Exhibit 10.8

[*] = 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.

AMENDED AND RESTATED COLLABORATION AGREEMENT

THIS AMENDED AND RESTATED COLLABORATION AGREEMENT (the “Agreement”) is made and
entered into as of April 15, 2011 (the “Effective Date”) by and between
EXELIXIS, INC., a Delaware corporation having its principal place of business at
210 East Grand Avenue, South San Francisco, California 94080 (“EXEL”), EXELIXIS
PATENT COMPANY, LLC., a Delaware limited liability company having its principal
place of business at 210 East Grand Avenue, South San Francisco, California
94080 (“EPC”), and BRISTOL-MYERS SQUIBB COMPANY, a Delaware corporation
headquartered at 345 Park Avenue, New York, New York, 10154 (“BMS”). EXEL, EPC
and BMS are sometimes referred to herein individually as a “Party” and
collectively as the “Parties”. EXEL and EPC are sometimes referred to
collectively as “Exelixis”.

RECITALS

A. BMS is a multinational health care company that has expertise and capability
in researching, developing and marketing human pharmaceuticals.

B. EXEL is a drug discovery company that has expertise and proprietary
technology relating to compounds that modulate the target known as ROR.

C. BMS, EXEL and EPC desire to establish a collaboration to apply such Exelixis
technology and expertise to the discovery, lead optimization and
characterization of Small Molecule Compounds, and to provide for the development
and commercialization of novel therapeutic and prophylactic products based on
such compounds.

D. BMS and EXEL are parties to a collaboration agreement that established such
collaboration, entered into on October 8, 2010 (such agreement, the
“Collaboration Agreement”, and the effective date of such agreement, the
“Original Effective Date”).

E. On event date herewith, EXEL is assigning to its wholly owned subsidiary,
EPC, the patents relating to compounds that modulate ROR.

F. BMS, EXEL and EPC wishes to amend and restate the Collaboration Agreement to
account for such change of patent ownership.

NOW, THEREFORE, the Parties agree as follows:

 

1. DEFINITIONS

Capitalized terms used in this Agreement (other than the headings of the
Sections or Articles) have the following meanings set forth in this Article 1,
or, if not listed in this Article 1, the meanings as designated in the text of
this Agreement.

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1.1 “Affiliate” means, with respect to a particular Party, a person,
corporation, partnership, or other entity that controls, is controlled by or is
under common control with such Party. For the purposes of the definition in this
Section 1.1, the word “control” (including, with correlative meaning, the terms
“controlled by” or “under the common control with”) means the actual power,
either directly or indirectly through one (1) or more intermediaries, to direct
or cause the direction of the management and policies of such entity, whether by
the ownership of at least fifty percent (50%) of the voting stock of such
entity, by contract or otherwise.

1.2 “ANDA” means an Abbreviated New Drug Application submitted to the FDA in
conformance with applicable laws and regulations, or the foreign equivalent of
any such application in any other country.

1.3 “BMS Licensed Know-How” means all Information (other than Patents)
Controlled by BMS and its Affiliates, including Information Controlled jointly
with Exelixis, as of the Original Effective Date or during the term of the
Agreement that: (a) relates to a Licensed Compound, a composition containing a
Licensed Compound, a formulation containing a Licensed Compound, or the
manufacture or use of a Licensed Compound; and (b) is [*] for Exelixis to
exercise the rights licensed to it under the Agreement or to perform its
obligations under the Agreement.

1.4 “BMS Licensed Patents” means all Patents Controlled by BMS and its
Affiliates, including Patents Controlled jointly with EPC, as of the Original
Effective Date or during the term of this Agreement that: (a) cover a Licensed
Compound, a composition containing a Licensed Compound, a formulation containing
a Licensed Compound, or the manufacture or use of a Licensed Compound; and
(b) are [*] for Exelixis to exercise the rights licensed to it under the
Agreement or to perform its obligations under the Agreement.

1.5 “BMS ROR Compound” means: (a) any Small Molecule Compound that is an ROR
Antagonist and is Controlled by BMS and/or its Affiliates as of the Original
Effective Date or during the Term, wherein such compound (i) (1) [*] or [*]
and/or [*] an ROR Antagonist [*] the [*] or (2) is [*] and [*] an ROR Antagonist
(A) [*] or [*] and/or [*] in the [*] the [*] or (B) [*] or [*] and/or [*] in the
[*] the [*], and (ii) is [*], a [*], or a [*] or [*]; or (b) any [*], or [*] of
[*]. Those ROR Antagonists that are [*] Controlled by BMS and/or its Affiliates
as of the Original Effective Date are set forth in the Disclosure Letter dated
as of even date herewith.

1.6 “Change of Control” means any transaction in which a Party: (a) sells,
conveys or otherwise disposes of all or substantially all of its property or
business; or (b)(i) merges, consolidates with, or is acquired by any other
Person (other than a wholly-owned subsidiary of such Party); or (ii) effects any
other transaction or series of transactions; in each case of clause (i) or (ii),
such that the stockholders of such Party immediately prior thereto, in the
aggregate, no longer own, directly or indirectly, beneficially or legally, at
least fifty percent (50%) of the outstanding voting securities or capital stock
of the surviving Person following the closing of such merger, consolidation,
other transaction or series of transactions. As used in this Section 1.6,
“Person” means any corporation, firm, partnership or other legal entity or
individual person.

1.7 “Collaboration” means all the activities performed by or on behalf of either
Exelixis or BMS in the course of performing work contemplated in Article 3, 4 or
5.

 

2

[*] = 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.

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

1.8 “Collaborative Research Period” means the period described in Section 3.2.

1.9 “Commercialize” means to promote, market, distribute, sell (and offer for
sale or contract to sell) or provide product support for a Product, including by
way of example: (a) detailing and other promotional activities in support of a
Product; (b) advertising and public relations in support of a Product, including
market research, development and distribution of selling, advertising and
promotional materials, field literature, direct-to-consumer advertising
campaigns, media/journal advertising, and exhibiting at seminars and
conventions; (c) developing reimbursement programs and information and data
specifically intended for national accounts, managed care organizations,
governmental agencies (e.g., federal, state and local), and other group
purchasing organizations, including pull-through activities; (d) co-promotion
activities not included in the above; (e) conducting Medical Education
Activities and journal advertising; and (f) [*]. For clarity, “Commercializing”
and “Commercialization” have a correlative meaning.

1.10 “Controlled” means, with respect to any compound, material, Information or
intellectual property right, that the Party owns or has a license to such
compound, material, Information or intellectual property right and has the
ability to grant to another Party access, a license or a sublicense (as
applicable) to such compound, material, Information or intellectual property
right as provided for herein without violating the terms of any agreement or
other arrangements with any Third Party existing at the time such Party would be
first required hereunder to grant such other Party such access, license or
sublicense.

1.11 “Decision Point [*]” or “[*]” means the point at which [*] decides whether
to [*] a [*] to [*] to [*], including [*] of [*] or [*] and the [*] of [*] and
[*] of [*] ([*], etc.) to that effort. At [*], the following [*]: (a) [*] or [*]
with [*] and [*] (through [*]); (b) [*] to [*]; (c) [*] or [*]; (d) [*] in [*];
(e) [*] for the [*] through [*] and [*]; (f) [*] for [*] for [*]; and (g) [*].

1.12 “Derivative” means, for a particular ROR Antagonist, each ROR Antagonist
that is [*] or [*] or [*] that are [*] of such ROR Antagonist.

1.13 “Development” means, with respect to a Product, those activities, including
clinical trials, supporting manufacturing activities and related regulatory
activities, that are [*] to: (a) obtain the approval by the applicable
Regulatory Authorities of the Drug Approval Application with respect to such
Product in the applicable regulatory jurisdiction, whether alone or for use
together, or in combination, with another active agent or pharmaceutical
product; or (b) maintain such approvals. To avoid confusion, Development [*].
For clarity, “Develop” and “Developing” have a correlative meaning.

1.14 “Diligent Efforts” means the carrying out of obligations or tasks in a
sustained manner consistent with the commercially reasonable efforts a Party
devotes to a product or a research, development or marketing project of similar
market potential, profit potential or strategic value resulting from its own
research efforts. Diligent Efforts requires that the Party: (a) [*], (b) [*],
and (c) [*] with respect to such [*].

1.15 “Disclosure Letter” means one or more mutually agreed written letters or
memoranda that are delivered by each of EXEL and BMS to the other
contemporaneously with or subsequent to the execution of this Agreement and are
identified therein as a Disclosure Letter

 

3

[*] = 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.

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

contemplated by this Agreement and any amendments or replacement thereof
approved in writing by both Parties.

1.16 “Dollars” or “$” means the legal tender of the United States.

1.17 “Drug Approval Application” or “DAA” means: (a) in the United States, an
NDA (or a supplemental NDA for following indications), and (b) in any other
country or regulatory jurisdiction, an equivalent application for regulatory
approval required before commercial sale or use of a Product (or with respect to
a subsequent indication) in such country or regulatory jurisdiction.

1.18 “[*]” or “[*]” means the point at which [*] decides whether to [*] a [*] to
[*] to [*]. This decision point is known [*] as “Decision Point [*]” or “[*]”.
This decision point is typically made [*] to [*] prior to the [*] of the [*] for
such [*]. For such a [*], the relevant [*] for such [*] shall [*] include:
(a) [*] of [*] in [*]; (b) [*] that [*] and is [*] to be [*]; (c) [*] that [*]
includes [*] and [*] and [*] to [*], [*], [*] and [*]; and (d) [*], and [*] and
[*], including [*] and [*]. For clarity, [*] (whether [*] or [*] or [*]) shall
be [*] at [*]; however, [*] must be [*] a [*]. Typically, the [*] shall also be
[*] and deemed suitable for [*].

1.19 “EMEA” means BMS’ European, Central and Eastern European, Middle Eastern
and African commercial territory, consisting of the following countries and
regions: Algeria, Andorra, Austria, Baltic States, Belgium, Bulgaria, Cyprus,
Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary,
Iceland, Ireland, Israel, Italy, Liechtenstein, Luxembourg, Malta, Morocco,
Netherlands, Norway, Poland, Portugal, Romania, Russia, Saudi Arabia, Slovakia,
Slovenia, South Africa, Spain, Sweden, Switzerland, Tunisia, Turkey, U.K.,
Ukraine, Vatican City, Lebanon, Jordan, Syria, Kuwait, Bahrain, Oman, UAE and
Qatar. The EMEA also includes: (a) the former Soviet Union and commonwealth of
independent states such as Georgia, Armenia and central Asian republics; and
(b) exports from France to English and French speaking African countries not
separately identified in the list. For clarity, the specific list of countries
and regions may change to align with any corresponding changes to BMS’ business
structures.

1.20 “EU” means the European Union, as its membership may be altered from time
to time, and any successor thereto. The member countries of the European Union
as of the Original Effective Date are Austria, Belgium, Bulgaria, Cyprus, Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland,
Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal,
Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

1.21 “Executive Officers” means: (a) in the case of Exelixis, the [*] of EXEL;
and (b) in the case of BMS, [*].

1.22 “Exelixis ROR Compound” means:

(a) any Small Molecule Compound that is an ROR Antagonist and is Controlled by
Exelixis and/or its Affiliates as of the Original Effective Date or during the
Term, wherein such compound (i) [*] an ROR Antagonist [*] or [*] and/or [*] the
[*]; (ii) [*] an ROR Antagonist [*] or

 

4

[*] = 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.

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

[*] and/or [*] in the [*] the [*] and is [*] a Small Molecule Compound that [*]
or [*] and/or [*] an ROR Antagonist [*] the [*]; or (iii) is [*] or [*] and such
[*] an ROR Antagonist (A) [*] or [*] and/or [*] in the [*] the [*] or (B) [*] or
[*] and/or [*] in the [*] the [*];

(b) any [*] or [*] that is an ROR Antagonist and is [*] or [*] and/or [*] the
[*] or [*], wherein such [*] (i) [*] an ROR Antagonist [*] or [*] and/or [*] the
[*]; or (ii) [*] an ROR Antagonist [*] or [*] and/or [*] in the [*] the [*];

(c) any [*] or a [*], wherein such [*] is [*] or [*] and/or [*] the [*] or [*]
and such [*] an ROR Antagonist (i) [*] or [*] and/or [*] in the [*] the [*] or
(ii) [*] or [*] and/or [*] in the [*] the [*]; or

(d) any [*], or [*] of [*] or [*].

Those ROR Antagonists that are [*] Controlled by Exelixis and/or its Affiliates
as of the Original Effective Date are set forth in the Disclosure Letter dated
as of even date herewith.

1.23 “Exelixis Licensed Know-How” means all Information (other than Patents)
Controlled by Exelixis and its Affiliates, including Information Controlled
jointly with BMS, as of the Original Effective Date or during the term of this
Agreement that: (a) relates to a Licensed Compound, a composition containing a
Licensed Compound, a formulation containing a Licensed Compound, or the
manufacture or use of a Licensed Compound; and (b) is [*] for BMS to exercise
the rights licensed to it under the Agreement or to perform its obligations
under the Agreement.

1.24 “Exelixis Licensed Patents” means all Patents Controlled by Exelixis and
its Affiliates, including Patents Controlled jointly with BMS, as of the
Original Effective Date or during the term of this Agreement that: (a) cover a
Licensed Compound, a composition containing a Licensed Compound, a formulation
containing a Licensed Compound, or the manufacture or use of a Licensed
Compound; and (b) are [*] for BMS to exercise the rights licensed to it under
the Agreement or to perform its obligations under the Agreement.

1.25 “FDA” means the U.S. Food and Drug Administration, and any successor
thereto.

1.26 “GAAP” means U.S. generally accepted accounting principles, consistently
applied.

1.27 “[*]” means, with respect to a particular Product in a country, [*]:
(a) [*] such Product (or [*]) and [*]; (b) is [*] ([*] or [*]); and (c) is [*]
or [*] a [*].

1.28 “IND” means an Investigational New Drug Application submitted to the FDA in
conformance with applicable laws and regulations, or the foreign equivalent of
any such application in any other country.

1.29 “Information” means information, results and data of any type whatsoever,
in any tangible or intangible form whatsoever, including, preclinical data,
clinical trial data, databases, practices, methods, techniques, specifications,
formulations, formulae, knowledge, know-how, skill, experience, test data
including pharmacological, biological, chemical, biochemical, toxicological and
clinical test data, analytical and quality control data, stability data, studies
and procedures. For clarity, Information does not include any Patents.

 

5

[*] = 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.

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

1.30 “Invention” means any and all inventions and improvements, whether or not
patentable, that are conceived or reduced to practice or otherwise made by or on
behalf of a Party (and/or its Affiliates) in the performance of its obligations,
or the exercise of its rights, under this Agreement.

1.31 “Joint Invention” means any Invention invented or discovered jointly by or
on behalf of the employee(s), contractor(s) or agent(s) of BMS on one hand, and
EXEL and/or EPC on the other hand (and/or their Affiliates).

1.32 “Joint Research Committee” or “JRC” means the committee described in
Section 2.1.

1.33 “Knowledge” means, with respect of a Party, the [*] facts and information
[*], or any [*] of, or [*], [*], [*] execution of this Agreement. For purposes
of this definition, [*] means any person in the [*] of a Party.

1.34 “Launch” means, for each Product in each country, the first arm’s-length
sale to a Third Party for use or consumption by the public of such Product in
such country after Regulatory Approval of such Product in such country. A Launch
shall not include any Product sold for use in clinical trials, for research or
for other non-commercial uses, or that is supplied as part of a compassionate
use or similar program.

1.35 “Licensed Compound” means any BMS ROR Compound or Exelixis ROR Compound.

1.36 “LXR Collaboration Agreement” means the Collaboration Agreement between
Exelixis and BMS, executed as of December 5, 2005, as amended.

1.37 “[*]” means [*] or [*] to the [*] that [*] the [*] set forth in [*] of the
[*].

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

1.39 “Major Territory” means each of the following territories: (a) [*].

1.40 “Manufacturing” means all activities related to the production,
manufacture, processing, filling, finishing, packaging, labeling, inspection,
receiving, holding and shipping of Licensed Compounds, Products, or any raw
materials or packaging materials with respect thereto, or any intermediate of
any of the foregoing, including process and cost optimization, process
qualification and validation, commercial manufacture, stability and release
testing, quality assurance and quality control. For clarity, “Manufacture” has a
correlative meaning.

1.41 “Materials” means: (a) Licensed Compounds; and (b) biological materials,
including but not limited to cell-lines, reagents, genes, vectors and
constructs, that are in Exelixis’ Control and that were used by Exelixis in the
performance of its obligations under the Research Plan.

 

6

[*] = 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.

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

1.42 “NDA” means a New Drug Application submitted to the FDA in conformance with
applicable laws and regulations.

1.43 “Net Sales” means the amount invoiced or otherwise billed by BMS, or its
Affiliate or sublicensee, for sales or other commercial disposition of a Product
to a Third Party purchaser, less the following to the extent included in such
billing or otherwise actually allowed or incurred with respect to such sales:
(a) discounts, including cash, trade and quantity discounts, price reduction
programs, retroactive price adjustments with respect to sales of a product,
charge-back payments and rebates granted to managed health care organizations or
to federal, state and local governments (or their respective agencies,
purchasers and reimbursers) or to trade customers, including but not limited to,
wholesalers and chain and pharmacy buying groups; (b) credits or allowances
actually granted upon rejections or returns of Products, including for recalls
or damaged goods; (c) freight, postage, shipping and insurance charges actually
allowed or paid for delivery of Products, to the extent billed; (d) customs
duties, surcharges and other governmental charges incurred in connection with
the exportation or importation of a Product; (e) bad debts relating to sales of
Products that are actually written off by BMS in accordance with GAAP during the
applicable calculation period; (f) costs due to the factoring of receivables;
and (g) taxes, duties or other governmental charges levied on, absorbed or
otherwise imposed on sale of Products, without limitation any fees payable under
the Health Care Reform Act of 2010, value-added taxes, or other governmental
charges otherwise measured by the billing amount, when included in billing, as
adjusted for rebates and refunds, but specifically excluding taxes based on net
income of the seller; provided that all of the foregoing deductions are
calculated in accordance with GAAP.

Notwithstanding the foregoing, if any Product is sold under a bundled or
capitated arrangement with other BMS products, then, solely for the purpose of
calculating Net Sales under this Agreement, any discount on such Products sold
under such an arrangement shall be [*] for the applicable accounting period. In
case of any dispute as to the applicable [*] under the preceding sentence, the
determination of same shall be calculated and certified by [*], whose decision
shall be binding.

A sale of a Product is deemed to occur upon invoicing. [*].

For sake of clarity and avoidance of doubt, sales by BMS, its Affiliates or
sublicensees of a Product to [*]. Any Products [*] considered in determining Net
Sales hereunder.

In the event a Product is sold as an end-user product consisting of a
combination of active functional elements or as a combined product and/or
service, Net Sales allocable to the Product in each such country, for purposes
of determining royalty payments on such Product, shall be determined by mutual
agreement reached in good faith by the Parties prior to the end of the
accounting period in question based on an equitable method of determining such
Net Sales that takes into account, on a country-by-country basis, variations in
potency, the relative contribution of each active agent, component or service,
as the case may be, in the combination, and relative value to the end user of
each active agent, component or service, as the case may be. Notwithstanding the
foregoing, the Parties agree that, for purposes of this paragraph, drug delivery
vehicles, adjuvants, and excipients shall not be deemed to be “active
ingredients” or “active functional elements”.

1.44 “[*]” means a [*] or [*] to the [*] that [*] the [*] set forth in [*] of
the [*].

 

7

[*] = 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.

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

1.45 “Patent” means all: (a) unexpired letters patent (including inventor’s
certificates and utility models) which have not been held invalid or
unenforceable by a court or other applicable governmental authority of competent
jurisdiction from which no appeal can be taken or has been taken within the
required time period (and which have not been admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise, or been abandoned in
accordance with or as permitted by the terms of this Agreement or by mutual
written agreement), including any substitution, extension, registration,
confirmation, reissue, re-examination, supplementary protection certificates,
confirmation patents, patent of additions, renewal or any like filing thereof;
(b) pending applications for letters patent which have not been canceled,
withdrawn from consideration, finally determined to be unallowable by the
applicable governmental authority or court for whatever reason (and from which
no appeal is or can be taken), and/or abandoned in accordance with or as
permitted by the terms of this Agreement or by mutual written consent, including
any continuation, division or continuation-in-part thereof and any provisional
or other priority applications; and (c) any international counterparts, and
counterparts in any country, to clauses (a) and (b) above.

1.46 “Phase IIb Clinical Trial” means a clinical trial of a Product on
sufficient numbers of patients that is designed to provide a preliminary
determination of safety and efficacy of such Product in the target patient
population over a range of doses and dose regimens.

1.47 “Phase III Clinical Trial” means a clinical trial of a Product on
sufficient numbers of patients that is designed to establish that such Product
is safe and efficacious for its intended use, and to define warnings,
precautions and adverse reactions that are associated with such Product in the
dosage range to be prescribed, and to support Regulatory Approval of such
Product or label expansion of such Product.

1.48 “Phase IV Clinical Trial” means a product support clinical trial of a
Product commenced after receipt of Regulatory Approval in the country where such
trial is conducted. A Phase IV Clinical Trial may include epidemiological
studies, modeling and pharmacoeconomic studies, and investigator-sponsored
clinical trials studying Product that are approved by BMS and that otherwise fit
the foregoing definition.

1.49 “Post-Termination Compound” means any ROR Antagonist for which [*] such
compound in any of the following time periods after the expiration or
termination of the Agreement: (i) within [*] thereafter in the event the
Agreement expires or terminates prior to the [*] anniversary of the Original
Effective Date; (ii) within [*] thereafter in the event the Agreement expires or
terminates on or after the [*] anniversary and prior to the [*] anniversary of
the Original Effective Date; (iii) within [*] thereafter in the event the
Agreement terminates on or after [*] anniversary and prior to the [*]
anniversary of the Original Effective Date; and (iv) within [*] in the event the
Agreement terminates on or after the [*] anniversary of the Original Effective
Date. For clarity, Post-Termination Compounds shall not include: (A) any
compound with respect to which [*] such compound [*] and [*] the [*] any [*] or
[*] or [*]; or (B) any compound that [*] or [*] that is [*] and that is [*]
under Article [*] of this Agreement.

1.50 “Product” means any human pharmaceutical product containing or comprising a
Licensed Compound, either alone or with other active ingredients and in all
forms, presentations, formulations and dosage forms.

 

8

[*] = 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.

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

1.51 “Registrational Trial” means, with respect to a given Product, either:
(a) a Phase III Clinical Trial with such Product; or (b) a Phase IIb Clinical
Trial that, at the time of commencement, is expected to be the basis for initial
Regulatory Approval of such Product.

1.52 “Regulatory Approval” means any and all approvals (including Drug Approval
Applications, supplements, amendments, pre- and post-approvals, pricing and
reimbursement approvals), licenses, registrations or authorizations of any
Regulatory Authority, national, supra-national (e.g., the European Commission or
the Council of the EU), regional, state or local regulatory agency, department,
bureau, commission, council or other governmental entity, that are necessary for
the manufacture, distribution, use or sale of a Product in a regulatory
jurisdiction.

1.53 “Regulatory Authority” means the applicable national (e.g., the FDA),
supra-national (e.g., the European Commission or the Council of the EU),
regional, state or local regulatory agency, department, bureau, commission,
council or other governmental entity that, in each case, governs the approval of
a Product in such applicable regulatory jurisdiction.

1.54 “Research” means the following activities: (a) identifying Small Molecule
Compounds as [*] that [*] and [*] ROR by [*]; (b) conducting a [*] program to
[*] such [*] to [*] that [*] and [*] ROR (including the conduct of [*] and [*]
studies, and [*] studies); and (c) conducting [*] on [*] to [*] for [*]
(including the conduct of [*] studies, and related [*] and [*] activities). To
avoid confusion, Research does not include the conduct of Development.

1.55 “Reverted Compound” means: (a) any Licensed Compound that has [*] prior to
the effective date of termination of this Agreement; and (b) any Licensed
Compound that: (i) has [*] prior to the effective date of termination of this
Agreement; and (ii) are [*].

1.56 “Reverted Compounds License Agreement” has the meaning set forth in
Section 11.5(a)(v).

1.57 “ROR” means: (a) the RAR-related orphan receptor [*] gene, otherwise known
as the [*] gene, ([*]); (b) the RAR-related orphan receptor [*] (otherwise known
as [*] or [*]) and RAR-related orphan receptor [*] (otherwise known as [*] or
[*]) proteins encoded by such gene (“[*]”); (c) the RAR-related orphan receptor
[*] (otherwise known as [*] (otherwise known as [*]) proteins encoded by such
gene (“[*]”); and (d) all [*] and [*] thereof.

1.58 “ROR Antagonist” means any Small Molecule Compound that (a) directly binds
and antagonizes (or is an inverse agonist of) ROR at the Target Potency
Threshold and (b) is specific for ROR, based upon the Target Specificity
Threshold.

1.59 “Small Molecule Compound” means a small molecule compound [*] or [*]. For
clarity, [*], shall be considered Small Molecule Compounds.

1.60 “Sole Invention” means any Invention invented or discovered solely by or on
behalf of a Party (or its Affiliate) and its employees, contractors and/or
agents.

1.61 “Success Criteria” has the meaning set forth in Section 3.3(b).

 

9

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

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1.62 “Target Potency Threshold” means, with respect to a Small Molecule
Compound, that such Small Molecule Compound [*] and [*] (or [*] of) the activity
of ROR with a half maximal inhibitory concentration (“IC50”) of less than or
equal to [*] in the [*] using [*].

1.63 “Target Specificity Threshold” means, with respect to a Small Molecule
Compound, that such Small Molecule Compound demonstrates, in a [*] or [*], [*]
ROR [*], [*] (i.e., the RAR-related orphan receptor [*] gene, otherwise known as
the [*] gene, and the protein encoded by such gene) (“ROR [*]”).

1.64 “Territory” means the world.

1.65 “Third Party” means any entity other than: (a) EXEL; (b) EPC; (c) BMS; or
(d) an Affiliate of any of the foregoing Party.

1.66 “United States” or “U.S.” means the United States of America, and its
territories, districts and possessions.

1.67 “Valid Claim” means: (a) a claim in an issued Patent that has not:
(i) expired or been canceled; (ii) been declared invalid by an unreversed and
unappealable or unappealed decision of a court or other appropriate body of
competent jurisdiction; (iii) been admitted to be invalid or unenforceable
through reissue, disclaimer or otherwise; or (iv) been abandoned in accordance
with or as permitted by the terms of this Agreement or by mutual written
agreement of the Parties; or (b) a claim under an application for a Patent that
has been pending [*], and, in any case, which has not been canceled, withdrawn
from consideration, finally determined to be unallowable by the applicable
governmental authority or court for whatever reason (and from which no appeal is
or can be taken), or abandoned.

 

10

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

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Additional Definitions

The following table identifies the location of definitions set forth in various
Sections of the Agreement.

 

Definition

  

Location (Section)

Alliance Manager

   2.3(a)

Bankrupt Party

   14.6(a)

[*]

   [*]

[*]

   [*]

BMS Independent Program

   5.1(b)

[*]

   [*]

Confidential Information

   10.1

Cost-Terminated Patent Right

   7.7(d)(iii)

[*] Notice

   [*]

[*] Notice

   [*]

EDI

   14.11

[*]

   [*]

Exelixis Sole Patent

   7.8(a)(i)

Indemnitee

   13.3

JAMS

   14.3(c)

Joint Invention Patents

   7.5(b)

Joint Product Patent

   7.8(b)(i)(1)

Letter Agreement

   14.4

[*]

   [*]

Losses

   13.1

Other Joint Patent

   7.8(b)(ii)(1)

Permitted Use

   4.2(b)

Prior CDA

   10.4

Proposed Terms

   14.3(d)

Research Plan

   3.3(a)

ROR Technology

   4.1

Royalty Term

   8.8

[*]

   [*]

Sales Threshold

   8.2(b)

Separable Compounds

   7.7(a)(v)

Sole Invention Patents

   7.5(b)

Support Memorandum

   14.3(c)

Term

   11.1

TGR5 License Agreement

   14.4

[*]

   [*]

Title 11

   14.6(a)

Transfer Addendum

   4.2(d)

Unauthorized Invention

   4.2(c)

 

11

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

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2. GOVERNANCE

2.1 Joint Research Committee.

(a) Membership of JRC. For the purpose of this Article 2, EXEL and EPC shall be
deemed collectively as one (1) “Party”. The JRC shall be composed of four
(4) members. Within [*] after the Original Effective Date, each Party shall
appoint two (2) representatives to the JRC. Each Party may replace its appointed
JRC representatives at any time upon written notice to the other Party. Each
Party shall designate one (1) of its representatives as co-chairperson of the
JRC. Each of the co-chairpersons shall be responsible, on an alternating basis
with the BMS co-chairperson having responsibility with respect to the initial
meeting, for working with the Alliance Managers to schedule meetings, prepare
and circulate an agenda in advance of each meeting, and to prepare and issue
minutes of each meeting within [*] thereafter. Any JRC member may add topics to
the draft agenda.

(b) Decision-making. The two (2) JRC representatives of each Party shall
collectively have one (1) vote, and the JRC shall operate by unanimous consent
of all JRC members present and in accordance with the principles set forth in
this Article 2. The JRC shall not have any authority or jurisdiction to amend,
modify, or waive compliance with this Agreement, any of which shall require
mutual written agreement of the Parties. In the event of a dispute between the
Parties with regard to the performance of the Collaboration, the matter shall be
first referred to the Alliance Managers for resolution. If these two
(2) individuals are unable to resolve the dispute, then the matter shall be
elevated to the [*] of EXEL and the [*] of BMS (or in either case a direct
report of such individual). If these two (2) individuals are unable to resolve
the dispute, then, subject to the last sentence of this Section 2.1(b) and to
Section 2.1(c), [*] shall have the final decision for [*] disputes relating to
the [*] or [*] of the [*], so long as such decision does not [*] or conflict
with the terms of the Agreement, the Parties shall mutually agree as to the [*]
of the [*] of [*] that [*] the [*] under the [*], and [*] shall have the final
decision with respect to [*] disputes with respect to the [*], so long as such
decision does not conflict with the terms of the Agreement. Notwithstanding
anything to the contrary, no decision by a Party shall (i) require the other
Party to: (1) [*] or [*] that such other Party [*] or [*]; (2) [*] that are [*]
or [*] those [*] the [*]; or (3) [*] any [*] (e.g., [*] of the [*] for [*] in
the [*] for [*]) in connection with [*] of [*] the [*], or [*] associated with
such [*]; or (ii) amend, modify, or waive such Party’s compliance with, this
Agreement, any of which shall require mutual written agreement of the Parties.

(c) Exceptions to Decision-making. Notwithstanding anything to the contrary, [*]
shall not have the final decision with respect to any dispute involving any of
the following: (i) [*] of the [*] the [*] and [*] of [*] the [*] and [*] of [*];
(ii) changing the [*]; (iii) changing [*] for [*] in a manner that [*] for [*]
that are [*] with [*] for the [*] the [*]; (iv) whether the [*] by [*] pursuant
to [*] that a [*] the [*]; (v) changing the [*] in a manner that [*] that are
[*] with [*] for the [*] the [*]; (vi) whether the [*] by [*] pursuant to [*]
that a [*] the [*]; (vii) changing the [*] or the [*]; or (viii) changing the
[*] the [*] so as to modify [*] (including [*]) under the [*], or the [*]
associated therewith.

(d) Responsibilities of the JRC. The JRC shall be responsible for the overall
planning and execution of the Collaboration and the approval and oversight of
the Research Plan.

 

12

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

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At its meetings, the JRC shall evaluate the Parties’ progress in carrying out
the Research Plan and the data generated by the Parties in the course of
carrying out the Research Plan, shall discuss and approve project prioritization
within the Research Plan, shall discuss and approve any revisions to the
Research Plan, and shall perform those activities specifically described in this
Agreement. To the extent necessary to carry out its responsibilities, a Party’s
JRC members shall be granted access to the other Party’s Confidential
Information relevant to any decision required to be made by the JRC.

2.2 Meetings of JRC. During the Collaborative Research Period, the JRC shall
meet [*] by audio or video teleconference and, at a minimum, [*] in person
(which in-person meeting shall be held on an alternating basis in New Jersey and
in San Francisco). With the consent of the representatives of each Party serving
on the JRC, other representatives of each Party may attend meetings of the JRC
as nonvoting observers (provided such representatives: (i) have contractual
confidentiality obligations to such Party that are at least as stringent as
those set forth in this Agreement; and (ii) are under intellectual property
assignment obligations to such Party in accordance with Section 7.5(c)).
Meetings of the JRC shall be effective only if at least one (1) representative
of each Party is present or participating. Each Party shall be responsible for
all of its own expenses of participating in JRC meetings. The Parties shall
endeavor to schedule meetings of the JRC at least [*] in advance. Upon the
conclusion of the Collaborative Research Period, the JRC shall be discontinued.

2.3 Alliance Managers.

(a) Appointment. Each of the Parties shall appoint an individual (each, an
“Alliance Manager”) who possesses a general understanding of the scientific and
business issues relevant to this Agreement. Each Party may change its designated
Alliance Manager from time to time upon prior written notice to the other Party.
Any Alliance Manager may designate a substitute to temporarily perform the
functions of that Alliance Manager by prior written notice to the other Party.

(b) Responsibilities. The Alliance Managers shall use good faith efforts to
attend all JRC meetings and support the co-chairpersons of the JRC in the
discharge of their responsibilities. Alliance Managers shall be nonvoting
participants in JRC meetings. An Alliance Manager may bring any matter to the
attention of the JRC if such Alliance Manager reasonably believes that such
matter warrants such attention. Each Alliance Manager shall be charged with
creating and maintaining a collaborative work environment within the JRC. In
addition, each Alliance Manager: (a) shall be the point of first referral in all
matters of conflict resolution; (b) shall identify and bring disputes to the
attention of the JRC in a timely manner; (c) shall plan and coordinate
cooperative efforts and internal and external communications; and (d) shall take
responsibility for ensuring that governance activities, such as the conduct of
required JRC meetings and production of meeting minutes, occur as set forth in
this Agreement, and that relevant action items resulting from such meetings are
appropriately carried out or otherwise addressed.

 

3. RESEARCH COLLABORATION.

3.1 Overview. The general goals and intent of the research portion of the
Collaboration are to apply each Party’s technology to discover, optimize and
characterize ROR Antagonists that

 

13

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

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may be developed into Products by BMS. Each of EXEL and BMS shall use Diligent
Efforts to carry out its research responsibilities in accordance with the
allocation of duties set forth in the Research Plan, including responsibilities
for [*], [*] and [*] of Licensed Compounds and activities to be conducted by the
Parties that lead to the submission by EXEL of data to BMS [*].

3.2 Collaborative Research Period. Subject to termination of this Agreement
pursuant to Section 11.2 or 11.3 (which will in turn terminate the Collaborative
Research Period), the Collaborative Research Period shall begin on the Original
Effective Date and shall, unless otherwise agreed by the Parties, terminate as
follows (such period, the “Collaborative Research Period”):

(a) In the event that [*] as of third (3rd) anniversary of the Original
Effective Date, then the Collaborative Research Period shall end on such third
(3rd) anniversary of the Effective Date.

(b) In the event that [*] prior to the third (3rd) anniversary of the Original
Effective Date, then the Collaborative Research Period shall end upon the
earlier of (i) the second (2nd) anniversary of the date on which in such series
of Licensed Compounds has achieved [*], or (ii) achievement of the first [*] for
a Licensed Compound.

During the Collaborative Research Period, each of EXEL and BMS shall use
Diligent Efforts to perform the tasks assigned to it in the Research Plan then
in effect. For clarity, upon [*], Exelixis shall be deemed to have fulfilled its
obligations under the Research Plan.

3.3 Research Plan; Success Criteria.

(a) The Parties have agreed in writing upon a detailed plan for the research to
be carried out by the BMS and EXEL during the Collaborative Research Period,
which is set forth in the Disclosure Letter and incorporated herein by reference
(the “Research Plan”). The Research Plan includes each of BMS’s and EXEL’s
respective obligations in furtherance of the research portion of the
Collaboration and timelines for completion of key stages. The JRC shall review
the Research Plan at least [*] and may propose and approve, subject to Sections
2.1(b) and 2.1(c), a revised version of the Research Plan that is consistent
with the terms of this Agreement. Once approved by the JRC, such revised
Research Plan shall replace the prior Research Plan.

(b) The Research Plan shall also contain criteria that a Licensed Compound must
satisfy in order for BMS to make the [*] decision (each set of criteria,
“Success Criteria”). Any Success Criteria that are not reasonably ascertainable
or completely known as of the Original Effective Date, or requiring adjustment
based on results obtained during the conduct of the Research Plan, shall be
supplemented and/or modified as approved by mutual agreement of the JRC from
time to time as appropriate.

3.4 Activities and Costs under the Research Plan.

(a) The Parties intend: (i) for EXEL to perform [*] activities during the “[*]”
phase of the Research Plan, including [*] of certain [*], known as “[*]” and
“[*]” in the [*], that were [*] or [*] pursuant to the [*] (with [*] the [*] to
[*] activities with respect to such [*] pursuant to the [*]); (ii) for EXEL to
perform the [*] activities in “[*]” phase of the Research Plan, which

 

14

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

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may include [*] of [*] that were [*] and [*] as [*] to the [*]; and (iii) for
EXEL and BMS, after [*], to jointly perform the “[*]” phase of the Research
Plan, in each case as set forth in more detail in the Research Plan. EXEL shall
provide no less than the minimum number of FTEs for the periods and activities
set forth in the Research Plan, and shall continue to support the Research Plan
using Diligent Efforts upon the expiration of any such period until the
conclusion of the Collaborative Research Period, and BMS shall provide adequate
resources to meet its activities set forth in the Research Plan.

(b) Each of EXEL and BMS shall bear its own internal and out-of-pocket costs and
expenses incurred in connection with the conduct of the activities assigned to
it under the Research Plan.

3.5 [*]. Promptly after EXEL and BMS’s activities pursuant to the Research Plan
generate data demonstrating that a particular series of Licensed Compounds meets
the Success Criteria for [*], and subsequent to activities in Section 3.7, EXEL
shall submit such data to BMS. BMS shall promptly (and in good faith) review
such data, and, within [*] of such submission, shall notify EXEL in writing if
BMS believes in good faith that such data do not demonstrate that such series of
Licensed Compounds [*], which notice shall specify the deficiencies in such data
that cause it not to demonstrate that such series of Licensed Compounds [*]
(such notice, a “[*] Notice”). If EXEL does not receive [*] Notice from BMS by
the end of such 30-day period, then BMS will, as of the end of such 30-day
period, be deemed to have agreed that the series of Licensed Compounds [*]
(“[*]”) and BMS shall be obligated to [*] set forth in Section [*] no later than
[*] after the end of such period. If EXEL receives [*] Notice within such [*]
period and it disagrees with BMS’ assessment of such data, then such dispute
shall be resolved by a mutually acceptable independent Third Party expert. Such
Third Party expert shall determine, within [*] of receipt of the data submitted
by EXEL to BMS pursuant to this Section 3.5 and the [*], whether such data
demonstrate that such series of Licensed Compounds [*], and EXEL and BMS agree
that such Third Party expert’s determination on this issue shall be final,
binding, and determinative. The Party against whom the Third Party expert rules
shall bear all costs of such Third Party determination. If such Third Party
expert determines that data submitted by EXEL to BMS pursuant to this
Section 3.5 demonstrate that such series of Licensed Compounds [*], then BMS
will, as of the date of such determination, be deemed to have made a [*] and BMS
shall be obligated to [*] set forth in Section [*] no later than [*] after the
date of such determination. If such Third Party expert determines that data
submitted by EXEL to BMS pursuant to this Section 3.5 does not demonstrate that
such series of Licensed Compounds [*], then [*] will not have occurred and EXEL
and BMS shall continue to work under the Research Plan in order to [*].

3.6 [*]. Promptly after the Parties’ activities pursuant to the Research Plan
generate data demonstrating that a particular Licensed Compound [*], EXEL shall
submit such data to BMS. BMS shall promptly (and in good faith) review such
data, and, within [*] of such submission, shall notify EXEL in writing if BMS
believes in good faith that such data do not demonstrate that such Licensed
Compound [*], which notice shall specify the deficiencies in such data that
cause it not to demonstrate that such Licensed Compound [*] (such notice, an
“[*] Notice”). If EXEL does not receive [*] Notice from BMS by the end of such
[*] period, then BMS will, as of the end of such [*] period, be deemed to have
agreed the Licensed Compound [*] (“[*]”) and BMS shall be obligated to [*] set
forth in Section [*] no later than [*] after the end of such period. If EXEL
receives [*] Notice within such [*] period and it disagrees with BMS’ assessment
of such data, then such dispute

 

15

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

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shall be resolved by a mutually acceptable independent Third Party expert. Such
Third Party expert shall determine, within [*] of receipt of the data submitted
by EXEL to BMS pursuant to this Section 3.6 and [*], whether such data
demonstrate that such Licensed Compound [*], and EXEL and BMS agree that such
Third Party expert’s determination on this issue shall be final, binding, and
determinative. The Party against whom the Third Party expert rules shall bear
all costs of such Third Party determination. If such Third Party expert
determines that data submitted by EXEL to BMS pursuant to this Section 3.6
demonstrate that such Licensed Compound [*], then BMS will, as of the date of
such determination, be deemed to have made a [*] and BMS shall be obligated to
[*] set forth in Section [*] no later than [*] after the date of such
determination. If such Third Party expert determines that data submitted by EXEL
to BMS pursuant to this Section 3.6 does not demonstrate that such Licensed
Compound [*], then [*] will not have occurred and EXEL and BMS shall continue to
work under the Research Plan in order to [*].

3.7 Review of Licensed Compounds. Prior to any determination whether a Licensed
Compound meets the Success Criteria for [*], EXEL shall review the results of
all [*] assays for [*] conducted by either EXEL or BMS for a compound that is
expected to progress to [*]. BMS shall provide EXEL with the results of all [*]
assays conducted by or on behalf of relating to [*] for each [*] Licensed
Compound, and sufficient samples of each [*] Licensed Compound to have such
assays conducted. EXEL may use such results and samples for the sole purpose of
performing assays to verify that such [*] Licensed Compound [*] of [*] any [*]
for [*] to any [*] (“[*]”). EXEL shall be responsible for having such assays
conducted [*] associated with such assays. If EXEL notifies BMS in writing
within [*] of receiving a sample of a submitted [*] Licensed Compound that such
Licensed Compound [*], then BMS shall [*] or [*] such Licensed Compound, and [*]
to [*] such Licensed Compound shall [*] ([*] to such Licensed Compound);
provided, however, that BMS [*] such Licensed Compound [*] in [*] to [*] the [*]
such Licensed Compound. For clarity, (i) nothing in this Section 3.7 shall be
[*] conducting screening activities, at any time, with respect to Licensed
Compounds in order to determine whether Licensed Compounds [*], and (ii) BMS may
[*] and [*] with respect to any such submitted [*] Licensed Compound during such
review period prior to receiving any such written notice from EXEL. In the event
that EXEL does not provide written notice to BMS with respect to the [*]
submitted [*] Licensed Compound within such [*] period, then BMS shall [*] and
[*] such Licensed Compound [*] and [*] in [*]. Notwithstanding the foregoing,
EXEL shall use commercially reasonable efforts to notify BMS as soon as
practicable in the event that EXEL becomes aware in the course of performing its
obligations under the Research Plan during the Collaborative Research Period
that a Licensed Compound [*].

3.8 Obligations of Parties. EXEL and BMS shall provide the JRC and its
authorized representatives with reasonable access during regular business hours
to all records, documents, and Information relating to the performance under the
Collaboration, which the JRC may reasonably require in order to perform its
obligations hereunder, provided that if such documents are under a bona fide
obligation of confidentiality to a Third Party, then EXEL or BMS, as the case
may be, may withhold access thereto to the extent necessary to satisfy such
obligation.

3.9 Collaboration Guidelines. Subject to the terms of this Agreement, the
activities and resources of each Party shall be managed by such Party, acting
independently and in its individual capacity. The relationship between EXEL, EPC
and BMS is that of independent contractors, and shall not constitute a
partnership, joint venture or agency, and none of the Parties

 

16

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

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shall have the power to bind or obligate any other Parties in any manner, other
than as is expressly set forth in this Agreement.

3.10 Conduct of Research. BMS and EXEL shall use Diligent Efforts to conduct
their respective tasks throughout the Collaboration and shall conduct the
Collaboration in good scientific manner, and in compliance in all material
respects with the requirements of applicable laws, rules and regulations and all
applicable good laboratory practices to attempt to achieve their objectives as
efficiently and expeditiously as reasonably practicable. Each of BMS and EXEL
may use its Affiliates or subcontractors, contract manufacturers, services
providers or other Third Parties to complete its research responsibilities under
the Research Plan, except that EXEL shall not be permitted to use Third Party
contractors to complete the respective tasks of the minimum EXEL FTEs
specifically set forth in the Research Plan without the approval of the JRC.

3.11 Records. Each of EXEL and BMS shall maintain complete and accurate records
of all work conducted under the Collaboration and all results, data and
developments made pursuant to its efforts under the Collaboration. Such records
shall be complete and accurate and shall fully and properly reflect all work
done and results achieved in the performance of the Collaboration in sufficient
detail and in good scientific manner appropriate for patent and regulatory
purposes. Each of EXEL and BMS shall maintain such records for a period of [*]
after such records are created; provided that the following records may be
maintained for a longer period, in accordance with each such Party’s internal
policies on record retention, provided that in no case shall such period be
shorter than [*] from the date of creation of such records: (a) scientific
notebooks; and (b) any other records that such other Party reasonably requests
be retained in order to ensure the preservation, prosecution, maintenance or
enforcement of intellectual property rights. Either such Party shall have the
right to review and copy such records of the other such Party at reasonable
times to the extent necessary or useful for it to conduct its obligations or
enforce its rights under this Agreement.

3.12 Reports. During the Collaborative Research Period, each of EXEL and BMS
shall report to the JRC no less than [*] and shall submit to the other such
Party and the JRC [*] written progress report summarizing the work performed
under the Collaboration. If reasonably necessary for EXEL or BMS to perform its
work under the Collaboration or to exercise its rights under the Agreement, such
Party may request that such other Party provide more detailed information and
data regarding such results reported by such other Party, and such other Party
shall promptly provide the requesting Party with information and data as is
reasonably related to such request, including any records created by a Party
pursuant to Section 3.11. All such reports shall be considered Confidential
Information of the Party providing same.

 

4. TRANSFER OF ROR TECHNOLOGY

4.1 General. For a period beginning on the Original Effective Date and ending
[*] after the end of the Collaborative Research Period, EXEL shall use Diligent
Efforts to transfer to BMS, solely in accordance with Section 4.2, all items of
Materials or Information that are in EXEL’s possession and Control and that are
[*] for BMS to research or clinically develop or manufacture Licensed Compounds
(such Information and Materials, “ROR Technology”); provided that subsequent to
such [*] period, EXEL will use commercially reasonable efforts to transfer
Information and Materials that are requested by BMS for purposes of making a
regulatory filing or patent application and that are in EXEL’s possession and
Control (as of the date of such request).

 

17

[*] = 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.

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

BMS may request such a transfer in writing pursuant to Section 4.2.
Additionally, BMS may request that EXEL provide a reasonable amount of on-site
advice or support in connection with the foregoing transfer until the date which
is [*] subsequent to the [*], and BMS shall reimburse EXEL for reasonable travel
costs incurred.

4.2 Transfer of ROR Technology. EXEL shall transfer to BMS, upon prior written
approval by the Parties, reasonable quantities of Information and Materials
included in the ROR Technology solely as described below.

(a) Ownership. Except as otherwise provided in the Agreement, all rights, title
and interest in and to such Information and Materials that are transferred by
EXEL to BMS shall remain with EXEL. All such Information and Materials shall be
considered the Confidential Information of EXEL and shall be subject to Article
10 of the Agreement.

(b) Permitted Use. BMS shall use such Information and Materials solely for
performing its obligations under the Research Plan and exercising its right to
perform the BMS Independent Program, subject to any additional limitations due
to Exelixis’ obligations to Third Parties relating to such Information or
Materials (with such limitations being set forth in the applicable Transfer
Addendum) (the “Permitted Use”). BMS shall not transfer, deliver or disclose any
of the Materials to any Third Party, other than its Affiliates or bona fide
collaborators or third party contract service providers, without EXEL’s prior
written consent, except as otherwise stipulated in the Transfer Addendum. The
Materials shall not be used in humans, except as otherwise contemplated by the
Agreement. Any unused Materials supplied by EXEL shall be returned to EXEL or
destroyed as agreed upon in writing by the Parties.

(c) Unauthorized Use. The Parties do not intend for BMS to use the Materials
other than for the Permitted Use. If BMS or its Affiliates or other transferees
use the Information or Materials outside of the Permitted Use, and any
inventions, improvements, discoveries or data arise (or result) from such
unauthorized use (such inventions, improvements, discoveries and data, and all
intellectual property rights related thereto, collectively the “Unauthorized
Inventions”), then: (i) BMS shall promptly and fully disclose all such
Unauthorized Inventions to EXEL in writing; (ii) BMS shall comply with the terms
of any upstream license agreement between either EXEL or EPC on one hand, and a
Third Party on the other hand, with respect to such Unauthorized Use of
Materials; and (iii) Exelixis may pursue all rights and remedies it may have
under this Agreement, or at law or in equity, with respect to any breach of BMS’
obligation of Permitted Use (and creation of any Unauthorized Inventions).

(d) Transfer Addendum. Each transfer shall occur through the execution of an
agreement substantially in the form of Exhibit 4.2 (each, a “Transfer
Addendum”), which is incorporated by reference into the Agreement. After
receiving BMS’ written request for a particular item of ROR Technology, EXEL
shall prepare and submit a Transfer Addendum listing the Information and
Materials to be transferred to BMS. Upon written approval of such Transfer
Addendum by the Parties, the Information and Materials shall be transferred to
BMS within [*]. For clarity, the intent of the Parties is to provide BMS with
the ability to use Materials and Information for the Permitted Use and without
additional restrictions other than those set forth in any applicable agreements
between EXEL or EPC on the one hand, and a Third Party on the other hand, and as
such, (i) no Transfer Addendum shall contain terms that are inconsistent with
this

 

18

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

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Agreement, and (ii) Exelixis shall not unreasonably withhold its signature on a
Transfer Addendum to prevent BMS from obtaining access to Materials or
Information where such request by BMS is consistent with Section 4.1 and this
Section 4.2.

 

5. RESEARCH, DEVELOPMENT, MANUFACTURING & COMMERCIALIZATION OF PRODUCTS

5.1 Research, Development, & Manufacturing of Products

(a) Scope. After the end of the Collaborative Research Period, BMS shall have
sole control and responsibility for the Research (which Research shall solely be
conducted pursuant to the BMS Independent Program), Development, Manufacture
(including formulation) and Commercialization of all Products. BMS shall bear
all costs and expenses associated with such Research, Development, Manufacture
(including formulation) and Commercialization of Products.

(b) BMS Independent Program. After the end of the Collaborative Research Period,
BMS shall have the right to, at its sole expense, to conduct Research upon
Licensed Compounds in accordance with, and solely to the extent permitted by,
the license set forth in Section 7.1(b) (such Research, the “BMS Independent
Program”). BMS shall provide EXEL with a written description of each ROR
Antagonist that is optimized under the BMS Independent Program. Each such ROR
Antagonist shall be deemed [*] unless it qualifies as [*] on account of
satisfying the definition set forth in Section [*].

(c) Diligence. During the BMS Independent Program, BMS shall use Diligent
Efforts to conduct Research to advance at least one Licensed Compound to meet
the Success Criteria for [*]. BMS shall use Diligent Efforts to Develop at least
one Product in each country in the Major Territory, and Commercialize each
Product for each indication for which it receives Regulatory Approval; provided,
however, that BMS may satisfy its diligence obligations by sublicensing the
Development and Commercialization of a Product to a Third Party pursuant to the
terms of this Agreement. EXEL may notify BMS in writing if EXEL in good faith
believes that BMS is not meeting its diligence obligations set forth in this
Section 5.1(c), and the Parties shall meet and discuss the matter in good faith.
EXEL may further request review of BMS’ records generated and maintained as
required under Section 5.1(d) below.

(d) Records. BMS shall maintain complete and accurate records of all Research,
Development, Manufacturing and Commercialization conducted by it or on its
behalf related to each Product, and all Information generated by it or on its
behalf in connection with Development under this Agreement with respect to each
such Product. BMS shall maintain such records at least until the later of:
(i) [*] after such records are created, or (ii) [*] after the Launch of the
Product to which such records pertain; provided that the following records may
be maintained for a longer period, in accordance with each Party’s internal
policies on record retention: (i) scientific notebooks and (ii) any other
records that EXEL reasonably requests be retained in order to ensure the
preservation, prosecution, maintenance or enforcement of intellectual property
rights. Such records shall be at a level of detail appropriate for patent and
regulatory purposes. EXEL shall have the right to review and copy such records
of BMS at reasonable times to the extent necessary or useful for EXEL to conduct
its obligations or enforce its rights under 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.

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(e) Reports. Beginning [*] after the end of the Collaborative Research Period,
and every [*] thereafter during the term of the Agreement, BMS shall submit to
EXEL a written progress report summarizing the Research, Development,
Manufacturing and Commercialization performed by or on behalf of BMS with
respect to Products. If reasonably necessary or useful for EXEL to exercise its
rights under this Agreement, EXEL may request that BMS provide more detailed
Information and data regarding such reports by BMS, and BMS shall promptly
provide EXEL with Information and data as is reasonably related to such request,
at EXEL’s expense. All such reports shall be considered Confidential Information
of BMS.

5.2 Standards of Conduct. BMS shall perform, or shall ensure that its
Affiliates, sublicensees and Third Party contractors perform, all Research,
Development, Manufacturing and Commercialization activities in a good scientific
and ethical business manner and in compliance with applicable laws, rules and
regulations.

 

6. REGULATORY

6.1 Regulatory Lead Party. BMS shall have sole responsibility for (and bear all
costs and expenses associated with) all regulatory activities regarding
Products. BMS shall also have sole responsibility for (and bear all costs and
expenses associated with) worldwide pharmacovigilance for each Product. BMS and
its Affiliates shall have sole responsibility for all pricing and reimbursement
approval proceedings relating to any Product in the Territory.

6.2 Ownership of Regulatory Dossier. BMS will own all regulatory filings for
such Product in order to facilitate BMS’ interactions with Regulatory
Authorities. BMS shall prepare and draft all filings (including any supplements
or modifications thereto and including the preparation of any electronic
submission of a Drug Approval Application) to Regulatory Authorities in each
such country for such Product.

6.3 Recalls in the Territory. Any decision to initiate a recall or withdrawal of
a Product in the Territory shall be made by BMS. In the event of any recall or
withdrawal, BMS shall take any and all necessary action to implement such recall
or withdrawal in accordance with applicable law, with assistance from EXEL as
reasonably requested by BMS. The costs of any such recall or withdrawal in the
Territory shall be borne solely by BMS.

 

7. LICENSES; INTELLECTUAL PROPERTY

7.1 Licenses to BMS. Subject to the terms of this Agreement:

(a) Collaborative Research Period (Non-Sublicensable to Non-Affiliates). During
the Collaborative Research Period, EXEL hereby grants to BMS a co-exclusive,
worldwide, royalty-free license (with the right to sublicense to its Affiliates,
but without the right to sublicense to Third Parties except with prior written
consent of Exelixis), under the Exelixis Licensed Know-How, solely to perform,
or have performed pursuant to Section 3.10, the research tasks assigned to BMS
pursuant to the Research Plan. During the Collaborative Research Period, EPC
hereby grants to BMS a co-exclusive, worldwide, royalty-free license (with the
right to sublicense to its Affiliates, but without the right to sublicense to
Third Parties except with prior written consent of Exelixis),

 

20

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

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under the Exelixis Licensed Patents, solely to perform, or have performed
pursuant to Section 3.10, the research tasks assigned to BMS pursuant to the
Research Plan.

(b) BMS Independent Program (Sublicensable to Non-Affiliates). During the period
beginning with the end of the Collaborative Research Period and ending on the
expiration or earlier termination of this Agreement, EXEL hereby grants to BMS,
an exclusive, worldwide, royalty-free license (with the right to sublicense to
its Affiliates, Third Party contract research providers and manufacturers, and
bona fide collaborators), under the Exelixis Licensed Know-How, to make, have
made, import and use for Research any: (i) Licensed Compounds (subject to
Section 3.7) that have achieved a [*] by the end of the Collaborative Research
Period; (ii) Licensed Compounds (subject to Section 3.7) that have achieved a
[*] by the end of the Collaborative Research Period; (iii) Licensed Compounds
(subject to Section 3.7) that have achieved the [*] described in the Research
Plan by the end of the Collaborative Research Period; and (iv) [*] the Licensed
Compounds described in [*], including [*] that is created under [*] for [*].
During the period beginning with the end of the Collaborative Research Period
and ending on the expiration or earlier termination of this Agreement, EPC
hereby grants to BMS, an exclusive, worldwide, royalty-free license (with the
right to sublicense to its Affiliates, Third Party contract research providers
and manufacturers, and bona fide collaborators), under the Exelixis Licensed
Patents, to make, have made, import and use for Research any: (i) Licensed
Compounds (subject to Section 3.7) that have achieved a [*] by the end of the
Collaborative Research Period; (ii) Licensed Compounds (subject to Section 3.7)
that have achieved a [*] by the end of the Collaborative Research Period;
(iii) Licensed Compounds (subject to Section 3.7) that have achieved the [*]
described in the Research Plan by the end of the Collaborative Research Period;
and (iv) [*] the Licensed Compounds [*] in [*], including [*] that is created
under [*] for [*].

(c) Clinical Development and Commercialization. EXEL hereby grants to BMS,
effective upon BMS’ timely payment of the milestone payment set forth in
Section 8.2(a)(i)(2), an exclusive, worldwide, royalty-bearing license (with the
right to sublicense), under the Exelixis Licensed Know-How, to make, have made,
use, Develop, import, sell, offer to sell and have sold Products. EPC hereby
grants to BMS, effective upon BMS’ timely payment of the milestone payment set
forth in Section 8.2(a)(i)(2), an exclusive, worldwide, royalty-bearing license
(with the right to sublicense), under the Exelixis Licensed Patents, to make,
have made, use, Develop, import, sell, offer to sell and have sold Products.

(d) Exelixis Retained Rights. Exelixis retains all rights to use the Exelixis
Licensed Know-How and Exelixis Licensed Patents except those expressly granted
to BMS on an exclusive basis under the terms of this Agreement. In addition,
notwithstanding the exclusive licenses granted to BMS pursuant to Section 7.1,
Exelixis retains the right under the Exelixis Licensed Patents and the Exelixis
Licensed Know-How to make, have made, use, and test Licensed Compounds solely
for internal research purposes. To the extent any such Exelixis Licensed Patents
are owned by EPC, EPC hereby grants EXEL an exclusive, fully-paid, royalty free
license, with the right to grant sublicenses, under the Exelixis Licensed
Patents to perform and have performed the research tasks assigned to EXEL
pursuant to the Research Plan.

(e) BMS Covenants. BMS hereby covenants that BMS shall not (and shall ensure
that any of its permitted sublicensees shall not) use any Exelixis Licensed
Know-How or

 

21

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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.

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Exelixis Licensed Patents for a purpose other than that expressly permitted in
Section 7.1 or 11.5(b).

7.2 License to Exelixis for Collaboration Research. Subject to the terms of this
Agreement, BMS hereby grants Exelixis a co-exclusive, worldwide, royalty-free
license (with the right to sublicense to Affiliates, but without the right to
sublicense to Third Parties except with prior written consent of BMS), under the
BMS Licensed Know-How and BMS Licensed Patents, solely to perform, or have
performed pursuant to Section 3.10, the research tasks assigned to Exelixis
pursuant to the Research Plan. Exelixis hereby covenants that Exelixis shall not
(and shall ensure that any of its permitted sublicensees shall not) use any BMS
Licensed Know-How or BMS Licensed Patents for a purpose other than that
expressly permitted in this Section 7.2 or 11.5(a).

7.3 No Additional Licenses. Except as expressly provided in Sections 4.2, 7.1,
7.2, and Article 11, nothing in this Agreement grants either Party any right,
title or interest in and to the intellectual property rights of an Party (either
expressly or by implication or estoppel). For clarity, the licenses granted in
Section 7.1 by Exelixis to BMS do not give BMS any right or license (a) to
incorporate into any Product (e.g., as a combination product) any compound that
is Controlled by Exelixis and that is not a Licensed Compound or (b) to perform
any research that is directed to identifying, characterizing, developing or
otherwise pursuing any Small Molecule Compound that is not a Licensed Compound.
For clarity, the licenses granted in Section 11.5 by BMS to Exelixis do not give
Exelixis any right or license (a) to incorporate into any Product (e.g., as a
combination product) any compound that is Controlled by Exelixis and that is not
a Reverted Compound or (b) to perform any research that is directed to
identifying, characterizing, developing or otherwise pursuing any small molecule
compound that is not a Reverted Compound.

7.4 Sublicensing. Each Party shall provide the other Parties with the name of
each permitted sublicensee of its rights under this Article 7 and a copy of the
applicable sublicense agreement; provided that each Party may redact
confidential or proprietary terms from such copy, including financial terms. The
sublicensing Party shall remain responsible for each permitted sublicensee’s
compliance with the applicable terms and conditions of this Agreement. Each
sublicense granted by a Party of its rights under this Article 7 to a party who
is an Affiliate of such Party at the time such license is granted shall
terminate immediately upon such party ceasing to be an Affiliate of such Party.

7.5 Ownership.

(a) The inventorship of all Sole Inventions and Joint Inventions shall be
determined under the U.S. patent laws.

(b) BMS shall own the entire right, title and interest in and to any and all of
its Sole Inventions, and Patents claiming only such Sole Inventions (and no
Joint Inventions) (“Sole Invention Patents”). As between EXEL and EPC, EPC shall
own the entire right, title and interest in and to any and all of Sole Invention
Patents of EXEL and/or EPC. EXEL hereby assigns to EPC its entire right, title
and interest in and to its Sole Invention Patents. BMS and Exelixis shall be
joint owners in and to any and all Joint Inventions, provided that, as between
EXEL and EPC, EPC shall be the joint owner of any and all Patents claiming such
Joint Inventions (“Joint Invention Patents”), and EXEL hereby assigns to EPC its
entire right, title and interest in and to its Joint

 

22

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

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Invention Patents. BMS and Exelixis (EPC for Joint Invention Patents and EXEL
for other Joint Inventions) as joint owners each shall have the right to exploit
and to grant licenses under such Joint Inventions, and where exercise of such
rights require, under the laws of a country, with the consent of the other Party
(such consent not to be unreasonably withheld, delayed or conditioned) unless
otherwise specified in this Agreement (including where such rights are
exclusively licensed to the other Party hereunder).

(c) All employees, agents and contractors of each Party shall be under written
obligation to assign any inventions and related intellectual property to the
Party for whom they are employed or are providing services.

(d) The Parties acknowledge and agree that this Agreement shall be deemed to be
a “Joint Research Agreement” as defined under 35 U.S.C. 103(c).

7.6 Disclosure. Each Party shall submit a written report to the other Parties no
less frequently than within [*] of the end of each [*] describing any Sole
Invention or Joint Invention arising during the prior [*] in the course of the
Agreement which it believes may be patentable or at such earlier time as may be
necessary to preserve patentability of such invention. Each Party shall provide
to the other Parties such assistance and execute such documents as are
reasonably necessary to permit the filing and prosecution of such patent
application to be filed on such Sole Invention or Joint Invention, or the
issuance, maintenance or extension of any resulting Patent.

7.7 Patent Prosecution and Maintenance; Abandonment.

(a) Joint Patent Committee.

(i) Establishment & Meetings. Promptly after the Original Effective Date (as
defined in the TGR5 License Agreement), the Parties shall establish a committee
(the “Joint Patent Committee” or “JPC”). The JPC shall be composed of at least
one (1) representative from each of BMS and EXEL, at least one of which shall be
a patent counsel for such Party. Each such Party may change its
representative(s) by giving the other such Party at least [*] prior written
notice. The JPC shall meet within [*] after the Original Effective Date (as
defined in the TGR5 License Agreement), and once per [*] thereafter, or as may
be requested by either Party as necessary, by teleconference, videoconference or
in person (as determined by the JPC).

(1) Duties. As between EXEL and EPC, EXEL shall carry out the day-to-day
responsibility for filing, prosecution and maintenance on behalf of EPC under
Section 7.1 through 7.8. Promptly after the Original Effective Date (as defined
in the TGR5 License Agreement), [*] shall oversee (subject to Sections
7.7(a)(ii), (iv) and (v) below) the preparation, filing, prosecution (including
any interferences, reissue proceedings and reexaminations) and maintenance of
all [*] Patents, [*] Patents Controlled by [*], and [*] Patents that in each
case are [*] (the “[*] Patents”), provided that, unless otherwise agreed by the
Parties, such responsibilities shall be carried out by: (A) [*] by [*] the [*],
unless there exists [*] of [*] and [*]; (B) [*] by [*], but only in the case
where [*] described in subsection (A) had [*] of [*]; or (C) [*] in conjunction
with [*] described in the preceding subsection (A) or (B), as applicable. [*],
or [*], shall provide [*] with an update of the filing, prosecution and
maintenance status for each of the [*] Patents on a periodic basis, and shall
use commercially reasonable efforts to consult with and

 

23

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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.

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cooperate with [*] with respect to the filing, prosecution and maintenance of
the [*] Patents, including providing [*] with drafts of proposed filings to
allow [*] a reasonable opportunity for review and comment before such filings
are due. [*], or [*], shall provide to [*] copies of any papers relating to the
filing, prosecution and maintenance of the [*] Patents promptly upon their being
filed and received.

(2) Decisions. Subsequent to the Original Effective Date (as defined in the TGR5
License Agreement), in the event of a dispute between the Parties with regard to
the preparation, filing, prosecution (including any interferences, reissue
proceedings and reexaminations) and maintenance of any [*] Patent, the matter
shall be promptly referred to the [*] of EXEL and [*] for BMS. If these two
(2) individuals are unable to resolve the dispute promptly, then the matter
shall be promptly elevated to the [*] of EXEL and the [*] of BMS. If these two
(2) individuals are unable to resolve the dispute promptly, then, subject to
Sections 7.7(a)(i)(3), 7.7(a)(i)(4), 7.7(a)(ii), [*], and [*], [*] shall have
the final decision, except if such decision: (A) conflicts with the terms of the
Agreement; (B) would result in [*] described in [*] or a [*] of the [*]; or
(C) materially impacts [*] prosecution of Patents that [*] a [*], in which case
of subsection 7.7(a)(i)(2)(A) - (C), [*] shall have the final decision.

(3) Limitation on Subsection 7.7(a)(i)(2)(B). If [*] reasonably believes that
filing a new patent application covering a [*] (other than the [*] of a [*])
would result in potential claims [*] for [*], and if [*] disputes with [*] that
such patent application should be filed, then such dispute shall be discussed as
described in the first two (2) sentences of Section 7.7(a)(i)(2), and, if still
unresolved, shall be arbitrated pursuant to Section [*], and [*] shall not have
the right to exercise its final-decision making authority pursuant to Subsection
7.7(a)(i)(2)(B) unless the dispute is resolved in [*] favor.

(4) Limitation on Subsection 7.7(a)(i)(2)(C). [*] hereby covenants that it shall
not, without the prior written consent of [*] (which shall not be unreasonably
delayed or conditioned), during the term of this Agreement, [*] the
decision-making authority granted to [*] pursuant to Subsection 7.7(a)(i)(2)(C)
[*] that is [*] as of the Original Effective Date or [*]. Furthermore, if [*]
the decision-making authority granted to [*] pursuant to Subsection
7.7(a)(i)(2)(C) [*] by [*], [*] or [*], and such [*] is [*] or [*] a [*] that is
[*], then [*] and [*] shall agree, pursuant to Section [*], on [*] the
decision-making authority granted to [*] pursuant to Subsection 7.7(a)(i)(2)(C).

(ii) Abandonment. In no event shall [*] knowingly permit any of the [*] Patents
to be abandoned in any country, or elect not to file a new patent application
claiming priority to a patent application within the [*] Patents either before
such patent application’s issuance or within the time period required for the
filing of an international (i.e., Patent Cooperation Treaty), regional
(including European Patent Office) or national application, without [*] written
consent (such consent not to be unreasonably withheld, delayed or conditioned)
or [*] otherwise first being given an opportunity to assume full responsibility
(at [*] expense) for the continued prosecution and maintenance of such [*]
Patents or the filing of such new patent application. Accordingly, [*], or [*],
shall provide [*] with notice of the allowance and expected issuance date of any
patent within the [*] Patents, or any of the aforementioned filing deadlines,
and [*] shall provide [*] with prompt notice as to whether [*] desires [*] to
file such new patent application. In the event that [*] decides either: (A) not
to continue the prosecution or maintenance of a patent application or patent
within

 

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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.

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the [*] Patents in any country; or (B) not to file such new patent application
requested to be filed by [*], [*] shall provide [*] with notice of this decision
at least [*] prior to any pending lapse or abandonment thereof, and [*] shall
thereafter have the right to assume responsibility for the filing, prosecution
and maintenance of such patent or patent application. In the event that [*]
assumes such responsibility for such filing, prosecution and maintenance, [*]
shall no longer have the responsibility for such filing, prosecution and
maintenance of such patent applications and patents, and [*] shall cooperate as
reasonably requested by [*] to facilitate control of such filing, prosecution
and maintenance by [*]. In the case where [*] takes over the filing, prosecution
or maintenance of any patent or patent application as set forth above, such
patent or patent application shall [*] be [*] the [*], and [*] shall [*] such
patent or patent application.

(iii) Filing, Prosecution and Maintenance of Sole Invention Patents Controlled
by BMS. In accordance with this Section 7.7(a)(iii), BMS shall be responsible
for the filing, prosecution (including any interferences, reissues and
reexaminations) and maintenance of all Sole Invention Patents Controlled by BMS.
BMS shall provide to EXEL copies of any papers relating to the filing,
prosecution and maintenance of the Sole Invention Patents Controlled by BMS
promptly upon their being filed and received.

(iv) Patent Term Extension. EXEL and BMS shall each cooperate with each another
and shall use commercially reasonable efforts in obtaining patent term extension
(including any pediatric exclusivity extensions as may be available) or
supplemental protection certificates or their equivalents in any country with
respect to patent rights covering the Products. If elections with respect to
obtaining such patent term extensions are to be made, [*] shall have the right
to make the election to seek patent term extension or supplemental protection.

(v) Exelixis Right to Separate Claims. To the extent that any Sole Invention
Patent owned by EPC contains claims that cover compounds that are not Licensed
Compounds (such compounds, “Separable Compounds”), EXEL shall have the right to
separate any claims that cover such Separable Compounds (and not Licensed
Compounds) and to file such claims in a separate application (e.g., a
continuation, continuation-in-part, or divisional application). EXEL shall
notify BMS in writing prior to separating such claims, and such separation shall
be at EXEL’s sole expense.

(b) Payment of Prosecution Costs. [*] shall bear the out-of-pocket expenses
(including reasonable fees for any outside counsel, [*]) associated with the
filing, prosecution (including any interferences, reissue proceedings and
reexaminations) and maintenance of: (X) Patents covering [*]; and (Y) the [*]
Patents other than those [*] Patents that are [*], provided that if any [*] or
[*] is part of a patent application or patent that is [*] but [*] that are [*],
then the Parties shall mutually agree upon an appropriate allocation of the
expenses so that [*] does not bear any portion of the out-of-pocket expenses
attributable to [*].

(c) Payment of Expenses for Joint Invention Patents. EXEL and BMS shall mutually
agree on the percentage of expenses that each of EXEL and BMS shall bear with
respect to Joint Invention Patents for which the cost of filing, prosecuting or
maintaining such Joint Invention is not the responsibility of a Party under
Section 7.7(b) hereof (which, in the absence of any other agreement between EXEL
and BMS, shall be divided evenly).

 

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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.

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(d) Non-payment of Expenses.

(i) If either EXEL or BMS elects not to pay its share of any expenses with
respect to [*] Patent in a given country under any of Section [*], such Party
shall inform such other Party in writing not less than [*] before any relevant
deadline (or, in the event of a shorter period in which to respond to a patent
office, as soon as reasonably practicable), and, if such other Party assumes the
expenses associated with the [*] Patent, then the assuming Party (in the case of
EXEL, EPC) shall thereby become the sole owner of such [*] Patent in such
country and such other Party shall assign to the assuming Party its rights,
title and interests in such [*] Patent in such country.

(ii) If either EPC or BMS is the assignee or owner of a Patent (other than [*])
that is licensed to such other Party under any of Sections 7.1 or 7.2, and such
owning Party elects not to pay its share of expenses pursuant to Section [*] in
a given country, such owning Party shall inform such other Party in writing not
less than [*] before any relevant deadline (or, in the event of a shorter period
in which to respond to a patent office, as soon as reasonably practicable). If
such other Party assumes the expenses associated with the Patent in such
country, then the assuming Party shall thereby [*] such Patent and the owning
Party shall [*] such Patent in such country.

(iii) If either EPC or BMS is the licensee of a Patent (other than [*]) under
any of Sections 7.1 or 7.2, and such Party elects not to pay its share of
expenses pursuant to Section [*] in a given country, such Party shall inform
such other Party (in the case EPC is the licensee, EPC or EXEL shall inform BMS,
and in the case BMS is the licensee, BMS shall inform EXEL) in writing not less
than [*] before any relevant deadline (or, in the event of a shorter period in
which to respond to a patent office, as soon as reasonably practicable) (such
Patent(s) in such countries, as identified in such notice, being a
“Cost-Terminated Patent Right”), and shall no longer have any rights under such
Sections 7.1 or 7.2, as applicable, with respect to the relevant Patent in such
country, provided that all remaining rights and licenses under all other
Patent(s) within such licensed Patents would remain in effect. It is also
understood that such licensee shall be offered the opportunity to assume its
share of the responsibility for the costs of filing, prosecution and maintenance
of any Patent(s) claiming priority directly or indirectly from any such
Cost-Terminated Patent Right, and that where such expenses are assumed by such
licensee, it shall be afforded all the rights and licenses as provided under
this Agreement for the licensed Patents (other than the Cost-Terminated Patent
Right) with respect to such Patent(s) claiming priority directly or indirectly
from any such Cost-Terminated Patent Right.

(e) Each of EXEL and BMS shall provide to such other Party, on [*] basis, a
patent report that includes the serial number, docket number and status of each
Patent for which such Party has the right to direct the filing, prosecution and
maintenance and which [*] (in the case of [*] such [*] that are [*]) or [*].
EXEL and BMS through their patent counsel shall discuss as appropriate (but not
more than [*]) ways in which to allocate such out-of-pocket expenses in an
appropriate, cost-effective manner consistent with the purposes 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.

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7.8 Enforcement of Patent Rights.

(a) Enforcement of Exelixis Sole Patents.

(i) Enforcement by [*]. In the event that management or in-house counsel for any
Party becomes aware of a suspected infringement by a Third Party of a Patent
claiming a Sole Invention owned by EPC that claims the composition of matter
(including formulation), manufacture or use of one or more Products that is
being Developed or Commercialized by BMS or its Affiliate or sublicensee using
Diligent Efforts and which is exclusively licensed to BMS under Section 7.1(c)
(for purposes of this Section 7.8(a)(i) only, an “Exelixis Sole Patent”), such
Party shall notify the other Parties promptly, and following such notification,
the Parties shall confer. As between EXEL and EPC, EXEL shall carry out the
patent enforcement activities on behalf of EPC under this 7.8, and shall pay
costs and expenses on behalf of EPC in connection therewith. Each Party of EXEL
and BMS shall provide the same level of disclosure to the other Party’s in-house
counsel concerning suspected infringement of an Exelixis Sole Patent as such
Party would provide with respect to suspected infringement of its own issued
Patent or an exclusively licensed issued Patent claiming a product it is
developing or commercializing independent of this Agreement. Where such
suspected infringement involves such Third Party’s development, manufacture, use
or sale of a product directed against ROR, [*] shall have the right, but shall
not be obligated, to bring an infringement action against any such Third Party
or to defend such proceedings at its own expense, in its own name and entirely
under its own direction and control. [*] shall reasonably assist [*] (at [*]
expense) in such actions or proceedings if so requested, and EPC shall lend its
name to such actions or proceedings if requested by [*] or required by law, and
[*] shall hold [*] harmless from any liability incurred by [*] arising out of
any such proceedings or actions at [*] request. [*] have the right to
participate and be represented in any such suit by its own counsel at its own
expense. No settlement of any such action or defense which restricts the scope,
or adversely affects the enforceability, of any such Exelixis Sole Patent may be
entered into by [*] without the prior consent of [*] (such consent not to be
unreasonably withheld, delayed or conditioned).

(ii) Enforcement by [*]. If [*] elects not to bring any action for infringement
or to defend any proceeding described in Section 7.8(a)(i) and so notifies [*],
or where [*] ([*] such Exelixis Sole Patent) otherwise desires to bring an
action or to defend any proceeding directly involving an Exelixis Sole Patent,
then [*] may bring such action or defend such proceeding at its own expense, in
[*] own name and entirely under its own direction and control; provided that [*]
must confer with [*] with respect to any such action or proceeding and obtain
the prior written consent of [*] to commence such action or proceeding, such
consent not to be unreasonably withheld, delayed or conditioned; provided
further, that with respect to any Exelixis Sole Patent that is a Patent [*] the
[*] (or foreign equivalent(s) of such Patent or the [*]) by [*] (a “[*]
Patent”), if [*] fails to consent to any such action or proceeding, the [*] for
any [*] such Exelixis Sole Patent shall in no event [*] by any failure to
enforce such Exelixis Sole Patent. [*] shall reasonably assist [*] (at [*]
expense) in any action or proceeding being prosecuted or defended by [*], if so
requested by [*] or required by law, and [*] shall hold [*] harmless from any
liability incurred by [*] arising out of any such proceedings or actions. [*]
shall have the right to participate and be represented in any such suit by its
own counsel at its own expense. No settlement of any such action or defense
which restricts the scope, or adversely affects the enforceability, of a [*]

 

27

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

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Patent, may be entered into by [*] without the prior consent of [*] (such
consent not to be unreasonably withheld, delayed or conditioned).

(b) Enforcement of Joint Invention Patents.

(i) Joint Product Patents.

(1) Enforcement by [*]. In the event that management or in-house counsel for
either EXEL or BMS becomes aware of a suspected infringement of a Patent
claiming a Joint Invention that pertains to the composition of matter (including
formulation), manufacture or use of one or more Products that is being developed
or commercialized by BMS or its Affiliate or sublicensee using Diligent Efforts
and which is exclusively licensed to BMS under Section 7.1(c) (a “Joint Product
Patent”), such Party shall notify such other Party promptly, and following such
notification, the Parties shall confer. Each Party shall provide the same level
of disclosure to such other Party’s in-house counsel concerning suspected
infringement of a Joint Product Patent as such Party would provide with respect
to suspected infringement of its own issued Patent or an exclusively licensed
issued Patent claiming a product it is developing or commercializing independent
of this Agreement. [*] shall have the right, but shall not be obligated, to
bring an infringement action or to defend such proceedings at its own expense,
in its own name and entirely under its own direction and control. [*] shall
reasonably assist [*] (at [*] expense) in such actions or proceedings if so
requested, and [*] shall lend its name to such actions or proceedings if
requested by [*] or required by law, and [*] shall hold [*] harmless from any
liability incurred by [*] arising out of any such proceedings or actions. [*]
have the right to participate and be represented in any such suit by its own
counsel at its own expense. No settlement of any such action or defense which
restricts the scope or affects the enforceability of a Joint Product Patent may
be entered into by [*] without the prior consent of [*] (such consent not to be
unreasonably withheld, delayed or conditioned).

(2) Enforcement by [*]. If [*] elects not to bring any action for infringement
or to defend any proceeding described in Section 7.8(b)(i)(1) and so notifies
[*], or for any other enforcement by [*] of a Joint Product Patent which is
exclusively licensed to BMS under Section 7.1(c), then [*] may bring such action
or defend such proceeding at its own expense, in [*] own name and entirely under
its own direction and control; provided that [*] must confer with [*] with
respect to any such action or proceeding and obtain the prior written consent of
[*] to commence such action or proceeding, such consent not to be unreasonably
withheld, delayed or conditioned; provided further, that with respect to any
Joint Product Patent that is a [*] Patent, if [*] fails to consent to any such
action or proceeding, the [*] for any [*] such Joint Product Patent shall in no
event [*] by any failure to enforce such Joint Product Patent. [*] shall
reasonably assist [*] (at [*] expense) in any action or proceeding being
prosecuted or defended by [*], if so requested by [*] or required by law, and
[*] shall hold [*] harmless from any liability incurred by [*] arising out of
any such proceedings or actions. [*] shall have the right to participate and be
represented in any such suit by its own counsel at its own expense. No
settlement of any such action or defense which restricts the scope or affects
the enforceability of a Joint Product Patent may be entered into by [*] without
the prior consent of [*] (such consent not to be unreasonably withheld, delayed
or conditioned).

 

28

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

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(ii) Other Joint Patents.

(1) Enforcement by [*]. In the event that management or in-house counsel for
either EXEL or BMS becomes aware of a suspected infringement of a Patent that
claims a Joint Invention but is not a Joint Product Patent (an “Other Joint
Patent”), such Party shall notify such other Party promptly, and following such
notification, the Parties shall confer. Each of EXEL and BMS shall provide the
same level of disclosure to such other Party’s in-house counsel concerning
suspected infringement of an Other Joint Patent as such Party would provide with
respect to suspected infringement of its own issued Patent or an exclusively
licensed issued Patent claiming a product it is developing or commercializing
independent of this Agreement. [*] shall have the right, but shall not be
obligated, to prosecute an infringement action or to defend such proceedings at
its own expense, in its own name and entirely under its own direction and
control. [*] shall reasonably assist [*] (at [*] expense) in such actions or
proceedings if so requested, and [*] shall lend its name to such actions or
proceedings if requested by [*] or required by law, and [*] shall hold [*]
harmless from any liability incurred by [*] arising out of any such proceedings
or actions. [*] have the right to participate and be represented in any such
suit by their own counsel at its own expense. No settlement of any such action
or defense which restricts the scope or affects the enforceability of an Other
Joint Patent may be entered into by [*] without the prior consent of [*] (such
consent not to be unreasonably withheld, delayed or conditioned).

(2) Enforcement by [*]. If [*] elects not to bring any action for infringement
or to defend any proceeding described in Section 7.8(b)(ii)(1) and so notifies
[*], then [*] may bring such action or defend such proceeding at its own
expense, in its own name and entirely under its own direction and control;
provided that [*] must confer with [*] with respect to any such action or
proceeding and obtain the prior written consent of [*] to commence such action
or proceeding, such consent not to be unreasonably withheld, delayed or
conditioned; provided further, that with respect to any Other Joint Patent that
is a [*] Patent, if [*] fails to consent to any such action or proceeding, the
[*] for any [*] such Other Joint Patent shall in no event [*] by any failure to
enforce such Other Joint Patent. [*] shall reasonably assist [*] (at [*]
expense) in any action or proceeding being prosecuted or defended by [*], if so
requested by [*] required by law, and [*] shall hold [*] harmless from any
liability incurred by [*] arising out of any such proceedings or actions. [*]
shall have the right to participate and be represented in any such suit by its
own counsel at its own expense. No settlement of any such action or defense
which restricts the scope or affects the enforceability of an Other Joint Patent
may be entered into by [*] without the prior consent of [*] (such consent not to
be unreasonably withheld, delayed or conditioned).

(c) General Provisions Relating to Enforcement of Patents.

(i) Withdrawal. If either EXEL or BMS brings such an action or defends such a
proceeding under this Section 7.8 and subsequently ceases to pursue or withdraws
from such action or proceeding, it shall promptly notify such other Party and
the other Party (in the case of EXEL, on behalf of EPC) may substitute itself
for the withdrawing Party under the terms of this Section 7.8 (including such
prior written consent as provided for under this Section 7.8) at its own
expense; provided, however, that [*] right to substitute itself for [*] pursuant
to this Section 7.8(c)(i) shall be limited, with respect to [*] Patents, to
actions and proceedings that [*] initially had the first right to bring or
defend pursuant to Section [*].

 

29

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

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(ii) Recoveries. In the event either Party exercises the rights conferred in
this Section 7.8 and recovers any damages or other sums in such action, suit or
proceeding or in settlement thereof, such damages or other sums recovered shall
first be applied to all out-of-pocket costs and expenses incurred by the Parties
in connection therewith, including attorneys fees. If such recovery is
insufficient to cover all such costs and expenses of both Parties, it shall be
shared in proportion to the total such costs and expenses incurred by each
Party. If after such reimbursement any funds shall remain from such damages or
other sums recovered, such funds shall be[*].

(d) Data Exclusivity and Orange Book Listings. With respect to data exclusivity
periods (such as those periods listed in the FDA’s Orange Book (including any
available pediatric extensions) or periods under national implementations of
Article 9.1(a)(iii) of Directive 2001/EC/83, and all international equivalents),
BMS shall use commercially reasonable efforts consistent with its obligations
under applicable law (including any applicable consent order) to seek, maintain
and enforce all such data exclusivity periods available for the Products. With
respect to filings in the FDA Orange Book (and foreign equivalents) for issued
patents for a Product, upon request by BMS (and at BMS’ expense), Exelixis shall
provide reasonable cooperation to BMS in filing and maintaining such Orange Book
(and foreign equivalent) listings.

(e) No Action in Violation of Law. None of the Parties shall be required to take
any action pursuant to this Section 7.8 that such Party reasonably determines in
its sole judgment and discretion conflicts with or violates any court or
government order or decree applicable to such Party.

(f) Notification of Patent Certification. [*] shall notify and provide [*] with
copies of any allegations of alleged patent invalidity, unenforceability or
non-infringement of any [*] Patent [*] hereunder pursuant to a Paragraph IV
Patent Certification by a Third Party filing an Abbreviated New Drug
Application, an application under §505(b)(2) or other similar patent
certification by a Third Party, and any foreign equivalent thereof. Such
notification and copies shall be provided to [*] by [*] as soon as practicable
and at least within [*] after [*] receives such certification, and shall be sent
by facsimile and overnight courier to the address set forth below:

[*]

7.9 Defense of Third Party Claims. If a claim is brought by a Third Party that
any activity related to work performed by a Party under the Agreement infringes
the intellectual property rights of such Third Party, each Party shall give
prompt written notice to the other Parties of such claim, and following such
notification, the Parties shall confer on how to respond.

 

8. COMPENSATION

8.1 Upfront Payment. BMS shall pay Exelixis an upfront payment of Five Million
Dollars ($5,000,000) on the earlier to occur of the following: (a) [*] after the
Original Effective Date; or (b) [*] after the Original Effective Date (as
defined in the TGR5 License Agreement). Such payment shall be noncreditable and
nonrefundable.

 

30

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

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8.2 Milestone Payments to EPC.

(a) Development and Regulatory Milestones.

(i) BMS shall make the milestone payments set forth below to EPC within [*]
after the first achievement of each indicated event by BMS or any of its
Affiliates or sublicensees and, subject to Section 8.2(a)(iii), with respect to
each of the events described in [*] below, after the first achievement of each
such event with respect to any Licensed Compound. For clarity, with respect to
milestones that are triggered by the [*], such [*] must be [*] that is [*] and
[*] the [*] or [*] of the [*]. All such milestone payments made by BMS to EPC
hereunder shall be noncreditable and nonrefundable.

 

Event

   Milestone Payment

(1) [*]

   $[*]

(2) [*]

   $[*]

(3) [*]

   $[*]

(4) [*]

   $[*]

(5) [*]

   $[*]

(6) [*]

   $[*]

(7) [*]

   $[*]

(8) [*]

   $[*]

(9) [*]

   $[*]

(10) [*]

   $[*]

(11) [*]

   $[*]

(12) [*]

   $[*]

(13) [*]

   $[*]

(14) [*]

   $[*]

(ii) Milestone Payment Restrictions. Each milestone payment set forth in
Section 8.2(a)(i) shall be paid [*] with respect to [*], [*] the [*] or [*] the
[*] in [*] for [*], or the [*] or [*] for [*].

 

31

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

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(iii) Milestone Payments for [*]. If BMS is diligently developing and paying
milestones to EPC under Section 8.2(a)(i) [*], the payments [*] made to EPC
under Sections 8.2(a)(i) for [*] shall be [*] such [*] the [*] in [*], in which
case BMS shall pay EPC the [*] the [*] in [*] within [*] of the [*] such [*];
provided, however, that if this Agreement terminates before such [*], then BMS
shall [*] pay EPC the [*]. If [*] the [*] or [*], then BMS shall only pay
milestones [*] for the events that [*] the [*] such [*]; however, if a [*], then
BMS shall pay the milestones [*] a [*] have been paid [*]. For clarity, the
Parties agree that [*] shall [*], [*], or [*] of the [*] the [*].

(b) Commercial Milestones. BMS shall make the milestone payments set forth below
to EPC after first achievement of each indicated event by BMS or any of its
Affiliates or sublicensees with respect to each Product. Each milestone payment
shall be made by BMS [*], [*] due and payable [*] after the end of the [*] in
which such milestone event is met. BMS shall pay [*] to [*] if, at the time [*],
the [*] the payment obligation (the “[*]”) was [*] for the [*]. Otherwise, the
[*] shall be [*], provided that [*]. BMS shall pay [*] to EPC [*] if, at the
time [*], the [*] for the [*]. Otherwise, the [*] shall be [*], provided that
[*]. All such milestone payments made by BMS to EPC hereunder shall be
noncreditable and nonrefundable, and shall be paid only once with respect to
each Product, regardless of [*] or [*] for that Product, or [*] or [*] for that
Product.

 

Event

   Milestone Payment

[*]

   $[*]

[*]

   $[*]

[*]

   $[*]

8.3 Royalty Payments to EPC for Net Sales of Products. For each Product, BMS
shall pay to EPC royalties on Net Sales of such Product by BMS (or its
Affiliates or sublicensees) in the Territory at a royalty rate determined by
aggregate Net Sales in the Territory of such Product in a calendar year as
follows:

 

Calendar year Net Sales of Products

   Royalty Rate for
Products Comprising
an Exelixis ROR
Compound     Royalty Rate for
Products Not
Comprising an Exelixis
ROR Compound  

First $[*]

     [ *]%      [ *]% 

Portion above $[*] and up to and including $[*]

     [ *]%      [ *]% 

Portion above $[*]

     [ *]%      [ *]% 

 

32

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

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For clarity, Net Sales shall be [*]. For the purpose of this Section 8.3, all
Products [*] shall be [*] and the Net Sales of such Products shall be [*] the
[*], regardless of whether [*] or [*], or [*] or [*]. All royalty payments made
by BMS to EPC hereunder shall be noncreditable and nonrefundable, [*] royalties
to EPC, in which case such [*] shall be [*] (or, in the event that [*], such [*]
shall be [*]).

8.4 Third Party Royalties

(a) [*] all Third Party royalties owed with respect to a Product in the
Territory on intellectual property that is intellectual property that: (A) [*]
from a Third Party prior to the Original Effective Date and [*]; and (B) [*].
Subject to Section 8.4(b), [*] Third Party royalties owed on intellectual
property in connection with the development and commercialization of a Product
in the Territory; provided that each Party shall bear all Third Party royalties
arising from any infringing activities by such Party prior to the Original
Effective Date.

(b) BMS may deduct from the royalties it would otherwise owe to EPC pursuant to
Section 8.3 for a particular Product, an amount equal to [*] of all royalties
payable to a Third Party in consideration for rights necessary or reasonably
useful for the manufacture, use or sale of such Product, up to a maximum
deduction of [*] of the royalties due EPC for such Product.

8.5 [*]. During the applicable Royalty Term for a particular Product, if the
Patents claiming the composition of matter of such Product have expired, and if
any [*]: (a) [*] in any given country in any year; and (b) such [*] in such
country for such year are, [*]:

(i) [*], but [*] of the [*] in such country, then [*]; or

(ii) [*] of the [*] in such country, then [*].

8.6 Limitation on Deductions. Notwithstanding anything to the contrary in this
Agreement, the operation of Sections 8.4 and 8.5 for a given Product, whether
singularly or in combination with each other, shall not [*].

8.7 Quarterly Payments and Reports. All royalties due under Section 8.3 shall be
paid quarterly, on a country-by-country basis, within [*] of the end of the
relevant quarter for which royalties are due. BMS shall provide to EPC within[*]
after the end of each quarter a report that summarizes the Net Sales of a
Product during such quarter, provided that to the extent additional information
is reasonably required by EPC and/or EXEL to comply with its obligations to any
of its licensors, the Parties shall work together in good faith to timely
compile and produce such additional information. Such reports shall also include
detailed information regarding the calculation of royalties due pursuant to
Section 8.3, including allowable deductions in the calculation of Net Sales of
each Product on which royalties are paid, and, to the extent Section 8.5 is
applicable, the calculation of [*] and [*] of [*].

8.8 Term of Royalties. EPC’s right to receive royalties under Section 8.3 shall
expire on a country-by-country and Product-by-Product basis upon the later of:
(a) [*]; or (b) [*] (the “Royalty Term”). Upon the expiration of the Royalty
Term with respect to a Product in a country,

 

33

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

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BMS shall have a fully-paid-up perpetual license under Section 7.1(c) for the
making, using, selling, offering for sale and importing of such Product in such
country.

8.9 Payment Method. All payments due under this Agreement to EPC shall be made
by bank wire transfer in immediately available funds to an account designated by
EPC. All payments hereunder shall be made in Dollars.

8.10 Taxes. EPC shall pay any and all taxes levied on account of all payments it
receives under this Agreement. If laws or regulations require that taxes be
withheld, BMS shall: (a) deduct those taxes from the remittable payment; (b) pay
the taxes to the proper taxing authority; and (c) send evidence of the
obligation together with proof of tax payment to EXEL within [*] following that
tax payment. The Parties shall discuss appropriate mechanisms for minimizing
such taxes to the extent possible in compliance with applicable law.

8.11 Blocked Currency. In each country where the local currency is blocked and
cannot be removed from the country, royalties accrued in that country shall be
paid to EPC in Dollars based on the Dollar reported sales for the quarter
(translated for such country per Statement of Financial Standards No. 52),
unless otherwise mutually agreed.

8.12 Sublicenses. In the event BMS grants any permitted licenses or sublicenses
to Third Parties to sell Products that are subject to royalty payments under
Section 8.3, BMS shall have the responsibility to account for and report sales
of any Product by a licensee or a sublicensee on the same basis as if such sales
were Net Sales by BMS. BMS shall pay to EPC (or cause the licensee or
sublicensee to pay to EPC, with BMS remaining responsible for any failure of the
licensee or sublicensee to pay amounts when due under this Agreement):
(a) royalties on such sales as if such sales of the licensee or sublicensee were
Net Sales of BMS or any of its Affiliates; and (b) milestones payments pursuant
to Section 8.2 based on the achievement by such licensee or sublicensee of any
milestone event contemplated in such Sections as if such milestone event had
been achieved by BMS or any of its Affiliates hereunder. Any sales by BMS’
Affiliates and sublicensees of BMS or such sublicensee’s Affiliates, in each
case to Third Parties, shall be aggregated with sales by BMS for the purpose of
calculating the aggregate Net Sales in Sections 8.2(b) and 8.3.

8.13 Foreign Exchange. Conversion of sales recorded in local currencies to
Dollars shall be performed in a manner consistent with BMS’ normal practices
used to prepare its audited financial statements for internal and external
reporting purposes, which uses a widely accepted source of published exchange
rates.

8.14 Records. BMS shall keep (and shall ensure that its Affiliates and
sublicensees shall keep) such records as are required to determine, in a manner
consistent with GAAP and this Agreement, the sums due under this Agreement,
including Net Sales. All such books, records and accounts shall be retained by
BMS until the later of (a) [*] after the end of the period to which such books,
records and accounts pertain and (b) the [*] (or any extensions thereof), or for
such longer period as may be required by applicable law. BMS shall require its
sublicensees to provide to it a report detailing the foregoing expenses and
calculations incurred or made by such sublicensee, which report shall be made
available to Exelixis in connection with any audit conducted by Exelixis
pursuant to Section 8.15.

 

34

[*] = 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.

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

8.15 Audits. Exelixis shall have the right to have an independent certified
public accountant, reasonably acceptable to BMS, to have access during normal
business hours, and upon reasonable prior written notice, to examine only those
records of BMS (and its Affiliates and sublicensees) as may be reasonably
necessary to determine, with respect to any calendar year ending not more than
[*] prior to Exelixis’ request, the correctness or completeness of any report or
payment made under this Agreement. The foregoing right of review may be
exercised [*]. Results of any such examination shall be: (a) limited to
information relating to the Products; (b) made available to both Parties; and
(c) subject to Article 10. Exelixis shall bear the full cost of the performance
of any such audit, unless such audit discloses a variance to the detriment of
Exelixis of more than [*] from the amount of the original report, royalty or
payment calculation, in which case BMS shall bear the full cost of the
performance of such audit. The results of such audit shall be [*].

8.16 Interest. Any payments or portions thereof due hereunder that are not paid
on the date such payments are due under this Agreement shall bear interest at a
rate equal to the lesser of: (a) [*] Rate as published by Citibank, N.A., New
York, New York, or any successor thereto, at 12:01 a.m. on the first day of each
quarter in which such payments are overdue; or (b) the maximum rate permitted by
law, in each case calculated on the number of days such payment is delinquent,
compounded monthly.

8.17 Non-Monetary Consideration. In the event that BMS or its Affiliate or
sublicensee receives any non-monetary consideration in connection with the sale
of a Product, BMS’ payment obligations under this Article 8 shall be based on
the fair market value of such other consideration. In such case, BMS shall
disclose the terms of such arrangement to EPC and EXEL and the Parties shall
endeavor in good faith to agree on such fair market value.

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

 

9. EXCLUSIVITY

9.1 Licensed Compounds. This Agreement will be exclusive with respect to the
Development, Manufacture, and Commercialization of [*] that are intended to [*]
as described below [*].

(a) Prior to Commercialization. Subject to Sections 9.2, 9.3 and 9.4, [*], [*]
(directly or indirectly, and either with or without a bona fide collaborator)
outside the scope of this Agreement any programs: (i) that [*] that [*]; or
(ii) where [*].

(b) Subsequent to Commercialization. Subject to Sections 9.2, 9.3 and 9.4, [*],
[*] (directly or indirectly, and either with or without a bona fide
collaborator) outside the scope of this Agreement any programs to [*] that [*],
and any [*] subject to the following terms and conditions:

(i) Commercial Launch of [*]. [*], any product [*]: (A) that is [*] and [*]; or
(B) where the [*] that [*] (any such product, a “[*]”), for a [*] of a [*].

 

35

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

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(ii) [*] of a [*]. In the event of any [*] of a [*] that is permitted under
Section [*], the Party [*] shall [*] a [*]: [*] of any [*] for a [*] subsequent
to [*] of a [*] and [*] the [*] the [*] with respect to such [*] or [*] of this
Agreement (in either case, [*]).

9.2 [*]. Notwithstanding anything to the contrary set forth in this Article 9,
if either BMS or EXEL is engaged in [*] a program that is [*] that is [*], and
[*] such program [*], such Party shall [*] with such [*] in order to [*] so the
[*] the [*] for [*].

9.3 Not Applicable to [*] or [*]. The restrictions and obligations in
Section 9.1 shall not apply with respect to either BMS or EXEL for [*] that are
[*] by such Party [*] (either with or without a bona fide collaborator) or for
any [*].

9.4 [*] Right. [*] may [*] with a [*] that [*] a [*] solely with respect to the
[*] of [*] and/or a [*] that [*]: (a) any [*] product that is [*] a [*]; and
(b) such [*] a [*], on the condition that [*] to [*] of [*] with respect to [*]
as set forth herein (assuming such [*] and/or a [*]).

 

10. CONFIDENTIALITY

10.1 Nondisclosure of Confidential Information. For the purpose of this Article
10, unless otherwise set forth herein, EXEL and EPC shall be deemed collectively
as one (1) “Party” and shall be referred to as Exelixis. All Information or
Materials disclosed by one Party to the other Party pursuant to this Agreement,
and, subject to Section 10.6, Information that is generated pursuant to this
Agreement with respect to Licensed Compounds or Products (for so long as such
Licensed Compound or Product is not removed from the Agreement as a result of a
Product specific termination pursuant to Section 11.3), shall be “Confidential
Information” for all purposes hereunder. The Parties agree that, during term of
this Agreement and for a period of [*] thereafter, a Party receiving
Confidential Information of the other Party shall: (a) use Diligent Efforts to
maintain in confidence such Confidential Information (but not less than those
efforts as such Party uses to maintain in confidence its own proprietary
industrial information of similar kind and value) and not to disclose such
Confidential Information to any Third Party without prior written consent of the
other Party (such consent not to be unreasonably withheld, delayed or
conditioned), except for disclosures made in confidence to any Third Party under
terms consistent with this Agreement and made in furtherance of this Agreement
or of rights granted to a Party hereunder; and (b) not use such other Party’s
Confidential Information for any purpose except those permitted by this
Agreement (it being understood that this Section 10.1 shall not create or imply
any rights or licenses not expressly granted under Article 4, 7 or 11 hereof).

10.2 Exceptions. The obligations in Section 10.1 shall not apply with respect to
any portion of the Confidential Information that the receiving Party can show by
competent written proof:

(a) Is publicly disclosed by the disclosing Party, either before or after it is
disclosed to the receiving Party hereunder; or

(b) Was known to the receiving Party or any of its Affiliates, without
obligation to keep it confidential, prior to disclosure by the disclosing Party;
or

 

36

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

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(c) Is subsequently disclosed to the receiving Party or any of its Affiliates by
a Third Party lawfully in possession thereof and without obligation to keep it
confidential; or

(d) Is published by a Third Party or otherwise becomes publicly available or
enters the public domain, either before or after it is disclosed to the
receiving Party, and is not directly or indirectly supplied by the receiving
Party in violation of this Agreement; or

(e) Has been independently developed by employees or contractors of the
receiving Party or any of its Affiliates without the aid, application or use of
the disclosing Party’s Confidential Information.

10.3 Authorized Disclosure. A Party may disclose the Confidential Information
belonging to the other Party to the extent such disclosure is reasonably
necessary in the following instances; provided that notice of any such
disclosure shall be provided as soon as practicable to the other Party:

(a) Filing or prosecuting Patents relating to Sole Inventions, Joint Inventions
or Products, in each case pursuant to activities under this Agreement;

(b) Regulatory filings;

(c) Prosecuting or defending litigation;

(d) Complying with applicable governmental laws and regulations; and

(e) Disclosure, in connection with the performance of this Agreement, or
exercise of its rights hereunder, to Affiliates, potential collaborators,
partners, and actual and potential licensees (including potential co-marketing
and co-promotion contractors, research contractors and manufacturing
contractors), research collaborators, potential investment bankers, investors,
lenders, and investors, employees, consultants, or agents, each of whom prior to
disclosure must be bound by similar obligations of confidentiality and non-use
at least equivalent in scope to those set forth in this Article 10.

The Parties acknowledge that the terms of this Agreement shall be treated as
Confidential Information of both Parties. Such terms may be disclosed by a Party
to individuals or entities covered by Section 10.3(e) above, each of whom prior
to disclosure must be bound by similar obligations of confidentiality and
non-use at least equivalent in scope to those set forth in this Article 10. In
addition, a copy of this Agreement may be filed by either Party with the
Securities and Exchange Commission in connection with any public offering of
such Party’s securities, in connection with such Party’s on-going periodic
reporting requirements under the federal securities laws, or as otherwise
necessary under applicable law or regulations. In connection with any such
filing, such Party shall endeavor to obtain confidential treatment of economic,
competitively sensitive, and trade secret information.

10.4 Prior Confidentiality Agreement. All Information exchanged between the
Parties under the Confidential Disclosure Agreement between EXEL and BMS
executed as of [*], and amended as of [*] and [*] (such confidential disclosure
agreement, as amended, the “Prior CDA”)

 

37

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

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that relates to ROR, ROR Antagonists, [*] and [*] ROR Antagonists, Licensed
Compounds or Products shall be deemed Confidential Information and shall,
commencing upon the Original Effective Date, be subject to the terms of this
Article 10 rather than the Prior CDA. The Prior CDA shall otherwise remain in
full force and effect, including with respect to each Party’s rights with
respect to breaches thereof, if any, that occurred prior to the Original
Effective Date with respect to Information described in the first sentence of
this Section 10.4.

10.5 Publicity. The Parties agree that the public announcement of the execution
of this Agreement shall be substantially in the form of the press release
attached as Exhibit 10.5. Any other publication, news release or other public
announcement relating to this Agreement or to the performance hereunder, shall
first be reviewed and approved by both Parties; provided, however, that any
disclosure which is required by law, including disclosures required by the U.S.
Securities and Exchange Commission or made pursuant to the requirements of the
national securities exchange or other stock market on which such Party’s
securities are traded, as advised by the disclosing Party’s counsel may be made
without the prior consent of the other Party, although the other Party shall be
given prompt notice of any such legally required disclosure and to the extent
practicable shall provide the other Party an opportunity to comment on the
proposed disclosure.

10.6 Publications. Subject to Section 10.3, each Party agrees to provide the
other Party the opportunity to review any proposed disclosure which contains
Confidential Information of the other Party and would or may constitute an oral,
written or electronic public disclosure if made (including the full content of
proposed abstracts, manuscripts or presentations) which relate to any
Inventions, at least [*] prior to its intended submission for publication and
agrees, upon request, not to submit any such abstract or manuscript for
publication until the other Party is given a reasonable period of time to secure
patent protection for any material in such publication which it believes to be
patentable; provided, however, that BMS may publish results of clinical studies
relating to Licensed Compounds without the prior review or approval of Exelixis.
Both Parties understand that a reasonable commercial strategy may require delay
of publication of information or filing of patent applications. The Parties
agree to review and consider delay of publication and filing of patent
applications under certain circumstances. The Alliance Managers (or the
Parties), as appropriate, shall review such requests and recommend subsequent
action. Subject to Section 10.3, neither Party shall have the right to publish
or present Confidential Information of the other Party which is subject to
Section 10.1. Nothing contained in this Section 10.6 shall prohibit the
inclusion of Confidential Information of the non-filing Party necessary for a
patent application, provided the non-filing Party is given a reasonable
opportunity to review the extent and necessity for its Confidential Information
to be included prior to submission of such patent application related to the
Agreement. Any disputes between the Parties regarding delaying a publication or
presentation to permit the filing of a patent application shall be referred to
the Alliance Managers (or the Parties), as appropriate.

 

11. TERM AND TERMINATION

11.1 Term. For the purpose of this Article 11, unless otherwise set forth
herein, EPC and EXEL shall be deemed collectively as one (1) “Party” and shall
be referred to as Exelixis. This Agreement shall become effective on the
Effective Date and shall remain in effect, subject to earlier termination in
accordance with Sections 11.2 or 11.3 or by mutual written agreement, until the
expiration of all payment obligations under Article 8. The period of time
between the Original

 

38

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

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Effective Date until the expiration of this Agreement shall be deemed the Term,
provided that, for the period of time between the Original a Effective Date and
the Effective Date, the terms and conditions of the Collaboration Agreement
shall apply.

11.2 BMS’ Right to Terminate. BMS shall have the right to terminate this
Agreement, at any time, [*]: (a) [*] prior written notice to each of EXEL and
EPC, in the event that such termination is [*] of the [*]; or (b) [*] prior
written notice to each of EXEL and EPC, in the event that such termination is
[*] of the [*].

11.3 Termination for Material Breach or Patent Challenge

(a) Notice. If either Party believes that the other is in material breach of
this Agreement (including any material breach of a representation or warranty
made in this Agreement), then the non-breaching Party may deliver notice of such
breach to the other Party. In such notice the non-breaching Party shall identify
the actions or conduct that such Party would consider to be an acceptable cure
of such breach. For all breaches other than a failure to make a payment set
forth in Article 8, the allegedly breaching Party shall have [*] to cure such
breach. For any breach arising from a failure to make a payment set forth in
Article 8, the allegedly breaching Party shall have [*] to cure such breach.

(b) Cure Period. Subject to Section 11.3(c), if the Party receiving notice of
breach fails to cure such breach within the [*] period or [*] period (as
applicable), or the Party providing the notice reasonably determines that the
proposed corrective plan or the actions being taken to carry it out is not
commercially practicable, the Party originally delivering the notice may
terminate this Agreement upon [*] advance written notice, provided, that if the
breach [*] or [*], the non-breaching Party may [*] the [*] with respect to [*].

(c) [*] Material Breach. If a Party gives notice of termination under
Section 11.3(a) and the other Party [*], or if a Party determines under
Section 11.3(b) that the [*] or the [*] is [*] and such [*] such [*], then the
[*]: (i) [*]; or (ii) [*] or the [*], shall in any case [*]. If [*] of such [*]
it is [*] the [*], then such termination shall [*] if the breaching Party fails
[*] to cure such breach in accordance with the [*] within the time period set
forth in Section 11.3(a) for the applicable breach [*]. If [*] of such [*] it is
[*] the [*], then [*] and [*].

(d) Termination for Patent Challenge. Exelixis may terminate this Agreement with
respect to a given Product in a given country if BMS or its Affiliates or
sublicensees, directly or indirectly, individually or in association with any
other person or entity, challenge the validity, enforceability or scope of any
Exelixis Licensed Patents that relate to such Product in such country; provided
that, if BMS, due to a Change of Control transaction, acquires control of a
company that is challenging, directly or indirectly, individually or in
association with another person or entity, the validity, enforceability or scope
of any Exelixis Licensed Patents, BMS shall have [*] from the date of such
acquisition to terminate such challenge to such Exelixis Licensed Patents before
Exelixis’ right to terminate under this Section 11.3(d) becomes effective. For
clarity, any dispute as to whether a given Patent is within the scope of
Exelixis Licensed Patents, such matter shall be subject to dispute resolution as
set forth in Section 14.3.

 

39

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

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11.4 Survival; Effect of Termination.

(a) In the event of expiration or termination of this Agreement, the following
provisions of this Agreement shall survive: Articles [*]; and Sections [*] (with
respect to [*] (and [*] for such purposes)); the last sentence of Section [*]
with respect to [*] in the event of expiration of this Agreement pursuant to
Section [*] and with respect to [*] in the event of termination of this
Agreement [*], [*].

(b) Notwithstanding anything to the contrary in this Agreement, in the event of
termination of this Agreement pursuant to Section [*], [*] under this Agreement
[*] of the [*] shall [*]. In such case, the non-breaching Party shall continue
to hold the licenses granted hereunder, subject to the milestone and royalties
set forth herein (which relevant provisions shall survive termination).

(c) In any event, expiration or termination of this Agreement shall not relieve
the Parties of any liability which accrued hereunder prior to the effective date
of such expiration or termination nor preclude either Party from pursuing all
rights and remedies it may have hereunder or at law or in equity with respect to
any breach of this Agreement nor prejudice either Party’s right to obtain
performance of any obligation.

11.5 Licenses and Payments on Expiration or Termination.

(a) Research, Development and Commercialization of Reverted Compounds by
Exelixis.

(i) Upon termination of this Agreement (other than for Exelixis’ uncured
material breach pursuant to Section 11.3), subject to Section 11.5(b), BMS
hereby grants EPC a worldwide, royalty-bearing (solely to the extent provided in
the Reverted Compounds License Agreement) license (with the right to sublicense)
to clinically develop, make, have made, use, import, sell, offer to sell and
have sold products incorporating any Reverted Compounds that are described in
Section 1.55(a), under any Information and Patents Controlled by BMS that
(A) cover one (1) or more of such Reverted Compounds, and/or any composition
containing any of the foregoing, or the manufacture or use thereof or (B) are
[*] to clinically develop, make, have made, use, import, sell, offer to sell and
have sold Products incorporating any such Reverted Compound. The license
described in this Section 11.5(a)(i) shall be [*] for [*] and [*] for [*].

(ii) Upon expiration of this Agreement pursuant to Section 11.1 or termination
of this Agreement, subject to Section 11.5(b) and Section 11.6, BMS hereby
grants EPC a worldwide, royalty-free license (with the right to sublicense) to
clinically develop, make, have made, use, import, sell, offer to sell and have
sold products incorporating any Reverted Compounds that are described in
Section 1.55(b), under any Information and Patents Controlled by BMS that
(A) cover one (1) or more of such Reverted Compounds, and/or any composition
containing any of the foregoing, or the manufacture or use thereof or (B) are
[*] to clinically develop, make, have made, use, import, sell, offer to sell and
have sold Products incorporating any such Reverted Compound. The license
described in this Section 11.5(a)(ii) shall be [*] for [*] and [*] for [*].

 

40

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

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(iii) Upon termination of this Agreement, subject to Section 11.5(b) and
Section 11.6, BMS hereby grants EPC a worldwide, royalty-free license (without
the right to sublicense except to Third Party contract research providers and
manufacturers) to research, identify, derivatize, pre-clinically develop, make,
have made and use Licensed Compounds for research purposes, under any BMS
Licensed Know-How and BMS Licensed Patents covering one (1) or more Licensed
Compounds, and/or any composition containing any of the foregoing, or the
manufacture or use thereof. The license described in this Section 11.5(a)(iii)
shall be: (A) [*] with respect to [*]; (B) [*] for [*]; and (C) [*] for [*].
Notwithstanding anything to the contrary in this Agreement, the foregoing
license grant shall not create (by any means, whether expressly, impliedly or by
estoppel) any right or license under any other Patents, Information or other
intellectual property right that is Controlled by BMS.

(iv) Upon termination of this Agreement, subject to Section 11.5(b) and
Section 11.6, BMS hereby grants EPC a [*], worldwide, royalty-free license
(without the right to sublicense except to Third Party contract research
providers and manufacturers) to research, identify, derivatize, pre-clinically
develop, make, have made and use Licensed Compounds for research purposes, under
any Information or Patents Controlled by BMS that are [*] for the research,
identification, derivatization, pre-clinical development, making, having made
and use of Licensed Compounds in a manner consistent with the activities
performed by (A) the Parties under the Research Plan or (B) BMS pursuant to the
BMS Independent Program. Notwithstanding anything to the contrary in this
Agreement, the foregoing license grant shall not create (by any means, whether
expressly, impliedly or by estoppel) any right or license under any other
Patents, Information or other intellectual property right that is Controlled by
BMS.

(v) Upon termination of this Agreement, BMS shall transfer via assignment,
license or sublicense to EPC: (A) all Information reasonably necessary for the
development and commercialization of Reverted Compounds; (B) [*] in BMS’ name;
(C) [*] to the extent that [*]; (D) [*] Controlled by BMS; and (E) supplies of
Product (including any intermediates, retained samples and reference standards)
that in each case ((A) through (E)) are existing and in BMS’ Control and that
[*] relate to such Reverted Compounds. Any such transfer(s) shall be [*] of [*].
BMS and EXEL shall promptly meet, over a [*] period, to negotiate in good faith
the commercially reasonable terms of a license agreement to such Reverted
Compounds (the “Reverted Compounds License Agreement”), including: (1) the
licenses described in Sections 11.5(a)(i) – (iv); (2) [*] under
Section 11.5(a)(i), and [*] of other Reverted Compounds; (3) a provision
requiring BMS to use commercially reasonable efforts to maintain ([*]) and not
to breach any agreements with Third Parties that provide a grant from such Third
Party to BMS of rights that are Controlled by BMS and that are licensed to EPC
pursuant to the Reverted Compounds License Agreement; and (4) other customary
terms and provisions, including terms and provisions relating to diligence,
audit rights, and intellectual property maintenance and enforcement, in each
case substantially similar to the terms of this Agreement.

(b) BMS Internal Compound Research License. Notwithstanding the licenses granted
to EPC pursuant to Section 11(a), upon termination or expiration of this
Agreement, BMS shall have a non-exclusive, worldwide, royalty-free license
(without the right to sublicense except to third party contract research
providers and manufacturers), under the Exelixis Licensed Patents and Exelixis
Licensed Know-How, to research, identify, derivatize, pre-clinically develop,
make, have made and use Licensed Compounds that are BMS ROR Compounds solely for
research purposes.

 

41

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

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Notwithstanding anything to the contrary in this Agreement, the foregoing
non-exclusive license grant shall not create (by any means, whether expressly,
impliedly or by estoppel) any right or license under any other Patents,
Information or other intellectual property right that is Controlled by EPC.

11.6 Exception for Termination for [*]. The licenses granted to [*] under
Sections [*] shall be [*] with respect to any given Product where [*]
termination of Development and/or Commercialization of such Product was due to
[*]. For purposes of this Section 11.6, “[*]” means it is [*] or [*] or [*] that
there is [*] for [*]: (i) [*], including [*]; or (ii) the [*] of [*] a Product
[*] or [*], such as [*] or [*] a Product. Notwithstanding anything to the
contrary, this Section 11.6 shall not prevent [*] (or its sublicensees) from
using its licenses in Sections [*] to [*] by [*] that was [*]. [*] shall provide
[*] with all [*] for such [*] but shall not [*] to [*] any [*] relating to such
[*].

11.7 Interim Supply. In the event of any termination pursuant to Section 11.2,
or Section 11.3 (where BMS is the breaching Party), in each case [*], at the
written request of EPC (or its sublicensee), BMS shall supply, or cause to be
supplied, to EPC or such sublicensee sufficient quantities of Product to satisfy
EPC (or its sublicensee’s)requirements for Product for a period of up to [*]
following the effective date of termination, as EPC or its sublicensee may
require until EPC or its sublicensee can itself assume or transition to a Third
Party such manufacturing responsibilities; provided, however that EPC or its
sublicensee shall use Diligent Efforts to affect such assumption (or transition)
as promptly as practicable. Such supply shall be [*] such Product(s) with
respect to development supply, and shall be [*] such Product(s) with respect to
commercial supply. Any such supply will be made pursuant to a supply agreement
between the Parties with typical provisions relating to quality, forecasting and
ordering to forecast, force majeure and product liability and indemnity. In the
event that BMS has one or more agreements with Third Party manufacturers with
respect to the manufacture of a Product, at EPC (or its sublicensee’s) request,
BMS shall use commercially reasonable efforts to transfer its rights and
obligations under such agreement(s) to EPC upon any such termination.

 

12. REPRESENTATIONS AND WARRANTIES AND COVENANTS

12.1 Mutual Authority. EXEL, EPC and BMS each represents and warrants to the
other Parties as of the Original Effective Date that: (a) it has the authority
and right to enter into and perform this Agreement, (b) this Agreement is a
legal and valid obligation binding upon it and is enforceable in accordance with
its terms, subject to applicable limitations on such enforcement based on
bankruptcy laws and other debtors’ rights, and (c) its execution, delivery and
performance of this Agreement shall not conflict in any material fashion with
the terms of any other agreement or instrument to which it is or becomes a party
or by which it is or becomes bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having authority over
it.

12.2  Rights in Technology.

(a) During the term of this Agreement, each Party shall use commercially
reasonable efforts to maintain (but without an obligation to renew) and not to
breach any agreements with Third Parties that provide a grant of rights from
such Third Party to a Party that are

 

42

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

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Controlled by such Party and are licensed or become subject to a license from
such Party to the other Party under Article 7. Each Party agrees to provide
promptly the other Parties with notice of any such alleged breach or obligation
to renew. As of the Original Effective Date, each Party is in compliance in all
material respects with any aforementioned agreements with Third Parties.

(b) Each of EPC and BMS represents and warrants that it: (i) has the ability to
grant the licenses contained in or required by this Agreement; and (ii) is not
currently subject to any agreement with any Third Party or to any outstanding
order, judgment or decree of any court or administrative agency that restricts
it in any way from granting to another Party such licenses or the right to
exercise its rights hereunder.

(c) Each of EPC and BMS represents and warrants that: (i) it has not granted,
and covenants that it shall not grant after the Original Effective Date and
during the term of this Agreement, any right, license or interest in or to, or
an option to acquire any of the foregoing with respect to, the intellectual
property rights licensed to another Party hereunder (including the Exelixis
Licensed Patents and the BMS Licensed Patents, as the case may be) that is in
conflict with the rights (including the rights set forth in Article 7) or
licenses granted or to be granted (including any conditional license rights) to
another Party under this Agreement; and (ii) it has not granted any lien,
security interest or other encumbrance (excluding any licenses) with respect to
any of the intellectual property rights licensed to another Party hereunder that
would prevent it from performing its obligations under this Agreement, or
permitted such a lien, security interest or other encumbrance (excluding any
permitted licenses) to attach to the intellectual property rights licensed to
another Party hereunder.

12.3 Performance by Affiliates. The Parties recognize that each may perform some
or all of its obligations under this Agreement through Affiliates; provided,
however, that each Party shall remain responsible and be guarantor of the
performance by its Affiliates and shall cause its Affiliates to comply with the
provisions of this Agreement in connection with such performance. In particular,
if any Affiliate of a Party participates under this Agreement with respect to
Licensed Compounds: (a) the restrictions of this Agreement which apply to the
activities of a Party with respect to Licensed Compounds shall apply equally to
the activities of such Affiliate; and (b) the Party affiliated with such
Affiliate shall assure, and hereby guarantees, that any intellectual property
developed by such Affiliate shall be governed by the provisions of this
Agreement (and subject to the licenses set forth in Article 7) as if such
intellectual property had been developed by the Party.

12.4 Third Party Rights. Each of BMS and EXEL represents and warrants to the
other Party that, to its Knowledge as of the Original Effective Date, its
performance of work as contemplated by this Agreement shall not infringe the
valid patent, trade secret or other intellectual property rights of any Third
Party. Each of BMS and EXEL represents and warrants to the other Party that, to
its Knowledge as of the Original Effective Date, it will not violate a
contractual or fiduciary obligation owed to any Third Party (including
misappropriation of trade secrets) by performing its work as contemplated by
this Agreement.

12.5 Notice of Infringement or Misappropriation. Each of EXEL and IMS represents
and warrants to the other Party that, as of the Original Effective Date, it has
received no notice of infringement or misappropriation of any alleged rights
asserted by any Third Party in relation to any

 

43

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

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technology that such Party intends, as of the Original Effective Date, to use in
connection with the Agreement.

 

13. INDEMNIFICATION AND LIMITATION OF LIABILITY

13.1 Mutual Indemnification. For the purpose of this Article 13, EPC and EXEL
shall be deemed collectively as one (1) “Party” and referred to as “Exelixis.”
Subject to Section 13.3, each Party hereby agrees to indemnify, defend and hold
harmless the other Party, its Affiliates, and their respective directors,
employees and agents from and against any and all Third Party suits, claims,
actions, demands, liabilities, expenses and/or losses, including reasonable
legal expenses and reasonable attorneys’ fees (“Losses”) to the extent such
Losses result from any: (a) breach of warranty by the indemnifying Party
contained in the Agreement; (b) breach of the Agreement or applicable law by
such indemnifying Party; (c) negligence or willful misconduct of the
indemnifying Party, its Affiliates or (sub)licensees, or their respective
directors, employees and agents in the performance of the Agreement; and/or
(d) breach of a contractual or fiduciary obligation owed by it to a Third Party
(including misappropriation of trade secrets).

13.2  Indemnification.

(a) Indemnification by BMS. Subject to Section 13.3, BMS hereby agrees to
indemnify, defend and hold harmless Exelixis and its directors, employees and
agents from and against any and all Losses to the extent such Losses result from
[*] or [*] by BMS or its Affiliates, agents or sublicensees, except to the
extent such Losses result from any: (a) breach of warranty by Exelixis contained
in the Agreement; (b) breach of the Agreement or applicable law by Exelixis;
(c) negligence or willful misconduct by Exelixis, its Affiliates or
(sub)licensees, or their respective directors, employees and agents in the
performance of the Agreement; and/or (d) breach of a contractual or fiduciary
obligation owed by Exelixis to a Third Party (including misappropriation of
trade secrets).

(b) Indemnification by Exelixis. Subject to Section 13.3, Exelixis hereby agrees
to indemnify, defend and hold harmless BMS and its directors, employees and
agents from and against any and all Losses to the extent such Losses result from
[*] or [*] by Exelixis or its Affiliates, agents or sublicensees, except to the
extent such Losses result from any: (a) breach of warranty by BMS contained in
the Agreement; (b) breach of the Agreement or applicable law by BMS;
(c) negligence or willful misconduct by BMS, its Affiliates or (sub)licensees,
or their respective directors, employees and agents in the performance of the
Agreement; and/or (d) breach of a contractual or fiduciary obligation owed by
BMS to a Third Party (including misappropriation of trade secrets).

13.3 Conditions to Indemnification. As used herein, “Indemnitee” shall mean a
party entitled to indemnification under the terms of Sections 13.1 or 13.2. A
condition precedent to each Indemnitee’s right to seek indemnification under
such Sections 13.1 or 13.2 is that such Indemnitee shall:

(a) inform the indemnifying Party under such applicable Section of a Loss as
soon as reasonably practicable after it receives notice of the Loss;

 

44

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

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(b) if the indemnifying Party acknowledges that such Loss falls within the scope
of its indemnification obligations hereunder, permit the indemnifying Party to
assume direction and control of the defense, litigation, settlement, appeal or
other disposition of the Loss (including the right to settle the claim solely
for monetary consideration); provided, that the indemnifying Party shall seek
the prior written consent (such consent not to be unreasonably withheld, delayed
or conditioned) of any such Indemnitee as to any settlement which would
materially diminish or materially adversely affect the scope, exclusivity or
duration of any Patents licensed under this Agreement, would require any payment
by such Indemnitee, would require an admission of legal wrongdoing in any way on
the part of an Indemnitee, or would effect an amendment of this Agreement; and

(c) fully cooperate (including providing access to and copies of pertinent
records and making available for testimony relevant individuals subject to its
control) as reasonably requested by, and at the expense of, the indemnifying
Party in the defense of the Loss.

Provided that an Indemnitee has complied with all of the conditions described in
subsections 13.3(a) – (c), as applicable, the indemnifying Party shall provide
attorneys reasonably acceptable to the Indemnitee to defend against any such
Loss. Subject to the foregoing, an Indemnitee may participate in any proceedings
involving such Loss using attorneys of the Indemnitee’s choice and at the
Indemnitee’s expense. In no event may an Indemnitee settle or compromise any
Loss for which the Indemnitee intends to seek indemnification from the
indemnifying Party hereunder without the prior written consent of the
indemnifying Party (such consent not to be unreasonably withheld, delayed or
conditioned), or the indemnification provided under such Section 13.1 or 13.2 as
to such Loss shall be null and void.

13.4 Limitation of Liability. EXCEPT FOR AMOUNTS PAYABLE TO THIRD PARTIES BY A
PARTY FOR WHICH IT SEEKS REIMBURSEMENT OR INDEMNIFICATION PROTECTION FROM THE
OTHER PARTY PURSUANT TO SECTIONS 13.1 AND 13.2, AND EXCEPT FOR BREACH OF SECTION
10.1 HEREOF, IN NO EVENT SHALL EITHER PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,
SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A
CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER
TORT, OR OTHERWISE, ARISING OUT OF THE AGREEMENT, UNLESS SUCH DAMAGES ARE DUE TO
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE LIABLE PARTY (INCLUDING GROSS
NEGLIGENCE OR WILLFUL BREACH WITH REEPCCT TO A PARTY’S REPRESENTATIONS AND
WARRANTIES IN ARTICLE 12). FOR CLARITY, THE AMOUNT OF THE UPFRONT PAYMENTS
DESCRIBED IN SECTION 8.1 MAY SERVE AS A MEASURE OF A REMEDY IN THE EVENT OF A
BREACH WITH REEPCCT TO EXELIXIS’ REPRESENTATIONS AND WARRANTIES IN ARTICLE 12.

13.5 Agreement Disclaimer. EXCEPT AS PROVIDED IN ARTICLE 12 ABOVE, BMS EXPRESSLY
DISCLAIMS ANY AND ALL OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES

 

45

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

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WITH RESPECT TO ANY COMPOUNDS, MATERIALS OR INFORMATION (AND ANY PATENT RIGHTS
OBTAINED THEREON) IDENTIFIED, MADE OR GENERATED BY BMS AS PART OF THE
COLLABORATION OR OTHERWISE MADE AVAILABLE TO EXELIXIS PURSUANT TO THE TERMS OF
THE AGREEMENT. EXCEPT AS PROVIDED IN ARTICLE 12 ABOVE, EXELIXIS EXPRESSLY
DISCLAIMS ANY AND ALL OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES WITH RESPECT TO ANY COMPOUNDS, MATERIALS OR INFORMATION (AND ANY PATENT
RIGHTS OBTAINED THEREON) IDENTIFIED, MADE OR GENERATED BY EXELIXIS AS PART OF
THE COLLABORATION OR OTHERWISE MADE AVAILABLE TO BMS PURSUANT TO THE TERMS OF
THE AGREEMENT.

 

14. MISCELLANEOUS

14.1 Dispute Resolution. For the purpose of Sections 14.1 through 14.3, EPC and
EXEL shall be deemed collectively as one (1) “Party” and referred to as
Exelixis. Unless otherwise set forth in this Agreement and excluding in
particular any dispute described in Section 14.3(a), Section 14.3(b), Section
[*] (which will be handled exclusively in accordance with Section [*]), Section
[*] (which will be handled exclusively in accordance with Section [*])and any
dispute handled pursuant to Sections [*], in the event of any dispute,
controversy or claim arising out of, relating to or in connection with any
provision of the Agreement, the Parties shall try to settle their differences
amicably between themselves first, by referring the disputed matter to the
Party’s respective Executive Officers. Any Party may initiate such informal
dispute resolution by sending written notice of the dispute to the other Party,
and, within [*] after such notice, such Executive Officers shall meet for
attempted resolution by good faith negotiations. If such Executive Officers are
unable to resolve such dispute within [*] of their first meeting for such
negotiations, any Party may seek to have such dispute resolved in any U.S.
federal or state court of competent jurisdiction and appropriate venue,
provided, that if such suit includes a Third Party claimant or defendant, and
jurisdiction and venue with respect to such Third Party appropriately resides
outside the U.S., then in any other jurisdiction or venue permitted by
applicable law.

14.2 Governing Law. Resolution of all disputes, controversies or claims arising
out of, relating to or in connection with the Agreement or the performance,
enforcement, breach or termination of the Agreement and any remedies relating
thereto, shall be governed by and construed under the substantive laws of the
State of Delaware, without regard to conflicts of law rules.

14.3 Patents and Trademarks; Equitable Relief.

(a) General Patent and Trademark Disputes. Except as set forth in Sections
14.3(c) and (d), any dispute, controversy or claim arising out of, relating to
or in connection with: (i) the scope, validity, enforceability or infringement
of any Patent rights covering the research, development, manufacture, use or
sale of any Product; or (ii) any trademark rights related to any Product, shall
in each case be submitted to a court of competent jurisdiction in the territory
in which such Patent or trademark rights were granted or arose.

 

46

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

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(b) Equitable Relief. Any dispute, controversy or claim arising out of, relating
to or in connection with the need to seek preliminary or injunctive measures or
other equitable relief (e.g., in the event of a potential or actual breach of
the confidentiality and non-use provisions in Article 10) need not be resolved
through the procedure described in Section 14.1 but may be immediately brought
in a court of competent jurisdiction.

(c) Disputes Related to Subsection [*]. Any dispute that concerns whether [*] a
[*] (other than [*] of a [*]) would [*] and that is not resolved by discussion
pursuant to Section [*] shall be finally resolved through binding arbitration by
JAMS (formerly, the Judicial Arbitration and Mediation Service) (“JAMS”), in
accordance with its Streamlined Arbitration Rules and Procedures in effect at
the time the dispute arises, and applying the substantive law specified in
Section 14.2. Either Party may initiate arbitration under this Section 14.3(c)
by written notice to the other Party of its intention to arbitrate, and such
notice shall specify in reasonable detail the nature of the dispute. Promptly
following receipt of such notice, the Parties shall meet and discuss in good
faith and agree on an arbitrator to resolve the issue, which arbitrator shall be
neutral and independent of both Parties, shall have significant experience and
expertise in [*] pharmaceutical products, and shall have some experience in
mediating or arbitrating issues relating to such [*]. If the Parties cannot
agree on such arbitrator within [*] of request by a Party for arbitration, then
such arbitrator shall be appointed by JAMS, which arbitrator must meet the
foregoing criteria. For each arbitration: (i) each Party shall submit to the
arbitrator its memorandum (the “Support Memorandum”) in support of its position
in the dispute; and (ii) the arbitrator shall determine which Party’s position
is correct. If the arbitrator’s determination is in [*] favor, then [*] would
not [*] under Section [*] for such [*]; however, if the arbitrator’s
determination is in [*] favor, then [*] would [*] under Section [*] for such
[*]. The decision of the arbitrator shall be final and judgment upon such
decision may be entered in any competent court or application may be made to any
competent court for judicial acceptance of such decision and order of
enforcement. The arbitration proceedings shall be conducted at such location as
shall be determined by the arbitrator. The Parties agree that they shall share
equally the cost of the arbitration filing and hearing fees, and the cost of the
arbitrator. Each Party shall bear its own attorneys’ fees and associated costs
and expenses.

(d) Disputes Related to Subsection [*]. If [*] and the [*] that [*] pursuant to
Subsection [*] do not agree upon [*] that reasonably [*] within [*] after the
[*] such [*], then either party may, by written notification to the other party,
submit the matter to binding “baseball” arbitration to determine the terms of
such [*], as follows. Promptly following receipt of such notice, the parties
shall meet and discuss in good faith and agree on an arbitrator to resolve the
issue, which arbitrator shall be neutral and independent of both parties, shall
have significant experience and expertise in [*] pharmaceutical products and in
[*] as part of collaboration agreements, and shall have some experience in
mediating or arbitrating issues relating to such [*]. If the parties cannot
agree on such arbitrator within [*] of request by a party for arbitration, then
such arbitrator shall be appointed by JAMS, which arbitrator must meet the
foregoing criteria. Within [*] after an arbitrator is selected (or appointed, as
the case may be), each party will deliver to both the arbitrator and the other
party a detailed written proposal setting forth its proposed terms for the [*]
containing the reasonable [*] (the “Proposed Terms” of the party) and a Support
Memorandum, not exceeding [*] in length. The parties will also provide the
arbitrator a copy of this Agreement, as may be amended at such time. Within [*]
after receipt of the other party’s Proposed Terms and Support Memorandum, each
party may submit to the arbitrator (with a copy to

 

47

[*] = 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.

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

the other party) a response to the other party’s Support Memorandum, such
response not exceeding [*] in length. Neither party may have any other
communications (either written or oral) with the arbitrator other than for the
sole purpose of engaging the arbitrator or as expressly permitted in this
Section 14.3(d); provided that, the arbitrator may convene a hearing if the
arbitrator so chooses to ask questions of the parties and hear oral argument and
discussion regarding each party’s Proposed Terms. Within [*] after the
arbitrator’s appointment, the arbitrator will select one of the two (2) Proposed
Terms (without modification) provided by the parties that he or she believes is
most consistent with the intention underlying and agreed principles set forth in
this Agreement and most accurately reflects industry norms for a transaction of
this type. The decision of the arbitrator shall be final, binding, and
unappealable and the parties shall promptly [*] having the terms set forth in
the Proposed Terms selected by the arbitrator. For clarity, the arbitrator must
select as the only method to determine the [*] one of the two (2) sets of
Proposed Terms, and may not combine elements of both Proposed Terms or take any
other action. Except as expressly stated in this Section 14.3(d), such
arbitration shall be conducted in accordance with JAMS’ Streamlined Arbitration
Rules and Procedures then in effect.

14.4 Entire Agreement; Amendments. This Agreement, the LXR Collaboration
Agreement and the license agreement (for the discovery, development and
commercialization of compounds that agonize the target known as TGR5) that is
between Exelixis and BMS and that is dated as of the Original Effective Date and
amended as of the Effective Date (the “TGR5 License Agreement”), set forth the
complete, final and exclusive agreement and all the covenants, promises,
agreements, warranties, representations, conditions and understandings between
the Parties hereto and supersedes and terminates all prior agreements and
understandings between the Parties. There are no covenants, promises,
agreements, warranties, representations, conditions or understandings, either
oral or written, between the Parties other than as are set forth in this
Agreement, the LXR Collaboration Agreement and the TGR5 License Agreement. No
subsequent alteration, amendment, change or addition to this Agreement shall be
binding upon the Parties unless reduced to writing and signed by an authorized
officer of each Party. The Collaboration Agreement shall be effective from the
Original Effective Date until the Effective Date and shall govern the Parties’
respective rights and obligations during such period of time.

14.5 Export Control. This Agreement is made subject to any restrictions
concerning the export of products or technical information from the U.S. or
other countries which may be imposed upon or related to Exelixis or BMS from
time to time. Each Party agrees that it shall not export, directly or
indirectly, any technical information acquired from the other Party under this
Agreement or any products using such technical information to a location or in a
manner that at the time of export requires an export license or other
governmental approval, without first obtaining the written consent to do so from
the appropriate agency or other governmental entity.

14.6 Bankruptcy.

(a) For the purpose of this 14.6, EPC and EXEL shall be deemed collectively as
one (1) “Party” and referred to as Exelixis. All rights and licenses granted
under or pursuant to this Agreement, including amendments hereto, by each Party
to the other Party are, for all purposes of Section 365(n) of Title 11 of the
U.S. Code (“Title 11”), licenses of rights to intellectual property as defined
in Title 11. Each Party agrees during the term of this Agreement to create and
maintain current copies or, if not amenable to copying, detailed descriptions or
other appropriate

 

48

[*] = 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.

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

embodiments, to the extent feasible, of all such intellectual property. If a
case is commenced by or against either Party (the “Bankrupt Party”) under Title
11, then, unless and until this Agreement is rejected as provided in Title 11,
the Bankrupt Party (in any capacity, including debtor-in-possession) and its
successors and assigns (including a Title 11 Trustee) shall, at the election of
the Bankrupt Party made within sixty (60) days after the commencement of the
case (or, if no such election is made, immediately upon the request of the
non-Bankrupt Party) either (i) perform all of the obligations provided in this
Agreement to be performed by the Bankrupt Party including, where applicable,
providing to the non-Bankrupt Party portions of such intellectual property
(including embodiments thereof) held by the Bankrupt Party and such successors
and assigns or otherwise available to them or (ii) provide to the non-Bankrupt
Party all such intellectual property (including all embodiments thereof) held by
the Bankrupt Party and such successors and assigns or otherwise available to
them.

(b) If a Title 11 case is commenced by or against the Bankrupt Party and this
Agreement is rejected as provided in Title 11 and the non-Bankrupt Party elects
to retain its rights hereunder as provided in Title 11, then the Bankrupt Party
(in any capacity, including debtor-in-possession) and its successors and assigns
(including a Title 11 Trustee) shall provide to the non-Bankrupt Party all such
intellectual property (including all embodiments thereof) held by the Bankrupt
Party and such successors and assigns or otherwise available to them immediately
upon the non-Bankrupt Party’s written request therefor. Whenever the Bankrupt
Party or any of its successors or assigns provides to the non-Bankrupt Party any
of the intellectual property licensed hereunder (or any embodiment thereof)
pursuant to this Section 14.6, the non-Bankrupt Party shall have the right to
perform the obligations of the Bankrupt Party hereunder with respect to such
intellectual property, but neither such provision nor such performance by the
non-Bankrupt Party shall release the Bankrupt Party from any such obligation or
liability for failing to perform it.

(c) All rights, powers and remedies of the non-Bankrupt Party provided herein
are in addition to and not in substitution for any and all other rights, powers
and remedies now or hereafter existing at law or in equity (including Title 11)
in the event of the commencement of a Title 11 case by or against the Bankrupt
Party. The non-Bankrupt Party, in addition to the rights, power and remedies
expressly provided herein, shall be entitled to exercise all other such rights
and powers and resort to all other such remedies as may now or hereafter exist
at law or in equity (including under Title 11) in such event. The Parties agree
that they intend the foregoing non-Bankrupt Party rights to extend to the
maximum extent permitted by law and any provisions of applicable contracts with
Third Parties, including for purposes of Title 11, (i) the right of access to
any intellectual property (including all embodiments thereof) of the Bankrupt
Party or any Third Party with whom the Bankrupt Party contracts to perform an
obligation of the Bankrupt Party under this Agreement, and, in the case of the
Third Party, which is necessary for the development, registration and
manufacture of Products and (ii) the right to contract directly with any Third
Party described in (i) in this sentence to complete the contracted work. Any
intellectual property provided pursuant to the provisions of this Section 14.6
shall be subject to the licenses set forth elsewhere in this Agreement and the
payment obligations of this Agreement, which shall be deemed to be royalties for
purposes of Title 11.

14.7 Force Majeure. Each Party shall be excused from the performance of its
obligations under this Agreement to the extent that such performance is
prevented by force majeure (defined below) and the nonperforming Party promptly
provides notice of the prevention to the

 

49

[*] = 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.

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

other Party. Such excuse shall be continued so long as the condition
constituting force majeure continues and the nonperforming Party takes
reasonable efforts to remove the condition. For purposes of this Agreement,
“force majeure” shall include conditions beyond the control of the Parties,
including an act of God, acts of terrorism, voluntary or involuntary compliance
with any regulation, law or order of any government, war, civil commotion, labor
strike or lock-out, epidemic, failure or default of public utilities or common
carriers, destruction of production facilities or materials by fire, earthquake,
storm or like catastrophe. The payment of invoices due and owing hereunder shall
in no event be delayed by the payer because of a force majeure affecting the
payer.

14.8 Notices. Any notices given under this Agreement shall be in writing,
addressed to the Parties at the following addresses, and delivered by person, by
facsimile (with receipt confirmation), or by FedEx or other reputable courier
service. Any such notice shall be deemed to have been given: (a) as of the day
of personal delivery; (b) one (1) day after the date sent by facsimile service;
or (c) on the day of successful delivery to the other Parties confirmed by the
courier service. Unless otherwise specified in writing, the mailing addresses of
the Parties shall be as described below.

 

For EXEL:

   Exelixis, Inc.    210 East Grand Aveue    South San Francisco, CA 94080   
Attention: EVP and General Counsel

With a copy to:

   Cooley LLP    3175 Hanover Street    Palo Alto, CA 94304    Attention: Marya
A. Postner, Esq.

For EPC:

   Exelixis Patent Company, LLC    210 East Grand Aveue    South San Francisco,
CA 94080    Attention: VP, Legal Services

With a copy to:

   Cooley LLP    3175 Hanover Street    Palo Alto, CA 94304    Attention: Marya
A. Postner, Esq.

For BMS:

   Bristol-Myers Squibb Company    P.O. Box 4000    Route 206 and Province Line
Road    Princeton, NJ 08543-4000    Attention: Senior Vice President, Strategy,
Alliances and Transactions    Phone: 609-252-5333    Fax: 609-252-7212

 

50

[*] = 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.

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

With a copy to:

   Bristol-Myers Squibb Company    P.O. Box 4000    Route 206 and Province Line
Road    Princeton, NJ 08543-4000    Attention: Vice President and Senior
Counsel, Corporate and Business Development    Phone: 609-252-5328    Fax:
609-252-4232

Furthermore, a copy of any notices required or given under Article 7 of this
Agreement shall also be addressed to the [*] of [*] at the address set forth in
Section 7.8(f).

14.9 Maintenance of Records Required by Law or Regulation. Each Party shall keep
and maintain all records required by law or regulation with respect to Products
and shall make copies of such records available to the other Parties upon
request.

14.10 Assignment. For the purpose of this 14.10, EPC and EXEL shall be deemed
collectively as one (1) “Party”. Neither Party may assign or transfer this
Agreement or any rights or obligations hereunder without the prior written
consent of the other (such consent not to be unreasonably withheld, delayed or
conditioned), except a Party may make such an assignment without the other
Party’s consent to an Affiliate or to a Third Party successor to all or
substantially all of the business of such Party to which this Agreement relates,
whether in a merger, sale of stock, sale of assets or other transaction;
provided that any such permitted successor or assignee of rights and/or
obligations hereunder is obligated, by reason of operation of law or pursuant to
a written agreement with the other Party, to assume performance of this
Agreement or such rights and/or obligations; and provided, further, that if
assigned to an Affiliate, the assigning Party shall remain jointly and severally
responsible for the performance of this Agreement by such Affiliate. Any
permitted assignment shall be binding on the successors of the assigning Party.
Any assignment or attempted assignment by either Party in violation of the terms
of this Section 14.10 shall be null and void and of no legal effect.

14.11 Electronic Data Interchange. If both Parties elect to facilitate business
activities hereunder by electronically sending and receiving data in agreed
formats (also referred to as Electronic Data Interchange or “EDI”) in
substitution for conventional paper-based documents, the terms and conditions of
this Agreement shall apply to such EDI activities.

14.12 Non-Solicitation of Employees. For the purpose of this 14.12, EPC and EXEL
shall be deemed collectively as one (1) “Party”. [*], each Party agrees that
neither it nor any of its divisions, operating groups or Affiliates shall
recruit, solicit or induce any employee of the other Party directly involved in
the activities conducted pursuant to this Agreement to terminate his or her
employment with such other Party and become employed by or consult for such
Party, whether or not such employee is a full-time employee of such other Party,
and whether or not such employment is pursuant to a written agreement or is
at-will. For purposes of the foregoing, “recruit”, “solicit” or “induce” shall
not be deemed to mean: (a) circumstances where an employee of a Party initiates
contact with the other Party or any of its Affiliates with regard to possible
employment; or (b) general solicitations of employment not specifically targeted
at employees of a Party or any of its Affiliates, including responses to general
advertisements.

 

51

[*] = 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.

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

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

14.14 Severability. If any of the provisions of this Agreement are held to be
invalid or unenforceable by any court of competent jurisdiction from which no
appeal can be or is taken, the provision shall be considered severed from this
Agreement and shall not serve to invalidate any remaining provisions hereof. The
Parties shall make a good faith effort to replace any invalid or unenforceable
provision with a valid and enforceable one such that the objectives contemplated
by the Parties when entering this Agreement may be realized.

14.15 No Waiver. Any delay in enforcing a Party’s rights under this Agreement or
any waiver as to a particular default or other matter shall not constitute a
waiver of such Party’s rights to the future enforcement of its rights under this
Agreement, excepting only as to an express written and signed waiver as to a
particular matter for a particular period of time.

14.16 Construction of this Agreement. Except where the context otherwise
requires, wherever used, the use of any gender shall be applicable to all
genders, and the word “or” are used in the inclusive sense. When used in this
Agreement, “including” means “including without limitation”. References to
either Party include the successors and permitted assigns of that Party. The
headings of this Agreement are for convenience of reference only and in no way
define, describe, extend or limit the scope or intent of this Agreement or the
intent of any provision contained in this Agreement. The Parties have each
consulted counsel of their choice regarding this Agreement, and, accordingly, no
provisions of this Agreement shall be construed against either Party on the
basis that the Party drafted this Agreement or any provision thereof. If the
terms of this Agreement conflict with the terms of any Exhibit, then the terms
of this Agreement shall govern. The official text of this Agreement and any
Exhibits hereto, any notice given or accounts or statements required by this
Agreement, and any dispute proceeding related to or arising hereunder, shall be
in English. In the event of any dispute concerning the construction or meaning
of this Agreement, reference shall be made only to this Agreement as written in
English and not to any other translation into any other language.

14.17 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document. Counterparts may be signed and delivered
by facsimile, or electronically in PDF format, each of which shall be binding
when sent.

Signature page follows.

 

52

[*] = 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 executed this Agreement in duplicate
originals by their proper officers. Further, the Parties agree that the
signature dates below reflect the actual date of signatures by the Parties and
may not be the effective date of this Agreement.

 

BRISTOL-MYERS SQUIBB COMPANY     EXELIXIS, INC. By:   /s/ Graham R. Brazier    
By:   /s/ Michael M. Morrissey Title:   Vice President, Business Development    
Title:   President and CEO Date:   4/20/11     Date:   4/13/11 EXELIXIS PATENT
COMPANY, LLC.     By:   /s/ Michael M. Morrissey       Title:   President and
CEO       Date:   4/13/11      

 

53

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

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

Exhibit 4.2

Form of Transfer Addendum

This Transfer Addendum No.          (the “Transfer Addendum”) to the license
agreement between Bristol-Myers Squibb Company and Exelixis, Inc., effective as
of                     , 2010 (the “License Agreement”), is made as of
                     {Note: Please insert date} (the “Addendum Effective Date”),
by and between:

Transferring Party: Exelixis, Inc.

And

Receiving Party: Bristol-Myers Squibb Company

for the transfer of:

(1) Information:

{Note: Please identify any Information other than the Materials that would be
transferred, e.g., assay protocols, or else add “N/A” if not applicable.}

(2) Materials:

(i) the following biological materials:

{Note: Please identify any cell-lines, reagents, genes, vectors and constructs
that would be transferred, or else add “N/A” if not applicable.}

(ii) the following {Licensed Compounds} known as:

{Note: Please insert identifier of the applicable compounds, or else add “N/A”
if not applicable.}

Terms and Special Terms

The Parties agree that the transfer of the above defined Information and
Materials pursuant to this Transfer Addendum shall be covered and submitted to
the terms and conditions of the License Agreement. Any special terms and
conditions identified on Appendix A, attached hereto and incorporated herein,
shall also apply to the transfer of the Materials under this Transfer Addendum.

 

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.

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

IN WITNESS WHEREOF, this Transfer Addendum is entered into as of the Addendum
Effective Date, and it is accepted and agreed to by the Parties’ authorized
representatives. The date that this Transfer Addendum is signed shall not be
construed to imply that the document was made effective on that date.

 

       

Name: {Note: insert name of AM}

For Exelixis

   

Name: {Note: insert name of AM}

For BMS

Title:   Alliance Manager     Title:   Alliance Manager Date:         Date:    

 

2

[*] = 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.

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

Appendix A to Transfer Addendum

Special Terms

The following special terms and conditions apply to the transfer of the
Materials under this Transfer Addendum.

{Note: Please identify any special terms and conditions, or else add “N/A” if
not applicable.}

 

3

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

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

Exhibit 10.5

Press Release

Contact:

Charles Butler

Vice President

Corporate Communications

& Investor Relations

Exelixis, Inc.

(650) 837-7277

cbutler@exelixis.com

DeDe Sheel

Associate Director,

Investor Relations

Exelixis, Inc.

(650) 837-8231

dsheel@exelixis.com

EXELIXIS LICENSES PROGRAMS TO BRISTOL-MYERS SQUIBB COMPANY

-Exelixis to receive initial payment of $60 million-

SOUTH SAN FRANCISCO, Calif., October XX, 2010 — Exelixis, Inc. (NASDAQ: EXEL)
announced today that it has entered into two new collaboration agreements with
Bristol-Myers Squibb Company (NYSE:BMY). Under the first agreement, Exelixis
will grant to Bristol-Myers Squibb an exclusive license to its small-molecule
TGR5 agonist program including backups. Under the second agreement, the
companies will collaborate to discover, optimize, and characterize
small-molecule ROR antagonists. The companies have also made minor amendments to
their XL281 and liver X receptor (LXR) agreements. Finally, under the companies’
cancer collaboration agreement Exelixis has opted to exercise its right to opt
out of further co-development of XL139 and will receive an accelerated milestone
payment.

Under the terms of the new agreements, Bristol-Myers Squibb will make a combined
initial payment of $60 million to Exelixis. Exelixis will be eligible for
potential development and approval milestone payments of up to $250 million on
TGR5 and $255 million on the ROR antagonists. Exelixis will also be eligible for
combined sales performance milestones, and royalties on net sales of products
from each of the TGR5 and ROR programs. Bristol-Myers Squibb will receive an
exclusive worldwide license to develop and commercialize small molecule TGR5
agonists and ROR antagonists. Under the TGR5 agreement, Bristol-Myers Squibb
will have sole responsibility for research, development, manufacturing, and
commercialization. Under the ROR agreement, Bristol-Myers Squibb and Exelixis
will collaborate on ROR antagonist programs up to a pre-clinical transition
point and then Bristol-Myers Squibb will have sole responsibility for the
further research, development, manufacture, and commercialization.

 

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.

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Exelixis is granting rights to the ROR program in exchange for Bristol-Myers
Squibb waiving rights to receive a third Investigational New Drug (IND)
candidate as agreed to under a collaboration signed in 2006 between the two
companies in the area of oncology.

After Exelixis opts-out of further co-development of XL139, Bristol-Myers Squibb
will receive an exclusive worldwide license to develop and commercialize, and
will have sole responsibility for the further development, manufacture, and
commercialization of the compound.

“We continue our strong relationship with Bristol-Myers Squibb and are excited
for these collaborations to maximize the potential of these novel programs and
bring benefits to patients with serious diseases,” said Michael M. Morrissey,
Ph.D., president and chief executive officer of Exelixis. “These transactions
leverage our discovery expertise with the development expertise of Bristol-Myers
Squibb in inflammation and metabolic diseases, and provide important additional
resources for us to continue our focus on our clinical stage development
pipeline.”

TGR5 is a G-protein coupled bile acid receptor (GPCR) which is highly expressed
in the gall bladder and intestine. Through TGR5, bile acids promote the
secretion of glucogen-like peptide-1 (GLP-1), a hormone that affects multiple
metabolic parameters including increased insulin secretion from the pancreas and
lowering of blood glucose. Stimulating GLP-1 secretion by activation of TGR5 has
the potential to be complementary to the use of dipeptidyl peptidase-4 (DPP-IV)
inhibitors for the treatment of diabetes.

ROR is a member of the nuclear hormone receptor family that is expressed in
multiple cell types including T-cells. ROR plays a prominent role in the
development and activity of the TH17 subset of T-cells, which secrete IL-17 and
are associated with a variety of inflammatory disorders. Small molecule
antagonists of ROR inhibit production of these pro-inflammatory cytokines and
have broad potential as novel anti-inflammatory compounds.

The TGR5 license agreement and the amendment to the 2007 cancer collaboration
agreement are subject to antitrust clearance under the Hart-Scott-Rodino
Antitrust Improvements Act and other customary regulatory approvals.

About Exelixis

Exelixis, Inc. is a development-stage biotechnology company dedicated to the
discovery and development of novel small molecule therapeutics for the treatment
of cancer and other serious diseases. The company is leveraging its biological
expertise and integrated research and development capabilities to generate a
pipeline of development compounds with significant therapeutic and commercial
potential for the treatment of cancer and potentially other serious diseases.
Currently, Exelixis’ broad product pipeline includes investigational compounds
in phase 3, phase 2, and phase 1 clinical development. Exelixis has established
strategic corporate alliances with major pharmaceutical and biotechnology
companies, including Bristol-Myers Squibb Company, sanofi-aventis,
GlaxoSmithKline, Genentech (a wholly owned member of the Roche Group),
Boehringer Ingelheim, and Daiichi-Sankyo. For more information, please visit the
company’s web site at http://www.exelixis.com.

Exelixis and the Exelixis logo are registered U.S. trademarks.

{Insert Forward-Looking Statements}

 

2

[*] = 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.