such product in such country. Sales for test
marketing or clinical trial purposes shall not constitute a First Commercial
Sale.

 

- 5 -

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Section 1.40 “Generic Competition” means, with respect to a Licensed Product in
a given country in a given Calendar Year, that, during such Calendar Year [**]
Generic Products shall be commercially available in such country.

Section 1.41 “Generic Product” means, as to a Licensed Product, any product
(including a “generic product” approved by way of an Abbreviated New Drug
Application by the FDA (or equivalent regulatory mechanism for another
Regulatory Authority), “biogeneric,” “follow-on biologic,” “follow-on biological
product,” “follow-on protein product,” “similar biological medicinal product,”
or “biosimilar product”) that, in each case, (a) is sold by a Third Party that
is not a sublicensee of the royalty-paying Party or any of its Affiliates and
that has not otherwise been authorized by the royalty-paying Party or any of its
Affiliates under a Regulatory Approval granted by a Regulatory Authority to such
Third Party that is based upon or relies upon the Regulatory Approval granted by
such Regulatory Authority for such Licensed Product; and (b) in the United
States, is “therapeutically equivalent,” “comparable,” “biosimilar,” or
“interchangeable,” as evaluated by the FDA, applying the definition of
“therapeutically equivalent” set forth in the preface to the then-current
edition of the FDA publication “Approved Drug Products With Therapeutic
Equivalence Evaluations” or any other definitions set forth in the U.S. Code,
FDA regulations, or other source of U.S. Law and, outside the United States,
meets such equivalent determination by the applicable Regulatory Authorities
(including a determination that the product is “comparable,” “interchangeable,”
“bioequivalent,” or “biosimilar” with respect to the Licensed Product), in each
case, as is necessary to permit a pharmacist or other individual authorized to
dispense pharmaceuticals under Law to substitute one product for another product
in the absence of specific instruction from a physician or other authorized
prescriber under Law.

Section 1.42 “Global Safety Database” has the meaning set forth in the AGI-23088
US Agreement.

Section 1.43 “IDH1” means (alias PICD, IDPC; UniProt identifier O75874) the
persoxisomal/cytosolic form of isocitrate dehydrogenase that catalyzes the NADP+
dependent conversion of isocitrate to alpha-ketoglutarate.

Section 1.44 “IDH2” means (alias ICD-M, IDPM; UniProt identifier P48735) the
mitochondrial form of isocitrate dehydrogenase that catalyzes the NADP+
dependent conversion of isocitrate to alpha-ketoglutarate.

Section 1.45 “IND” means any Investigational New Drug application filed with the
FDA pursuant to Part 312 of Title 21 of the U.S. Code of Federal Regulations,
including any supplements or amendments thereto. References herein to IND shall
include, to the extent applicable, any comparable filing(s) outside the United
States.

Section 1.46 “IND Acceptance Date” means thirty (30) days following the filing
of an IND with the FDA; provided that the FDA has not provided any communication
indicating that the conduct of clinical activities described in such IND may not
begin within thirty (30) days

 

- 6 -

--------------------------------------------------------------------------------

after such filing. In the event that any such communication is provided by the
FDA, “IND Acceptance Date” means the date that the Parties are permitted by the
FDA to begin clinical activities. If the Parties both agree, “IND Acceptance
Date” means the date, following filing of an IND with a Regulatory Authority
(other than the FDA), that Agios receives a written communication from such
Regulatory Authority pursuant to which the conduct of clinical activities
described in the appropriate submissions is permitted to begin.

Section 1.47 “Indication” means any human disease, condition or syndrome, or
sign or symptom of, or associated with, a human disease or condition.

Section 1.48 “Know-How” means any tangible or intangible trade secrets,
know-how, expertise, discoveries, inventions, information, data or materials,
including ideas, concepts, formulas, methods, procedures, designs, technologies,
compositions, plans, applications, technical data, assays, manufacturing
information or data, samples, chemical and biological materials and all
derivatives, modifications and improvements thereof.

Section 1.49 “Law” means any law, statute, rule, regulation, ordinance or other
pronouncement having the effect of law, of any federal, national, multinational,
state, provincial, county, city or other political subdivision, as from time to
time enacted, repealed or amended, including good clinical practices and adverse
event reporting requirements, guidance from the International Conference on
Harmonization or other generally accepted conventions, the FDCA and similar laws
and regulations in countries outside the United States, and all other rules,
regulations and requirements of the FDA and other applicable Regulatory
Authorities.

Section 1.50 “Licensed Products” means (a) a Compound, and (b) any product that
contains a Compound as an active ingredient.

Section 1.51 “Licensee Partner” means any Third Party to whom a Party or any of
its Affiliates grants a sublicense or license with respect to the Development,
Manufacture or Commercialization of Licensed Products in the Field in the ROW
Territory under the rights to Agios Intellectual Property, Celgene Intellectual
Property or Collaboration Intellectual Property, as the case may be, granted to
such Party or Affiliate hereunder, in each case excluding (a) any Person that is
granted a sublicense in accordance with Section 8.2(a), and (b) wholesale
distributors or any other Third Party that purchases Licensed Product in an
arm’s-length transaction, where such Third Party does not have a sublicense to
Develop, Manufacture or Commercialize the Licensed Product except for a limited
sublicense to the extent required to enable such Third Party to perform final
packaging for such Licensed Product for local distribution.

Section 1.52 “Major European Countries” means France, Germany, Italy, Spain and
the United Kingdom.

Section 1.53 “Major Market” means each of the United States of America, Japan,
and the Major European Countries.

Section 1.54 “Manufacture” or “Manufacturing” means, as applicable, all
activities associated with the production, manufacture, processing, filling,
packaging, labeling, shipping, and storage of a drug substance or drug product,
and/or any components thereof, including

 

- 7 -

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process and formulation development, process validation, stability testing,
manufacturing scale up, preclinical, clinical and commercial manufacture and
analytical methods development and validation, product characterization, quality
assurance and quality control development, testing and release.

Section 1.55 “Manufacturing Technology” means copies of all Celgene Know-How,
Agios Know-How or Collaboration Know-How, as applicable, which are necessary or
useful for Manufacturing preclinical, clinical and/or commercial supply, as
applicable, of the Licensed Products, including specifications, assays, batch
records, quality control data, and transportation and storage requirements.

Section 1.56 “Mutual Consent” means with respect to any matter specified as
requiring “Mutual Consent”, that each Party must consent in writing to the
action to be taken (or not taken), or if the matter is one referred to the JSC,
that the JSC must approve the action to be taken (or not taken) by unanimous
vote, with each Party (or its voting member of the JSC), in its/his/her sole
discretion, being entitled to withhold its/his/her consent to or approval of the
matter; provided, however, that a Party may take any such action as required by
applicable Law or order of any governmental authority in the absence of the
consent of the other Party or the approval of the JSC, as applicable.

Section 1.57 “NDA” means an application submitted to a Regulatory Authority for
the marketing approval of a Licensed Product, including (a) a New Drug
Application, Product License Application or Biologics License Application filed
with FDA or any successor applications or procedures, (b) a foreign equivalent
of a U.S. New Drug Application, Product License Application or Biologics License
Application or any successor applications or procedures, and (c) all supplements
and amendments that may be filed with respect to the foregoing.

Section 1.58 “Parent” means, with respect to Agios, Agios USA, and with respect
to Celgene, Celgene USA.

Section 1.59 “Party” means Agios or Celgene; “Parties” means Agios and Celgene.

Section 1.60 “Patent Rights” means (a) patents and patent applications anywhere
in the world, (b) all divisionals, continuations, continuations in-part thereof
or any other patent application claiming priority, or entitled to claim
priority, directly or indirectly to (i) any such patents or patent applications
or (ii) any patent or patent application from which such patents or patent
applications claim, or is entitled to claim, direct or indirect priority, and
(c) all patents issuing on any of the foregoing anywhere in the world, together
with all registrations, reissues, re-examinations, patents of addition,
renewals, supplemental protection certificates, or extensions of any of the
foregoing anywhere in the world.

Section 1.61 “Person” means any corporation, limited or general partnership,
limited liability company, joint venture, trust, unincorporated association,
governmental body, authority, bureau or agency, any other entity or body, or an
individual.

Section 1.62 “Phase I Study” means a human clinical trial of a product, the
principal purpose of which is a preliminary determination of safety,
tolerability and pharmacokinetics in

 

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study subjects where potential pharmacological activity may be determined or
similar clinical study prescribed by the Regulatory Authorities, from time to
time, pursuant to applicable Law or otherwise, including for example the trials
referred to in 21 C.F.R. §312.21(a), as amended (or the non-United States
equivalent thereof).

Section 1.63 “Phase II Study” means a human clinical trial of a product, the
principal purpose of which is a preliminary determination of safety and efficacy
or appropriate dosage ranges in the target patient population or a similar
clinical study prescribed by the Regulatory Authorities, from time to time,
pursuant to applicable Law or otherwise, including for example the trials
referred to in 21 C.F.R. §312.21(b), as amended (or the non-United States
equivalent thereof).

Section 1.64 “Phase III Study” means a pivotal human clinical trial of a
product, the principal purpose of which is to gain evidence with statistical
significance of the efficacy of a product in a target population, to obtain
expanded evidence of safety for such product that is needed to evaluate the
overall benefit-risk relationship of such product, and to provide an adequate
basis to determine warnings, precautions, and adverse reactions that are
associated with such product in the dosage range to be prescribed, which trial
is intended to support or maintain Regulatory Approval for such product,
including all tests and studies prescribed by the applicable Regulatory
Authority, from time to time, pursuant to applicable Law or otherwise, including
for example the trials referred to in 21 C.F.R. §312.21(c), as amended (or the
non-United States equivalent thereof).

Section 1.65 “Phase IV Study” means a human clinical trial of a product which is
(a) conducted to satisfy a requirement of a Regulatory Authority in order to
maintain a Regulatory Approval or (b) conducted voluntarily after Regulatory
Approval of the product has been obtained from an appropriate Regulatory
Authority for enhancing marketing or scientific knowledge of an approved
Indication.

Section 1.66 “Prosecution” or “Prosecute” means the filing, preparation,
prosecution and maintenance of Patent Rights, including any and all pre-grant
and post-grant ex-parte or inter partes proceedings before any patent authority,
such as interferences, reissue proceedings, reexaminations, oppositions or other
challenges to the patentability or validity of any Patent Rights not initiated
through a court or other tribunal that determines infringement.

Section 1.67 “Publication” means any publication in a scientific journal or
other scientific periodical, publication in any government clinical trial
reporting website, any abstract to be presented to any scientific audience, any
presentation at any scientific conference, including slides and texts of oral or
other public presentations, any other public presentation directed to a
scientific audience that pertains to any Licensed Product, the use of any
Licensed Product, or the data or result from any work under the Collaboration.

Section 1.68 “Regulatory Approval” means all approvals of the applicable
Regulatory Authority necessary for the commercial marketing and sale of a
product for a particular Indication in a country.

 

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Section 1.69 “Regulatory Authority” means a federal, national, multinational,
state, provincial or local regulatory agency, department, bureau or other
governmental entity with authority over the testing, manufacture, use, storage,
import, promotion, marketing or sale of a product in a country or territory.

Section 1.70 “Regulatory Documentation” means, with respect to the
Collaboration, all INDs, NDAs and other regulatory applications submitted to any
Regulatory Authority, Regulatory Approvals, pre-clinical and clinical data and
information, regulatory materials, drug dossiers, master files (including Drug
Master Files, as defined in 21 C.F.R. 314.420 and any non-United States
equivalents), and any other data, reports, records, regulatory correspondence
and other materials relating to Development or Regulatory Approval of the
Licensed Products, or required to Manufacture, distribute or sell the Licensed
Products, including any information that relates to pharmacology, toxicology,
chemistry, Manufacturing and controls data, batch records, safety and efficacy,
and any safety database.

Section 1.71 “Regulatory Exclusivity” means, with respect to a Licensed Product
in a country, that the Licensed Product has been granted marketing exclusivity
afforded approved drug products, or approved biological products if applicable,
pursuant to (a) Sections 505(c), 505(j), and 505A of the FDCA, and the
regulations promulgated thereunder, as amended from time to time, or similar
laws enacted to apply to biological products, and the regulations promulgated
thereunder, as amended from time to time, or their equivalent in a country other
than the United States, (b) the orphan drug exclusivity afforded approved drugs
designated for rare diseases or conditions under Sections 526 and 527 of the
FDCA, and the regulations promulgated thereunder, as amended from time to time,
or its equivalent in a country other than the United States, or (c) any future
Law.

Section 1.72 “Right of Reference or Use” means a “Right of Reference or Use” as
that term is defined in 21 C.F.R. §314.3(b), and any non-United States
equivalents.

Section 1.73 “ROW Territory” means all countries in the world other than the US
Territory.

Section 1.74 “Sole” means, with respect to the license of any Patent Rights or
Know-How, that such license is an exclusive license, except for the rights
reserved by the licensor for itself and its Affiliates (a) to continue to
practice the subject Patent Rights and Know-How and (b) to license or
sublicense, as applicable, the subject Patent Rights and Know to Third Parties
as reasonably necessary for such licensor or its Affiliates to exercise their
rights or fulfill their obligations under the Collaboration.

Section 1.75 “Target” means IDH1 or IDH2.

Section 1.76 “Territory” means the US Territory and the ROW Territory.

Section 1.77 “Third Party” means any Person other than Agios or Celgene or each
Party’s respective Affiliates.

Section 1.78 “Third Party Agreement” means (a) the Existing Third Party
Agreement and (b) any other Third Party agreements which either Party may enter
into, during the Term in

 

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accordance with the terms of this Agreement, to acquire or license Third Party
Patent Rights or Know-How that are necessary or useful for the Development,
Manufacture and/or Commercialization of the Licensed Products.

Section 1.79 “Third Party Rights” means, with respect to a Party, any rights of,
and any limitations, restrictions or obligations imposed by, Third Parties
pursuant to any Third Party Agreements.

Section 1.80 “US Territory” means the United States of America, including its
territories, possessions and Puerto Rico.

Section 1.81 “Valid Claim” means (a) a claim of any issued, unexpired patent
that has not been revoked or held unenforceable or invalid by a decision of a
court or governmental agency of competent jurisdiction from which no appeal can
be taken, or with respect to which an appeal is not taken within the time
allowed for appeal, and that has not been disclaimed or admitted to be invalid
or unenforceable through reissue, disclaimer or otherwise, or (b) a patent
application or subject matter of a claim thereof filed by a Person in good faith
that has not been cancelled, withdrawn or abandoned, nor been pending for more
than [**] years from the earliest filing date to which such patent application
or claim is entitled.

Section 1.82 Additional Definitions. Each of the following definitions is set
forth in the section of this Agreement indicated below:

 

DEFINITION

  

SECTION

2010 Agreement    Introduction AAA    15.1(b) Accounting Standards    Exhibit E
Acquired Party    15.4(b) Acquired Party Activity    15.4(c) Acquired Third
Party    15.4(c) Acquirer    15.4(b) Acquisition    15.4(b) Additional
Development Activities    3.3 Additional Development Opt-In Date    3.3(e)(i)
Additional Development Opt-In Notice    3.3(e) Additional Development Proposal
   3.3(a) Additional Development Party    3.3(c) Additional Revenue    Exhibit E
Advertising and Market Research Expenses    Exhibit E AGI-23088 US Agreement   
Recitals Agios    Preamble Agios Clinical-Scale Manufacturing Responsibilities
   4.1(a) Agios Commercial-Scale Manufacturing Responsibilities    4.1(a) Agios
Guarantor    15.17 Agios Indemnified Parties    13.1(a)

 

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DEFINITION

  

SECTION

Agios Non-Satisfaction Condition    15.17 Agios Obligations    15.17 Agios USA
   Recitals Agreement    Preamble Alliance Manager    2.6 Annual Net Sales   
Exhibit E Arbitrable Matters    15.1(b) Audit Team    9.8(a) Audit Rights Holder
   9.8(f) Auditee    9.8(f) Bankruptcy Code    8.8 Breaching Party    14.2(b)(i)
CA 23088 ROW Partnership    15.16 Celgene    Preamble Celgene Controlled Agios
Patent Rights    10.2(b) Celgene Guarantor    15.18 Celgene Indemnified Parties
   13.2(a) Celgene Manufacturing Responsibilities    4.1(c) Celgene
Non-Satisfaction Condition    15.18 Celgene Obligations    15.18 Celgene USA   
Recitals Challenge    10.8(a) Change of Control    15.5(c) Combination Product
   Exhibit E Commercialization Expenses    Exhibit E Commercialization Budget   
6.2(a)(i) Commercialization Plan    6.2(a)(i) Committee    2.1(a) Competitive
Infringement    10.3(b) Cooperating Party    11.3(b)(iii) CPI    Exhibit E
CREATE Act Patent    10.7 Development Budget    3.1(a) Development Costs   
Exhibit E Disclosing Party    11.1 Dispute    15.1(a) Distribution Costs   
Exhibit E [**] Agreement    Exhibit D Earlier Patent    10.7 Effective Date   
Preamble Expert    15.1(b)(i) Finance Working Group    2.1(a) Financial Exhibit
   2.9(b) FTE    Exhibit E FTE Costs    Exhibit E

 

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DEFINITION

  

SECTION

FTE Rate    Exhibit E [**]    15.12 Initial Enforcement Party    10.3(b)
Invalidity Claim    10.4(b) JCC    2.1(a) JDC    2.1(a) Joint Inventions   
10.1(c) Joint Patents    10.1(c) JPC    2.1(a) JPC Designee    2.8(e) JSC   
2.1(a) Manufacturing Costs    Exhibit E Manufacturing Scale-Up Costs    Exhibit
E Marketing Activities    6.3(a) Marketing Expenses    Exhibit E Marketing
Management Expenses    Exhibit E Medical Education Expenses    Exhibit E Net
Sales    Exhibit E Non-Additional Development Party    3.3(c) Non-Breaching
Party    14.2(b)(i) Objecting Party    6.1(b) Other Commercialization Costs   
Exhibit E Out-of-Pocket Costs    Exhibit E Patent and Trademark Prosecution and
Enforcement Costs    Exhibit E Patent Prosecution Expenses    10.2(e) Payments
   9.9(a) Pharmacovigilance Agreement    5.3 Phase IV Trial Expenses    Exhibit
E Product Liabilities    Exhibit E Product Trademarks    6.4(a) Proposing Party
   6.1(b) Prosecuting Party    10.2(f)(i) Recall Expenses    Exhibit E Receiving
Party    11.1 Reconciliation Procedures    2.9(b) Redacted Version    11.3(b)(i)
Regulatory Interactions    5.1(b) Regulatory Expenses    Exhibit E Regulatory
Maintenance Costs    Exhibit E Requesting Party    11.3(b)(iii) Royalty Term   
9.5(b) Selling Expenses    Exhibit E Step-In Enforcement Party    10.3(d) Term
   14.1 Third Party Activity    15.4(b)

 

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DEFINITION

  

SECTION

Third Party Contractors    8.2(a)(ii) Third Party Infringement    10.3(a) Third
Party Infringement Action    10.4(a) Third Party Patent Costs    Exhibit E Third
Party Products Liability Action    13.4(a) ROW Territory Loss    Exhibit E ROW
Territory Profit    Exhibit E ROW Territory Profit or Loss    Exhibit E

Article II

Governance; Collaboration

Section 2.1 General.

(a) Governance Committees. The Parties hereby establish (i) a Joint Steering
Committee (“JSC”) to oversee and coordinate the overall conduct of all further
activities concerning the Collaboration after the Effective Date; (ii) a Joint
Development Committee (“JDC”) to oversee and coordinate Development (including
Manufacturing of clinical supply) of the Licensed Product(s); (iii) a Joint
Commercialization Committee (“JCC”) to oversee the Commercialization (including
Manufacturing of commercial supply) of the Licensed Products; (iv) the Joint
Patent Committee (“JPC”) to coordinate the Prosecution of Agios Patent Rights,
Agios Collaboration Patent Rights, Celgene Patent Rights and Celgene
Collaboration Patent Rights (the JSC, the JDC, the JCC and JPC shall each be
referred to as a “Committee”); and (v) a joint Finance Working Group (“Finance
Working Group”) to coordinate financial aspects of the Collaboration and to act
as a resource for all financial matters for each Committee as needed. Each
Committee may from time to time establish subcommittees or project teams to
handle matters within the scope of its authority. From and after the Effective
Date, no “Committee” or other working group established under the 2010 Agreement
shall have the authority to address any matters involving this Collaboration.

(b) Certain Interactions with and Effects on the 2010 Agreement. Upon and after
the Effective Date, notwithstanding anything to the contrary in the 2010
Agreement (with each quoted term below having the meaning given in the 2010
Agreement):

(i) All activities regarding Development, Manufacturing and Commercialization of
a Compound or Licensed Product containing AGI-23088 shall cease under the 2010
Agreement and all future such activities shall be conducted solely under this
Agreement and the AGI-23088 US Agreement.

(ii) None of the Parties’ activities performed in accordance with this Agreement
(including those activities specifically permitted upon and after termination)
shall be deemed a violation of Section 8.8 of the 2010 Agreement.

(iii) Neither AGI-23088 nor any other Compound or Licensed Product is or can be
(A) included as an “Agreement Compound” or in any of the classes of compounds
comprising “Agreement Compounds”, (B) part of the “Compound List,” (C) included
in any of the “Picks”, or (D) part of an “Agios Reverted Program,” or “Celgene
Reverted Program”.

 

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(iv) No payments, including any “IND Amount” or “Phase I Amount”, any milestones
or any royalties, will be due under the 2010 Agreement with respect to the
Licensed Products.

(v) No decision of any “Committee” or working group under the 2010 Agreement
shall have any binding effect on any Committee or working group under this
Agreement, and no decision of any Committee or working group under this
Agreement shall have any binding effect on any “Committee” or working group
under the 2010 Agreement notwithstanding that the members of any such committees
may contain some or all of the same individual representatives for each Party.
Each meeting of a Committee or working group under this Agreement shall be
conducted separately from any meeting of a “Committee” or working group under
the 2010 Agreement.

(vi) All “Confidential Information” disclosed under the 2010 Agreement that
solely relates to AGI-23088, Compound or any Licensed Product shall be deemed to
be Confidential Information disclosed under this Agreement and not the 2010
Agreement. All “Confidential Information” disclosed under the 2010 Agreement
that relates to, but does not solely relate to, AGI-23088, Compound or any
Licensed Product shall be deemed “Confidential Information” disclosed under the
2010 Agreement and also Confidential Information disclosed under this Agreement;
provided, however, that any disclosure of such information that is permitted
under the 2010 Agreement shall not be deemed a breach of this Agreement and any
disclosure of such information that is permitted under this Agreement shall not
be deemed a breach of the 2010 Agreement.

Section 2.2 Joint Steering Committee.

(a) Establishment. The initial members of the JSC for each Party will be
determined by each Party, respectively, within [**] days after the Effective
Date, and the Parties will complete Exhibit H to reflect such appointments. The
Parties intend that the JSC shall have the responsibility for general oversight
over the Collaboration for the ROW Territory and for coordinating with the JSC
from the AGI-23088 US Territory Agreement on such matters.

(b) Duties. The JSC shall:

(i) oversee and coordinate the conduct of the Collaboration for the ROW
Territory and related matters within the responsibilities of the Committees
hereunder;

(ii) by Mutual Consent provide strategic guidance, and coordinate efforts
between the Parties, with respect to any Publications and by Mutual Consent
approve requests for Publication, from either Party, according to Section 11.4
hereof;

(iii) serve as a forum for dispute resolution in accordance with Section 2.8
with respect to matters that are not resolved at the JDC or JCC;

 

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(iv) approve the initial Development Plan (as provided in Section 1.32) and any
changes thereto proposed by the JDC, in all cases by Mutual Consent; and

(v) perform such other duties as are specifically assigned to the JSC under this
Agreement.

Section 2.3 Joint Development Committee.

(a) Establishment. The initial members of the JDC for each Party will be
determined by each Party, respectively, within [**] days after the Effective
Date, and the Parties will complete Exhibit H to reflect such appointments. The
Parties intend that the JDC shall have the responsibility for overseeing the
Development of Licensed Products under the Collaboration for the ROW Territory
and for coordinating with the JDC from the AGI-23088 US Territory Agreement on
such matters.

(b) Duties. The JDC shall:

(i) review and recommend to the JSC approval of the initial Development Plan (as
provided in Section 1.32) and any proposed updates or amendments to the
Development Plan (and applicable Development Budget) as needed;

(ii) oversee, review, coordinate and provide strategic guidance to the Parties
on the Development of the Licensed Products in the ROW Territory, including
assigning activities to be performed by each Party, subject to the provisions of
Section 3.1;

(iii) in conjunction with any committees under the AGI-23088 US Agreement
responsible for Development of the Licensed Products, review and coordinate such
committees’ activities with respect to the Development of the Licensed Products
with the Parties activities under this Agreement;

(iv) subject to and within the parameters of each Development Plan (A) oversee
the implementation of the Development Plan (including evaluation of Clinical
Trial protocols and review of the conduct of Clinical Trials conducted pursuant
to the Development Plan); and (B) oversee and approve the overall strategy and
positioning of all material submissions and filings with the applicable
Regulatory Authorities;

(v) manage the Development of any Companion Diagnostics, including the
Development of any biomarkers;

(vi) oversee, review and coordinate the studies required for the preparation of
the CMC section of an IND for filing with Regulatory Authorities for the
Licensed Products, including studies relating to analytical methods and purity
analysis, and (in conjunction with the JCC) formulation and Manufacturing
development studies, together with associated regulatory activities;

(vii) oversee, review and coordinate Manufacturing of Licensed Product for
Development purposes;

 

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(viii) review and approve the content of any IND for a Licensed Product;

(ix) develop and approve a publication plan for any Publications made prior to
the First Commercial Sale of a Licensed Product in the ROW Territory;

(x) in conjunction with the JCC, oversee and coordinate the Parties’ activities
with respect to the Manufacture of pre-clinical and clinical supply of the
Licensed Products; and

(xi) perform such other duties as are specifically assigned to the JDC under
this Agreement.

Section 2.4 Joint Commercialization Committee. Upon initiation of the [**] Study
with respect to a Licensed Product or within [**] days after request by either
Party if requested by either Party earlier, the Parties shall establish the JCC.
The Parties intend that the JCC shall have the responsibility for overseeing the
Commercialization of Licensed Products under the Collaboration for the ROW
Territory and for coordinating with the JCC from the AGI-23088 US Territory
Agreement on such matters.

(a) Duties. The JCC shall:

(i) oversee, review and coordinate the Commercialization of the Licensed
Products by the Parties in the ROW Territory;

(ii) in conjunction with any committees under the AGI-23088 US Agreement
responsible for Commercialization of the Licensed Products, review and
coordinate such committees’ activities with respect to the Commercialization of
the Licensed Products with the Parties activities under this Agreement;

(iii) develop and oversee a pricing and branding strategy for the Licensed
Products;

(iv) set overall strategic objectives and plans related to Commercialization of
the Licensed Products in the ROW Territory;

(v) review and approve the annual Commercialization Plan for the Licensed
Products, and any updates or amendments thereto, and propose revisions to the
Commercialization Plan as needed;

(vi) review and approve all sales, promotional and communication materials for
the Licensed Products;

(vii) develop and approve a publication plan for any Publications made after the
First Commercial Sale of a Licensed Product in the ROW Territory;

(viii) provide a forum for the Parties to share information with respect to the
Commercialization of the Licensed Products;

 

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(ix) review and provide strategic guidance on all Marketing Activities with
respect to the Licensed Products worldwide;

(x) subject to and within the parameters of the Commercialization Plan, oversee
the implementation of such plan;

(xi) confirm that both Parties’ have approved all promotional materials in
accordance with the Parties’ internal copy review procedures;

(xii) oversee, review and coordinate Manufacturing of commercial supply of the
Licensed Products; and

(xiii) perform such other duties as are specifically assigned to the JCC under
this Agreement.

Section 2.5 Joint Patent Committee.

(a) Establishment. The initial members of the JPC for each Party will be
determined by each Party, respectively, within [**] days after the Effective
Date, and the Parties will complete Exhibit H to reflect such appointments. The
Parties intend that the JPC shall have the responsibility for sharing
information and coordinating Patent Prosecution matters involving Agios Patent
Rights, Celgene Patent Rights, and Collaboration Patent Rights for the ROW
Territory and for coordinating with the JPC from the AGI-23088 US Territory
Agreement on such matters.

(b) Duties. The JPC shall:

(i) discuss the current status of all Agios Patent Rights, Celgene Patent Rights
and Collaboration Patent Rights in the ROW Territory;

(ii) discuss filing and claiming strategies involving Agios Patent Rights,
Celgene Patent Rights and Collaboration Patent Rights in the ROW Territory for
all those existing as of the Effective Date as well as any new applications for
the foregoing to be filed after the Effective Date;

(iii) in conjunction with the JPC from the AGI-23088 US Territory Agreement,
coordinate the timing and conduct of the Parties’ respective activities assigned
to each of them under this Agreement with respect to Prosecution;

(iv) in conjunction with the JPC from the AGI-23088 US Territory Agreement,
coordinate the Parties’ respective activities in preparation for potential
litigation involving the assertion of the Agios Patent Rights, Agios
Collaboration Patent Rights, Celgene Patent Rights and Celgene Collaboration
Patent Rights in the ROW Territory under Section 10.3(c); and

(v) perform such other duties as are specifically assigned to the JPC under this
Agreement.

 

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Section 2.6 Alliance Managers. Each Party shall appoint one designated
representative to serve as an alliance manager (“Alliance Manager”) with
responsibility for being the primary point of contact between the Parties with
respect to the Collaboration. The Alliance Managers shall attend JSC, JDC and
JCC meetings, as necessary, as non-voting observers. Nothing herein shall
prohibit a Party from appointing its Alliance Manager as a member of one or more
Committees.

Section 2.7 General Committee Membership and Procedures.

(a) Committee Membership. Each Committee shall each be composed of three
(3) representatives from Celgene, on the one hand, and (3) representatives from
Agios, on the other hand, each of which representatives shall be of the
seniority and experience appropriate for service on the applicable Committee in
light of the functions, responsibilities and authority of such Committee and the
status of Development and Commercialization of the Licensed Products being
pursued hereunder from time to time. Each Party may replace any of its
representatives on any Committee at any time with prior written notice to the
other Party; provided that such replacement meets this standard. [**] shall
appoint an initial chairperson from among its members for the JDC, and [**]
shall appoint an initial chairperson from its members for the JSC and JPC and,
upon its formation, the JCC. The chairperson for each Committee shall alternate
each Calendar Year between a representative of Agios and a representative of
Celgene. The initial chairperson for each Committee is indicated on Exhibit H.
Within fifteen (15) Business Days following each Committee meeting, the
chairperson of each Committee shall circulate to all Committee members a draft
of the minutes of such meeting. The Committee shall then approve, by Mutual
Consent, such minutes within fifteen (15) Business Days following circulation.

(b) Committee Meetings.

(i) The JSC, JPC and JDC shall hold an initial meeting within [**] days of the
Effective Date or as otherwise agreed by the Parties. Thereafter, each Committee
shall meet at least once every Calendar Quarter, unless the respective Committee
members otherwise agree. All Committee meetings shall be conducted in person,
unless otherwise determined by the applicable Committee by Mutual Consent.

(ii) Unless otherwise agreed by the Parties, all in-person meetings for each
Committee shall be held on an alternating basis between Agios’ facilities in
Cambridge, Massachusetts (or such future location as Agios’ facilities may move
to) and Celgene’s facilities in Summit, New Jersey or San Diego, California, as
determined by Celgene (or such future location as Celgene’s facilities may move
to). A reasonable number of other representatives of a Party may attend any
Committee meeting as non-voting observers; provided that such additional
representatives are under obligations of confidentiality and non-use applicable
to the Confidential Information of the other Party that are at least as
stringent as those set forth in Article XI; and provided further that the
Parties, reasonably in advance of the applicable Committee meeting approve the
list of non-voting observers to attend such meeting. Each Party shall be
responsible for all of its own personnel and travel costs and expenses relating
to participation in Committee meetings.

 

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Section 2.8 Decision Making.

(a) Committee Voting. All decisions of a Committee shall be attempted to be made
by unanimous vote, with each Party’s representatives collectively having one
(1) vote, and each such decision (if made) shall be set forth in minutes
approved by both Parties’ representatives on the Committee. Upon [**] Business
Days prior written notice, either Party may convene a special meeting of a
Committee for the purpose of resolving any failure to reach agreement on a
matter within the scope of the authority and responsibility of such Committee.
No Committee shall have the authority to resolve any dispute involving the
breach or alleged breach of this Agreement or to amend or modify this Agreement
or the Parties’ respective rights and obligations hereunder.

(b) Referrals from JDC or JCC to JSC. If the JDC or JCC is unable to decide, by
unanimous vote, on any matter so referred to it for resolution by one or both
Parties within [**] Business Days after the matter is so referred to it, the
Chairperson of the JDC or JCC, as applicable, shall refer such matter to the JSC
for attempted resolution by unanimous vote.

(c) Referrals from the JSC to Executive Officers. If the JSC is unable to
decide, by unanimous vote, on any such matter referred to it by the JDC or the
JCC or on any other matter specified in this Agreement to be decided by the JSC,
within [**] Business Days after the matter is referred to it or first considered
by it, the Chairperson of the JSC shall submit such matter for attempted
resolution by agreement of the Executive Officers.

(d) Decision-Making Authority. If the Executive Officers are unable to resolve
any matter referred to them by the Chairperson of the JSC within [**] Business
Days after the matter is referred to them, then, subject to Section 2.8(c):

(i) if the unresolved matter relates to the Development of the Licensed
Products, including Agios Clinical-Scale Manufacturing Responsibilities and
Celgene Manufacturing Responsibilities during Development and Regulatory
Interactions in a geography until Regulatory Approval for such geography,
neither Party shall have final decision-making rights with respect to such
matter and neither Party may take action with respect to the unresolved matter
unless and until resolved by Mutual Consent;

(ii) if the unresolved matter relates to Manufacturing of the Licensed Products
for Commercialization, (A) if the unresolved matter relates to Agios
Commercial-Scale Manufacturing Responsibilities, then Agios shall have final
decision-making rights with respect to such matter, and (B) if the unresolved
matter relates to Celgene Manufacturing Responsibilities, then Celgene shall
have final decision-making rights with respect to such matter, provided that
such resolving Party shall give due consideration to any comments or preferences
expressed by the other Party with respect to such matter; and

(iii) if the unresolved matter relates to Commercialization of the Licensed
Products, subject to Section 6.3(f), Celgene shall have the right to decide the
unresolved matter for the ROW Territory except for the matters specified in
subsection (ii)(A) above, provided that Celgene shall give due consideration to
any comments or preferences expressed by Agios with respect to such matter.

 

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(e) JPC. If the JPC is unable to decide, by unanimous vote, on any matter within
[**] Business Days after the matter is first raised with the JPC, then the
matter will be referred to the Vice President of Intellectual Property, Chief
Patent Counsel of Celgene and the Vice President of Legal of Agios (each, a “JPC
Designee”) for resolution. If such matter is not resolved by such JPC Designees
of the Parties within [**] Business Days after the matter was referred to them,
then the JPC Designees shall submit such matter for attempted resolution by
agreement of the Executive Officers. If the Executive Officers are unable to
resolve any matter referred to them by the JPC Designees within [**] Business
Days after the matter is referred to them, then, subject to Section 2.8(f), a
Party may exercise its rights to decide the matter as provided in Article X.
Notwithstanding the foregoing, if at any time the Party who has decision making
rights for such matter under Article X reasonably believes that the delay in
decision resulting from such procedure will create a risk that any rights to
Know-How or Patent Rights will be lost or otherwise diminished, then such Party
may exercise such decision making rights immediately, provided that such
resolving Party shall give due consideration to any comments or preferences
expressed by the other Party with respect to such matter.

(f) Exceptions. Notwithstanding the foregoing, neither Party shall have the
right to finally resolve a dispute pursuant to Section 2.8(d)(ii) or (iii) or
2.8(e):

(i) in a manner that excuses such Party from any of its obligations specifically
enumerated under this Agreement;

(ii) in a manner that negates any consent rights or other rights specifically
allocated to the other Party under this Agreement;

(iii) to resolve any dispute involving the breach or alleged breach of this
Agreement;

(iv) to resolve any dispute regarding whether a milestone event set forth in
Section 9.3 has been achieved;

(v) to resolve a matter if the provisions of this Agreement specify that mutual
agreement of the Parties or a Mutual Consent is required for such matter; or

(vi) in a manner that would require the other Party to perform any act that is
inconsistent with any Law.

Section 2.9 Finance Working Group.

(a) Establishment. Within [**] days after the Effective Date, the Parties shall
establish the Finance Working Group. The Finance Working Group shall include
individuals from each Party with reasonable expertise in the areas of
accounting, cost allocation, budgeting financial reporting and tax. Membership
and governance of the Finance Working Group shall be as set forth in Section 2.7
as if the Finance Working Group were a Committee for the limited purpose of such
Section. The Parties intend that the Finance Working Group shall have the
responsibility for the matters set forth in subsection (b) of this Section 2.9
with respect to the ROW Territory and for coordinating with the Finance Working
Group from the AGI-23088 US Territory Agreement on such matters.

 

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(b) Duties. The purpose of the Finance Working Group is to provide financial
information as requested to the JDC and JSC with respect to the Development of
the Licensed Products, to the JCC and JSC with respect to the Commercialization
of the Licensed Products, and to the JSC with respect to the preparation and
approval of ROW Territory Profit or Loss statements in accordance with the
provisions of Section 9.4 and Exhibit E to this Agreement (the “Financial
Exhibit”). The Finance Working Group will also develop procedures for quarterly
reporting of actual results and review and discussion of potential
discrepancies, quarterly reconciliation, reasonable forecasting and for each
Party’s review of the applicable books and records of the other Party, as well
as other finance, tax and accounting matters, to the extent not set forth in the
provisions below or in the Financial Exhibit (the “Reconciliation Procedures”).
Such procedures must be established in a manner that provides the ability to
comply with financial reporting requirements of each Party. The Finance Working
Group shall be responsible for:

(i) coordinating and conducting the accounting, reporting, reconciliation and
other related activities set forth in this Agreement and the Financial Exhibit;

(ii) advising and providing support to the JSC and the other Committees with
respect to financial, accounting, tax, budgeting, reporting and other issues
that may arise in connection with the various plans and corresponding budgets
for activities thereunder;

(iii) reviewing relevant FTE Costs and Out-of-Pocket Costs incurred by the
Parties and their Affiliates hereunder;

(iv) recommending for approval by the JSC any changes to reporting procedures;

(v) coordinating or performing the budgeting, consolidation, completion and
review of Development Cost and ROW Territory Profit or Loss statements in
accordance with the Reconciliation Procedures and the Financial Exhibit,
including budgeting and calculation of expenses not covered in the Development
Budget or the Commercialization Budget;

(vi) establishing the overall FTE Rate to be applied to each FTE devoted to
Commercialization on a country-by-country basis at least [**] months prior to
commencement of Commercialization activities (including pre-launch activities)
and annually thereafter in connection with updates to the Commercialization
Plan; such overall FTE Rate for a country to be set in consideration of the
wages and salaries, employee benefits, bonus, automobile allowance, meal
expenses, travel/housing for meetings, dues, subscriptions, meetings and
purchased services (including training, recruitment, communications, repairs and
maintenance, and contractors), and other incidental expenses incurred by each
such FTE in the ordinary course of employment and other things as may be
determined by the JCC;

(vii) performing and reviewing calculations for the reconciliation of payments,
and controlling and performing such other accounting functions as provided in
the Financial Exhibit;

 

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(viii) coordinating audits pursuant to Section 9.8 by Audit Teams, and
discussing and attempting to resolve discrepancies or issues arising from such
audits;

(ix) performing such other functions as are specifically designated to the
Finance Working Group in this Agreement or the Financial Exhibit, or as the
Parties otherwise agree are appropriate to further the purposes of this
Agreement;

(x) working with the JSC, JDC and JCC to assist in financial, accounting, tax,
budgeting and planning matters if and as requested by the respective Committee,
and providing periodic updates to the JSC, JDC (if requested) and JCC on
financial matters relating to this Agreement, and performing such other
financial matters as are delegated to it under this Agreement or by the JSC, JDC
and JCC; and

(xi) making such decisions and determinations as are assigned to it under this
Agreement.

Section 2.10 Scope of Governance. Notwithstanding the creation of each of the
Committees and the Finance Working Group, each Party shall retain the rights,
powers and discretion granted to it under this Agreement, and neither any
Committee nor the Finance Working Group shall be delegated or vested with
rights, powers or discretion unless such delegation or vesting is expressly
provided herein, or the Parties expressly so agree in writing. It is understood
and agreed that issues to be formally decided by a particular Committee are only
those specific issues that are expressly provided in this Agreement to be
decided by such Committee, as applicable, and (except with respect to
Section 2.9(b)(vi)) that the Finance Working Group has no decision making
authority whatsoever.

Section 2.11 Agios Participation. Notwithstanding anything in this Article II to
the contrary, at any time, Agios shall have the right, but not the obligation,
to participate in, and may elect not to appoint members to, any given Committee,
the Finance Working Group, subcommittee or project team. If Agios elects not to
participate in, or does not appoint members to, any Committee, subcommittee or
project team, (a) it shall not be a breach of this Agreement; (b) no
consideration shall be required to be returned; (c) unless and until such
members are appointed, Celgene may unilaterally discharge the roles of such
Committee, subcommittee or project team, as applicable, for which members were
not appointed by Agios, including making in Celgene’s sole discretion all
decisions of such Committee, subcommittee, or project team, including decisions
requiring Mutual Consent; provided that Celgene shall not unilaterally discharge
the roles of such Committee, subcommittee or project team, as applicable, as
permitted under this Article II unless Agios has not appointed any members
within [**] days after Celgene has completed its appointment of its members; and
(d) Agios shall abide by all decisions made by Celgene on behalf of the
applicable Committee, subcommittee, or project team and shall continue to
perform its obligations hereunder. If Agios thereafter appoints members to a
Committee, subcommittee or project team, Celgene shall no longer have the
unilateral right to discharge the role of such Committee, subcommittee or
project team, as applicable; provided that such Committee, subcommittee or
project team shall not thereafter repeal prior decisions made by Celgene when
Celgene was unilaterally discharging such role.

 

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Section 2.12 Agios Opt-Out.

(a) [Not used].

(b) Effects of Agios Opt-Out Notice or Date. Without it being a breach of
Article VII of this Agreement, following the Agios Opt-Out Notice:

(i) the license and sublicense granted to Agios under Section 8.1(b) shall
terminate effective as of the Agios Opt-Out Date;

(ii) effective as of the Agios Opt-Out Date, all decisions relating to
Development, Manufacturing or Commercialization that require decision by a
Committee or that are subject to Mutual Consent shall be made solely by Celgene
and all decisions for which Agios was provided with final decision-making
authority under Section 2.8 or Article 10 shall be made solely by Celgene;
provided that Celgene shall exercise any such decision-making authority in a
manner consistent with a commitment of Commercially Reasonable Efforts to the
Development and Commercialization of the Licensed Products in the ROW Territory;
provided, further, that if Celgene or its Affiliate propose(s) to take or
take(s) any action not contemplated by the Development Plan in effect on the
Agios Opt-Out Date, and that Agios reasonably determines is reasonably likely to
have a material adverse impact on the Commercialization of any of the “Licensed
Products,” as such term is defined in the 2010 Agreement, then Agios shall
provide written notice to such effect to Celgene specifying in reasonable detail
which actions by Celgene or its Affiliates would have such an effect, and what
such effect would be. The Parties shall use good faith efforts to discuss the
pertinent actions and resolve the matter. If Celgene concurs with Agios’
determination, Celgene and its Affiliates shall not proceed with, or shall cease
as quickly as reasonably possible, as applicable, such action without the
written consent of Agios. If Celgene does not concur with Agios’ determination,
Celgene may present the issue to the Executive Officers for resolution pursuant
to Section 15.1(a) and, if agreement is not reached, may seek resolution of such
matter in accordance with Section 15.1(b);

(iii) neither Party shall have any further obligations under the Development
Plan or Commercialization Plan effective as of the Agios Opt-Out Date;

(iv) effective as of the Agios Opt-Out Date, Celgene (but not Agios) shall
continue to have obligations under Section 7.1(b) and 7.2, but neither Party
shall have any obligations under Section 7.1(a);

(v) Celgene shall be solely responsible for all Development Costs and
Commercialization Expenses for the Licensed Products incurred after the Agios
Opt-Out Date, except as provided in clause (vi) immediately below and as
provided in Sections 5.4, 13.3 and 13.4;

(vi) effective as of the Agios Opt-Out Date, Agios shall cease to conduct any
further Development or Commercialization activities (including Marketing
Activities) with respect to any Licensed Products and cease to incur any further
Development Costs or Commercialization Expenses except as approved by Celgene or
as provided in Sections 5.4, 13.3 and 13.4;

(vii) within [**] days after the Agios Opt-Out Date, Agios shall provide to
Celgene a reasonably detailed accounting of all Development Costs and
Commercialization

 

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Expenses incurred by Agios under the Collaboration prior to the Agios Opt-Out
Date for the purpose of calculating a final reconciliation of shared costs
through the Agios Opt-Out Date in accordance with Sections 9.2 and 9.4;

(viii) within [**] days after the Agios Opt-Out Notice, Agios shall provide to
Celgene a reasonably detailed summary of Development and Commercialization
activities undertaken by Agios under the Collaboration, including any Clinical
Trials committed but not yet completed as of such date, and Agios shall provide
to Celgene an update to such summary within [**] days after the Agios Opt-Out
Date;

(ix) Agios shall undertake, and coordinate with Celgene with respect to, any
wind-down or transitional activities reasonably necessary to transfer to Celgene
all Development, Manufacturing (including all Agios Clinical-Scale Manufacturing
Responsibilities and Agios Commercial-Scale Manufacturing Responsibilities) and
Commercialization responsibility for the Licensed Products throughout the
Territory, at Agios’ sole expense, including those activities referenced in
Section 14.3(b)(viii), all of which must be completed before the Agios Opt-Out
Date; provided that the Parties shall reasonably cooperate in seeking to
minimize the costs of such wind-down or transitional activities; provided
further that, (A) if Celgene requests that any contracts or agreements that
extend beyond the Agios Opt-Out Date be terminated, Agios and Celgene shall
share all costs associated with such termination, and, (B) if Celgene requests
that any such contract or agreement remain in effect, Celgene shall be
responsible for all Development Costs and Commercialization Expenses under such
contract or agreement following the Agios Opt-Out Date or, if Celgene requests
assignment of such contract or agreement prior to the Agios Opt-Out Date,
following such assignment (whichever is earlier);

(x) Celgene shall have the option to obtain Agios’ inventory of the Licensed
Products and their active pharmaceutical ingredients at a price equal to [**]%
of Agios’ Manufacturing Costs;

(xi) in the event Agios is utilizing a Third Party manufacturer to Manufacture
the Licensed Products or their active pharmaceutical ingredients, to the extent
permitted by the terms of such contract, Agios shall, if requested by Celgene,
promptly assign to Celgene the manufacturing agreements with such Third Party
with respect to such products and ingredients;

(xii) Agios shall transfer, or have transferred, to Celgene or its designee,
pursuant to a technology transfer plan to be mutually agreed by the Parties
promptly after the Agios Opt-Out Notice, all Manufacturing Technology Controlled
by Agios or Agios USA within Agios Intellectual Property that is both necessary
to Manufacture the Licensed Products or their active pharmaceutical ingredients
as Manufactured by or on behalf of Agios and its Affiliates, and Agios shall
provide reasonable assistance in connection with the transfer of such
Manufacturing Technology to Celgene or its designee, all of which shall be
deemed Development Costs and shall be completed before the Agios Opt-Out Date;

(xiii) effective as of the Agios Opt Out Date, each Licensed Product shall be
subject to the royalty provisions of Section 9.5 from and after the Agios
Opt-Out Date, in lieu of the sharing of Development Costs under Section 9.2 and
ROW Territory Profit or Loss under Section 9.4;

 

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(xiv) as quickly as reasonably possible but in no event later than the Agios
Opt-Out Date, Agios shall transition to Celgene Agios’ initial Prosecution and
enforcement responsibilities with respect to Agios Patent Rights, Agios
Collaboration Patent Rights, Joint Inventions and Joint Patents, and provide
reasonable assistance to Celgene and cooperation in connection therewith,
including execution of such documents as may be necessary to effect such
transition, provided that Agios shall retain step-in rights under
Section 10.2(b) as well as comparable step-in rights on Prosecution matters
relating to Agios Patent Rights and Agios Collaboration Patent Rights that are
not Joint Patents but not under Section 10.3; and

(xv) The AGI-23088 US Agreement will be affected in a corresponding manner as
provided therein.

Article III

Development

Section 3.1 Development of Licensed Products.

(a) Development Plan and Changes. Once the Development Plan has been mutually
agreed, the Parties shall undertake the Development of Licensed Products on a
worldwide basis in accordance with the Development Plan, including the [**]
budget of Development Costs (“Development Budget”). The JDC may propose changes
to the Development Plan to the JSC. The Development Plan may be amended from
time to time only by Mutual Consent of the JSC.

(b) Development Responsibilities. Each Party shall use Commercially Reasonable
Efforts to perform the activities assigned to it in accordance with the
specifications, timelines and budgets indicated in the Development Plan,
provided that if Agios so desires, the Development Plan shall specify that Agios
shall be responsible for conducting all Phase I Studies of the Licensed Product
in the Territory. For purposes of clarity, except as provided in Section 3.3,
neither Party shall undertake any Development activities relating to the
Licensed Products that are not specifically allocated to such Party in the
Development Plan.

(c) General Development Principles. It is the intent of the Parties that
Development of the Licensed Products will be conducted in accordance with the
following principles, except to the extent (if any) otherwise expressly provided
in the then-current Development Plan. The JDC (or the JSC or the Executive
Officers as applicable) shall take into account and attempt to implement the
following principles in its decision-making, including preparation, review and
approval of any updates to and amendments of the Development Plan.

(i) Regardless of the specific division of responsibility between the Parties
for particular activities at any particular time, the JDC (and JSC) shall serve
as a conduit for sharing information, knowledge and expertise relating to the
Development of the Licensed Products.

 

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(ii) Clinical Development of the Licensed Products should be performed according
to a single, integrated global program (with, for the avoidance of doubt,
allowance of Additional Development Activities as provided in Section 3.3).

(iii) The Development Plan should include an allocation of responsibilities
between the Parties reasonably determined after taking into consideration each
Party’s expertise, capabilities, staffing and available resources to take on
such activities.

(iv) After receipt of Regulatory Approval of a Licensed Product in any Major
Market, the Development Plan should (absent special circumstances or significant
changes in circumstances) include pursuit of Regulatory Approval for such
Licensed Product in all other Major Markets and such other countries as the JSC
deems appropriate.

(d) Coordination and Reports. Each Party shall coordinate with, and keep the JDC
informed with respect to, activities assigned to such Party under the
Development Plan, including the conduct of any applicable Clinical Trials. Each
Party shall provide the JDC with regular [**] written reports on such Party’s
Development activities relating to the Collaboration, including a summary of
results, information, and data generated, any activities planned with respect to
Development going forward (including, for example, updates regarding regulatory
matters and Development activities for the [**]), challenges anticipated and
updates regarding intellectual property issues (including a disclosure of
Collaboration Intellectual Property developed or generated since the last
written report) relating to the Collaboration. Such written reports may be
discussed by telephone or video-conference, or may be provided at each JDC
meeting; provided that, reasonably in advance of the meeting of the JDC, the
Party providing the written report will deliver to the JDC an agenda setting
forth what will be discussed during the meeting. The Party receiving such
written report shall have the right to reasonably request, and to receive in a
timely manner at or after the JDC meeting, clarifications and answers to
questions with respect to such reports.

Section 3.2 Development Costs. The Parties will share all Development Costs in
accordance with Section 9.2.

Section 3.3 Additional Development Activities. Subject to Section 2.12, each
Party shall be permitted (i) to undertake Development activities (including
Clinical Trials) not contemplated by the Development Plan (for example, a
Clinical Trial for an Indication not included in such plans) or (ii) to repeat
any Clinical Trial previously conducted under the Development Plan that failed
to meet its primary endpoints (collectively, “Additional Development
Activities”); provided that such Party complies with the provisions of this
Section 3.3.

(a) Additional Development Proposals. If a Party desires to undertake Additional
Development Activities, such Party shall submit to the JDC a proposal for the
addition of such Additional Development Activities to the Development Plan (an
“Additional Development Proposal”). Each Additional Development Proposal for
Additional Development Activities shall include a general description of the
Development activities including, as applicable, study design, clinical study
endpoints, clinical methodology and monitoring requirements, and the funding
budget. If the JDC approves an Additional Development Proposal, such Additional
Development Proposal shall, within [**] days, be submitted to the JSC for review
and approval.

 

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(b) Inclusion of Additional Development Activities in the GDP. If the JSC
approves an Additional Development Proposal, the Development Plan shall be
deemed to be amended to include the Additional Development Activities and
associated budget upon approval of such Additional Development Proposal by the
JSC. For the sake of clarity, all Development Costs incurred by the Parties and
their Affiliates in performing such Additional Development Activities shall be
shared by the Parties in accordance with Section 9.2.

(c) Independent Performance of Additional Development Activities. If the JDC
does not approve an Additional Development Proposal within [**] days after its
submission to the JDC, or the JSC does not approve an Additional Development
Proposal within [**] days after its submission to the JSC, then the Party that
submitted the Additional Development Proposal (the “Additional Development
Party”) may, upon notice to the other Party, conduct the relevant Additional
Development Activities in accordance with the Additional Development Proposal at
its own expense; provided, however, that, if the other Party (the
“Non-Additional Development Party”) determines reasonably and in good faith that
any of the proposed Additional Development Activities is reasonably likely to
adversely affect the Development, Manufacturing or Commercialization of any of
the Licensed Products or “Licensed Products” as such term is defined in the 2010
Agreement, then the Additional Development Party shall not undertake such
Additional Development Activities unless and until the JDC or JSC determines
that such Additional Development Activities should be permitted. Additional
Development Activities undertaken by the Additional Development Party shall be
subject to the oversight of the JDC and, except as expressly set forth in this
Section 3.3(c), subject to all terms and conditions of this Agreement relating
to Development of Licensed Products (including the license grants in Article
VIII). For clarity, a Licensed Product that is the subject of Additional
Development Activities shall continue to be a “Licensed Product” for all
purposes of this Agreement. The Additional Development Party shall provide
informal reports of its progress with regard to the Additional Development
Activities at each meeting of the JDC and shall provide formal written reports
of the results and budgeted costs of the Additional Development Activities to
the JDC at least [**] during the first [**] months in which any Clinical Trial
within the Additional Development Activities is being performed, and otherwise
in the same manner and frequency as the Parties provide reports to the JDC with
respect to activities covered by the Development Plan. If, at any time after the
commencement of an Additional Development Activity, the Non-Additional
Development Party determines reasonably and in good faith that any Additional
Development Activity is reasonably likely to adversely affect the Development or
Commercialization of the Licensed Products or “Licensed Products” as such term
is defined in the 2010 Agreement, the Non-Additional Development Party shall so
notify the Additional Development Party and such Additional Development Activity
shall be promptly discontinued (subject to such ethical obligations to continue
support of patients already enrolled in Clinical Trials, as the Additional
Development Party may in good faith determine) unless and until the JDC or JSC
determines that such Additional Development Activities should be permitted to
continue.

(d) Costs of Additional Development Activities. The Additional Development Party
shall bear all costs associated with the Additional Development Activities it

 

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undertakes and such costs shall not be taken into account as Development Costs
for purposes of Section 9.2. If the JSC determines, by Mutual Consent, to
include Data generated from such Additional Development Activities (excluding
only safety Data) for label expansion purposes in a submission for Regulatory
Approval for a Licensed Product or for other specific commercial purposes, the
Non-Additional Development Party shall reimburse the Additional Development
Party an amount equal to [**] percent ([**]%) of the costs incurred by the
Additional Development Party for the Additional Development Activities (to the
extent not previously reimbursed pursuant to Section 3.3(e)). Such costs will be
determined using the same manner of calculating Development Costs under the
Development Plan.

(e) Opt-In for Additional Development Activities. In the event that the
Non-Additional Development Party elects, in its discretion and upon written
notice to the Additional Development Party (an “Additional Development Opt-In
Notice”), on a Clinical Trial-by-Clinical Trial basis, to opt in with respect to
a given Clinical Trial within the Additional Development Activities, then:

(i) such Clinical Trial shall be deemed to be included in the Development Plan
from and after the date on which such Additional Development Opt-In Notice is
received by the Additional Development Party (the “Additional Development Opt-In
Date”);

(ii) the then-current plan and budget of the Additional Development Party with
respect to such Clinical Trial shall be deemed to be included within and part of
the Development Plan from the Additional Development Opt-In Date, and shall
control with respect to such Clinical Trial unless and until an amendment to the
Development Plan providing for a different or modified plan and budget is
approved by the JSC;

(iii) the Out-of-Pocket Costs and FTE Costs associated with such Clinical Trial
incurred after the Additional Development Opt-In Date shall be treated as
Development Costs and shared by the Parties in accordance with Section 9.2; and

(iv) the Non-Additional Development Party shall reimburse the Additional
Development Party an amount equal to [**] percent ([**]%) of the costs incurred
prior to the Additional Development Opt-In Date by the Additional Development
Party and its Affiliates for such Clinical Trial (to the extent not previously
reimbursed pursuant to Section 3.3(d)). Such costs will be determined using the
same manner of calculating Development Costs under the Development Plan.

Section 3.4 Companion Diagnostics.

(a) Development of Companion Diagnostic. The Parties may mutually agree to
Develop and/or Commercialize a Companion Diagnostic for use with the Licensed
Products; provided that, the Parties will use a Third Party Contractor
reasonably acceptable to both Parties to perform all Development and
Commercialization for the Companion Diagnostic. In such event, (i) the
definition of “Licensed Product” shall and hereby does include the Companion
Diagnostic for purposes of defining Agios Patent Rights, Celgene Patent Rights
and Collaboration Patent Rights, and each of the licenses granted to a Party
under Section 8.1 or 8.2; and (ii) all costs and profits with respect to such
Development or Commercialization of the Companion Diagnostic shall be shared
equally by the Parties pursuant to a mechanism agreed to by the Parties at the
time the Third Party Contractor is appointed.

 

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(b) Separate Obligations. No payments shall be owed by Celgene to Agios pursuant
to Sections 9.3 through 9.5 with respect to a Companion Diagnostic. Upon
termination of this Agreement, or reversion of rights to a Party with respect to
the Licensed Products, in addition to the effects of such termination or
reversion set forth in Section 14.3, separate transitional activities shall be
undertaken with respect to the Companion Diagnostic to ensure that the
appropriate Regulatory Approvals, Manufacturing Technology or other Know-How or
Patent Rights necessary for the Development, Manufacture and/or
Commercialization of such Companion Diagnostic shall be transferred to the Party
to whom the rights to the Licensed Products are transferred to the same extent
as Regulatory Approvals, Manufacturing Technology or other Know-How or Patent
Rights otherwise associated with such Licensed Products are transferred.

(c) No Other Diagnostics. For purposes of clarity, unless otherwise mutually
agreed by the Parties, neither Party shall have any right, under the licenses
granted to such Party pursuant to Section 8.1 and notwithstanding the definition
of “Field” hereunder, to Develop, Manufacture and/or Commercialize any biomarker
or diagnostic product for use with the Licensed Products, other than a Companion
Diagnostic pursuant to this Section 3.4.

Section 3.5 Records; Tech Transfer.

(a) Maintenance of Records. Each Party shall maintain in all material respects,
and shall require its Third Party Contractors to maintain in all material
respects, complete and accurate records in segregated books of all Development
work conducted in furtherance of the Collaboration and all results, data and
developments made in conducting such activities. Such records shall be complete
and accurate and shall fully and properly reflect all such work done and results
achieved in sufficient detail and in good scientific manner appropriate for
patent and regulatory purposes. Each Party shall require the applicable study
sites to maintain original source documents from Clinical Trials of the Licensed
Products for at least [**] years (or such longer period as is commercially
reasonable under the circumstances, taking into account maintenance requirements
under applicable Law) following completion of the Development activities
undertaken by such Party or its Third Party Contractors; provided that Celgene
or Agios shall be entitled to obtain copies of such source documents at the end
of such [**]-year period.

(b) Inspection. Each Party shall have the right, during normal business hours
and upon reasonable notice, to inspect and copy (or request the other Party to
copy) all records of the other Party or its Third Party Contractors, as
applicable, maintained in connection with the work done and results achieved in
the performance of Development activities under the Collaboration, but solely to
the extent access to such records is necessary for such Party to exercise its
rights under this Agreement.

(c) Tech Transfer. As soon as reasonably practical after the Effective Date and
thereafter upon Celgene’s reasonable request during the Term, Agios shall
transfer to Celgene[**] copies of all Agios Know-How and Agios Collaboration
Know-How related to the

 

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Licensed Product, to the extent not previously transferred to Celgene. Upon
Agios’ reasonable request during the Term, Celgene shall transfer to Agios[**]
copies of all Celgene Know-How and Celgene Collaboration Know-How related to the
Licensed Product, to the extent not previously transferred to Agios. In
addition, each Party shall provide reasonable assistance, including making its
personnel reasonably available for meetings or teleconferences to answer
questions and provide technical support to the other Party with respect to the
use of such transferred Know-How in the Development, Manufacture and
Commercialization of Licensed Products. The costs and expense incurred by either
Party in connection with such assistance shall constitute Development Costs.

Article IV

Manufacture and Supply

Section 4.1 Pre-Clinical, Clinical and Commercial Supply.

(a) Agios Responsibilities. Agios shall be responsible for Manufacturing, or
having Manufactured by its designee, (i) all pre-clinical supply of Licensed
Products, (ii) all supply of Licensed Products for Phase I Studies, (iii) all
active pharmaceutical ingredients for all Phase II Studies and Phase III Studies
(collectively, items (i), (ii) and (iii), the “Agios Clinical-Scale
Manufacturing Responsibilities”), and (iv) all active pharmaceutical ingredients
for Commercialization of Licensed Products (the “Agios Commercial-Scale
Manufacturing Responsibilities”). Agios shall fulfill a substantial portion of
the Agios Commercial-Scale Manufacturing Responsibilities from within, and ship
all such Licensed Products and active pharmaceutical ingredients to Celgene
from, Agios’ or its designee’s manufacturing facility located in Switzerland or
another country mutually agreed in writing by the Parties such that the Licensed
Products are treated as manufactured in Switzerland or such other country for
purposes of Section 954(d) of the Code and Section 1.954-3(a)(2) of the Treasury
Regulations (or any other similar provision of the Code or Treasury Regulations
in effect as of any time); provided that Agios may obtain raw materials from any
country as determined by Agios for use in connection with the Agios
Commercial-Scale Manufacturing Responsibilities, and provided further that if
Celgene disagrees that the fulfillment of the Agios Manufacturing
Responsibilities is such that the Licensed Products are so treated, Agios shall
deliver to Celgene an opinion of an independent nationally recognized law or
accounting firm that the Licensed Products should be so treated.

(b) Agios Commercial-Scale Manufacturing Responsibilities. Agios or its
Affiliate may have any Third Party conduct on behalf of Agios any of the Agios
Commercial-Scale Manufacturing Responsibilities, provided that, from the period
commencing on the Effective Date and ending on the first to occur of (i) the
first date upon which Celgene and Agios are Affiliates, and (ii) a Change of
Control of Celgene, Agios shall notify Celgene at least [**] months prior to the
time at which it anticipates it will engage a Third Party to conduct such
activities, and the Parties thereafter shall discuss the selection of the Third
Party, provided that Celgene may, in its discretion, indicate that it is
interested in undertaking the applicable Agios Commercial-Scale Manufacturing
Responsibilities, in which event the Parties shall discuss that as well. Agios
retains the right to determine whether a Third Party or Celgene shall conduct
the applicable Agios Commercial-Scale Manufacturing Responsibilities, and the
terms thereof, provided that such manufacturing still conforms to the
requirements of Section 4.1(a).

 

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(c) Celgene Responsibilities. Celgene shall be responsible for Manufacturing, or
having Manufactured by its designee, all supply of Licensed Products not
included within Agios Clinical-Scale Manufacturing Responsibilities and Agios
Commercial-Scale Manufacturing Responsibilities, including drug product
manufacturing and processing, filling, packaging, labeling, shipping and storage
of Licensed Products for all Clinical Trials (other than Phase I Studies) and
for Commercialization of Licensed Products (collectively, the “Celgene
Manufacturing Responsibilities”). Celgene shall fulfill a substantial portion of
the Celgene Manufacturing Responsibilities from within Celgene’s or its
designee’s manufacturing facility located in Switzerland or another country
mutually agreed in writing by the Parties such that the Licensed Products are
treated as manufactured in Switzerland or such other country for purposes of
Section 954(d) of the Code and Section 1.954-3(a)(2) of the Treasury Regulations
(or any other similar provision of the Code or Treasury Regulations in effect as
of any time); provided that Celgene may obtain raw materials from any country as
determined by Celgene for use in connection with the Celgene Manufacturing
Responsibilities, and provided further that if Agios disagrees that the
fulfillment of the Celgene Manufacturing Responsibilities is such that the
Licensed Products are so treated, Celgene shall deliver to Agios an opinion of
an independent nationally recognized law or accounting firm that the Licensed
Products should be so treated.

(d) Manufacturing Costs. Manufacturing Costs associated with clinical supply of
the Licensed Products shall be shared in accordance with Section 9.2.
Manufacturing Costs associated with commercial supply of the Licensed Products
shall constitute Commercialization Expenses.

Section 4.2 Third Party Manufacturers. If either Party uses any Third Party to
fulfill its Manufacturing obligations or rights under Section 4.1 with respect
to any supply to be used in any Development or Commercialization activities
under the Collaboration, the Third Party and the terms of the agreement with
such Third Party must be approved by the JDC or JCC, as applicable, in each case
subject to Section 2.8.

Section 4.3 Transfer of Manufacturing Responsibility. In order to assist Celgene
to perform the Celgene Manufacturing Responsibilities or, if selected by Agios
pursuant to Section 4.1(b), the Agios Commercial-Scale Manufacturing
Responsibilities, Agios shall (a) transfer, or have transferred, to Celgene or
its designee, pursuant to a technology transfer plan to be mutually agreed by
the Parties, all Manufacturing Technology Controlled by Agios or Agios USA and
used in Manufacturing Licensed Products at the time of such transfer to the
extent relevant to the Celgene Manufacturing Responsibilities or, if selected by
Agios pursuant to Section 4.1(b), the Agios Commercial-Scale Manufacturing
Responsibilities, and (b) provide reasonable assistance in connection with the
transfer of such Manufacturing responsibility to Celgene or its designee. Costs
incurred by either Party in such transfer shall be Development Costs.

Section 4.4 Manufacturing Efforts. The Party that is responsible for
Manufacturing hereunder shall use Commercially Reasonable Efforts to ensure
adequate manufacturing capacity to meet forecast demand for the applicable
Licensed Product, including, if deemed necessary by the JDC or JCC, as
applicable, the establishment of an alternative supply source. Such Party shall
also use Commercially Reasonable Efforts to ensure adequate pre-clinical,
clinical and commercial supply of the applicable Licensed Product for both
Parties to Develop and/or Commercialize, as applicable, such Licensed Products
as contemplated under the applicable Development Plan and/or Commercialization
Plan.

 

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Article V

Regulatory Matters

Section 5.1 Lead Responsibility for Regulatory Interactions. Except as may
otherwise be mutually agreed by the Parties or the JSC, JDC or JCC, as
applicable, and subject to oversight by the JSC, JDC or JCC:

(a) Lead Responsibility. Agios shall have the initial lead responsibility for
all Regulatory Interactions with Regulatory Authorities in the ROW Territory
with respect to each Licensed Product unless and until there is a transfer
thereof to Celgene as provided in Section 5.1(c). Celgene shall have lead
responsibility for all Regulatory Interactions with Regulatory Authorities in
the ROW Territory for the applicable Licensed Product after any such transfer to
the extent set forth in Section 5.1(c). The JDC may propose to the JSC a
different allocation for the roles of each Party for all Regulatory Interactions
in the ROW Territory but such roles may only be changed by Mutual Consent of the
JSC.

(b) Regulatory Interactions Defined. For purposes of this Agreement, “Regulatory
Interactions” means (i) monitoring and coordinating all regulatory actions,
preparing, submitting and coordinating all communications and filings with, and
submissions to, all Regulatory Authorities in the ROW Territory with respect to
the Licensed Products and (ii) interfacing, corresponding and meeting with the
Regulatory Authorities in the ROW Territory with respect to the Licensed
Products.

(c) Transfer of Regulatory Responsibility in ROW Territory. At any time after
either an Agios Opt-Out Notice or the date that is [**] days prior to the
expected commencement of a Phase III Study for a Licensed Product, Celgene may
notify Agios that Celgene desires to take over lead responsibility for the
Regulatory Interactions in the ROW Territory for such Licensed Product. Upon and
after such notice from Celgene:

(i) Agios shall (1) at Celgene’s option, either close or inactivate Agios’
IND(s) for such Licensed Product, or transfer such IND(s) to Celgene, and
(2) with Celgene input, complete all relevant activities related to such IND as
required for Celgene to assume regulatory ownership, as applicable, all within
[**] days after Celgene’s notice;

(ii) Celgene shall be responsible for the preparation and filing of all
regulatory filings with respect to any subsequent Development, Manufacturing or
Commercialization for Licensed Products after such activities described in
clause (i) above are completed; and

(iii) Agios shall provide Celgene with all relevant clinical and non-clinical
data reasonably requested by Celgene or a Regulatory Authority, including CMC,
pharmacology and toxicology generated by Agios with respect to the subject
Licensed Product.

If Celgene does not provide notice to Agios in accordance with this
Section 5.1(c) that Celgene desires to take over lead responsibility for the
Regulatory Interactions in the ROW Territory associated with a Licensed Product,
Agios shall retain lead responsibility for all Regulatory Interactions in the
ROW Territory with respect to such Licensed Product.

 

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Section 5.2 Participation Rights.

(a) Review of Regulatory Documentation. Each Party shall keep the JDC reasonably
informed in connection with all Regulatory Interactions, preparation of all
Regulatory Documentation, Regulatory Authority review of Regulatory
Documentation, Regulatory Approvals, annual reports, including annual safety
reports to the respective health authorities, annual re-assessments, and any
subsequent variations and changes to labeling, in each case with respect to the
Licensed Products. Each Party shall respond within a reasonable time frame to
all reasonable inquiries by the other Party with respect to any information
provided pursuant to this Section 5.2(a) (and sufficiently promptly for the
other Party to provide meaningful input with respect to responses to Regulatory
Authorities).

(b) Participation in Meetings. The Party not having the lead responsibility for
Regulatory Interactions in a country with respect to the Licensed Products shall
have the right to have two senior, experienced employees reasonably acceptable
to the responsible Party, participate as an observer in material or scheduled
face-to-face meetings, video conferences and any teleconferences with the
applicable Regulatory Authority, and shall be provided with advance access to
the responsible Party’s material documentation prepared for such meetings.

(c) Review. Prior to submission of material correspondence to any Regulatory
Authority with respect to the Licensed Products, the Party having the lead
responsibility for Regulatory Interactions shall, sufficiently in advance for
the other Party to review and comment, provide the other Party any material
correspondence with the Regulatory Authority related to such meetings. The
responsible Party shall also provide the other Party with copies of any material
correspondence with Regulatory Authorities relating to Development of, or the
process of obtaining Regulatory Approval for, the Licensed Products in such
Party’s territory (i.e., initially the ROW Territory if the responsible Party is
Agios, or the ROW Territory if the responsible Party is Celgene), and respond
within a reasonable time frame to all reasonable inquiries by the other Party
with respect thereto.

Section 5.3 Global Safety Database; Pharmacovigilance Agreement. The Parties
will use Commercially Reasonable Efforts to negotiate a pharmacovigilance
agreement (the “Pharmacovigilance Agreement”) to govern cooperation among the
Parties together with Celgene USA and Agios USA that will enable each of them to
comply with its respective obligations under applicable Laws and to satisfy its
duty of care with respect to the Licensed Products, including with regard to
ownership of the Global Safety Database, adverse event data collection, analysis
and reporting. The Pharmacovigilance Agreement will be entered among the Parties
together with Celgene USA and Agios USA no later than the completion of the
first Phase I Study of a Licensed Product.

Section 5.4 Recalls, Market Withdrawals or Corrective Actions.

(a) In the event that any Regulatory Authority issues or requests a recall,
market withdrawal or similar action in connection with a Licensed Product in any
portion of the

 

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ROW Territory, or in the event either Party determines that an event, incident
or circumstance has occurred that may result in the need for a recall, market
withdrawal or similar action in any portion of the ROW Territory, the Party
notified of such recall, market withdrawal or similar action, or the Party that
desires such recall, market withdrawal or similar action, shall within [**]
hours advise the other Party thereof by telephone or facsimile. The JSC shall
decide whether to conduct a recall, market withdrawal or similar action in any
portion of the ROW Territory and the manner in which any such recall, market
withdrawal or similar action shall be conducted. Each Party will make available
to the other Parties, upon request, all of such Party’s (and its Affiliates’)
pertinent records that such other Party may reasonably request to assist such
other Party in effecting any recall, market withdrawal or similar action.

(b) The costs and expenses incurred before the Agios Opt-Out Date relating to a
recall, market withdrawal or similar action of any Licensed Product(s) in the
ROW Territory shall be taken into account in determining ROW Territory Profit or
Loss as, and to the extent, provided in the Financial Exhibit. The costs and
expenses incurred after the Agios Opt-Out Date for any recall, market withdrawal
or similar action of any Licensed Product(s) in the ROW Territory shall be borne
solely by Celgene if and only to the extent (i) such recall, market withdrawal
or similar action was caused by the occurrence after the Agios Opt-Out Date of
the event, incident or circumstance that led to the recall, market withdrawal or
similar action and (ii) the event, incident or circumstance and the costs and
expenses for such recall, market withdrawal or similar action are not the
subject of an indemnity obligation of Agios under Section 13.2. The costs and
expenses incurred after the Agios Opt-Out Date relating to any recall, market
withdrawal or similar action of any Licensed Product(s) in the ROW Territory
shall be borne fifty per cent (50%) by each of the Parties to the extent
(A) such recall, market withdrawal or similar action was caused by the
occurrence before the Agios Opt-Out Date of the event, incident or circumstance
that led to the recall, market withdrawal or similar action and (B) such event,
incident or circumstance and such costs and expenses are not the subject of an
indemnity obligation of either Party under Section 13.1 or 13.2. If Agios is
invoiced for its portion of such costs and expenses incurred after the Agios
Opt-Out Date, payment is due within [**] days of receipt of invoice.

Article VI

Commercialization

Section 6.1 Commercialization Responsibilities for Licensed Products.

(a) Responsibility. Subject to oversight by the JCC and to Sections 2.8, 2.12
and 6.3(f), each Party shall have the responsibility for the Commercialization
of Licensed Products in the ROW Territory as specified in the Commercialization
Plan.

(b) Effects on Licensed Product and “Licensed Products” Under 2010 Agreement. If
(i) either Party or its Affiliate (the “Proposing Party”) proposes to take or
take(s) any Commercialization action (or make any business decision) that is not
contemplated by the Commercialization Plan in effect at such time, that the
other Party (the “Objecting Party”) reasonably determines is reasonably likely
to have a material adverse impact on the Commercialization of any of the
“Licensed Products,” as such term is defined in the 2010 Agreement or
(ii) Celgene or its Affiliate proposes to take any such action that Agios or its

 

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Affiliate reasonably determines is reasonably likely to have an adverse impact
on Commercialization of the “Licensed Products,” as such term is defined in the
AGI-23088 US Agreement, in the ROW Territory, such Objecting Party (and its
Affiliate, if applicable) shall provide written notice to such effect to the
Proposing Party specifying in reasonable detail which actions by such Proposing
Party or its Affiliates would have such an effect, and what such effect would
be. The Parties shall use good faith efforts to discuss the pertinent actions
and resolve the matter. If the Proposing Party concurs with the Objecting
Party’s determination, the Proposing Party and its Affiliates shall not proceed
with, or shall cease as quickly as reasonably possible, as applicable, such
action without the written consent of the Objecting Party. If the Proposing
Party does not concur with the Objecting Party’s determination, the Objecting
Party may present the issue to the Executive Officers for resolution pursuant to
Section 15.1(a) and, if agreement is not reached, may seek resolution of such
matter in accordance with Section 15.1(b). If the Objecting Party does present
the issue to the Executive Officers for resolution, then Proposing Party and its
Affiliates shall not proceed with, or shall cease as quickly as reasonably
possible, as applicable, such action until the dispute is resolved by agreement
of the Executive Officers or in accordance with Section 15.1(b).

(c) Sales. Celgene will book all sales of the Licensed Products in the ROW
Territory and will have the sole responsibility for the processing of orders,
invoicing, terms of sale, and distribution of the Licensed Products throughout
the Territory associated therewith.

Section 6.2 Commercialization Plan.

(a) Initial Commercialization Plan.

(i) Subject to Sections 2.8 and 2.12, Commercialization of Products shall be
governed by a Commercialization Plan (the “Commercialization Plan”) that
describes the Commercialization activities (including pre-launch and launch
activities, if applicable) to be undertaken with respect to the Licensed
Products in the ROW Territory, which shall include an [**] budget of
Commercialization Expenses (“Commercialization Budget”) and anticipated
timelines for performance.

(ii) Commencing no later than [**] months prior to the anticipated commercial
launch of the first Licensed Product in the ROW Territory and thereafter at
least [**] days prior to the start of each Calendar Year, Agios shall prepare
the initial Commercialization Plan for each Licensed Product, with input and
guidance from the JDC, JCC and the Finance Working Group. Such Commercialization
Plan shall describe Commercialization activities to be undertaken by the Parties
in the ROW Territory.

(b) JCC Approval; Amendments. The JCC shall approve the first Commercialization
Plan for each Licensed Product no later than [**] prior to the anticipated
commercial launch of each such Licensed Product in the ROW Territory.
Thereafter, the JCC shall review the Commercialization Plan not less frequently
than [**] and shall propose updates to the Commercialization Plan for [**].
Either Party may also develop and submit to the JCC for review from time to time
other proposed amendments to the applicable Commercialization Plan. The initial
Commercialization Plan, and any amendments and updates to the Commercialization
Plan, shall be effective upon the approval of the JCC (subject to resolution of
any dispute involving such approval as provided in Section 2.8).

 

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Section 6.3 Field-Based Marketing Activities.

(a) General. The JCC shall determine the type and scope of field-based marketing
efforts to be used for Commercialization of each Licensed Product in the ROW
Territory (e.g., sales force (and the number of physicians to be called on and
call frequency), field-based medical affairs, advertising, and field-based
market access resources) (collectively, “Marketing Activities”), and the
Commercialization Plan for each Licensed Product in the ROW Territory shall set
forth such Marketing Activities for each Indication which is marketed in the ROW
Territory.

(b) Allocation of Activities. The Commercialization Plan will allocate to each
Party its portion of the total Marketing Activities for each Licensed Product in
the ROW Territory; provided that, unless otherwise agreed to by the Parties,
Agios will be allocated thirty-three percent (33%) of the Marketing Activities
in the Major European Countries, wherein such percentage refers to the total
number of FTEs devoted to an activity when applicable, and Celgene will be
allocated the balance of all Marketing Activities throughout the Major European
Countries and other parts of the ROW Territory. The Commercialization Plan will
attempt to provide that Marketing Activities are distributed geographically
within the Major European Countries in a manner reasonably consistent with the
distribution of the population in the Major European Countries and that each
Party’s detailing effort, if applicable, will be directed to physicians of
similar prescribing potential but shall take into account the competitive
situation of the Licensed Product. In overseeing the Marketing Activities, the
JCC will take into account the Licensed Product’s customer base and call volume
measured against the customer base, geographic scope of activities, and the
competitive market for the Licensed Product.

(c) Sales Force. To the extent the Marketing Activities include detailing
efforts, the JCC shall determine the number of sales representatives needed to
carry out the required Marketing Activities in the ROW Territory for each
Licensed Product. Each Party, in its sole discretion, shall create a field
management structure for its sales effort. Each Party shall use Commercially
Reasonable Efforts to have hired, no later than [**] months before the
applicable PDUFA date, the full sales force planned to be available for the
launch of the Licensed Products in the ROW Territory and to have the sales force
trained within [**] months of hiring. Each sales representative shall have a
sales territory that allows such sales representative to perform a reasonable
number of details within a reasonable geographic area (i.e., without
overly-burdensome travel requirements but avoiding sales representatives
detailing the same persons). The effort of the Agios and Celgene sales forces in
promoting the Licensed Products will be organized under the supervision of the
JCC as to qualifications of sales representatives and field-based sales
managerial personnel and the timing of hiring in light of the then-current
Commercialization Plan; provided that the Commercialization Plan shall identify
the portion of the detailing effort to be undertaken by each Party in the ROW
Territory no later than [**] months before the planned date of the NDA
submission in the ROW Territory.

 

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(d) Training Materials and Sessions. The JCC will develop product-specific
training materials and arrange for provision of such materials to each Party’s
sales forces, if applicable, for use in the ROW Territory. The JCC will develop
a sales training program directed towards the Licensed Products use in the ROW
Territory. Unless otherwise mutually agreed by the Parties, Celgene and Agios
sales representatives will participate in a launch meeting(s) (which may be held
together or separately) for each Licensed Product, which shall include training
sessions of product-specific sales skills with respect to the approved
Indications for the Licensed Products. Subsequent to launch, Celgene and Agios
shall periodically hold meetings with Agios and Celgene field management (down
to and including district managers or their equivalents who are directly
supervising territory sales representatives) to coordinate promotion of the
Licensed Products in the ROW Territory. As requested by Agios, Celgene shall
make its management, marketing, training and other personnel reasonably
available to participate in Agios’ national and regional sales meetings and
Licensed Product training events for the ROW Territory.

(e) Other Obligations. Subject to Section 2.12, in conducting the Marketing
Activities in the ROW Territory, the Parties will comply with all applicable
Laws, applicable industry professional standards and compliance policies of
Celgene, and, subject to Section 6.3(f), Agios, that have been previously
furnished to the other Party, as the same may be updated from time to time and
provided to the other Party and not in violation of any applicable Law. Each
Party will reasonably assist the other Party in training sales representatives
in such standards. Neither Party shall make any claims or statements with
respect to the Licensed Products that are not strictly consistent with the
product labeling and the sales and marketing materials approved for use pursuant
to the Commercialization Plan or otherwise approved by the JCC.

(f) Termination of Marketing Activities. Agios shall have the right to terminate
its Marketing Activities obligations in the ROW Territory with respect to any
Licensed Product by providing at least [**] months’ prior written notice to
Celgene (or sooner as Celgene may determine, in its sole discretion). Upon
exercise of such termination right, effective upon the expiration of such
[**]-month (or, if applicable, shorter) notice period, Agios’ obligations to
perform Marketing Activities under this Section 6.3 in the ROW Territory shall
terminate, and Celgene’s obligation under the first sentence of Section 6.3(e)
to comply with Agios compliance policies, shall terminate (but, for clarity,
Celgene’s other obligations under such first sentence shall not terminate).
Further, if Agios exercises this right with respect to the ROW Territory, then
Celgene shall have final decision-making authority over all matters regarding
Commercialization with respect to the ROW Territory.

Section 6.4 Trademarks.

(a) Selection of Trademarks. The JCC shall select the trademark(s) to be used in
connection with the marketing and sale of the Licensed Products in the ROW
Territory (such marks, together will registrations, applications for
registration and common law rights therein, collectively, “Product Trademarks”).
Any dispute over the selection of a Product Trademarks shall be presented to the
JSC for resolution. The Parties shall adhere to the use of the Product
Trademark(s) in their Commercialization of the Licensed Products in the ROW
Territory hereunder, to the extent permitted by Law.

 

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(b) Ownership. Celgene shall own all Product Trademarks for any Licensed Product
in the ROW Territory.

(c) Agios Acknowledgement and License. In connection with all packaging,
literature, labels and other printed matters used in the ROW Territory, to the
extent permitted by Law, the Parties shall include an expression to the effect
that the Licensed Products were developed under license from Agios, together
with the Agios logo. Agios hereby grants Celgene a license to use Agios’ name
and logo to comply with such obligation for the ROW Territory as reasonably
required for Celgene to exercise its rights and perform its obligations under
this Agreement in the ROW Territory.

Article VII

Diligence

Section 7.1 Collaboration Activities.

(a) General. Each Party shall use Commercially Reasonable Efforts to perform all
Development, Manufacturing and Commercialization activities for which such Party
is responsible hereunder in compliance with the applicable Development Plan or
Commercialization Plan, including any budget(s) and timeframe(s) set forth
therein and including making available those resources set forth in any
applicable Development Plan or Commercialization Plan, and the terms of this
Agreement.

(b) Compliance with Laws. Each Party shall:

(i) perform its obligations under this Agreement in a scientifically sound and
workmanlike manner; and

(ii) carry out all work done in the course of the Collaboration in compliance
with all applicable Laws governing the conduct of such work.

Section 7.2 Diligence Obligations.

(a) In addition to the diligence obligations set forth in Section 7.1, the
Parties shall use Commercially Reasonable Efforts to Develop and achieve
Regulatory Approval for the Licensed Products in each of the Major Markets and,
following such Regulatory Approval, to Commercialize such Licensed Products in
each of the Major Markets.

(b) A breach of the diligence obligations set forth in this Section 7.2 shall be
deemed a material breach and shall be subject to termination under
Section 14.2(b)(i). Notwithstanding the foregoing, the Parties acknowledge that
it might be commercially reasonable, under certain circumstances, for the Party
having lead responsibility for Marketing Activities in any portion of the Major
Markets to determine not to launch a Licensed Product in [**] Major Markets, and
failure under such circumstances to launch such Licensed Product shall not be a
breach of this Agreement.

Section 7.3 Day-to-Day Responsibility. Each Party shall be responsible for
day-to-day implementation of the Development, Manufacturing Commercialization
activities for which

 

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it (or its Affiliate) has or otherwise is assigned responsibility under this
Agreement or the applicable Development Plan or Commercialization Plan and shall
keep the other Party reasonably informed as to the progress of such activities,
as determined by the JDC and JCC.

Article VIII

Grant of Rights; Exclusivity

Section 8.1 License Grants. Subject to the terms and conditions of this
Agreement:

(a) Licenses Granted to Celgene. Agios hereby grants to Celgene a
non-transferable (except as set forth in Section 15.4), right and license in the
Field, with the right to grant sublicenses as set forth in Sections 8.2(a) and
8.2(b), under Agios’ rights in Agios Intellectual Property and Agios
Collaboration Intellectual Property, to Develop, Manufacture and/or
Commercialize Licensed Products in the ROW Territory. Such license is a Sole
license until the Agios Opt-Out Date; upon and after the Agios Opt-Out Date,
such license automatically converts to an exclusive license (including exclusive
of Agios and its Affiliates).

(b) Licenses Granted to Agios. Celgene hereby grants to Agios a Sole,
non-transferable (except as set forth in Section 15.4), right and license in the
Field, with the right to grant sublicenses as set forth in Sections 8.2(a) and
8.2(b), under Celgene’s rights in Celgene Intellectual Property and Celgene
Collaboration Intellectual Property, to Develop, Manufacture and/or
Commercialize Licensed Products in the ROW Territory.

Section 8.2 Sublicense Rights. Subject to Section 8.3, the Parties have the
following sublicensing rights.

(a) Sublicenses to Affiliates and Subcontractors. Each Party shall have the
right to grant sublicenses within the scope of the licenses and sublicense under
Section 8.1:

(i) to such Party’s Affiliates; and

(ii) to Third Parties for the purpose of engaging Third Parties as contract
research organizations, contract manufacturers, contract sales forces,
consultants, academic researchers and the like (“Third Party Contractors”) in
connection with Development, Manufacturing or Commercialization activities on
behalf of such Party or its Affiliates with respect to the Collaboration under
this Agreement, subject to the following:

(A) unless otherwise agreed by the JSC by Mutual Consent, each Party shall
require any such Third Party to whom such Party discloses Confidential
Information to enter into an appropriate written agreement obligating such Third
Party to be bound by obligations of confidentiality and restrictions on use of
such Confidential Information that are no less restrictive than the obligations
set forth in Article XI, including requiring such Third Party to agree in
writing not to issue any Publications except in compliance with the terms of
this Agreement (including approval by the JDC or JCC, as applicable, pursuant to
the approved publication plan, and the obligations set forth in Section 11.4,
except that Publications by academic collaborators shall be permitted (without
JDC or JCC consent, as applicable) if the academic collaborator (i) provides an
advance copy of the proposed Publication (under the same time periods as
described in Section 11.4(a)), which may be shared with the other Party, (ii)

 

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agrees to delay such Publication sufficiently long enough to permit the timely
preparation and filing of a patent application, and (iii) upon the request of
either Party, removes from such Publication any Confidential Information of such
Party);

(B) unless otherwise agreed by the JSC by Mutual Consent, each Party will
obligate such Third Party to agree in writing to [**] to, any inventions arising
under its agreement with such Third Party to the extent related to Development,
Manufacturing or Commercialization with respect to the Licensed Products in the
Field in the ROW Territory; and such Party shall structure such [**] so as to
enable such Party to sublicense such Third Party inventions to the other Party
pursuant to Section 8.1 (including permitting such other Party to grant further
sublicenses); provided that, in connection with any academic collaborator
performing research work to research either or both of the Targets, each Party
will only be required to obligate such academic collaborator to agree in writing
to grant [**] to, and a right to negotiate for [**] to, any such inventions,
which must be sublicensable to the other Party pursuant to Section 8.1
(including permitting such other Party to grant further sublicenses);

(C) each Party shall notify the JDC or JCC, as applicable, at a regular meeting
of the JDC or JCC, as applicable, of the execution any such agreement with such
Third Party and, if requested, shall provide the other Party with a copy of such
agreement, which copy may be redacted with respect to matters that do not relate
to the Collaboration; and

(D) unless otherwise agreed by the JSC by Mutual Consent, each Party will
require any such Third Party to grant to the other Party access to [**]
generated by such Third Party’s work with respect to the Licensed Products to
the same extent as such other Party’s licenses under Section 8.1, and grant the
other Party the right to audit the records of such Third Party.

(b) Other Sublicenses. Except as provided in Section 8.2(a), any sublicense by
either Party under the licenses and sublicense set forth in Section 8.1 shall
require the prior written approval of the other Party.

Section 8.3 Sublicense Requirements. Any sublicense granted by a Party pursuant
to this Agreement shall be subject to the following:

(a) each sublicense granted hereunder by a Party shall be consistent with the
requirements of this Agreement;

(b) any transfer of rights between a Party and its Affiliates shall not be
deemed a sublicense by such Party but shall be deemed a direct license by the
other Party to such Party’s Affiliate; provided that such Party shall remain
responsible for the activities of its Affiliate;

(c) a Party’s or its Affiliates’ Third Party sublicensees shall have no right to
grant further sublicenses without the other Party’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed;

(d) such Party shall be primarily liable for any failure by its sublicensees to
comply with all relevant restrictions, limitations and obligations in this
Agreement;

 

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(e) such sublicense must be granted pursuant to a written sublicense agreement
and, with respect to any sublicense other than a sublicense by a Party to an
Affiliate of such Party, such Party must provide the other Party with a copy of
any sublicense agreement entered into under Section 8.2 above within [**] days
after the execution of such sublicense agreement; provided that any such copy
may be redacted to remove any confidential, proprietary or competitive
information, but such copy shall not be redacted to the extent that it impairs
the other Party’s ability to ensure compliance with this Agreement. Such
sublicense agreement shall be treated as Confidential Information of the
sublicensing Party; and

(f) except as otherwise provided in the sublicense agreement, if this Agreement
terminates for any reason, any Third Party sublicensee of a Party shall, from
the effective date of such termination, automatically become a direct licensee
of the other Party with respect to the rights licensed to such Party hereunder
and sublicensed to the sublicensee by such Party; provided, however, that such
sublicensee is not in breach of its sublicense agreement and continues to
perform thereunder.

Section 8.4 Affiliates and Third Party Contractors. Either Party may exercise
its rights and perform its obligations hereunder itself or through its
Affiliates and sublicensees. Each Party shall be primarily liable for any
failure by its Affiliates and sublicensees (including Third Party Contractors)
to comply with all relevant restrictions, limitations and obligations in this
Agreement. If either Party desires to use any Person to conduct any of its
Development, Commercialization or other Collaboration activities hereunder, such
Party must comply with the obligations of Section 8.2(a)(ii)(A) through (D),
even to the extent no sublicense of rights is granted to such Third Party.

Section 8.5 Existing Third Party Agreement.

(a) Acknowledgement. Except as provided in Section 8.5(b), the Parties
acknowledge that Agios or Agios USA is responsible for the fulfillment of all of
their respective obligations under the Existing Third Party Agreement and will
fulfill the same, including any provisions necessary to maintain in effect any
rights sublicensed to Celgene hereunder and the exclusive nature of such rights,
subject to Celgene’s compliance with its obligations hereunder. In the event of
any conflict between the terms of this Agreement and the Existing Third Party
Agreement, the Parties will discuss in good faith how to address the conflict;
provided that, if the Parties are unable to agree on how to address the
conflict, the terms of this Agreement shall govern.

(b) Incorporation of Certain Provisions. Celgene acknowledges and agrees that it
shall be bound by the following provisions of the Existing Third Party
Agreement, as a sublicensee of the rights licensed to Agios USA thereunder but
only to the extent applicable to the rights sublicensed to Celgene hereunder:
Sections 1.3 (as described in Section 8.7(b) hereof), 2.1, 2.3, 5.2, 5.3, 5.4,
5.5, 6.2, 7.1, 8.1 (with respect to information of the licensors under the [**]
Agreement or with respect to the licensors’ obligation to keep information of
either Party confidential), 10.1 and 10.4 of the [**] Agreement. Furthermore,
Celgene acknowledges that Agios USA is required to share certain reports and
copies of sublicense agreements provided by Celgene to Agios hereunder with the
licensors under the Existing Third Party Agreement, and Celgene consents to the
sharing of such reports and such copies of such

 

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sublicense agreements to the extent required under such Existing Third Party
Agreement to the same extent as disclosures are permitted under
Section 11.3(b)(ii)(B) hereunder; provided that any such copies of sublicense
agreements must be redacted to the extent permitted under such Existing Third
Party Agreement.

(c) Covenants Regarding the Existing Third Party Agreement. Agios agrees that
during the Term:

(i) The rights granted to Celgene hereunder with respect to the Existing Third
Party Agreement are passed through Agios to Celgene to the fullest extent
possible as if granted directly from Agios USA, and Agios shall not modify or
amend or terminate any such rights licensed from Agios USA to Agios under the
Existing Third Party Agreement in any way without Celgene USA’s prior written
consent;

(ii) As between the Parties, Agios shall be solely responsible for, and shall
make, all royalty payments, milestone payments, yearly fees, sublicensee fees,
Prosecution fees (as defined under the AGI-23088 US Agreement), and all other
payments owed to the licensors under and pursuant to the Existing Third Party
Agreement;

(iii) Agios shall not exercise or fail to exercise any of Agios’ rights, or fail
to perform any of Agios’ obligations, under the Existing Third Party Agreement
or its sublicense thereunder with Agios USA, in each case that relate to
Celgene’s rights under the this Agreement without the prior written consent of
Celgene, including rights with respect to including improvements within the
licenses granted under the Existing Third Party Agreement; and, at the
reasonable request of Celgene, Agios shall exercise such rights and make such
requests that relate to Celgene’s rights hereunder as are permitted under the
Existing Third Party Agreement;

(iv) Agios shall promptly furnish Celgene with copies of all reports and other
communications that Agios USA furnishes to the licensors under the Existing
Third Party Agreement to the extent that such reports relate to this Agreement;

(v) Agios shall promptly furnish Celgene with copies of all reports and other
communications that Agios USA receives from the licensors under the Existing
Third Party Agreement that relate to the subject of this Agreement (including
notices relating to improvements under the Existing Third Party Agreement);

(vi) Agios shall furnish Celgene with copies of all notices received by Agios
USA relating to any alleged breach or default by Agios USA or any of its
sublicensees (of any tier) under the Existing Third Party Agreement within [**]
Business Days after Agios USA’s receipt thereof; in addition, if Agios USA
should at any time breach the Existing Third Party Agreement or become unable to
timely perform its obligations thereunder, Agios shall immediately notify
Celgene;

(vii) If Agios USA cannot or chooses not to cure or otherwise resolve any
alleged breach or default under the Existing Third Party Agreement, (A) Agios
shall so notify Celgene within [**] Business Days of such decision, which shall
not be less than [**] Business Days prior to the expiration of the cure period
under the Existing Third Party

 

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Agreement; provided that Agios shall use Commercially Reasonable Efforts to cure
any such breach or default (to the extent within Agios’ control); and
(B) Celgene, in its sole discretion, shall be permitted (but shall not be
obligated), on behalf of Agios, to cure any breach or default under the Existing
Third Party Agreement in accordance with the terms and conditions of the
Existing Third Party Agreement or otherwise resolve such breach directly with
the licensors under the Existing Third Party Agreement; and (C) if Celgene pays
any such licensor any amounts owed by Agios under the Existing Third Party
Agreement, Celgene may deduct such amounts from payments Celgene is required to
make thereafter to Agios hereunder or, at Celgene’s election, may otherwise seek
reimbursement of such amounts from Agios; and

(viii) Agios shall not provide any Licensed Products to the licensors under the
Existing Third Party Agreement without Celgene’s prior written consent.

(d) Survival of Celgene’s Rights Following Termination of Existing Third Party
Agreement. The Parties agree that in the event of any termination of the
Existing Third Party Agreement with respect to any intellectual property rights
licensed to Celgene hereunder, Celgene shall have any rights available under
such Existing Third Party Agreement to become a direct licensee of the Third
Party licensors under such Existing Third Party Agreement and Agios shall use
Commercially Reasonable Efforts to assist Celgene in exercising such rights;
provided that Celgene has not breached this Agreement, or breached the
applicable Third Party Rights under such Existing Third Party Agreement. In
addition, notwithstanding the foregoing, in the event of such termination,
Celgene may in any event approach the licensors under the Existing Third Party
Agreement for a direct license. In the event of any such direct license
following any termination of the Existing Third Party Agreement without
Celgene’s consent, Celgene shall be entitled to deduct from any payments owed to
Agios hereunder [**] percent ([**]%) of the amounts paid by Celgene to such
licensor under such direct license with respect to licenses within the scope of
the licenses previously granted to Agios under the Existing Third Party
Agreement.

(e) Termination of Existing Third Party Agreement. The Parties agree that
termination, without Celgene’s prior written consent, of the Existing Third
Party Agreement with respect to any Patent Right or Know-How that is necessary
to Develop, Manufacture or Commercialize the Licensed Products shall be deemed a
material breach of this Agreement by Agios; provided that (i) if Celgene’s
breach of this Agreement results in a breach of the Existing Third Party
Agreement, Celgene agrees to use Commercially Reasonable Efforts to assist Agios
in curing such breach of the Existing Third Party Agreement, and (ii) if
Celgene’s breach of this Agreement results in a termination of the Existing
Third Party Agreement, such termination of the Existing Third Party Agreement
shall not be deemed a material breach by Agios of this Agreement or a material
breach by Agios USA of the AGI-23088 US Agreement.

Section 8.6 Exclusivity.

(a) Agios Exclusivity Obligations. During the Term, Agios and, subject to
Sections 15.4(b) and 15.4(c), its Affiliates shall not, directly or indirectly,
Develop, Manufacture or Commercialize any therapeutic modality (including any
small molecule or biologic) in any field or application that [**], except for
the following:

(i) Licensed Products pursuant to the Collaboration under this Agreement
(including those activities specifically permitted upon and after termination);

 

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(ii) Collaboration Compounds, Development Candidates, Licensed Compounds,
Independent Compounds and products that contain any of the foregoing pursuant to
the 2010 Agreement (as such terms are defined in the 2010 Agreement); and

(iii) Agios Reverted Compounds (other than Agios Reverted Compounds that [**])
and Agios Reverted Products that contain any such Agios Reverted Compound, in
each case pursuant to the 2010 Agreement (as such terms are defined in the 2010
Agreement).

(b) Celgene Exclusivity Obligations. During the Term, Celgene and, subject to
Sections 15.4(b) and 15.4(c), its Affiliates shall not, directly or indirectly,
Develop, Manufacture or Commercialize any therapeutic modality (including any
small molecule or biologic) in any field or applications that [**], except for
the following:

(i) Licensed Products pursuant to this Agreement (including those activities
specifically permitted upon and after termination); and

(ii) Collaboration Compounds, Development Candidates, Licensed Compounds,
Independent Compounds, Celgene Reverted Compounds and products that contain any
of the foregoing in each case pursuant to the 2010 Agreement (as such terms are
defined in the 2010 Agreement).

(c) Exception. A Party shall not be deemed to be, directly or indirectly,
Developing, Manufacturing or Commercializing in violation of the provisions of
Section 8.6(a) or 8.6(b) as a result of conducting a research program or
discovery effort (or manufacturing or commercializing a therapeutic modality
resulting from such research program or discovery effort) that has as its
specified and primary goal, as evidenced by laboratory notebooks or other
relevant documents contemporaneously kept, taken as a whole, to discover or
Develop compounds that [**], as applicable, that are subject to the prohibitions
of Section 8.6(a) or 8.6(b).

(d) Celgene Exception. It is agreed and understood by the Parties that any
Celgene research, discovery and commercialization activities existing as of the
effective date of the 2010 Agreement, whether such activities are undertaken by
Celgene alone or in conjunction with one or more partners, licensors, licensees,
and/or collaborators, are expressly excluded from the provisions of this
Section 8.6. In particular and without limitation, Celgene research, discovery,
and commercialization activities related to (i) the [**]; (ii) the [**];
(iii) [**]; (iv) [**]; (v) [**]; or (vi) [**].

Section 8.7 Retained Rights.

(a) No Implied Licenses or Rights. Except as expressly provided in Section 8.1,
and subject to Section 8.6, all rights in and to the Agios Intellectual
Property, Agios’ and its Affiliates’ interests in Agios Collaboration
Intellectual Property and any other Patent Rights or Know-How of Agios and its
Affiliates, are hereby retained by Agios and its Affiliates. Except

 

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as expressly provided in Sections 8.1, and subject to Section 8.6, all rights in
and to the Celgene Intellectual Property, Celgene’s and its Affiliates’
interests in Celgene Collaboration Intellectual Property and any other Patent
Rights or Know-How of Celgene and its Affiliates, are hereby retained by Celgene
and its Affiliates.

(b) Other Retained Rights. The Parties acknowledge that the licenses granted
hereunder are subject to the rights retained by the licensors under the [**]
Agreement pursuant to Sections 1.3 and 2.3 of the [**] Agreement; provided that,
upon Celgene’s reasonable request, Agios shall cooperate fully in requesting and
obtaining any waiver with respect to the requirement, if applicable under such
agreements, that the Licensed Products used or sold in the United States be
manufactured substantially in the United States.

Section 8.8 Section 365(n) of the Bankruptcy Code. All rights and licenses
granted under or pursuant to any section of this Agreement are and will
otherwise be deemed to be for purposes of Section 365(n) of the United States
Bankruptcy Code (Title 11, U.S. Code), as amended (the “Bankruptcy Code”),
licenses of rights to “intellectual property” as defined in Section 101(35A) of
the Bankruptcy Code. The Parties will retain and may fully exercise all of their
respective rights and elections under the Bankruptcy Code. The Parties agree
that each Party, as licensee of such rights under this Agreement, will retain
and may fully exercise all of its rights and elections under the Bankruptcy Code
or any other provisions of applicable law outside the United States that provide
similar protection for “intellectual property.” The Parties further agree that,
in the event of the commencement of a bankruptcy proceeding by or against a
Party under the Bankruptcy Code or analogous provisions of applicable Law
outside the United States, the Party that is not subject to such proceeding will
be entitled to a complete duplicate of (or complete access to, as appropriate)
such intellectual property and all embodiments of such intellectual property,
which, if not already in the non-subject Party’s possession, will be promptly
delivered to it upon the non-subject Party’s written request thereof. Any
agreements supplemental hereto will be deemed to be “agreements supplementary
to” this Agreement for purposes of Section 365(n) of the Bankruptcy Code.

Article IX

Financial Provisions

Section 9.1 Initial Payment. In consideration of Agios’ discovery of AG-23088
and the rights and licenses granted hereunder, Celgene shall make an initial,
non-refundable payment to Agios of [**] Dollars (US $[**]) within [**] days
following the Effective Date.

Section 9.2 Development Costs.

(a) Sharing of Development Costs. Subject to Section 2.12:

(i) The Development Costs to be shared by the Parties under this Agreement and
the parties to the AGI-23088 US Agreement are those (A) Development Costs that
are incurred after the IND Acceptance Date and (B) Manufacturing Costs
associated with clinical supply of Licensed Products (even if incurred before
the Effective Date), and, in either case, that are within [**] percent ([**]%)
of the approved Development Budget under the Development Plan. Any Development
Costs in excess of [**] percent ([**]%) of the approved

 

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Development Budget under the Development Plan shall be borne solely by the Party
incurring such costs unless such Party has received the other Party’s written
approval to share such excess costs. The Parties have determined the reasonably
anticipated benefits share for purposes of Section 482 of the Code between the
US Territory and ROW Territory to be derived from the Development activities and
as a result each Party agrees to have it and its Affiliates allocate [**]
percent ([**]%) of the Development Costs to the US Territory under the AGI-23088
US Agreement and the remainder of their portion of the Development Costs to the
ROW Territory under this Agreement. Each Party shall be responsible for fifty
percent (50%) of the Development Costs allocated to this Agreement.

(ii) Within [**] days following the beginning of the [**], each Party shall
prepare and deliver to the Finance Working Group a [**] report detailing its and
its Affiliates’ Development Costs incurred during the first [**], estimated to
be incurred during the [**], and actually incurred in the [**] which are
required to be shared pursuant to this Section 9.2. Each Party shall submit any
supporting information or clarifications reasonably requested by the other Party
related to such Development Costs included in such Party’s report within [**]
days after the other Party’s receipt of such request. The Parties, with the
assistance of the Finance Working Group, shall conduct a reconciliation of
Development Costs for the subject [**] within [**] days after receipt of all
such supporting information, and an invoice shall be issued to the Party (if
any) that has not paid for its full share of the Development Costs for such
[**]. Such reconciliation shall balance the actual amount of Development Costs
incurred during the [**] (to correct for any differences between the estimates
and actual amount of such costs) together with the amounts incurred during the
first [**] and those estimated to be incurred during the [**]. The paying Party
shall pay all amounts payable under any such invoice within [**] days after its
receipt of such invoice.

(b) Annual Cost Cap. In the event of an Excess Amount, as calculated under
Section 9.2(b) of the AGI-23088 US Agreement, for any Calendar Year, then any
such amounts for such Calendar Year shall be borne initially by Celgene and
Celgene USA, and not by Agios or Agios USA, and the reimbursement calculations
set forth in Section 9.2(a) for such Calendar Year shall be adjusted accordingly
with [**] percent ([**]%) of the Excess Amount being applied under the AGI-23088
US Agreement and [**] percent ([**]%) of the Excess Amounts being applied to
this Agreement (and the reimbursement calculations in Section 9.2(a) of the
AGI-23088 US Agreement also being adjusted accordingly. Celgene may recoup the
[**] percent ([**]%) of the Excess Amounts due under this Agreement, together
with interest thereon calculated at the rate set forth in Section 9.11,
calculated on the number of days from the date on which Agios’ payment of such
Excess Amounts would otherwise be due to Celgene if this Section 9.2(b) did not
apply until the date reimbursed to Celgene, from any milestone payments owed
under Section 9.3 and Agios’ share of ROW Territory Profits (if any) and Agios
USA’s share of US Territory Profits (if any) (as defined in the AGI-23088 US
Agreement) in the Calendar Year in which the Excess Amounts accrued or
thereafter until such Excess Amounts and applicable interest have been fully
recouped (and the other [**]% of such Excess Amounts, together with interest,
will be recouped as provided in the AGI-23088 US Agreement). Excess Amounts and
interest thereon shall be reimbursable only from such milestone payments and
Agios’ share of ROW Territory Profits (if any) and Agios USA’s share of US
Territory Profits (if any) (as defined in the AGI-23088 US Agreement), and shall
not otherwise be owed from Agios to Celgene; provided, however, that in the
event that the

 

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Development and Commercialization of all Licensed Products are permanently
discontinued by Mutual Consent or this Agreement is terminated for any reason,
then all Excess Amounts due under this Agreement shall be paid by Agios to
Celgene in equal annual installments over the next [**]. Agios may in its
discretion elect to pre-pay any portion of outstanding Excess Amounts or
associated interest upon written notice to Celgene.

Section 9.3 Milestone Payments. Celgene shall pay Agios the following amounts
after the first achievement by or on behalf of the Parties or their respective
Affiliates or sublicensees of the corresponding milestone events set forth below
with respect to the first Licensed Product to achieve such milestone events.

 

Milestones

   Amount  

(1) Filing of first NDA in a Major Market, whether such NDA is filed in the ROW
Territory pursuant to this Agreement or in the US Territory pursuant to the
AGI-23088 US Agreement

   US$ [** ] 

(2) First Regulatory Approval in any Major Market, whether such Regulatory
Approval is obtained in the ROW Territory pursuant to this Agreement or in the
US Territory pursuant to the AGI-23088 US Agreement

   US$ [** ] 

(3) Second Regulatory Approval in any Major Market, but only if received in a
different country or region, as applicable, than the first Regulatory Approval,
whether such Regulatory Approval is obtained in the ROW Territory pursuant to
this Agreement or in the US Territory pursuant to the AGI-23088 US Agreement

   US$ [** ] 

(a) For purposes of determining the occurrence of milestones under item (1) in
the table above, [**] shall be deemed to have occurred [**] days following [**];
provided that, if such [**]. For purposes of determining the occurrence of
milestones under items (2) and (3) in the table above, the [**]. For purposes of
clarity, no milestone amount shall be payable to Agios under item (3) if [**]
for purposes of item (3).

(b) Each milestone payment under this Section 9.3 shall be made within [**] days
after the achievement of the applicable milestone by Celgene or any of its
Affiliates or sublicensees (or, if achievement of such milestone is within the
control of Agios, within [**] days following Celgene’s receipt of written notice
of the achievement of such milestone).

(c) For clarity, (i) the milestone payments set forth in the table above in this
Section 9.3 (to the extent payable) shall be paid only once, regardless of the
number of Licensed Products to achieve the applicable milestone event and
regardless of the number of Indications for which the milestone event may be
achieved and (ii) the milestone payments set forth in the table above shall be
in addition to any milestones payable pursuant to the AGI-23088 US Agreement.

 

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Section 9.4 ROW Territory Profit or Loss. Subject to Section 2.12:

(a) Profit or Loss. The Parties shall share in ROW Territory Profit or Loss as
follows: Agios shall bear (and be entitled to) fifty percent (50%), and Celgene
shall bear (and be entitled to) fifty percent (50%). Each Party may include
Commercialization Expenses in the ROW Territory Profit or Loss incurred by such
Party that are within [**] percent ([**]%) of the approved Commercialization
Budget under the Commercialization Plan. Any Commercialization Expenses in
excess of [**] percent ([**]%) of the approved Commercialization Budget under
the Commercialization Plan shall be borne solely by the Party incurring such
costs and not included in ROW Territory Profit or Loss unless such Party has
received the other Party’s written approval to share such excess costs.

(b) [**] Reconciliation and Payments. Unless the Parties otherwise agree, the
Reconciliation Procedures shall provide that:

(i) Within [**] days following the end of [**], each Party shall prepare and
deliver to the Finance Working Group a [**] report detailing its Net Sales made
and Commercialization Expenses incurred, and other amounts necessary to
calculate ROW Territory Profit or Loss, during such [**], with respect to which
the Parties share ROW Territory Profit or Loss pursuant to this Section 9.4.
Each Party shall submit any supporting information reasonably requested by the
other Party related to such Net Sales, Commercialization Expenses and such other
amounts included in such Party’s reconciliation report within [**] days after
the other Party’s receipt of such request. The Parties, with the assistance of
the Finance Working Group, shall conduct a reconciliation of ROW Territory
Profit or Loss for the full [**] within [**] days after receipt of all such
supporting information, and an invoice shall be issued to the Party (if any)
that owes the other Party a payment to accomplish the sharing of the ROW
Territory Profit or Loss identified in such reconciliation for such [**]. The
paying Party shall pay all amounts payable under any such invoice within [**]
days after its receipt of such invoice.

Section 9.5 Royalty Payments Following Agios Opt-Out. In the event of an Agios
Opt-Out Date:

(a) Royalty Rate. Celgene shall pay to Agios royalties on Annual Net Sales of
Licensed Products in the ROW Territory (i) at the royalty rate of [**] percent
([**]%), if acceptance for review of the first NDA for a Licensed Product
occurred prior to the Agios Opt-Out Date, or (ii) at the following rates, if
acceptance for review of the first NDA for a Licensed Product did not occur
prior to the Agios Opt-Out Date:

 

Annual Net Sales of Licensed Products

   Royalty Rate  

On the tranche of Annual Net Sales in the ROW Territory occurring until
aggregate, worldwide Annual Net Sales reaches US$[**]

     [** ]% 

On the tranche of Annual Net Sales in the ROW Territory occurring so long as
aggregate, worldwide Annual Net Sales is equal to or greater than US$[**] and
less than US$[**]

     [** ]% 

On the tranche of Annual Net Sales in the ROW Territory occurring upon and after
aggregate, worldwide Annual Net Sales equals US$[**]

     [** ]% 

 

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(b) Royalty Term. Royalties payable under this Section 9.5 shall be paid by
Celgene on a Licensed Product-by-Licensed Product and country-by-country basis
from the later of (i) the Agios Opt-Out Date and (ii) the date of First
Commercial Sale of each Licensed Product in a country of the ROW Territory with
respect to which royalty payments are due, until the latest of:

(i) the last to expire of any Valid Claim of Agios Patent Rights or Agios
Collaboration Patent Rights (including Joint Patents), in each case Covering
such Licensed Product in such country of the ROW Territory;

(ii) [**] years following the date of First Commercial Sale in such country of
the ROW Territory; and

(iii) the expiration of Regulatory Exclusivity for such Licensed Product in such
country of the ROW Territory;

(each such term with respect to a Licensed Product and a country, a “Royalty
Term”).

(iv) Notwithstanding the foregoing, (A) in the event that the Royalty Term for a
Licensed Product in a country of the ROW Territory continues solely due to
Section 9.5(b)(ii) above (i.e., the Licensed Product is not Covered by a Valid
Claim of Agios Patent Rights or Agios Collaboration Patent Rights in the
applicable country, and such Licensed Product is not subject to Regulatory
Exclusivity in such country) or (B) in the event that, and for so long as,
Generic Competition for a Licensed Product occurs in a country of the ROW
Territory, then, in either such event, the royalty rate in such country will be
reduced to [**] percent ([**]%) of the applicable rate in Section 9.5(a) in such
country.

(v) Upon the expiration of the Royalty Term with respect to a Licensed Product
in a country of the ROW Territory, the license granted by Agios to Celgene
pursuant to Section 8.1(a) shall be deemed to be fully paid-up, irrevocable and
perpetual with respect to such Licensed Product in such country.

(c) Deduction for Third Party Payments. In the event that royalties are payable
by Celgene to Agios with respect to any Licensed Product under this Section 9.5,
Celgene shall have the right to deduct a maximum of [**] percent ([**]%) of any
royalties or other amounts actually paid by Celgene to a Third Party from and
after the Agios Opt-Out Date (i) with respect to any license obtained prior to
the Agios Opt-Out Date pursuant to Section 9.6(b)(i), and (ii) with respect to
any other license obtained pursuant to Section 9.6(b) but only

 

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to the extent that the Patent Rights and/or Know-How licensed under such other
license are necessary (A) to use the Targets to which the applicable Licensed
Product is directed or (B) to the Development, Manufacture or Commercialization
of such Licensed Product in a country(ies) in the ROW Territory, from royalty
payments otherwise due and payable by Celgene to Agios under this Section 9.5
with respect to such Licensed Product in such country(ies), on a Licensed
Product-by-Licensed Product and country-by-country basis; provided, however,
that in no event shall the aggregate deductions permitted by this Section 9.5(c)
reduce the royalties payable by Celgene to Agios with respect to any such
Licensed Product in such country(ies) for any Calendar Quarter to less than [**]
percent ([**]%) of the royalties otherwise due in the absence of any deduction
pursuant to this Section 9.5(c); provided further that on a Licensed
Product-by-Licensed Product basis, any royalty deductions that are not credited
against royalties for the Calendar Quarter in which they were accrued due to the
limitation in the preceding proviso shall be carried forward and credited
against royalties payable in subsequent Calendar Quarter(s) hereunder until such
royalty credits are completely expended.

(d) Royalty Reports; Payments. Within [**] calendar days after the end of any
[**] following the Agios Opt-Out Date, Celgene with respect to each Licensed
Product shall provide Agios with a report stating the sales in units and in
value of such Licensed Product made by Celgene, its Affiliates, licensees and
sublicensees, as applicable, in the ROW Territory, on a country-by-country
basis, together with the calculation of the royalties due to Agios, including
the method used to calculate the royalties, the exchange rates used, and
itemized deductions. Payments of all amounts payable under this Section 9.5
shall be made by Celgene to the bank account indicated by Agios concurrently
with the delivery of such report.

Section 9.6 Third Party Payments.

(a) Existing Third Party Agreement. Except as otherwise provided in
Section 14.3(b)(vii), [**] shall be [**] responsible for [**] amounts payable
under the Existing Third Party Agreement with respect to the Licensed Products.

(b) Additional Agreements. If Celgene at any time or Agios before an Agios
Opt-Out Notice believes that a license under Third Party Patent Rights or Third
Party Know-How could be [**] to Develop, Manufacture or Commercialize the
Licensed Products in the ROW Territory, then such Party shall notify the (A) JDC
if such notice is provided during Development or Manufacturing of Licensed
Products for Development or (B) JCC if such notice is provided during
Commercialization.

(i) If the JDC or JCC, as applicable, agrees by unanimous vote to obtain such
license, and if so, which of the Parties will do so, then the Parties will
proceed as determined by the JDC or JCC, as applicable. If the JDC or JCC, as
applicable, cannot agree on whether to obtain such license or which Party will
do so, then the matter will be escalated to the JSC for resolution in accordance
with Section 2.8; provided that, if the JSC cannot agree on which Party should
obtain such license, then until an Agios Opt-Out Notice, Agios shall have the
first right to obtain such license for the ROW Territory and if Agios does not
promptly exercise such right then Celgene shall have the right to do so, and
after an Agios Opt-Out Notice, Celgene shall have the sole right to obtain such
license.

 

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(ii) The costs of each such license to the extent the costs directly relate to
the Licensed Products shall be shared as Development Costs if paid prior to the
First Commercial Sale of a Licensed Product in the ROW Territory and/or
Commercialization Expenses if paid thereafter and, in the event of an Agios
Opt-Out Date, shall be borne solely by Celgene to the extent incurred after the
Agios Opt-Out Date, subject to deduction from royalties in accordance with
Section 9.5(c).

(iii) For purposes of this Agreement, the Third Party Patent Rights and Third
Party Know-How licensed pursuant to this Section 9.6 shall be deemed
“Collaboration Intellectual Property” of the Party obtaining such license.

(iv) (1) The Party designated to pursue the license shall keep the other Party
fully informed of the status of the negotiations with the Third Party and
provide the other Party with copies of all draft agreements; (2) the other Party
may provide comments and suggestions with respect to the negotiation of the
agreement with the Third Party, and the Party seeking the license shall
reasonably consider all comments and suggestions reasonably recommended by the
other Party; and (3) the Party seeking the license shall obtain a license that
is sublicensable to the other Party in accordance with the terms of this
Agreement, treating (unless otherwise agreed by the Parties) the Third Party
intellectual property as Collaboration Intellectual Property hereunder and
treating the agreement licensing such Third Party intellectual property in the
same way as the Existing Third Party Agreement (including as provided in
Section 8.5), except for payment obligations, which will be treated as provided
in this Section 9.6.

Section 9.7 Financial Records. The Parties shall keep, and shall require their
respective Affiliates and sublicensees to keep, complete and accurate books and
records in accordance with the applicable Accounting Standards. The Parties
shall keep, and shall require their respective Affiliates and sublicensees to
keep, such books and records for at least [**] years following the end of the
Calendar Year to which they pertain. Such books of accounts shall be kept at the
principal place of business of the financial personnel with responsibility for
preparing and maintaining such records. With respect to royalties, such records
shall be in sufficient detail to support calculations of royalties due to Agios.
Celgene and Agios shall also keep, and require their respective Affiliates and
sublicensees to keep, complete and accurate records and books of accounts
containing all data reasonably required for the calculation and verification of
Development Costs, including internal FTEs utilized by either Party, ROW
Territory Profit or Loss and, if applicable, Annual Net Sales.

Section 9.8 Audits.

(a) Audit Team. Each Party may, upon request and at its expense (except as
provided for herein), cause an internationally recognized independent accounting
firm selected by it (except one to whom the Auditee has a reasonable objection)
(the “Audit Team”) to audit during ordinary business hours the books and records
of the other Party and the correctness of any payment made or required to be
made to or by such Party, and any report underlying such payment (or lack
thereof), pursuant to the terms of this Agreement. Prior to commencing its work
pursuant to this Agreement, the Audit Team shall enter into an appropriate
confidentiality agreement with the Auditee obligating the Audit Team to be bound
by obligations of confidentiality and restrictions on use of such Confidential
Information that are no less restrictive than the obligations set forth in
Article XI.

 

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(b) Limitations. In respect of each audit of the Auditee’s books and records:
(i) the Auditee may be audited only [**], (ii) no records for any given year for
an Auditee may be audited more than [**]; provided that the Auditee’s records
shall still be made available if such records impact another financial year
which is being audited, and (iii) the Audit Rights Holder shall only be entitled
to audit books and records of an Auditee from the [**] Calendar Years prior to
the Calendar Year in which the audit request is made.

(c) Audit Notice. In order to initiate an audit for a particular Calendar Year,
the Audit Rights Holder must provide written notice to the Auditee. The Audit
Rights Holder exercising its audit rights shall provide the Auditee with notice
of [**] proposed dates of the audit not less than [**] days prior to the first
proposed date. The Auditee will reasonably accommodate the scheduling of such
audit. The Auditee shall provide such Audit Team(s) with full and complete
access to the applicable books and records and otherwise reasonably cooperate
with such audit.

(d) Audit Report. The audit report and basis for any determination by an Audit
Team shall be made available first for review and comment by the Auditee, and
the Auditee shall have the right, at its expense, to request a further
determination by such Audit Team as to matters which the Auditee disputes (to be
completed no more than [**] days after the first determination is provided to
such Auditee and to be limited to the disputed matters). Such Audit Team shall
not disclose to the Audit Rights Holder any information relating to the business
of the Auditee except that which should properly have been contained in any
report required hereunder or otherwise required to be disclosed to the Audit
Rights Holder to the extent necessary to verify the payments required to be made
pursuant to the terms of this Agreement.

(e) Payments. If the audit shows any under-reporting or underpayment, or
overcharging by any Party, that under-reporting, underpayment or overcharging
shall be reported to the Audit Rights Holder and the underpaying or overcharging
Party shall remit such underpayment or reimburse such overcompensation (together
with interest at the rate set forth in Section 9.11) to the underpaid or
overcharged Party within [**] days after receiving the audit report. Further, if
the audit for an annual period shows an under-reporting or underpayment or an
overcharge by any Party for that period in excess of [**] percent ([**]%) of the
amounts properly determined, the underpaying or overcharging Party, as the case
may be, shall reimburse the applicable underpaid or overcharged Audit Rights
Holder conducting the audit, for its respective audit fees and reasonable
Out-of-Pocket Costs in connection with said audit, which reimbursement shall be
made within [**] days after receiving appropriate invoices and other support for
such audit-related costs.

(f) Definitions. For the purposes of the audit rights described herein, an
individual Party subject to an audit in any given year will be referred to as
the “Auditee” and the other Party who has certain and respective rights to audit
the books and records of the Auditee will be referred to as the “Audit Rights
Holder.”

 

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Section 9.9 Tax Matters.

(a) Withholding Taxes. The milestones and other amounts payable by a Party to
the other Party pursuant to this Agreement (“Payments”) shall not be reduced on
account of any taxes unless required by Law. The receiving Party alone shall be
responsible for paying any and all taxes (other than withholding taxes required
by Law to be deducted and paid on the receiving Party’s behalf by the paying
Party) levied on account of, or measured in whole or in part by reference to,
any Payments it receives. The Parties will cooperate in good faith to obtain the
benefit of any relevant tax treaties to minimize as far as reasonably possible
any taxes which may be levied on any Payments. The paying Party shall deduct or
withhold from the Payments any taxes that it is required by Law to deduct or
withhold. If the receiving Party is entitled under any applicable tax treaty or
any Law to a reduction of the rate of, or the elimination of, applicable
withholding tax, it may deliver to the paying Party or the appropriate
governmental authority (with the assistance of the paying Party to the extent
that this is reasonably required and is expressly requested in writing) the
prescribed forms necessary to reduce the applicable rate of withholding or to
relieve the paying Party of its obligation to withhold tax, and the paying Party
shall apply the reduced rate of withholding tax, or dispense with withholding
tax, as the case may be; provided that the paying Party has received evidence of
the receiving Party’s delivery of all applicable forms (and, if necessary, its
receipt of appropriate governmental authorization) at least [**] days prior to
the time that the Payment is due. If, in accordance with the foregoing, the
paying Party withholds any amount, it shall make timely payment to the proper
taxing authority of the withheld amount, and send to the receiving Party proof
of such payment within [**] days following that latter payment.

(b) Limited Gross-Up Obligation. Notwithstanding the foregoing, if the rights
and obligations of a Party making payments hereunder are assigned to an
Affiliate or Third Party outside of the United States or Switzerland pursuant to
Section 15.4, and if such Affiliate or Third Party shall be required by Law to
withhold any additional taxes from or in respect of any sum payable under this
Agreement as a result of such assignment, then any such sum payable under this
Agreement shall be increased to take into account the additional taxes withheld
as may be necessary so that, after making all required withholdings, the
receiving Party receives an amount equal to the sum it would have received had
no such assignment been made; provided, however, that, if the rights and
obligations of the paying Party hereunder are assigned to an Affiliate or Third
Party outside of the United States or Switzerland pursuant to Section 15.4 and
if at the time of such assignment such Affiliate or Third Party is not required
by Law to withhold any additional taxes as a result of such assignment, the
paying Party shall not be required to increase any such sum payable under this
Agreement in the event of a change in Law. In addition, if the rights and
obligations of the receiving Party hereunder are assigned to an Affiliate or
Third Party pursuant to Section 15.4, the paying Party shall not have an
obligation to pay an additional sum pursuant to this Section 9.9(b) to the
extent that the additional sum would not have been due pursuant to this
Section 9.9(b) if the rights and obligations of the receiving Party hereunder
had not been assigned to an Affiliate or Third Party pursuant to Section 15.4.

 

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Section 9.10 Currency Exchange.

(a) Currency Conversion. Unless otherwise expressly stated in this Agreement,
all amounts specified in, and all payments made under, this Agreement shall be
in United States Dollars. If any currency conversion shall be required in
connection with the calculation of amounts payable under this Agreement, such
conversion shall be made using the average of the buying and selling exchange
rate for conversion of the applicable foreign currency into United States
Dollars, quoted for current transactions reported in The Wall Street Journal
(U.S., Eastern Edition) (or similarly recognized source for currency exchange
rates agreed by the Parties) for the last [**] Business Days of the Calendar
Quarter to which such payment pertains.

(b) Restrictions on Payments. Where Payments are due in a country where, for
reasons of currency, tax or other regulations, transfer of foreign currency out
of such country is prohibited, the paying Party has the right to place Payments
due to the other Party in a bank account in such country in the name of and
under the sole control of such other Party; provided, however, that the bank
selected be reasonably acceptable to such other Party and that the paying Party
inform such other Party of the location, account number, amount and currency of
money deposited therein. After such other Party has been so notified, those
monies shall be considered as Payments duly paid to such Party and will be
completely controlled by such Party.

(c) Prohibitions on Payments. When in any country in the ROW Territory
applicable Law prohibits both the transmittal and the deposit of royalties on
sales in such country, royalty payments due on Net Sales shall be suspended for
as long as such prohibition is in effect and as soon as such prohibition ceases
to be in effect, all royalties that Celgene would have been under an obligation
to transmit or deposit but for the prohibition shall forthwith be deposited or
transmitted, to the extent allowable.

Section 9.11 Late Payments. The paying Party shall pay interest to the receiving
Party on the aggregate amount of any payments that are not paid on or before the
date such payments are due under this Agreement at a rate per annum equal to the
lesser of the [**] month LIBOR plus [**] percent ([**]%), as reported by The
Wall Street Journal, or the highest rate permitted by applicable Law, calculated
on the number of days such payments are paid after the date such payments are
due; provided that, with respect to any disputed payments, no interest payment
shall be due until such dispute is resolved and the interest which shall be
payable thereon shall be based on the finally-resolved amount of such payment,
calculated from the original date on which the disputed payment was due through
the date on which payment is actually made.

Article X

Intellectual Property Ownership, Protection and Related Matters

Section 10.1 Ownership of Inventions.

(a) Non-Collaboration Know-How. Any Know-How developed or generated by Celgene
or Agios prior to or outside the Collaboration shall remain the sole property of
such Party.

 

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(b) Sole Inventions. All Collaboration Know-How developed or generated solely by
employees, agents and consultants of a Party shall be owned exclusively by such
Party.

(c) Joint Inventions. All Collaboration Know-How developed or generated jointly
by employees, agents and consultants of Celgene, on the one hand, and employees,
agents and consultants of Agios, on the other hand (“Joint Inventions” and, any
Patent Rights Covering such Joint Inventions, “Joint Patents”) shall be owned
jointly on the basis of each Party having an undivided interest without a duty
to account to the other Party and shall be deemed to be Controlled by each
Party. Each Party shall have the right to use such Joint Inventions, or license
such Joint Inventions to its Affiliates or any Third Party, or sell or otherwise
transfer its interest in such Joint Inventions to its Affiliates or a Third
Party, in each case without the consent of the other Party (and, to the extent
that applicable Law requires the consent of the other Party, this
Section 10.1(c) shall constitute such consent), so long as such use, sale,
license or transfer is subject to Section 8.6 and the licenses granted pursuant
to this Agreement and is otherwise consistent with this Agreement.

(d) Notice. Each Party agrees to provide regular [**] written reports disclosing
to the other Party all Collaboration Intellectual Property developed or
generated by employees, agents and consultants of such Party and all Agios
Intellectual Property and Celgene Intellectual Property that becomes subject to
this Agreement, which disclosures may be made in connection with the updates
made in accordance with Section 3.1(d).

(e) Inventorship. The determination of inventorship shall be made in accordance
with United States patent laws. In the event of a dispute regarding
inventorship, if the Parties are unable to resolve the dispute, the Parties
shall jointly engage [**] to resolve such dispute. The decision of such [**]
shall be binding on the Parties with respect to the issue of inventorship.

(f) Further Actions and Assignments. Each Party shall take all further actions
and execute all assignments requested by the other Party and reasonably
necessary or desirable to vest in the other Party (and/or its Parent, as
designated by such requesting Party) the ownership rights set forth in this
Article X.

Section 10.2 Prosecution of Patent Rights. Subject to the terms and conditions
of the Existing Third Party Agreement to the extent such agreement applies to
the Agios Patent Rights or Agios Collaboration Patent Rights in the ROW
Territory, the following provisions shall apply with respect to the Agios Patent
Rights, Celgene Patent Rights and Collaboration Patent Rights in the ROW
Territory:

(a) Agios Patent Rights. Subject to the provisions of Section 10.2(h) and
coordination with the JPC, Agios shall have the initial right and option to
Prosecute the Agios Patent Rights and Agios Collaboration Patent Rights
(excluding Joint Patents) in the ROW Territory with respect to which Celgene
does not have the initial right to Prosecute pursuant to Section 10.2(b). In the
event that Agios declines to Prosecute such Patent Rights, it shall give Celgene
reasonable notice to this effect, sufficiently in advance to permit Celgene to
undertake such Prosecution in such country without a loss of rights, and
thereafter Celgene may, upon written notice to Agios, Prosecute such Patent
Rights in Agios’ name subject to coordination with the JPC.

 

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(b) Agios Patent Rights Prosecuted by Celgene. Subject to coordination with the
JPC, Celgene shall have the initial right and option to Prosecute the Core
Patent Rights within any of the Agios Patent Rights or Agios Collaboration
Patent Rights in the ROW Territory that specifically Cover a Compound or a
Licensed Product (“Celgene Controlled Agios Patent Rights”). Certain of the
Agios Patent Rights and Agios Collaboration Patent Rights may from time to time
Cover some Celgene Controlled Agios Patent Rights and other Agios Patent Rights
or Agios Collaboration Patent Rights in the same application. Each Party will
cooperate reasonably with any requests of the other Party from time to time to
attempt to isolate Celgene Controlled Agios Patent Rights, on the one hand, from
applications containing other Agios Patent Rights and Agios Collaboration Patent
Rights, on the other hand. In the event that Celgene declines to Prosecute such
Patent Rights, Celgene shall give Agios reasonable notice to this effect,
sufficiently in advance to permit Agios to undertake such Prosecution in such
country without a loss of rights, and thereafter Agios may, upon written notice
to Celgene, Prosecute such Patent Rights in Agios’ name subject to coordination
with the JPC.

(c) Celgene Patent Rights. Celgene shall have the sole right and option to
Prosecute the Celgene Patent Rights in the ROW Territory and, subject to
coordination with the JPC, the initial right and option to Prosecute the Celgene
Collaboration Patent Rights (excluding Joint Patents) in the ROW Territory. In
the event Celgene declines to Prosecute any such Celgene Collaboration Patent
Right, Celgene shall give Agios reasonable notice to this effect, sufficiently
in advance to permit Agios to undertake such Prosecution for such Celgene
Collaboration Patent Right in such country without a loss of rights, and
thereafter Agios may, upon written notice to Celgene, Prosecute such Patent
Rights in Celgene’s name.

(d) Joint Patents. The JPC shall determine which Party shall have the initial
right and option to Prosecute Joint Patents in the ROW Territory; provided that
(i) if the JPC cannot make such determination by unanimous vote, then
(x) Celgene shall have such initial right and option with respect to such Joint
Patents that (A) are Core Patent Rights and that specifically Cover a Compound
or Licensed Product or (B) claim or embody an improvement to technology claimed
or embodied in Celgene Intellectual Property, and (y) Agios shall have such
initial right and option with respect to all other such Joint Patents; and
(ii) in the event that the Party with the initial right to Prosecute Joint
Patents declines the option to Prosecute any such Joint Patents in any country,
such Party shall give the other Party reasonable notice to this effect,
sufficiently in advance to permit such other Party to undertake such Prosecution
in such country without a loss of rights, and thereafter such other Party may,
upon written notice to the first Party, Prosecute such Joint Patent in both
Parties’ names, with expenses shared as provided in Section 10.2(e).

(e) Costs and Expenses. The Parties shall jointly bear all costs and expenses in
Prosecuting Agios Patent Rights, Agios Collaboration Patent Rights, Celgene
Collaboration Patent Rights and Joint Patents (collectively, “Patent Prosecution
Expenses”) in the ROW Territory as either Development Costs (to the extent
incurred for any country of the ROW Territory prior to the First Commercial Sale
of the Licensed Product in the country to which the

 

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Patent Rights relate) or Commercialization Expenses (if incurred after First
Commercial Sale of the Licensed Product in the ROW Territory); provided,
however, that, in the event of an Agios Opt-Out Date, all such Patent
Prosecution Expenses incurred by Celgene following the Agios Opt-Out Date shall
be borne solely by Celgene.

(f) Strategy; Failure of JPC to Agree; Diligence and Cooperation.

(i) The JPC shall attempt to agree upon a strategy (which may be updated from
time to time) for Prosecution of Agios Patent Rights, Collaboration Patent
Rights and Joint Patents in the ROW Territory, including the scope and priority
of the claims to be pursued within such Patent Rights and to maximize the value
of such Patent Rights, together with their counterparts in the US Territory, on
a global basis. Any failure by the JPC to agree by unanimous vote with respect
to such strategy or any other Prosecution matter will be attempted to be
resolved as specified in Section 2.8(e), and if such attempt fails, then as
follows: Prosecution matters involving (A) Agios Patent Rights (other than
Celgene Controlled Agios Patent Rights therein) may be resolved by Agios;
(B) Agios Collaboration Patent Rights (other than Celgene Controlled Agios
Patent Rights and Joint Patents therein) may be resolved by Agios; (C) Celgene
Controlled Agios Patent Rights and Celgene Collaboration Patent Rights (other
than Joint Patents) may be resolved by Celgene; (D) all Core Patent Rights
within the Joint Patents may be resolved by Celgene; and (E) all other Joint
Patents may be resolved only by Mutual Consent. The Party conducting Prosecution
(the “Prosecuting Party”) with respect to each such Patent Right shall follow
such strategy in connection with all Prosecution of such Patent Rights unless
the JPC approves of a divergence from such strategy (with any failure by the JPC
to agree by unanimous vote to be resolved in accordance with Section 2.8(e) and
the foregoing sentence).

(ii) The Prosecuting Party shall be entitled to use patent counsel selected by
it and reasonably acceptable to the non-Prosecuting Party (including in-house
patent counsel as well as outside patent counsel) for the Prosecution of the
Patents Rights subject to Section 10.2(a), (b), (c), and (d). Each Party agrees
to cooperate with the other with respect to the Prosecution of such Patent
Rights pursuant to this Section 10.2, including (x) executing all such documents
and instruments and performing such acts as may be reasonably necessary in order
to permit the other Party to undertake any Prosecution of Patent Rights that
such other Party is entitled, and has elected, to Prosecute, as provided for in
Sections 10.2(a), 10.2(b), 10.2(c), and 10.2(d) and (y) giving consideration to
the proper scope of Patent Rights. The Prosecuting Party shall:

(A) regularly provide the JPC in advance with reasonable information relating to
the Prosecuting Party’s Prosecution of Patent Rights hereunder, including by
providing copies of substantive communications, notices and actions submitted to
or received from the relevant patent authorities and copies of drafts of filings
and correspondence that the Prosecuting Party proposes to submit to such patent
authorities, each of which shall be provided at least [**] days prior to any
filing or response deadlines, or within [**] Business Days of the Prosecuting
Party’s receipt of any official correspondence if such correspondence only
allows for [**] days or less to respond; provided that, if the foregoing time
periods are not practicable under the circumstances, the Prosecuting Party shall
provide such copies as far in advance as is practicable but with sufficient time
for the non-Prosecuting party to provide meaningful input;

 

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(B) consider in good faith and consult with the non-Prosecuting Party regarding
its timely comments with respect to the same;

(C) use Commercially Reasonable Efforts to Prosecute additional claims
substantially similar to those suggested by the non-Prosecuting Party, if any,
in such jurisdictions of the ROW Territory reasonably requested by the
non-Prosecuting Party; and

(D) consult with the JPC and non-Prosecuting Party before taking any action that
would have a material adverse impact on the scope of claims within the Agios
Patent Rights or Collaboration Patent Rights (including the Joint Patents), as
applicable.

(iii) The JPC shall determine the countries in which Agios Patent Rights and
Collaboration Patent Rights (including Joint Patents) shall be Prosecuted, with
the understanding that the countries set forth on Exhibit F of this Agreement
shall generally form the basis for the overall Prosecution strategy for such
Patent Rights and that any failure of the JPC to determine such countries by
unanimous vote will be resolved as provided in clause (i) of this
Section 10.2(f). Further, Agios shall consult with the JPC well in advance of
[**] and [**] deadlines as to additional countries (if any) in which the JPC or
Celgene desires that the Agios Patent Rights and Collaboration Patent Rights be
Prosecuted.

(iv) The Prosecuting Party agrees not to abandon the subject matter of a claim
in an Agios Patent Right, Collaboration Patent Right or Joint Patent or narrow
such claim except in response to an office action from the applicable patent
office that, in the Prosecuting Party’s reasonable judgment after consultation
with the non-Prosecuting Party, requires such abandonment or narrowing; provided
that, prior to such abandonment or narrowing, if feasible, the Parties will
co-operate to file divisional or continuation applications to separate such
claim.

(g) Third Party Rights. Agios covenants and agrees that it shall not grant any
Third Party any right to control the Prosecution of the Agios Patent Rights or
Agios Collaboration Patent Rights or to approve or consult with respect to any
Patent Rights licensed to Celgene hereunder, in any case, that is more favorable
to the Third Party than the rights granted to Celgene hereunder or that
otherwise conflicts with Celgene’s rights hereunder.

(h) Existing Third Party Agreement. Each Party acknowledges that, pursuant to
the Existing Third Party Agreement, the applicable licensors thereunder
Prosecute the Agios Patent Rights covered by such agreements; provided that
Agios may have certain rights to assume Prosecution under such agreement. Agios
agrees to keep Celgene fully informed of these rights, as well as provide to
Celgene all information and copies of documents received from the licensors
under the Existing Third Party Agreement or their patent counsel relating to the
Agios Patent Rights covered by such agreements. To the extent that Agios is
permitted to proceed with Prosecution or provide comments or suggestions to
patent documents under the Existing Third Party Agreement, then the Agios Patent
Rights under such Existing Third Party Agreement shall be treated in the same
manner as other Agios Patent Rights under this Section 10.2, and Agios shall
exercise all such rights with respect to such Agios Patents Rights pursuant to
the instructions of Celgene, if Celgene is given the right to act under this
Section 10.2.

 

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Section 10.3 Third Party Infringement of Agios Patent Rights and Collaboration
Patent Rights. Subject to the terms and conditions of the Existing Third Party
Agreement to the extent such agreement applies to the Agios Patent Rights or
Agios Collaboration Patent Rights in the ROW Territory, the following provisions
shall apply with respect to the Agios Patent Rights, Agios Collaboration Patent
Rights, Celgene Collaboration Patent Rights, Agios Know-How, Agios Collaboration
Know-How, and Celgene Collaboration Know-How in the ROW Territory:

(a) Notice. Each Party shall immediately provide the other Party with written
notice reasonably detailing any (i) known or alleged infringement of any Agios
Patent Rights or Collaboration Patent Rights, or known or alleged
misappropriation of any Agios Know-How or Collaboration Know-How, by a Third
Party, (ii) “patent certification” filed in the United States under 21 U.S.C.
§355(b)(2) or 21 U.S.C. §355(j)(2) or similar provisions in other jurisdictions,
and (iii) any declaratory judgment, opposition, or similar action alleging the
invalidity, unenforceability or non-infringement of any such intellectual
property rights (collectively “Third Party Infringement”).

(b) First Right to Initiate Infringement Actions. Until an Agios Opt-Out Notice,
Agios shall have the initial right throughout the ROW Territory, but not the
obligation, to initiate a suit or take other appropriate action in the ROW
Territory that Agios believes is reasonably required to protect the Agios
Intellectual Property or Agios Collaboration Intellectual Property against the
infringement, including Third Party Infringement, unauthorized use or
misappropriation by a Third Party that relates to a Licensed Product
(“Competitive Infringement”). Celgene shall have the sole right throughout the
ROW Territory, but not the obligation, to initiate a suit or take other
appropriate action in the ROW Territory that Celgene believes is reasonably
required to protect the Celgene Collaboration Patent Rights from Competitive
Infringement. Upon and after an Agios Opt-Out Notice, Celgene also shall have
the initial right throughout the ROW Territory, but not the obligation, to
initiate a suit or take other appropriate action in the ROW Territory that
Celgene believes is reasonably required to protect the Agios Patent Rights and
Agios Collaboration Patent Rights from Competitive Infringement. The Party
having such initial or sole right under the preceding three sentences (“Initial
Enforcement Party”) shall give the other Party advance notice of the Initial
Enforcement Party’s intent to file any such suit or take any such action and the
reasons therefor, and shall provide the other Party with an opportunity to make
suggestions and comments regarding such suit or action. Thereafter, the Initial
Enforcement Party shall keep the other Party promptly informed, and shall from
time to time consult with the other Party regarding the status of any such suit
or action and shall provide the other Party with copies of all material
documents (e.g., complaints, answers, counterclaims, material motions, orders of
the court, memoranda of law and legal briefs, interrogatory responses,
depositions, material pre-trial filings, expert reports, affidavits filed in
court, transcripts of hearings and trial testimony, trial exhibits and notices
of appeal) filed in, or otherwise relating to, such suit or action. Without
limiting the generality of the foregoing, the Parties shall discuss in good
faith the Initial Enforcement Party’s intended response to a Competitive
Infringement.

(c) Preparation to Enforce. After the First Commercial Sale of a Licensed
Product in the ROW Territory, subject to coordination with the JPC, the Initial
Enforcement Party shall use reasonable efforts to prepare for the possibility of
suit for Competitive Infringement starting [**] years after such First
Commercial Sale. Such preparation includes

 

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identifying and retaining experts, selecting and retaining outside counsel,
having outside counsel conduct a pre-litigation diligence investigation into
potential validity and unenforceability arguments, data and document collection
and review, and other actions reasonably capable of being conducted before
initiation of any such litigation.

(d) Step-in Rights. If Agios, as the Initial Enforcement Party, fails to
initiate a suit or take such other appropriate action under Section 10.3(b)
above within [**] days after becoming aware of the Competitive Infringement,
then Celgene may, in its discretion, provide Agios with written notice of
Celgene’s intent to initiate a suit or take other appropriate action to combat
such Competitive Infringement. If Celgene, as the Initial Enforcement Party for
the Agios Patent Rights and Agios Collaboration Patent Rights after the Agios
Opt-Out Notice, fails to initiate a suit or take such other appropriate action
under Section 10.3(b) above within [**] days after becoming aware of the
Competitive Infringement, then Agios may, in its discretion, provide Celgene
with written notice of Agios’ intent to initiate a suit or take other
appropriate action to combat such Competitive Infringement. If the Party with
such step-in rights under either of the two preceding sentences (“Step-In
Enforcement Party”) provides such notice and the Initial Enforcement Party fails
to initiate a suit or take such other appropriate action within [**] days after
receipt of such notice from the Step-In Enforcement Party, then Step-In
Enforcement Party shall have the right, but not the obligation, to initiate a
suit or take other appropriate action that it believes is reasonably required to
protect the applicable Agios Intellectual Property or Agios Collaboration
Intellectual Property from Competitive Infringement. The Step-In Enforcement
Party shall give the Initial Enforcement Party advance notice of the Step-In
Enforcement Party’s intent to file any such suit or take any such action and the
reasons therefor and shall provide the Initial Enforcement Party with an
opportunity to make suggestions and comments regarding such suit or action.
Thereafter, the Step-In Enforcement Party shall keep the Initial Enforcement
Party promptly informed and shall from time to time consult with the Initial
Enforcement Party regarding the status of any such suit or action and shall
provide the Initial Enforcement Party with copies of all material documents
(e.g., complaints, answers, counterclaims, material motions, orders of the
court, memoranda of law and legal briefs, interrogatory responses, depositions,
material pre-trial filings, expert reports, affidavits filed in court,
transcripts of hearings and trial testimony, trial exhibits and notices of
appeal) filed in, or otherwise relating to, such suit or action. For the
avoidance of any doubt, this Section 10.3(d) shall not be applicable to any of
the Celgene Collaboration Patent Rights, so Agios shall not have any right to be
the Step-In Enforcement Party for Celgene Collaboration Patent Rights without
the written agreement of Celgene.

(e) Conduct of Action; Costs. The Party initiating suit shall have the sole and
exclusive right to select counsel for any suit initiated by it under this
Section 10.3, which counsel must be reasonably acceptable to the other Party. If
required under applicable Law in order for such Party to initiate and/or
maintain such suit, the other Party shall join as a party to the suit. If
requested by the Party initiating suit, the other Party shall provide reasonable
assistance to the Party initiating suit in connection therewith at no charge to
such Party except that the initiating Party shall reimburse the other Party for
Out-of-Pocket Costs, other than outside counsel expenses, incurred in rendering
such assistance. The Party initiating suit shall assume and pay all of its own
Out-of-Pocket Costs incurred in connection with any litigation or proceedings
described in this Section 10.3, including the fees and expenses of the counsel
selected by it, provided that, prior to the Agios Opt-Out Date, if any, such
fees and expenses

 

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shall be included in the calculation of Development Costs (if incurred in any
country of the ROW Territory prior to the First Commercial Sale of a Licensed
Product in the country) or Commercialization Expenses (if incurred after the
First Commercial Sale of a Licensed Product in the ROW Territory). The other
Party shall have the right to participate and be represented in any such suit by
its own counsel at its own expense (and which shall not be a Patent and
Trademark Enforcement Cost or other cost that is a factor in the calculation of
ROW Territory Profit or Loss).

(f) Recoveries. Any recovery obtained as a result of any proceeding described in
this Section 10.3 or from any counterclaim or similar claim asserted in a
proceeding described in Section 10.4, by settlement or otherwise, shall be
applied in the following order of priority:

(i) first, the Party initiating the suit or action shall be reimbursed for all
previously unreimbursed (or not otherwise included in the calculation of
Development Costs or Commercialization Expenses) Out-of-Pocket Costs in
connection with such proceeding; and

(ii) second, any remainder shall be (A) treated as Additional Revenue, if
obtained before the Agios Opt-Out Date, if any; or (B) paid [**] percent ([**]%)
to the Party initiating the suit or action, and [**] percent ([**]%) to the
other Party, if obtained on or after the Agios Opt-Out Date, if any.

(g) Existing Third Party Agreement. In the event that (i) a Patent Right covered
by the Existing Third Party Agreement is at issue in an action under this
Section 10.3 or Section 10.4, (ii) Agios has a right to enforce the Agios Patent
Rights under such Existing Third Party Agreement, and (iii) Celgene desires to
enforce such Patent in accordance with the procedures under this Section 10.3 or
Section 10.4, as applicable, then Agios shall either obtain the licensors’
consent under the Existing Third Party Agreement so that Celgene may file such
an action in its own name or shall undertake such an action on Celgene’s behalf.

Section 10.4 Claimed Infringement; Claimed Invalidity.

(a) Infringement of Third Party Rights. Each Party shall promptly notify the
other Party in writing of any allegation by a Third Party that the activity of
either Party or their Affiliates or Licensee Partners under this Agreement
infringes or may infringe the intellectual property rights of such Third Party.
If a Third Party asserts or files against a Party or its Affiliates, in the ROW
Territory, any claim of infringement of the intellectual property rights of such
Third Party or other action relating to alleged infringement of such
intellectual property rights (“Third Party Infringement Action”), then, unless
otherwise agreed by the Parties:

(i) In the event of a Third Party Infringement Action against a single Party,
the unnamed Party shall have the right, in the unnamed Party’s sole discretion,
to participate in the defense of such legal action with legal counsel selected
by the unnamed Party and reasonably acceptable to the named Party (the costs of
which shall not be a Patent and Trademark Enforcement Cost or other cost that is
a factor in the calculation of ROW Territory Profit or Loss). The Party named in
such Third Party Infringement Action shall have the right to control the defense
of the action, but shall notify and keep the unnamed Party apprised in writing

 

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of such action and shall consider and take into account the unnamed Party’s
reasonable interests and requests and suggestions regarding the defense of such
action. In the event of a Third Party Infringement Action against both Parties,
the Parties shall attempt to mutually agree as to which Party shall control the
defense of such Third Party Infringement Action; provided that, in the event of
an Agios Opt-Out Notice or the failure of the Parties to so mutually agree,
Celgene shall have the right to control the defense of such Third Party
Infringement Action.

(ii) The non-controlling Party of a Third Party Infringement Action shall
reasonably cooperate with the controlling Party in the preparation and
formulation of a defense to such Third Party Infringement Action, and in taking
other steps reasonably necessary to respond to such Third Party Infringement
Action. The controlling Party shall have the right to select its counsel for the
defense to such Third Party Infringement Action, which counsel must be
reasonably acceptable to the non-controlling Party if both Parties have been
named as defendants in the action. The non-controlling Party shall also have the
right to participate and be represented in any such suit by its own counsel at
its own expense (and which shall not be a Patent and Trademark Enforcement Cost
or other cost that is a factor in the calculation of ROW Territory Profit or
Loss). The controlling Party shall not (and shall cause its Affiliates and
Licensee Partners not to) either (A) admit infringement, validity or
enforceability of the asserted intellectual property rights, (B) pay any amount
of money in settlement thereof, unless the controlling Party does not claim the
payment as a Patent and Trademark Enforcement Cost or other cost that is a
factor in the calculation of ROW Territory Profit or Loss, or (C) enter into a
license for the asserted intellectual property rights upon terms that would
restrict either Party from fully exploiting such rights consistently with the
scope of the rights and obligations of both Parties under this Agreement and the
AGI-23088 US Agreement, in each case (A) - (C), without the written consent of
the non-controlling Party, which will not to be unreasonably withheld,
conditioned or delayed. For the avoidance of doubt, except as provided in the
foregoing clause (B), the costs of such defense and settlement (if approved by
the non-controlling Party) shall be deemed Patent and Trademark Enforcement
Costs that are factored into the calculation of ROW Territory Profit or Loss.

(iii) If the Party entitled to control the defense under Section 10.4(a)(i) or
(ii) fails to proceed in a timely manner with respect to such defense, the other
Party shall have the right to control the defense of such claim upon the same
conditions set forth therein.

(iv) If requested by the Party controlling the defense, the Parties shall enter
into a joint defense agreement that further outlines their rights and
responsibilities consistent with the terms of this Section or as otherwise
mutually agreed.]

(b) Patent Invalidity Claim. If a Third Party at any time asserts a claim that
any issued Agios Patent Right or Agios Collaboration Patent Right (including
Joint Patents) is invalid or otherwise unenforceable (an “Invalidity Claim”),
whether as a defense in an infringement action brought by Agios or Celgene
pursuant to Section 10.3(b) or (d), in a declaratory judgment action or in a
Third Party Infringement claim brought against Agios or Celgene, the Parties
shall cooperate with each other in preparing and formulating a response to such
Invalidity Claim; provided that, subject to the terms and conditions of the
Existing Third Party Agreement to the extent such agreement applies to such
Agios Patent Right or Agios Collaboration Patent Right, the Party who has (or
would have) control over litigation pursuant

 

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to Section 10.3(b) or (d) shall have the sole right to control the defense and
settlement of any such Invalidity Claim as if it were litigation initiated
therein. For the avoidance of doubt, any claim asserted against any Agios Patent
Right or Agios Collaboration Patent Right before any such right is issued is
deemed a Prosecution matter that is the subject of Section 10.2.

Section 10.5 Patent Term Extensions. The JPC shall, as necessary and
appropriate, use reasonable efforts to agree upon a joint strategy for
obtaining, and cooperate with each other in obtaining, patent term extensions
for Agios Patent Rights, Agios Collaboration Patent Rights and Celgene
Collaboration Patent Rights that Cover Licensed Products. If the JPC is unable
to agree upon which of such Patent Rights should be extended, and the matter
remains unresolved after the procedure described in Section 2.8(e), then the
Initial Enforcement Party shall have the right to resolve the dispute, subject
in each case to the terms and conditions of the Existing Third Party Agreement
to the extent such agreement applies to such Agios Patent Right or Agios
Collaboration Patent Right.

Section 10.6 Patent Marking. Each Party shall comply with the patent marking
statutes in each country in which the Licensed Product is Manufactured or
Commercialized by or on behalf of a Party or their respective Affiliates or
sublicensees, as applicable, hereunder.

Section 10.7 CREATE Act Application. It is agreed and acknowledged that this
Agreement establishes a qualifying collaboration within the scope of the U.S.
CREATE Act and, accordingly, shall be deemed to constitute a “Joint Research
Agreement” for all purposes under the CREATE Act. Neither Party shall invoke the
provisions of the CREATE Act, or file this Agreement, in connection with the
prosecution of any patent application claiming, in whole or in part, any CREATE
Act invention without the prior written consent of the other Party. In the event
that a Party, during the course of prosecuting a patent application claiming a
CREATE Act invention (a “CREATE Act Patent”), deems it necessary to file a
terminal disclaimer to overcome an obviousness type double patenting rejection
in view of an earlier filed patent held by the other Party (the “Earlier
Patent”), then, if the Parties agree, the Parties shall coordinate the filing of
such terminal disclaimer in good faith, and, to the extent required under the
CREATE Act, both Parties shall agree, in such terminal disclaimer, that they
shall not separately enforce the CREATE Act Patent independently from the
Earlier Patent. To this end, to the extent required under the CREATE Act,
following the filing of such terminal disclaimer, the Parties shall, in good
faith, coordinate all enforcement actions with respect to the CREATE Act Patent.

Section 10.8 Challenges to Patent Rights.

(a) Certain Consequences of Celgene Challenges. Without limiting Celgene’s
obligations pursuant to Section 8.5(b), if Celgene or any of its Affiliates or
any of its sublicensees under the licenses granted to Celgene in this Agreement
(i) initiates or requests an interference or opposition proceeding with respect
to any Agios Patent Right or Agios Collaboration Patent Right that Covers a
Target or Licensed Product, (ii) makes, files or maintains any claim, demand,
lawsuit, or cause of action to challenge the validity or enforceability of any
Agios Patent Right or Agios Collaboration Patent Right that Covers a Target or
Licensed Product, or (iii) funds or otherwise provides material assistance to
any other Person with respect to any of the foregoing (any of the actions
described in the foregoing clauses (i), (ii) and (iii), a “Challenge”), and if
the outcome of such Challenge is that any claim

 

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of an Agios Patent Right or Agios Collaboration Patent Right that Covers a
Target or Licensed Product and that is subject to such Challenge remains valid
and enforceable, then (A) Celgene shall [**] Agios in connection with such
Challenge (which amounts shall not be deemed to constitute Development Costs or
Commercialization Expenses), and (B) thereafter, if the Agios Opt-Out Date has
not occurred before such outcome, then Agios’ share of ROW Territory Profit or
Loss hereunder with respect to any Licensed Product Covered by any remaining
such valid and enforceable claim of a Challenged Agios Patent Right or Agios
Collaboration Patent Right shall [**], notwithstanding Section 9.4(a), and if
the Agios Opt-Out Date has occurred before such outcome, then all royalty
amounts payable by Celgene to Agios hereunder with respect to any Licensed
Product Covered by any remaining such valid and enforceable claim of a
Challenged Agios Patent Right or Agios Collaboration Patent Right shall [**] of
the otherwise applicable royalty amounts payable under Section 9.5(a).

(b) No Use of Confidential Information. Without limiting Celgene’s obligations
pursuant to Section 10.8(a), Celgene shall not, and shall ensure that its
Affiliates and its sublicensees under the licenses granted to Celgene in this
Agreement do not, use or disclose any Confidential Information of Agios or any
nonpublic information regarding the Prosecution or enforcement of any Agios
Patent Rights or Agios Collaboration Patent Rights to which Celgene or any of
its Affiliates or sublicensees are or become privy as a consequence of the
rights granted to Celgene pursuant to this Article X, in initiating, requesting,
making, filing or maintaining, or in funding or otherwise assisting any other
Person with respect to, any Challenge.

(c) Certain Consequences of Agios Challenges. The provisions of Sections 10.8(a)
and 10.8(b) shall apply with respect to Celgene Patent Rights and Celgene
Collaboration Patent Rights licensed to Agios pursuant to Section 8.1, in each
case, substituting “Celgene” for “Agios” and vice versa with respect to all
obligations and definitions, and otherwise mutatis mutandis.

Section 10.9 Celgene Intellectual Property. Celgene shall have the sole right,
but not the obligation, to initiate a suit or take other appropriate action that
it believes is reasonably required to protect the Celgene Intellectual Property
without any obligation to consult with Agios. Notwithstanding anything to the
contrary in Section 10.3 or 10.4, all recoveries with respect to any such
action, by settlement or otherwise, shall be [**] by Celgene.

Article XI

Confidentiality

Section 11.1 Confidential Information. All Confidential Information of a Party
(“Disclosing Party”) shall not be used by the other Party (the “Receiving
Party”) except in performing its obligations or exercising rights explicitly
granted under this Agreement and shall be maintained in confidence by the
Receiving Party and shall not otherwise be disclosed by the Receiving Party to
any Third Party, without the prior written consent of the Disclosing Party with
respect to such Confidential Information, except to the extent that the
Confidential Information:

(a) was known by the Receiving Party or its Affiliates prior to its date of
disclosure to the Receiving Party; or

 

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(b) is lawfully disclosed to the Receiving Party or its Affiliates by sources
other than the Disclosing Party rightfully in possession of the Confidential
Information; or

(c) becomes published or generally known to the public through no fault or
omission on the part of the Receiving Party, its Affiliates or its sublicensees;
or

(d) is independently developed by or for the Receiving Party or its Affiliates
without reference to or reliance upon such Confidential Information, as
established by written records.

Section 11.2 Permitted Disclosure. The Receiving Party may provide the
Disclosing Party’s Confidential Information:

(a) to the Receiving Party’s respective employees, consultants and advisors, and
to the employees, consultants and advisors of such Party’s Affiliates, who have
a need to know such information and materials for performing obligations or
exercising rights expressly granted under this Agreement and have an obligation
to treat such information and materials as confidential;

(b) to patent offices in order to seek or obtain Patent Rights or to Regulatory
Authorities in order to seek or obtain approval to conduct Clinical Trials or to
gain Regulatory Approval with respect to the Licensed Products as contemplated
by this Agreement; provided that such disclosure may be made only following
reasonable notice to the Disclosing Party and to the extent reasonably necessary
to seek or obtain such Patent Rights or Regulatory Approvals; or

(c) if such disclosure is required by judicial order or applicable Law or to
defend or prosecute litigation or arbitration; provided that, prior to such
disclosure, to the extent permitted by Law, the Receiving Party promptly
notifies the Disclosing Party of such requirement, cooperates with the
Disclosing Party to take whatever action it may deem appropriate to protect the
confidentiality of the information and furnishes only that portion of the
Disclosing Party’s Confidential Information that the Receiving Party is legally
required to furnish.

Section 11.3 Publicity; Terms of this Agreement; Non-Use of Names.

(a) Public Announcements. Except as required by judicial order or applicable Law
(in which case, Section 11.3(b) must be complied with) or as explicitly
permitted by this Article XI, neither Party shall make any public announcement
concerning this Agreement without the prior written consent of the other Party,
which consent shall not be unreasonably withheld or delayed. The Party preparing
any such public announcement shall provide the other Party with a draft thereof
at least [**] Business Days prior to the date on which such Party would like to
make the public announcement (or, in extraordinary circumstances, such shorter
period as required to comply with applicable Law). Notwithstanding the
foregoing, the Parties shall issue a press release, in the form attached as
Exhibit G to this Agreement within [**] after

 

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the Effective Date. Neither Party shall use the name, trademark, trade name or
logo of the other Party or its employees in any publicity or news release
relating to this Agreement or its subject matter, without the prior express
written permission of the other Party. For purposes of clarity, either Party may
issue a press release or public announcement or make such other disclosure
relating to this Agreement if the contents of such press release, public
announcement or disclosure (x) (i) does not consist of financial information and
has previously been made public other than through a breach of this Agreement by
the issuing Party or its Affiliates, (ii) is contained in such Party’s financial
statements prepared in accordance with Accounting Standards, or (iii) is
contained in the Redacted Version of this Agreement, and (y) is material to the
event or purpose for which the new press release or public announcement is made.

(b) Permitted Disclosures. Notwithstanding the terms of this Article XI:

(i) Either Party shall be permitted to disclose the existence and terms of this
Agreement to the extent required, in the reasonable opinion of such Party’s
legal counsel, to comply with applicable Laws, including the rules and
regulations promulgated by the Securities and Exchange Commission or any other
governmental authority. Notwithstanding the foregoing, before disclosing this
Agreement or any of the terms hereof pursuant to this Section 11.3(b), the
Parties will coordinate in advance with each other in connection with the
redaction of certain provisions of this Agreement with respect to any filings
with the Securities and Exchange Commission, London Stock Exchange, the UK
Listing Authority, NYSE, the NASDAQ Stock Market or any other stock exchange on
which securities issued by a Party or a Party’s Affiliate are traded (the
“Redacted Version”), and each Party will use commercially reasonable efforts to
seek confidential treatment for such terms as may be reasonably requested by the
other Party; provided that the Parties will use commercially reasonable efforts
to file redacted versions with any governing bodies which are consistent with
the Redacted Version.

(ii) Either Party may disclose the existence and terms of this Agreement in
confidence:

(A) to (1) its attorneys, professional accountants, and auditors, and
(2) bankers or other financial advisors in connection with a public offering,
other strategic transaction, or corporate valuation for internal purposes;
provided that any such disclosure to such professional accountants, auditors,
bankers or other financial advisors is under an agreement to keep the terms of
confidentiality and non-use no less rigorous than the terms contained in this
Agreement and to use such information solely for the applicable purpose
permitted pursuant to this Section 11.3(b)(ii)(A);

(B) to the licensors under the Existing Third Party Agreement; provided that
such disclosure is under the confidentiality and non-use provisions of such
agreement;

(C) to potential acquirers (and their respective attorneys and professional
advisors), in connection with a potential merger, acquisition or reorganization;
provided that (1) the Party making the disclosure has a bona fide offer from
such Third Party for such a transaction, and (2) such disclosure is under an
agreement to keep the terms of confidentiality and non-use no less rigorous than
the terms contained in this Agreement and to use such information solely for the
purpose permitted pursuant to this Section 11.3(b)(ii)(C);

 

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(D) to existing investors, lenders or permitted assignees of such Party (and
their respective attorneys and professional advisors); provided that such
disclosure is under an agreement to keep the terms of confidentiality and
non-use no less rigorous than the terms contained in this Agreement; and

(E) to potential investors, lenders or permitted assignees of such Party, or to
potential licensees or sublicensees of such Party (and their respective
attorneys and professional advisors); provided that (1) such disclosure shall
not be made prior to [**] Business Days prior to the good faith anticipated
closing date for the investment, loan, assignment or license, as applicable, and
shall be made only if such Party reasonably concludes that such transaction with
such disclosee is likely to be consummated; (2) the disclosure shall be limited
to the Redacted Version plus such additional terms and conditions reasonably
requested by the disclosing Party and consented to by the other Party (for
purposes of clarity, the disclosing Party shall not be obligated to disclose the
identity of the disclosee in order to request such consent); and (3) such
disclosure is under an agreement to keep the terms of confidentiality and
non-use no less rigorous than the terms contained in this Agreement.

(iii) The Parties acknowledge the importance of supporting each other’s efforts
to publicly disclose results and significant developments regarding the Licensed
Products and other activities in connection with this Agreement that may include
information that is not otherwise permitted to be disclosed under this ARTICLE
XI, and that may be beyond what is required by applicable Law, and each Party
may make such disclosures from time to time. Such disclosures may include
achievement of milestones, significant events in the development and regulatory
process, commercialization activities and the like. Except for the initial press
release described in Section 11.3(a), whenever a Party (the “Requesting Party”)
elects to make any such public disclosure, it shall first notify the other Party
(the “Cooperating Party”) of such planned press release or public announcement
and provide a draft for review at least [**] Business Days in advance of issuing
such press release or making such public announcement (or, with respect to press
releases and public announcements that are required by applicable Law, or by
regulation or rule of any public stock exchange (including NASDAQ), with as much
advance notice as possible under the circumstances if it is not possible to
provide notice at least [**] Business Days in advance); provided, however, that
a Party may issue such press release or public announcement without such prior
review by the other Party if (A) the contents of such press release or public
announcement have previously been made public other than through a breach of
this Agreement by the issuing Party and (B) such press release or public
announcement does not materially differ from the previously issued press release
or other publicly available information. The Cooperating Party may notify the
Requesting Party of any reasonable objections or suggestions that the
Cooperating Party may have regarding the proposed press release or public
announcement, and the Requesting Party shall reasonably consider any such
objections or suggestions that are provided in a timely manner. The principles
to be observed in such disclosures shall include accuracy, compliance with
applicable Law and regulatory guidance documents, reasonable sensitivity to
potential negative reactions of the FDA (and its foreign counterparts) and the
need to keep investors informed regarding the Requesting Party’s business.

 

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Section 11.4 Publications. The Parties agree that decisions regarding the timing
and content of Publications shall be subject to the oversight and approval by
Mutual Consent of the JSC and JPC and neither Party nor its Affiliates shall
have the right to make Publications pertaining to the Collaboration except as
provided herein. If a Party or its Affiliates desire to make a Publication, such
Party must comply with the following procedure:

(a) JSC Review. The publishing Party shall provide the JSC and the
non-publishing Party with an advance copy of the proposed Publication, and the
JSC, by Mutual Consent, shall then have [**] days prior to submission for any
Publication ([**] days in the case of an abstract or oral presentation) in which
to determine whether the Publication may be published and under what conditions,
including (i) delaying sufficiently long to permit the timely preparation and
filing of a patent application or (ii) specifying changes the JSC reasonably
believes are necessary to preserve any Patent Rights or Know-How belonging
(whether through ownership or license, including under this Agreement) in whole
or in part to the non-publishing Party.

(b) Removal of Confidential Information. In addition, if the non-publishing
Party informs the publishing Party that such Publication, in the non-publishing
Party’s reasonable judgment, discloses any Confidential Information of the
non-publishing Party or could be expected to have a material adverse effect on
any Know-How which is Confidential Information of the non-publishing Party, such
Confidential Information or Know-How shall be deleted from the Publication.

(c) Scientific Conferences. Each Party shall have the right to present its
Publications approved pursuant to this Section 11.4 at scientific conferences,
including at any conferences in any country in the world, subject to any
conditions imposed by the JSC in its approval.

(d) Academic Publications. Notwithstanding the foregoing, the Parties
acknowledge that, to the extent that any Publication relates to Agios
Intellectual Property that is subject to the Existing Third Party Agreement, the
parties to such Existing Third Party Agreement may have retained the right to
publish certain information, and nothing in this Section 11.4 is intended to
restrict the exercise of such rights; provided that, to the extent that Agios
has the right to review and comment on any such publications, Agios shall, to
the extent permissible under such Existing Third Party Agreement, exercise such
rights after consultation with Celgene.

(e) Delegation. For purposes of convenience, the JSC may by Mutual Consent
delegate its responsibilities under this Section 11.4 to one or more
representatives of Agios and Celgene.

Section 11.5 Term. All obligations under this Article XI shall expire [**] years
following termination or expiration of this Agreement.

 

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Section 11.6 Return of Confidential Information.

(a) Obligations to Return or Destroy. Upon the expiration or termination of this
Agreement, the Receiving Party shall return to the Disclosing Party all
Confidential Information received by the Receiving Party from the Disclosing
Party (and all copies and reproductions thereof). In addition, the Receiving
Party shall destroy:

(i) any notes, reports or other documents prepared by the Receiving Party which
contain Confidential Information of the Disclosing Party; and

(ii) any Confidential Information of the Disclosing Party (and all copies and
reproductions thereof) which is in electronic form or cannot otherwise be
returned to the Disclosing Party.

(b) Destruction. Alternatively, upon written request of the Disclosing Party,
the Receiving Party shall destroy all Confidential Information received by the
Receiving Party from the Disclosing Party (and all copies and reproductions
thereof) and any notes, reports or other documents prepared by the Receiving
Party which contain Confidential Information of the Disclosing Party. Any
requested destruction of Confidential Information shall be certified in writing
to the Disclosing Party by an authorized officer of the Receiving Party
supervising such destruction.

(c) Limitation. Nothing in this Section 11.6 shall require the alteration,
modification, deletion or destruction of archival tapes or other electronic
back-up media made in the ordinary course of business; provided that the
Receiving Party shall continue to be bound by its obligations of confidentiality
and other obligations under this Article XI with respect to any Confidential
Information contained in such archival tapes or other electronic back-up media.

(d) Exceptions. Notwithstanding the foregoing,

(i) the Receiving Party’s legal counsel may retain one copy of the Disclosing
Party’s Confidential Information solely for the purpose of determining the
Receiving Party’s continuing obligations under this Article XI; and

(ii) the Receiving Party may retain the Disclosing Party’s Confidential
Information and its own notes, reports and other documents

(A) to the extent reasonably required (1) to exercise the rights and licenses of
the Receiving Party expressly surviving expiration or termination of this
Agreement; or (2) to perform the obligations of the Receiving Party expressly
surviving expiration or termination of this Agreement; or

(B) to the extent it is impracticable to do so without incurring
disproportionate cost.

Notwithstanding the return or destruction of the Disclosing Party’s Confidential
Information, the Receiving Party shall continue to be bound by its obligations
of confidentiality and other obligations under this Article XI.

 

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Article XII

Representations and Warranties

Section 12.1 Mutual Representations. Agios and Celgene each represents, warrants
and covenants to the other Party, as of the Effective Date, that:

(a) Authority. It has full corporate right, power and authority to enter into
this Agreement and to perform its obligations under this Agreement.

(b) Consents. Except as provided in Section 15.17, all necessary consents,
approvals and authorizations of all government authorities and other Persons
required to be obtained by it as of the Effective Date in connection with the
execution, delivery and performance of this Agreement have been or shall be
obtained by the Effective Date.

(c) No Conflicts. Notwithstanding anything to the contrary in this Agreement,
the execution and delivery of this Agreement, the performance of such Party’s
obligations in the conduct of the Collaboration and the licenses and sublicenses
to be granted pursuant to this Agreement (i) do not and will not conflict with
or violate any requirement of applicable Laws existing as of the Effective Date
and (ii) do not and will not conflict with, violate, breach or constitute a
default under any contractual obligations of such Party or any of its Affiliates
existing as of the Effective Date. It has not used, and during the Term will not
knowingly use, any Know-How that is encumbered by any contractual right of or
obligation to a Third Party that conflicts or interferes with any of the rights
or licenses granted or to be granted to the other Party hereunder. It has not
granted, and during the Term it will not grant, any right or license, to any
Third Party relating to any of the intellectual property rights it Controls,
that conflicts with the rights or licenses granted or to be granted to the other
Party hereunder.

(d) Enforceability. This Agreement is a legal and valid obligation binding upon
it and is enforceable in accordance with its terms.

(e) Employee Obligations. To its knowledge, none of its or its Affiliates’
employees who have been, are or will be involved in the Collaboration are, as a
result of the nature of such Collaboration to be conducted by the Parties, in
violation of any covenant in any contract with a Third Party relating to
non-disclosure of proprietary information, non-competition or non-solicitation.

Section 12.2 Additional Agios Representations. Agios represents, warrants and
covenants to Celgene, as of the Effective Date, as follows:

(a) Agios possesses sufficient rights to enable Agios to grant all rights and
licenses it purports to grant to Celgene with respect to the Agios Intellectual
Property under this Agreement.

(b) The Agios Patent Rights existing as of the Effective Date constitute all of
the Patent Rights Controlled by Agios or Agios USA as of such date that are
necessary or useful for the Development, Manufacture or Commercialization of the
Licensed Products.

 

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(c) There is no pending litigation, and Agios has not received any written
notice of any claims or litigation, seeking to invalidate or otherwise challenge
the Agios Patent Rights or Agios’ rights therein.

(d) There is no pending litigation, and Agios has not received any written
notice of any claims or litigation, that alleges that Agios’ activities with
respect to IDH1 or IDH2 have infringed or misappropriated any intellectual
property rights of any Third Party.

(e) [**] practice of the Agios Intellectual Property as contemplated under this
Agreement does not (i) infringe any claims of any Patent Rights of any Third
Party, or (ii) misappropriate any Know-How of any Third Party.

(f) None of (i) the Agios Patent Rights owned by Agios or both Controlled by and
Prosecuted by Agios and (ii) [**], the Agios Patent Rights Controlled but not
Prosecuted by Agios are subject to any pending re-examination, opposition,
interference or litigation proceedings.

(g) All of (i) the Agios Patent Rights owned by Agios or both Controlled by and
Prosecuted by Agios and (ii) [**], the Agios Patent Rights Controlled but not
Prosecuted by Agios have been filed and diligently Prosecuted in accordance with
all applicable Laws in the Territory and have been maintained, with all
applicable fees with respect thereto having been paid.

(h) True and correct copies of the Existing Third Party Agreement have been
provided to Celgene, and such agreement is in full force and effect and have not
been modified or amended. Neither Agios nor, [**], any licensor under the
Existing Third Party Agreement is in default with respect to a material
obligation under, and none of such parties has claimed or has grounds upon which
to claim that the other party is in default with respect to a material
obligation under, the Existing Third Party Agreement.

(i) [**] Agios Patent Rights Controlled by Agios pursuant to the Existing Third
Party Agreement were not and are not subject to any restrictions or limitations
except as set forth in the Existing Third Party Agreement.

(j) Agios has not waived or allowed to lapse any of its rights under the
Existing Third Party Agreement with respect to the Licensed Products, and no
such rights have lapsed or otherwise expired or been terminated.

(k) Agios has and, [**], the applicable licensor under the Existing Third Party
Agreement has complied with any and all obligations under [**] to perfect rights
to the applicable Patent Rights or Know-How licensed thereunder.

(l) Agios has not employed and, to its knowledge, has not used a contractor or
consultant that has employed, any individual or entity (i) debarred by the FDA
(or subject to a similar sanction of another applicable Regulatory Authority),
(ii) who is the subject of an FDA debarment investigation or proceeding (or
similar proceeding of another applicable Regulatory Authority), or (iii) has
been charged with or convicted under United States Law for conduct relating to
the development or approval, or otherwise relating to the regulation of any
Licensed Product under the Generic Drug Enforcement Act of 1992, in each case,
in the conduct of its activities prior to the Effective Date.

 

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Section 12.3 Additional Celgene Representations. Celgene represents, warrants
and covenants to Agios, as of the Effective Date, as follows:

(a) Celgene possesses sufficient rights to enable Celgene to grant all rights
and licenses it purports to grant to Agios with respect to the Celgene
Intellectual Property under this Agreement.

(b) Celgene has not employed and, to its knowledge, has not used a contractor or
consultant that has employed, any individual or entity (i) debarred by the FDA
(or subject to a similar sanction of another applicable Regulatory Authority),
(ii) who is the subject of an FDA debarment investigation or proceeding (or
similar proceeding of another applicable Regulatory Authority), or (iii) has
been charged with or convicted under United States Law for conduct relating to
the development or approval, or otherwise relating to the regulation of any
Licensed Product under the Generic Drug Enforcement Act of 1992, in each case,
in the conduct of its activities prior to the Effective Date.

Section 12.4 Employee Obligations. Agios and Celgene each covenants to the other
Party that all of its and its Affiliates’ employees, officers, consultants and
advisors who have been, are or will be involved in the Collaboration have
executed (or, prior to becoming involved in the Collaboration, will have
executed agreements) or have existing obligations under Law requiring assignment
to such Party of all intellectual property made during the course of and as the
result of their association with such Party, and obligating the individual to
maintain as confidential such Party’s Confidential Information, to the extent
required to support such Party’s obligations under this Agreement.

Section 12.5 No Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THE
PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATIONS OR WARRANTIES AS TO
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT.

Article XIII

Indemnification; Product Liabilities

Section 13.1 By Celgene.

(a) Celgene Indemnification Obligation. Celgene agrees, at Celgene’s cost and
expense, to defend, indemnify and hold harmless Agios and its Affiliates and
their respective directors, officers, employees and agents (the “Agios
Indemnified Parties”) from and against any losses, costs, damages, fees or
expenses arising out of any Third Party claim relating to:

(i) any breach by Celgene of any of its representations, warranties or
obligations pursuant to this Agreement; or

(ii) the gross negligence, or willful misconduct or violation of Law of Celgene
or its Affiliates.

 

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(b) Indemnification Procedures. In the event of any such claim against the Agios
Indemnified Parties by any Third Party, Agios shall promptly, and in any event
within [**] Business Days, notify Celgene in writing of the claim. Celgene shall
have the right, exercisable by notice to Agios within [**] Business Days after
receipt of notice from Agios of the claim, to assume direction and control of
the defense, litigation, settlement, appeal or other disposition of the claim
(including the right to settle the claim solely for monetary consideration) with
counsel selected by Celgene and reasonably acceptable to Agios; provided that
the failure to provide timely notice of a claim by a Third Party shall not limit
an Agios Indemnified Party’s right for indemnification hereunder except to the
extent such failure results in actual prejudice to Celgene. The Agios
Indemnified Parties shall cooperate with Celgene and may, at their option and
expense, be separately represented in any such action or proceeding. Celgene
shall not be liable for any litigation costs or expenses incurred by the Agios
Indemnified Parties without Celgene’s prior written authorization. In addition,
Celgene shall not be responsible for the indemnification or defense of any Agios
Indemnified Party to the extent arising from any negligent or intentional acts
by any Agios Indemnified Party or the breach by Agios of any representation,
obligation or warranty under this Agreement, or any claims compromised or
settled without its prior written consent.

Section 13.2 By Agios.

(a) Agios Indemnification Obligation. Agios agrees, at Agios’ cost and expense,
to defend, indemnify and hold harmless Celgene and its Affiliates and their
respective directors, officers, employees and agents (the “Celgene Indemnified
Parties”) from and against any losses, costs, damages, fees or expenses arising
out of any Third Party claim relating to:

(i) any breach by Agios of any of its representations, warranties or obligations
pursuant to this Agreement; or

(ii) the gross negligence, willful misconduct or violation of Law of Agios or
its Affiliates.

(b) Indemnification Procedures. In the event of any such claim against the
Celgene Indemnified Parties by any Third Party, Celgene shall promptly, and in
any event within [**] Business Days, notify Agios in writing of the claim. Agios
shall have the right, exercisable by notice to Celgene within [**] Business Days
after receipt of notice from Celgene of the claim, to assume direction and
control of the defense, litigation, settlement, appeal or other disposition of
the claim (including the right to settle the claim solely for monetary
consideration) with counsel selected by Agios and reasonably acceptable to
Celgene; provided that the failure to provide timely notice of a claim by a
Third Party shall not limit a Celgene Indemnified Party’s right for
indemnification hereunder except to the extent such failure results in actual
prejudice to Agios. The Celgene Indemnified Parties shall cooperate with Agios
and may, at their option and expense, be separately represented in any such
action or proceeding. Agios shall not be liable for any litigation costs or
expenses incurred by the Celgene Indemnified Parties without Agios’ prior
written authorization. In addition, Agios shall not be

 

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responsible for the indemnification or defense of any Celgene Indemnified Party
to the extent arising from any negligent or intentional acts by any Celgene
Indemnified Party or the breach by Celgene of any representation, obligation or
warranty under this Agreement, or any claims compromised or settled without its
prior written consent.

Section 13.3 Product Liability Costs. Except with respect to such portion (if
any) of Product Liabilities that are claims entitled to indemnification under
Section 13.1 or Section 13.2, the Parties shall be responsible for all Product
Liabilities, all Out-of-Pocket Costs and FTE Costs incurred by the controlling
Party under Section 13.4 in connection with any litigation or proceeding related
to such Third Party Products Liability Action, and all Out-of-Pocket Costs and
FTE Costs incurred by the non-controlling Party under Section 13.4 at the
request of the controlling Party under Section 13.4 as follows:

(a) All such costs and expenses incurred before the Agios Opt-Out Date shall be
taken into account in determining ROW Territory Profit or Loss as, and to the
extent, provided in the Financial Exhibit.

(b) All such costs and expenses incurred after the Agios Opt-Out Date relating
to Licensed Products in the ROW Territory shall be borne solely by Celgene if
and only to the extent such Product Liabilities were caused by the occurrence
after the Agios Opt-Out Date of the event, incident or circumstance that led to
the Third Party Liability Action.

(c) All such costs and expenses incurred after the Agios Opt-Out Date relating
to Licensed Products in the ROW Territory shall be borne fifty per cent (50%) by
each of the Parties to the extent such Product Liabilities were caused by the
occurrence before the Agios Opt-Out Date of an event, incident or circumstance
that is the subject of the Third Party Liability Action. If Agios is invoiced
for its portion of such costs and expenses incurred after the Agios Opt-Out
Date, payment is due within [**] days of receipt of invoice.

Section 13.4 Conduct of Product Liability Claims.

(a) Each Party shall promptly notify the other in the event that any Third Party
asserts or files in the ROW Territory any products liability claim or other
action relating to alleged defects in the Licensed Product (whether design
defects, manufacturing defects or defects in sales or marketing) (“Third Party
Products Liability Action”) against such Party. In the event of a Third Party
Products Liability Action against such a single Party, the unnamed Party shall
have the right, in the unnamed Party’s sole discretion, to join or otherwise
participate in such legal action with legal counsel selected by the unnamed
Party and reasonably acceptable to the named Party. The Party named in such
Third Party Products Liability Action shall have the right to control the
defense of the action, but shall notify and keep the unnamed Party apprised in
writing of such action and shall consider and take into account the unnamed
Party’s reasonable interests and requests and suggestions regarding the defense
of such action; provided that, in the event of an Agios Opt-Out Notice, Celgene
shall have the right to control the defense of all Third Party Product Liability
Actions after the Agios Opt-Out Date. In the event of a Third Party Products
Liability Action against both Parties, the Parties shall attempt to mutually
agree upon which Party shall control the response to such Third Party Products
Liability Action; provided that, in the event of an Agios Opt-Out Notice or the
failure of the Parties to mutually agree otherwise, Celgene shall have the right
to control the defense of all Third Party Product Liability Actions.

 

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(b) The non-controlling Party of a Third Party Products Liability Action shall
reasonably cooperate with the controlling Party in the preparation and
formulation of a defense to such Third Party Products Liability Action, and in
taking other steps reasonably necessary to respond to such Third Party Products
Liability Action. The controlling Party shall have the right to select its
counsel for the defense to such Third Party Products Liability Action, which
counsel must be reasonably acceptable to the non-controlling Party. If required
under applicable Law in order for the controlling Party to maintain a suit in
response to such Third Party Products Liability Action, the non-controlling
Party shall join as a party to the suit. Subject to Section 13.3, each Party
shall be responsible for its own Out-of-Pocket Costs incurred in connection with
any litigation or proceedings related to such Third Party Products Liability
Action, including the fees and expenses of the counsel selected by the
controlling Party. The non-controlling Party shall also have the right to
participate and be represented in any such suit by its own counsel at its own
expense. The controlling Party shall not settle or compromise any Third Party
Products Liability Action without the consent of the other Party, which consent
shall not be unreasonably withheld.

Section 13.5 Limitation of Liability. EXCEPT WITH RESPECT TO A BREACH OF SECTION
8.6 OR ARTICLE XI, OR A PARTY’S LIABILITY PURSUANT TO SECTION 13.1 OR 13.2,
NEITHER PARTY SHALL BE LIABLE FOR SPECIAL, CONSEQUENTIAL, EXEMPLARY, PUNITIVE,
MULTIPLE OR OTHER INDIRECT OR REMOTE DAMAGES, OR FOR LOSS OF PROFITS, LOSS OF
DATA OR LOSS OF USE DAMAGES ARISING IN ANY WAY OUT OF THIS AGREEMENT OR THE
EXERCISE OF ITS RIGHTS HEREUNDER, WHETHER BASED UPON WARRANTY, CONTRACT, TORT,
STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES OR LOSS.

Section 13.6 Insurance. Beginning on the [**] and thereafter during the Term,
each Party shall maintain commercial general liability insurance (including
product liability insurance) from a recognized, creditworthy insurance company,
with coverage limits of at least $[**] per claim and annual aggregate. Celgene
may elect to self-insure all or parts of the limits described above. Within [**]
days following written request from the other Party, each Party shall furnish to
the other Party a certificate of insurance evidencing such coverage. If such
coverage is modified or cancelled, the insured Party shall notify the other
Party and promptly provide such other Party with a new certificate of insurance
evidencing that such insured Party’s coverage meets the requirements of this
Section 13.6.

Article XIV

Term and Termination

Section 14.1 Term. The term of this Agreement (the “Term”) shall commence on the
Effective Date and shall continue, unless earlier terminated pursuant to
Section 2.12(b) or 14.2, in full force and effect as long as the Parties
continue to Develop and/or Commercialize Licensed Products in accordance with
the terms and conditions of this Agreement, or, in the event of an Agios Opt-Out
Date, until expiration of the Royalty Term for all Licensed Products.

 

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Section 14.2 Termination.

(a) Termination for Convenience. Celgene shall have the right to terminate this
Agreement in its entirety for convenience upon ninety (90) days’ prior written
notice to Agios; provided that Celgene shall not have the right to terminate
this Agreement until twelve (12) months following the Effective Date.

(b) Termination for Material Breach or Insolvency.

(i) If either Party (the “Non-Breaching Party”) believes that the other Party
(the “Breaching Party”) is in material breach of this Agreement, then the
Non-Breaching Party may deliver written notice of such breach to the Breaching
Party. If the Breaching Party fails to cure such breach, or take such steps as
would be considered reasonable to effectively cure such breach, within the [**]
day period after delivery of such notice, the Non-Breaching Party may terminate
this Agreement upon written notice to the Breaching Party. Notwithstanding the
foregoing, if such breach is capable of being cured, but is not reasonably
capable of being cured within the [**]-day cure period, if the Breaching Party
(A) proposes within such [**]-day period a written plan to cure such breach
within a defined time frame extending for a period not to exceed an additional
[**] days, and (B) makes good faith efforts to cure such default and to
implement such written cure plan, then the Non-Breaching Party may not terminate
this Agreement until the earlier of such time as the Breaching Party is no
longer diligently pursuing such cure in accordance with such plan or the end of
such additional period.

(ii) To the extent permitted by Law, this Agreement may be terminated by either
Party upon the filing or institution of bankruptcy, reorganization, liquidation
or receivership proceedings, or upon an assignment of a substantial portion of
the assets for the benefit of creditors by the other Party; provided, however,
that, in the event of any involuntary bankruptcy or receivership proceeding such
right to terminate shall only become effective if the Party consents to the
involuntary bankruptcy or receivership or such proceeding is not dismissed
within ninety (90) days after the filing thereof.

(c) Termination of AGI-23088 US Agreement. This Agreement terminates
automatically if the AGI-23088 US Agreement terminates for any reason. The
AGI-23088 US Agreement terminates if this Agreement terminates for any reason.

Section 14.3 Effects Of Termination.

(a) Effects of Celgene Termination for Convenience or Agios Termination for
Celgene Breach or Insolvency. Upon termination of this Agreement by Celgene
under Section 14.2(a), by Agios under Section 14.2(b), as a result of
termination of the AGI-23088 US Agreement by Celgene USA under Section 14.2(a)
for Celgene USA convenience therein, or as a result of termination of the
AGI-23088 US Agreement by Agios USA under Section 14.2(b)for Celgene USA breach
therein, the following shall apply:

(i) all licenses granted by Agios to Celgene under Section 8.1(a) shall
terminate, and all licenses granted by Celgene to Agios under Section 8.1(b)
shall remain in effect and, from and after such termination, Agios shall pay
Celgene royalties on Annual Net Sales of Licensed Products in the ROW Territory
pursuant to Section 9.5 substituting “Agios”

 

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for “Celgene” and vice versa with respect to all obligations and definitions,
and otherwise mutatis mutandis, with the Agios Opt-Out Date, as used therein,
deemed to be the effective date of termination;

(ii) each Party shall be released from its Development, Manufacture and
Commercialization obligations (except as set forth in Section 14.3(a)(vii) and
(viii) below with respect to Celgene’s transfer of Manufacturing to Agios
hereunder);

(iii) within [**] days after such termination, unless there has been an Agios
Opt-Out Date, each Party shall provide the other with a report of Development
Costs, Net Sales and Commercialization Expenses and other amounts incurred by
such Party that are subject to the Parties’ cost-sharing obligations through the
effective date of termination for the purpose of calculating a final
reconciliation of shared costs and payments in accordance with Sections 9.2 and
9.4, as applicable. Each Party shall submit any supporting information
reasonably requested by the other Party related to such Development Costs, Net
Sales, Commercialization Expenses and such other amounts included in such
Party’s reconciliation report within [**] days after the other Party’s receipt
of such request. The Parties, with the assistance of the Finance Working Group,
shall conduct a final reconciliation of such costs and payments within [**] days
after receipt of all such supporting information, and an invoice shall be issued
to the Party (if any) that owes the other Party a payment to accomplish the cost
sharing or payment envisioned under this Agreement pursuant to Sections 9.2 and
9.4, as applicable. The paying Party shall pay all amounts payable under any
such invoice within [**] days after its receipt of such invoice; provided,
however, that, Celgene shall remain responsible for its applicable share of the
Developments Costs of any Clinical Trials or other Development activities
committed and not cancelable by Agios with respect to the Licensed Products
prior to the effective date of termination to the extent such Development Costs
are within an approved Development Budget under an approved Development Plan in
place prior to termination;

(iv) within [**] days after such termination, Celgene shall provide to Agios a
fair and accurate summary report of the status of Development and
Commercialization activities conducted by Celgene with respect to the Licensed
Products;

(v) Celgene shall promptly transfer and assign to Agios all of Celgene’s and its
Affiliates’ rights, title and interests in and to the product trademark(s) (but
not any Celgene house marks or composite marks including a house mark) owned by
Celgene and solely used for Licensed Products in the ROW Territory;

(vi) Celgene shall as soon as reasonably practicable transfer and assign to
Agios all Regulatory Approvals of the Licensed Products in the ROW Territory,
their corresponding Regulatory Documentation, and a copy of all of the data
comprising the Global Safety Database; provided that Celgene may retain such
data and a single copy of such Regulatory Approvals and Regulatory Documentation
for its records; and provided further that, if such Regulatory Approvals or
Regulatory Documentation are necessary or useful for the Development,
Manufacture and/or Commercialization of any product other than the Licensed
Products, in place of transferring or assigning the foregoing, Celgene shall
grant Agios a Right of Reference or Use with respect to such approvals or
documentation with respect to the Licensed Products in the ROW Territory;

 

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(vii) Agios shall have the option, exercisable within [**] days following the
effective date of such termination of this Agreement, to obtain Celgene’s
inventory of the Licensed Products at a price equal to one hundred five percent
(105%) of Celgene’s Manufacturing Costs for such inventory of the Licensed
Products; provided that, if Celgene, its Affiliates or sublicensees have
outstanding orders, at Agios’ election, either Agios shall fulfill such orders
or, notwithstanding Agios’ option to purchase inventory, Celgene may retain
sufficient inventory to fulfill such orders. Agios may exercise such option by
written notice to Celgene during such [**]day period; provided that, in the
event Agios exercises such right to purchase such inventory, Celgene shall
grant, and hereby does grant, a royalty-free right and license to any
trademarks, names and logos of Celgene contained therein for a period of [**]
months solely to permit the orderly sale of such inventory, subject to Agios
meeting reasonable quality control standards imposed by Celgene on the use of
such trademarks, names and logos, which shall be consistent with the standards
used by Celgene prior to such termination;

(viii) to the extent that Celgene is responsible for Manufacturing the Licensed
Products immediately prior to such termination, at Agios’ written request:

(A) in exchange for a payment equal to one hundred five percent (105%) of
Celgene’s Manufacturing Costs and upon other commercially reasonable terms as
may be mutually agreed between the Parties or their respective Affiliates in a
supply agreement, Celgene shall use Commercially Reasonable Efforts to supply
Agios and its Affiliates with comparable quantities of the Licensed Products in
the form, formulation and presentation as were being Developed or Commercialized
immediately prior to termination until the earlier of [**] months after the
effective date of the termination and establishment by Agios of an alternative
supply for such product(s);

(B) in the event Celgene was utilizing a Third Party manufacturer to Manufacture
the Licensed Products, to the extent permitted by the terms of such contract,
Celgene shall promptly assign to Agios the manufacturing agreements with such
Third Party with respect to such product(s); and

(C) Celgene shall transfer, or have transferred, to Agios or its designee,
pursuant to a technology transfer plan to be mutually agreed by the Parties, all
Manufacturing Technology Controlled by Celgene or Celgene USA within Celgene
Collaboration Intellectual Property that is both necessary to Manufacture the
Licensed Products as Manufactured by or on behalf of Celgene and its Affiliates
prior to termination and has been incorporated in regulatory documentation
submitted to a Regulatory Authority in support of Development or
Commercialization of the Licensed Products (or is in the process of being
incorporated), and Celgene shall provide reasonable assistance in connection
with the transfer of such Manufacturing Technology to Agios or its designee, all
of which shall be transferred or provided at Celgene’s Out-of-Pocket Costs;

(ix) notwithstanding anything to the contrary in Section 8.6, Agios shall have
the right to pursue the Development, Manufacture and Commercialization of the
Licensed Products, provided, however, that in the event of a termination under
Section 14.2(a) by Celgene, if Agios or any of its Affiliates propose(s) to take
or take(s) any action not contemplated by the Development Plan in effect at the
time of such termination, and that

 

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Celgene reasonably determines is reasonably likely to have a material adverse
impact on the Commercialization of any of the “Licensed Products,” as such term
is defined in the 2010 Agreement, then Celgene shall provide written notice to
such effect to Agios specifying in reasonable detail which actions by Agios or
its Affiliates would have such an effect, and what such effect would be. The
Parties shall use good faith efforts to discuss the pertinent actions and
resolve the matter. If Agios concurs with Celgene’s determination, Agios and its
Affiliates shall not proceed with, or shall cease as quickly as reasonably
possible, as applicable, such action without the written consent of Celgene. If
Agios does not concur with Celgene’s determination, Celgene may present the
issue to the Executive Officers for resolution pursuant to Section 15.1(a) and,
if agreement is not reached, may seek resolution of such matter in accordance
with Section 15.1(b). If Celgene does present the issue to the Executive
Officers for resolution, then Agios and its Affiliates shall not proceed with,
or shall cease as quickly as reasonably possible, as applicable, such action
until the dispute is resolved by agreement of the Executive Officers or in
accordance with Section 15.1(b); and

(x) the provisions of Article X (other than Section 10.1) terminate, and Celgene
shall, if applicable, provide reasonable assistance to Agios and cooperation in
connection with the transition of Prosecution and enforcement responsibilities
to Agios with respect to Agios Patents Rights and Collaboration Patent Rights
then being Prosecuted or enforced by Celgene, including execution of such
documents as may be necessary to effect such transition.

(b) Effects of Celgene Termination for Agios Breach. Upon any termination of
this Agreement by Celgene under Section 14.2(b) or as a result of termination of
the AGI-23088 US Agreement by Celgene USA under Section 14.2(b) for Agios USA
breach therein:

(i) all future milestones payable by Celgene under Section 9.3 shall be reduced
by fifty percent (50%) of the otherwise applicable payment amounts; provided
that, if the termination of this Agreement is as a result of Agios’ breach of
Section 8.6, all future milestones payable by Celgene under Section 9.3 shall
terminate;

(ii) from and after such termination, if the Agios Opt-Out Date has not occurred
before the effective date of termination, then Celgene shall pay Agios royalties
on Annual Net Sales of Licensed Products in the ROW Territory pursuant to
Section 9.5, with the Agios Opt-Out Date, as used therein, deemed to be the
effective date of termination, and if the Agios Opt-Out Date has occurred before
the effective date of termination, then Celgene shall continue to pay to Agios
royalties on Annual Net Sales of Licensed Products in the ROW Territory but the
applicable royalty rate(s) shall be reduced by fifty percent (50%) of the
otherwise applicable rate(s);

(iii) all licenses granted by Celgene to Agios under Sections 8.1(b) with
respect to the Licensed Products shall terminate;

(iv) each Party shall be released from its Development, Manufacture and
Commercialization obligations (except as set forth in clause (viii) below with
respect to Agios’ transfer of Manufacturing to Celgene hereunder);

 

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(v) each Party shall provide the other with a report of the Development Costs
and Commercialization Expenses incurred by such Party that are subject to the
Parties’ cost-sharing obligations through the effective date of termination for
the purpose of calculating a final reconciliation of shared costs in accordance
with Section 9.2 and 9.4; provided, however, that, Agios shall remain
responsible for its applicable share of the Developments Costs of any Clinical
Trials or other Development activities committed by the Parties with respect to
the Licensed Products prior to the effective date of termination to the extent
such Development Costs are within an approved Development Budget under an
approved Development Plan in place prior to termination;

(vi) within [**] days after such termination, Agios shall provide to Celgene a
fair and accurate summary report of the status of Development and
Commercialization activities conducted by Agios with respect to the Licensed
Products;

(vii) the license granted by Agios to Celgene in Section 8.1(a) shall
immediately become an exclusive (even as to Agios) license for the entire ROW
Territory, which license shall continue in full force in perpetuity; provided
that Celgene shall be solely responsible for any payments owed by Agios to any
Third Party licensors of Agios Intellectual Property or Agios Collaboration
Intellectual Property and shall be responsible for complying with the terms of
any license agreements with such Third Party licensors, in either case, directly
related to Celgene’s exercise of such license;

(viii) the provisions of Section 14.3(a)(v), (vi), (vii) and (viii), shall
apply, in each case, substituting “Agios” for “Celgene” and vice versa with
respect to all obligations and definitions, and otherwise mutatis mutandis;

(ix) notwithstanding anything to the contrary in Section 8.6, Celgene shall have
the right to pursue the Development, Manufacture and Commercialization of the
Licensed Products, provided, however, that if Celgene or any of its Affiliates
propose(s) to take or take(s) any action not contemplated by the Development
Plan in effect at the time of such termination, and that Agios reasonably
determines is reasonably likely to have a material adverse impact on the
Commercialization of any of the “Licensed Products,” as such term is defined in
the 2010 Agreement, then Agios shall provide written notice to such effect to
Celgene specifying in reasonable detail which actions by Celgene or its
Affiliates would have such an effect, and what such effect would be. The Parties
shall use good faith efforts to discuss the pertinent actions and resolve the
matter. If Celgene concurs with Agios’ determination, Celgene and its Affiliates
shall not proceed with, or shall cease as quickly as reasonably possible, as
applicable, such action without the written consent of Agios. If Celgene does
not concur with Agios’ determination, Celgene may present the issue to the
Executive Officers for resolution pursuant to Section 15.1(a) and, if agreement
is not reached, may seek resolution of such matter in accordance with
Section 15.1(b). If Agios does present the issue to the Executive Officers for
resolution, then Celgene and its Affiliates shall not proceed with, or shall
cease as quickly as reasonably possible, as applicable, such action until the
dispute is resolved by agreement of the Executive Officers or in accordance with
Section 15.1(b); and

(x) the rights of Agios in Article X (other than Section 10.1) shall be
terminated and Agios shall, if applicable, provide reasonable assistance to
Celgene and

 

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cooperation in connection with the transition of Prosecution and enforcement
responsibilities to Celgene with respect to Agios Patents Rights and Agios
Collaboration Patent Rights and all Joint Inventions and Joint Patents,
including execution of such documents as may be necessary to effect such
transition.

(c) Sell-Down. Unless Agios exercises its option under Section 14.3(a)(vii), if
Celgene, its Affiliates or sublicensees at termination of this Agreement possess
Licensed Product, have started the manufacture thereof or have accepted orders
therefor, Celgene, its Affiliates or sublicensees shall have the right, for up
to [**] following the date of termination, to sell their inventories thereof,
complete the manufacture thereof and Commercialize such fully-manufactured
Licensed Product, in order to fulfill such accepted orders or distribute such
fully-manufactured Licensed Product, subject to the obligation of Celgene to pay
Agios any and all payments as provided in this Agreement.

(d) Survival. Upon any termination or expiration of this Agreement, unless
otherwise specified in this Agreement and except for any rights or obligations
that have accrued prior to the effective date of termination or expiration, all
rights and obligations of each Party under this Agreement shall terminate in
whole or with respect to the Licensed Products, as the case may be; provided,
however, that Sections 2.1(b), 3.4(b), 8.3(f), 8.7, 8.8, 9.2(b), 9.5(b)(v), 9.7,
9.8, 9.9, 10.1, 12.5, 13.6 (for at least [**]) and this Section 14.3 and
Articles IX (to the extent any amounts are due but unpaid), XI, XIII (other than
Section 13.6 (Insurance))and XV, as well as any other provision which by its
terms or by the context thereof is intended to survive, shall survive any such
termination or expiration of this Agreement.

(e) Equitable Relief. Termination of this Agreement shall be in addition to, and
shall not prejudice, the Parties’ remedies at law or in equity, including the
Parties’ ability to receive legal damages and/or equitable relief with respect
to any breach of this Agreement, regardless of whether or not such breach was
the reason for the termination.

(f) Accrued Liabilities. Except as otherwise specifically provided herein,
termination of this Agreement shall not relieve the Parties of any liability or
obligation which accrued hereunder prior to the effective date of such
termination, nor preclude either Party from pursuing all rights and remedies it
may have hereunder or at law or in equity with respect to any breach of this
Agreement nor prejudice either Party’s right to obtain performance of any
obligation. In addition, termination of this Agreement shall not terminate
provisions which provide by their respective terms for obligations or
undertakings following the expiration of the term of this Agreement.

Article XV

Miscellaneous

Section 15.1 Dispute Resolution.

(a) Except for any disagreements that are within the authority of any Committee
as provided in Article II (which disagreements shall be resolved in accordance
with Section 2.8), the Parties agree that any disputes arising with respect to
the interpretation, enforcement, termination or invalidity of this Agreement
(each, a “Dispute”) shall first be

 

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presented to the Parties’ respective Executive Officers for resolution. If the
Parties are unable to resolve a given dispute pursuant to this Section 15.1(a)
after in-person discussions between the Executive Officers within [**] Business
Days after referring such dispute to the Executive Officers, either Party may,
at its sole discretion, seek resolution of such matter in accordance with
Section 15.1(b) or Section 15.2, as applicable.

(b) If the Parties do not resolve a Dispute with respect to any Arbitrable
Matter after referring such matter to the Executive Officers pursuant to
Section 15.1(a), then either Party may request that such Dispute be resolved by
binding arbitration in accordance with the expedited procedures applicable to
the Commercial Arbitration Rules of the American Arbitration Association (the
“AAA”) and the provisions of this Section 15.1(b). Dispute resolution pursuant
to this Section 15.1(b) shall apply only to the following Disputes if the
Parties cannot agree by Mutual Consent (“Arbitrable Matters”): (x) whether an
action proposed to taken by a Party or its Affiliate pursuant to
Section 2.12(b)(ii), 6.1(b)(i), 14.3(a)(ix) or 14.3(b)(ix) is reasonably likely
to have a material adverse impact on the Commercialization of any of the
“Licensed Products,” as such term is defined in the 2010 Agreement; or
(y) whether an action proposed to be taken by Agios or its Affiliate pursuant to
Section 6.1(b)(ii) is reasonably likely to have an adverse impact on
Commercialization of any of the “Licensed Products,” as such term is defined in
the AGI-23088 US Agreement.

(i) The Party desiring to initiate an arbitration proceeding with respect to an
Arbitrable Matter will send a written notice to the other Party requesting the
commencement of the arbitration proceeding and specifying the issue to be
resolved. Within [**] days after the date such notice is sent, the Parties shall
negotiate in good faith to appoint a mutually acceptable independent person,
with scientific, technical, and regulatory experience with respect to the
development of pharmaceutical products in the Field necessary to resolve such
Dispute and with availability to comply with the time periods in this
Section 15.1(b) (an “Expert”). If the Parties fail to choose an Expert within
the foregoing time period, the AAA shall choose an Expert (with such experience
and availability) on behalf of the Parties within [**] days after receipt of
written request by a Party to the AAA. Disputes about arbitration procedure will
be resolved by the Expert or, failing agreement, by the AAA in New York, New
York. Unless otherwise agreed by the Parties, the arbitration proceedings will
be conducted in New York, New York. The fees and costs of the Expert and the
AAA, if applicable, shall be shared equally by the Parties.

(ii) Within [**] days after selection of the Expert, each Party shall
simultaneously deliver to the Expert and the other Party a written statement:
(A) stating each of the issues that is the subject of the Arbitrable Matter
dispute, (B) setting forth such Party’s position on each issue in dispute, and
(C) setting forth such Party’s final position with respect to each such issue.
With such statement, each Party may also submit supporting documentation, if
any, for such Party’s final position. Each Party shall have [**] days after the
other Party’s submission to submit to the Expert and the other Party a written
response thereto, which may include any scientific and technical information in
support thereof. The Expert shall have the right to meet with the Parties,
either alone or together, as necessary to make a determination.

(iii) In resolving the dispute, the Expert will have no authority to make a
decision on any issue other than by selecting the final position of one of the
Parties. An

 

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arbitration decision with respect to the Arbitrable Matter will be rendered in
writing the designation of the Expert, which decision will be final and binding
on the Parties. For all purposes under this Agreement, any decision made
pursuant to this Section 15.1(b) shall be deemed to be the decision of the
Parties, by Mutual Consent.

Section 15.2 Submission to Court for Resolution. Subject to Section 15.1, the
Parties hereby irrevocably and unconditionally consent to the exclusive
jurisdiction of the courts located in the Southern District of New York for any
action, suit or proceeding (other than appeals therefrom) arising out of or
relating to this Agreement, and agree not to commence any action, suit or
proceeding (other than appeals therefrom) related thereto except in such courts.
The Parties further hereby irrevocably and unconditionally waive any objection
to the laying of venue of any action, suit or proceeding (other than appeals
therefrom) arising out of or relating to this Agreement in the courts of New
York, and hereby further irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. Each Party
further agrees that service of any process, summons, notice or document by
registered mail to its address set forth in Section 15.7 shall be effective
service of process for any action, suit or proceeding brought against it under
this Agreement in any such court.

Section 15.3 Governing Law. This Agreement and all questions regarding its
validity or interpretation, or the performance or breach of this Agreement,
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without reference to conflicts of laws principles.

Section 15.4 Assignment.

(a) Right to Assign. Neither Party may assign this Agreement, in whole or in
part, without the consent of the other Party, except that either Party may
assign this Agreement without the consent of the other Party, (i) in whole or in
part, to any non-U.S. Affiliate of such Party, (ii) in whole to a non-U.S.
Person as part of a Change of Control of such Party, or (iii) in whole to a
non-U.S. Person as part of a Change of Control of Agios USA or Celgene USA, as
applicable; provided that the assigning Party provides the other Party with
written notice of such assignment and such assignee agrees in writing to be
bound by the terms and conditions of this Agreement. The terms of this Agreement
shall be binding upon and shall inure to the benefit of the successors, heirs,
administrators and permitted assigns of the Parties. Any purported assignment in
violation of this Section 15.4 shall be null and void.

(b) Acquisition of a Party. Each Party agrees that in the event that a Party
(the “Acquired Party”) is acquired by Change of Control (an “Acquisition”) by a
Third Party (the “Acquirer”), (i) the non-Acquired Party shall not obtain any
rights or access under this Agreement to any Know-How or Patent Rights
Controlled by such Acquirer which were not already within Agios Intellectual
Property (if the Acquired Party is Agios) or Celgene Intellectual Property (if
the Acquired Party is Celgene) immediately prior to the consummation of such
Acquisition; and (ii) the provisions of Section 8.6 shall not apply to any
activity otherwise prohibited therein if a Party’s involvement in such
prohibited activity results from the Acquirer’s activities but only if (A) such
Acquirer, prior to such acquisition or merger, was already engaged in such
prohibited activity (the “Third Party Activity”), and (B) no Celgene
Intellectual Property, Agios Intellectual Property, or Collaboration
Intellectual Property is used in connection with such Third Party Activity.

 

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(c) Acquisition by a Party. Each Party agrees that in the event that a Party
acquires (whether by way of merger, acquisition, sale of all or substantially
all of its business or assets to which this Agreement pertains, or otherwise) a
Third Party (the “Acquired Third Party”), the provisions of Section 8.6 shall
not apply to any activity otherwise prohibited therein if a Party’s involvement
in such prohibited activity results from such acquisition, but only if (i) such
Acquired Third Party, prior to such acquisition, was already engaged in such
prohibited activity (the “Acquired Party Activity”), and (ii) the Party
acquiring such Acquired Third Party shall, within [**] days after the date of
the consummation of such acquisition, notify the other Party of such acquisition
and comply with the other provisions of this Section 15.4(c). Following
consummation of such an acquisition, the acquiring Party shall, at its option,
either (A) use good faith efforts to identify a Third Party purchaser to whom
such Party will divest its interest in the Acquired Party Activity and to enter
into a definitive agreement with such Third Party for such divestiture as soon
as reasonably practicable under the circumstances, but such divestiture must be
completed no later than [**] months after the closing of such Party’s
acquisition of the Acquired Party Activity, or (B) promptly discontinue such
Acquired Party Activity; provided that notwithstanding which option is chosen,
such divesture or discontinuation must be accomplished no later than [**] months
after the closing of such Party’s acquisition of the Acquired Party Activity.
During the time period following the consummation of an acquisition covered by
this Section 15.4(c) through the divestiture or discontinuation of the Acquired
Party Activity, the acquiring Party shall not use any Celgene Intellectual
Property, Agios Intellectual Property, or Collaboration Intellectual Property in
connection with such Acquired Party Activities. So long as the acquiring Party
divests of, or discontinues, the Acquired Party Activity in accordance with this
Section 15.4(c), such acquisition shall not be deemed a violation of
Section 8.6.

Section 15.5 Certain Additional Matters Relating to Change of Control of a
Party. In the event that either Party is subject to a Change of Control, such
Party shall notify the other Party at least [**] Business Days prior to the
consummation of such Change of Control (or such lesser period of time as is
practicable under the circumstances), and shall thereafter provide written
notice to the other Party promptly following consummation of such Change of
Control.

(a) Agios Change of Control. Upon consummation of a Change of Control of Agios,
the Collaboration shall continue in effect as provided in this Agreement except
that:

(i) the license and sublicense granted to Agios under Section 8.1(b) shall
terminate;

(ii) all decisions relating to Development, Manufacturing and Commercialization
that require decision by a Committee or that are subject to Mutual Consent shall
be made solely by Celgene and all decisions for which Agios was provided with
final decision-making authority under Section 2.8 shall be made solely by
Celgene; provided, however, that Celgene shall not exercise such decision-making
authority in any manner that diminishes Agios’ rights with respect to Marketing
Activities pursuant to Section 6.3;

 

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(iii) except as otherwise directed by Celgene and except with respect to
Marketing Activities allocated to Agios pursuant to Section 6.3, Agios shall
cease to conduct any further Development or Commercialization activities with
respect to any Licensed Products and cease to incur any further Development
Costs or Commercialization Expenses except as approved by Celgene or as provided
in Sections 5.4, 13.3 and 13.4;

(iv) Agios shall provide to Celgene a reasonably detailed summary of Development
and Commercialization activities undertaken by Agios under the Collaboration,
including any Clinical Trials committed but not yet completed as of such date;

(v) Agios shall undertake, and coordinate with Celgene with respect to, any
wind-down or transitional activities reasonably necessary to transfer to Celgene
all Development, Manufacturing (including all Agios Clinical-Scale Manufacturing
Responsibilities and Agios Commercial-Scale Manufacturing Responsibilities) and
Commercialization responsibility for the Licensed Products throughout the ROW
Territory (other than Marketing Activities allocated to Agios pursuant to
Section 6.3), at Agios’ sole expense, including those activities referenced in
Section 14.3(b)(viii); provided that the Parties shall reasonably cooperate in
seeking to minimize the costs of such wind-down or transitional activities;
provided further that (A) if Celgene requests that any contracts or agreements
that extend beyond consummation of the Change of Control be terminated, Agios
shall be responsible for all costs associated with such termination, and (B) if
Celgene requests that any such contract or agreement remain in effect, Celgene
shall be responsible for all Development Costs and Commercialization Expenses
under such contract or agreement following consummation of the Change of
Control;

(vi) Celgene shall have the option to obtain Agios’ inventory of the Licensed
Products and their active pharmaceutical ingredients at a price equal to their
Manufacturing Costs;

(vii) in the event Agios is utilizing a Third Party manufacturer to Manufacture
the Licensed Products or their active pharmaceutical ingredients, to the extent
permitted by the terms of such contract, Agios shall, if requested by Celgene,
promptly assign to Celgene the manufacturing agreements with such Third Party
with respect to such products and ingredients;

(viii) Agios shall transfer, or have transferred, to Celgene or its designee,
pursuant to a technology transfer plan to be mutually agreed by the Parties, all
Manufacturing Technology Controlled by Agios or Agios USA within Agios
Intellectual Property that is both necessary to Manufacture the Licensed
Products or their active pharmaceutical ingredients as Manufactured by or on
behalf of Agios and its Affiliates, and Agios shall provide reasonable
assistance in connection with the transfer of such Manufacturing Technology to
Celgene or its designee, all of which shall be deemed Development Costs;

(ix) notwithstanding anything to the contrary in Section 2.8 or otherwise
herein, Celgene shall have the right to resolve all disputes within any
Committee and final decision making authority on all unresolved matters
throughout the ROW Territory;

 

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(x) all of Agios’ rights under Article X (other than Section 10.1) shall
terminate, and Agios shall transition to Celgene all of Agios’ Prosecution and
enforcement responsibilities with respect to Agios Patents Rights, Agios
Collaboration Patent Rights, Joint Inventions and Joint Patents, and provide
reasonable assistance to Celgene and cooperation in connection therewith,
including execution of such documents as may be necessary to effect such
transition, and Agios’ rights under Sections 10.2(a) and 10.2(d) on Prosecution
matters all terminate notwithstanding anything to the contrary in Article X,
provided that Agios shall retain step-in rights under Sections 10.2(b) and
Section 10.3(d) as well as comparable step-in rights on Prosecution matters
relating to Agios Patent Rights and Agios Collaboration Patent Rights; and

(xi) the AGI-23088 US Agreement will be affected in a corresponding manner as
provided therein.

(b) Celgene Change of Control. Upon consummation of a Change of Control of
Celgene before the Agios Opt-Out Notice, the Collaboration shall continue in
effect as provided in this Agreement, except that:

(i) the license and sublicense granted to Celgene under Section 8.1(a) shall
terminate;

(ii) all decisions relating to Development, Manufacturing and Commercialization
that require decision by a Committee or that are subject to Mutual Consent shall
be made solely by Agios and all decisions relating to Commercialization for
which Celgene was provided with final decision-making authority under
Section 2.8 shall be made solely by Agios; provided, however, that Agios shall
not exercise such decision-making authority in any manner that diminishes
Celgene’s rights with respect to Marketing Activities pursuant to Section 6.3;

(iii) except as otherwise directed by Agios and except with respect to Marketing
Activities allocated to Celgene pursuant to Section 6.3, Celgene shall cease to
conduct any further Development or Commercialization activities with respect to
any Licensed Products and cease to incur any further Development Costs or
Commercialization Expenses except as approved by Agios or as provided in
Sections 5.4, 13.3 and 13.4;

(iv) Celgene shall provide to Agios a reasonably detailed summary of Development
and Commercialization activities undertaken by Celgene under the Collaboration,
including any Clinical Trials committed but not yet completed as of such date;

(v) Celgene shall undertake, and coordinate with Agios with respect to, any
wind-down or transitional activities reasonably necessary to transfer to Agios
all Development, Manufacturing (including all Celgene Manufacturing
Responsibilities) and Commercialization responsibility for the Licensed Products
throughout the Territory (other than Marketing Activities allocated to Celgene
pursuant to Section 6.3), at Celgene’s sole expense, including those activities
referenced in Section 14.3(b)(viii); provided that the Parties shall reasonably
cooperate in seeking to minimize the costs of such wind-down or transitional
activities; provided further that (A) if Agios requests that any contracts or
agreements that extend beyond the consummation of the Change of Control be
terminated, Celgene shall be responsible

 

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for all costs associated with such termination, and (B) if Agios requests that
any such contract or agreement remain in effect, Agios shall be responsible for
all Development Costs and Commercialization Expenses under such contract or
agreement following the consummation of the Change of Control;

(vi) Agios shall have the option to obtain Celgene’s inventory of the Licensed
Products and their active pharmaceutical ingredients at a price equal to their
Manufacturing Costs;

(vii) in the event Celgene is utilizing a Third Party manufacturer to
Manufacture the Licensed Products or their active pharmaceutical ingredients, to
the extent permitted by the terms of such contract, Celgene shall, if requested
by Agios, promptly assign to Agios the manufacturing agreements with such Third
Party with respect to such products and ingredients;

(viii) Celgene shall transfer, or have transferred, to Agios or its designee,
pursuant to a technology transfer plan to be mutually agreed by the Parties, all
Manufacturing Technology Controlled by Celgene or Celgene USA within Celgene
Intellectual Property that is both necessary to Manufacture the Licensed
Products or their active pharmaceutical ingredients as Manufactured by or on
behalf of Celgene and its Affiliates, and Celgene shall provide reasonable
assistance in connection with the transfer of such Manufacturing Technology to
Agios or its designee, all of which shall be deemed Development Costs;

(ix) notwithstanding anything to the contrary in Section 2.8 or otherwise
herein, Agios shall have the right to resolve all disputes within any Committee
and final decision making authority on all unresolved matters throughout the ROW
Territory;

(x) all of Celgene’s rights under Article X (other than Section 10.1) with
respect to the Agios Patent Rights, Agios Collaboration Intellectual Property,
and Joint Patents shall terminate, and Celgene shall transition to Agios all of
Celgene’s Prosecution and enforcement responsibilities with respect to Agios
Patents Rights, Agios Collaboration Patent Rights, Joint Inventions and Joint
Patents, and provide reasonable assistance to Agios and cooperation in
connection therewith, including execution of such documents as may be necessary
to effect such transition, and Celgene’s rights under Sections 10.2(b) and
10.2(d) on Prosecution matters all terminate notwithstanding anything to the
contrary in Article X, provided that Celgene shall retain its step-in rights
under Section 10.2(a) and 10.3(d) and shall be extended comparable step-in
rights under Celgene-Controlled Agios Patent Rights as those Agios had under
Section 10.2(b) and 10.2(d); and

(xi) the AGI-23088 US Agreement will be affected in a corresponding manner as
provided therein.

(c) Definition. For purposes of this Agreement, “Change of Control” of a Party
means any of the following, in a single transaction or a series of related
transactions: (i) the sale or disposition of all or substantially all of the
assets of such Party to a Third Party, (ii) the direct or indirect acquisition
by a Third Party (other than an employee benefit plan (or related trust)
sponsored or maintained by such Party or any of its Affiliates) of beneficial

 

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ownership of more than fifty percent (50%) of the then-outstanding common shares
or voting power of such Party, or (iii) the merger or consolidation of such
Party with or into a Third Party, unless, following such merger or
consolidation, the stockholders of such Party immediately prior to such merger
or consolidation beneficially own directly or indirectly more than fifty percent
(50%) of the then-outstanding common shares or voting power of the entity
resulting from such merger or consolidation.

Section 15.6 Force Majeure. If the performance of any part of this Agreement by
a Party is prevented, restricted, interfered with or delayed by an occurrence
beyond the control of such Party (and which did not occur as a result of such
Party’s financial condition, negligence or fault), including fire, earthquake,
flood, embargo, power shortage or failure, acts of war or terrorism,
insurrection, riot, lockout or other labor disturbance, governmental acts or
orders or restrictions, acts of God (for the purposes of this Agreement, a
“force majeure event”), such Party shall, upon giving written notice to the
other Party, be excused from such performance to the extent of such prevention,
restriction, interference or delay; provided that the affected Party shall use
its Commercially Reasonable Efforts to avoid or remove such causes of
non-performance and shall continue performance with the utmost dispatch whenever
such causes are removed.

Section 15.7 Notices. Unless otherwise agreed by the Parties or specified in
this Agreement, all notices required or permitted to be given under this
Agreement shall be in writing and shall be sufficient if: (a) personally
delivered; (b) sent by registered or certified mail (return receipt requested
and postage prepaid); (c) sent by express courier service providing evidence of
receipt and postage prepaid where applicable; or (d) sent by facsimile
transmission (receipt verified and a copy promptly sent by another permissible
method of providing notice described in clauses (a), (b) or (c) above), to
address for a Party set forth below, or such other address for a Party as may be
specified in writing by like notice:

 

To Agios:

 

Agios International Sarl

c/o BK-Services AG

Baarerstrasse 8

6301 Zug

Switzerland

Attention: President

Telephone:

Facsimile:

  

To Celgene:

 

Celgene International II Sàrl

rue des Nasieux 18

Couvet, CH 2108

Switzerland

Attention: President

Phone: +41 32 729 85 00

Fax: +41 32 729 85 08

 

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With copies to:

 

WilmerHale LLP

60 State Street

Boston, MA 02109

Attention: Steven D. Singer, Esq.

Telephone: (617) 526-6000

Facsimile: (617) 526-5000

 

Agios Pharmaceuticals, Inc.

38 Sidney Street

Cambridge, MA 02139

Attention: Legal Department

Telephone: (617) 649-8600

Facsimile: (617) 649-8618

  

With a copy to:

 

Celgene Corporation

86 Morris Avenue

Summit, NJ 07901

Attention: Legal Department

Telephone: (908) 673-9000

Facsimile: (908) 673-2162

 

Celgene Corporation

86 Morris Avenue

Summit, NJ 07901

Attention: George S. Golumbeski

Telephone: (908) 673-9043

Facsimile: (908) 673-2769

Any such notices shall be effective upon receipt by the Party to whom it is
addressed.

Section 15.8 Waiver. Except as otherwise expressly provided in this Agreement,
any term of this Agreement may be waived only by a written instrument executed
by a duly authorized representative of the Party waiving compliance. The delay
or failure of either Party at any time to require performance of any provision
of this Agreement shall in no manner affect such Party’s rights at a later time
to thereafter enforce such provision. No waiver by either Party of any condition
or term in any one or more instances shall be construed as a further or
continuing waiver of such condition or term or of another condition or term.

Section 15.9 Severability. If any provision of this Agreement should be held
invalid, illegal or unenforceable in any jurisdiction, the Parties shall
negotiate in good faith a valid, legal and enforceable substitute provision that
most nearly reflects the original intent of the Parties and all other provisions
of this Agreement shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the Parties
hereto as nearly as may be possible. If the Parties cannot agree upon a
substitute provision, the invalid, illegal or unenforceable provision of this
Agreement shall not affect the validity of this Agreement as a whole, unless the
invalid, illegal or unenforceable provision is of such essential importance to
this Agreement that it is to be reasonably assumed that the Parties would not
have entered into this Agreement without the invalid, illegal or unenforceable
provision.

Section 15.10 Entire Agreement. This Agreement (including the Exhibits attached
hereto) constitutes the entire agreement between the Parties relating to its
subject matter, and supersedes all prior and contemporaneous agreements,
representations or understandings, either written or oral, between the Parties
with respect to such subject matter, including the 2010 Agreement solely with
respect to AGI-23088. There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the Parties other than as set forth herein and therein.

Section 15.11 Modification. No modification, amendment or addition to this
Agreement, or any provision hereof, shall be effective unless reduced to writing
and signed by a duly

 

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authorized representative of each Party. No provision of this Agreement shall be
varied, contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by a duly authorized representative of each Party.

Section 15.12 Independent Contractors; No Intended Third Party Beneficiaries.
This Agreement is not intended nor shall be deemed or construed to create any
relationship of employer and employee, agent and principal, partnership, or
joint venture between the Parties. Each Party is an independent contractor.
Neither Party shall assume, either directly or indirectly, any liability of or
for the other Party. Neither Party shall have any express or implied right or
authority to assume or create any obligations on behalf of, or in the name of,
the other Party, nor to bind the other Party to any contract, agreement or
undertaking with any Third Party. There are no express or implied third party
beneficiaries hereunder, (a) except for the indemnitees identified in Sections
13.1 and 13.2, and (b) except that [**] are intended third party beneficiaries
of certain provisions of this Agreement, as specifically referred to herein.
Notwithstanding the provisions of this Section 15.12, the provisions of
Section 15.16 shall control for U.S. federal income tax purposes, as applicable.

Section 15.13 Interpretation; Construction. The captions to the several Articles
and Sections of this Agreement are included only for convenience of reference
and shall not in any way affect the construction of, or be taken into
consideration in interpreting, this Agreement. In this Agreement, unless the
context requires otherwise, (a) the word “including” shall be deemed to be
followed by the phrase “without limitation” or like expression; (b) references
to the singular shall include the plural and vice versa; (c) references to
masculine, feminine and neuter pronouns and expressions shall be
interchangeable; (d) the words “herein” or “hereunder” relate to this Agreement;
(e) “or” is disjunctive but not necessarily exclusive; (f) the word “will” shall
be construed to have the same meaning and effect as the word “shall”; and
(g) all references to “dollars” or “$” herein shall mean U.S. Dollars. Each
Party represents that it has been represented by legal counsel in connection
with this Agreement and acknowledges that it has participated in the drafting
hereof. In interpreting and applying the terms and provisions of this Agreement,
the Parties agree that no presumption will apply against the Party which drafted
such terms and provisions.

Section 15.14 Performance by Affiliates. To the extent that this Agreement
imposes obligations on Affiliates of a Party, such Party agrees to cause its
Affiliates to perform such obligations.

Section 15.15 Counterparts. This Agreement may be executed in two
(2) counterparts, each of which shall be deemed an original, and both of which
together shall constitute one and the same instrument.

Section 15.16 Certain U.S. Federal Income Tax Treatment. Pursuant to
Section 15.12, this Agreement is not intended nor shall be deemed or construed
to create any relationship of employer and employee, agent and principal, legal
partnership, or joint venture between the Parties; provided however, the Parties
hereby acknowledge and agree that the Collaboration shall be treated as a
partnership for U.S. federal and state income tax purposes only pursuant to
Section 7701(a)(2) of the Code and the Treasury Regulations thereunder, and each
of Agios and

 

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Celgene shall be treated as partners in such partnership (the “CA 23088 ROW
Partnership”), for all taxable periods that the Collaboration is effective and
before the Agios Opt-Out Date. Agios and Celgene agree that each will take no
position inconsistent with partnership tax treatment for U.S. federal and state
income tax purposes for such time. For so long as the tax partnership remains in
existence, (a) Celgene shall control all tax matters with respect to the CA
23088 ROW Partnership (including the preparation of returns and making of
elections) and shall be the “tax matters partner” of the CA 23088 ROW
Partnership (as that term is defined in Section 6231(a)(7) of the Code),
(b) Agios shall cooperate as reasonably requested by Celgene in furtherance of
(a), (c) the CA 23088 ROW Partnership shall comply with the provisions of
Subchapter K of the Code and the Treasury Regulations thereunder, including the
requirements of Section 704 of the Code and the Treasury Regulations thereunder
with respect to the maintenance of capital accounts and allocation of items, and
(d) each payment made by Celgene in connection with this Agreement (including
the initial payment pursuant to Section 9.1 and each milestone payment pursuant
to Section 9.3) shall be reported for U.S. federal income tax purposes so as to
maximize the amount deductible to Celgene in respect of any such payment
(including as a result of the allocation of an amortization deduction) to the
full extent permitted by the Code. Exhibit I of this Agreement sets for the
Parties’ intentions regarding allocations and other tax matters related to the
tax partnership. Exhibit I shall be interpreted in a manner consistent with this
Section 15.16.

Section 15.17 Agios Guarantee and Related Covenants.

(a) Agios Guarantee. To induce Celgene to enter into this Agreement, the Person
indicated on the guarantor signature page of this Agreement as the “Agios
Guarantor” hereby irrevocably, absolutely, and unconditionally guarantees, not
as a primary obligor but only as surety to Celgene, on the terms and conditions
set forth herein, the full and punctual payment, performance and discharge of
the payment and other obligations of Agios when due under this Agreement (the
“Agios Obligations”). In furtherance of the foregoing, the Agios Guarantor
acknowledges that its liability under this Section 15.17 shall extend to the
Agios Obligations and that Celgene may, in its sole discretion, bring and
prosecute a separate action or actions against the Agios Guarantor for the full
amount of the Agios Obligations, provided that Celgene may only do so in respect
of any Agios Obligation if (i) Celgene has first provided written notice to
Agios of Agios’s failure to fulfill or otherwise satisfy such Agios Obligation
in accordance with this Agreement (and, at such time, Agios has in fact failed
to fulfill or otherwise satisfy such Agios Obligation within the time specified
in this Agreement), and (ii) Agios has failed to fulfill or satisfy such Agios
Obligation within [**] days after Agios’s receipt of such written notice (the
requirements in clauses (i) and (ii), collectively, the “Agios Non-Satisfaction
Condition”).

(b) Changes in Obligations; Certain Waivers.

(i) The Agios Guarantor agrees that Celgene and Agios may from time to time and
at any time, without notice to or further consent of the Agios Guarantor, extend
the time of payment of the Agios Obligations, and Celgene may also make any
agreement with Agios or with any other Person interested in the transactions
contemplated by this Agreement, for the payment, compromise, extension,
discharge, renewal, or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between Celgene, Agios or

 

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any such other Person without in any way impairing or affecting the Agios
Guarantor’s obligations under this Section 15.17. The Agios Guarantor agrees
that its obligations hereunder shall not be released or discharged, in whole or
in part, or otherwise affected by (A) the existence of any claim, set-off or
other right which the Agios Guarantor may have at any time against Agios,
whether in connection with the Agios Obligations or otherwise; (B) any
insolvency, bankruptcy, reorganization or other similar proceeding affecting
Agios or any other Person interested in the transactions contemplated by this
Agreement; (C) any change in the corporate existence, structure or ownership of
Agios or any other Person interested in the transactions contemplated by this
Agreement; (D) the addition, substitution or release of any Person to or from
this Section 15.17, this Agreement, or any related agreement or document
(provided that any such addition, substitution or release shall, in the case of
this Agreement or any such agreement or document, be subject to the prior
written consent of Agios to the extent required thereunder); (E) any change in
the time, place or manner of payment of the Agios Obligations or any rescission,
waiver, compromise, consolidation or other amendment or modification of any of
the terms or provisions of this Agreement or any other agreement evidencing,
securing or otherwise executed in connection with the Agios Obligations
(provided that any such change, rescission, waiver, compromise, consolidation or
other amendment or modification shall be subject to the prior written consent of
Agios to the extent required under this Agreement or such other agreement); or
(F) the failure of Celgene to assert any claim or demand or to enforce any right
or remedy against Agios or any other Person interested in the transactions
contemplated by this Agreement (but subject, however, to the fulfillment of the
Agios Non-Satisfaction Condition). To the fullest extent permitted by Law, the
Agios Guarantor hereby expressly waives any and all rights or defenses arising
by reason of any Law which would otherwise require any election of remedies by
Celgene. Subject to the fulfillment of the Agios Non-Satisfaction Condition, the
Agios Guarantor waives (x) promptness, diligence, presentment, demand for
payment, notice of non-performance and all other notices of any kind, and all
defenses by virtue of any valuation, stay, moratorium or similar law now or
hereafter in effect, and (y) any right to require Celgene to proceed against
Agios or pursue any other remedy in Celgene’s power whatsoever.

(ii) The Agios Guarantor hereby unconditionally and irrevocably agrees not to
exercise any rights that it may now have or hereafter acquire against Agios or
any other Person interested in the transactions contemplated by this Agreement
that arise from the existence, payment, performance, or enforcement of the Agios
Guarantor’s obligations under or in respect of this Section 15.17 or any other
agreement in connection therewith, including any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of Celgene against Agios or such other
Person, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including the right to take or receive from
Agios or such other Person, directly or indirectly, in cash or other property or
by set-off or in any other manner, payment or security on account of such claim,
remedy or right.

(iii) The Agios Guarantor hereby covenants and agrees that it shall not
institute, and shall cause its respective Affiliates not to institute, any
proceedings asserting and shall not in any case assert that this Section 15.17
is illegal, invalid or unenforceable in accordance with its terms.

 

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(c) Nature of Guarantee. The liability of the Agios Guarantor as surety
hereunder shall not be affected or impaired by any circumstance or occurrence
whatsoever, including the failure of the Agios Guarantor to receive any benefit
from or as a result of its execution, delivery and performance of this
Section 15.17. Celgene shall not be obligated to file any claim relating to the
Agios Obligations in the event that Agios becomes subject to a reorganization,
bankruptcy or similar proceeding, and the failure of Celgene to so file shall
not affect the Agios Guarantor’s obligations under this Section 15.17. In the
event that any payment to Celgene in respect of the Agios Obligations is
rescinded or must otherwise be returned for any reason whatsoever, the Agios
Guarantor shall remain liable hereunder with respect to the Agios Obligations as
if such payment had not been made (subject to the terms hereof). This
Section 15.17 is an unconditional guarantee of payment, and not merely of
collectability.

Section 15.18 Celgene Guarantee and Related Covenants.

(a) Guarantee. To induce Agios to enter into this Agreement, the Person
indicated on the guarantor signature page of this Agreement as the “Celgene
Guarantor” hereby irrevocably, absolutely, and unconditionally guarantees, not
as a primary obligor but only as surety to Agios, on the terms and conditions
set forth herein, the full and punctual payment, performance and discharge of
the payment and other obligations of Celgene when due under this Agreement (the
“Celgene Obligations”). In furtherance of the foregoing, the Celgene Guarantor
acknowledges that its liability under this Section 15.18 shall extend to the
Celgene Obligations and that Agios may, in its sole discretion, bring and
prosecute a separate action or actions against the Celgene Guarantor for the
full amount of the Celgene Obligations, provided that Agios may only do so in
respect of any Celgene Obligation if (i) Agios has first provided written notice
to Celgene of Celgene’s failure to fulfill or otherwise satisfy such Celgene
Obligation in accordance with this Agreement (and, at such time, Celgene has in
fact failed to fulfill or otherwise satisfy such Celgene Obligation within the
time specified in this Agreement), and (ii) Celgene has failed to fulfill or
satisfy such Celgene Obligation within [**] days after Celgene’s receipt of such
written notice (the requirements in clauses (i) and (ii), collectively, the
“Celgene Non-Satisfaction Condition”).

(b) Changes in Obligations; Certain Waivers.

(i) The Celgene Guarantor agrees that Celgene and Agios may from time to time
and at any time, without notice to or further consent of the Celgene Guarantor,
extend the time of payment of the Celgene Obligations, and Agios may also make
any agreement with Celgene or with any other Person interested in the
transactions contemplated by this Agreement, for the payment, compromise,
extension, discharge, renewal, or release thereof, in whole or in part, or for
any modification of the terms thereof or of any agreement between Celgene, Agios
or any such other Person without in any way impairing or affecting the Celgene
Guarantor’s obligations under this Section 15.18. The Celgene Guarantor agrees
that its obligations hereunder shall not be released or discharged, in whole or
in part, or otherwise affected by (A) the existence of any claim, set-off or
other right which the Celgene Guarantor may have at any time against Celgene,
whether in connection with the Celgene Obligations or otherwise; (B) any
insolvency, bankruptcy, reorganization or other similar proceeding affecting
Celgene or any other Person interested in the transactions contemplated by this
Agreement; (C)

 

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any change in the corporate existence, structure or ownership of Celgene or any
other Person interested in the transactions contemplated by this Agreement;
(D) the addition, substitution or release of any Person to or from this
Section 15.18, this Agreement, or any related agreement or document (provided
that any such addition, substitution or release shall, in the case of this
Agreement or any such agreement or document, be subject to the prior written
consent of Celgene to the extent required thereunder); (E) any change in the
time, place or manner of payment of the Celgene Obligations or any rescission,
waiver, compromise, consolidation or other amendment or modification of any of
the terms or provisions of this Agreement or any other agreement evidencing,
securing or otherwise executed in connection with the Celgene Obligations
(provided that any such change, rescission, waiver, compromise, consolidation or
other amendment or modification shall be subject to the prior written consent of
Celgene to the extent required under this Agreement or such other agreement); or
(F) the failure of Agios to assert any claim or demand or to enforce any right
or remedy against Celgene or any other Person interested in the transactions
contemplated by this Agreement (but subject, however, to the fulfillment of the
Celgene Non-Satisfaction Condition). To the fullest extent permitted by Law, the
Celgene Guarantor hereby expressly waives any and all rights or defenses arising
by reason of any Law which would otherwise require any election of remedies by
Agios. Subject to the fulfillment of the Celgene Non-Satisfaction Condition, the
Celgene Guarantor waives (x) promptness, diligence, presentment, demand for
payment, notice of non-performance and all other notices of any kind, and all
defenses by virtue of any valuation, stay, moratorium or similar law now or
hereafter in effect, and (y) any right to require Agios to proceed against
Celgene or pursue any other remedy in Agios’s power whatsoever.

(ii) The Agios Guarantor hereby unconditionally and irrevocably agrees not to
exercise any rights that it may now have or hereafter acquire against Agios or
any other Person interested in the transactions contemplated by this Agreement
that arise from the existence, payment, performance, or enforcement of the Agios
Guarantor’s obligations under or in respect of this Section 15.18 or any other
agreement in connection therewith, including any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of Celgene against Agios or such other
Person, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including the right to take or receive from
Agios or such other Person, directly or indirectly, in cash or other property or
by set-off or in any other manner, payment or security on account of such claim,
remedy or right.

(iii) The Celgene Guarantor hereby covenants and agrees that it shall not
institute, and shall cause its respective Affiliates not to institute, any
proceedings asserting and shall not in any case assert that this Section 15.18
is illegal, invalid or unenforceable in accordance with its terms.

(c) Nature of Guarantee. The liability of the Celgene Guarantor as surety
hereunder shall not be affected or impaired by any circumstance or occurrence
whatsoever, including the failure of the Celgene Guarantor to receive any
benefit from or as a result of its execution, delivery and performance of this
Section 15.18. Agios shall not be obligated to file any claim relating to the
Celgene Obligations in the event that Celgene becomes subject to a
reorganization, bankruptcy or similar proceeding, and the failure of Agios to so
file shall not affect the Celgene Guarantor’s obligations under this
Section 15.18. In the event that any

 

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payment to Agios in respect of the Celgene Obligations is rescinded or must
otherwise be returned for any reason whatsoever, the Celgene Guarantor shall
remain liable hereunder with respect to the Celgene Obligations as if such
payment had not been made (subject to the terms hereof). This Section 15.18 is
an unconditional guarantee of payment, and not merely of collectability.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the Parties have executed this Collaboration and License
Agreement as of the Effective Date.

 

AGIOS INTERNATIONAL SARL By:  

/s/ David Schenkein

Name:  

David Schenkein

Title:  

CEO / Managing Director

CELGENE INTERNATIONAL II SARL By:  

/s/ Tuomo Patsi

Name:  

Tuomo Patsi

Title:  

President, EMEA

By:  

/s/ Michael J. Morrissey

Name:  

Michael J. Morrissey

Title:  

Managing Director

--------------------------------------------------------------------------------

Guarantors Signature Page

IN WITNESS WHEREOF, the Parties have executed this Collaboration and License
Agreement as of the Effective Date as guarantors for purposes of Sections 15.17
and 15.18.

 

AGIOS PHARMACEUTICALS, INC., as Agios Guarantor By:  

/s/ David Schenkein

Name:  

David Schenkein

Title:  

CEO

CELGENE SWITZERLAND SA, as Celgene Guarantor Signed in Switzerland: By:  

/s/ Jurg Oehen

Name:  

Jurg Oehen

Title:  

Director

--------------------------------------------------------------------------------

Exhibit A

AGI-23088 (Also known as AG-881)

[**]

 

A-1

--------------------------------------------------------------------------------

Exhibit B

Agios Patent Rights and Agios Collaboration Patent Rights

(as of the Effective Date)

 

AGIOS DOCKET NO.

  

APPLICATION NO.

  

FILING DATE

  

PUBLICATION NO.

  

PATENT NO.

[**]    [**]    [**]    [**]    [**]

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. A total of two pages were omitted. [**]

 

B-2

--------------------------------------------------------------------------------

Exhibit C

[Exhibit no longer used]

 

C-1

--------------------------------------------------------------------------------

Exhibit D

Existing Third Party Agreement

[**]

 

D-1

--------------------------------------------------------------------------------

Exhibit E

Certain Financial Definitions

“Accounting Standards” means (a) GAAP (United States Generally Accepted
Accounting Principles) or (b) IFRS (International Financial Reporting
Standards), in either case, consistently applied.

“Additional Revenue” means the sum of (a) recoveries pursuant to
Section 10.3(f)(ii)(A) of this Agreement, (b) insurance proceeds relating to
liabilities previously paid by the Parties and reflected in Commercialization
Expenses, and (c) any payments or income (other than Net Sales) received by a
Party or its Affiliates that are attributable to the Licensed Products and
relate to the ROW Territory.

“Advertising and Market Research Expenses” means those expenses incurred related
to: (a) conducting and monitoring professional and consumer appraisals of the
Licensed Products in the Territory, such as market share services (e.g., IMS
data), pricing analysis, special research testing and focus groups; and
(b) advertising and promotion of the Licensed Products in the Territory through
any means, including (i) television and radio advertisements;
(ii) advertisements appearing in journals, newspapers, magazines or other media;
(iii) seminars, symposia and conventions; (iv) packaging design; (v) programs
for education of health care professionals; (vi) product samples; (vii) visual
aids and other selling materials; (viii) hospital formulary committee
presentations; (ix) presentations to state and other governmental formulary
committees; and (x) all media costs associated with product advertising.

“Annual Net Sales” means, with respect to Licensed Products sold after the Agios
Opt-Out Date under this Agreement or the AGI-23088 US Agreement (as the term
“Licensed Products” is defined therein), the aggregate Net Sales of such
Licensed Products by Celgene or its Affiliates or sublicensees in the portion of
such Calendar Year following the Agios Opt-Out Date, and in each subsequent
Calendar Year during which this Agreement or the AGI-23088 US Agreement is in
effect.

“Commercialization Expenses” mean those expenses incurred by either Party (as
detailed below) for the purpose of, and directly and specifically attributable
to, the Commercialization of the Licensed Products in the ROW Territory, and
shall consist of the following expenses: (a) Distribution Costs;
(b) Manufacturing Costs for commercial supply in the ROW Territory;
(c) Marketing Expenses; (d) Other Commercialization Costs; (e) Patent and
Trademark Prosecution and Enforcement Costs incurred in any country of the ROW
Territory from and after the First Commercial Sale of a Licensed Product in the
country; (f) Product Liabilities; (g) Recall Expenses; (h) Regulatory
Maintenance Costs; (i) Selling Expenses; and (j) Third Party Patent Costs
incurred in a country of the ROW Territory from and after the First Commercial
Sale of a Licensed Product in the country.

Commercialization Expenses shall not include: (w) expenses related to any
Clinical Trial even if incurred after the First Commercial Sale of a Licensed
Product in any country of the ROW Territory; (x) costs that are deductible from
Net Sales under the definition thereof; (y) any losses, damages, fees, costs and
other liabilities incurred by a Party as a result of such Party’s

 

F-1

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negligence, gross negligence, illegal conduct, willful misconduct or breach of
such Party’s representations and warranties made hereunder and any such losses,
damages, fees, costs and other liabilities will be treated as the sole and
exclusive responsibility of the Party whose actions or omissions gave rise to
such losses, damages, fees, costs and other liabilities; or (z) fines,
penalties, assessments or other financial sanctions levied by any governmental
authority on either Party.

All of such costs shall be as determined from the books and records of the
applicable Party and its Affiliates maintained in accordance with the Accounting
Standards. Notwithstanding anything in this definition to the contrary, only
those Commercialization Expenses that are contemplated by, and materially
consistent with, the Commercialization Plan and Commercialization Budget for the
Licensed Product shall be chargeable as Commercialization Expenses. For purposes
of clarity, no general corporate overhead or fixed charges, such as
depreciation, shall constitute Commercialization Expenses (except as otherwise
provided under the definition of Manufacturing Costs).

“Development Costs” means the costs and expenses that are actually incurred by
or on behalf of a Party and specifically identifiable or specifically allocable
to the Development of the Licensed Products or Companion Diagnostics throughout
the Territory. “Development Costs” shall include:

(a) the FTE Costs of the relevant Party or its Affiliates with respect to such
Development;

(b) all Out-of-Pocket Costs incurred by the Parties or their Affiliates,
including payments made to Third Parties with respect to such Development,
including Phase IV Trial Expenses (except to the extent that such costs have
been included in FTE Costs);

(c) Regulatory Expenses other than Regulatory Maintenance Costs;

(d) the cost of contract research organizations (CROs);

(e) Manufacturing Costs for clinical supply, including:

(i) costs of packaging of drug products and distribution of drug products used
in Clinical Trials;

(ii) expenses incurred to purchase or package comparator drugs;

(iii) costs and expenses of disposal of clinical samples; and

(iv) costs and expenses incurred in scaling up Manufacturing activities related
to pre-clinical or clinical supply, including formulation development
activities;

(f) Manufacturing Scale-Up Costs; and

(g) Third Party Patent Costs and Patent and Trademark Prosecution and
Enforcement Costs incurred in each country of the Territory prior to the First
Commercial Sale of a Licensed Product in the country.

 

F-2

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Development Costs shall not include: (x) any losses, damages, fees, costs and
other liabilities incurred by a Party as a result of such Party’s negligence,
gross negligence, illegal conduct, willful misconduct or breach of such Party’s
representations and warranties made hereunder and any such losses, damages,
fees, costs and other liabilities will be treated as the sole and exclusive
responsibility of the Party whose actions or omissions gave rise to such losses,
damages, fees, costs and other liabilities; or (y) fines, penalties, assessments
or other financial sanctions levied by any governmental authority on either
Party.

All of such costs shall be as determined from the books and records of the
applicable Party and its Affiliates maintained in accordance with the Accounting
Standards. Notwithstanding anything in this definition to the contrary, only
those Development Costs that are contemplated by, and materially consistent
with, the Development Plan and Development Budget for the Licensed Product shall
be chargeable as Development Costs. For purposes of clarity, no general
corporate overhead or fixed charges, such as depreciation, shall constitute
Development Costs (except as otherwise provided under the definition of
Manufacturing Costs).

“Distribution Costs” means Out-of-Pocket Costs and FTE Costs identifiable to the
distribution of the Licensed Products in the ROW Territory, including customer
and wholesaler services, collection of data on sales, order entry, billing,
shipping, logistics, warehousing, product insurance, freight not paid by
customers, credit collection and similar activities.

“FTE” means a full-time equivalent person year (consisting of a total of [**]
hours per year) of scientific, technical or commercialization work undertaken by
a Party’s employees.

“FTE Costs” means, for any period, the FTE Rate multiplied by the number of FTEs
in such period.

“FTE Rate” means $[**] per FTE for each FTE devoted to Development and the
overall rate as established from time to time by the Finance Working Group
pursuant to Section 2.9(b)(vi) for each FTE devoted to Commercialization. On
January 1, 2016 and on January 1st of each subsequent Calendar Year, the
foregoing rates shall be increased for the Calendar Year then commencing by the
percentage increase, if any, in the Consumer Price Index (“CPI”) as of
December 31 of the then most recently completed Calendar Year with respect to
the level of the CPI on December 31, 2014. As used in this definition, Consumer
Price Index or CPI means the Consumer Price Index – Urban Wage Earners and
Clerical Workers, US City Average, All Items, 1982-84 = 100, published by the
United States Department of Labor, Bureau of Vital Statistics (or its successor
equivalent index).

“Manufacturing Costs” means, with respect to the Licensed Products, the
reasonable FTE Costs and Out-of-Pocket Costs of a Party or any of its Affiliates
or sublicensees incurred in Manufacturing the Licensed Products, excluding
Manufacturing Scale-Up Costs, but including:

(a) to the extent that the Licensed Products are manufactured by a Party or any
of its Affiliates or sublicensees, direct material and direct labor costs, plus
manufacturing

 

F-3

--------------------------------------------------------------------------------

overhead attributable to the Compound and any Products (including facility
start-up costs, all directly incurred manufacturing variances, and a reasonable
allocation of related manufacturing administrative and facilities costs
(including depreciation) and a reasonable allocation of the costs of failed
batches to be further described in the applicable supply agreement, to be
provided for the Licensed Products, but excluding costs associated with excess
capacity), all determined in accordance with the books and records of the
applicable Party or its Affiliates or sublicensees maintained in accordance with
the Accounting Standards, consistently applied; and

(b) to the extent that the Licensed Products are manufactured by a Third Party
manufacturer, the Out-of-Pocket Costs paid by a Party or any of its Affiliates
or sublicensees to the Third Party for the manufacture, supply, packaging and
labeling of the Licensed Products, and any reasonable Out-of-Pocket Costs and
direct labor costs actually incurred by such Party or any of its Affiliates or
sublicensees in managing or overseeing the Third Party relationship, determined
in accordance with the books and records of the applicable Party or its
Affiliates or sublicensees maintained in accordance with the Accounting
Standards, consistently applied.

“Manufacturing Scale-Up Costs” means the reasonable FTE Costs and Out-of-Pocket
Costs of a Party or any of its Affiliates or sublicensees incurred in scaling up
Manufacturing activities related to the Licensed Products for clinical and
commercial supply, including (a) costs for process development work, analytical
method optimization, and process validation, (b) costs for complete technology
transfer to a commercial site (including costs for Manufacturing of
demonstration batches on a suitable scale), and (c) Regulatory Expenses
associated with such Manufacturing activities.

“Marketing Expenses” mean the sum of Marketing Management Expenses, Advertising
and Market Research Expenses and Medical Education Expenses.

“Marketing Management Expenses” mean FTE Costs of the Parties arising from the
management of marketing activities for the Licensed Products in the Field in the
ROW Territory, including management and administration of managed care and
national accounts and other activities associated with developing overall sales
and marketing strategies; product-related advertising, market research and
public relations; relationship maintenance with opinion leaders, professional
societies, contract pricing administrators, and market information systems;
education programs for health care professionals; governmental affairs
activities for reimbursement, formulary acceptance; and other activities
directly related to the marketing and/or promotion of a Licensed Product in the
Territory; provided, that, in each case, such costs may be allocated to the
Licensed Product on a percent of sales or other basis consistently applied
within and across a Party’s operating units; provided, further, that such
allocation is made no less favorable to the Licensed Product than to the
internal allocation to such Party’s other products.

“Medical Education Expenses” means all Out-of-Pocket Costs specifically incurred
to educate health care professionals licensed to practice in the ROW Territory
with respect to a Licensed Product in the ROW Territory through any means not
covered in the definition of “Advertising and Marketing Research Expenses”, but
including articles appearing in journals, newspapers, magazines or other media;
seminars, scientific exhibits, and conventions; and symposia, advisory boards
and opinion leader development activities; and education grant programs.

 

F-4

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“Net Sales” means, with respect to any Licensed Product, gross amounts invoiced
by the Parties, their respective Affiliates or sublicensees to Third Parties
(that are not sublicensees) for the sale or other commercial disposition of such
Licensed Product anywhere within the ROW Territory, including sales to wholesale
distributors, less deductions from such amounts calculated in accordance with
the Accounting Standards so as to arrive at “net sales” under the Accounting
Standards, and further reduced by write-offs of accounts receivables or
increased for collection of accounts that were previously written off.

Net Sales, and any and all set-offs against gross amounts invoiced, shall be
determined from books and records maintained in accordance with the Accounting
Standards, consistently applied throughout the organization and across all
products of the entity whose sales of any Product are giving rise to Net Sales.
Sales or other commercial dispositions of Licensed Products between a Party and
its Affiliates and its sublicensees, and Licensed Products provided to Third
Parties without charge, in connection with research and development, clinical
trials, compassionate use, humanitarian and charitable donations, or indigent
programs or for use as samples shall be excluded from the computation of Net
Sales, and no payments will be payable on such sales or such other commercial
dispositions, except where such an Affiliate or sublicensee is an end user of
the Licensed Product.

If a Licensed Product is sold or otherwise commercially disposed of for
consideration other than cash or in a transaction that is not at arm’s length
between the buyer and the seller, then the gross amount to be included in the
calculation of Net Sales shall be the amount that would have been invoiced had
the transaction been conducted at arm’s length and for cash. Such amount that
would have been invoiced shall be determined, wherever possible, by reference to
the average selling price of the relevant Product in arm’s length transactions
in the relevant country.

In the event of an Agios Opt-Out Date, then, notwithstanding the foregoing, in
the event a Licensed Product is sold as a Combination Product following the
Agios Opt-Out Date, then Net Sales shall be calculated by multiplying the Net
Sales of the Combination Product by the fraction A/(A+B), where A is the gross
invoice price of the Licensed Product if sold separately in a country and B is
the gross invoice price of the other product(s) included in the Combination
Product if sold separately in such country. If no such separate sales are made
by the relevant Party, its Affiliates or sublicensees in a country, Net Sales of
the Combination Product shall be calculated in a manner to be negotiated and
agreed upon by the Parties, reasonably and in good faith, prior to any sale of
such Combination Product, which shall be based upon the relative value of the
active components of such Combination Product.

As used in this definition, “Combination Product” means any product that
comprises a Licensed Product sold in conjunction with another active ingredient
so as to be a combination product (whether packaged together or in the same
therapeutic formulation). Pharmaceutical dosage form vehicles, adjuvants and
excipients shall be deemed not to be “active ingredients.”

“Other Commercialization Costs” means any Out-of-Pocket Costs and FTE Costs
approved by the JCC and included in the Commercialization Budget and
Commercialization Plan that is not otherwise included in any other
Commercialization Expense category. It is understood that Other
Commercialization Costs shall not include costs associated with Development
activities.

 

F-5

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“Out-of-Pocket Costs” means, with respect to certain activities hereunder,
direct expenses paid or payable by either Party or its Affiliates to Third
Parties (other than employees of such Party or its Affiliates) that are
specifically identifiable and incurred to conduct such activities for the
Collaboration hereunder and have been recorded in accordance with the Accounting
Standards.

“Patent and Trademark Prosecution and Enforcement Costs” means (a) costs
incurred pursuant to Sections 10.2(e), 10.3(e) and 10.4, and (b) costs incurred
in connection with the selection, protection, utilization and defense of Product
Trademarks relating to the Licensed Products.

“Phase IV Trial Expenses” means all Out-of-Pocket Costs incurred for the ROW
Territory related to a Phase IV Study for any Licensed Product in the ROW
Territory, including expenses arising from: (a) the activities related to the
performance of the Phase IV Trial; (b) Manufacturing Costs for Licensed Product
used in connection with such Phase IV Study; (c) preparation, filing, and
maintenance of related Regulatory Documentation; and (d) any Product Liabilities
relating to a Licensed Product being used in the course of such Phase IV Study;
provided, however, any losses, damages, fees, costs and other liabilities,
including any Product Liabilities, that are the result of a Party’s negligence,
gross negligence, illegal conduct, willful misconduct or breach of such Party’s
representations or warranties, are expressly excluded from the definition of
Phase IV Trial Expenses, and shall be treated as the sole and exclusive
responsibility of the Party whose actions or omissions gave rise to such losses,
damages, fees, costs and other liabilities.

“Product Liabilities” means all losses, damages, fees, costs and other
liabilities incurred by a Party, its Affiliate or its sublicensee and resulting
from or relating to the use of a Licensed Product in a human (including clinical
trials and/or Commercialization) in the ROW Territory incurred after the
Effective Date. For the avoidance of doubt, Product Liabilities include
reasonable attorneys’ and experts’ fees and costs relating to any claim or
potential claim against a Party, its Affiliate, or its sublicensee and all
losses, damages, fees and costs associated therewith. Product Liabilities shall
not include liabilities associated with recalls and/or the voluntary or
involuntary withdrawal of the Licensed Product.

“Recall Expenses” means Out-of-Pocket Costs and FTE Costs directly associated
with notification, retrieval and return of Licensed Products, distribution of
such returned Licensed Products, replacement Licensed Products and distribution
of the replacement Licensed Products, in each case in the ROW Territory and that
are incurred with respect to a recall conducted in accordance with Section 5.4
of this Agreement.

“Regulatory Expenses” means, with respect to the Licensed Products, all
Out-of-Pocket Costs incurred by or on behalf of a Party in connection with the
preparation and filing of regulatory submissions for the Licensed Products and
obtaining of Regulatory Approvals and any applicable governmental price and
reimbursement approvals.

 

F-6

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“Regulatory Maintenance Costs” means Out-of-Pocket Costs and FTE Costs for
maintenance fees relating to Regulatory Approvals for the Licensed Products in
the ROW Territory, and personnel engaged in the filing and maintenance of
Regulatory Approvals.

“ROW Territory Profit or Loss” means the profits or losses resulting from the
Commercialization of the Licensed Products in the ROW Territory and which shall
be equal to (a) the sum of (i) Net Sales of Licensed Products, plus
(ii) Additional Revenue, less (b) Commercialization Expenses for such Licensed
Products, less (c) to the extent approved by the JSC (with any disputes resolved
pursuant to Section 2.8(e)), income taxes incurred by any sales or distribution
Affiliate of Celgene directly attributable to the sale or other commercial
disposition of Licensed Product in any jurisdiction within the ROW Territory,
less (d) non-refundable, non-creditable value added and similar taxes incurred
by either Party in connection with the activities undertaken pursuant to this
Agreement. As used herein, “ROW Territory Profit” refers to a Calendar Quarter
or Calendar Year in which a profit exists, and “ROW Territory Loss” refers to a
Calendar Quarter or Calendar Year in which a loss exists.

“Selling Expenses” means (a) the FTE Costs incurred by the Parties in
performance of details or Out-of-Pocket Costs incurred by the Parties for the
performance of details by a qualified contract sales force in the ROW Territory;
where such FTE Costs shall be calculated on the basis of a fixed rate per
detail, which shall be approved by the JSC prior to the First Commercial Sale in
the ROW Territory, and (b) Out-of-Pocket Costs and FTE Costs directly
attributable to selling the Licensed Products in the ROW Territory, including
sales managers, exhibits at shows or conventions including samples, charges for
space, sales aids and brochures, sales meetings, specialty sales forces, call
reporting and Third Party monitoring/tracking services.

“Third Party Patent Costs” means Out-of-Pocket Costs paid to Third Parties
pursuant to Section 9.6(b) of this Agreement.

 

F-7

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Exhibit F

Countries for Filing Agios Patent Rights and Collaboration Patent Rights

[**]

 

F-1

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Exhibit G

Press Release

Agios Pharmaceuticals Selects Third Novel IDH Mutant Inhibitor, AG-881, for
Clinical Development

 

  •   Brain-penetrant, pan-IDH mutant inhibitor broadens pipeline for treatment
of patients with IDH mutant positive cancers

 

  •   New worldwide development and profit share collaboration for AG-881
entered into by Agios and Celgene

 

  •   Expect to initiate clinical development for AG-881 in second quarter 2015

CAMBRIDGE, Mass., April 28, 2015 — Agios Pharmaceuticals, Inc. (NASDAQ: AGIO), a
leader in the fields of cancer metabolism and rare genetic disorders of
metabolism, today announced that it plans to advance into clinical development
AG-881, a small molecule that has shown in preclinical studies to fully
penetrate the blood brain barrier and inhibit isocitrate dehydrogenase-1 (IDH1)
and IDH2 mutant cancer cells, in collaboration with its cancer metabolism
partner Celgene Corporation. The companies have entered into a new joint
worldwide development and profit share collaboration for AG-881, and plan to
initiate clinical development of AG-881 in the second quarter of 2015. AG-881
will be the third IDH mutant inhibitor discovered by Agios to enter clinical
development.

“The addition of our third IDH mutant inhibitor to our growing pipeline is an
exciting milestone for Agios and underscores our goals to lead the scientific
understanding of cancer metabolism and help as many patients as possible with an
IDH mutant positive cancer,” said David Schenkein, M.D., chief executive officer
of Agios. “AG-221 and AG-120 remain our lead medicines in clinical development
and are advancing rapidly. We believe the addition of AG-881 given its unique
profile provides added flexibility to our portfolio of IDH inhibitors. Based on
our preclinical findings, it has the potential to support our ongoing
development effort to provide treatment options to patients with glioma, and it
represents a possible second-generation molecule for both AG-221 and AG-120 in
IDH mutant tumors. We look forward to generating data for AG-881 to inform our
future development plans.”

Under the terms of the new AG-881 collaboration, Agios will receive an initial
payment of $10 million in the second quarter of 2015 and is eligible to receive
regulatory milestone payments of up to $70 million. Agios and Celgene will
jointly collaborate on the worldwide development program for AG-881, sharing
development costs 50/50 worldwide. The two companies have agreed to share any
worldwide profits 50/50, with Celgene booking worldwide commercial sales. Agios
would lead commercialization in the U.S. with both companies sharing equally in
field-based commercial activities, and Celgene would lead commercialization
ex-U.S. with Agios providing one third of field-based commercial activities in
the major E.U. markets.

 

G-1

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Summary of Agios and Celgene Collaboration on IDH Mutant Inhibitors

Agios and Celgene entered a global, strategic collaboration in April 2010 and,
to date, three potential new distinct investigational medicines have emerged –
the IDH2 mutant inhibitor, AG-221; the IDH1 mutant inhibitor, AG-120; and the
pan-IDH mutant inhibitor, AG-881, which as described above is now part of a new
collaboration between the companies. These three investigational medicines aim
to improve the treatment outcomes for patients whose cancers carry these IDH
mutations, including difficult to treat acute myelogenous leukemia and glioma, a
type of aggressive brain tumor with poor prognosis. Each of these
investigational medicines carries different financial terms and rights under the
collaboration, including:

 

•   AG-221: Celgene has worldwide development and commercialization rights for
AG-221. Agios is eligible for up to $120 million in milestone payments and
royalties on any net sales.

 

•   AG-120: Agios retains U.S. development and commercialization rights, while
Celgene has development and commercialization rights outside the U.S. Agios is
eligible to receive royalties on any net sales outside the U.S. and up to $120
million in milestone payments. Celgene is eligible to receive royalties on any
net sales in the U.S.

 

•   AG-881: Joint worldwide development and 50/50 profit share agreement. Agios
is eligible to receive regulatory milestone payments up to $70 million.

About Agios Pharmaceuticals, Inc.

Agios Pharmaceuticals is focused on discovering and developing novel
investigational medicines to treat cancer and rare genetic disorders of
metabolism through scientific leadership in the field of cellular metabolism. In
addition to an active research and discovery pipeline across both therapeutic
areas, Agios has multiple first-in-class investigational medicines in clinical
and/or preclinical development. All Agios programs focus on genetically
identified patient populations, leveraging our knowledge of metabolism, biology
and genomics. For more information, please visit the company’s website at
agios.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of The
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements include those regarding the potential benefits of, and plans relating
to, the collaboration with Celgene; the potential benefits of AG-221, AG-120 and
AG-881; and Agios’ plans to generate data from AG-881 to inform its future
development plans; and the benefit of Agios’ strategic plans and focus. The
words “anticipate,” “believe,” “estimate,” “expect,” “goal,” “intend,” “may,”
“plan,” “possible,” “potential,” “predict,” “project,” “could,” “would” and
similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these identifying words.
Such statements are subject to numerous important factors, risks and
uncertainties that may cause actual events or results to differ materially from
Agios’ current expectations and beliefs. For example, there can be no guarantee
that AG-881 or any other product candidate Agios is developing will successfully
commence or complete necessary preclinical and clinical development phases, or
that development of any of Agios’ product candidates will successfully continue.
There can be no guarantee that any positive developments in Agios’ business will
result in stock price appreciation. Management’s expectations and, therefore,
any forward-looking statements in this press release could also be affected by
risks and uncertainties relating to a number of

 

G-2

--------------------------------------------------------------------------------

other important factors, including: Agios’ results of clinical trials and
preclinical studies, including subsequent analysis of existing data and new data
received from ongoing and future studies; the content and timing of decisions
made by the U.S. FDA and other regulatory authorities, investigational review
boards at clinical trial sites and publication review bodies; Agios’ ability to
obtain and maintain requisite regulatory approvals and to enroll patients in its
planned clinical trials; unplanned cash requirements and expenditures;
competitive factors; Agios’ ability to obtain, maintain and enforce patent and
other intellectual property protection for any product candidates it is
developing; Agios’ ability to maintain key collaborations; and general economic
and market conditions. These and other risks are described in greater detail
under the caption “Risk Factors” included in Agios’ Annual Report on Form 10-K
for the year ended December 31, 2014, and other filings that Agios may make with
the Securities and Exchange Commission in the future. Any forward-looking
statements contained in this press release speak only as of the date hereof, and
Agios expressly disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events or otherwise.

###

Contact:

Agios Pharmaceuticals, Inc.

Lora Pike, 617-649-8608

Senior Director, Investor Relations and Public Relations

lora.pike@agios.com

 

G-3

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Exhibit H

Initial JSC, JDC and JPC Appointments

 

Joint Steering Committee (JSC)

Position

  

Celgene Appointee

  

Agios Appointee

Initial Chairperson    [**]    [**] JSC Member    [**]    [**] JSC Member   
[**]    [**] JSC Member    [**]    [**]

 

Joint Development Committee (JDC)

Position

  

Celgene Appointee

  

Agios Appointee

Initial Chairperson    [**]    [**] JDC Member    [**]    [**] JDC Member   
[**]    [**] JDC Member    [**]    [**]

 

Joint Patent Committee (JPC)

Position

  

Celgene Appointee

  

Agios Appointee

Initial Chairperson    [**]    [**] JPC Member    [**]    [**] JPC Member   
[**]    [**]

 

H-1

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Exhibit I

Partnership Tax Matters

(See attached.)

 

I-1