EXHIBIT 10.1

 

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

EXECUTION COPY

 

 

DRUG DISCOVERY AND DEVELOPMENT AGREEMENT

THIS DRUG DISCOVERY AND DEVELOPMENT AGREEMENT (the “Agreement”) is made
effective as of September 21, 2007 (“Effective Date”) by and between Array
BioPharma Inc., a Delaware corporation, having its principal offices located at
3200 Walnut, Boulder, CO 80301 (“Array”), and Celgene Corporation, a Delaware
corporation, having its principal offices located at 86 Morris Avenue, Summit,
NJ 07901 (“Celgene”).

BACKGROUND

A.            Array has skills, expertise and technology relating to the
discovery and development of therapeutics that modulate molecular targets
involved in oncology and other disease areas.

B.            Celgene is engaged in the discovery, development and
commercialization of therapeutics in the fields of oncology and immunological
diseases.

C.            Celgene and Array desire to establish a collaboration to apply
Array’s expertise and technology to the discovery, optimization and development
of small molecule compounds that directly bind and modulate certain molecular
targets, and to provide for the development and commercialization of certain
products based on such compounds, all on the terms and conditions set forth in
this Agreement.

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

ARTICLE I
DEFINITIONS

The following terms shall have the following meanings as used in this Agreement:

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1.1           “[ * ]” SHALL MEAN THOSE [ * ] PREVIOUSLY AGREED BY THE PARTIES.

1.2           “AFFILIATE” OF A PARTY SHALL MEAN ANY PERSON, CORPORATION OR OTHER
ENTITY THAT, DIRECTLY OR INDIRECTLY THROUGH ONE OR MORE INTERMEDIARIES,
CONTROLS, IS CONTROLLED BY OR IS UNDER COMMON CONTROL WITH SUCH PARTY, AS THE
CASE MAY BE, FOR SO LONG AS SUCH CONTROL EXISTS.  AS USED IN THIS SECTION 1.1,
“CONTROL” SHALL MEAN: (A) TO POSSESS, DIRECTLY OR INDIRECTLY, THE POWER TO
DIRECT THE MANAGEMENT AND POLICIES OF SUCH PERSON, CORPORATION OR OTHER ENTITY,
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 CORPORATION IN A PARTICULAR JURISDICTION) OF
THE VOTING SHARE CAPITAL IN SUCH PERSON, CORPORATION OR OTHER ENTITY.

1.3           “ANALOG” SHALL MEAN, WITH RESPECT TO A SPECIFIC DEVELOPMENT
COMPOUND, DEVELOPMENT BACK-UP COMPOUND, COLLABORATION COMPOUND, COLLABORATION
BACK-UP COMPOUND OR ABANDONED COMPOUND, MOLECULES (A) THAT HAVE THE SAME CORE
STRUCTURE (MEANING EXACT ATOM ARRANGEMENT THAT MAKES UP THE ORIGINAL CORE
STRUCTURE PRESENT IN THE STRUCTURE OF SUCH SPECIFIC CHEMICAL COMPOUND, MINUS ANY
SUBSTITUENT R GROUPS) AS SUCH SPECIFIC DEVELOPMENT COMPOUND, DEVELOPMENT BACK-UP
COMPOUND, COLLABORATION COMPOUND, COLLABORATION BACK-UP COMPOUND OR ABANDONED
COMPOUND; (B) THAT MODULATES THE TARGET TO WHICH SUCH DEVELOPMENT COMPOUND,
DEVELOPMENT BACK-UP COMPOUND, COLLABORATION COMPOUND, COLLABORATION BACK-UP
COMPOUND OR ABANDONED COMPOUND IS DIRECTED, THE MECHANISM OF ACTION OF WHICH IS
A SPECIFIC INTERACTION WITH SUCH TARGET; AND (C) THAT HAS A [ * ].

1.4           “ANNUAL NET SALES” SHALL MEAN TOTAL NET SALES OF LICENSED PRODUCTS
IN A PARTICULAR CALENDAR YEAR, AS DERIVED FROM AUDITED FINANCIAL STATEMENTS OF
CELGENE (OR THE APPLICABLE AFFILIATE OR SUBLICENSEE), PROVIDED, HOWEVER, THAT
CELGENE SHALL USE U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES TO CALCULATE IN
GOOD FAITH THE NET SALES FROM ANY ENTITIES THAT ARE NOT AUDITED OR HAVE NOT
COMPLETED THEIR AUDIT WITHIN SEVENTY-FIVE (75) DAYS OF THE END OF THE PRECEDING
CALENDAR YEAR.

1.5           “ARRAY TECHNOLOGY” SHALL MEAN THE ARRAY PATENTS AND ARRAY
KNOW-HOW.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1.5.1        “ARRAY KNOW-HOW” SHALL MEAN ANY AND ALL INFORMATION CONTROLLED BY
ARRAY AND CREATED PRIOR TO THE EFFECTIVE DATE THAT:  (A) COVERS A COLLABORATION
COMPOUND OR A COLLABORATION BACK-UP COMPOUND (INCLUDING THE COMPOSITION OF
MATTER, OR MANUFACTURE OR ANY USE THEREOF); AND (B) IS NECESSARY FOR CELGENE TO
EXERCISE THE RIGHTS LICENSED TO IT UNDER THE AGREEMENT OR PERFORM ITS
OBLIGATIONS WITH RESPECT TO COLLABORATION COMPOUNDS, COLLABORATION BACK-UP
COMPOUNDS AND LICENSED PRODUCTS UNDER THE AGREEMENT.  FOR THE PURPOSES OF THE
LICENSE GRANTED IN SECTION 5.1.2, ARRAY KNOW-HOW SHALL ALSO INCLUDE ANY AND ALL
INFORMATION CONTROLLED BY ARRAY AND CREATED PRIOR TO THE EFFECTIVE DATE THAT IS
NECESSARY FOR, OR SPECIFICALLY PERTAINS TO, THE DISCOVERY, DEVELOPMENT OR USE OF
COMPOUNDS, DEVELOPMENT COMPOUNDS AND DEVELOPMENT BACK-UP COMPOUNDS.

1.5.2        “ARRAY PATENTS” SHALL MEAN ALL PATENTS OWNED OR CONTROLLED BY ARRAY
(A) AS OF THE EFFECTIVE DATE, OR (B) DURING THE TERM OF THIS AGREEMENT TO THE
EXTENT THAT SUCH PATENTS CLAIM ARRAY KNOW-HOW, IN EACH CASE THAT:  (I) CLAIM A
COLLABORATION COMPOUND OR A COLLABORATION BACK-UP COMPOUND (INCLUDING THE
COMPOSITION OF MATTER, OR MANUFACTURE OR ANY USE THEREOF); AND (II) ARE
NECESSARY FOR CELGENE TO EXERCISE THE RIGHTS LICENSED TO IT UNDER THE AGREEMENT
OR PERFORM ITS OBLIGATIONS WITH RESPECT TO COLLABORATION COMPOUNDS,
COLLABORATION BACK-UP COMPOUNDS AND LICENSED PRODUCTS UNDER THE AGREEMENT.  FOR
THE PURPOSES OF THE LICENSE GRANTED IN SECTION 5.1.2, ARRAY PATENTS SHALL ALSO
INCLUDE ALL PATENTS OWNED OR CONTROLLED BY ARRAY AS OF THE EFFECTIVE DATE
COVERING INVENTIONS THAT ARE NECESSARY FOR THE DISCOVERY, DEVELOPMENT, OR USE OF
COMPOUNDS, DEVELOPMENT COMPOUNDS AND DEVELOPMENT BACK-UP COMPOUNDS.

Notwithstanding Sections 1.5.1 and 1.5.2 above, the Array Technology shall not
include Collaboration Patents or Collaboration Know-How.

1.6           “CELGENE COMPOUND” SHALL MEAN A CHEMICAL ENTITY PROVIDED TO ARRAY
BY CELGENE, IN CELGENE’S SOLE DISCRETION, AND AGREED ON BY THE JRC AS EVIDENCED
BY WRITTEN NOTICE THAT SUCH CHEMICAL ENTITY IS PROVIDED FOR RESEARCH AND
DEVELOPMENT PURPOSES UNDER THIS AGREEMENT.

1.7           “CELGENE TECHNOLOGY” SHALL MEAN THE CELGENE PATENTS AND CELGENE
KNOW-HOW.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1.7.1        “CELGENE KNOW-HOW” SHALL MEAN ANY AND ALL INFORMATION CONTROLLED BY
CELGENE AND (A) CREATED PRIOR TO THE EFFECTIVE DATE OR DURING THE OPTION TERM
THAT IS NECESSARY FOR THE DISCOVERY, DEVELOPMENT, MANUFACTURE, USE OR SALE OF
COMPOUNDS, DEVELOPMENT COMPOUNDS AND BACK-UP COMPOUNDS DIRECTED TO EACH TARGET
FOR WHICH CELGENE DOES NOT EXERCISE THE CELGENE PRODUCT OPTION, AND (B) WHICH IS
CONTRIBUTED BY CELGENE DURING THE OPTION TERM, IN CELGENE’S SOLE DISCRETION, TO
THE COLLABORATION HEREUNDER, AS EVIDENCED BY WRITTEN NOTICE FROM CELGENE TO
ARRAY AND AGREED ON BY THE JRC OR JDC.

1.7.2        “CELGENE PATENTS” SHALL MEAN ALL PATENTS OWNED OR CONTROLLED BY
CELGENE (A) PRIOR TO THE EFFECTIVE DATE OR DURING THE OPTION TERM COVERING
INVENTIONS THAT ARE NECESSARY FOR THE DISCOVERY, DEVELOPMENT, MANUFACTURE, USE
OR SALE OF COMPOUNDS, DEVELOPMENT COMPOUNDS AND BACK-UP COMPOUNDS DIRECTED TO
EACH TARGET FOR WHICH CELGENE DOES NOT EXERCISE THE CELGENE PRODUCT OPTION, AND
(B) WHICH ARE CONTRIBUTED BY CELGENE DURING THE OPTION TERM, IN CELGENE’S SOLE
DISCRETION, THE COLLABORATION HEREUNDER, AS EVIDENCED BY WRITTEN NOTICE FROM
CELGENE TO ARRAY AND AGREED ON BY THE JRC OR JDC.

Notwithstanding Sections 1.7.1 and 1.7.2 above, the Celgene Technology shall not
include Collaboration Patents or Collaboration Know-How.

1.8           “COLLABORATION COMPOUND” MEANS EACH DEVELOPMENT COMPOUND FOR WHICH
CELGENE HAS EXERCISED ITS CELGENE PRODUCT OPTION UNDER SECTION 3.5 OF THIS
AGREEMENT AND WHICH IS IDENTIFIED IN THE WRITTEN NOTICE GIVEN BY CELGENE TO
EFFECT SUCH EXERCISE.

1.9           “COLLABORATION TECHNOLOGY” SHALL MEAN THE COLLABORATION PATENTS
AND COLLABORATION KNOW-HOW.

1.9.1        “COLLABORATION KNOW-HOW” SHALL MEAN ANY INFORMATION GENERATED,
SOLELY OR JOINTLY, BY EMPLOYEES, CONSULTANTS OR AGENTS OF ARRAY AND/OR CELGENE
IN THE COURSE OF PERFORMING ACTIVITIES UNDER THE DISCOVERY PROGRAM OR IN
ACCORDANCE WITH THE APPLICABLE DEVELOPMENT PLAN, OR, SOLELY WITH RESPECT TO
ARRAY, ACTIVITIES DIRECTED TO THE DEVELOPMENT, MANUFACTURE AND/OR USE OF
COMPOUNDS, DEVELOPMENT COMPOUNDS, COLLABORATION COMPOUNDS, BACK-UP COMPOUNDS,

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

DEVELOPMENT BACK-UP COMPOUNDS, COLLABORATION BACK-UP COMPOUNDS, LICENSED
PRODUCTS, IN EACH CASE DURING THE OPTION TERM.

1.9.2        “COLLABORATION PATENTS” SHALL MEAN ALL PATENTS COVERING INVENTIONS
CONCEIVED OR CREATED, SOLELY OR JOINTLY, BY EMPLOYEES, CONSULTANTS OR AGENTS OF
ARRAY AND/OR CELGENE IN THE COURSE OF PERFORMING ACTIVITIES UNDER THE DISCOVERY
PROGRAM OR IN ACCORDANCE WITH THE APPLICABLE DEVELOPMENT PLAN, OR, SOLELY WITH
RESPECT TO ARRAY, ACTIVITIES DIRECTED TO THE DEVELOPMENT, MANUFACTURE AND/OR USE
OF COMPOUNDS, DEVELOPMENT COMPOUNDS, COLLABORATION COMPOUNDS, BACK-UP COMPOUNDS,
DEVELOPMENT BACK-UP COMPOUNDS, COLLABORATION BACK-UP COMPOUNDS OR LICENSED
PRODUCTS, IN EACH CASE DURING THE OPTION TERM.

1.10         “COMBINATION PRODUCT” SHALL MEAN A LICENSED PRODUCT THAT IS A
PHARMACEUTICAL PREPARATION FOR HUMAN USE INCORPORATING TWO OR MORE
THERAPEUTICALLY ACTIVE INGREDIENTS AND INCLUDING A COLLABORATION COMPOUND AS ONE
OF ITS ACTIVE INGREDIENTS.  NOTWITHSTANDING THE FOREGOING, DRUG DELIVERY
VEHICLES, ADJUVANTS, AND EXCIPIENTS SHALL NOT BE DEEMED TO BE “THERAPEUTICALLY
ACTIVE INGREDIENTS,” AND THEIR PRESENCE SHALL NOT BE DEEMED TO CREATE A
COMBINATION PRODUCT UNDER THIS SECTION 1.10.

1.11         “COMPOUND” SHALL MEAN A SMALL MOLECULE CHEMICAL ENTITY (A) THAT IS
(I) SYNTHESIZED AND/OR ASSAYED AGAINST A TARGET BY ARRAY PRIOR TO THE EFFECTIVE
DATE, (II) FIRST SYNTHESIZED AND/OR ASSAYED BY OR ON BEHALF OF A PARTY IN THE
COURSE OF PERFORMING ACTIVITIES UNDER THE DISCOVERY PROGRAM, OR (III) A CELGENE
COMPOUND; (B) THAT MODULATES ONE OR MORE TARGET(S), THE MECHANISM OF ACTION OF
WHICH IS A SPECIFIC INTERACTION WITH SUCH TARGET; AND (C) THAT HAS [ * ].

1.12         “CONTROL” (INCLUDING ANY VARIATIONS, SUCH AS “CONTROLLED” OR
“CONTROLLING”), WITH RESPECT TO ANY COMPOUND OR INTELLECTUAL PROPERTY RIGHTS,
SHALL MEAN RIGHTS TO A COMPOUND OR INTELLECTUAL PROPERTY SUFFICIENT TO GRANT THE
APPLICABLE LICENSE UNDER THIS AGREEMENT, WITHOUT VIOLATING THE TERMS OF ANY
AGREEMENT OR OTHER ARRANGEMENT WITH ANY THIRD PARTY OR, WITHOUT THE OTHER
PARTY’S WRITTEN CONSENT, REQUIRING ANY PAYMENT TO A THIRD PARTY.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1.13         “DERIVATIVE” SHALL MEAN A MOLECULE (A) THAT IS SYNTHESIZED USING
THE SAME SYNTHETIC ROUTE SUCH THAT SUCH MOLECULE IS DERIVED FROM THE DEVELOPMENT
COMPOUND BY ONE SYNTHETIC STEP AND SUCH THAT ANY COMPOUND MODIFICATIONS (I.E.,
DIFFERENCES BETWEEN SUCH MOLECULE AND THE CORRESPONDING DEVELOPMENT COMPOUND)
ARE READILY DETERMINED TO BE RELATED TO OR DERIVED FROM THE DEVELOPMENT
COMPOUND, AND (B) THAT HAS [ * ].

1.14         “DEVELOPMENT BACK-UP COMPOUND” SHALL MEAN, WITH RESPECT TO EACH
COMPOUND DESIGNATED AS A DEVELOPMENT COMPOUND, ADDITIONAL LEAD COMPOUNDS
SUITABLE FOR CLINICAL DEVELOPMENT DESIGNATED IN ACCORDANCE WITH SECTION 3.5.3
BELOW.

1.15         “DEVELOPMENT COMPOUND” SHALL MEAN A COMPOUND THAT IS DESIGNATED FOR
FURTHER DEVELOPMENT IN CLINICAL TRIALS, IN ACCORDANCE WITH SECTION 3.5.2 BELOW.

1.16         “DILIGENT EFFORTS” SHALL MEAN THE CARRYING OUT OF OBLIGATIONS OR
TASKS IN A MANNER CONSISTENT WITH THE EFFORTS A PARTY DEVOTES TO A PRODUCT OR A
RESEARCH, DEVELOPMENT OR MARKETING PROJECT AT A SIMILAR STAGE OF RESEARCH OR
DEVELOPMENT THAT IS OF SIMILAR MARKET POTENTIAL, PROFIT POTENTIAL OR STRATEGIC
VALUE RESULTING FROM ITS OWN RESEARCH EFFORTS, BUT IN NO EVENT USING LESS THAN
THE COMMERCIALLY REASONABLE STANDARDS APPLIED BY OTHER PUBLIC BIOTECHNOLOGY
COMPANIES TO THEIR PHARMACEUTICAL PRODUCTS AT A SIMILAR STAGE OF RESEARCH OR
DEVELOPMENT THAT IS OF SIMILAR MARKET POTENTIAL, PROFIT POTENTIAL OR STRATEGIC
VALUE.

1.17         “FDA” SHALL MEAN THE UNITED STATES FOOD AND DRUG ADMINISTRATION, OR
ANY SUCCESSOR ENTITY THERETO PERFORMING SIMILAR FUNCTIONS.

1.18         “FD&C ACT” SHALL MEAN THE UNITED STATES FEDERAL FOOD, DRUG, AND
COSMETIC ACT, AS AMENDED FROM TIME TO TIME, AND THE REGULATIONS PROMULGATED
THEREUNDER, AS AMENDED FROM TIME TO TIME.

1.19“       FTE” SHALL MEAN A FULL-TIME PERSON EMPLOYED BY ARRAY, DEDICATED
FULL-TIME TO THE DISCOVERY PROGRAM, OR IN THE CASE OF LESS THAN A FULL-TIME
DEDICATED PERSON, A FULL-TIME, EQUIVALENT

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

PERSON YEAR, BASED UPON A TOTAL OF ONE THOUSAND EIGHT HUNDRED EIGHTY (1,880)
HOURS PER YEAR OF WORK ON THE DISCOVERY PROGRAM.

1.20         “GAAP” SHALL MEAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AS
APPLICABLE IN THE UNITED STATES OF AMERICA.

1.21         “IND” SHALL MEAN ANY INVESTIGATIONAL NEW DRUG APPLICATION FILED
WITH THE FDA PURSUANT TO 21 C.F.R. § 312 BEFORE THE COMMENCEMENT OF CLINICAL
TRIALS INVOLVING A DEVELOPMENT COMPOUND, A DEVELOPMENT BACK-UP COMPOUND, A
COLLABORATION COMPOUND OR A COLLABORATION BACK-UP COMPOUND (OR ANY LICENSED
PRODUCT INCORPORATING A COLLABORATION COMPOUND OR COLLABORATION BACK-UP
COMPOUND), OR ANY COMPARABLE FILINGS WITH ANY REGULATORY AUTHORITY IN ANY OTHER
JURISDICTION.

1.22         “INFORMATION” SHALL MEAN MATERIALS, DATA AND OTHER INFORMATION
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND INCLUDING: (A) TECHNIQUES
AND DATA, INCLUDING SCREENS, MODELS, INVENTIONS, METHODS, TEST DATA (INCLUDING,
PHARMACOLOGICAL, TOXICOLOGICAL AND CLINICAL TEST DATA), ANALYTICAL AND QUALITY
CONTROL DATA, MARKETING, PRICING, DISTRIBUTION, COSTS, AND SALES DATA,
MANUFACTURING INFORMATION, AND PATENT AND LEGAL DATA OR DESCRIPTIONS (TO THE
EXTENT THAT DISCLOSURE THEREOF WOULD NOT RESULT IN LOSS OR WAIVER OF PRIVILEGE
OR SIMILAR PROTECTION); (B) COMPOSITIONS OF MATTER, INCLUDING COMPOUNDS,
BIOLOGICAL MATERIALS AND ASSAYS; AND (C) THE SUBJECT MATTER AND CONTENT OF ALL
JRC, JDC, JMC AND JCC DISCUSSIONS AND MEETINGS.  AS USED HEREIN, “CLINICAL TEST
DATA” SHALL BE DEEMED TO INCLUDE ALL INFORMATION RELATED TO THE CLINICAL OR
PRECLINICAL TESTING OF A COMPOUND OR LICENSED PRODUCT, INCLUDING PATIENT REPORT
FORMS, INVESTIGATORS’ REPORTS, BIOSTATISTICAL, PHARMACO-ECONOMIC AND OTHER
RELATED ANALYSES, REGULATORY FILINGS AND COMMUNICATIONS, AND THE LIKE.

1.23         “INITIATION” OF A PARTICULAR CLINICAL TRIAL SHALL BE DEEMED TO
OCCUR UPON THE DATE OF FIRST DOSING OF THE FIRST SUBJECT IN SUCH TRIAL.

1.24         “LICENSED PRODUCT” SHALL MEAN A PRODUCT THAT INCORPORATES A
COLLABORATION COMPOUND OR A COLLABORATION BACK-UP COMPOUND AS AN ACTIVE
INGREDIENT.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1.25         “MARKETING APPROVAL” SHALL MEAN ALL APPROVALS, LICENSES,
REGISTRATIONS OR AUTHORIZATIONS OF A REGULATORY AUTHORITY IN A COUNTRY NECESSARY
FOR THE MANUFACTURE, USE, STORAGE, IMPORT, MARKETING AND SALE OF A LICENSED
PRODUCT IN SUCH COUNTRY.

1.26         “MARKETING APPROVAL APPLICATION” OR “MAA” SHALL MEAN A NEW DRUG
APPLICATION (AS DEFINED IN 21 C.F.R. § 314.50 ET. SEQ.) OR A COMPARABLE
APPLICATION FOR MARKETING APPROVAL (NOT INCLUDING PRICING OR REIMBURSEMENT
APPROVAL) IN ANOTHER JURISDICTION, IN EACH CASE WITH RESPECT TO A LICENSED
PRODUCT.

1.27         “MARKETING EXCLUSIVITY” SHALL MEAN, WITH RESPECT TO A LICENSED
PRODUCT THAT THE LICENSED PRODUCT HAS BEEN GRANTED MARKETING EXCLUSIVITY
AFFORDED APPROVED DRUG PRODUCTS PURSUANT TO (A) SECTIONS 505(C), 505(J), AND
505A OF THE FD&C ACT OR ITS EQUIVALENT IN A COUNTRY OTHER THAN THE UNITED
STATES, OR (B) THE ORPHAN DRUG EXCLUSIVITY AFFORDED APPROVED DRUGS DESIGNATED
FOR RARE DISEASES OR CONDITIONS UNDER SECTIONS 526 AND 527 OF THE FD&C ACT OR
ITS EQUIVALENT IN A COUNTRY OTHER THAN THE UNITED STATES, OR (C) APPLICABLE LAW
COVERING THE LICENSED PRODUCT WHICH PRECLUDES THE REGULATORY AUTHORITY IN A
COUNTRY FROM GRANTING MARKETING APPROVAL FOR ANOTHER PRODUCT THAT CONTAINS THE
SAME ACTIVE INGREDIENT AS THAT WHICH IS CONTAINED IN THE APPLICABLE LICENSED
PRODUCT.

1.28         “NET SALES” SHALL MEAN THE GROSS AMOUNTS BILLED OR INVOICED BY
CELGENE, ITS AFFILIATES OR SUBLICENSEES TO NON-SUBLICENSEE THIRD PARTIES FOR THE
SALE OR OTHER COMMERCIAL DISPOSITION OF LICENSED PRODUCTS LESS DEDUCTIONS FROM
SUCH AMOUNTS CALCULATED IN ACCORDANCE WITH GAAP, SO AS TO ARRIVE AT REPORTED NET
PRODUCT SALES UNDER GAAP, AND FURTHER REDUCED BY WRITE OFFS OF ACCOUNTS
RECEIVABLE OR INCREASED FOR COLLECTION OF ACCOUNTS THAT WERE PREVIOUSLY WRITTEN
OFF.

Sales between Celgene and its Affiliates or Sublicensees and Licensed Products
provided to Third Parties at no cost, or below direct manufacturing cost, in
connection with research and development, clinical trials, compassionate sales
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
no-cost transfers except where such Affiliates or Sublicensees are end users. 
If a Licensed Product is sold or transferred for consideration other than cash,
or in a transaction not at arm’s length, the Net

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

Sales from such sale or transfer shall be deemed the then-fair market value of
such Licensed Product.

In the event a Licensed Product is sold which is a Combination Product, for
purposes of determining royalty payments due Array under Section 6.5, Net Sales
of Combination Products shall be calculated by multiplying the Net Sales of the
Combination Product during the applicable reporting period by the fraction
A/(A+B), in which “A” is the average sales price of the Licensed Product when
such Licensed Product comprising a single Collaboration Compound or
Collaboration Back-Up Compound as the sole therapeutically active ingredient is
sold separately in substantial quantities, and “B” is the average sales price of
the other therapeutically active ingredients contained in the Combination
Product sold separately in substantial quantities; in each case during the
applicable reporting period.  In the event that no separate sales of either the
Licensed Product comprising a single Collaboration Compound or Collaboration
Back-Up Compound, as the case may be, as the sole therapeutically active
ingredient or the other therapeutically active ingredients of the Combination
Product are made during the applicable reporting period, or if the average sales
price for a particular therapeutically active ingredient cannot be determined
for the applicable reporting period, the respective average sales prices during
the most recent reporting period in which sales of both occurred shall be used. 
In the event that either or both of A or (and) B is (are) not available, then
Net Sales of Combination Products for the purposes of determining royalty
payments hereunder shall be reasonably allocated based on the relative values
contributed by each component, and agreement by the Parties to such allocation
shall not be unreasonably withheld or delayed.

1.29         “OPTION TERM” SHALL HAVE THE MEANING SET FORTH IN SECTION 4.1.1(A).

1.30         “PARTY” OR “PARTIES” SHALL MEAN ARRAY AND/OR CELGENE.

1.31         “PATENT” SHALL MEAN ANY PATENTS AND PATENT APPLICATIONS, TOGETHER
WITH ALL ADDITIONS, DIVISIONS, CONTINUATIONS, CONTINUATIONS-IN-PART,
SUBSTITUTIONS, REISSUES, RE-EXAMINATIONS, EXTENSIONS, REGISTRATIONS, PATENT TERM
EXTENSIONS, SUPPLEMENTAL PROTECTION CERTIFICATES AND RENEWALS OF ANY OF THE
FOREGOING.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1.32         “PHASE I” SHALL MEAN A HUMAN CLINICAL TRIAL CONDUCTED ON A LIMITED
NUMBER OF STUDY SUBJECTS FOR THE PURPOSE OF GAINING EVIDENCE OF THE SAFETY AND
TOLERABILITY OF, AND INFORMATION REGARDING PHARMACOKINETICS AND, WITH RESPECT TO
APPLICABLE ONCOLOGY TRIALS, POTENTIAL PHARMACOLOGICAL ACTIVITY FOR, A PRODUCT OR
COMPOUND, AS DESCRIBED IN 21 C.F.R.§ 312.21(A) (INCLUDING ANY SUCH CLINICAL
STUDY IN ANY COUNTRY OTHER THAN THE UNITED STATES).

1.33         “PHASE II” SHALL MEAN A HUMAN CLINICAL TRIAL CONDUCTED ON STUDY
SUBJECTS WITH THE DISEASE OR CONDITION BEING STUDIED FOR THE PRINCIPAL PURPOSE
OF ACHIEVING A PRELIMINARY DETERMINATION OF EFFICACY AND/OR APPROPRIATE DOSAGE
RANGES, AS FURTHER DESCRIBED IN 21 C.F.R. §312.21(B) (INCLUDING ANY SUCH
CLINICAL STUDY IN ANY COUNTRY OTHER THAN THE UNITED STATES).

1.34         “PHASE III” SHALL MEAN A HUMAN CLINICAL TRIAL, THE PRINCIPAL
PURPOSE OF WHICH IS TO ESTABLISH SAFETY AND EFFICACY IN STUDY SUBJECTS WITH THE
DISEASE OR CONDITION BEING STUDIED, AS FURTHER DESCRIBED IN 21 C.F.R. §312.21(C)
(INCLUDING ANY SUCH CLINICAL STUDY IN A COUNTRY OTHER THAN THE UNITED STATES),
WHICH IS DESIGNED AND INTENDED TO BE OF A SIZE AND STATISTICAL POWER SUFFICIENT
TO SERVE AS A PIVOTAL STUDY TO SUPPORT THE FILING OF A MAA FOR THE INDICATION
BEING STUDIED.

1.35         “REGULATORY AUTHORITY” SHALL MEAN THE FDA, OR A REGULATORY BODY
WITH SIMILAR REGULATORY AUTHORITY IN ANY JURISDICTION OUTSIDE THE UNITED STATES.

1.36         “SALES REPRESENTATIVE” SHALL MEAN A PROFESSIONAL PHARMACEUTICAL
SALES REPRESENTATIVE ENGAGED OR EMPLOYED BY EITHER PARTY TO CONDUCT SALES
ACTIVITIES AND OTHER PROMOTIONAL EFFORTS WITH RESPECT TO A CO-PROMOTED PRODUCT.

1.37         “SUBLICENSEE” SHALL MEAN, WITH RESPECT TO A PARTICULAR
COLLABORATION COMPOUND, A COLLABORATION BACK-UP COMPOUND OR LICENSED PRODUCT, A
THIRD PARTY TO WHOM CELGENE HAS GRANTED A LICENSE OR SUBLICENSE TO MAKE AND SELL
SUCH COLLABORATION COMPOUND, COLLABORATION BACK-UP COMPOUND OR LICENSED PRODUCT;
AND A “SUBLICENSE” SHALL MEAN ANY AGREEMENT OR ARRANGEMENT BETWEEN CELGENE AND A
SUBLICENSEE GRANTING SUCH RIGHTS.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1.38         “TARGET” SHALL MEAN THOSE TARGETS LISTED ON SCHEDULE 1.38 ATTACHED
HERETO, OR ANY SUBSTITUTE FOR SUCH A TARGET MUTUALLY AGREED BY THE PARTIES IN
ACCORDANCE WITH SECTION 3.2 BELOW OR SELECTED BY ARRAY FROM TWO (2) PROPOSED
SUBSTITUTE TARGETS IN ACCORDANCE WITH SECTION 3.5.1 BELOW.

1.39         “THIRD PARTY” SHALL MEAN ANY ENTITY OTHER THAN ARRAY, CELGENE AND
THEIR RESPECTIVE AFFILIATES.

1.40         “VALID CLAIM” SHALL MEAN (A) A CLAIM OF AN ISSUED AND UNEXPIRED
PATENT (INCLUDING THE TERM OF ANY PATENT TERM EXTENSION, SUPPLEMENTAL PROTECTION
CERTIFICATE, RENEWAL OR OTHER EXTENSION) WHICH HAS NOT BEEN HELD UNPATENTABLE,
INVALID OR UNENFORCEABLE IN A FINAL DECISION OF A COURT OR OTHER GOVERNMENT
AGENCY OF COMPETENT JURISDICTION FROM WHICH NO APPEAL MAY BE OR HAS BEEN TAKEN,
AND WHICH HAS NOT BEEN ADMITTED TO BE INVALID OR UNENFORCEABLE THROUGH REISSUE,
RE-EXAMINATION, DISCLAIMER OR OTHERWISE; OR (B) A CLAIM OF A PATENT APPLICATION,
WHICH CLAIM HAS BEEN PENDING LESS THAN FIVE (5) YEARS FROM THE ORIGINAL FILING
DATE OF SUCH CLAIM IN A GIVEN COUNTRY, UNLESS OR UNTIL SUCH CLAIM THEREAFTER
ISSUES AS A CLAIM OF AN ISSUED PATENT (FROM AND AFTER WHICH TIME THE SAME SHALL
BE DEEMED A VALID CLAIM SUBJECT TO PARAGRAPH (A) ABOVE).

1.41         ADDITIONAL DEFINITIONS.  EACH OF THE FOLLOWING TERMS SHALL HAVE THE
MEANING DESCRIBED IN THE CORRESPONDING SECTION OF THIS AGREEMENT BELOW.

 

Term

 

Section Defined

Abandoned Product

 

12.3.2

Array Indemnitees

 

11.4.2

[ * ]

 

[ * ]

[ * ]

 

[ * ]

Celgene Indemnitees

 

11.4.1

Celgene Product Option

 

4.1

Clinical Candidate Guidelines

 

3.5.1

Collaboration Back-Up Compound

 

4.1.1(b)

 

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amended.

 

Commercialization Plan

 

8.1.2

Compound Improvement

 

9.2.2

Confidential Information

 

10.1

Cooperating Party

 

10.4.2

Co-Promoted Product

 

8.2.1

Co-Promotion Option

 

8.2.1

Co-Promotion Plan

 

8.2.2

Development Back-Up Compound

 

3.5.2

Development Milestone

 

6.3.1

Development Plan

 

3.6.1

Discovery Milestone

 

6.2

Discovery Program

 

3.1

Dispute

 

13.1

Escalation Notice

 

2.2.3

Exclusivity Period

 

5.6.2

force majeure event

 

13.4

Indemnify

 

11.4

JCC

 

2.1

JDC

 

2.1

JMC

 

2.1

JRC

 

2.1

[ * ]

 

[ * ]

Losses

 

11.4.1

Prosecution and Maintenance

 

9.5.1(a)

Prosecuting Party

 

9.5.1(b)

Requesting Party

 

10.4.2

Subject Transaction

 

13.3.2

 

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amended.

 

Third-Party Claim

 

11.4.1

Trial Design Guidelines

 

2.3

ARTICLE II
GOVERNANCE

2.1           GENERAL.  THE PARTIES SHALL ESTABLISH (I) A JOINT RESEARCH
COMMITTEE (“JRC”) TO OVERSEE AND COORDINATE ACTIVITIES UNDER THE DISCOVERY
PROGRAM; (II) A JOINT DEVELOPMENT COMMITTEE (“JDC”) FOR EACH DEVELOPMENT
COMPOUND TO OVERSEE AND COORDINATE CLINICAL DEVELOPMENT OF SUCH DEVELOPMENT
COMPOUND; (III) A JOINT MANUFACTURING COMMITTEE (“JMC”) TO OVERSEE AND
COORDINATE CMC ACTIVITIES WITH RESPECT TO EACH DEVELOPMENT COMPOUND AND
DEVELOPMENT BACK-UP COMPOUNDS; AND (IV) IF APPLICABLE, A JOINT COMMERCIALIZATION
COMMITTEE (“JCC”) FOR EACH CO-PROMOTED PRODUCT.  EACH COMMITTEE MAY FROM TIME TO
TIME ESTABLISH SUB-COMMITTEES TO HANDLE MATTERS WITHIN THE SCOPE OF ITS
AUTHORITY.

2.1.1        JOINT RESEARCH COMMITTEE.  WITHIN THIRTY (30) DAYS FOLLOWING THE
EFFECTIVE DATE, ARRAY AND CELGENE SHALL ESTABLISH A JOINT RESEARCH COMMITTEE.

(A)   DUTIES.  THE JRC SHALL:

(I)    ESTABLISH, OVERSEE, REVIEW AND COORDINATE THE DISCOVERY PROGRAM,
INCLUDING ASSIGNING ACTIVITIES TO BE PERFORMED BY EACH PARTY UNDER THE DISCOVERY
PROGRAM (SUBJECT TO SECTION 3.1), WHICH MAY REQUIRE THE PARTIES TO ENTER INTO
MATERIAL TRANSFER AND OTHER APPROPRIATE AGREEMENTS IN CONNECTION WITH SUCH
ACTIVITIES;

(II)   DISCUSS DESIGNATION OF COMPOUNDS AS DEVELOPMENT COMPOUNDS AND BACK-UP
COMPOUNDS IN ACCORDANCE WITH SECTION 3.5;

(III)  PROVIDE A FORUM FOR THE PARTIES:  (1) TO DISCUSS THE OBJECTIVES OF THE
DISCOVERY PROGRAM; AND (2) TO EXCHANGE AND REVIEW SCIENTIFIC INFORMATION AND
DATA RELATING TO

 

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

THE ACTIVITIES BEING CONDUCTED UNDER, AND THE THEN-CURRENT PROGRESS OF, THE
DISCOVERY PROGRAM, INCLUDING THE EXCHANGE AND REVIEW OF DATA, COMPOUND
STRUCTURES AND THE LIKE RESULTING FROM THE DISCOVERY PROGRAM;

(IV)  DETERMINE WHEN AND FOR WHICH GENERAL DISEASE AREA (SPECIFICALLY, CANCER OR
INFLAMMATORY DISEASE) AN IND WILL BE FILED ON EACH DEVELOPMENT COMPOUND;
PROVIDED, HOWEVER, THAT THE PARTIES SHALL MUTUALLY AGREE WHICH GENERAL DISEASE
AREA THE IND WILL BE FILED FOR A DEVELOPMENT COMPOUND DIRECTED TO A
CANCER/INFLAMMATION TARGET; AND

(V)   MAKE ANY SUCH DECISIONS AS ARE EXPRESSLY ALLOCATED TO THE JRC UNDER THIS
AGREEMENT.

(B)           TERMINATION OF JRC.  THE JRC, ON A TARGET-BY-TARGET BASIS, SHALL
EXIST UNTIL THE END OF THE OPTION TERM FOR SUCH TARGET.

2.1.2        JOINT DEVELOPMENT COMMITTEE.  PROMPTLY BUT NO LATER THAN THIRTY
(30) DAYS FOLLOWING THE EFFECTIVE DATE, ARRAY AND CELGENE SHALL ESTABLISH A
JOINT DEVELOPMENT COMMITTEE.

(A)           DUTIES.  THE JDC SHALL:

(I)    ESTABLISH AND DIRECT THE STRATEGY FOR THE WORLDWIDE DEVELOPMENT OF EACH
DEVELOPMENT COMPOUND AND CORRESPONDING DEVELOPMENT BACK-UP COMPOUNDS, IF ANY,
AND PRODUCTS CONTAINING EACH DEVELOPMENT COMPOUND OR A CORRESPONDING DEVELOPMENT
BACK-UP COMPOUND;

(II)   REVIEW AND FINALIZE THE APPLICABLE DEVELOPMENT PLAN FOR EACH DEVELOPMENT
COMPOUND AND, IF APPLICABLE A CORRESPONDING DEVELOPMENT BACK-UP COMPOUND, AND
PROPOSE REVISIONS TO EACH DEVELOPMENT PLAN AS NEEDED, BUT NO LESS FREQUENTLY
THAN ANNUALLY;

(III)  SUBJECT TO AND WITHIN THE PARAMETERS OF EACH DEVELOPMENT PLAN:  (1)
OVERSEE THE IMPLEMENTATION OF THE SUCH DEVELOPMENT PLAN (INCLUDING APPROVAL OF
CLINICAL TRIAL PROTOCOLS AND REVIEW OF THE CONDUCT OF CLINICAL TRIALS CONDUCTED
PURSUANT TO THE DEVELOPMENT

 

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

PLAN); AND (2) REVIEW AND APPROVE THE OVERALL STRATEGY AND POSITIONING OF ALL
MATERIAL SUBMISSIONS AND FILINGS WITH THE APPLICABLE REGULATORY AUTHORITIES; AND

(iv)          Perform such other duties as are specifically assigned to such JDC
under this Agreement.

(B)           TERMINATION OF JDC.  THE JDC SHALL EXIST, ON A TARGET-BY-TARGET
BASIS, UNTIL THE END OF THE OPTION TERM FOR SUCH TARGET.

2.1.3        JOINT MANUFACTURING COMMITTEE.  PROMPTLY BUT NO LATER THAN THIRTY
(30) DAYS FOLLOWING THE DESIGNATION OF THE FIRST DEVELOPMENT COMPOUND, ARRAY AND
CELGENE SHALL ESTABLISH A JOINT MANUFACTURING COMMITTEE.

(A)           DUTIES.  THE JMC SHALL:

(i)            oversee, review and coordinate the studies required for the
preparation of the CMC section of an IND for filing with the FDA for each
Development Compound and, if applicable, Development Back-Up Compounds,
including studies relating to analytical methods and purity analysis, and
formulation and manufacturing development studies, together with associated
regulatory activities;

(ii)           oversee, review and coordinate process research and development
activities (including manufacturing scale-up) and formulation development
activities; and

(iii)          Perform such other duties as are specifically assigned to such
JMC under this Agreement.

(B)           TERMINATION OF JMC.  THE JMC SHALL EXIST, ON A TARGET-BY-TARGET
BASIS, UNTIL THE END OF THE OPTION TERM FOR SUCH TARGET.

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

2.1.4        JOINT COMMERCIALIZATION COMMITTEE. WITHIN THIRTY (30) DAYS
FOLLOWING A REQUEST BY EITHER PARTY AFTER ARRAY’S EXERCISE OF THE CO-PROMOTION
OPTION, ARRAY AND CELGENE SHALL ESTABLISH A JOINT COMMERCIALIZATION COMMITTEE,
WHICH AT CELGENE’S OPTION MAY BE SPLIT INTO SEPARATE JOINT COMMERCIALIZATION
COMMITTEES FOR EACH CO-PROMOTED PRODUCT.  THE JCC SHALL HAVE AS ITS OVERALL
PURPOSE OVERSIGHT OF THE COMMERCIALIZATION OF CO-PROMOTED PRODUCTS IN THE UNITED
STATES.

(A)           DUTIES:  THE JCC SHALL:

(i)            Review and approve the Co-Promotion Plan for each Co-Promoted
Product developed in accordance with Section 8.2.2 below;

(ii)           Subject to and within the parameters of the Co-Promotion Plan,
oversee the implementation of the Co-Promotion Plan; and

(iii)          Perform such other duties as are specifically assigned to such
JCC under this Agreement.

2.2           GENERAL COMMITTEE MEMBERSHIP AND PROCEDURES.

2.2.1        COMMITTEE MEMBERSHIP.  EACH COMMITTEE SHALL EACH BE COMPOSED OF
THREE (3) REPRESENTATIVES FROM EACH OF CELGENE AND ARRAY.  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 IS OF
COMPARABLE STANDING AND AUTHORITY WITHIN THAT PARTY’S ORGANIZATION AS THE PERSON
HE OR SHE IS REPLACING.

2.2.2        COMMITTEE MEETINGS.  THE JRC AND JDC SHALL HOLD AN INITIAL JOINT
MEETING WITHIN FORTY-FIVE (45) 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 MAY BE CONDUCTED BY TELEPHONE, VIDEO-CONFERENCE OR IN PERSON
AS DETERMINED BY THE APPLICABLE COMMITTEE; PROVIDED, HOWEVER, THAT EACH
COMMITTEE SHALL MEET IN PERSON AT LEAST ONCE EACH CALENDAR YEAR, UNLESS THE
PARTIES MUTUALLY AGREE TO

 

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

MEET BY ALTERNATIVE MEANS.  UNLESS OTHERWISE AGREED BY THE PARTIES, ALL
IN-PERSON MEETINGS FOR EACH COMMITTEE SHALL BE HELD ON AN ALTERNATING BASIS
BETWEEN ARRAY’S FACILITIES AND CELGENE’S FACILITIES.  WITH THE CONSENT OF THE
PARTIES (NOT TO BE UNREASONABLY WITHHELD OR DELAYED), 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 10). 
EACH PARTY SHALL BE RESPONSIBLE FOR ALL OF ITS OWN PERSONNEL AND TRAVEL COSTS
AND EXPENSES RELATING TO PARTICIPATION IN COMMITTEE MEETINGS.

2.2.3        DECISION-MAKING.  DECISIONS OF EACH COMMITTEE WITH DECISION-MAKING
AUTHORITY SHALL BE MADE BY UNANIMOUS VOTE.  IN THE EVENT SUCH COMMITTEE FAILS TO
REACH UNANIMOUS AGREEMENT WITH RESPECT TO A PARTICULAR MATTER WITHIN ITS
DECISION-MAKING AUTHORITY, THEN, EITHER PARTY MAY, BY WRITTEN NOTICE TO THE
OTHER PARTY (AN “ESCALATION NOTICE”), HAVE SUCH MATTER REFERRED TO THE FOLLOWING
INDIVIDUALS OF EACH PARTY OR HIS/HER DESIGNEE (THE “NEGOTIATORS”):  FOR DISPUTES
ORIGINATING IN THE JRC, THE HEADS OF RESEARCH OF EACH PARTY SHALL SERVE AS
NEGOTIATORS; AND THE NEGOTIATORS FOR DISPUTES ORIGINATING IN THE JDC AND THE JMC
SHALL BE THE HEADS OF CLINICAL DEVELOPMENT AND MANUFACTURING, RESPECTIVELY.  THE
NEGOTIATORS SHALL MEET PROMPTLY AND NEGOTIATE IN GOOD FAITH TO RESOLVE SUCH
MATTER.  IF THE NEGOTIATORS ARE UNABLE TO RESOLVE SUCH MATTER WITHIN THIRTY (30)
DAYS OF THE DATE OF THE APPLICABLE ESCALATION NOTICE, OR SUCH LONGER PERIOD OF
TIME AS THE NEGOTIATORS MAY AGREE, THE MATTER SHALL BE REFERRED TO THE CHIEF
EXECUTIVE OFFICERS OF THE PARTIES, WHO SHALL MEET PROMPTLY AND NEGOTIATE IN GOOD
FAITH TO RESOLVE SUCH MATTER.  IF THE CHIEF EXECUTIVE OFFICERS ARE UNABLE TO
RESOLVE SUCH MATTER WITHIN THIRTY (30) DAYS, OR SUCH LONGER PERIOD OF TIME AS
THE CHIEF EXECUTIVE OFFICERS MAY AGREE:  (A) CELGENE SHALL CAST THE DECIDING
VOTE ON ANY SUCH MATTER BEFORE THE JCC; (B) EXCEPT AS SET FORTH IN SECTION 3.5
BELOW, ARRAY SHALL CAST THE DECIDING VOTE ON ANY SUCH MATTER BEFORE THE JRC; (C)
EXCEPT AS SET FORTH IN SECTION 3.5 BELOW, THE DECIDING VOTE ON ANY SUCH MATTER
BEFORE THE JDC SHALL BE MADE BY AN ARBITRATOR IN ACCORDANCE WITH SECTION 2.3
BELOW, PROVIDED, HOWEVER, THAT, CELGENE SHALL HAVE THE EXCLUSIVE RIGHT TO SELECT
THE INDICATION FOR EACH DEVELOPMENT COMPOUND FROM THE LIST ATTACHED HERETO AS
SCHEDULE 2.2.3(C); AND (D) ARRAY SHALL CAST THE DECIDING VOTE ON ANY SUCH MATTER
BEFORE THE JMC.  NOTWITHSTANDING THE FOREGOING, NEITHER PARTY

 

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amended.

 

NOR THE ARBITRATOR (FOR MATTERS SUBJECT TO SECTION 2.3 BELOW) SHALL HAVE THE
RIGHT TO CAST THE DECIDING VOTE IN ANY MANNER THAT WOULD UNILATERALLY IMPOSE A
FINANCIAL OBLIGATION ON ARRAY OR CELGENE, AS THE CASE MAY BE, BEYOND THE
COMMITMENTS SET FORTH HEREIN OR CAUSE IT TO VIOLATE ANY OBLIGATION OR AGREEMENT
IT MAY HAVE WITH ANY THIRD PARTY.

2.3           BINDING ARBITRATION.  IN THE EVENT THE JDC CANNOT REACH AGREEMENT
WITH RESPECT TO A PARTICULAR MATTER THAT IS PROPERLY TO BE DECIDED BY UNANIMOUS
VOTE OF THE JDC UNDER SECTION 2.2.3(C) ABOVE, AND SUCH MATTER IS NOT RESOLVED BY
THE APPLICABLE NEGOTIATORS IN ACCORDANCE WITH SECTION 2.2.3 ABOVE, THEN THE
MATTER SHALL BE REFERRED TO BINDING ARBITRATION BY ONE (1) ARBITRATOR.  IN SUCH
ARBITRATION, THE ARBITRATOR SHALL BE AN INDEPENDENT EXPERT (INCLUDING IN THE
AREA OF THE DISPUTE) IN THE PHARMACEUTICAL OR BIOTECHNOLOGY INDUSTRY MUTUALLY
ACCEPTABLE TO THE PARTIES.  THE PARTIES SHALL USE THEIR BEST EFFORTS TO MUTUALLY
AGREE UPON ONE (1) ARBITRATOR; PROVIDED, HOWEVER, THAT IF THE PARTIES HAVE NOT
DONE SO WITHIN TEN (10) DAYS AFTER INITIATION OF ARBITRATION HEREUNDER, OR SUCH
LONGER PERIOD OF TIME AS THE PARTIES HAVE AGREED TO IN WRITING, THEN SUCH
ARBITRATOR SHALL BE AN INDEPENDENT EXPERT AS DESCRIBED IN THE PRECEDING SENTENCE
SELECTED BY THE CHICAGO OFFICE OF THE AMERICAN ARBITRATION ASSOCIATION.  SUCH
ARBITRATION SHALL BE LIMITED TO CASTING THE DECIDING VOTE WITH RESPECT TO MATTER
IN DISPUTE, AND IN CONNECTION THEREWITH, EACH PARTY SHALL SUBMIT TO THE
ARBITRATOR IN WRITING ITS POSITION ON AND DESIRED RESOLUTION OF SUCH MATTER. 
SUCH SUBMISSION SHALL BE MADE WITHIN TEN (10) DAYS OF THE SELECTION OR
APPOINTMENT OF THE ARBITRATOR, AND THE ARBITRATOR SHALL RULE ON SUCH MATTER AND
CAST THE DECIDING VOTE WITHIN TEN (10) DAYS OF RECEIPT OF THE WRITTEN
SUBMISSIONS BY BOTH PARTIES.  THE ARBITRATOR SHALL SELECT ONE OF THE PARTY’S
POSITIONS AS HIS DECISION, AND SHALL NOT HAVE AUTHORITY TO RENDER ANY
SUBSTANTIVE DECISION OTHER THAN TO SO SELECT THE POSITION OF EITHER CELGENE OR
ARRAY; PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL NOT HAVE THE AUTHORITY TO
SELECT A PARTY’S POSITION IF SUCH POSITION WOULD REQUIRE ARRAY TO CONDUCT
CLINICAL TRIAL ACTIVITIES THAT ARE NOT WITHIN THE GENERAL GUIDELINES AND
OBJECTIVES FOR TRIAL DESIGNS PREVIOUSLY AGREED BY THE PARTIES (“TRIAL DESIGN
GUIDELINES”) AS INTERPRETED BY THE ARBITRATOR.  EXCEPT AS PROVIDED IN THE
PRECEDING SENTENCE, SUCH ARBITRATION SHALL BE CONDUCTED IN ACCORDANCE WITH THE
THEN-CURRENT COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION.  THE ARBITRATOR’S RULING AND VOTE SHALL BE FINAL AND BINDING UPON
THE PARTIES.  THE COSTS OF ANY ARBITRATION CONDUCTED PURSUANT TO THIS SECTION
2.3 SHALL BE BORNE

 

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amended.

 

EQUALLY BY THE PARTIES.  THE PARTIES SHALL USE DILIGENT EFFORTS TO CAUSE THE
COMPLETION OF ANY SUCH ARBITRATION WITHIN SIXTY (60) DAYS FOLLOWING A REQUEST BY
ANY PARTY FOR SUCH ARBITRATION.

2.4           SCOPE OF GOVERNANCE.  NOTWITHSTANDING THE CREATION OF EACH OF THE
COMMITTEES, EACH PARTY SHALL RETAIN THE RIGHTS, POWERS AND DISCRETION GRANTED TO
IT UNDER THIS AGREEMENT, AND NO COMMITTEE 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.  NO COMMITTEE
SHALL HAVE THE POWER TO AMEND OR MODIFY THIS AGREEMENT, AND NO DECISION OF ANY
COMMITTEE SHALL BE IN CONTRAVENTION OF ANY TERMS AND CONDITIONS OF THIS
AGREEMENT.  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.

ARTICLE III
DISCOVERY PROGRAM

3.1           DISCOVERY PROGRAM.  DURING THE OPTION TERM, ARRAY AND, IF DIRECTED
BY THE JRC, JDC OR JMC AND EXPRESSLY AGREED BY CELGENE IN WRITING, CELGENE SHALL
BE RESPONSIBLE FOR CONDUCTING A DISCOVERY RESEARCH PROGRAM WITH THE PRINCIPAL
GOALS OF:  (I) IDENTIFYING AND DISCOVERING COMPOUNDS THAT DIRECTLY MODULATE EACH
OF THE TARGETS; (II) CHARACTERIZING, OPTIMIZING AND SUPPORTING THE PRE-CLINICAL
DEVELOPMENT OF SUCH COMPOUNDS; (III) CONDUCTING A PHASE I CLINICAL TRIAL AND,
WHERE APPLICABLE UNDER SECTION 3.7.3 BELOW, A PHASE II CLINICAL TRIAL WITH
RESPECT TO COMPOUNDS THAT HAVE BEEN DESIGNATED AS DEVELOPMENT COMPOUNDS PURSUANT
TO SECTION 3.5 BELOW; AND (IV) IF REQUIRED PURSUANT TO SECTION 3.7.4 BELOW,
CONDUCTING CONTINUED PRECLINICAL DEVELOPMENT AND POTENTIALLY A PHASE I CLINICAL
TRIAL WITH RESPECT TO CERTAIN DEVELOPMENT BACK-UP COMPOUNDS (“DISCOVERY
PROGRAM”).  DURING THE OPTION TERM, ARRAY SHALL, ON A TARGET-BY-TARGET BASIS,
USE DILIGENT EFFORTS TO CONDUCT THE DISCOVERY PROGRAM WITH RESPECT TO SUCH
TARGET.

3.2           TARGETS.

3.2.1        GENERAL.  EXCEPT AS OTHERWISE SPECIFIED IN THIS SECTION 3.2, THE
DISCOVERY PROGRAM SHALL BE FOCUSED ON IDENTIFYING, FOR EACH OF THE TARGETS,
DEVELOPMENT COMPOUNDS AND

 

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amended.

 

CORRESPONDING DEVELOPMENT BACK-UP COMPOUNDS THAT DIRECTLY MODULATE THE ACTIVITY
OF EACH SUCH TARGET, WITH THE GOAL OF COMPLETING EARLY CLINICAL DEVELOPMENT OF A
DEVELOPMENT COMPOUND AND, IF REQUIRED PURSUANT TO SECTION 3.7.4 BELOW, A
CORRESPONDING DEVELOPMENT BACK-UP COMPOUND, DIRECTED TO EACH OF UP TO FOUR (4)
TARGETS FOR POSSIBLE EXERCISE BY CELGENE OF ITS PRODUCT OPTIONS.

3.2.2        ABANDONMENT AND SUBSTITUTION OF TARGETS.  FROM TIME TO TIME DURING
THE OPTION TERM, THE JRC MAY DETERMINE IN GOOD FAITH THAT THE DISCOVERY PROGRAM
HAS NOT YIELDED SUFFICIENT PROGRESS WITH RESPECT TO ONE OR MORE TARGETS (E.G.,
BECAUSE SUCH TARGET IS FOUND TO BE INTRACTABLE, MODULATION OF SUCH TARGET DOES
NOT YIELD A THERAPEUTICALLY RELEVANT OUTCOME OR MODULATION OF SUCH TARGET
PRESENTS UNWANTED SIDE EFFECTS), AND THAT RESEARCH AND/OR DEVELOPMENT ACTIVITIES
WITH RESPECT TO SUCH TARGET SHOULD BE DISCONTINUED.  IF SUCH ACTIVITIES ARE [ *
], THEN CELGENE MAY PROPOSE, AFTER DISCUSSION WITH THE JRC, AND SUBJECT TO THE
MUTUAL WRITTEN AGREEMENT OF THE PARTIES, ANOTHER MOLECULAR TARGET AS A
SUBSTITUTE FOR SUCH DISCONTINUED TARGET.  IN SUCH CASE, (I) THE DISCONTINUED
TARGET SHALL CEASE TO BE A TARGET, THE SUBSTITUTE TARGET SHALL BE DEEMED A
TARGET FOR THE PURPOSES OF THIS AGREEMENT AND SCHEDULE 1.38 SHALL BE DEEMED TO
BE UPDATED ACCORDINGLY; AND (II) THE OPTION TERM FOR THE SUBSTITUTE TARGET SHALL
COMMENCE ON THE DATE THAT PARTIES AGREE ON THE SUBSTITUTE TARGET (I.E., SUCH
DATE SHALL BE DEEMED THE EFFECTIVE DATE FOR SUCH TARGET FOR PURPOSES OF SECTION
4.1.1(A)); PROVIDED, HOWEVER, THAT IF RESEARCH AND/OR DEVELOPMENT ACTIVITIES
WITH RESPECT TO SUCH SUBSTITUTE TARGET, OR WITH RESPECT TO A SUBSTITUTE TARGET
SELECTED PURSUANT TO SECTION 3.5.1, ARE SUBSEQUENTLY DISCONTINUED PURSUANT TO
THIS SECTION 3.2.2, THE DISCONTINUED SUBSTITUTE TARGET SHALL NOT BE REPLACED
WITH A NEW MOLECULAR TARGET.

3.3           DISCOVERY PROGRAM FUNDING.  EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT, ARRAY WILL BE RESPONSIBLE FOR FUNDING ITS ACTIVITIES UNDER THE
DISCOVERY PROGRAM, INCLUDING UNDER EACH DEVELOPMENT PLAN, DURING THE OPTION
TERM.

3.4           UPDATES; REPORTS.  DURING THE OPTION TERM, ARRAY SHALL PROVIDE
CELGENE WITH REGULAR UPDATES NO LESS THAN ONCE A MONTH ON THE RESULTS OF THE
DISCOVERY PROGRAM.  SUCH UPDATES SHALL BE CONDUCTED BY TELEPHONE OR
VIDEO-CONFERENCE, AND PRIOR TO EACH SUCH UPDATE, ARRAY SHALL PROVIDE CELGENE
WITH A WRITTEN SUMMARY OF THE ACTIVITIES CONDUCTED UNDER THE DISCOVERY PROGRAM
FOR THE

 

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amended.

 

PRECEDING CALENDAR MONTH AND SUPPORTING DATA RELATED THERETO.  CELGENE SHALL
HAVE THE RIGHT TO REASONABLY REQUEST AND TO RECEIVE IN A TIMELY MANNER
CLARIFICATIONS AND ANSWERS TO QUESTIONS WITH RESPECT TO SUCH REPORTS.

3.5           DESIGNATION OF DEVELOPMENT COMPOUNDS AND DEVELOPMENT BACK-UP
COMPOUNDS.

3.5.1        CLINICAL CANDIDATE GUIDELINES; LEAD COMPOUNDS.  THE PARTIES HAVE
PREVIOUSLY ESTABLISHED CLINICAL CANDIDATE GUIDELINES (“CLINICAL CANDIDATE
GUIDELINES”) FOR EACH TARGET TO INDICATE THE SUITABILITY OF COMPOUNDS AS
DEVELOPMENT COMPOUNDS.  SUCH CLINICAL CANDIDATE GUIDELINES MAY BE AMENDED UPON
MUTUAL WRITTEN AGREEMENT OF THE PARTIES OR SUBSEQUENT CLINICAL CANDIDATE
GUIDELINES MAY BE AGREED IN WRITING BY THE PARTIES AND ATTACHED TO THIS
AGREEMENT FROM TIME TO TIME AS APPROPRIATE, AND IN EACH CASE SUCH AGREEMENT
SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED.  FOR EACH TARGET, THE JRC SHALL [
* ].  IF THE PARTIES MUTUALLY AGREE THAT A PARTICULAR COMPOUND DOES NOT STRICTLY
MEET THE CLINICAL CANDIDATE GUIDELINES, BUT SHOULD BE CONSIDERED AS A POTENTIAL
DEVELOPMENT COMPOUND, THEN THE JRC MAY [ * ], THE PARTIES MAY MUTUALLY AGREE
THAT THE JRC MAY [ * ], THEN CELGENE SHALL HAVE THE RIGHT TO DISCONTINUE
ACTIVITIES WITH RESPECT TO SUCH TARGET AND TO PROPOSE IN WRITING, AFTER
DISCUSSION WITH ARRAY, TWO (2) MOLECULAR TARGETS AS POTENTIAL SUBSTITUTES FOR
SUCH DISCONTINUED TARGET THAT ARE (I) [ * ], AND (II) ARE NOT THE SUBJECT OF AN
AGREEMENT THAT ARRAY HAS WITH A THIRD PARTY OR THE TARGET OF ARRAY’S OWN
RESEARCH OR DRUGS IN ARRAY’S CLINICAL DEVELOPMENT PIPELINE OR MARKETED PRODUCT
PORTFOLIO; PROVIDED THAT CELGENE MAY ONLY EXERCISE SUCH RIGHT WITH RESPECT TO
THE FOUR (4) INITIAL TARGETS OR WITH RESPECT TO ANY TARGET SUBSTITUTED FOR AN
INITIAL TARGET PURSUANT TO SECTION 3.2.2, BUT NOT WITH RESPECT TO ANY SUBSTITUTE
TARGET SELECTED PURSUANT TO THIS SECTION 3.5.1; AND PROVIDED FURTHER THAT
CELGENE MAY ONLY PROPOSE AS A POTENTIAL SUBSTITUTE A MOLECULAR TARGET DIRECTED
TO THE SAME GENERAL DISEASE AREA (SPECIFICALLY, CANCER OR INFLAMMATORY DISEASE)
AS THE DISCONTINUED TARGET.  ARRAY SHALL NOTIFY CELGENE IN WRITING WHICH OF THE
PROPOSED SUBSTITUTE TARGETS IT SELECTS FOR INCLUSION IN THE DISCOVERY PROGRAM. 
IN SUCH CASE, THE DISCONTINUED TARGET SHALL CEASE TO BE A TARGET, THE SUBSTITUTE
TARGET SHALL BE DEEMED A TARGET FOR THE PURPOSES OF THIS AGREEMENT, SCHEDULE
1.38 SHALL BE DEEMED TO BE UPDATED ACCORDINGLY, AND THE OPTION TERM FOR THE
SUBSTITUTE TARGET SHALL COMMENCE ON THE DATE CELGENE RECEIVES NOTICE OF

 

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

ARRAY’S SELECTION (I.E., SUCH DATE SHALL BE DEEMED THE EFFECTIVE DATE FOR SUCH
TARGET FOR PURPOSES OF SECTION 4.1.1(A)).

3.5.2        DEVELOPMENT COMPOUNDS.  BASED UPON THE CLINICAL CANDIDATE
GUIDELINES AND THE RESULTS OF THE DISCOVERY PROGRAM [ * ], CELGENE SHALL
DESIGNATE FOR EACH TARGET ONE (1) COMPOUND AS A DEVELOPMENT COMPOUND FROM [ * ],
AND EACH SUCH COMPOUND SO DESIGNATED SHALL BE DEEMED A “DEVELOPMENT COMPOUND”
FOR THE PURPOSES OF THIS AGREEMENT.  BASED ON [ * ], CELGENE MAY, WITHIN
FORTY-FIVE (45) DAYS OF RECEIPT THEREOF, DE-SELECT A PARTICULAR DEVELOPMENT
COMPOUND AND SELECT AN ALTERNATE LEAD COMPOUND AS A DEVELOPMENT COMPOUND.  IN
SUCH CASE, THE DE-SELECTED COMPOUND SHALL CEASE TO BE A DEVELOPMENT COMPOUND FOR
THE PURPOSES OF THIS AGREEMENT, BUT SHALL CONTINUE TO BE A LEAD COMPOUND AND MAY
BE SELECTED BY CELGENE AS A DEVELOPMENT BACK-UP COMPOUND.

3.5.3        DEVELOPMENT BACK-UP COMPOUNDS.  AT SUCH TIME AS CELGENE DESIGNATES
A DEVELOPMENT COMPOUND FOR A PARTICULAR TARGET, CELGENE SHALL, BASED UPON THE
CLINICAL CANDIDATE GUIDELINES AND THE RESULTS OF THE DISCOVERY PROGRAM INCLUDING
THE RESULTS OF THE ACUTE TOX STUDIES, DESIGNATE FOR SUCH TARGET UP TO TWO (2)
LEAD COMPOUNDS AS DEVELOPMENT BACK-UP COMPOUNDS.  EACH SUCH BACK-UP COMPOUND SO
DESIGNATED SHALL BE DEEMED A “DEVELOPMENT BACK-UP COMPOUND” FOR THE PURPOSES OF
THIS AGREEMENT.

3.6           DEVELOPMENT PLAN.

3.6.1        ESTABLISHMENT.  THE JDC, FOR A PARTICULAR DEVELOPMENT COMPOUND AND,
IF REQUIRED PURSUANT TO 3.7.4 BELOW, A CORRESPONDING DEVELOPMENT BACK-UP
COMPOUND, SHALL HAVE THE RESPONSIBILITY FOR ESTABLISHING A COMPREHENSIVE,
MULTI-YEAR PLAN FOR THE DEVELOPMENT OF SUCH DEVELOPMENT COMPOUND AND, IF
APPLICABLE, DEVELOPMENT BACK-UP COMPOUND (A “DEVELOPMENT PLAN”).  THE INITIAL
DEVELOPMENT PLAN SHALL BE FINALIZED BY THE PARTIES WITHIN THREE (3) MONTHS AFTER
THE DESIGNATION OF SUCH DEVELOPMENT COMPOUND AND CORRESPONDING DEVELOPMENT
BACK-UP COMPOUNDS.

 

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amended.

 

3.6.2        CONTENTS.  EACH DEVELOPMENT PLAN SHALL FULLY DESCRIBE THE PROPOSED
ACTIVITIES RELATED TO ONGOING PRECLINICAL STUDIES (E.G., TOXICOLOGY),
FORMULATION, CLINICAL STUDIES AND REGULATORY PLANS, AND OTHER ACTIVITIES AND
TIMELINES DIRECTED TO IND FILING, PHASE I CLINICAL DEVELOPMENT AND PREPARATION
FOR PHASE II CLINICAL DEVELOPMENT AND SHALL BE IN ACCORDANCE WITH THE TRIAL
DESIGN GUIDELINES.  IF THE FIRST IND FOR A PARTICULAR DEVELOPMENT COMPOUND IS TO
BE FILED IN A DIVISION OF THE FDA OTHER THAN THE CANCER DIVISION, THE
DEVELOPMENT PLAN SHALL ALSO INCLUDE A SINGLE PHASE II CLINICAL TRIAL FOR THE
SUBJECT DEVELOPMENT COMPOUND AND ASSOCIATED CONTINUING DEVELOPMENT ACTIVITIES
(E.G., CONTINUED AND ONGOING PRECLINICAL STUDIES, FORMULATION AND PROCESS
DEVELOPMENT).  WHERE A PHASE II TRIAL IS TO BE INCLUDED, THE DEVELOPMENT PLAN
SHALL ALSO INCLUDE [ * ] SUCH PHASE II TRIAL AND CONTINUING DEVELOPMENT
ACTIVITIES.

3.6.3        ANNUAL REVIEW.  AFTER THE ESTABLISHMENT OF THE INITIAL DEVELOPMENT
PLAN FOR A DEVELOPMENT COMPOUND AND, IF APPLICABLE, A CORRESPONDING DEVELOPMENT
BACK-UP COMPOUND, THE JDC SHALL REVIEW AND UPDATE SUCH DEVELOPMENT PLAN AT LEAST
ANNUALLY AND PRIOR TO ANY MATERIAL MODIFICATION OR ADDITION THERETO.

3.7           DEVELOPMENT.

3.7.1        IND.  DURING THE OPTION TERM FOLLOWING DESIGNATION OF A DEVELOPMENT
COMPOUND, ARRAY SHALL USE DILIGENT EFFORTS TO CONTINUE PRE-CLINICAL DEVELOPMENT
OF SUCH DEVELOPMENT COMPOUND AND, TO THE EXTENT REQUIRED PURSUANT TO SECTION
3.7.4 BELOW, A CORRESPONDING DEVELOPMENT BACK-UP COMPOUND, WITH THE GOAL OF
SUBMITTING AN IND WITH THE FDA ON SUCH DEVELOPMENT COMPOUND.  UNLESS OTHERWISE
AGREED BY THE PARTIES, SUCH IND SHALL INCLUDE THOSE IND TOXICOLOGY AND ADME
STUDIES PREVIOUSLY AGREED BY THE PARTIES, AND TAKING INTO ACCOUNT THE
DEVELOPMENT PLAN.  ARRAY SHALL NOT BE REQUIRED TO SUBMIT MORE THAN ONE (1) IND
FOR EACH DEVELOPMENT COMPOUND.

3.7.2        PHASE I.

(A)   AFTER THE DATE OF THE FIRST FILING OF AN IND WITH THE FDA WITH RESPECT TO
A DEVELOPMENT COMPOUND AND PRIOR TO THE EARLIER OF (I) THE DATE OF CELGENE’S
EXERCISE OF THE CELGENE

 

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amended.

 

PRODUCT OPTION WITH RESPECT TO SUCH DEVELOPMENT COMPOUND (OR TERMINATION OF THE
CELGENE PRODUCT OPTION WITH RESPECT TO THE TARGET TO WHICH SUCH DEVELOPMENT
COMPOUND IS DIRECTED) AND (II) THE EXPIRATION OF THE OPTION TERM, ARRAY SHALL
USE DILIGENT EFFORTS TO CONDUCT AND MANAGE A PHASE I CLINICAL TRIAL OF SUCH
DEVELOPMENT COMPOUND IN ACCORDANCE WITH THE DEVELOPMENT PLAN FOR SUCH
DEVELOPMENT COMPOUND AND TO PERFORM ADDITIONAL DEVELOPMENT ACTIVITIES TO PREPARE
FOR LATER STAGE CLINICAL DEVELOPMENT (E.G., ONGOING TOXICITY STUDIES AND
CMC-RELATED ACTIVITIES).  ARRAY SHALL NOT BE REQUIRED (I) TO CONDUCT A PHASE I
CLINICAL TRIAL EXCEEDING THE TRIAL DESIGN GUIDELINES, OR (II) TO CONDUCT MORE
THAN ONE (1) PHASE I CLINICAL TRIAL FOR EACH DEVELOPMENT COMPOUND.

(B)   ARRAY SHALL BE RESPONSIBLE FOR ALL COSTS INCURRED BY ARRAY, ITS AFFILIATES
OR SUBCONTRACTORS IN PERFORMING ITS ACTIVITIES UNDER THIS SECTION 3.7.2,
INCLUDING THE FOLLOWING: (I) OUT-OF-POCKET COSTS PAID TO THIRD PARTIES (SUCH AS
CONTRACT RESEARCH ORGANIZATIONS, TESTING LABS, IMAGING LABS, QUALITY ASSURANCE
AUDITORS OR GROUPS FOR TRIAL SITES OR VENDORS, OR OTHER CONTRACTORS) FOR THE
PERFORMANCE OF SUCH ACTIVITIES; (II) ARRAY FTES OVERSEEING THE ACTIVITIES SET
FORTH IN (I) ABOVE; (III) ARRAY’S OUT-OF-POCKET COSTS FOR OBTAINING OR
MANUFACTURING QUANTITIES OF THE DEVELOPMENT COMPOUND USED AS CLINICAL SUPPLIES
(INCLUDING STABILITY TESTING, FORM SELECTION AND TESTING, AND RADIOLABELLED
DERIVATIVE PREPARATION) IN PERFORMING SUCH ACTIVITIES; AND (IV) COSTS INCURRED
WITH RESPECT TO MEETING OF INVESTIGATORS AND ASSOCIATED TRAVEL EXPENSES.

3.7.3        PHASE II.

(A)   IF THE FIRST IND FOR A PARTICULAR DEVELOPMENT COMPOUND WAS FILED IN A
DIVISION OF THE FDA OTHER THAN THE CANCER DIVISION AND CELGENE HAS NOT EXERCISED
THE CELGENE PRODUCT OPTION WITH RESPECT TO SUCH DEVELOPMENT COMPOUND (OR
TERMINATED THE CELGENE PRODUCT OPTION WITH RESPECT TO THE TARGET TO WHICH SUCH
DEVELOPMENT COMPOUND IS DIRECTED), THEN ARRAY SHALL USE DILIGENT EFFORTS DURING
THE OPTION TERM TO CONDUCT AND MANAGE ONE PHASE II CLINICAL TRIAL OF SUCH
DEVELOPMENT COMPOUND AND TO PERFORM ADDITIONAL DEVELOPMENT ACTIVITIES TO PREPARE
FOR FURTHER CLINICAL DEVELOPMENT, IN ACCORDANCE WITH THE DEVELOPMENT PLAN FOR
SUCH DEVELOPMENT COMPOUND.  ARRAY SHALL NOT BE REQUIRED (I) TO CONDUCT A PHASE
II CLINICAL TRIAL EXCEEDING THE TRIAL

 

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amended.

 

DESIGN GUIDELINES, OR (II) EXCEPT AS PROVIDED IN SUBPARAGRAPH (C) BELOW, TO
CONDUCT MORE THAN TWO (2) PHASE II CLINICAL TRIALS UNDER THIS AGREEMENT.

(B)   FOR THE FIRST TWO (2) DEVELOPMENT COMPOUNDS FOR WHICH ARRAY IS OBLIGATED
TO CONDUCT A PHASE II CLINICAL TRIAL PURSUANT TO SECTION 3.7.3(A) OR (C), ARRAY
SHALL BE RESPONSIBLE FOR [ * ] IN PERFORMING THE STUDIES AND/OR ACTIVITIES
DESCRIBED IN PARAGRAPH (A) ABOVE WITH RESPECT TO EACH APPLICABLE DEVELOPMENT
COMPOUND, AND CELGENE SHALL [ * ].  IF ARRAY IS OBLIGATED TO CONDUCT A THIRD
PHASE II CLINICAL TRIAL PURSUANT TO SECTION 3.7.3(A) OR (C), CELGENE SHALL [ *
].  CELGENE SHALL [ * ].  UPON REQUEST, ARRAY SHALL PROVIDE CELGENE WITH [ * ]. 
PRIOR TO COMMENCING A PHASE II TRIAL FOR WHICH CELGENE [ * ], ARRAY SHALL
PROVIDE CELGENE [ * ]; SUCH [ * ] SHALL BE REVISED OR UPDATED FROM TIME TO TIME
BY THE JDC.

(C)   IF THE PARTIES SELECTED INFLAMMATION AS THE GENERAL DISEASE AREA FOR THE
IND FOR A DEVELOPMENT COMPOUND DIRECTED TO A CANCER/INFLAMMATION TARGET UNDER
SECTION 2.1.1(A)(IV) ABOVE, AND CELGENE HAS NOT EXERCISED THE CELGENE PRODUCT
OPTION WITH RESPECT TO SUCH DEVELOPMENT COMPOUND (OR TERMINATED THE CELGENE
PRODUCT OPTION WITH RESPECT TO THE TARGET TO WHICH SUCH DEVELOPMENT COMPOUND IS
DIRECTED), THEN ARRAY SHALL USE DILIGENT EFFORTS DURING THE OPTION TERM TO
CONDUCT AND MANAGE ONE PHASE II CLINICAL TRIAL OF SUCH DEVELOPMENT COMPOUND, IN
ACCORDANCE WITH THE DEVELOPMENT PLAN FOR SUCH DEVELOPMENT COMPOUND AND WITHIN
THE TRIAL DESIGN GUIDELINES.

(D)   “[ * ]” SHALL MEAN [ * ].

3.7.4        DEVELOPMENT BACK-UP COMPOUNDS.

(A)           IND-ENABLING STUDIES.  AT THE REQUEST OF CELGENE, ARRAY SHALL USE
DILIGENT EFFORTS TO PERFORM CONTINUED IND-ENABLING STUDIES FOR ONE (1)
DEVELOPMENT BACK-UP COMPOUND PER TARGET DURING THE OPTION TERM FOR SUCH TARGET. 
FOR PURPOSES OF THIS SECTION 3.7.4, “IND-ENABLING STUDIES” SHALL MEAN STUDIES
WHICH ARE SPECIFICALLY REQUIRED FOR AN IND FILING WITH THE FDA, INCLUDING
WITHOUT LIMITATION, ADME AND GLP TOXICOLOGY STUDIES, OR STUDIES REQUIRED FOR THE
PREPARATION OF THE CMC SECTION OF SUCH IND INCLUDING STUDIES RELATING TO
ANALYTICAL METHODS AND

 

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amended.

 

PURITY ANALYSIS, AND FORMULATION AND MANUFACTURING DEVELOPMENT STUDIES, ALL AS
NECESSARY TO OBTAIN THE PERMISSION OF REGULATORY AUTHORITIES TO BEGIN HUMAN
CLINICAL TESTING.

(B)           PHASE I.  UPON MUTUAL WRITTEN AGREEMENT, PRIOR TO THE EARLIER OF
(I) THE DATE OF CELGENE’S EXERCISE OF THE CELGENE PRODUCT OPTION WITH RESPECT TO
THE DEVELOPMENT COMPOUND FOR THE TARGET TO WHICH SUCH DEVELOPMENT BACK-UP
COMPOUND IS DIRECTED (OR TERMINATION OF THE CELGENE PRODUCT OPTION WITH RESPECT
TO THE TARGET TO WHICH SUCH DEVELOPMENT BACK-UP COMPOUND IS DIRECTED) AND (II)
THE EXPIRATION OF THE OPTION TERM, ARRAY SHALL USE DILIGENT EFFORTS TO PREPARE
AND SUBMIT AN IND WITH THE FDA AND TO CONDUCT AND MANAGE A PHASE I CLINICAL
TRIAL FOR ANY DEVELOPMENT BACK-UP COMPOUND FOR WHICH ARRAY CONDUCTED
IND-ENABLING STUDIES, ALL IN ACCORDANCE WITH THE DEVELOPMENT PLAN FOR SUCH
DEVELOPMENT BACK-UP COMPOUND; PROVIDED THAT SUCH PHASE I TRIAL SHALL BE FOR THE
SAME INDICATION AS THE CORRESPONDING DEVELOPMENT COMPOUND AND SHALL NOT EXCEED
THE TRIAL DESIGN GUIDELINES.  IF THE PARTIES DO NOT AGREE, CELGENE SHALL HAVE
THE RIGHT[ * ] TO PERFORM, OR HAVE PERFORMED ON ITS BEHALF, THE ACTIVITIES
DESCRIBED IN THIS SECTION 3.7.4(B) WITH RESPECT TO SUCH DEVELOPMENT BACK-UP
COMPOUND UNDER THE DISCOVERY PROGRAM PURSUANT TO A DEVELOPMENT PLAN; PROVIDED
THAT (A) SUCH ACTIVITIES CAN AND SHALL BE COMPLETED PRIOR TO EXPIRATION OF THE
OPTION TERM OR EXTENSIONS THEREOF FOR THE TARGET TO WHICH SUCH DEVELOPMENT
BACK-UP COMPOUND IS DIRECTED, (B) CELGENE SHALL SHARE ALL CLINICAL TRIAL DATA
WITH ARRAY, AND (C) AT THE CONCLUSION OF SUCH ACTIVITIES, UNLESS CELGENE
EXERCISES THE CELGENE PRODUCT OPTION WITH RESPECT TO SUCH TARGET, CELGENE SHALL
(1) AT ARRAY’S OPTION, CLOSE OR INACTIVATE ITS IND FOR SUCH DEVELOPMENT BACK-UP
COMPOUND OR TRANSFER SUCH IND TO ARRAY [ * ], AND (2) SHALL REASONABLY COOPERATE
WITH ARRAY TO PROMPTLY, AND IN ANY EVENT WITHIN THIRTY (30) DAYS OF ARRAY’S
WRITTEN REQUEST, PROVIDE ARRAY WITH ALL COLLABORATION TECHNOLOGY AND INFORMATION
GENERATED IN THE COURSE OF SUCH ACTIVITIES.

(C)           BUDGET AND REIMBURSEMENT.  ARRAY SHALL PROVIDE CELGENE WITH A
PROPOSED BUDGET OUTLINING ANTICIPATED BACK-UP DEVELOPMENT COSTS FOR EACH
DEVELOPMENT BACK-UP COMPOUND FOR WHICH ARRAY IS PERFORMING ACTIVITIES UNDER THIS
SECTION 3.7.4, WHICH BUDGET SHALL BE REVISED OR UPDATED FROM TIME TO TIME BY THE
JDC.  CELGENE SHALL REIMBURSE ARRAY [ * ], FOR ALL BACK-UP DEVELOPMENT COSTS
INCURRED UNDER SECTIONS 3.7.4(A) AND/OR (B) ABOVE WITH RESPECT TO SUCH

 

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amended.

 

DEVELOPMENT BACK-UP COMPOUND, AND, UPON REQUEST, ARRAY SHALL PROVIDE CELGENE
WITH REASONABLY DETAILED DOCUMENTATION THEREOF.

(D)           SUBSTITUTION OF DEVELOPMENT COMPOUNDS.  FROM TIME TO TIME DURING
THE OPTION TERM, CELGENE MAY DETERMINE IN GOOD FAITH THAT A DEVELOPMENT PLAN HAS
NOT YIELDED SUFFICIENT PROGRESS WITH RESPECT THE APPLICABLE DEVELOPMENT
COMPOUND, AND THAT DEVELOPMENT ACTIVITIES WITH RESPECT TO SUCH DEVELOPMENT
COMPOUND SHOULD BE DISCONTINUED.  IF SUCH DEVELOPMENT ACTIVITIES ARE
DISCONTINUED WITH RESPECT TO ANY DEVELOPMENT COMPOUND, THEN CELGENE MAY PROPOSE,
AFTER DISCUSSION WITH THE JDC, A DEVELOPMENT BACK-UP COMPOUND CORRESPONDING TO
SUCH DEVELOPMENT COMPOUND AS A SUBSTITUTE DEVELOPMENT COMPOUND.  IN SUCH CASE,
THE DISCONTINUED DEVELOPMENT COMPOUND SHALL CEASE TO BE A DEVELOPMENT COMPOUND,
THE PROPOSED DEVELOPMENT BACK-UP COMPOUND SHALL BE DEEMED A DEVELOPMENT
COMPOUND, AND THE DISCONTINUED DEVELOPMENT COMPOUND SHALL BE DEEMED A
DEVELOPMENT BACK-UP COMPOUND TO SUCH SUBSTITUTE DEVELOPMENT COMPOUND.  CELGENE
SHALL [ * ] OF A DEVELOPMENT BACK-UP COMPOUND THAT IS SELECTED AS A SUBSTITUTE
FOR THE CORRESPONDING DEVELOPMENT COMPOUND [ * ] IN THE DEVELOPMENT OF THE
SUBSTITUTED DEVELOPMENT COMPOUND, [ * ].

(E)           “BACK-UP DEVELOPMENT COSTS” SHALL MEAN THE FOLLOWING COSTS
INCURRED BY ARRAY, ITS AFFILIATES OR SUBCONTRACTORS IN PERFORMING IND-ENABLING
STUDIES PURSUANT TO SECTION 3.7.4(A) OR ACTIVITIES UNDER THE APPLICABLE
DEVELOPMENT PLAN PURSUANT TO SECTION 3.7.4(B), AS APPLICABLE, INCLUDING THE
FOLLOWING: (I) ARRAY FTES ENGAGED IN IND DRAFTING, PREPARATION AND SUBMISSION;
(II) OUT-OF-POCKET COSTS PAID TO THIRD PARTIES (SUCH AS CONTRACT RESEARCH
ORGANIZATIONS, TESTING LABS, IMAGING LABS, QUALITY ASSURANCE AUDITORS OR GROUPS
FOR TRIAL SITES OR VENDORS, OR OTHER CONTRACTORS) FOR THE PERFORMANCE OF SUCH
ACTIVITIES ON A PASS-THROUGH BASIS; (III) ARRAY FTES PLANNING, PERFORMING OR
OVERSEEING THE ACTIVITIES UNDER SECTION 3.7.4(A) OR (B), AS APPLICABLE AT A RATE
OF $325,000 PER FTE; (IV) ARRAY’S ACTUAL COSTS FOR OBTAINING OR MANUFACTURING
REASONABLE QUANTITIES OF THE DEVELOPMENT COMPOUND FOR USE AS CLINICAL SUPPLIES
(SUCH AS STABILITY TESTING) IN PERFORMING ARRAY’S OBLIGATIONS UNDER SECTIONS
3.7.4(A) AND 3.7.4(B) ABOVE; AND (V) COSTS INCURRED WITH RESPECT TO MEETING OF
INVESTIGATORS (SINGLE SITE, REGIONAL AND GLOBAL) AND ASSOCIATED TRAVEL EXPENSES.

 

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amended.

 

3.7.5        MANUFACTURING.  ARRAY SHALL BE RESPONSIBLE, EITHER ITSELF OR
THROUGH THIRD PARTIES, FOR THE MANUFACTURE AND SUPPLY OF EACH DEVELOPMENT
COMPOUND AND, IF REQUIRED PURSUANT TO SECTION 3.7.4 ABOVE, CORRESPONDING
DEVELOPMENT BACK-UP COMPOUNDS, AS NECESSARY TO CONDUCT ITS ACTIVITIES UNDER THE
DISCOVERY PROGRAM.  ALL SUCH MANUFACTURING AND SUPPLY ACTIVITIES SHALL BE IN
ACCORDANCE WITH THE MANUFACTURING GUIDELINES PREVIOUSLY AGREED BY THE PARTIES.

3.8           RECORDS.

3.8.1        RETENTION.  ARRAY SHALL MAINTAIN, OR CAUSE TO BE MAINTAINED RECORDS
OF ALL (A) ACTIVITIES CONDUCTED UNDER THE DISCOVERY PROGRAM, (B) [ * ], (C)
BACK-UP DEVELOPMENT COSTS, AND (D) ALL [ * ], IN EACH CASE IN SUFFICIENT DETAIL
AND, AS APPLICABLE, IN A SCIENTIFIC MANNER AS WILL PROPERLY REFLECT ALL WORK
DONE AND RESULTS ACHIEVED IN THE PERFORMANCE OF THE DISCOVERY PROGRAM AND WHICH
ARE OTHERWISE SUFFICIENT TO DETERMINE THE IDENTITY AND INVENTORSHIP DATES OF
INVENTIONS.  ARRAY SHALL RETAIN SUCH RECORDS DURING THE OPTION TERM AND FOR A
PERIOD OF FIVE (5) YEARS THEREAFTER, OR SUCH OTHER PERIOD AGREED BY THE PARTIES.

3.8.2        INSPECTION.  DURING THE OPTION TERM AND FOR A PERIOD OF [ * ]
THEREAFTER, ARRAY SHALL MAKE AVAILABLE TO CELGENE, AS REASONABLY REQUESTED AND
UPON REASONABLE NOTICE, DURING ARRAY’S NORMAL BUSINESS HOURS, SUCH RECORDS AS
MAY BE REASONABLY NECESSARY FOR CELGENE:  (A) TO INQUIRE ABOUT DETAILS OF THE
RESULTS GENERATED UNDER THE DISCOVERY PROGRAM (BOTH DISCOVERY RESEARCH AND
SUPPORT FOR CLINICAL DEVELOPMENT); (B) TO SUPPLEMENT THE REPORTS FURNISHED BY
ARRAY PURSUANT TO SECTION 3.8.1 ABOVE; AND/OR (C) [ * ], BACK-UP DEVELOPMENT
COSTS AND [ * ].  SUCH DISCLOSURES SHALL OCCUR NO MORE THAN ONCE EVERY SIX (6)
MONTHS DURING THE OPTION TERM AND SHALL BE PURSUANT TO REASONABLE PROCEDURES TO
PROTECT THE CONFIDENTIALITY OF SUCH RECORDS.  UPON THE EXPIRATION OF THE PERIOD
FOR RECORD RETENTION SPECIFIED IN SECTION 3.8.1 ABOVE AND UPON REQUEST BY
CELGENE, ARRAY SHALL PROVIDE TO CELGENE, AT CELGENE’S EXPENSE, COPIES OF SUCH
RECORDS ASSOCIATED WITH ANY COLLABORATION COMPOUND OR COLLABORATION BACK-UP
COMPOUND FOR RETENTION IN CELGENE’S ARCHIVES, IT BEING UNDERSTOOD THAT SUCH
RECORDS SHALL REMAIN SUBJECT TO THE CONFIDENTIALITY OBLIGATIONS IN ARTICLE 10.

 

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amended.

 

ARTICLE IV
CELGENE PRODUCT OPTION

4.1           CELGENE PRODUCT OPTION.  CELGENE SHALL HAVE THE OPTION TO SELECT
ONE (1) DEVELOPMENT COMPOUND, ALONG WITH CORRESPONDING DEVELOPMENT BACK-UP
COMPOUNDS, EACH FOR UP TO TWO (2) TARGETS TO ACQUIRE AN EXCLUSIVE, WORLDWIDE
LICENSE TO DEVELOP AND COMMERCIALIZE SUCH DEVELOPMENT COMPOUND AND DEVELOPMENT
BACK-UP COMPOUNDS (THE “CELGENE PRODUCT OPTION”), ALL IN ACCORDANCE WITH THE
TERMS AND CONDITIONS SET FORTH IN THIS ARTICLE 4.

4.1.1        EXERCISE.

(A)   OPTION TERM.  UNLESS EARLIER PARTIALLY TERMINATED WITH RESPECT TO A
PARTICULAR TARGET AS PROVIDED IN SECTION 6.2.1, CELGENE MAY EXERCISE THE CELGENE
PRODUCT OPTION WITH RESPECT TO A PARTICULAR DEVELOPMENT COMPOUND AND ITS
CORRESPONDING DEVELOPMENT BACK-UP COMPOUNDS, AT ANY TIME BEFORE THE EARLIEST OF:
(A) FOR DEVELOPMENT COMPOUNDS WITH RESPECT TO WHICH THE FIRST IND WAS FILED IN
THE CANCER DIVISION OF THE FDA, [ *  ]; AND (B) FOR DEVELOPMENT COMPOUNDS WITH
RESPECT TO WHICH THE FIRST IND WAS FILED IN A DIVISION OF THE FDA OTHER THAN THE
CANCER DIVISION, [ * AND (C) THE [ * ] OF THE EFFECTIVE DATE (THE “OPTION
TERM”); PROVIDED THAT THE OPTION TERM SHALL TERMINATE UPON:  (I) AN EARLIER
TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH ARTICLE 12; OR (II) THE DATE ON
WHICH CELGENE HAS EXERCISED THE CELGENE PRODUCT OPTION WITH RESPECT TO TWO (2)
DEVELOPMENT COMPOUNDS.  CELGENE MAY EXTEND THE OPTION TERM SET FORTH IN (C) OF
THIS SUBSECTION FOR UP TO [ * ] UPON WRITTEN NOTICE TO ARRAY, SUCH NOTICE TO BE
PROVIDED NO EARLIER THAN ONE HUNDRED EIGHTY (180) DAYS PRIOR TO THE [ * ]
ANNIVERSARY OF THE EFFECTIVE DATE OR THE END OF THE THEN-CURRENT OPTION TERM, AS
APPLICABLE.  THE PARTIES MAY FURTHER EXTEND THE OPTION TERM SET FORTH IN (C) OF
THIS SUBSECTION FOR UP TO [ * ], COMMENCING IMMEDIATELY AFTER EXPIRATION OF THE
[ * ] EXERCISED BY CELGENE, BY MUTUAL WRITTEN AGREEMENT; PROVIDED, HOWEVER, THAT
IF ARRAY DOES NOT AGREE TO SO EXTEND THE OPTION TERM, [ * ].  AS USED IN THIS
SECTION 4.1.1, (1) THE “COMPLETION OF THE FIRST PHASE I CLINICAL TRIAL” SHALL BE
DEEMED TO HAVE OCCURRED (A) UPON THE LATER OF (1) RECEIPT OF CLEARANCE FROM THE
FDA TO COMMENCE PHASE II CLINICAL TRIALS WITH RESPECT TO THE RELEVANT
DEVELOPMENT COMPOUND, WHETHER BY AFFIRMATIVE COMMUNICATION FROM THE FDA OR THE
PASSAGE OF THE TIME PERIOD FOR PLACING SUCH

 

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amended.

 

PHASE II CLINICAL TRIAL ON HOLD, OR (2) SIXTY (60) DAYS AFTER ARRAY DELIVERS TO
CELGENE A DRAFT CLINICAL TRIAL REPORT CONTAINING ALL TABLES AND GRAPHS RELATED
TO THE KEY ENDPOINTS FOR THE SUBJECT CLINICAL TRIAL AS DEFINED IN THE PROTOCOL
FOR SUCH CLINICAL TRIAL, WHICH REPORT SHALL BE BASED ON TRIAL DATA OBTAINED AS
OF THE DATE ALL TRIAL SUBJECTS HAVE COMPLETED THE TRIAL (ON A LAST PATIENT, LAST
VISIT BASIS PURSUANT TO THE PROTOCOL FOR SUCH CLINICAL TRIAL) OR THE DATE ON
WHICH THE LAST TRIAL SUBJECT HAS RECEIVED THE RELEVANT DEVELOPMENT COMPOUND FOR
A PERIOD OF FOUR (4) MONTHS (OR SUCH OTHER MUTUALLY AGREED TIME PERIOD),
WHICHEVER IS EARLIER, AND (B) AFTER RECEIPT BY CELGENE OF REASONABLE SUPPORTING
INFORMATION REQUESTED BY CELGENE AND HELD BY ARRAY WITH RESPECT TO THE SUBJECT
CLINICAL TRIAL OF THE RELEVANT DEVELOPMENT COMPOUND; AND (2) THE “COMPLETION OF
THE FIRST PHASE II CLINICAL TRIAL” SHALL BE DEEMED TO HAVE OCCURRED SIXTY (60)
DAYS AFTER (A) ARRAY DELIVERS TO CELGENE A DRAFT CLINICAL TRIAL REPORT
CONTAINING ALL TABLES AND GRAPHS RELATED TO THE KEY ENDPOINTS FOR THE SUBJECT
CLINICAL TRIAL AS DEFINED IN THE PROTOCOL FOR SUCH CLINICAL TRIAL, AND (B) AFTER
RECEIPT BY CELGENE OF REASONABLE SUPPORTING INFORMATION REQUESTED BY CELGENE AND
HELD BY ARRAY WITH RESPECT TO THE SUBJECT CLINICAL TRIAL OF THE RELEVANT
DEVELOPMENT COMPOUND.

(B)           EXERCISE.  TO EXERCISE THE CELGENE PRODUCT OPTION WITH RESPECT TO
A PARTICULAR DEVELOPMENT COMPOUND, CELGENE SHALL SO NOTIFY ARRAY IN WRITING AT
ANY TIME DURING THE OPTION TERM.  UPON RECEIPT BY ARRAY OF SUCH NOTICE, THE
SUBJECT DEVELOPMENT COMPOUND AND ITS CORRESPONDING TWO (2) DEVELOPMENT BACK-UP
COMPOUNDS SHALL CEASE TO BE A DEVELOPMENT COMPOUND OR DEVELOPMENT BACK-UP
COMPOUNDS, RESPECTIVELY, AND SHALL THEREAFTER BE DEEMED A COLLABORATION COMPOUND
OR COLLABORATION BACK-UP COMPOUNDS, RESPECTIVELY.

(C)           TRANSITION.  SUBJECT TO PARAGRAPH (A) ABOVE, AND INCIDENT TO THE
EXTENT REASONABLY NECESSARY FOR CELGENE TO PERFORM ACTIVITIES ASSIGNED TO IT
UNDER THE DEVELOPMENT PLAN APPROVED BY THE JDC:

(I)    FROM AND AFTER THE TIME THAT CELGENE EXERCISES THE CELGENE PRODUCT OPTION
WITH RESPECT TO A DEVELOPMENT COMPOUND (WHICH WILL THEN BECOME A COLLABORATION
COMPOUND), ARRAY SHALL COOPERATE FULLY WITH CELGENE TO PROMPTLY, AND IN ANY
EVENT WITHIN THIRTY (30) DAYS OF CELGENE’S WRITTEN REQUEST, PROVIDE CELGENE WITH
ALL COLLABORATION TECHNOLOGY AND

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

ARRAY TECHNOLOGY AND INFORMATION TO WHICH CELGENE HAS A RIGHT OR LICENSE UNDER
THIS AGREEMENT AND WHICH IS NECESSARY FOR CELGENE TO PERFORM SUCH ACTIVITIES. 
SUCH COOPERATION SHALL INCLUDE THE REASONABLE DISCLOSURE OF ALL INFORMATION
(INCLUDING, STUDY PROTOCOLS, STUDY RESULTS, ANALYTICAL METHODOLOGIES, PRODUCT
MANUFACTURING PROCESSES, BATCH RECORDS, VENDOR INFORMATION, VALIDATION
DOCUMENTATION, REGULATORY DOCUMENTATION, PATENT INFORMATION), REGULATORY
FILINGS, INFORMATION RELATED TO REGULATORY INFORMATION AND FILINGS, PRE-CLINICAL
AND CLINICAL DATA, ADVERSE EVENT DATA, REGULATORY CORRESPONDENCE, EXPERT
OPINIONS, ANALYSES, MANUFACTURING DATA, MANUFACTURING AND SUPPLY AGREEMENTS, AND
THE LIKE, ALL TO THE EXTENT THAT SUCH MATERIAL IS NOT IN THE POSSESSION OF
CELGENE, AND SUCH OTHER DISCLOSURES AND TRANSFERS AS ARE REASONABLY NECESSARY OR
USEFUL FOR CELGENE TO EXERCISE ITS RIGHTS AND PERFORM SUCH ACTIVITIES WITH
RESPECT TO SUCH COLLABORATION COMPOUND AND CORRESPONDING COLLABORATION BACK-UP
COMPOUNDS.  NOTWITHSTANDING THE FOREGOING, ARRAY SHALL NOT BE CONSIDERED TO BE
IN BREACH OF THIS SECTION 4.1.1(C) FOR FAILURE TO DISCLOSE INFORMATION, IF,
DESPITE COMMERCIALLY REASONABLE EFFORTS, ARRAY CANNOT IDENTIFY SUCH
INFORMATION.  WITHOUT LIMITING THE FOREGOING, ARRAY SHALL USE COMMERCIALLY
REASONABLE EFFORTS TO ENSURE ORDERLY TRANSITION AND UNINTERRUPTED RESEARCH AND
DEVELOPMENT OF COLLABORATION COMPOUNDS, AND IF APPLICABLE, CORRESPONDING
COLLABORATION BACK-UP COMPOUNDS, UNDER THIS SECTION 4.1.1.

(II)   IN ADDITION, THE JDC SHALL MEET AND DISCUSS HOW BEST TO TRANSITION THE
MANUFACTURE OF SUCH COLLABORATION COMPOUND AND, IF APPLICABLE, COLLABORATION
BACK-UP COMPOUNDS TO CELGENE (OR ITS DESIGNEE) AND SHALL ESTABLISH A SUPPLY
TRANSITION PLAN WITH RESPECT TO SUCH COLLABORATION COMPOUND AND COLLABORATION
BACK-UP COMPOUNDS.  ARRAY SHALL COOPERATE FULLY TO TRANSITION TO CELGENE ALL
MANUFACTURING ACTIVITIES RELATED TO THE COLLABORATION COMPOUND AND ITS
CORRESPONDING COLLABORATION BACK-UP COMPOUNDS AS REFLECTED IN THE DEVELOPMENT
PLAN AND SUPPLY TRANSITION PLAN APPROVED BY THE JDC.  CELGENE, AT ITS OPTION,
MAY PURCHASE FROM ARRAY ANY SURPLUS QUANTITIES OF GMP COLLABORATION COMPOUND AND
COLLABORATION BACK-UP COMPOUNDS [ * ].

(III)  ARRAY SHALL PROVIDE CELGENE WITH A PROPOSED BUDGET OUTLINING ANTICIPATED
COSTS INCURRED BY ARRAY, ITS AFFILIATES OR SUBCONTRACTORS IN PERFORMING THOSE
ADDITIONAL DEVELOPMENT ACTIVITIES (E.G., PRECLINICAL STUDIES AND CMC-RELATED
ACTIVITIES, INCLUDING FORMULATION AND PROCESS DEVELOPMENT, TOGETHER WITH
ASSOCIATED REGULATORY ACTIVITIES, AND IN EACH CASE RELATING

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

DIRECTLY TO THE DEVELOPMENT COMPOUND) NOT DIRECTLY ATTRIBUTABLE TO THE ONGOING
CONDUCT OF CLINICAL TRIALS THAT ARRAY PERFORMED IN ACCORDANCE WITH THE
DEVELOPMENT PLAN DURING THE LAST CLINICAL TRIAL OF A COLLABORATION COMPOUND OR
COLLABORATION BACK-UP COMPOUND CONDUCTED PRIOR TO CELGENE’S EXERCISE OF THE
CELGENE PRODUCT OPTION IN RESPECT OF SUCH COLLABORATION COMPOUND OR
COLLABORATION BACK-UP COMPOUND, WHICH BUDGET SHALL BE REVISED OR UPDATED FROM
TIME TO TIME, PROVIDED THAT ANY [ * ] ABOVE THE ORIGINAL BUDGET SUBMITTED BY
ARRAY SHALL [ * ].  ARRAY SHALL SUBMIT AN ITEMIZED INVOICE TO CELGENE OUTLINING
SUCH COSTS, AND, UPON REQUEST, ARRAY SHALL PROVIDE CELGENE WITH REASONABLY
DETAILED DOCUMENTATION THEREOF.  SUCH COSTS DESCRIBED IN THE PRECEDING SENTENCE
SHALL BE CALCULATED AS FOLLOWS: (A) FOR ARRAY FTES PERFORMING SUCH ACTIVITIES, [
* ]; (B) [ * ] COSTS PAID TO THIRD PARTIES FOR THE PERFORMANCE OF SUCH
ACTIVITIES [ * ]; AND (C) ARRAY’S [ * ] FOR OBTAINING OR MANUFACTURING
REASONABLE QUANTITIES OF THE DEVELOPMENT COMPOUND OR DEVELOPMENT BACK-UP
COMPOUND USED AS IN PERFORMING SUCH ACTIVITIES.  CELGENE SHALL PAY ANY INVOICE
ISSUED UNDER THIS SECTION 4.1.1(C)(III) [ * ], PROVIDED, HOWEVER, THAT CELGENE
SHALL NOT BE OBLIGATED TO PAY ANY AMOUNTS [ * ] SUBMITTED BY ARRAY IF CELGENE [
* ].  FOR THE AVOIDANCE OF DOUBT, CELGENE SHALL NOT BE OBLIGATED TO REIMBURSE
ARRAY FOR ANY SUCH COSTS WITH RESPECT TO ANY DEVELOPMENT COMPOUND OR DEVELOPMENT
BACK-UP COMPOUND ON WHICH CELGENE DOES NOT EXERCISE THE CELGENE PRODUCT OPTION.

4.1.2        TERMINATION.  IN THE EVENT THAT CELGENE FAILS TO EXERCISE ITS
CELGENE PRODUCT OPTION WITH RESPECT TO A PARTICULAR DEVELOPMENT COMPOUND, IN
ACCORDANCE WITH SECTION 4.1.1 ABOVE, THEN THE CELGENE PRODUCT OPTION, AND ALL OF
ARRAY’S OBLIGATIONS UNDER ARTICLE 3 AND THIS SECTION 4.1 WITH RESPECT TO SUCH
DEVELOPMENT COMPOUND AND CORRESPONDING DEVELOPMENT BACK-UP COMPOUNDS, AS WELL AS
WITH RESPECT TO ANY AND ALL COMPOUNDS FOR THE SAME TARGET, SHALL TERMINATE. 
ARRAY SHALL THEREAFTER BE FREE TO DEVELOP SUCH COMPOUNDS, DEVELOPMENT COMPOUNDS,
BACK-UP COMPOUNDS AND OTHER COMPOUNDS THAT MODULATE THE ACTIVITY OF SUCH TARGETS
OUTSIDE THE COLLABORATION, ALONE OR IN CONNECTION WITH THIRD PARTIES, IN EACH
CASE SUBJECT TO THE LICENSE GRANT SET FORTH IN SECTION 5.3.

4.2           DEVELOPMENT.  FOLLOWING THE EXERCISE OF THE CELGENE PRODUCT OPTION
WITH RESPECT TO A DEVELOPMENT COMPOUND AND CORRESPONDING DEVELOPMENT BACK-UP
COMPOUNDS, AND THE DESIGNATION OF SUCH COMPOUNDS AS A COLLABORATION COMPOUND AND
COLLABORATION BACK-UP

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

COMPOUNDS, RESPECTIVELY, ARRAY SHALL, AT CELGENE’S OPTION AND SOLE DISCRETION,
CLOSE OR INACTIVATE ITS IND(S) FOR SUCH COLLABORATION COMPOUND AND, IF
APPLICABLE, COLLABORATION BACK-UP COMPOUNDS, OR TRANSFER SUCH IND(S) TO CELGENE
AT CELGENE’S EXPENSE; AND ARRAY SHALL COMPLETE ALL RELEVANT CLINICAL TRIAL AND
IND ADMINISTRATIVE ACTIVITIES AND SHALL SHARE ALL CLINICAL TRIAL DATA WITH
CELGENE.  CELGENE SHALL BE RESPONSIBLE, AT ITS EXPENSE, FOR THE PREPARATION AND
FILING OF ALL SUBSEQUENT INDS WITH RESPECT TO ANY SUBSEQUENT CLINICAL
DEVELOPMENT FOR SUCH COLLABORATION COMPOUND OR COLLABORATION BACK-UP COMPOUNDS. 
ARRAY SHALL ALSO PROVIDE TO CELGENE IN SUPPORT OF ANY CELGENE IND FILINGS ALL
RELEVANT NON-CLINICAL DATA, INCLUDING CMC, PHARMACOLOGY AND TOXICOLOGY GENERATED
BY ARRAY WITH RESPECT TO SUCH COLLABORATION COMPOUND AND COLLABORATION BACK-UP
COMPOUNDS.

4.3           MANUFACTURING.  CELGENE SHALL HAVE THE RIGHT AND RESPONSIBILITY TO
ARRANGE FOR MANUFACTURING OF THE COLLABORATION COMPOUNDS, COLLABORATION BACK-UP
COMPOUNDS AND LICENSED PRODUCTS, INCLUDING BOTH CLINICAL MATERIALS AND
COMMERCIAL PRODUCT, CONSISTENT WITH CELGENE’S REASONABLE INTERNAL PRACTICES AND
INDUSTRY STANDARDS.  CELGENE SHALL MAKE REASONABLE COMMERCIAL EFFORTS TO ENSURE
ADEQUATE MANUFACTURING CAPACITY TO MEET FORECAST DEMAND FOR COLLABORATION
COMPOUNDS, COLLABORATION BACK-UP COMPOUNDS AND LICENSED PRODUCTS, AS APPLICABLE,
INCLUDING, IF DEEMED NECESSARY BY CELGENE, THE ESTABLISHMENT OF AN ALTERNATIVE
SUPPLY SOURCE.  CELGENE SHALL ALSO MAKE REASONABLE COMMERCIAL EFFORTS TO ENSURE
AN ADEQUATE CLINICAL AND COMMERCIAL SUPPLY OF SUCH COLLABORATION COMPOUNDS,
COLLABORATION BACK-UP COMPOUNDS AND LICENSED PRODUCTS, AS APPLICABLE.

ARTICLE V
LICENSE GRANTS; EXCLUSIVITY

5.1           RESEARCH LICENSES.  SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT:

5.1.1        TO ARRAY.  CELGENE HEREBY GRANTS TO ARRAY A NON-EXCLUSIVE WORLDWIDE
LICENSE TO MAKE AND USE AND OTHERWISE EXPLOIT SUBJECT MATTER WITHIN THE CELGENE
TECHNOLOGY AND CELGENE’S RIGHTS UNDER THE COLLABORATION TECHNOLOGY TO THE EXTENT
NECESSARY TO:  (A) COOPERATE WITH CELGENE IN CONNECTION WITH THE PERFORMANCE OF
THE DISCOVERY PROGRAM AND ANY DEVELOPMENT PLAN DURING THE

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

OPTION TERM; (B) TO CONDUCT THE ACTIVITIES UNDER THE DISCOVERY PROGRAM IN
ACCORDANCE WITH THE APPLICABLE DEVELOPMENT PLAN DURING THE OPTION TERM; AND (C)
TO CONDUCT ACTIVITIES ASSIGNED TO ARRAY IN ACCORDANCE WITH SECTION 4.1.1(C)
ABOVE FOR A COLLABORATION COMPOUND AND A CORRESPONDING COLLABORATION BACK-UP
COMPOUND(S).

5.1.2        TO CELGENE.  ARRAY HEREBY GRANTS TO CELGENE A NON-EXCLUSIVE
WORLDWIDE LICENSE TO MAKE AND USE AND OTHERWISE EXPLOIT SUBJECT MATTER WITHIN
THE ARRAY TECHNOLOGY AND ARRAY’S RIGHTS UNDER THE COLLABORATION TECHNOLOGY TO
THE EXTENT NECESSARY TO:  (A) COOPERATE WITH ARRAY IN CONNECTION WITH THE
PERFORMANCE OF THE DISCOVERY PROGRAM AND ANY DEVELOPMENT PLAN DURING THE OPTION
TERM; AND (B) CONDUCT THE ACTIVITIES ASSIGNED TO CELGENE UNDER THE DISCOVERY
PROGRAM IN ACCORDANCE WITH THE APPLICABLE DEVELOPMENT PLAN DURING THE OPTION
TERM.

5.1.3        NO RIGHT TO SUBLICENSE. THE LICENSES GRANTED UNDER THIS SECTION 5.1
SHALL NOT INCLUDE THE RIGHT TO GRANT OR AUTHORIZE SUBLICENSES; PROVIDED HOWEVER
THAT THE USE BY A PARTY OF SUBCONTRACTORS SHALL NOT BE CONSTRUED AS A
SUBLICENSE.

5.2           COMMERCIAL LICENSE TO CELGENE.

5.2.1        LICENSE GRANT.  SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, ON AND FROM THE DATE OF EXERCISE OF THE CELGENE PRODUCT OPTION WITH
RESPECT TO A PARTICULAR COLLABORATION COMPOUND, ARRAY HEREBY GRANTS CELGENE AN
EXCLUSIVE, WORLDWIDE LICENSE UNDER THE ARRAY TECHNOLOGY AND ARRAY’S INTEREST IN
ANY COLLABORATION TECHNOLOGY TO DEVELOP, MAKE, HAVE MADE, USE, SELL, OFFER FOR
SALE AND IMPORT SUCH COLLABORATION COMPOUND AND EACH CORRESPONDING COLLABORATION
BACK-UP COMPOUND, IN EACH CASE ALONE OR IN LICENSED PRODUCTS.  IN ADDITION,
SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, ON AND FROM THE DATE OF
EXERCISE OF THE CELGENE PRODUCT OPTION WITH RESPECT TO A PARTICULAR
COLLABORATION COMPOUND, ARRAY HEREBY GRANTS CELGENE A NON-EXCLUSIVE, WORLDWIDE
LICENSE, UNDER ANY PATENT CONTROLLED BY ARRAY THAT IS NECESSARY TO DEVELOP,
MAKE, USE, SELL, OFFER FOR SALE OR IMPORT SUCH COLLABORATION COMPOUND OR ITS
CORRESPONDING COLLABORATION BACK-UP COMPOUNDS, IN EACH CASE ALONE OR IN LICENSED
PRODUCTS, OTHER THAN COLLABORATION TECHNOLOGY AND ARRAY TECHNOLOGY, TO DEVELOP,
MAKE, USE, SELL, OFFER FOR SALE OR IMPORT SUCH COLLABORATION

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

COMPOUND AND EACH CORRESPONDING COLLABORATION BACK-UP COMPOUND, IN EACH CASE
ALONE OR IN LICENSED PRODUCTS.

5.2.2        SUBLICENSES.  THE LICENSES GRANTED UNDER THIS SECTION 5.2 SHALL
INCLUDE THE RIGHT TO GRANT AND AUTHORIZE SUBLICENSES:  (A) TO A THIRD PARTY;
AND/OR (B) TO ITS AFFILIATES SOLELY FOR SO LONG AS SUCH ENTITY REMAINS AN
AFFILIATE OF CELGENE; PROVIDED THAT CELGENE SHALL REMAIN RESPONSIBLE FOR THE
COMPLIANCE OF SUCH AFFILIATE WITH THE APPLICABLE TERMS OF THIS AGREEMENT.  EACH
SUBLICENSE GRANTED BY CELGENE SHALL BE CONSISTENT WITH ALL OF THE TERMS AND
CONDITIONS OF THIS AGREEMENT AND SUBORDINATE THERETO, AND CELGENE SHALL REMAIN
RESPONSIBLE TO ARRAY FOR THE COMPLIANCE OF EACH SUCH SUBLICENSEE WITH THE
FINANCIAL AND OTHER OBLIGATIONS DUE UNDER THIS AGREEMENT.  EXCEPT FOR
SUBLICENSES GRANTED UNDER SECTION 9.6.2, ANY SUBLICENSEE OF CELGENE MUST HAVE
REASONABLE CAPABILITIES TO SUPPORT THE FURTHER DEVELOPMENT AND COMMERCIALIZATION
OF SUCH DEVELOPMENT COMPOUND(S) AND/OR DEVELOPMENT BACK-UP COMPOUND(S), AS
APPLICABLE.  ANY SUCH SUBLICENSE TO A THIRD PARTY (AND ANY RIGHT OF A THIRD
PARTY TO OBTAIN SUCH A SUBLICENSE) SHALL BE GRANTED NO EARLIER THAN THE DATE THE
COMPOUND INCLUDED THEREIN HAS BEEN DESIGNATED AS A COLLABORATION COMPOUND OR
COLLABORATION BACK-UP COMPOUND, AS APPLICABLE, IN ACCORDANCE WITH SECTION 4.1.1
ABOVE.

5.2.3        ANALOGS AND DERIVATIVES.  SUBJECT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, ARRAY SHALL NOT MAKE, USE OR SELL ANALOGS OR DERIVATIVES OF
COLLABORATION COMPOUNDS OR COLLABORATION BACK-UP COMPOUNDS, PROVIDED, HOWEVER,
THAT THE FOREGOING SHALL NOT APPLY TO ANY COMPOUND THAT ARRAY HAS UNDER
DEVELOPMENT AS OF THE EFFECTIVE DATE, AS REASONABLY DOCUMENTED BY ARRAY. 
NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 5.2.3 SHALL MODIFY
ARRAY’S OBLIGATIONS UNDER SECTION 5.6.

5.3           COMMERCIAL LICENSE TO ARRAY.

5.3.1        LICENSE GRANT.  SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, CELGENE HEREBY GRANTS ARRAY AN EXCLUSIVE, WORLDWIDE, ROYALTY-FREE
LICENSE UNDER THE CELGENE TECHNOLOGY AND CELGENE’S INTEREST IN ANY COLLABORATION
TECHNOLOGY TO DEVELOP, MAKE, HAVE MADE, USE, SELL, OFFER FOR SALE AND IMPORT (I)
DEVELOPMENT COMPOUNDS AND DEVELOPMENT BACK-UP

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

COMPOUNDS FOR WHICH THE CELGENE PRODUCT OPTION HAS EXPIRED OR BEEN TERMINATED,
AND (II) ABANDONED PRODUCTS, IN EACH CASE ALONE OR AS INCORPORATED IN PRODUCTS.

5.3.2        SUBLICENSES.  THE LICENSES GRANTED UNDER THIS SECTION 5.3 SHALL
INCLUDE THE RIGHT TO GRANT AND AUTHORIZE SUBLICENSES:  (A) SUBJECT TO SECTION
5.3.4 BELOW, TO A THIRD PARTY; AND/OR (B) TO ITS AFFILIATES SOLELY FOR SO LONG
AS SUCH ENTITY REMAINS AN AFFILIATE OF ARRAY; PROVIDED THAT ARRAY SHALL REMAIN
RESPONSIBLE FOR THE COMPLIANCE OF SUCH AFFILIATE WITH THE APPLICABLE TERMS OF
THIS AGREEMENT.  EACH SUBLICENSE GRANTED BY ARRAY SHALL BE CONSISTENT WITH ALL
OF THE TERMS AND CONDITIONS OF THIS AGREEMENT AND SUBORDINATE THERETO, AND ARRAY
SHALL REMAIN RESPONSIBLE TO CELGENE FOR THE COMPLIANCE OF EACH SUCH SUBLICENSEE
WITH ALL OF THE OBLIGATIONS DUE UNDER THIS AGREEMENT.  ANY SUCH SUBLICENSE TO A
THIRD PARTY (AND ANY RIGHT OF A THIRD PARTY TO OBTAIN SUCH A SUBLICENSE) OF A
DEVELOPMENT COMPOUND, DEVELOPMENT BACK-UP COMPOUND OR ABANDONED PRODUCT SHALL BE
GRANTED NO EARLIER THAN THE DATE THE CELGENE PRODUCT OPTION HAS EXPIRED OR BEEN
TERMINATED FOR SUCH DEVELOPMENT COMPOUND AND DEVELOPMENT BACK-UP COMPOUND OR THE
DATE SUCH ABANDONED PRODUCT BECOMES SAME AS SET FORTH IN SECTION 12.3.2,
RESPECTIVELY.

5.3.3        ANALOGS AND DERIVATIVES.  SUBJECT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, CELGENE SHALL NOT MAKE, USE OR SELL ANALOGS OR DERIVATIVES OF
DEVELOPMENT COMPOUNDS OR DEVELOPMENT BACK-UP COMPOUNDS OR ABANDONED COMPOUNDS,
PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT APPLY TO ANY COMPOUND THAT
CELGENE HAS UNDER DEVELOPMENT AS OF THE EFFECTIVE DATE, AS REASONABLY DOCUMENTED
BY CELGENE.  NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 5.3.3 SHALL
MODIFY CELGENE’S OBLIGATIONS UNDER SECTION 5.6.

5.3.4        RIGHT OF FIRST OPPORTUNITY.  IF ARRAY INTENDS TO OFFER ANY THIRD
PARTY ANY SUBLICENSE UNDER SECTION 5.3.2 ABOVE, THEN CELGENE SHALL HAVE AN
OPPORTUNITY TO NEGOTIATE WITH ARRAY FOR A PERIOD OF SIXTY (60) DAYS TO ENTER
INTO A SUBLICENSE GRANTING CELGENE SUCH RIGHTS ON TERMS TO BE DISCUSSED AT THE
TIME.

5.4           NO OTHER RIGHTS.  EXCEPT FOR THE RIGHTS EXPRESSLY GRANTED UNDER
THIS AGREEMENT, NO RIGHT, TITLE OR INTEREST OF ANY NATURE WHATSOEVER IS GRANTED,
WHETHER BY IMPLICATION, ESTOPPEL OR

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

OTHERWISE, BY ANY PARTY TO THE OTHER PARTY.  ALL RIGHTS WITH RESPECT TO
INFORMATION, PATENT OR OTHER INTELLECTUAL PROPERTY RIGHTS THAT ARE NOT
SPECIFICALLY GRANTED HEREIN ARE RESERVED TO THE OWNER THEREOF.

5.5           NO IMPLIED LICENSES.  EACH PARTY ACKNOWLEDGES THAT THE LICENSES
GRANTED UNDER THIS ARTICLE 5 ARE LIMITED TO THE SCOPE EXPRESSLY GRANTED, AND ALL
OTHER RIGHTS TO PATENTS AND INFORMATION OF SUCH PARTY ARE EXPRESSLY RESERVED TO
THE PARTY OWNING SUCH PATENT AND INFORMATION.  WITHOUT LIMITING THE FOREGOING,
IT IS UNDERSTOOD THAT WHERE AN EXCLUSIVE LICENSE UNDER ANY PATENT AND/OR
INFORMATION IS GRANTED TO A PARTY UNDER THIS ARTICLE 5 FOR A PARTICULAR PURPOSE,
THE PARTY GRANTING SUCH LICENSE RETAINS ALL OF ITS RIGHTS TO SUCH PATENT AND
INFORMATION FOR ALL PURPOSES NOT EXPRESSLY LICENSED.

5.6           EXCLUSIVITY OF EFFORTS.

5.6.1        DURING THE EXCLUSIVITY PERIOD.  DURING THE APPLICABLE EXCLUSIVITY
PERIOD, EXCEPT PURSUANT TO THIS AGREEMENT, NEITHER PARTY SHALL [ * ], ALONE OR
WITH ANY AFFILIATE OR ANY THIRD PARTY, ANY [ * ].  IT IS UNDERSTOOD AND AGREED
THAT THE PROVISIONS OF THIS SECTION 5.6 SHALL NOT APPLY TO [ * ] FOR WHICH SUCH
PARTY HAS [ * ], AS REASONABLY DOCUMENTED BY SUCH PARTY; PROVIDED, HOWEVER, THAT
IN NO EVENT SHALL A PARTY OR ANY OF ITS AFFILIATES [ * ], INCLUDING, WITHOUT
LIMITATION, [ * ], OR ENABLE A THIRD PARTY TO DO ANY OF THE FOREGOING.

5.6.2        EXCLUSIVITY PERIOD.  AS USED IN THIS SECTION 5.6, “EXCLUSIVITY
PERIOD” SHALL MEAN, WITH RESPECT TO CELGENE, THE PERIOD COMMENCING ON THE
EFFECTIVE DATE AND EXPIRING, ON A TARGET-BY-TARGET BASIS, ON THE EARLIER OF: 
(A) [ * ]; (B) [ * ]; OR (C) [ * ].  WITH RESPECT TO ARRAY, THE EXCLUSIVITY
PERIOD SHALL COMMENCE ON THE EFFECTIVE DATE AND SHALL EXTEND, ON A
TARGET-BY-TARGET BASIS, (Y) [ * ]; AND (Z) [ * ]

5.6.3        CHANGE OF CONTROL; ACQUISITIONS.

(A)           NOTWITHSTANDING THE PROVISION OF SECTIONS 5.6.1 AND 5.6.2, IN THE
EVENT OF A CHANGE OF CONTROL (AS DEFINED BELOW) OF EITHER PARTY, THE PROVISIONS
OF SUCH SECTIONS SHALL NOT APPLY TO ANY RESEARCH OR DEVELOPMENT PROGRAM THAT A
PORTION OF THE SURVIVING ENTITY THAT WAS NOT ARRAY OR CELGENE (PRIOR TO THE
CHANGE OF CONTROL), AS THE CASE MAY BE, HAD ONGOING AS OF

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

IMMEDIATELY PRIOR TO THE DATE OF SUCH CHANGE OF CONTROL.  FOR PURPOSES OF THIS
SECTION 5.6, A “CHANGE OF CONTROL” SHALL MEAN THE MERGER, CONSOLIDATION, SALE OF
SUBSTANTIALLY ALL OF A PARTY’S ASSETS OR SIMILAR TRANSACTION OR SERIES OF
TRANSACTIONS, AS A RESULT OF WHICH SUCH PARTY’S SHAREHOLDERS BEFORE SUCH
TRANSACTION OR SERIES OF TRANSACTIONS OWN LESS THAN FIFTY PERCENT (50%) OF THE
TOTAL NUMBER OF VOTING SECURITIES OF THE SURVIVING ENTITY IMMEDIATELY AFTER SUCH
TRANSACTION OR SERIES OF TRANSACTIONS.  FOR CLARITY, IF AS A RESULT OF ANY SUCH
CHANGE OF CONTROL, EITHER PARTY EXISTS AS A WHOLLY OWNED SUBSIDIARY OF A PARENT,
THEN THE PROVISIONS OF THIS SECTION 5.6 SHALL CONTINUE TO APPLY TO SUCH PARTY AS
THE SURVIVING ENTITY, BUT NOT TO SUCH PARENT.  FURTHER, IT IS UNDERSTOOD THAT,
ON AND FROM THE DATE OF CLOSING OF ANY TRANSACTION(S) CONSTITUTING A CHANGE OF
CONTROL AS DESCRIBED ABOVE, EACH REFERENCE TO A “PARTY” IN SECTION 1.29 ABOVE
SHALL BE DEEMED ALSO TO INCLUDE ANY SURVIVING ENTITY INTO WHICH ARRAY OR
CELGENE, AS APPLICABLE, MERGED, WAS CONSOLIDATED OR WHICH ACQUIRED SUBSTANTIALLY
ALL OF ARRAY’S OR CELGENE’S ASSETS, AS APPLICABLE, AS A RESULT OF SUCH CHANGE OF
CONTROL.

(B)           IF, DURING THE EXCLUSIVITY PERIOD WITH RESPECT TO A PARTICULAR
TARGET, EITHER PARTY ACQUIRES A THIRD PARTY, WHETHER BY WAY OF MERGER, PURCHASE
OF SUBSTANTIALLY ALL OF A THIRD PARTY’S ASSETS OR IN A SIMILAR TRANSACTION OR
SERIES OF TRANSACTIONS, THAT * ], THEN (I) IF THE ACQUIRING PARTY IS CELGENE,
EITHER (1) CELGENE SHALL [ * ] AFTER THE DATE CELGENE [ * ], OR (2) IF CELGENE
DOES NOT [ * ] PURSUANT TO PARAGRAPH (I)(1) OF THIS SECTION 5.6.3(B), [ * ]; AND
(II) IF THE ACQUIRING PARTY IS ARRAY, ARRAY SHALL HAVE THE OPTION, IN ITS SOLE
DISCRETION, TO EITHER (1) [ * ] AFTER THE DATE ARRAY [ * ], OR (2) [ * ]. 
CELGENE SHALL NOTIFY ARRAY IN WRITING WITHIN NINETY (90) DAYS AFTER THE DATE
CELGENE OBTAINS CONTROL OVER THE ACQUIRED PROGRAM OF ITS ELECTION OF (I)(1) OR
(I)(2) ABOVE; AND ARRAY SHALL NOTIFY CELGENE IN WRITING WITHIN NINETY (90) DAYS
AFTER THE DATE ARRAY OBTAINS CONTROL OVER THE ACQUIRED PROGRAM OF ITS ELECTION
OF (II)(1) OR (II)(2) ABOVE.  IN THE EVENT CELGENE ELECTS (I)(2) ABOVE, THEN
PROVISIONS THEREOF SHALL BECOME EFFECTIVE ON THE DATE ARRAY RECEIVES SUCH
NOTICE, AND IN THE EVENT ARRAY ELECTS (II)(2) ABOVE, THEN THE PROVISIONS THEREOF
SHALL BECOME EFFECTIVE ON THE DATE CELGENE RECEIVES SUCH NOTICE.  FOR THE
PURPOSES OF THIS SECTION 5.6.3(B), “[ * ]” SHALL MEAN, [ * ].

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

ARTICLE VI
PAYMENTS

6.1           INITIAL PAYMENT.  IN PARTIAL CONSIDERATION OF ARRAY’S PERFORMANCE
OF ITS OBLIGATIONS UNDER THE DISCOVERY PROGRAM AND THE RIGHTS AND LICENSES
GRANTED BY ARRAY TO CELGENE IN THIS AGREEMENT, CELGENE SHALL PAY TO ARRAY AN
INITIAL FEE OF FORTY MILLION DOLLARS ($40,000,000) WITHIN TEN (10) DAYS
FOLLOWING THE EFFECTIVE DATE IN ACCORDANCE WITH THE PAYMENT PROVISIONS OF
ARTICLE 7.  THE INITIAL FEE SET FORTH IN THIS SECTION SHALL NOT BE REFUNDABLE OR
CREDITABLE AGAINST ANY OTHER AMOUNTS DUE ARRAY UNDER THIS AGREEMENT.

6.2           RESEARCH MILESTONES.  CELGENE SHALL PAY TO ARRAY THE AMOUNTS SET
FORTH BELOW UPON THE ACHIEVEMENT OF EACH OF THE CORRESPONDING MILESTONES WITH
RESPECT TO EACH TARGET (EACH, A “DISCOVERY MILESTONE”):

 

Discovery Milestone

 

Payment Amount

1.[ * ]

 

$[ * ]

2.[ * ]

 

$[ * ]

6.2.1        CELGENE SHALL HAVE THE OPTION, ON A TARGET-BY-TARGET BASIS, TO
ELECT NOT TO PAY A DISCOVERY MILESTONE.  TO EXERCISE SUCH OPTION, CELGENE SHALL
SO NOTIFY ARRAY IN WRITING DURING THE PERIOD SUCH DISCOVERY MILESTONE PAYMENT IS
DUE.  IF CELGENE EXERCISES SUCH OPTION, THEN (I) CELGENE SHALL HAVE NO FURTHER
RIGHTS (INCLUDING THE CELGENE PRODUCT OPTION), OTHER THAN CELGENE’S RIGHTS IN
ANY APPLICABLE CELGENE TECHNOLOGY (SUBJECT TO THE LICENSE GRANTED TO ARRAY IN
SECTION 5.3), AND ARRAY SHALL HAVE NO FURTHER OBLIGATION, WITH RESPECT TO ANY
DEVELOPMENT COMPOUND AND CORRESPONDING DEVELOPMENT BACK-UP COMPOUNDS THAT
MODULATES THE TARGET MODULATED BY THE DEVELOPMENT COMPOUND FOR WHICH CELGENE
ELECTED NOT TO PAY THE DISCOVERY MILESTONE, AND (II) SUCH TARGET SHALL CEASE TO
BE A TARGET UNDER THIS AGREEMENT, AND THE PARTIES’ OBLIGATIONS WITH RESPECT TO
SUCH TARGET UNDER SECTION 5.6 SHALL IMMEDIATELY EXPIRE.  NOTWITHSTANDING THE
FOREGOING, IT IS

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

UNDERSTOOD THAT CELGENE SHALL BE OBLIGATED TO PAY EACH DISCOVERY MILESTONE ONLY
ONCE UPON THE FIRST ACHIEVEMENT OF THE APPLICABLE DISCOVERY MILESTONE WITH
RESPECT TO EACH TARGET (I.E., IF A PARTICULAR DISCOVERY MILESTONE IS ACHIEVED BY
A DEVELOPMENT BACK-UP COMPOUND WITH RESPECT TO A PARTICULAR TARGET, CELGENE
SHALL NOT ALSO BE OBLIGATED TO PAY SUCH DISCOVERY MILESTONE UPON THE ACHIEVEMENT
OF SUCH DISCOVERY MILESTONE BY THE CORRESPONDING DEVELOPMENT COMPOUND OR THE
OTHER DEVELOPMENT BACK-UP COMPOUND WITH RESPECT TO SUCH TARGET).

6.2.2        FOR PURPOSES OF THIS SECTION 6.2, “CLEARANCE” OF AN IND SHALL BE
DEEMED TO HAVE OCCURRED ON THE EARLIER OF (I) THIRTY (30) DAYS AFTER FILING, OR
(II) THE DATE ON WHICH THE FDA INDICATES THAT CLINICAL TRIALS UNDER SUCH IND MAY
COMMENCE AND THERE ARE NO CLINICAL HOLD ISSUES OUTSTANDING.

6.3           DEVELOPMENT MILESTONES.

6.3.1        DEVELOPMENT MILESTONE PAYMENTS.  CELGENE SHALL PAY TO ARRAY THE
AMOUNTS SET FORTH BELOW FOLLOWING THE ACHIEVEMENT OF EACH OF THE CORRESPONDING
MILESTONES WITH RESPECT TO EACH DEVELOPMENT COMPOUND FOR WHICH THE CELGENE
PRODUCT OPTION HAS NOT EXPIRED OR BEEN TERMINATED OR CORRESPONDING COLLABORATION
COMPOUND OR COLLABORATION BACK-UP COMPOUND, REGARDLESS OF WHETHER THE
DEVELOPMENT, PROMOTION OR MARKETING OF SUCH DEVELOPMENT COMPOUND OR
CORRESPONDING COLLABORATION COMPOUNDED OR COLLABORATION BACK-UP COMPOUND IS
DISCONTINUED AT ANY TIME AFTER THE ACHIEVEMENT OF SUCH MILESTONE (EACH, A
“DEVELOPMENT MILESTONE”):

 

Development Milestone Event

 

Payment Amount

1.[ * ]

 

$[ * ]

2.[ * ]

 

$[ * ]

3.[ * ]

 

$[ * ]

4.[ * ]

 

$[ * ]

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

5.[ * ]

 

$[ * ]

6.[ * ]

 

$[ * ]

7.[ * ]

 

$[ * ]

8.[ * ]

 

$[ * ]

9.[ * ]

 

$[ * ]

FOR THE PURPOSES OF THIS SECTION 6.3.1, “INITIATION” OF A CLINICAL TRIAL SHALL
MEAN THE DATE OF THE FIRST VISIT WITH THE FIRST PATIENT PURSUANT TO THE PROTOCOL
FOR SUCH CLINICAL TRIAL.

6.3.2        SECOND INDICATION.  IF, WITH RESPECT TO A PARTICULAR COLLABORATION
COMPOUND OR COLLABORATION BACK-UP COMPOUND, CELGENE, ITSELF OR THROUGH ITS
AFFILIATES OR SUBLICENSEE, ACHIEVES DEVELOPMENT MILESTONES [ * ] FOR A SECOND
THERAPEUTIC INDICATION HAVING A SEPARATE HISTOLOGY (I.E., MULTIPLE MYELOMA AND
BREAST CANCER, NOT FIRST-LINE TO SECOND-LINE MULTIPLE MYELOMA THERAPIES),
CELGENE SHALL MAKE AN ADDITIONAL PAYMENT TO ARRAY OF [ * ] OF THE CORRESPONDING
MILESTONE PAYMENTS SET FORTH IN SECTION 6.3.1 ABOVE.  FOR THE AVOIDANCE OF
DOUBT, CELGENE SHALL NOT BE OBLIGATED TO MAKE ANY MILESTONE PAYMENTS BEYOND THE
SECOND INDICATION.

6.3.3        SKIPPED DEVELOPMENT MILESTONES.  IF DEVELOPMENT MILESTONE 4, 5 OR 6
IS ACHIEVED WITH RESPECT TO A PARTICULAR LICENSED PRODUCT BEFORE DEVELOPMENT
MILESTONE 1, 2 OR 3 IS ACHIEVED (EACH A “PRIOR” DEVELOPMENT MILESTONE), THEN
EACH SUCH PRIOR DEVELOPMENT MILESTONES SHALL BE DEEMED ACHIEVED UPON ACHIEVEMENT
OF DEVELOPMENT MILESTONE 4, 5 OR 6, AS APPLICABLE, AND BECOME PAYABLE (IF NOT
PREVIOUSLY PAID) IN ACCORDANCE WITH THIS SECTION 6.3; PROVIDED THAT CELGENE
SHALL ONLY PAY THE APPLICABLE DEVELOPMENT MILESTONE 2 OR 3, BUT NOT BOTH.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

6.3.4        CERTAIN TERMS.  FOR PURPOSES OF THIS SECTION 6.3, AND SECTION 6.6
BELOW, ALL DOSAGES, DOSAGE FORMS AND ALL FORMULATIONS OF PRODUCTS CONTAINING A
PARTICULAR COLLABORATION COMPOUND OR COLLABORATION BACK-UP COMPOUND SHALL BE
DEEMED A SINGLE LICENSED PRODUCT, AND CELGENE SHALL NOT BE OBLIGATED TO PAY ANY
ADDITIONAL DEVELOPMENT MILESTONES THEREFOR, EXCEPT AS SET FORTH IN SECTION 6.3.2
ABOVE.  NOTWITHSTANDING ANYTHING SET FORTH IN THIS SECTION 6.3 TO THE CONTRARY,
CELGENE SHALL NOT BE OBLIGATED TO PAY ANY DEVELOPMENT MILESTONE WITH RESPECT TO
A COLLABORATION BACK-UP COMPOUND THAT CELGENE HAS SUBSTITUTED FOR THE
CORRESPONDING COLLABORATION COMPOUND FOR WHICH CELGENE HAS PREVIOUSLY PAID SUCH
DEVELOPMENT MILESTONE FOR SUCH CORRESPONDING COLLABORATION COMPOUND IF CELGENE
HAS TERMINATED ALL DEVELOPMENT ACTIVITIES WITH RESPECT TO SUCH COLLABORATION
COMPOUND.

6.4           MILESTONE PAYMENT TIMING.  CELGENE AND ARRAY EACH AGREE TO
PROMPTLY NOTIFY THE OTHER OF ITS ACHIEVEMENT OF ANY MILESTONE EVENT SET FORTH IN
SECTIONS 6.2 AND 6.3 ABOVE AND THE PAYMENT OF EACH CORRESPONDING MILESTONE
PAYMENT SET FORTH IN THE SECTION 6.2 OR 6.3, AS APPLICABLE, SHALL BE DUE AND
PAYABLE BY CELGENE TO ARRAY AS FOLLOWS:  (A) FOR MILESTONES EVENTS SET OUT IN
SECTION 6.3 ABOVE ACHIEVED BY CELGENE, ITS AFFILIATE OR SUBLICENSEE, CELGENE
SHALL NOTIFY ARRAY IN WRITING [ * ] AFTER THE ACHIEVEMENT OF EACH SUCH MILESTONE
BY CELGENE, ITS AFFILIATE OR SUBLICENSEE, AND EACH SUCH NOTICE SHALL BE
ACCOMPANIED BY THE APPROPRIATE MILESTONE PAYMENT; AND (B) FOR MILESTONE EVENTS
SET OUT IN SECTION 6.2 OR SECTION 6.3 ACHIEVED BY ARRAY, THE APPROPRIATE
MILESTONE PAYMENT SHALL BE DUE [ * ] AFTER RECEIPT BY CELGENE OF NOTIFICATION
FROM ARRAY THEREOF, SUBJECT TO CELGENE’S VERIFICATION DURING SUCH [ * ] PERIOD
THAT THE APPLICABLE MILESTONE EVENT OCCURRED.  FOR THE AVOIDANCE OF DOUBT, THE
MILESTONE PAYMENTS SET FORTH IN SECTIONS 6.2 AND 6.3 ABOVE SHALL NOT BE
REFUNDABLE AND SHALL NOT BE CREDITABLE AGAINST FUTURE MILESTONE PAYMENTS,
ROYALTIES OR OTHER PAYMENTS TO ARRAY UNDER THIS AGREEMENT, AND NOTIFICATION OF
ACHIEVEMENT OF DEVELOPMENT MILESTONES 7, 8 AND 9 AND THE PAYMENTS THEREFOR SHALL
BE DUE WITHIN [ * ] OF THE END OF THE CALENDAR YEAR IN WHICH THEY WERE ACHIEVED.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

6.5           ROYALTIES.

6.5.1        ROYALTY PAYMENT.  CELGENE SHALL PAY ARRAY A ROYALTY [ * ] OF NET
SALES OF LICENSED PRODUCTS WHEN THE LICENSED PRODUCT(S) ARE (A) COVERED BY A
VALID CLAIM WITHIN AN ARRAY PATENT OR COLLABORATION PATENT IN THE COUNTRY IN
WHICH SUCH PRODUCT IS SOLD, OR (B) SUBJECT TO MARKETING EXCLUSIVITY IN THE
COUNTRY IN WHICH SUCH LICENSED PRODUCT IS SOLD AT THE TIME OF SUCH SALE;
PROVIDED THAT, CELGENE SHALL PAY ARRAY A REDUCED ROYALTY [ * ] OF NET SALES OF
LICENSED PRODUCTS IN A COUNTRY WHERE BOTH (Y) NO MARKETING EXCLUSIVITY APPLIES
TO A LICENSED PRODUCT AND (Z) THE SALE OF SUCH LICENSED PRODUCT WOULD NOT
INFRINGE A VALID CLAIM WITHIN AN ARRAY PATENT OR COLLABORATION PATENT; AND
PROVIDED FURTHER, THAT CELGENE SHALL PAY ARRAY A [ * ] ROYALTY [ * ] OF NET
SALES OF LICENSED PRODUCTS IF IN SUCH COUNTRY THERE ARE OTHER PRODUCTS ON THE
MARKET THAT CONTAIN, AS ONE OF THEIR ACTIVE INGREDIENTS, THE SAME COLLABORATION
COMPOUND OR COLLABORATION BACK-UP COMPOUND THAT IS CONTAINED IN SUCH LICENSED
PRODUCT.

6.5.2        ROYALTY TERM.  THE ROYALTIES DUE PURSUANT TO THIS SECTION 6.5 SHALL
BE PAYABLE ON A COUNTRY-BY-COUNTRY AND LICENSED PRODUCT-BY-LICENSED PRODUCT
BASIS UNTIL THE LATER OF:  (A) THE DATE OF EXPIRATION OF THE LAST-TO-EXPIRE
VALID CLAIM OF AN ARRAY PATENT OR COLLABORATION PATENT COVERING SUCH LICENSED
PRODUCT IN THE COUNTRY IN WHICH SUCH LICENSED PRODUCT IS MANUFACTURED OR SOLD AT
THE TIME OF SUCH MANUFACTURE OR SALE; OR (B) [ * ] AFTER THE FIRST COMMERCIAL
SALE OF SUCH LICENSED PRODUCT IN SUCH COUNTRY.

6.5.3        ONE ROYALTY.  ONLY ONE ROYALTY SHALL BE PAID TO ARRAY WITH RESPECT
TO A PARTICULAR LICENSED PRODUCT SUBJECT TO ROYALTIES UNDER THIS SECTION 6.5,
WITHOUT REGARD TO WHETHER MORE THAN ONE ISSUED AND UNEXPIRED CLAIM OF A PATENT
WITHIN THE ARRAY PATENTS OR COLLABORATION PATENTS IS APPLICABLE TO SUCH LICENSED
PRODUCT.  IN NO EVENT SHALL MORE THAN ONE ROYALTY BE DUE HEREUNDER WITH RESPECT
TO ANY LICENSED PRODUCT UNIT.

6.5.4        THIRD PARTY OBLIGATIONS.  IN THE EVENT THAT (I) IT BECOMES
NECESSARY FOR CELGENE, ITS AFFILIATES OR SUBLICENSEES TO OBTAIN A LICENSE UNDER
A PATENT OF A THIRD PARTY, WHERE SUCH [ * ], AND SUCH PATENT WOULD BE INFRINGED
BY THE DEVELOPMENT OR SALE OF SUCH LICENSED PRODUCT, AND (II) CELGENE, ITS
AFFILIATES OR SUBLICENSEES MUST PAY SUCH THIRD PARTY FOR SUCH LICENSE A ROYALTY
ON LICENSED PRODUCT IN A PARTICULAR COUNTRY, THEN CELGENE MAY [ * ] OF THE
ROYALTIES ACTUALLY BEING PAID

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

TO SUCH THIRD PARTY AGAINST ROYALTIES DUE ARRAY ON NET SALES OF SUCH LICENSED
PRODUCT IN SUCH COUNTRY; PROVIDED, HOWEVER, THAT THE ROYALTIES PAYABLE TO ARRAY
IN ANY GIVEN CALENDAR YEAR SHALL NOT BE [ * ] NOR SHALL THE ROYALTIES PAYABLE TO
ARRAY ON NET SALES OF LICENSED PRODUCTS BE [ * ], AND PROVIDED FURTHER THAT ANY
THIRD PARTY ROYALTIES PROPERLY DEDUCTIBLE UNDER THIS SECTION 6.5.4 THAT ARE NOT
CREDITED AGAINST ROYALTIES PAID TO ARRAY IN THE CALENDAR YEAR IN WHICH THEY WERE
ACCRUED SHALL BE CARRIED FORWARD AND CREDITED AGAINST ROYALTIES PAYABLE TO ARRAY
IN THE SUBSEQUENT CALENDAR YEAR(S) AND/OR CREDITED AGAINST MILESTONES DIRECTED
TO THE APPLICABLE COLLABORATION COMPOUND OR COLLABORATION BACK-UP COMPOUND
PAYABLE BY CELGENE IN THE SUBSEQUENT CALENDAR YEAR(S), AT CELGENE’S OPTION,
UNTIL SUCH ROYALTY CREDITS ARE COMPLETELY EXPENDED.  CELGENE SHALL NOT BE
ENTITLED TO CONTINUE TO TAKE SUCH CREDIT IN ANY COUNTRY IN THE EVENT THE PATENTS
OF SUCH THIRD PARTY FOR WHICH SUCH OBLIGATIONS HAVE BEEN INCURRED ARE HELD
INVALID OR UNENFORCEABLE IN SUCH COUNTRY IN A FINAL DECISION OF A COURT OR OTHER
GOVERNMENT AGENCY OF COMPETENT JURISDICTION FROM WHICH NO APPEAL MAY BE OR HAS
BEEN TAKEN AFTER THE DATE OF SUCH HOLDING.

6.5.5        TIMING OF ROYALTY PAYMENTS AND REPORTS.  ROYALTY PAYMENTS UNDER
THIS AGREEMENT SHALL BE MADE TO ARRAY QUARTERLY [ * ] FOLLOWING THE END OF EACH
CALENDAR QUARTER FOR WHICH SUCH ROYALTIES ARE DUE.  TOGETHER WITH ANY SUCH
PAYMENT, CELGENE SHALL DELIVER TO ARRAY A REPORT SETTING OUT IN REASONABLE
DETAIL THE INFORMATION NECESSARY TO CALCULATE THE ROYALTY PAYMENTS DUE UNDER
THIS SECTION 6.5 FOR SUCH CALENDAR QUARTER, INCLUDING THE FOLLOWING INFORMATION,
SPECIFIED IN THE AGGREGATE AND ON A LICENSED PRODUCT-BY-LICENSED PRODUCT AND
COUNTRY-BY-COUNTRY BASIS:  (A) TOTAL GROSS INVOICED AMOUNT FROM SALES OF
LICENSED PRODUCTS BY CELGENE, ITS AFFILIATES AND SUBLICENSEES; (B) ALL RELEVANT
DEDUCTIONS FROM GROSS INVOICED AMOUNTS TO CALCULATE NET SALES; (C) NET SALES;
(D) ANY OTHER DEDUCTIONS OR CREDITS PERMITTED IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT; AND (E) ROYALTIES PAYABLE.

6.6           CONFLICTS OF INTEREST.  CELGENE AGREES TO ESTABLISH LIST PRICES
AND DISCOUNTS FOR EACH LICENSED PRODUCT SOLELY IN THE INTEREST OF THE COMMERCIAL
SUCCESS OF SUCH LICENSED PRODUCT IN A PARTICULAR COUNTRY, TAKING INTO ACCOUNT
THE COMPETITIVE ENVIRONMENT, PRODUCT PROFILE AND COMMERCIAL POTENTIAL OF THE
LICENSED PRODUCT, AND NOT IN THE INTERESTS OF CELGENE’S OTHER PRODUCTS AND
SERVICES.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

However, the foregoing shall not be construed to dictate to Celgene any resale
prices for Licensed Products.

ARTICLE VII
PAYMENTS; BOOKS AND RECORDS

7.1           PAYMENT METHOD.  UNLESS OTHERWISE EXPRESSLY STATED IN THIS
AGREEMENT, ALL PAYMENTS UNDER THIS AGREEMENT TO ARRAY SHALL BE MADE BY BANK WIRE
TRANSFER IN IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED BY ARRAY.  ANY
PAYMENTS OR PORTIONS THEREOF PAYABLE UNDER THIS AGREEMENT THAT ARE NOT PAID WHEN
DUE SHALL BEAR INTEREST AT A RATE EQUAL TO:  (A) THE PRIME RATE AS REPORTED BY
CITIBANK N.A. ON THE DATE SUCH PAYMENT IS DUE, PLUS TWO PERCENT (2%); OR (B) IF
LOWER, THE MAXIMUM RATE PERMITTED BY LAW; CALCULATED ON THE NUMBER OF DAYS SUCH
PAYMENT IS DELINQUENT, COMPOUNDED ANNUALLY AND COMPUTED ON THE BASIS OF A THREE
HUNDRED SIXTY FIVE (365) DAY YEAR.  THIS SECTION 7.1 SHALL IN NO WAY LIMIT ANY
OTHER REMEDIES AVAILABLE TO THE PARTIES.

7.2           FOREIGN EXCHANGE.  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) FOR THE LAST THIRTY (30) BUSINESS DAYS OF THE CALENDAR
QUARTER TO WHICH SUCH PAYMENT PERTAINS.

7.3           TAXES.  IF LAWS OR REGULATIONS REQUIRE THAT TAXES BE WITHHELD FROM
ANY AMOUNTS PAYABLE HEREUNDER, CELGENE WILL:  (A) DEDUCT THOSE TAXES FROM THE
OTHERWISE REMITTABLE PAYMENT; (B) TIMELY PAY THE TAXES TO THE PROPER TAXING
AUTHORITY; AND (C) NOTIFY ARRAY AND PROMPTLY FURNISH ARRAY WITH COPIES OF ANY
DOCUMENTATION EVIDENCING SUCH WITHHOLDING.

7.4           RECORDS.  CELGENE SHALL KEEP, AND SHALL CAUSE ITS AFFILIATES AND
SUBLICENSEES TO KEEP, COMPLETE, TRUE AND ACCURATE BOOKS OF ACCOUNTS AND RECORDS,
IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRACTICES AND SUFFICIENT TO
DETERMINE AND ESTABLISH THE AMOUNTS PAYABLE TO ARRAY UNDER

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

THIS AGREEMENT, AND COMPLIANCE WITH THE OTHER TERMS AND CONDITIONS OF THIS
AGREEMENT.  SUCH BOOKS AND RECORDS SHALL BE KEPT AT THE PRINCIPAL PLACE OF
BUSINESS FOR A PARTY FOR AT LEAST THREE (3) YEARS FOLLOWING THE END OF THE
CALENDAR QUARTER TO WHICH THEY PERTAIN AND SHALL BE MADE AVAILABLE FOR
INSPECTION THROUGHOUT SUCH THREE (3) YEAR PERIOD BY AN INDEPENDENT THIRD PARTY
AUDITOR SELECTED BY OR UNDER AUTHORITY OF ARRAY FOR SUCH PURPOSES IN ACCORDANCE
WITH SECTION 7.5 BELOW.

7.5           INSPECTION OF RECORDS.  UPON NO LESS THAN THIRTY (30) DAYS’
WRITTEN NOTICE BY ARRAY TO CELGENE, CELGENE SHALL PERMIT, AND SHALL REQUIRE ITS
AFFILIATES AND SUBLICENSEES TO PERMIT, AN INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT (SUBJECT TO REASONABLE OBLIGATIONS OF CONFIDENTIALITY TO CELGENE AND
ITS AFFILIATES AND SUBLICENSEES, AS APPLICABLE), APPOINTED BY ARRAY AND
REASONABLY ACCEPTABLE TO CELGENE AND ITS AFFILIATES AND SUBLICENSEES, AS
APPLICABLE, TO INSPECT THE BOOKS AND RECORDS OF SUCH PARTY DESCRIBED IN
SECTION 7.4 ABOVE FOR THE SOLE PURPOSE OF VERIFYING THE ACCURACY OF THE ROYALTY
PAYMENTS REQUIRED TO BE MADE HEREUNDER; PROVIDED THAT SUCH INSPECTION SHALL
OCCUR DURING NORMAL BUSINESS HOURS AND NOT MORE OFTEN THAN ONCE PER CALENDAR
YEAR, UNLESS A MATERIAL ERROR IS DISCOVERED IN SUCH INSPECTION IN WHICH CASE
ARRAY SHALL HAVE THE RIGHT TO CONDUCT AN ADDITIONAL AUDIT IN SUCH PERIOD.  THE
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT SHALL REPORT TO ARRAY ONLY WHETHER THERE
HAS BEEN A ROYALTY UNDERPAYMENT OR OVERPAYMENT AND, IF SO, THE AMOUNT THEREOF
AND INFORMATION RELATED TO THE DETERMINATION OF SUCH AMOUNT.  ANY INSPECTION
CONDUCTED UNDER THIS SECTION 7.6 SHALL BE AT THE EXPENSE OF ARRAY, UNLESS SUCH
INSPECTION ESTABLISHES ANY UNDERPAYMENT OF ANY AMOUNT DUE TO ARRAY HEREUNDER BY
AT LEAST FIVE PERCENT (5%) FOR ANY ANNUAL PERIOD, IN WHICH CASE THE FULL COSTS
OF SUCH INSPECTION SHALL BE BORNE BY CELGENE.  ANY UNDERPAYMENT SHALL BE PAID BY
CELGENE TO ARRAY WITHIN FIFTEEN (15) BUSINESS DAYS WITH INTEREST ON THE
UNDERPAYMENT AT THE RATE SPECIFIED IN SECTION 7.1 ABOVE FROM THE DATE SUCH
PAYMENT WAS ORIGINALLY DUE.  ANY OVERPAYMENT SHALL BE PAID BY ARRAY TO CELGENE
WITHIN FIFTEEN (15) BUSINESS DAYS OR CREDITED AGAINST FUTURE ROYALTIES DUE, AT
ARRAY’S SOLE DISCRETION.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

ARTICLE VIII
COMMERCIALIZATION

8.1           COMMERCIALIZATION OF LICENSED PRODUCTS.

8.1.1        CELGENE RESPONSIBILITY.  EXCEPT AS PROVIDED BELOW, CELGENE SHALL
HAVE SOLE RESPONSIBILITY FOR THE DEVELOPMENT, COMMERCIALIZATION, DISTRIBUTION,
MARKETING AND PROMOTION OF LICENSED PRODUCTS.

8.1.2        DILIGENCE.

(A)   GENERAL.  FOR EACH COLLABORATION COMPOUND AND EACH COLLABORATION BACK-UP
COMPOUND CELGENE HAS ELECTED TO DEVELOP AND COMMERCIALIZE, CELGENE SHALL USE
DILIGENT EFFORTS TO DEVELOP AND ACHIEVE MARKETING APPROVAL FOR, AND LAUNCH
LICENSED PRODUCTS INCORPORATING A COLLABORATION COMPOUND, OR, IF APPLICABLE, A
COLLABORATION BACK-UP COMPOUND, AS SOON AS PRACTICABLE IN THE UNITED STATES AND
THE EUROPEAN UNION, AND THEREAFTER TO MARKET, PROMOTE AND SELL SUCH LICENSED
PRODUCTS AND TO MAXIMIZE NET SALES OF SUCH LICENSED PRODUCT IN SUCH MARKETS. 
WITHOUT LIMITING THE FOREGOING, CELGENE SHALL DEVELOP AND COMMERCIALIZE LICENSED
PRODUCTS SOLELY IN THE INTEREST OF THE COMMERCIAL SUCCESS OF SUCH LICENSED
PRODUCTS IN A PARTICULAR COUNTRY, TAKING INTO ACCOUNT THE COMPETITIVE
ENVIRONMENT, PRODUCT PROFILE AND COMMERCIAL POTENTIAL OF SUCH LICENSED PRODUCTS,
AND NOT IN THE INTERESTS OF CELGENE’S OTHER PRODUCTS AND SERVICES.

(B)   REPORTS.  UNTIL FIRST COMMERCIAL INTRODUCTION OF EACH LICENSED PRODUCT BY
OR ON BEHALF OF CELGENE HEREUNDER, CELGENE SHALL KEEP ARRAY APPRISED OF THE
STATUS OF THE PRE-CLINICAL, CLINICAL AND COMMERCIAL DEVELOPMENT OF SUCH LICENSED
PRODUCT (AND THE COLLABORATION COMPOUND OR COLLABORATION BACK-UP COMPOUND FROM
WHICH SUCH LICENSED PRODUCT IS BEING DEVELOPED) BY PROVIDING ARRAY WITH
QUARTERLY UPDATES BY PHONE, VIDEO-CONFERENCE OR EMAIL AND A SEMI-ANNUAL WRITTEN
REPORTS CONTAINING A REASONABLY DETAILED SUMMARY OF SUCH ACTIVITIES WITH RESPECT
TO EACH APPLICABLE LICENSED PRODUCT (AND THE COLLABORATION COMPOUND OR
COLLABORATION BACK-UP COMPOUND FROM WHICH SUCH LICENSED PRODUCT IS BEING
DEVELOPED) DURING THE PRIOR YEAR, TOGETHER WITH ALL MATERIAL CORRESPONDENCE WITH
THE FDA OR SIMILAR REGULATORY AGENCIES CONCERNING SUCH

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

LICENSED PRODUCT (OR THE COLLABORATION COMPOUND OR COLLABORATION BACK-UP
COMPOUND FROM WHICH SUCH LICENSED PRODUCT IS BEING DEVELOPED).  THE SEMI-ANNUAL
WRITTEN REPORTS DESCRIBED IN THIS SECTION 8.1.2(B) SHALL CONTAIN SUFFICIENT
INFORMATION TO ALLOW ARRAY TO MONITOR CELGENE’S COMPLIANCE WITH THIS AGREEMENT,
INCLUDING CELGENE’S OBLIGATIONS WITH RESPECT TO ACCOMPLISHMENT OF THE
DEVELOPMENT MILESTONES SET FORTH IN SECTION 6.3.  ALL REPORTS AND INFORMATION
PROVIDED UNDER THIS SECTION 8.1.2(B) SHALL BE DEEMED CONFIDENTIAL INFORMATION OF
CELGENE.

(C)   MEETINGS.  TWICE EACH CALENDAR YEAR, ON DATES AND TIMES MUTUALLY AGREED BY
THE PARTIES, ARRAY MAY, AT ITS OPTION, SEND AT LEAST ONE (1) ARRAY
REPRESENTATIVE, AT ARRAY’S COST, TO MEET WITH THE CELGENE PRODUCT TEAM(S)
RESPONSIBLE FOR THE DEVELOPMENT AND REGULATORY ACTIVITIES FOR EACH COLLABORATION
COMPOUND AND ITS CORRESPONDING COLLABORATION BACK-UP COMPOUNDS AND LICENSED
PRODUCTS AND TO DISCUSS THE CONDUCT AND PROGRESS OF, AND PLANS FOR, THE
DEVELOPMENT AND REGULATORY AFFAIRS WITH RESPECT TO SUCH COLLABORATION COMPOUND
AND ITS CORRESPONDING COLLABORATION BACK-UP COMPOUNDS AND LICENSED PRODUCTS.  IN
ADDITION, AND WITHOUT LIMITING CELGENE’S REPORTING OBLIGATIONS UNDER ANY OTHER
PROVISION OF THIS AGREEMENT, CELGENE, AT ITS SOLE DISCRETION, SHALL PROVIDE
ARRAY WITH SUCH INFORMATION AS ARRAY MAY REASONABLY REQUEST FROM TIME TO TIME TO
PERTAINING TO EACH COLLABORATION COMPOUND, ITS CORRESPONDING COLLABORATION
BACK-UP COMPOUND AND LICENSED PRODUCTS, WHICH, FOR ILLUSTRATIVE PURPOSES, MAY
INCLUDE, AT CELGENE’S SOLE DISCRETION, THE FOLLOWING CATEGORIES:  (I) CLINICAL
STUDIES; (II) SUMMARIES OF CLINICAL STUDY RESULTS; (III) SCHEDULES OF MEETINGS
PLANNED WITH REGULATORY AGENCIES; (IV) SUMMARIES OF KEY CMC ISSUES, INCLUDING
MANUFACTURING AND FORMULATION; (V) PRIOR NOTICE OF THE INITIATION OF CLINICAL
TRIALS; AND (VI) PRIOR NOTICE OF PUBLIC COMMUNICATION OF CLINICAL RESULTS.

8.2           CO-PROMOTION OPTION OF ARRAY.

8.2.1        EXERCISE OF CO-PROMOTION OPTION.  SUBJECT TO [ * ], ARRAY SHALL
HAVE AN OPTION TO CO-PROMOTE EACH LICENSED PRODUCT IN THE UNITED STATES (THE
“CO-PROMOTION OPTION”) IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN
THIS SECTION 8.2.  TO EXERCISE ITS CO-PROMOTION OPTION WITH RESPECT TO A
PARTICULAR LICENSED PRODUCT, ARRAY SHALL NOTIFY CELGENE IN WRITING NO EARLIER
THAN THE DATE OF FIRST FILING OF A MMA FOR SUCH LICENSED PRODUCT IN THE UNITED
STATES AND NO LATER

 

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

THAN ONE HUNDRED EIGHTY (180) DAYS AFTER SUCH DATE (EACH SUCH LICENSED PRODUCT
FOR WHICH ARRAY EXERCISES THE CO-PROMOTION OPTION BEING REFERRED AS A
“CO-PROMOTED PRODUCT”).  TO FACILITATE SUCH ELECTION, CELGENE SHALL NOTIFY ARRAY
IN WRITING WITHIN NO LESS THAN FORTY-FIVE (45) DAYS PRIOR TO THE ANTICIPATED
FILING OF SUCH MAA AND SHALL CONFIRM SUCH NOTICE WITHIN TEN (10) DAYS AFTER
ACTUALLY FILING SUCH MAA.  IT IS UNDERSTOOD THAT ARRAY’S ELECTION NOT TO
EXERCISE ITS CO-PROMOTION OPTION, OR FAILURE TO EXERCISE ITS CO-PROMOTION OPTION
WITHIN PERIOD REFERENCED ABOVE, FOR A PARTICULAR LICENSED PRODUCT SHALL NOT IN
ANY MANNER AFFECT ARRAY’S CO-PROMOTION OPTION WITH RESPECT TO ANY OTHER LICENSED
PRODUCT.  AS USED IN THIS AGREEMENT, “CO-PROMOTE” SHALL MEAN TO PROMOTE JOINTLY
A LICENSED PRODUCT THROUGH CELGENE AND ARRAY’S RESPECTIVE SALES FORCES UNDER A
SINGLE BRAND AND TRADEMARK IN A GIVEN COUNTRY; AND “DETAILS” SHALL MEAN
FACE-TO-FACE SALES PRESENTATIONS MADE TO PHYSICIANS, NURSES, PHARMACISTS AND
OTHER INDIVIDUALS WHO PROVIDE HEALTHCARE SERVICES TO PATIENTS, IN THEIR CAPACITY
AS SUCH.

8.2.2        CO-PROMOTION PLAN.  IF CELGENE HAS NOT [ * ] AND ARRAY HAS
EXERCISED ITS CO-PROMOTION OPTION IN ACCORDANCE WITH SECTION 8.2.1 ABOVE,
CELGENE SHALL PREPARE, IN CONSULTATION WITH ARRAY AND THE JCC, THE OPERATING
PLAN FOR CO-PROMOTION OF EACH CO-PROMOTED PRODUCT (EACH, A “CO-PROMOTION PLAN”),
WHICH SHALL BE REVIEWED AND APPROVED BY THE JCC AT LEAST TWELVE (12) MONTHS
PRIOR TO THE ANTICIPATED FIRST COMMERCIAL SALE OF THE APPLICABLE CO-PROMOTED
PRODUCT IN THE UNITED STATES.  EACH CO-PROMOTION PLAN SHALL SET OUT IN
REASONABLE DETAIL:  (A) OVERALL STRATEGIES WITH RESPECT TO PROMOTING AND
MARKETING THE APPLICABLE CO-PROMOTED PRODUCT IN THE UNITED STATES; (B) THE
ACTIVITIES TO BE CONDUCTED AND THE RESPONSIBILITIES OF EACH PARTY IN CONNECTION
WITH THE CO-PROMOTION OF THE APPLICABLE CO-PROMOTED PRODUCT; AND (C) A FAIR AND
REASONABLE ALLOCATION BETWEEN CELGENE AND ARRAY OF ACTIVITIES UNDER SUCH CO
PROMOTION PLAN, INCLUDING FOR EXAMPLE, A REASONABLE ALLOCATION OF PROMOTION
RESPONSIBILITIES WITHIN MAJOR METROPOLITAN AREAS, INDICATIONS AND CHANNELS AND
OF ACCESS TO KEY OPINION LEADERS AND THE LIKE IN ACCORDANCE WITH SUCH
ALLOCATION.  WITHOUT LIMITING THE FOREGOING, WITH RESPECT TO ANY CO-PROMOTED
PRODUCT WITHIN THE FIELD OF ONCOLOGY, THE APPLICABLE CO-PROMOTION PLAN SHALL
INCLUDE A FAIR AND REASONABLE ALLOCATION TO ARRAY OF PROMOTION RESPONSIBILITIES
IN THE MAJOR CANCER CENTERS IN EACH OF THE UNITED STATES AND TO ONCOLOGISTS AND
OTHER SPECIALIST PHYSICIANS IN THE UNITED STATES.

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

8.2.3        CHANGES TO THE CO-PROMOTION PLAN.  AFTER THE SUBMISSION OF THE
INITIAL CO-PROMOTION PLAN FOR EACH CO-PROMOTED PRODUCT, THE JCC SHALL REVIEW THE
CO-PROMOTION PLAN FOR SUCH CO-PROMOTED PRODUCT ON AN ONGOING BASIS AND IN NO
EVENT LESS FREQUENTLY THAN ONCE EACH CALENDAR HALF-YEAR.

8.2.4        SCOPE OF CO-PROMOTION.  AT THE TIME ARRAY EXERCISES ITS
CO-PROMOTION OPTION FOR A PARTICULAR LICENSED PRODUCT, ARRAY SHALL NOTIFY
CELGENE OF THE TOTAL NUMBER OF SALES REPRESENTATIVES THAT ARRAY DESIRES TO
DEPLOY ANNUALLY FOR THE APPLICABLE CO-PROMOTED PRODUCT IN THE UNITED STATES. 
EXCEPT AS PROVIDED BELOW, ARRAY WILL DEDICATE THE NUMBER OF SALES
REPRESENTATIVES TO THE CO-PROMOTION OF THE APPLICABLE CO-PROMOTED PRODUCT THAT
WOULD BE REQUIRED TO PERFORM APPROXIMATELY NO LESS THAN TWENTY-FIVE PERCENT
(25%) AND NO MORE THAN FIFTY PERCENT (50%) OF THE TOTAL DETAILS MADE TO
PHYSICIANS AND OTHER HEALTH CARE PROVIDERS AND CUSTOMERS TO BE CONDUCTED FOR
SUCH CO-PROMOTED PRODUCT IN THE UNITED STATES IN ANY CALENDAR YEAR, UNLESS
OTHERWISE AGREED BY THE JCC.  ARRAY SHALL HAVE THE RIGHT TO PHASE-IN SUCH
DETAILING EFFORTS OVER THE INITIAL THREE (3) YEARS OF CO-PROMOTING A CO-PROMOTED
PRODUCT; PROVIDED THAT ARRAY MUST COMMIT TO PROVIDE AT LEAST FIFTY PERCENT (50%)
OF ITS MAXIMUM DESIGNATED COMMITMENT IN THE FIRST, AND SEVENTY-FIVE
PERCENT (75%) OF SUCH COMMITMENT IN THE SECOND, CALENDAR YEAR OF SUCH
CO-PROMOTED PRODUCTS.  SUBJECT TO THE LIMITATIONS SET FORTH IN THIS SECTION
8.2.4, THE NUMBER OF SUCH SALES REPRESENTATIVES THAT ARRAY DEPLOYS IN ANY
CALENDAR YEAR MAY BE INCREASED OR DECREASED BY ARRAY, SUBJECT TO PRIOR APPROVAL
BY THE JCC.  IN ADDITION, ON AN ANNUAL BASIS IN ACCORDANCE WITH THE TIMETABLE
ESTABLISHED BY THE JCC FOR REVIEW AND UPDATE OF THE RELEVANT CO-PROMOTION PLAN
(BUT IN NO CASE LESS THAN NINETY (90) DAYS OR MORE THAN ONE HUNDRED EIGHTY (180)
DAYS PRIOR TO THE START OF EACH CALENDAR YEAR), THE JCC SHALL HAVE THE RIGHT TO
ADJUST THE TOTAL NUMBER OF SALES REPRESENTATIVES THAT ARRAY MAY DEPLOY WITH
RESPECT TO EACH CO-PROMOTED PRODUCT IN THE UNITED STATES.

8.2.5        CO-PROMOTION COORDINATION.  THE JCC SHALL BE RESPONSIBLE FOR
COORDINATING THE CO-PROMOTION ACTIVITIES UNDER THIS SECTION 8.2 WITH RESPECT TO
EACH CO-PROMOTED PRODUCT, AND SHALL DEVELOP THE STRATEGIES AND PROGRAMS TO
CARRY-OUT CO-PROMOTION ACTIVITIES IN AN OPTIMAL FASHION, INCLUDING THE
ASSIGNMENT OF CO-PROMOTION ACTIVITIES AND DETAILS IN ACCORDANCE WITH THE
CO-PROMOTION PLAN.

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

8.2.6        SALES REPRESENTATIVES.

(A)   QUALIFICATIONS.  ARRAY SHALL EMPLOY PROFESSIONAL AND TRAINED SALES
REPRESENTATIVES TO CO-PROMOTE EACH CO-PROMOTED PRODUCT IN THE UNITED STATES, AND
SUCH SALES REPRESENTATIVES SHALL MEET STANDARDS OF COMPETENCE AND
PROFESSIONALISM AS IS COMMON IN THE PHARMACEUTICAL INDUSTRY.  WITH THE PRIOR
WRITTEN CONSENT OF THE JCC, ARRAY MAY SUB-CONTRACT ITS CO-PROMOTION OBLIGATIONS
TO A THIRD PARTY; PROVIDED THAT CELGENE SHALL HAVE THE RIGHT TO APPROVE THE
HIRING OF SALES REPRESENTATIVES PERFORMING DETAILS FOR A CO-PROMOTED PRODUCT
HEREUNDER AND TO CAUSE THE REMOVAL OF SUCH SALES REPRESENTATIVES FROM SUCH
DETAILING ACTIVITIES; PROVIDED THAT IN EXERCISING SUCH RIGHTS OF APPROVAL AND
REMOVAL, CELGENE SHALL APPLY THE SAME STANDARDS AS CELGENE APPLIES WITH RESPECT
TO ITS OWN SALES REPRESENTATIVES.

(B)   TRAINING.  CELGENE SHALL PROVIDE, AT ITS EXPENSE, THE SAME SALES TRAINING
ON EACH CO-PROMOTED PRODUCT FOR ARRAY SALES REPRESENTATIVES WHO WILL BE
PROMOTING SUCH CO-PROMOTED PRODUCT AS THE TRAINING ON THE PRODUCT CELGENE
PROVIDES TO ITS OWN SALES REPRESENTATIVES WHO PROMOTE SUCH CO-PROMOTED PRODUCT
IN THE UNITED STATES.  ARRAY SHALL BE RESPONSIBLE FOR ALL OF ITS COSTS.

(C)   PROMOTIONAL MATERIALS.  WITH RESPECT TO THE CO-PROMOTION OF EACH
CO-PROMOTED PRODUCT, ARRAY SALES REPRESENTATIVES WILL UTILIZE ONLY THE
PROMOTIONAL, ADVERTISING, EDUCATIONAL AND COMMUNICATION MATERIALS PROVIDED TO
THEM BY CELGENE, FREE OF CHARGE, AND WILL NOT UTILIZE ANY OTHER PROMOTIONAL,
ADVERTISING, EDUCATIONAL OR COMMUNICATION MATERIALS OR OTHER MATERIALS RELATING
TO OR REFERRING TO THE CO-PROMOTED PRODUCT.  ARRAY SALES REPRESENTATIVES WILL
CONDUCT ONLY THOSE PROMOTIONAL AND OTHER SALES ACTIVITIES RELATING TO THE
CO-PROMOTED PRODUCT THAT HAVE BEEN APPROVED IN ADVANCE IN ACCORDANCE WITH THE
CO-PROMOTION PLAN.  ARRAY SALES REPRESENTATIVES SHALL NOT MODIFY, CHANGE OR
ALTER THE PROMOTIONAL, ADVERTISING, EDUCATIONAL AND COMMUNICATION MATERIALS
PROVIDED BY CELGENE IN ANY WAY WHATSOEVER, WITHOUT THE EXPRESS PRIOR WRITTEN
CONSENT OF CELGENE.  ARRAY SALES REPRESENTATIVES SHALL USE SUCH MATERIALS SOLELY
FOR THE PURPOSE OF PERFORMING THEIR OBLIGATIONS UNDER THIS AGREEMENT.  ARRAY
SHALL ENSURE THAT ITS AND ITS SALES REPRESENTATIVES, INCLUDING

 

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

ANY PERMITTED SUBCONTRACTED SALES REPRESENTATIVES, PERFORM IN COMPLIANCE WITH
ALL APPLICABLE LAWS, RULES AND REGULATIONS.

(D)   TIMING.  ARRAY AND CELGENE SHALL COOPERATE TO HAVE THE ARRAY SALES
REPRESENTATIVES HIRED AND TRAINED PRIOR TO THE COMMENCEMENT OF THEIR
CO-PROMOTION ACTIVITIES WITH RESPECT TO A PARTICULAR CO-PROMOTED PRODUCT.

8.2.7        REIMBURSEMENTS.

(A)   IN ADDITION TO THE PAYMENTS DUE TO ARRAY UNDER ARTICLE 6 ABOVE, CELGENE
SHALL COMPENSATE ARRAY FOR PERFORMING PROMOTIONAL ACTIVITIES WITH RESPECT TO
EACH CO-PROMOTED PRODUCT BY PAYING TO ARRAY:  (I) A PER DETAIL FEE (AS DEFINED
BELOW) BASED ON THE NUMBER OF DETAILS CONDUCTED BY ARRAY DURING EACH CALENDAR
QUARTER UNDER THE CO-PROMOTION PLAN; AND (II) A COMMISSION, CALCULATED IN
ACCORDANCE WITH SECTION 8.2.7(B) BELOW (“COMMISSION”), ON ALL SALES OF SUCH
CO-PROMOTED PRODUCT BOOKED BY CELGENE AS A RESULT OF ARRAY’S CO-PROMOTION
ACTIVITIES WITH RESPECT TO SUCH CO-PROMOTED PRODUCT.

(B)   PROMPTLY FOLLOWING ARRAY’S EXERCISE OF ITS CO-PROMOTION OPTION IN
ACCORDANCE WITH SECTION 8.2.1, THE PARTIES SHALL, ACTING IN GOOD FAITH,
REASONABLY AGREE UPON: (I) THE FEE TO BE PAID TO ARRAY FOR EACH DETAIL PERFORMED
BY ARRAY FOR THE APPLICABLE CO-PROMOTED PRODUCT IN ACCORDANCE WITH THE
CO-PROMOTION PLAN THEN IN EFFECT (“PER DETAIL FEE”) AND SUCH PER DETAIL FEE
SHALL EQUAL ARRAY’S AVERAGE COST OF PERFORMING SUCH DETAILS OVER A QUARTERLY
PERIOD, ON A FULLY ALLOCATED BASIS, PROVIDED THAT THE PER DETAIL FEE SHALL NOT
EXCEED CELGENE’S AVERAGE COST PER DETAIL FOR SUCH CO-PROMOTED PRODUCT, ON A
FULLY ALLOCATED BASIS, FOR THE SAME PERIOD; AND (II) THE COMMISSION, AND THE
BASIS FOR CALCULATION THEREOF.  IN THE EVENT THAT THE PARTIES ARE UNABLE TO
AGREE UPON EITHER THE PER DETAIL FEE OR COMMISSION FOR SUCH CO-PROMOTED PRODUCT,
SUCH MATTER SHALL BE SUBMITTED TO AN ARBITRATOR FOR RESOLUTION IN ACCORDANCE
WITH SECTION 2.3 ABOVE AS TO AN AMOUNT THAT WOULD CONSTITUTE A REASONABLE PER
DETAIL FEE OR COMMISSION, AS APPLICABLE.

(C)   WITHIN FORTY-FIVE (45) DAYS AFTER THE END OF EACH CALENDAR QUARTER
FOLLOWING ARRAY’S EXERCISE OF ITS CO-PROMOTION OPTION FOR A PARTICULAR
CO-PROMOTED PRODUCT

 

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

PURSUANT TO SECTION 8.2.1: (I) ARRAY SHALL SUBMIT TO CELGENE A REPORT
SUMMARIZING THE NUMBER OF DETAILS PERFORMED BY ARRAY DURING SUCH CALENDAR
QUARTER AND THE TOTAL AMOUNT OF PER DETAIL FEES PAYABLE TO ARRAY FOR SUCH
CALENDAR QUARTER; AND (II) CELGENE SHALL PROVIDE TO ARRAY CELGENE’S GOOD FAITH
DETERMINATION OF THE NUMBER OF SALES OF SUCH CO-PROMOTED PRODUCT BOOKED AS A
RESULT OF ARRAY’S CO-PROMOTION ACTIVITIES WITH RESPECT TO SUCH CO-PROMOTED
PRODUCT DURING SUCH CALENDAR QUARTER AND THE COMMISSION PAYABLE TO ARRAY ON SUCH
SALES.  PAYMENTS DUE UNDER THIS SECTION 8.2.7 SHALL BE MADE QUARTERLY BY CELGENE
TO ARRAY WITHIN THIRTY (30) DAYS AFTER RECEIPT OF THE APPLICABLE REPORT FROM
ARRAY PURSUANT TO THIS SECTION 8.2.7(B).

8.3           [ * ]; TERMINATION OF CO-PROMOTION.

8.3.1        CELGENE [BUY-OUT OPTION].  CELGENE SHALL HAVE [ * ], ON A LICENSED
PRODUCT-BY-LICENSED PRODUCT BASIS, IN ACCORDANCE WITH THE TERMS OF THIS SECTION
8.3.1.  AT ANY TIME AFTER CELGENE’S EXERCISE OF THE CELGENE PRODUCT OPTION WITH
RESPECT TO A LICENSED PRODUCT [ * ], CELGENE MAY NOTIFY ARRAY IN WRITING THAT IT
WISHES TO [ * ] IN ACCORDANCE WITH THE PAYMENT PROVISIONS OF ARTICLE 7.  UPON
ARRAY’S RECEIPT OF SUCH NOTICE [ * ].  FOR THE AVOIDANCE OF DOUBT, IN NO EVENT
SHALL CELGENE BE OBLIGATED TO [ * ].

8.3.2        ARRAY TERMINATION RIGHT.  ARRAY SHALL HAVE THE RIGHT TO TERMINATE
ITS CO-PROMOTION OF ANY CO-PROMOTED PRODUCT, AND ITS OBLIGATIONS UNDER THIS
ARTICLE 8 WITH RESPECT TO SUCH CO-PROMOTED PRODUCT, ON A LICENSED
PRODUCT-BY-LICENSED PRODUCT BASIS, UPON ONE HUNDRED EIGHTY (180) DAYS’ PRIOR
WRITTEN NOTICE TO CELGENE.

8.3.3        CELGENE TERMINATION RIGHT.  CELGENE SHALL HAVE THE RIGHT TO
TERMINATE ARRAY’S CO-PROMOTION OF ANY CO-PROMOTED PRODUCT, ON A LICENSED
PRODUCT-BY-LICENSED PRODUCT BASIS, UPON A MATERIAL BREACH BY ARRAY OF ITS OTHER
OBLIGATIONS UNDER THIS ARTICLE 8 WITH RESPECT TO THE LICENSED PRODUCT, WHICH
BREACH IS NOT CURED BY ARRAY WITHIN SIXTY (60) DAYS AFTER RECEIPT OF A NOTICE OF
SUCH BREACH FROM CELGENE.  CELGENE SHALL NOT HAVE THE RIGHT TO TERMINATE THIS
AGREEMENT DUE TO AN UNCURED MATERIAL BREACH BY ARRAY UNDER THIS ARTICLE 8;
HOWEVER, CELGENE SHALL OTHERWISE HAVE THE

 

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amended.

 

RIGHT TO PURSUE ANY AND ALL OTHER REMEDIES AVAILABLE TO IT AT LAW AND IN EQUITY
WITH RESPECT TO ANY SUCH BREACH.

8.3.4        CONSEQUENCES OF TERMINATION.  UPON TERMINATION OF ARRAY’S RIGHT TO
CO-PROMOTE ANY CO-PROMOTED PRODUCT, ARRAY SHALL HAVE NO FURTHER RIGHT TO
CO-PROMOTE SUCH CO-PROMOTED PRODUCT.  IT IS UNDERSTOOD THAT TERMINATION OF
ARRAY’S CO-PROMOTION RIGHTS WITH RESPECT TO A PARTICULAR CO-PROMOTED PRODUCT
SHALL NOT AFFECT ARRAY’S CO-PROMOTION RIGHTS WITH RESPECT TO ANY OTHER LICENSED
PRODUCT UNDER THIS ARTICLE 8.

8.4           ARRAY LOGO.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, FOR SUCH
TIME AS ARRAY IS CO-PROMOTING A LICENSED PRODUCT, ARRAY’S NAME AND LOGO
(COLLECTIVELY, THE “ARRAY MARKS”) SHALL APPEAR, IN REASONABLE SIZE AND
PROMINENCE, ON ALL LABELS AND PACKAGE INSERTS AND MARKETING MATERIALS FOR EACH
CO-PROMOTED PRODUCT SOLD IN THE UNITED STATES IDENTIFYING ARRAY AS A
CO-PROMOTER.  ACCORDINGLY, ARRAY HEREBY GRANTS TO CELGENE A NON-EXCLUSIVE,
ROYALTY-FREE LICENSE TO USE THE ARRAY MARKS SOLELY IN CONNECTION WITH THE
MARKETING, PROMOTION AND SALE OF THE CO-PROMOTED PRODUCT(S) IN THE UNITED
STATES.  CELGENE SHALL ENSURE THAT USE OF THE ARRAY MARKS IS CONSISTENT WITH
HIGH LEVELS OF BUSINESS PROFESSIONALISM AND PRODUCT QUALITY AND REASONABLE
WRITTEN GUIDELINES PROVIDED FROM TIME TO TIME BY ARRAY TO CELGENE.  ALL
OWNERSHIP AND GOODWILL ARISING OUT OF THE USE OF THE ARRAY MARKS SHALL VEST IN
AND INURE SOLELY TO THE BENEFIT OF ARRAY.  NOTWITHSTANDING ANYTHING HEREIN TO
THE CONTRARY, UPON ARRAY’S WRITTEN REQUEST, CELGENE, ITS AFFILIATES AND
SUBLICENSEES AGREE TO CEASE THE USE OF THE ARRAY MARKS; PROVIDED:  (A) THAT
CELGENE, ITS AFFILIATES AND SUBLICENSEES MAY CONTINUE TO USE ANY LABELS, PACKAGE
INSERTS AND MARKETING MATERIALS IN EXISTENCE AS OF THE RECEIPT OF SUCH NOTICE;
AND (B) IN SUCH CASE, CELGENE’S OBLIGATION TO INCLUDE THE ARRAY MARKS ON LABELS,
PACKAGE INSERTS AND MARKETING MATERIALS FOR CO-PROMOTED PRODUCT(S) IN THE UNITED
STATES SHALL TERMINATE.

 

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

ARTICLE IX
OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

9.1           MATERIALS.

 

9.1.1        OWNERSHIP.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, AS
BETWEEN THE PARTIES, ALL RIGHT, TITLE AND INTEREST IN AND TO ALL TRANSFERRED
MATERIALS, INCLUDING ANY COMPOUNDS AND CHEMICAL SCAFFOLD INFORMATION PROVIDED BY
CELGENE TO ARRAY HEREUNDER, (AND ANY INTELLECTUAL PROPERTY RIGHTS RELATING
THERETO) SHALL REMAIN IN THE PARTY TRANSFERRING SUCH MATERIALS TO THE OTHER
PARTY.

9.1.2        USE; TRANSFER.  EACH PARTY AGREES THAT, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, IT SHALL USE THE OTHER PARTY’S MATERIALS ONLY IN
CONNECTION WITH ACTIVITIES CONDUCTED PURSUANT TO THIS AGREEMENT OR IN ORDER TO
FURTHER THE PURPOSES OF THIS AGREEMENT, AND SHALL NOT TRANSFER SUCH MATERIALS OF
THE OTHER PARTY TO ANY THIRD PARTY WITHOUT SUCH OTHER PARTY’S PRIOR WRITTEN
CONSENT.

9.2           OWNERSHIP OF INVENTIONS.

9.2.1        GENERALLY.  EACH PARTY SHALL RETAIN ALL OF ITS RIGHT, TITLE AND
INTEREST IN AND TO ITS TECHNOLOGY (I.E., WITH RESPECT TO ARRAY, THE ARRAY
TECHNOLOGY; AND WITH RESPECT TO CELGENE, CELGENE COMPOUNDS AND THE CELGENE
TECHNOLOGY), SUBJECT ONLY TO ITS OBLIGATIONS UNDER THIS AGREEMENT.  AS BETWEEN
THE PARTIES, TITLE TO ALL INVENTIONS AND OTHER INTELLECTUAL PROPERTY MADE: 
(A) SOLELY BY ARRAY PERSONNEL IN CONNECTION WITH THIS AGREEMENT SHALL BE OWNED
BY ARRAY; (B) SOLELY BY CELGENE PERSONNEL IN CONNECTION WITH THIS AGREEMENT
SHALL BE OWNED BY CELGENE; AND (C) JOINTLY BY PERSONNEL OF ARRAY AND CELGENE IN
CONNECTION WITH THIS AGREEMENT SHALL BE JOINTLY OWNED BY ARRAY AND CELGENE. 
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, IT IS UNDERSTOOD THAT NEITHER
PARTY SHALL HAVE ANY OBLIGATION TO ACCOUNT TO THE OTHER FOR PROFITS, OR TO
OBTAIN ANY CONSENT OF THE OTHER PARTY TO PRACTICE, ENFORCE, LICENSE, ASSIGN OR
OTHERWISE EXPLOIT JOINTLY-OWNED INVENTIONS OR INTELLECTUAL PROPERTY, BY REASON
OF JOINT OWNERSHIP THEREOF, AND EACH PARTY HEREBY WAIVES ANY RIGHT IT MAY HAVE
UNDER THE LAWS OF ANY JURISDICTION TO REQUIRE ANY SUCH CONSENT OR ACCOUNTING;
SUBJECT, IN ALL CASES, TO THE LICENSES AND RIGHTS GRANTED BY THE PARTIES IN THIS
AGREEMENT.

9.2.2        CELGENE COMPOUNDS AND COMPOUND IMPROVEMENTS.  NOTWITHSTANDING
SECTION 9.2.1 ABOVE, AS BETWEEN THE PARTIES, (I) TITLE TO ALL ANALOGS HAVING THE
SAME CORE STRUCTURE OF ANY CELGENE COMPOUND (I.E., HAVING THE EXACT ATOM
ARRANGEMENT THAT MAKES UP THE ORIGINAL CORE

 

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amended.

 

STRUCTURE OF SUCH CELGENE COMPOUND MINUS ANY SUBSTITUENT R GROUPS) MADE BY OR
UNDER THE AUTHORITY OF A PARTY, WHETHER ALONE OR JOINTLY WITH OTHERS, IN
CONNECTION WITH THE ACTIVITIES CONDUCTED PURSUANT TO THIS AGREEMENT, SHALL BE
OWNED BY, AND ARE HEREBY ASSIGNED TO, CELGENE; AND (II) TITLE TO ALL OTHER
COMPOUND IMPROVEMENTS MADE BY OR UNDER THE AUTHORITY OF A PARTY, WHETHER ALONE
OR JOINTLY WITH OTHERS, IN CONNECTION WITH THE ACTIVITIES CONDUCTED PURSUANT TO
THIS AGREEMENT, SHALL BE OWNED BY, AND ARE HEREBY ASSIGNED TO, ARRAY.  AS USED
HEREIN, “COMPOUND IMPROVEMENT” MEANS ANY INVENTION OR OTHER SUBJECT MATTER
(INCLUDING INFORMATION) COMPRISING THE COMPOSITION OF MATTER OF ANY COMPOUND,
DEVELOPMENT COMPOUND, COLLABORATION COMPOUND, BACK-UP COMPOUND, DEVELOPMENT
BACK-UP COMPOUND, COLLABORATION BACK-UP COMPOUND, ABANDONED COMPOUND OR LICENSED
PRODUCT, OR METHOD OF USE OR MANUFACTURE THEREOF (TOGETHER WITH ALL INTELLECTUAL
PROPERTY RIGHTS THEREIN, INCLUDING PATENTS).  UPON THE OWNING PARTY’S REQUEST,
THE ASSIGNING PARTY SHALL TAKE, OR CAUSE TO BE TAKEN, ANY AND ALL ACTIONS
NECESSARY TO CONFIRM AND PERFECT THE OWNING PARTY’S RIGHTS IN AND TO CELGENE
COMPOUNDS OR COMPOUND IMPROVEMENTS, AS APPLICABLE.

9.3           INVENTORSHIP.  THE DETERMINATION OF INVENTORSHIP FOR COLLABORATION
TECHNOLOGY SHALL BE MADE IN ACCORDANCE WITH APPLICABLE LAWS RELATING TO
INVENTORSHIP SET FORTH IN THE PATENT LAWS OF THE UNITED STATES.  ALL SUCH
DETERMINATIONS SHALL BE DOCUMENTED TO ENSURE THAT ANY DIVISIONAL OR CONTINUATION
PATENT APPLICATIONS REFLECT APPROPRIATE INVENTORSHIP AND THAT INVENTIONS AND
PATENT RIGHTS ARE ASSIGNED TO THE APPROPRIATE PARTY.  IF EITHER PARTY IDENTIFIES
JOINTLY-OWNED COLLABORATION TECHNOLOGY, THE PARTIES’ PATENT COUNSEL SHALL
DETERMINE INVENTORSHIP AND, IN THE EVENT OF A DISAGREEMENT, THE PARTIES SHALL
REFER SUCH DETERMINATION TO MUTUALLY ACCEPTABLE INDEPENDENT OUTSIDE COUNSEL.

9.4           ASSIGNMENT; COOPERATION.  EACH PARTY SHALL REQUIRE ALL OF ITS
EMPLOYEES AND ANY THIRD PARTIES WORKING PURSUANT TO THIS AGREEMENT ON ITS
BEHALF, TO ASSIGN TO SUCH PARTY ANY COLLABORATION TECHNOLOGY DISCOVERED,
CONCEIVED OR REDUCED TO PRACTICE BY SUCH EMPLOYEE OR THIRD PARTY, AND TO
COOPERATE WITH SUCH PARTY IN CONNECTION WITH OBTAINING PATENT PROTECTION
THEREFOR.  THE PARTIES AGREE TO REASONABLY COOPERATE WITH EACH OTHER TO
EFFECTUATE OWNERSHIP OF COLLABORATION TECHNOLOGY AS SET FORTH HEREIN, INCLUDING,
BUT NOT LIMITED TO, BY EXECUTING AND RECORDING DOCUMENTS.

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

9.5           PATENT PROSECUTION.  THE PROSECUTING PARTY (AS DEFINED BELOW) OF
PATENTS COVERING INVENTIONS WITHIN THE COLLABORATION TECHNOLOGY SHALL USE
DILIGENT EFFORTS TO OBTAIN A REASONABLE SCOPE OF PROTECTION FOR SUCH
INVENTIONS.  EACH PARTY WILL PROVIDE COPIES OF ALL PATENT PROSECUTION
CORRESPONDENCE TO THE OTHER WITH SUFFICIENT TIME TO ALLOW FOR REVIEW AND COMMENT
BY THE OTHER PARTY, AND, TO THE EXTENT POSSIBLE, AT LEAST SIXTY (60) DAYS PRIOR
TO ANY RESPONSE BEING DUE TO THE APPLICABLE PATENT OFFICE, AND WILL CONSIDER IN
GOOD FAITH REASONABLE COMMENTS PROVIDED BY THE OTHER PARTY.

9.5.1        DEFINITIONS.  THE FOLLOWING DEFINITIONS SHALL BE USED ONLY FOR THE
PURPOSES OF THIS SECTION 9.5 (OR AS OTHERWISE EXPRESSLY REFERENCED IN THIS
AGREEMENT):

(A)   “PROSECUTION AND MAINTENANCE” OR “PROSECUTE AND MAINTAIN,” WITH REGARD TO
A PARTICULAR PATENT, MEANS THE PREPARATION, FILING, PROSECUTION AND MAINTENANCE
OF SUCH PATENT, AS WELL AS RE-EXAMINATIONS, REISSUES, REQUESTS FOR PATENT TERM
EXTENSIONS AND THE LIKE WITH RESPECT TO SUCH PATENT, TOGETHER WITH THE CONDUCT
OF INTERFERENCES, THE DEFENSE OF OPPOSITIONS AND OTHER SIMILAR PROCEEDINGS WITH
RESPECT TO SUCH PATENT.

(B)   “PROSECUTING PARTY” MEANS THE PARTY THAT IS RESPONSIBLE FOR THE
PROSECUTION AND MAINTENANCE OF A PATENT UNDER THIS SECTION 9.5.

9.5.2        EXISTING TECHNOLOGY.  EACH OF ARRAY AND CELGENE, IN ITS SOLE
DISCRETION, MAY PROSECUTE AND MAINTAIN PATENTS COVERING THE ARRAY TECHNOLOGY OR
CELGENE TECHNOLOGY, RESPECTIVELY, AND SUCH PROSECUTION AND MAINTENANCE SHALL BE
AT THE EXPENSE OF THE PARTY OWNING SUCH PATENT; PROVIDED, HOWEVER, THAT DURING
THE OPTION TERM AND FOR SO LONG THEREAFTER AS CELGENE RETAINS RIGHTS (UNDER THE
CELGENE PRODUCT OPTION, BY LICENSE OR OTHERWISE) TO COMPOUNDS THAT MODULATE THE
TARGET TO WHICH THE PATENTS LISTED IN SCHEDULE 9.5.2 RELATE, ARRAY SHALL PROVIDE
CELGENE WITH COPIES OF ALL CORRESPONDENCE REGARDING THE PROSECUTION OF SUCH
PATENTS WITH SUFFICIENT TIME FOR CELGENE TO COMMENT, AND TO THE EXTENT POSSIBLE,
AT LEAST SIXTY (60) DAYS PRIOR TO ANY RESPONSE BEING DUE TO THE APPLICABLE
PATENT OFFICE, AND ARRAY WILL CONSIDER IN GOOD FAITH REASONABLE COMMENTS
PROVIDED BY CELGENE.  IF EITHER PARTY ELECTS NOT TO PROSECUTE AND MAINTAIN
PATENTS COVERING SUCH PARTY’S TECHNOLOGY IN ANY COUNTRY, THEN SUCH PARTY SHALL
PROVIDE AT LEAST SIXTY (60) DAYS WRITTEN NOTICE TO THE

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

OTHER PARTY.  THEREAFTER, THE OTHER PARTY SHALL HAVE THE RIGHT, BUT NOT THE
OBLIGATION, TO PURSUE, AT ITS SOLE EXPENSE AND IN ITS SOLE DISCRETION, THE
PROSECUTION AND MAINTENANCE OF SUCH PATENTS IN SUCH COUNTRY.  THE OWNERSHIP OF
SUCH PATENTS SHALL NOT BE AFFECTED, NOTWITHSTANDING ANY TRANSFER OF PROSECUTION
AND MAINTENANCE OF SUCH PATENTS TO SUCH OTHER PARTY IN ACCORDANCE WITH THIS
SECTION 9.5.2.

9.5.3        COLLABORATION TECHNOLOGY.

(A)   JOINTLY OWNED PATENTS.  THE PARTIES SHALL JOINTLY DECIDE ON A STRATEGY FOR
THE PROSECUTION AND MAINTENANCE OF PATENTS COVERING COLLABORATION TECHNOLOGY
THAT ARE JOINTLY OWNED, WHICH STRATEGY MAY INCLUDE RETENTION OF MUTUALLY
ACCEPTABLE OUTSIDE COUNSEL TO CONDUCT SUCH MAINTENANCE AND PROSECUTION, AND THE
PARTIES SHALL EQUALLY SHARE THE EXPENSES THEREFOR.

(B)   SOLELY OWNED PATENTS.  CELGENE OR ARRAY, AS THE CASE MAY BE, SHALL CONTROL
THE PROSECUTION AND MAINTENANCE OF PATENTS WITHIN THE COLLABORATION TECHNOLOGY
THAT ARE OWNED BY SUCH PARTY, IN EACH CASE USING COUNSEL OF ITS CHOICE AND IN
SUCH COUNTRIES AS SUCH PARTY DETERMINES IS APPROPRIATE, AND SUCH PROSECUTION AND
MAINTENANCE SHALL BE AT THE EXPENSE OF THE PARTY OWNING SUCH PATENT.

(C)   COOPERATION.  EACH PARTY SHALL, AT ITS OWN EXPENSE, REASONABLY COOPERATE
WITH AND ASSIST THE OTHER PARTY, AT SUCH OTHER PARTY’S REQUEST, IN CONNECTION
WITH THE PROSECUTION AND MAINTENANCE THE PATENTS COVERING ANY COLLABORATION
TECHNOLOGY, INCLUDING BY MAKING SCIENTISTS AND SCIENTIFIC RECORDS REASONABLY
AVAILABLE TO SUCH OTHER PARTY.

9.5.4        DISCLOSURE OF DEVELOPMENTS.  EACH PARTY SHALL KEEP THE OTHER
INFORMED AS TO MATERIAL DEVELOPMENTS WITH RESPECT TO THE PROSECUTION AND
MAINTENANCE OF PATENTS COVERING ANY COLLABORATION TECHNOLOGY INCLUDING BY
PROMPTLY PROVIDING TO THE OTHER PARTY COPIES OF ANY SUBSTANTIVE DOCUMENTS THAT
SUCH PARTY RECEIVES FROM ANY PATENT OFFICE (INCLUDING NOTICE OF INTERFERENCES,
REISSUES, RE-EXAMINATIONS, OPPOSITIONS OR REQUESTS FOR PATENT TERM EXTENSIONS),
AND BY PROVIDING SUCH OTHER PARTY THE OPPORTUNITY TO HAVE REASONABLE INPUT INTO
THE STRATEGIC ASPECTS OF SUCH PROSECUTION AND MAINTENANCE.

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

9.5.5        TRANSFER OF PROSECUTION AND MAINTENANCE.  IF A PROSECUTING PARTY
ELECTS NOT TO PROSECUTE AND MAINTAIN PATENTS COVERING COLLABORATION TECHNOLOGY
IN A COUNTRY, AND THE OTHER PARTY RETAINS RIGHTS TO SUCH PATENT AT THE TIME OF
SUCH ELECTION, SUCH PROSECUTING PARTY SHALL PROVIDE AT LEAST SIXTY (60) DAYS
WRITTEN NOTICE TO THE OTHER PARTY.  THEREAFTER, SUCH OTHER PARTY SHALL HAVE THE
RIGHT, BUT NOT THE OBLIGATION, TO PURSUE, AT ITS SOLE EXPENSE, IN ITS SOLE
DISCRETION AND IN ITS SOLE NAME, THE PROSECUTION AND MAINTENANCE OF SUCH PATENTS
IN SUCH COUNTRY.  UPON THE TRANSFER OF PROSECUTION AND MAINTENANCE OF SUCH
PATENTS TO SUCH OTHER PARTY IN ACCORDANCE WITH THE FOREGOING, THE TRANSFERRING
PARTY SHALL ALSO ASSIGN AND TRANSFER ITS OWNERSHIP RIGHTS IN AND TO SUCH PATENTS
TO THE SUCH OTHER PARTY.

9.6           ENFORCEMENT RIGHTS.

9.6.1        DEFENSE AND SETTLEMENT OF THIRD PARTY CLAIMS.  IF ANY COLLABORATION
COMPOUND, COLLABORATION BACK-UP COMPOUND OR LICENSED PRODUCT MANUFACTURED, USED
OR SOLD BY CELGENE, ITS AFFILIATES OR SUBLICENSEES BECOMES THE SUBJECT OF A
THIRD PARTY’S CLAIM OR ASSERTION OF INFRINGEMENT OF A PATENT OR OTHER
INTELLECTUAL PROPERTY RELATING TO THE MANUFACTURE, USE, SALE, OFFER FOR SALE OR
IMPORTATION OF SUCH COLLABORATION COMPOUND OR LICENSED PRODUCT, THE PARTY FIRST
HAVING NOTICE OF THE CLAIM OR ASSERTION SHALL PROMPTLY NOTIFY THE OTHER PARTY,
AND THE PARTIES SHALL PROMPTLY CONFER TO CONSIDER THE CLAIM OR ASSERTION AND THE
APPROPRIATE COURSE OF ACTION.  UNLESS THE PARTIES OTHERWISE AGREE IN WRITING
AND, IF APPLICABLE, SUBJECT TO THE INDEMNIFICATION OBLIGATIONS AND PROCEDURE SET
FORTH IN SECTION 11.4 BELOW, EACH PARTY SHALL HAVE THE RIGHT TO DEFEND ITSELF
AGAINST A SUIT THAT NAMES IT AS A DEFENDANT.  NEITHER PARTY SHALL ENTER INTO ANY
SETTLEMENT OF ANY CLAIM DESCRIBED IN THIS SECTION 9.5 THAT ADVERSELY AFFECTS THE
OTHER PARTY’S RIGHTS OR INTERESTS WITHOUT SUCH OTHER PARTY’S WRITTEN CONSENT,
WHICH CONSENT SHALL NOT BE UNREASONABLY CONDITIONED, WITHHELD OR DELAYED.  IN
ANY EVENT, THE PARTIES SHALL REASONABLY ASSIST ONE ANOTHER AND COOPERATE IN ANY
SUCH LITIGATION AT THE OTHER PARTY’S REQUEST AND EXPENSE.

9.6.2        INFRINGEMENT BY THIRD PARTIES.

(A)   IF ANY ARRAY PATENT OR COLLABORATION PATENT IS INFRINGED BY A THIRD PARTY
IN ANY COUNTRY IN CONNECTION WITH THE MANUFACTURE, USE AND SALE OF A PRODUCT
SUBSTANTIALLY SIMILAR TO A

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

LICENSED PRODUCT IN SUCH COUNTRY, CELGENE SHALL HAVE THE PRIMARY RIGHT, BUT NOT
THE OBLIGATION TO INSTITUTE, PROSECUTE, AND CONTROL ANY ACTION OR PROCEEDING
WITH RESPECT TO SUCH INFRINGEMENT OF SUCH PATENT, BY COUNSEL OF ITS OWN CHOICE,
AND ARRAY SHALL HAVE THE RIGHT, AT ITS OWN EXPENSE, TO BE REPRESENTED IN THAT
ACTION BY COUNSEL OF ITS OWN CHOICE.  IF CELGENE FAILS TO BRING AN ACTION OR
PROCEEDING OR SUBLICENSE SUCH THIRD PARTY (IF PERMITTED UNDER THIS AGREEMENT)
WITHIN A PERIOD OF ONE HUNDRED TWENTY (120) DAYS AFTER A WRITTEN REQUEST BY
ARRAY TO ENFORCE THE PATENT RIGHTS LICENSED TO CELGENE HEREUNDER, ARRAY SHALL
HAVE THE RIGHT TO BRING AND CONTROL ANY SUCH ACTION BY COUNSEL OF ITS OWN
CHOICE, AND CELGENE SHALL HAVE THE RIGHT TO BE REPRESENTED IN ANY SUCH ACTION BY
COUNSEL OF ITS OWN CHOICE AT ITS OWN EXPENSE.

(B)   IF ONE PARTY BRINGS ANY SUCH ACTION OR PROCEEDING IN ACCORDANCE WITH THIS
SECTION 9.6.2, THE SECOND PARTY AGREES TO BE JOINED AS A PARTY PLAINTIFF AND TO
GIVE THE FIRST PARTY REASONABLE ASSISTANCE AND AUTHORITY TO FILE AND PROSECUTE
THE SUIT.  THE COSTS AND EXPENSES OF THE PARTY BRINGING SUIT UNDER THIS SECTION
SHALL BE BORNE BY SUCH PARTY, AND ANY DAMAGES OR OTHER MONETARY AWARDS RECOVERED
SHALL BE SHARED AS FOLLOWS:  [ * ], AND THEN (I) IF CELGENE IS THE PARTY THAT
BRINGS SUCH ACTION OR PROCEEDING, THEN [ * ], OR (II) IF ARRAY IS THE PARTY THAT
BRINGS SUCH ACTION OR PROCEEDING, THEN [ * ].  A SETTLEMENT OR CONSENT JUDGMENT
OR OTHER VOLUNTARY FINAL DISPOSITION OF A SUIT UNDER THIS SECTION 9.6.2 MAY BE
ENTERED INTO WITHOUT THE CONSENT OF THE PARTY NOT BRINGING THE SUIT; PROVIDED
THAT SUCH SETTLEMENT, CONSENT JUDGMENT OR OTHER DISPOSITION DOES NOT ADMIT THE
INVALIDITY OR UNENFORCEABILITY OF ANY ARRAY PATENT OR ANY COLLABORATION PATENT
CONTROLLED BY ARRAY IF ENTERED BY CELGENE AND PROVIDED FURTHER, THAT ANY RIGHTS
TO CONTINUE THE INFRINGING ACTIVITY IN SUCH SETTLEMENT, CONSENT JUDGMENT OR
OTHER DISPOSITION SHALL BE LIMITED TO THOSE RIGHTS THAT THE GRANTING PARTY
OTHERWISE HAS THE RIGHT TO GRANT.

9.7           PATENT MARKING.  CELGENE SHALL MARK (OR CAUSED TO BE MARKED) ALL
LICENSED PRODUCTS MARKETED AND SOLD HEREUNDER WITH APPROPRIATE ARRAY PATENT OR
COLLABORATION PATENT NUMBERS OR INDICIA AT ARRAY’S REQUEST TO THE EXTENT
PERMITTED BY LAW, IN THOSE COUNTRIES IN WHICH SUCH NOTICES IMPACT RECOVERIES OF
DAMAGES OR REMEDIES AVAILABLE WITH RESPECT TO INFRINGEMENTS OF PATENTS.  ARRAY
SHALL MARK (OR CAUSED TO BE MARKED) ALL DEVELOPMENT COMPOUNDS AND ABANDONED
PRODUCTS SUBJECT TO THE LICENSE GRANTED TO ARRAY UNDER SECTION 5.3 ABOVE AND
MARKETED AND SOLD BY ARRAY WITH

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

APPROPRIATE CELGENE PATENT OR COLLABORATION PATENT NUMBERS OR INDICIA AT
CELGENE’S REQUEST TO THE EXTENT PERMITTED BY LAW, IN THOSE COUNTRIES IN WHICH
SUCH NOTICES IMPACT RECOVERIES OF DAMAGES OR REMEDIES AVAILABLE WITH RESPECT TO
INFRINGEMENTS OF PATENTS.

ARTICLE X
CONFIDENTIALITY

10.1         CONFIDENTIALITY; EXCEPTIONS.  EXCEPT TO THE EXTENT EXPRESSLY
AUTHORIZED BY THIS AGREEMENT OR OTHERWISE AGREED IN WRITING, THE PARTIES AGREE
THAT THE RECEIVING PARTY SHALL KEEP CONFIDENTIAL AND SHALL NOT PUBLISH OR
OTHERWISE DISCLOSE AND SHALL NOT USE FOR ANY PURPOSE OTHER THAN AS PROVIDED FOR
IN THIS AGREEMENT ANY INFORMATION AND OTHER CONFIDENTIAL AND PROPRIETARY
INFORMATION AND MATERIALS FURNISHED TO IT BY THE OTHER PARTY PURSUANT TO THIS
AGREEMENT (COLLECTIVELY, “CONFIDENTIAL INFORMATION”).  NOTWITHSTANDING THE
FOREGOING, CONFIDENTIAL INFORMATION SHALL NOT BE DEEMED TO INCLUDE INFORMATION
AND MATERIALS TO THE EXTENT THAT IT CAN BE ESTABLISHED BY WRITTEN DOCUMENTATION
BY THE RECEIVING PARTY THAT SUCH INFORMATION OR MATERIAL:

(A)   WAS ALREADY KNOWN TO THE RECEIVING PARTY, OTHER THAN UNDER AN OBLIGATION
OF CONFIDENTIALITY (EXCEPT TO THE EXTENT SUCH OBLIGATION HAS EXPIRED OR AN
EXCEPTION IS APPLICABLE UNDER THE RELEVANT AGREEMENT PURSUANT TO WHICH SUCH
OBLIGATION WAS ESTABLISHED), AT THE TIME OF DISCLOSURE;

(B)   WAS GENERALLY AVAILABLE TO THE PUBLIC OR OTHERWISE PART OF THE PUBLIC
DOMAIN AT THE TIME OF ITS DISCLOSURE TO THE RECEIVING PARTY;

(C)   BECAME GENERALLY AVAILABLE TO THE PUBLIC OR OTHERWISE PART OF THE PUBLIC
DOMAIN AFTER ITS DISCLOSURE AND OTHER THAN THROUGH ANY ACT OR OMISSION OF THE
RECEIVING PARTY IN BREACH OF THIS AGREEMENT;

(D)   WAS INDEPENDENTLY DEVELOPED BY THE RECEIVING PARTY WITHOUT ANY USE OF OR
REFERENCE TO THE DISCLOSING PARTY’S CONFIDENTIAL INFORMATION, AS DEMONSTRATED BY
DOCUMENTED EVIDENCE PREPARED CONTEMPORANEOUSLY WITH SUCH INDEPENDENT
DEVELOPMENT; OR

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

(E)   WAS DISCLOSED TO THE RECEIVING PARTY, OTHER THAN UNDER AN OBLIGATION OF
CONFIDENTIALITY, BY A THIRD PARTY WHO HAD NO OBLIGATION TO THE DISCLOSING PARTY
NOT TO DISCLOSE SUCH INFORMATION TO OTHERS.

It is understood that Confidential Information that is assigned to a Party under
Section 9.2.2 shall be considered Confidential Information of the Party to whom
such Confidential Information is assigned.

10.2         AUTHORIZED DISCLOSURE.  EXCEPT AS EXPRESSLY PROVIDED OTHERWISE IN
THIS AGREEMENT, EACH PARTY MAY USE AND DISCLOSE CONFIDENTIAL INFORMATION OF THE
OTHER PARTY AS FOLLOWS: (A) UNDER APPROPRIATE CONFIDENTIALITY PROVISIONS
SUBSTANTIALLY EQUIVALENT TO THOSE IN THIS AGREEMENT, IN CONNECTION WITH THE
PERFORMANCE OF ITS OBLIGATIONS OR EXERCISE OF RIGHTS GRANTED OR RESERVED BY SUCH
PARTY IN THIS AGREEMENT (INCLUDING, IN THE CASE OF CELGENE, THE RIGHTS TO
DEVELOP AND COMMERCIALIZE COLLABORATION COMPOUNDS, COLLABORATION BACK-UP
COMPOUNDS AND LICENSED PRODUCTS; AND IN THE CASE OF ARRAY, TO DEVELOP AND
COMMERCIALIZE DEVELOPMENT COMPOUNDS AND DEVELOPMENT BACK-UP COMPOUNDS FOR WHICH
THE CELGENE PRODUCT OPTION HAS EXPIRED OR BEEN TERMINATED AND ABANDONED
PRODUCTS; AND IN THE CASE OF EITHER PARTY, TO GRANT SUBLICENSES AS EXPRESSLY
PERMITTED HEREUNDER) AND COMPLYING WITH THE TERMS OF AGREEMENTS WITH THIRD
PARTIES; (B) TO THE EXTENT SUCH DISCLOSURE IS REASONABLY NECESSARY IN FILING
FOR, PROSECUTING OR MAINTAINING PATENTS, COPYRIGHTS AND TRADEMARKS (INCLUDING
APPLICATIONS THEREFOR), PROSECUTING OR DEFENDING LITIGATION, COMPLYING WITH
APPLICABLE GOVERNMENTAL REGULATIONS, OBTAINING AND MAINTAINING REGULATORY
APPROVALS (INCLUDING MARKETING APPROVALS), CONDUCTING PRECLINICAL OR CLINICAL
TRIALS, MARKETING LICENSED PRODUCTS (IN THE CASE OF CELGENE) OR PRODUCTS
CONTAINING DEVELOPMENT COMPOUNDS OR DEVELOPMENT BACK-UP COMPOUNDS FOR WHICH THE
CELGENE PRODUCT OPTION HAS EXPIRED OR BEEN TERMINATED AND/OR ABANDONED PRODUCTS
(IN THE CASE OF ARRAY), OR AS OTHERWISE REQUIRED BY APPLICABLE LAWS OR COURT
ORDER (INCLUDING SECURITIES LAWS, REGULATIONS AND GUIDANCES); PROVIDED, HOWEVER,
THAT IF A PARTY IS REQUIRED BY LAW OR REGULATION TO MAKE ANY SUCH DISCLOSURE OF
THE OTHER PARTY’S CONFIDENTIAL INFORMATION SUCH PARTY WILL, EXCEPT WHERE
IMPRACTICABLE FOR NECESSARY DISCLOSURES (FOR EXAMPLE IN THE EVENT OF MEDICAL
EMERGENCY), GIVE REASONABLE ADVANCE NOTICE TO THE OTHER PARTY OF SUCH DISCLOSURE
REQUIREMENT AND, EXCEPT TO THE EXTENT INAPPROPRIATE IN THE CASE OF PATENT
APPLICATIONS, WILL USE COMMERCIALLY

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

REASONABLE EFFORTS TO SECURE CONFIDENTIAL TREATMENT OF SUCH CONFIDENTIAL
INFORMATION REQUIRED TO BE DISCLOSED; (C) IN COMMUNICATION WITH EXISTING AND
POTENTIAL INVESTORS, CONSULTANTS, ADVISORS (INCLUDING FINANCIAL ADVISORS,
LAWYERS AND ACCOUNTANTS) OR OTHERS ON A NEED-TO-KNOW BASIS, IN EACH CASE UNDER
APPROPRIATE CONFIDENTIALITY PROVISIONS SUBSTANTIALLY SIMILAR TO THOSE IN THIS
AGREEMENT; OR (D) TO THE EXTENT MUTUALLY AGREED TO BY THE PARTIES.

10.3         SCIENTIFIC PUBLICATIONS.  DURING THE OPTION TERM FOR A PARTICULAR
TARGET, (A) NEITHER PARTY SHALL PUBLISH OR PRESENT THE RESULTS OF ACTIVITIES
CARRIED OUT UNDER THIS AGREEMENT WITH RESPECT TO SUCH TARGET, AND (B) TO THE
EXTENT ANY CLINICAL SITE OR INVESTIGATOR HAS ANY RIGHT TO PUBLISH, PRESENT OR
OTHERWISE PUBLICLY DISCLOSE ANY DATA OR RESULTS FROM ANY CLINICAL TRIAL
CONDUCTED HEREUNDER, THE PARTY CONTRACTING WITH SUCH CLINICAL SITE AND/OR
INVESTIGATOR SHALL REQUIRE SAME TO (I) PROVIDE EACH PARTY WITH A COPY OF EACH
PROPOSED PUBLICATION, PRESENTATION OR OTHER DISCLOSURE AND (II) GRANT EACH PARTY
THE RIGHT TO REVIEW, COMMENT ON, REQUIRE THE DELETION OF ITS CONFIDENTIAL
INFORMATION FROM AND DELAY, FOR THE PURPOSE OF FILING INTELLECTUAL PROPERTY
APPLICATIONS, SUBMISSION OF EACH SUCH PUBLICATION, PRESENTATION OR OTHER
DISCLOSURE OR PRESENTATION.  THEREAFTER, EACH PARTY SHALL HAVE THE RIGHT TO
PUBLISH ON THE PARTICULAR TARGET(S) TO WHICH IT HAS OR RETAINS RIGHTS HEREUNDER
(I.E., CELGENE SHALL HAVE THE RIGHT TO PUBLISH ON THE TARGETS TO WHICH
COLLABORATION COMPOUNDS AND COLLABORATION BACK-UP COMPOUNDS ARE DIRECTED, AND
ARRAY SHALL HAVE THE RIGHT TO PUBLISH ON THE OTHER TARGETS), BUT NOT THE OTHER
TARGETS, PROVIDED, HOWEVER, THAT EACH PARTY SHALL SUBMIT ANY PROPOSED
PUBLICATION CONTAINING THE DISCLOSING PARTY’S CONFIDENTIAL INFORMATION TO THE
OTHER PARTY AT LEAST THIRTY (30) DAYS IN ADVANCE TO ALLOW THAT PARTY TO REVIEW
SUCH PLANNED PUBLIC DISCLOSURE.  THE REVIEWING PARTY WILL PROMPTLY REVIEW SUCH
PROPOSED PUBLICATION AND MAKE ANY OBJECTIONS THAT IT MAY HAVE TO THE PUBLICATION
OF CONFIDENTIAL INFORMATION OF THE REVIEWING PARTY CONTAINED THEREIN.  THE
PUBLISHING PARTY SHALL CONSIDER IN GOOD FAITH ANY COMMENTS PROVIDED BY THE OTHER
PARTY DURING SUCH THIRTY (30) DAY PERIOD.  SHOULD THE REVIEWING PARTY MAKE AN
OBJECTION TO THE PUBLICATION OF ANY SUCH CONFIDENTIAL INFORMATION, THEN THE
PARTIES SHALL DISCUSS THE ADVANTAGES AND DISADVANTAGES OF PUBLISHING OR
DISCLOSING SUCH INFORMATION.  NOTWITHSTANDING THE FOREGOING, EACH PARTY SHALL
HAVE THE RIGHT TO PUBLICLY DISCLOSE ANY INFORMATION, INCLUDING CONFIDENTIAL
INFORMATION, PERTAINING TO SAFETY OR EFFICACY OF A COMPOUND AND/OR ANY LICENSED
PRODUCT THAT SUCH PARTY, IN THE REASONABLE OPINION OF ITS

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

LEGAL COUNSEL, IT IS OBLIGATED OR ETHICALLY BOUND TO DISCLOSE.  THE CONTRIBUTION
OF EACH PARTY SHALL BE NOTED IN ALL PUBLICATIONS OR PRESENTATIONS BY
ACKNOWLEDGMENT OR CO-AUTHORSHIP, WHICHEVER IS APPROPRIATE.  THIS SECTION SHALL
NOT BE DEEMED TO LIMIT THE PARTIES’ OBLIGATIONS UNDER SECTION 10.1 ABOVE.

10.4         PUBLICITY.

10.4.1      CONFIDENTIAL TERMS.  EACH OF THE PARTIES AGREES NOT TO DISCLOSE TO
ANY THIRD PARTY THE TERMS AND CONDITIONS OF THIS AGREEMENT WITHOUT THE PRIOR
WRITTEN CONSENT OF THE OTHER PARTY, EXCEPT EACH PARTY MAY DISCLOSE THE TERMS OF
THIS AGREEMENT:  (A) TO ADVISORS (INCLUDING FINANCIAL ADVISORS, LAWYERS AND
ACCOUNTANTS), EXISTING AND POTENTIAL INVESTORS, OTHERS ON A NEED-TO-KNOW BASIS
AND TO THIRD PARTIES TO THE EXTENT NECESSARY TO COMPLY WITH THE TERMS OF
AGREEMENTS WITH SUCH THIRD PARTIES, IN EACH CASE UNDER CIRCUMSTANCES AND/OR
OBLIGATIONS OF CONFIDENTIALITY THAT REASONABLY PROTECT THE CONFIDENTIALITY
THEREOF; AND (B) TO THE EXTENT NECESSARY TO COMPLY WITH APPLICABLE LAWS AND
COURT ORDERS (INCLUDING SECURITIES LAWS, REGULATIONS AND GUIDANCES); PROVIDED
THAT IN THE CASE OF THE FOREGOING PARAGRAPH (B), THE DISCLOSING PARTY SHALL
PROMPTLY NOTIFY THE OTHER PARTY AND (OTHER THAN IN THE CASE WHERE SUCH
DISCLOSURE IS NECESSARY, IN THE REASONABLE OPINION OF THE DISCLOSING PARTY’S
LEGAL COUNSEL, TO COMPLY WITH SECURITIES LAWS, REGULATIONS OR GUIDANCES) ALLOW
THE OTHER PARTY A REASONABLE OPPORTUNITY TO OPPOSE WITH THE BODY INITIATING THE
PROCESS AND, TO THE EXTENT ALLOWABLE BY LAW, TO SEEK LIMITATIONS ON THE PORTION
OF THIS AGREEMENT THAT IS REQUIRED TO BE DISCLOSED.  NOTWITHSTANDING THE
FOREGOING, THE PARTIES SHALL AGREE UPON A JOINT PRESS RELEASE TO ANNOUNCE THE
EXECUTION OF THIS AGREEMENT, TOGETHER WITH A CORRESPONDING QUESTION & ANSWER
OUTLINE FOR USE IN RESPONDING TO INQUIRIES ABOUT THIS AGREEMENT; THEREAFTER,
CELGENE AND ARRAY MAY EACH DISCLOSE TO THIRD PARTIES THE INFORMATION CONTAINED
IN SUCH PRESS RELEASE AND QUESTION & ANSWER OUTLINE WITHOUT THE NEED FOR FURTHER
APPROVAL BY THE OTHER.

10.4.2      PUBLICITY REVIEW.  THE PARTIES ACKNOWLEDGE THE IMPORTANCE OF
SUPPORTING EACH OTHER’S EFFORTS TO PUBLICLY DISCLOSE RESULTS AND SIGNIFICANT
DEVELOPMENTS REGARDING COLLABORATION COMPOUNDS AND LICENSED PRODUCTS AND OTHER
ACTIVITIES IN CONNECTION WITH THIS AGREEMENT, BEYOND WHAT MAY BE STRICTLY
REQUIRED BY APPLICABLE LAW OR REGULATION, AND EACH PARTY MAY MAKE SUCH

 

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DISCLOSURES FROM TIME TO TIME WITH THE APPROVAL OF THE OTHER PARTY, WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED.  SUCH
DISCLOSURES MAY INCLUDE ACHIEVEMENT OF MILESTONES UNDER SECTION 6.2 OR 6.3,
SIGNIFICANT EVENTS IN THE RESEARCH, DEVELOPMENT AND REGULATORY PROCESS WITH
RESPECT TO A COLLABORATION COMPOUND OR LICENSED PRODUCT OR COMMERCIALIZATION
ACTIVITIES AND THE LIKE.  WHEN A PARTY (THE “REQUESTING PARTY”) ELECTS TO MAKE
ANY SUCH PUBLIC DISCLOSURE UNDER THIS SECTION 10.4.2, IT WILL GIVE THE OTHER
PARTY (THE “COOPERATING PARTY”) REASONABLE WRITTEN NOTICE TO ALLOW THE
COOPERATING PARTY TO REVIEW AND COMMENT ON SUCH STATEMENT, IT BEING UNDERSTOOD
THAT IF THE COOPERATING PARTY DOES NOT NOTIFY THE REQUESTING PARTY IN WRITING
WITHIN TEN (10) BUSINESS DAYS OF SUCH NOTICE (OR SUCH SHORTER PERIOD IF REQUIRED
BY APPLICABLE LAW AND EXPRESSLY SET FORTH IN THE APPLICABLE NOTICE; OR, IF THE
NATURE OF THE ANNOUNCEMENT DOES NOT PERMIT THE USUAL TEN (10) BUSINESS DAY
WAITING PERIOD, THEN TWO (2) BUSINESS DAYS, PROVIDED THAT THE COOPERATING
PARTY’S HEAD OF INVESTOR RELATIONS IS NOTIFIED DIRECTLY IN WRITING) OF ANY
REASONABLE OBJECTIONS AS CONTEMPLATED IN THIS SECTION 10.4.2, SUCH DISCLOSURE
SHALL BE DEEMED APPROVED, AND IN ANY EVENT THE COOPERATING PARTY SHALL WORK
DILIGENTLY AND REASONABLY TO AGREE ON THE TEXT OF ANY PROPOSED DISCLOSURE IN AN
EXPEDITIOUS MANNER.  THE PRINCIPLES TO BE OBSERVED IN SUCH DISCLOSURES SHALL BE
ACCURACY, COMPLIANCE WITH APPLICABLE LAWS, RULES, REGULATIONS AND REGULATORY
GUIDANCE DOCUMENTS, REASONABLE SENSITIVITY TO POTENTIAL NEGATIVE REACTIONS OF
APPLICABLE REGULATORY AUTHORITIES (INCLUDING THE FDA) AND THE NEED TO KEEP
INVESTORS AND OTHERS INFORMED REGARDING THE REQUESTING PARTY’S BUSINESS. 
ACCORDINGLY, THE COOPERATING PARTY SHALL NOT WITHHOLD OR DELAY ITS APPROVAL OF A
PROPOSED DISCLOSURE THAT COMPLIES WITH SUCH PRINCIPLES.

10.5         PRIOR NON-DISCLOSURE AGREEMENTS.  UPON EXECUTION OF THIS AGREEMENT,
THE TERMS OF THIS ARTICLE 10 SHALL SUPERSEDE ANY PRIOR NON-DISCLOSURE, SECRECY
OR CONFIDENTIALITY AGREEMENT BETWEEN THE PARTIES.  ANY INFORMATION DISCLOSED BY
A PARTY UNDER SUCH PRIOR AGREEMENT SHALL BE DEEMED SUCH PARTY’S CONFIDENTIAL
INFORMATION AND SHALL BE SUBJECT TO THE TERMS OF THIS ARTICLE 10.

10.6         EXPIRATION.  EACH PARTY’S OBLIGATIONS UNDER THIS ARTICLE 10 SHALL
SURVIVE FOR A PERIOD OF FIVE (5) YEARS AFTER THE EXPIRATION OR TERMINATION OF
THIS AGREEMENT.

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

ARTICLE XI
REPRESENTATIONS, WARRANTIES AND COVENANTS;
INDEMNIFICATION

11.1         GENERAL REPRESENTATIONS AND WARRANTIES.  EACH PARTY REPRESENTS AND
WARRANTS TO THE OTHER THAT:

(A)   IT IS DULY ORGANIZED AND VALIDLY EXISTING UNDER THE LAWS OF ITS STATE OF
INCORPORATION, AND HAS FULL CORPORATE POWER AND AUTHORITY TO ENTER INTO THIS
AGREEMENT AND TO CARRY OUT THE PROVISIONS HEREOF;

(B)   IT IS DULY AUTHORIZED TO EXECUTE AND DELIVER THIS AGREEMENT AND TO PERFORM
ITS OBLIGATIONS HEREUNDER, AND THE PERSON OR PERSONS EXECUTING THIS AGREEMENT ON
ITS BEHALF HAS BEEN DULY AUTHORIZED TO DO SO BY ALL REQUISITE CORPORATE ACTION;

(C)   THIS AGREEMENT IS LEGALLY BINDING UPON IT AND ENFORCEABLE IN ACCORDANCE
WITH ITS TERMS.  THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY IT
DOES NOT CONFLICT WITH ANY AGREEMENT, INSTRUMENT OR UNDERSTANDING, ORAL OR
WRITTEN, TO WHICH IT IS A PARTY OR BY WHICH IT MAY BE BOUND, NOR VIOLATE ANY
MATERIAL LAW OR REGULATION OF ANY COURT, GOVERNMENTAL BODY OR ADMINISTRATIVE OR
OTHER AGENCY HAVING JURISDICTION OVER IT;

(D)   IT HAS NOT GRANTED, AND SHALL NOT GRANT DURING THE TERM OF THIS AGREEMENT,
ANY RIGHT TO ANY THIRD PARTY WHICH WOULD CONFLICT WITH THE RIGHTS GRANTED TO THE
OTHER PARTY HEREUNDER; AND

(E)   IT IS NOT AWARE OF ANY ACTION, SUIT OR INQUIRY OR INVESTIGATION INSTITUTED
BY ANY PERSON OR GOVERNMENTAL AGENCY WHICH COULD REASONABLY QUESTION OR THREATEN
THE VALIDITY OF THIS AGREEMENT.

 

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

11.2         ARRAY’S REPRESENTATIONS, WARRANTIES AND COVENANTS.  ARRAY
REPRESENTS, WARRANTS AND COVENANTS THAT AS OF THE EFFECTIVE DATE:

(A)   ARRAY OWNS ALL RIGHT, TITLE AND INTEREST IN AND TO ALL ARRAY PATENTS IN
EXISTENCE AS OF THE EFFECTIVE DATE;

(B)   AS OF THE EFFECTIVE DATE ARRAY DOES NOT HAVE ANY OBLIGATION TO ANY THIRD
PARTY THAT CONFLICTS WITH THIS AGREEMENT OR ITS OBLIGATIONS HEREUNDER, AND ARRAY
HAS NOT GRANTED, AND WILL NOT GRANT DURING THE TERM OF THIS AGREEMENT, RIGHTS TO
ANY THIRD PARTY UNDER THE ARRAY TECHNOLOGY OR ARRAY’S INTEREST IN THE
COLLABORATION TECHNOLOGY THAT CONFLICT WITH THE RIGHTS GRANTED TO CELGENE
HEREUNDER;

(C)   ARRAY HAS NOT RECEIVED ANY WRITTEN NOTICE OF ANY THREATENED CLAIMS OR
LITIGATION SEEKING TO INVALIDATE OR OTHERWISE CHALLENGE THE ARRAY PATENTS OR
ARRAY’S RIGHTS THEREIN;

(D)   TO ITS KNOWLEDGE, NONE OF THE ARRAY PATENTS ARE SUBJECT TO ANY PENDING
RE-EXAMINATION, OPPOSITION, INTERFERENCE OR LITIGATION PROCEEDINGS;

(E)   ARRAY SHALL NOT [ * ]; AND

(F)    AFTER [ * ].

11.3         DISCLAIMER OF WARRANTIES. ARRAY AND CELGENE EXPRESSLY DISCLAIM ANY
GUARANTEE THAT THE DISCOVERY PROGRAM WILL BE SUCCESSFUL, IN WHOLE OR IN PART. 
THE FAILURE OF THE PARTIES TO SUCCESSFULLY DEVELOP COMPOUNDS, DEVELOPMENT
COMPOUNDS, COLLABORATION COMPOUNDS OR LICENSED PRODUCTS WILL NOT CONSTITUTE A
BREACH OF ANY REPRESENTATION OR WARRANTY OR OTHER OBLIGATION UNDER THIS
AGREEMENT.  EXCEPT AS SET FORTH IN THIS AGREEMENT, ARRAY AND CELGENE MAKE NO
WARRANTIES OR CONDITIONS OF ANY KIND (EXPRESS, IMPLIED, STATUTORY OR OTHERWISE)
WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING THE ARRAY

 

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amended.

 

TECHNOLOGY, COLLABORATION TECHNOLOGY OR CELGENE TECHNOLOGY, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

11.4         INDEMNIFICATION.

11.4.1      INDEMNIFICATION BY ARRAY.  ARRAY HEREBY AGREES TO DEFEND, HOLD
HARMLESS AND INDEMNIFY (COLLECTIVELY “INDEMNIFY”) CELGENE AND ITS AFFILIATES,
AND ITS AND THEIR AGENTS, DIRECTORS, OFFICERS, EMPLOYEES AND CONSULTANTS (THE
“CELGENE INDEMNITEES”) FROM AND AGAINST ANY LIABILITY OR EXPENSE (INCLUDING
REASONABLE LEGAL EXPENSES AND ATTORNEYS’ FEES) (COLLECTIVELY “LOSSES”) RESULTING
FROM SUITS, CLAIMS, ACTIONS AND DEMANDS, IN EACH CASE BROUGHT BY A THIRD PARTY
(EACH, A “THIRD-PARTY CLAIM”) ARISING OUT OF:  (I) A BREACH OF ANY OF ARRAY’S
REPRESENTATIONS AND WARRANTIES UNDER SECTIONS 11.1 OR 11.2 OR ANY OTHER MATERIAL
BREACH OF THIS AGREEMENT BY ARRAY; (II) PERSONAL INJURY RESULTING FROM THE
PERFORMANCE OF ACTIVITIES BY ARRAY UNDER THE DISCOVERY PROGRAM OR ANY
DEVELOPMENT PLAN; (III) THE DEVELOPMENT, MANUFACTURE, COMMERCIALIZATION,
STORAGE, HANDLING, USE, SALE, OFFER FOR SALE OR IMPORTATION OF DEVELOPMENT
COMPOUNDS SUBJECT TO THE LICENSE GRANTED TO ARRAY IN SECTION 5.3 ABOVE AND
ABANDONED PRODUCTS OR OTHER EXERCISE OF THE LICENSES GRANTED HEREUNDER, IN EACH
CASE BY OR UNDER AUTHORITY OF ARRAY; OR (IV) THE GROSS NEGLIGENCE OR INTENTIONAL
MISCONDUCT OF ANY ARRAY INDEMNITEE IN THE PERFORMANCE OF ACTIVITIES UNDER THIS
AGREEMENT.  ARRAY’S OBLIGATION TO INDEMNIFY THE CELGENE INDEMNITEES PURSUANT TO
THIS SECTION 11.4.1 SHALL NOT APPLY TO THE EXTENT THAT ANY SUCH LOSSES ARE
LOSSES FOR WHICH CELGENE IS OBLIGATED TO INDEMNIFY THE ARRAY INDEMNITEES
PURSUANT TO SECTION 11.4.2 BELOW.

11.4.2      INDEMNIFICATION BY CELGENE.  CELGENE HEREBY AGREES TO INDEMNIFY
ARRAY AND ITS AFFILIATES, AND ITS AND THEIR AGENTS, DIRECTORS, OFFICERS,
EMPLOYEES AND CONSULTANTS (THE “ARRAY INDEMNITEES”) FROM AND AGAINST ANY AND ALL
LOSSES RESULTING FROM THIRD-PARTY CLAIMS ARISING OUT OF: (I) A BREACH OF ANY OF
CELGENE’S REPRESENTATIONS AND WARRANTIES UNDER SECTION 11.1 OR ANY OTHER
MATERIAL BREACH OF THIS AGREEMENT BY CELGENE; (II) PERSONAL INJURY RESULTING
FROM THE PERFORMANCE OF ACTIVITIES BY CELGENE UNDER THE DISCOVERY PROGRAM OR ANY
DEVELOPMENT PLAN; (III) THE DEVELOPMENT,

 

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

MANUFACTURE, COMMERCIALIZATION, STORAGE, HANDLING, USE, SALE, OFFER FOR SALE OR
IMPORTATION OF COLLABORATION COMPOUNDS, COLLABORATION BACK-UP COMPOUNDS AND/OR
LICENSED PRODUCTS OR OTHER EXERCISE OF THE LICENSES GRANTED HEREUNDER, IN EACH
CASE BY OR UNDER AUTHORITY OF CELGENE; OR (IV) THE GROSS NEGLIGENCE OR
INTENTIONAL MISCONDUCT OF ANY CELGENE INDEMNITEE IN THE PERFORMANCE OF
ACTIVITIES UNDER THIS AGREEMENT.  CELGENE’S OBLIGATION TO INDEMNIFY THE ARRAY
INDEMNITEES PURSUANT TO THE FOREGOING SENTENCE SHALL NOT APPLY TO THE EXTENT
THAT ANY SUCH LOSSES ARE LOSSES FOR WHICH ARRAY IS OBLIGATED TO INDEMNIFY THE
CELGENE INDEMNITEES PURSUANT TO SECTION 11.4.1 ABOVE.

11.4.3      PROCEDURE.  TO BE ELIGIBLE TO BE INDEMNIFIED HEREUNDER, THE
INDEMNIFIED PARTY SHALL PROVIDE THE INDEMNIFYING PARTY WITH PROMPT WRITTEN
NOTICE OF THE THIRD-PARTY CLAIM GIVING RISE TO THE INDEMNIFICATION OBLIGATION
PURSUANT TO THIS SECTION 11.4 AND THE EXCLUSIVE RIGHT TO DEFEND (WITH THE
REASONABLE COOPERATION OF THE INDEMNIFIED PARTY) OR SETTLE ANY SUCH CLAIM USING
COUNSEL OF ITS CHOICE; PROVIDED, HOWEVER, THAT THE INDEMNIFYING PARTY SHALL NOT
ENTER INTO ANY SETTLEMENT THAT ADMITS FAULT, WRONGDOING OR DAMAGES WITHOUT THE
INDEMNIFIED PARTY’S WRITTEN CONSENT, SUCH CONSENT NOT TO BE UNREASONABLY
WITHHELD, CONDITIONED OR DELAYED.  THE INDEMNIFIED PARTY SHALL HAVE THE RIGHT TO
PARTICIPATE, AT ITS OWN EXPENSE AND WITH COUNSEL OF ITS CHOICE, IN THE DEFENSE
OF ANY CLAIM OR SUIT THAT HAS BEEN ASSUMED BY THE INDEMNIFYING PARTY.

ARTICLE XII
TERM AND TERMINATION

12.1         TERM.  UNLESS EARLIER TERMINATED, THIS AGREEMENT AND THE PAYMENT
OBLIGATIONS UNDER ARTICLE 6 WILL CONTINUE IN EFFECT, ON A LICENSED
PRODUCT-BY-LICENSED PRODUCT AND COUNTRY-BY-COUNTRY BASIS UNTIL CELGENE HAS NO
REMAINING ROYALTY PAYMENT OBLIGATIONS IN SUCH COUNTRY WITH RESPECT TO SUCH
LICENSED PRODUCT PURSUANT TO SECTION 6.5 ABOVE.  EFFECTIVE UPON THE EXPIRATION
(BUT NOT EARLIER TERMINATION) OF THIS AGREEMENT, ON A LICENSED
PRODUCT-BY-LICENSED PRODUCT AND COUNTRY-BY-COUNTRY BASIS, ARRAY HEREBY GRANTS TO
CELGENE A FULLY-PAID-UP, ROYALTY-FREE LICENSE UNDER ARRAY TECHNOLOGY AND ARRAY’S
INTEREST IN COLLABORATION TECHNOLOGY TO MAKE, HAVE MADE, USE, SELL, OFFER FOR
SALE AND IMPORT SUCH COLLABORATION COMPOUNDS, COLLABORATION BACK-UP COMPOUNDS
AND LICENSED PRODUCTS IN SUCH COUNTRY(IES) WITHOUT FURTHER PAYMENT OR
CONSIDERATION TO ARRAY.

 

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

12.2         TERMINATION FOR BREACH.

12.2.1      TERMINATION.  IN THE EVENT A PARTY SHALL HAVE MATERIALLY BREACHED OR
DEFAULTED IN THE PERFORMANCE OF ANY OF ITS MATERIAL OBLIGATIONS HEREUNDER, THE
OTHER PARTY MAY TERMINATE THIS AGREEMENT IN ACCORDANCE WITH THIS SECTION 12.2. 
THE NON-BREACHING PARTY SHALL PROVIDE WRITTEN NOTICE TO THE OTHER PARTY OF ITS
MATERIAL BREACH OR DEFAULT IN THE PERFORMANCE OF ANY OF ITS MATERIAL
OBLIGATIONS.  IF THE PARTY RECEIVING SUCH NOTICE DISPUTES THAT THE NON-BREACHING
PARTY IS ENTITLED TO TERMINATE THIS AGREEMENT UNDER THIS SECTION 12.2.1
(INCLUDING, WITHOUT LIMITATION, WHETHER A BREACH OR DEFAULT OCCURRED OR WHETHER
SUCH BREACH OR DEFAULT WAS MATERIAL), THEN THE MATTER SHALL BE REFERRED TO
BINDING ARBITRATION PURSUANT TO SECTION 12.2.2 BELOW.  ANY PERMITTED TERMINATION
SHALL BECOME EFFECTIVE (A) IF NO ARBITRATION OCCURS, NINETY (90) DAYS AFTER THE
EFFECTIVE DATE OF SUCH NOTICE, (B) IF ARBITRATION IS RESOLVED IN FAVOR OF THE
NON-BREACHING PARTY, NINETY (90) DAYS AFTER THE ARBITRATOR’S RULING, UNLESS, IN
EITHER CASE, THE BREACHING PARTY (OR ANY OTHER PARTY ON ITS BEHALF) HAS CURED
ANY SUCH BREACH OR DEFAULT PRIOR TO THE EXPIRATION OF THE NINETY (90) DAY
PERIOD.  NOTWITHSTANDING THE FOREGOING, IN THE EVENT OF A FAILURE TO PERFORM A
MATERIAL OBLIGATION UNDER THIS AGREEMENT THAT IS CAPABLE OF BEING CURED, BUT IS
NOT REASONABLY CAPABLE OF BEING CURED WITHIN THE NINETY (90) DAY CURE PERIOD,
PROVIDED THAT (I) THE BREACHING PARTY PROPOSES WITHIN SUCH NINETY (90) DAY
PERIOD A WRITTEN PLAN TO CURE SUCH NON-PERFORMANCE WITHIN A DEFINED TIME FRAME,
(II) SUCH WRITTEN PLAN AND TIMEFRAME ARE REASONABLY ACCEPTABLE TO THE
NON-BREACHING PARTY, AND (III) THE BREACHING PARTY 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 FOR SO LONG AS THE
BREACHING PARTY IS DILIGENTLY PURSUING SUCH CURE; PROVIDED, HOWEVER, THAT THE
BREACHING PARTY SHALL LOSE ITS RIGHT TO CONTINUE TO CURE PURSUANT TO THIS
SENTENCE IF AT ANY TIME SUCH PARTY CEASES TO MAKE A GOOD FAITH EFFORT TO CURE
SUCH DEFAULT FOR A PERIOD EXCEEDING FOURTEEN (14) DAYS DURING THE EXTENDED CURE
PERIOD OR IF SUCH PARTY FAILS TO CURE SUCH DEFAULT WITHIN THE DEFINED TIME
FRAME, AND IN SUCH CASE THE NOTIFYING PARTY SHALL HAVE THE RIGHT TO TERMINATE
IMMEDIATELY ON WRITTEN NOTICE TO THE BREACHING PARTY.  THE RIGHT OF EITHER PARTY
TO TERMINATE THIS AGREEMENT AS HEREIN ABOVE PROVIDED SHALL NOT BE AFFECTED IN
ANY WAY BY ITS WAIVER OF, OR FAILURE TO TAKE ACTION WITH RESPECT TO, ANY
PREVIOUS DEFAULT OR NON-PERFORMANCE.

12.2.2      ARBITRATION.  IN THE EVENT A PARTY DISPUTES WHETHER THE OTHER PARTY
IS ENTITLED TO

 

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amended.

 

TERMINATE THIS AGREEMENT UNDER SECTION 12.2.1 ABOVE, THEN THE MATTER SHALL BE
FINALLY SETTLED BY BINDING ARBITRATION, HELD IN CHICAGO, ILLINOIS.

(A)   CHOICE OF ARBITRATORS AND GOVERNING RULES.  THE PARTIES SHALL USE THEIR
BEST EFFORTS TO MUTUALLY AGREE UPON ONE (1) ARBITRATOR; PROVIDED, HOWEVER, THAT
IF THE PARTIES HAVE NOT DONE SO WITHIN TEN (10) DAYS AFTER INITIATION OF
ARBITRATION HEREUNDER, OR SUCH LONGER PERIOD OF TIME AS THE PARTIES HAVE AGREED
TO IN WRITING, THEN THERE SHALL BE THREE (3) ARBITRATORS, INCLUDING ONE NOMINEE
OF ARRAY, ONE NOMINEE OF CELGENE, AND A THIRD PERSON SELECTED BY SAID NOMINEES. 
THE ARBITRATOR’S(S’) RULING SHALL BE FINAL AND BINDING UPON THE PARTIES.  THE
PARTY AGAINST WHICH THE ARBITRATOR(S) RULE SHALL BEAR ALL COSTS OF SUCH
ARBITRATION, AND ADDITIONALLY, THE PREVAILING PARTY SHALL BE ENTITLED TO
REASONABLE ATTORNEYS’ FEES AND COSTS TO BE FIXED BY THE ARBITRATOR(S).  ANY
ARBITRATION CONDUCTED PURSUANT TO THIS ARTICLE 12.2.2 SHALL BE IN ACCORDANCE
WITH THE THEN-CURRENT COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION.  THE PARTIES SHALL USE DILIGENT EFFORTS TO CAUSE THE COMPLETION OF
ANY SUCH ARBITRATION WITHIN ONE HUNDRED EIGHTY (180) DAYS FOLLOWING A REQUEST BY
ANY PARTY FOR SUCH ARBITRATION.

(B)   INJUNCTIVE RELIEF.  NOTWITHSTANDING THE ABOVE, PENDING THE OUTCOME OF ANY
ARBITRATION PROCEEDINGS, THE NON-BREACHING PARTY SHALL BE ENTITLED TO APPLY TO
ANY COURT HAVING JURISDICTION OVER THE ALLEGEDLY BREACHING PARTY SEEKING
INJUNCTIVE RELIEF (INTERIM, INTERLOCUTORY AND/OR FINAL) TO PREVENT THE ALLEGEDLY
BREACHING PARTY FROM BREACHING OR CONTINUING TO BREACH ANY OF ITS OBLIGATIONS
UNDER THIS AGREEMENT.

12.3         TERMINATION UPON NOTICE.

12.3.1      TERMINATION BY CELGENE ON NOTICE.  CELGENE MAY TERMINATE THIS
AGREEMENT UPON SIX (6) MONTHS’ WRITTEN NOTICE TO ARRAY.

12.3.2      TERMINATION BY CELGENE ON A PRODUCT-BY-PRODUCT BASIS.  IN ADDITION,
CELGENE MAY TERMINATE THIS AGREEMENT AS TO ANY PARTICULAR COLLABORATION
COMPOUND, CORRESPONDING COLLABORATION BACK-UP COMPOUNDS AND ANY LICENSED PRODUCT
INCORPORATING SUCH COLLABORATION COMPOUND OR COLLABORATION BACK-UP COMPOUNDS (AN
“ABANDONED PRODUCT”) BY SO NOTIFYING ARRAY,

 

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amended.

 

WHICH TERMINATION SHALL BE EFFECTIVE SIX (6) MONTHS AFTER THE DATE OF SUCH
NOTICE.  ON AND FROM THE EFFECTIVE DATE OF ANY SUCH TERMINATION BY CELGENE
PURSUANT TO THIS SECTION 12.3.2, SUCH COLLABORATION COMPOUND, COLLABORATION
BACK-UP COMPOUNDS AND THE TARGET WHICH IS MODULATED BY SUCH COMPOUNDS SHALL
CEASE TO BE A COLLABORATION COMPOUND, COLLABORATION BACK-UP COMPOUNDS AND A
TARGET, RESPECTIVELY, FOR ALL PURPOSES OF THIS AGREEMENT.

12.3.3      FOR EACH ABANDONED PRODUCT FOR WHICH RIGHTS REVERT TO ARRAY UNDER
THIS SECTION 12.3, ARRAY AND CELGENE SHALL, AT ARRAY’S REQUEST, TRANSFER TO
ARRAY ANY MAA OR MARKETING APPROVAL AND ALL CLINICAL TEST DATA IN CELGENE’S
POSSESSION OR CONTROL FOR SUCH ABANDONED PRODUCT, PROVIDE ANY SURPLUS QUANTITIES
OF SUCH LICENSED PRODUCT [ * ], NEGOTIATE WITH ARRAY IN GOOD FAITH FOR A
ROYALTY-BEARING LICENSE TO ANY INTELLECTUAL PROPERTY CONTROLLED BY CELGENE
NECESSARY FOR ARRAY TO DEVELOP, MAKE, HAVE MADE, USE, SELL, OFFER FOR SALE AND
IMPORT ABANDONED PRODUCTS, AND ENTER INTO ANY OTHER COMMERCIALLY REASONABLE
ARRANGEMENTS AS THE PARTIES MAY MUTUALLY AGREE; PROVIDED THAT ARRAY SHALL
REIMBURSE CELGENE FOR ANY OUT-OF-POCKET COSTS REASONABLY INCURRED AT ARRAY’S
REQUEST TO EFFECTUATE SUCH TRANSFER.  NOTWITHSTANDING THE FOREGOING, FOR EACH
ABANDONED PRODUCT FOR WHICH RIGHTS REVERT TO ARRAY UNDER THIS SECTION 12.3,
CELGENE HEREBY GRANTS ARRAY A WORLD-WIDE, ROYALTY-FREE, NON-EXCLUSIVE RIGHT AND
LICENSE UNDER MANUFACTURING TECHNOLOGY (DEFINED BELOW), SOLELY TO DEVELOP, MAKE,
HAVE MADE, USE, SELL, OFFER FOR SALE AND IMPORT SUCH ABANDONED PRODUCT; PROVIDED
THAT ARRAY REIMBURSES CELGENE FOR ITS OUT-OF-POCKET COSTS INCURRED IN CREATING
SUCH MANUFACTURING TECHNOLOGY; AND PROVIDED FURTHER THAT SUCH LICENSE SHALL
INCLUDE THE RIGHT TO GRANT SUBLICENSES TO THIRD PARTIES IDENTIFIED TO CELGENE,
BUT NOT TO AUTHORIZE FURTHER SUBLICENSES.  “MANUFACTURING TECHNOLOGY” SHALL MEAN
CELGENE INTELLECTUAL PROPERTY COMPRISING A METHOD OF MANUFACTURING AN ABANDONED
PRODUCT THAT IS INCLUDED IN CELGENE’S MAA OR MARKETING APPROVAL FOR SUCH
ABANDONED PRODUCT.

12.4         TERMINATION ON BANKRUPTCY.  EITHER PARTY MAY TERMINATE THIS
AGREEMENT, IF, AT ANY TIME, THE OTHER PARTY SHALL FILE IN ANY COURT OR AGENCY
PURSUANT TO ANY STATUTE OR REGULATION OF ANY STATE OR COUNTRY, A PETITION IN
BANKRUPTCY OR INSOLVENCY OR FOR REORGANIZATION OR FOR AN ARRANGEMENT OR FOR THE
APPOINTMENT OF A RECEIVER OR TRUSTEE OF THE PARTY OR OF SUBSTANTIALLY ALL OF ITS
ASSETS, OR IF THE OTHER PARTY PROPOSES A WRITTEN AGREEMENT OF COMPOSITION OR
EXTENSION OF SUBSTANTIALLY ALL OF ITS DEBTS,

 

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amended.

 

OR IF THE OTHER PARTY SHALL BE SERVED WITH AN INVOLUNTARY PETITION AGAINST IT,
FILED IN ANY INSOLVENCY PROCEEDING, AND SUCH PETITION SHALL NOT BE DISMISSED
WITHIN SIXTY (60) DAYS AFTER THE FILING THEREOF, OR IF THE OTHER PARTY SHALL
PROPOSE OR BE A PARTY TO ANY DISSOLUTION OR LIQUIDATION, UNLESS IN CONNECTION
WITH SUCH DISSOLUTION OR LIQUIDATION THIS AGREEMENT IS ASSIGNED UNDER
SECTION 12.4, OR IF THE OTHER PARTY SHALL MAKE AN ASSIGNMENT OF SUBSTANTIALLY
ALL OF ITS ASSETS FOR THE BENEFIT OF CREDITORS.  NOTWITHSTANDING THE FOREGOING,
THE RIGHTS AND LICENSES GRANTED TO CELGENE AND TO ARRAY UNDER SECTIONS 5.2 AND
5.3 ABOVE ARE, AND SHALL OTHERWISE BE DEEMED TO BE, FOR PURPOSES OF SECTION
365(N) OF THE UNITED STATES BANKRUPTCY CODE, LICENSES OF RIGHTS TO “INTELLECTUAL
PROPERTY” AS DEFINED UNDER SECTION 101 OF THE UNITED STATES BANKRUPTCY CODE. 
THE PARTIES ACKNOWLEDGE AND AGREE THAT CELGENE AND ARRAY, AS APPLICABLE, AS A
LICENSEE OF SUCH RIGHTS UNDER THIS AGREEMENT, SHALL RETAIN AND MAY FULLY
EXERCISE ALL OF ITS RIGHTS AND ELECTIONS UNDER THE UNITED STATES BANKRUPTCY
CODE.

12.5         EFFECT OF TERMINATION.

12.5.1      ACCRUED RIGHTS, SURVIVING OBLIGATIONS.  TERMINATION, RELINQUISHMENT
OR EXPIRATION OF THIS AGREEMENT FOR ANY REASON SHALL BE WITHOUT PREJUDICE TO ANY
OBLIGATIONS WHICH SHALL HAVE ACCRUED PRIOR TO SUCH TERMINATION, RELINQUISHMENT
OR EXPIRATION, INCLUDING THE PAYMENT OBLIGATIONS UNDER ARTICLE 6 HEREOF AND ANY
AND ALL DAMAGES ARISING FROM ANY BREACH HEREUNDER.

12.5.2      CERTAIN TERMINATIONS.  IN ADDITION TO THE PROVISIONS OF
SECTION 12.6, THE FOLLOWING SHALL APPLY.

(A)   NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, (I) CELGENE SHALL NOT BE
OBLIGATED TO PAY ANY PAYMENT OTHERWISE PAYABLE UNDER SECTION 6.2 AS A RESULT OF
OCCURRENCE OF A DISCOVERY MILESTONE OR UNDER SECTION 6.3 AS THE RESULT OF
OCCURRENCE OF A DEVELOPMENT MILESTONE IF THE DISCOVERY MILESTONE OR DEVELOPMENT
MILESTONE OCCURS AFTER THE EFFECTIVE DATE OF A TERMINATION PURSUANT TO
SECTION 12.2, 12.3 OR 12.4 ABOVE AND (II) IN THE EVENT THAT [ * ] TERMINATES
THIS AGREEMENT [ * ], THE FOLLOWING SHALL APPLY:

(I)    IF SUCH TERMINATION IS [ * ], THEN (1) IF CELGENE HAS EXERCISED THE
CELGENE PRODUCT OPTION WITH RESPECT TO TWO (2) TARGETS, (A) [ * ] SHALL SURVIVE
WITHOUT [ * ], (B) [ * ]

 

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amended.

 

RIGHTS AND [ * ] OBLIGATIONS UNDER [ * ] SHALL SURVIVE, AND (C) [* ] OBLIGATIONS
UNDER [ * ] SHALL SURVIVE [ * ] BASIS UNTIL [ * ] (Y) SUCH TIME AS [ * ] AND (Z)
[ * ]; OR (2) IF CELGENE HAS NOT EXERCISED THE CELGENE PRODUCT OPTION WITH
RESPECT TO TWO (2) TARGETS, THEN (A) [ * ] SHALL HAVE THE RIGHT TO [ * ], IN ITS
SOLE DISCRETION, [ * ], (B) [ * ] SHALL SURVIVE AND INCLUDE [ * ], AND IN
CONNECTION THEREWITH, [ * ], (C) [SECTION 5.2] SHALL SURVIVE WITHOUT [ * ], (D)
[ * ] SHALL IMMEDIATELY TERMINATE, (E) [ * ] RIGHTS AND [ * ] OBLIGATIONS UNDER
[ * ] SHALL SURVIVE, AND (F) [ * ] OBLIGATIONS UNDER [ * ] SHALL SURVIVE [ * ]
BASIS UNTIL [ * ] (Y) SUCH TIME AS [ * ] AND (Z) [ * ];

(II)   IF SUCH TERMINATION IS [ * ], THEN [ * ] RIGHT TO TERMINATE SHALL BE
LIMITED TO [ * ], AND [ * ] SHALL HAVE THE RIGHT, IN ITS SOLE DISCRETION, TO
EITHER (1) [ * ], IN WHICH EVENT (A) [ * ] SHALL SURVIVE AND SHALL INCLUDE [ *
], AND IN CONNECTION THEREWITH, [ * ], (B) [ * ] SHALL SURVIVE WITH RESPECT TO [
* ] WITHOUT [ * ], (C) [ * ] RIGHTS AND [ * ] OBLIGATIONS UNDER [ * ] SHALL
SURVIVE, AND (D) [ * ] OBLIGATIONS UNDER [ * ] SHALL SURVIVE [ * ] BASIS UNTIL [
* ] (Y) SUCH TIME AS [ * ] AND (Z) [ * ]; OR (2) TERMINATE THE AGREEMENT WITH
RESPECT TO [ * ], IN WHICH EVENT [ * ] SHALL [ * ] AS [ * ] FOR [ * ] AND [ * ].

(III)  IF SUCH TERMINATION IS [ * ] OTHER THAN AS SET FORTH IN SUBSECTIONS (I)
OR (II) ABOVE, THEN (1) IF CELGENE HAS EXERCISED THE CELGENE PRODUCT OPTION WITH
RESPECT TO TWO (2) TARGETS, (A) [ * ] SHALL SURVIVE, EXCEPT THAT [ * ]
OBLIGATIONS UNDER [ * ], AS THE ONLY [ * ], SHALL BE [ * ], (B) [ * ] RIGHTS AND
[ * ] OBLIGATIONS UNDER [ * ] SHALL SURVIVE, AND (C) [ * ] OBLIGATIONS UNDER [ *
] SHALL CONTINUE [ * ] AS IF THIS AGREEMENT HAD NOT BEEN TERMINATED; OR (2) IF
CELGENE HAS NOT EXERCISED THE CELGENE PRODUCT OPTION WITH RESPECT TO TWO (2)
TARGETS, THEN (A) [ * ] SHALL HAVE THE RIGHT TO [ * ], IN ITS SOLE DISCRETION, [
* ], (B) [ * ] SHALL SURVIVE AND INCLUDE [ * ], AND IN CONNECTION THEREWITH, [ *
], (C) [ * ] SHALL SURVIVE, EXCEPT THAT [ * ] OBLIGATIONS UNDER [ * ], AS THE
ONLY [ * ], SHALL BE [ * ], (D) [ * ] SHALL IMMEDIATELY TERMINATE, (E) [ * ]
RIGHTS AND [ * ] OBLIGATIONS UNDER [ * ] SHALL SURVIVE, AND (F) [ * ]
OBLIGATIONS UNDER [ * ] SHALL CONTINUE [ * ] AS IF THIS AGREEMENT HAD NOT BEEN
TERMINATED.

(B)   FURTHER, IN THE EVENT OF A TERMINATION OF THIS AGREEMENT [ * ], OR
TERMINATION BY [ * ]:  (1) ALL LICENSED PRODUCTS, COLLABORATION COMPOUNDS AND
COLLABORATION BACK-UP COMPOUNDS THEN BEING DEVELOPED OR COMMERCIALIZED BY
CELGENE SHALL [ * ]; PROVIDED, HOWEVER,

 

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amended.

 

IF SUCH TERMINATION IS [ * ], [ * ] SHALL GRANT [ * ] A [ * ]; (2) [ * ] SHALL
SURVIVE; (3) [ * ] RIGHTS AND [ * ] OBLIGATIONS UNDER [ * ] SHALL SURVIVE; AND
(4) [ * ] OBLIGATIONS UNDER [ * ] SHALL CONTINUE [ * ] AS IF THIS AGREEMENT HAD
NOT BEEN TERMINATED.  FROM AND AFTER THE EFFECTIVE DATE OF TERMINATION FOR THE
EVENTS DESCRIBED IN THIS SECTION 12.5.2(B), [ * ] SHALL HAVE NO FURTHER
OBLIGATIONS UNDER THIS AGREEMENT BEYOND THOSE OBLIGATIONS THAT SURVIVE
TERMINATION IN SUCH EVENTS AS SPECIFIED IN THIS SECTION 12.5.2(B) AND SECTION
12.5.3 BELOW.

12.5.3      SURVIVAL.  ARTICLES 1, 10 (SUBJECT TO EXPIRATION PURSUANT TO SECTION
10.6) AND 13 (EXCEPT FOR SECTIONS 13.3.2  AND 13.4) AND SECTIONS 5.3 (UNLESS
SUCH SECTION IS TERMINATED BY ARRAY PURSUANT TO SECTION 5.6.3(B)(II)(2) OR
TERMINATED IN ACCORDANCE WITH SECTION 12.5.2(A)), 9.1, 9.2, 9.3, 11.3, 11.4,
12.5 AND 12.6 SHALL SURVIVE THE EXPIRATION AND ANY TERMINATION OF THIS
AGREEMENT; AND SECTION 5.2 SHALL SURVIVE THE EXPIRATION BUT NOT AN EARLIER
TERMINATION (EXCEPT AS PROVIDED ABOVE) OF THIS AGREEMENT.

12.6         TERMINATION NOT SOLE REMEDY.  TERMINATION IS NOT THE SOLE REMEDY
UNDER THIS AGREEMENT AND, WHETHER OR NOT TERMINATION IS EFFECTED, ALL OTHER
REMEDIES WILL REMAIN AVAILABLE EXCEPT AS AGREED TO OTHERWISE HEREIN OR
SEPARATELY BY THE PARTIES IN WRITING.

ARTICLE XIII
MISCELLANEOUS

13.1         DISPUTE RESOLUTION.  EXCEPT FOR ANY DISAGREEMENTS THAT ARE WITHIN
THE AUTHORITY OF ANY COMMITTEE AS PROVIDED IN ARTICLE 2 ABOVE OR DISAGREEMENTS
UNDER SECTION 12.2.1 ABOVE, WHICH DISAGREEMENTS SHALL BE RESOLVED IN ACCORDANCE
WITH SECTION 2.2.3 OR SECTION 12.2.2 ABOVE, RESPECTIVELY, THE PARTIES AGREE THAT
ANY DISPUTES ARISING WITH RESPECT TO THE INTERPRETATION, ENFORCEMENT,
TERMINATION OR INVALIDITY OF THIS AGREEMENT (EACH, A “DISPUTE”), THE DISPUTE
SHALL FIRST BE PRESENTED TO THE PARTIES’ RESPECTIVE HEAD OF RESEARCH OR HIS/HER
DESIGNEE FOR RESOLUTION.  IF EACH PARTY’S HEAD OF RESEARCH OR HIS/HER DESIGNEE
CANNOT RESOLVE SUCH DISPUTE WITHIN THIRTY (30) DAYS OR SUCH LONGER PERIOD OF
TIME AS SUCH HEADS OF RESEARCH OR THEIR RESPECTIVE DESIGNEES MAY AGREE, EITHER
PARTY MAY INITIATE LEGAL PROCEEDINGS WITH RESPECT THERETO.  NOTWITHSTANDING
ANYTHING IN THIS

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

SECTION 13.1 TO THE CONTRARY, EACH PARTY SHALL EACH HAVE THE RIGHT TO APPLY TO
ANY COURT OF COMPETENT JURISDICTION FOR APPROPRIATE INTERIM OR PROVISIONAL
RELIEF, AS NECESSARY TO PROTECT THE RIGHTS OR PROPERTY OF SUCH PARTY.

13.2         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.

13.3         ASSIGNMENT.

13.3.1      GENERAL.  THIS AGREEMENT SHALL NOT BE ASSIGNABLE BY EITHER PARTY TO
ANY THIRD PARTY HERETO WITHOUT THE WRITTEN CONSENT OF THE OTHER PARTY HERETO,
EXCEPT THAT EITHER PARTY MAY ASSIGN THIS AGREEMENT, WITHOUT THE WRITTEN CONSENT
OF THE OTHER PARTY, TO AN ENTITY THAT ACQUIRES ALL OR SUBSTANTIALLY ALL OF THE
BUSINESS OR ASSETS OF THE ASSIGNING PARTY TO WHICH THIS AGREEMENT PERTAINS,
WHETHER BY MERGER, ACQUISITION, SALE OR OTHERWISE, PROVIDED THAT THE ACQUIRER
ASSUMES THIS AGREEMENT IN WRITING OR BY OPERATION OF LAW.  IN ADDITION, EITHER
PARTY SHALL HAVE THE RIGHT TO ASSIGN THIS AGREEMENT TO AN AFFILIATE UPON WRITTEN
NOTICE TO THE NON-ASSIGNING PARTY; PROVIDED THAT:  (A) THE ASSIGNING PARTY
GUARANTEES THE PERFORMANCE OF THIS AGREEMENT BY SUCH AFFILIATE; AND (B) IF THE
NON-ASSIGNING PARTY REASONABLY BELIEVES THAT SUCH ASSIGNMENT COULD RESULT IN
MATERIAL ADVERSE TAX CONSEQUENCES TO THE NON-ASSIGNING PARTY, SUCH ASSIGNMENT
SHALL NOT BE MADE WITHOUT THE NON-ASSIGNING PARTY’S CONSENT.  SUBJECT TO THE
FOREGOING, THIS AGREEMENT INURE TO THE BENEFIT OF EACH PARTY AND ITS SUCCESSORS
AND PERMITTED ASSIGNS.  ANY ASSIGNMENT IN CONTRAVENTION OF THIS SECTION 13.3
SHALL BE NULL AND VOID.

13.3.2      CERTAIN MATTERS RELATING TO ACQUISITIONS.  IN THE EVENT (I) CELGENE
ASSIGNS THIS AGREEMENT TO AN ENTITY THAT ACQUIRES ALL OR SUBSTANTIALLY ALL OF
THE BUSINESS OR ASSETS OF CELGENE, OR (II) CELGENE MERGES OR CONSOLIDATES OR
ENTERS INTO A SIMILAR TRANSACTION WITH AN ENTITY IN WHICH SUCH ENTITY BECOMES AN
AFFILIATE OF CELGENE (EACH SUCH EVENT, A “SUBJECT TRANSACTION”), AND, AS A
RESULT OF THE SUBJECT TRANSACTION, CELGENE (OR ITS SUCCESSOR) IS THEREAFTER
REQUIRED TO DIVEST, OR CHOOSES TO

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

LICENSE, ONE OR MORE LICENSED PRODUCTS TO A THIRD PARTY, CELGENE (OR ITS
SUCCESSOR) SHALL SO NOTIFY ARRAY AND PROVIDE ARRAY AN OPPORTUNITY TO PURCHASE OR
LICENSE SUCH RIGHTS ON TERMS TO BE DISCUSSED AT THE TIME.

13.4         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 REASONABLE EFFORTS TO AVOID OR REMOVE SUCH CAUSES OF NON-PERFORMANCE AND
SHALL CONTINUE PERFORMANCE WITH THE UTMOST DISPATCH WHENEVER SUCH CAUSES ARE
REMOVED.

13.5         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 PARAGRAPHS (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:

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

To Array:

Array BioPharma, Inc.
3200 Walnut Street
Boulder, CO 80301
Attention: Chief Operating Officer
Phone: (303) 381-6699
Facsimile: (303) 381-6697

 

To Celgene:

Celgene Corporation
86 Morris Avenue
Summit, NJ 07901
Attention: President of Research
Telephone: (908) 673-9000
Facsimile: (908) 673-2766

With a copy to:

Array BioPharma Inc.
3200 Walnut Street
Boulder, CO 80301
Attention: General Counsel
Phone: (303) 381-6679
Facsimile: (303) 386-1290

With a copy to:

Celgene Corporation
86 Morris Avenue
Summit, NJ 07901
Attention: General Counsel
Telephone: (908) 673-9000
Facsimile: (908) 673-2771

Any such notices shall be effective upon receipt by the Party to whom it is
addressed, or within three (3) business days of dispatch, whichever is earlier.

13.6         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.

 

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13.7         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.  SUCH INVALIDITY, ILLEGALITY OR
UNENFORCEABILITY SHALL NOT AFFECT THE VALIDITY, LEGALITY OR ENFORCEABILITY OF
SUCH PROVISION IN ANY OTHER JURISDICTION.

13.8         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.  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.

13.9         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 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.

13.10       INDEPENDENT CONTRACTORS.  NOTHING CONTAINED IN THIS AGREEMENT IS
INTENDED, OR 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.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

13.11       INTERPRETATION.  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:  (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; AND (D) THE WORDS “HEREIN” OR “HEREUNDER” RELATE TO
THIS AGREEMENT.  EACH ACCOUNTING TERM USED HEREIN THAT IS NOT SPECIFICALLY
DEFINED HEREIN SHALL HAVE THE MEANING GIVEN TO IT UNDER GAAP, BUT ONLY TO THE
EXTENT CONSISTENT WITH ITS USAGE AND THE OTHER DEFINITIONS IN THIS AGREEMENT.

13.12       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.

[Remainder of page intentionally left blank; signature page follows]

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

IN WITNESS WHEREOF, the Parties have caused this Drug Discovery and Development
Agreement to be executed by their duly authorized representatives as of the date
and year first written above.

 

ARRAY BIOPHARMA INC.

By:____________________________________

Name: _________________________________

Title: __________________________________

Date: __________________________________

 

CELGENE CORPORATION

By:____________________________________

Name: _________________________________

Title: __________________________________

Date: __________________________________

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

Schedule 1.38

TARGETS

 

[ * ] Targets

•                  [ * ]

[ * ]

•                  [ * ]

[ * ] Targets

•                  [ * ]

•                  [ * ]

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

Schedule 2.2.3(c)

TARGET INDICATIONS

 

[ * ]

•                  [ * ]

•                  [ * ]

•                  [ * ]

[ * ]

•                  [ * ]

•                  [ * ]

[ * ]

•                  [ * ]

•                  [ * ]

[ * ]

•                  [ * ]

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

Schedule 9.5.2

[ * ]

 

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

 

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