[ * ] = 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 10.25




 




COLLABORATION AGREEMENT




This

Collaboration Agreement  (the “Agreement”) is entered into as of August 1st, 2002 (the “Effective Date”) by and

between Rigel Pharmaceuticals, Inc., a Delaware corporation (“Rigel”)

with its offices at 240 East Grand Avenue, South San Francisco, California

94080, and Daiichi Pharmaceutical Co., Ltd., a

Japanese corporation (“Daiichi”) with offices at 14-10 Nihonbashi 3-chome,

Chuo-ku, Tokyo 103-8234, Japan.  Rigel

and Daiichi may be referred to herein individually as a “Party” or,

collectively, as the “Parties.”




Recitals




Whereas, Rigel is a leader in the discovery and

validation of target molecules involved in cancer;




Whereas, Daiichi is engaged in the research,

development, marketing, manufacture and distribution of pharmaceutical products

for the diagnosis, treatment or prevention of cancer;




Whereas, Rigel and Daiichi desire to enter into a

collaborative relationship to identify small molecule inhibitors of a specific

Target Molecule (hereinafter defined) useful for the development of such pharmaceutical

products; and




Whereas,  Rigel is prepared to grant Daiichi worldwide marketing

rights with respect to any products arising from this collaboration, and

Daiichi is prepared to grant to Rigel rights to co-develop and co-promote such

products in North America, as specified below;




Now,

Therefore, in

consideration of the foregoing and the covenants and promises contained in this

Agreement, the Parties agree as follows:




1.                                      Definitions




Each of the capitalized

terms used in this Agreement (other than the headings of the Articles and

Sections), whether used in the singular or the plural, shall have the meaning

as set forth below or, if not listed below, the meaning as designated in places

throughout this Agreement.




1.1          “Affiliate” means any company or entity controlled

by, controlling, or under common control with a Party hereto and shall include

without limitation any company fifty percent (50%) or more of whose voting

stock or participating profit interest is owned or controlled, directly or

indirectly, by a Party, and any company which owns or controls, directly or

indirectly, fifty percent (50%) or more of the voting stock of a Party.




1.2          “Assays” means [*]




 




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1.3          “Assay Know-How” means all Information Controlled by

Rigel during the Research Term that is necessary or reasonably useful to

practice the Assay Patents or to make, perform or use the Assays.




1.4          “Assay Patents” means all Patents Controlled by Rigel during the

Research Term that claim (a) the Assays or any component thereof, (b) a method

of making the Assays or any component thereof or (c) a method of performing or

using the Assays.




1.5          “Assay Technology” means the Assay Know-How and Assay Patents.




1.6          “[*]” means the [*]

that are described in the Research Plan.




1.7          “[*]” means the [*]

that are described in the Research Plan.




1.8          “Co-Developed Product” means a Product for which an IND has

been filed in the North American Territory, and Rigel has not exercised any Non

Co-Development Option and has not terminated, pursuant to Section 5.15(a),

co-development in all countries of the North American Territory.




1.9          “Co-Developed Territory” means, with respect to a particular

Co-Developed Product, the country or countries in the North American Territory

for which (a) Rigel has not exercised its Non Co-Development Option, (b) Rigel

has not terminated co-development pursuant to Section 5.15(a), and (c) Daiichi

has not terminated co-development pursuant to Section 5.15(b).




1.10        “Confidential Information” means (a) all Information, and other

information and materials, received by either Party from the other Party

pursuant to this Agreement or pursuant to the Confidential Disclosure Agreement

between the Parties dated November 1, 2000 and (b) all Rigel Restricted

Information.  For clarity, Rigel

Restricted Information shall be considered Confidential Information of Rigel.




1.11        “Controlled” means, with respect to any gene,

protein, compound, material, Information or intellectual property right, that

the Party owns or has a license to such gene, protein, compound, material,

Information or intellectual property right and has the ability to grant to the

other Party access, a license or a sublicense (as applicable) to such gene,

protein, 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 the other Party such access, license or

sublicense.




1.12        “Co-Promoted Product” means a Co-Developed Product for which

Rigel has not exercised any Non Co-Promotion Option and has not terminated,

pursuant to Section 6.3(a), co-promotion in all countries in which such Product

was co-developed by the Parties.




1.13        “Co-Promoted Territory” means, with respect to a particular

Co-Promoted Product, the country or countries in the Co-Developed Territory for

such product for which (a) Rigel has not exercised its Non Co-Promotion Option,

(b) Rigel has not terminated co-promotion




 




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pursuant to

Section 6.3(a), (c) Daiichi has not terminated co-promotion pursuant to Section

6.3(b), and (d) the [*]

Co-Promotion Period has not expired.




1.14        “Co-Promotion Period” means, with respect to a particular

Co-Promoted Product in a particular country in its Co-Promoted Territory, the

period beginning on the receipt of approval of the Drug Approval Application

for such Product in such country and ending [*]

after the first commercial sale of such Product in such country.




1.15        “Daiichi Product Know-How” means all Information (other than

Daiichi Product Patents) Controlled by Daiichi during the Term that is

necessary or reasonably useful to (a) develop or offer for sale a Product or

(b) practice the Daiichi Product Patents.




1.16        “Daiichi Product Patents” means all Patents Controlled by Daiichi

during the Term that cover the manufacture, use or composition of matter of a

Product.




1.17        “Daiichi Technology” means all Information and Patents

Controlled by Daiichi during the Research Term that are necessary or reasonably

useful for Rigel to carry out its responsibilities under the Research Program.




1.18        “Daiichi-Alone Territory” means all countries and territories of

the world other than those countries and territories in the North American

Territory.




1.19        “Development Budget” shall have the meaning assigned in

Section 5.9.




1.20        “Development Costs” means the total costs incurred by the

Parties in the course of planning, conducting, managing or reviewing the

results of a Phase I Trial or a Phase II Trial for any Co-Developed Product in its Co-Developed

Territory, including (without limitation): (a) costs of producing bulk drug,

filling and finishing, shipping, storing and administering all doses of such

Co-Developed Product that are administered to patients during such trials

(where such costs are allocated on a per gram basis), (b) payments made to

hospitals, medical personnel and clinical trial management organizations in

consideration for work performed on such trials, (c) costs incurred as a result

of the preparation, review and filing of regulatory submissions for such

clinical trials, and (d) wages and benefits to the extent employees work on

such clinical trials  and related regulatory submissions

(calculated on a full-time equivalent basis), provided that such costs were

incurred in accordance with each Party’s responsibilities under the Development

Plan for such Co-Developed Product. 

Notwithstanding the foregoing, Development Costs shall exclude:  [*].




1.21        “Development Plan” shall have the meaning assigned in

Section 5.9.




1.22        “Diligent Efforts” means the carrying out of obligations in

a sustained manner consistent with the efforts a Party devotes to a product of similar

market potential, profit potential or strategic value resulting from its own

research efforts, based on conditions then prevailing.  Diligent Efforts requires that:  (a) each Party promptly assign

responsibility for such obligations to specific employee(s) who are held

accountable for progress and monitor such progress on an on-going basis, (b)

each Party set and consistently seek to achieve specific and meaningful

objectives for carrying out such obligations, and (c) each Party consistently

make




 




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and implement

decisions and allocate resources designed to advance progress with respect to

such objectives.




1.23        “Drug Approval Application” means an application for Regulatory

Approval required before commercial sale or use of a Product as a drug in a

regulatory jurisdiction.




1.24        “FTE” means the equivalent of one researcher working full

time for or on behalf of Rigel for one 12-month period (including normal

vacations, sick days and holidays).




1.25        “Hit Compound” means a Pre-Hit Compound that meets the

criteria set forth in the Research Plan.




1.26          “IND” shall mean (a) with respect to the

United States, an Investigational New Drug application, as defined in the U.S.

Food, Drug and Cosmetics Act and the regulations promulgated thereunder, or (b)

with respect to any other regulatory jurisdiction, any corresponding or

equivalent application, registration or certification in such jurisdiction.




1.27        “Information” means biological materials, information,

results and data of any type whatsoever, in any tangible or intangible form

whatsoever, including without limitation, gene sequences, vectors, cell lines,

reagents, samples, chemical compounds, 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, and patent and other

legal information or descriptions.




1.28        “Invention” means any and all inventions and

improvements thereto, made, conceived or reduced to practice by a Party in the

performance of its duties under the Research Program or in the course of its

practice of a license granted to it pursuant to Section 4.2 or 4.3.




1.29         “Joint Development Committee” or “JDC” means the committee formed

pursuant to Section 5.2.




1.30        “Joint Invention” means any Invention made, discovered or

developed jointly by employee(s) or agent(s) of both Parties.




1.31        “Joint Research Committee” or “JRC” means the committee formed

pursuant to Section 2.1.




1.32        “Lead Compound” means a Hit Compound or a derivative,

analog or congener of a Hit Compound or Lead Compound, wherein such Hit Compound

or derivative, analog or congener meets the criteria set forth

in the Research Plan.




1.33         “NDA” means (a) a New Drug Application filed with the

United States Food and Drug Administration in conformance with applicable laws

and regulations, or (b) the foreign equivalent of any such application in any

country other than the United States.




1.34        “Net Sales” means the gross amount invoiced for sales of a

Product in a particular territory by Daiichi, its Affiliates or their permitted

sublicensees to an unrelated Third




 




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Party, less (to

the extent incurred for such Product in such territory):  (i) discounts, including

cash discounts (including quantity discounts), charge-back payments and rebates

granted to managed health care organizations or to federal, state and local

governments, their agencies, and purchasers and reimbursers or to trade

customers, including but not limited to, wholesalers and chain and pharmacy

buying groups (with any such discounts or reductions which are based on sales

to the customer of multiple products being allocated to such Product on the

basis of a methodology approved by the Parties), (ii) credits or allowances

actually granted upon claims, damaged goods, rejections or returns of such

Product, including recalls, (iii) freight, postage, shipping and insurance

charges actually allowed or paid for delivery of such Product, to the extent

billed, (iv) commissions paid to Third Parties, (v) taxes, tariffs, duties or

other governmental charges levied on, absorbed or otherwise imposed on sale of

such Products, including without limitation value-added taxes, or other

governmental charges measured by the billing amount, when included in billing,

as adjusted for rebates and refunds and (vi) bad debts (determined in

accordance with the normal accounting procedures of, and applied consistently

within and across the operating units of, Daiichi, its Affiliates or their

permitted sublicensees).  If Daiichi or

its Affiliate or licensee sells any Product as a combination product containing

one or more active ingredients in addition to the Product (which may be either

combined in a single formulation or bundled with separate formulations), Net

Sales for such combination product will be calculated by multiplying actual Net

Sales of such combination product by the fraction A/(A+B) where A is the

invoice price of the Product if sold separately, and B is the total invoice

price of any other active ingredient or ingredients in the combination, if sold

separately.  If, on a country-by-country

basis, the other active ingredient or ingredients in the combination are not

sold separately in said country, Net Sales for the purpose of determining

royalties of the combination product shall be calculated by multiplying actual

Net Sales of such combination product by the fraction A/C where A is the

invoice price of the Product if sold separately, and C is the invoice price of

the combination product.  If, on a

country-by-country basis, neither the Product nor the other active ingredient

or ingredients of the combination product is sold separately in said country or

the mechanics provided above are otherwise inapplicable (as in the case of

medical devices), Net Sales for the purposes of determining royalties of the

combination product shall be determined by the Parties in good faith.




1.35        “Non Co-Development Option” shall have the meaning set forth in

Section 5.1(b).




1.36        “Non Co-Promotion Option” shall have the meaning set forth in

Section 6.1(b).




1.37        “North American Territory” means (a) the United States and its

possessions and territories, (b) Canada and its provinces and territories, (c)

Mexico and (d) any successor states to the foregoing.




1.38        “Patent” means (a) unexpired letters patent (including

inventor’s certificates) which have not been held invalid or unenforceable by a

court of competent jurisdiction from which no appeal can be taken or has been

taken within the required time period, including without limitation any

substitution, extension, registration, confirmation, reissue, re-examination,

renewal or any like filing thereof and (b) pending applications for letters

patent, including without limitation any continuation, division or

continuation-in-part thereof and any provisional applications.




 




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1.39        “Phase I Trial” means a trial on sufficient numbers of

normal volunteers and patients that is designed to establish that a

pharmaceutical product is safe for its intended use, and to support its

continued testing in Phase II Trials, or the equivalent of such trial (in the

United States or abroad).




1.40        “Phase II Trial” means a trial on sufficient numbers of

patients that is designed to establish the safety and biological activity of a

pharmaceutical product for its intended use, and to define warnings,

precautions and adverse reactions that are associated with the pharmaceutical

product in the dosage range to be prescribed, or the equivalent of such trial

(in the United States or abroad), but not a trial designed to establish

efficacy with statistical significance.




1.41        “Phase III Trial” means a trial on sufficient numbers of

patients that is designed to establish that a pharmaceutical product is safe

and efficacious for its intended use, and to define warnings, precautions and

adverse reactions that are associated with the pharmaceutical product in the

dosage range to be prescribed, and to support Regulatory Approval of such

pharmaceutical product or label expansion of such pharmaceutical product, or

the equivalent of such trial (in the United States or abroad).




1.42        “Pre-Hit Compound” means a compound that is identified by

Rigel during the Research Term, or by Daiichi during or after the Research Term

ends, that meets the criteria set forth in the Research Plan.




1.43        “Product” means any product that contains, comprises or

incorporates a Lead Compound and that was developed to diagnose, prevent or

treat a human disease or condition.




1.44        “Promotion Expenses” means, with respect to a particular

Co-Promoted Product, the costs incurred by Rigel (a) to operate and maintain

the Sales Representatives for such Co-Promoted Product or (b) in connection

with the promotion of such Co-Promoted Product in its Co-Promoted Territory by

such Sales Representatives.




1.45        “Regulatory Approval” means any approvals (including

supplements, amendments, pre- and post-approvals, pricing and reimbursement

approvals), licenses, registrations or authorizations of any national,

supra-national (e.g., the European Commission or the Council of the European Union),

regional, state or local regulatory agency, department, bureau, commission,

council or other governmental entity, necessary for the manufacture,

distribution, use or sale of Products in a regulatory jurisdiction.




1.46        “Research Plan” means the plan that sets forth the

research work to be performed by Rigel and Daiichi in the course of the

Research Program and other matters referred to therein.




1.47        “Research Program” means the program of collaborative

research described in Article 3.




1.48        “Research Term” means the period, the duration of which

is set forth in Section 3.2, during which the Parties conduct the Research

Program.




 




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1.49        “Reverted Territory” means with respect to a particular

Product, all countries in the North American Territory for which Rigel either

(i) exercised its Non Co-Development Option or (ii) did not exercise such

option but subsequently terminated co-development pursuant to Section 5.15(a).




1.50        “Rigel Compound Know-How” means all Information Controlled by

Rigel, during the Research Term, that is necessary or reasonably useful to

practice the Rigel Compound Patents.




1.51        “Rigel Compound Patents” means all Patents Controlled by Rigel,

during the Research Term, that cover the manufacture, use or composition of

matter of a Lead Compound.




1.52        “Rigel Product” means a Product on which Daiichi either

(a) terminated co-development pursuant to Section 5.15(b) or (b) terminated

co-promotion pursuant to Section 6.3(b).




1.53        “Rigel Restricted Information” means all Information of Rigel, other

than Assay Know-How, Assay Patents, Rigel Compound Know-How, Rigel Compound

Patents and Rigel Technology, that is learned by the employees of Daiichi who

work at Rigel as permitted under Section 3.6 at any time they are at a Rigel

facility.




1.54        “Rigel Technology” means all Information and Patents (other

than Assay Know-How and Assay Patents) Controlled by Rigel during the Research

Term that are necessary or reasonably useful for Daiichi to carry out its responsibilities

under the Research Program.




1.55        “Rigel-Alone Option” shall have the meaning assigned in

Section 7.4(a).




1.56        “Rigel-Alone Territory” means, with respect to a particular

Rigel Product, the country or countries in which Daiichi terminated (a)

co-development of such Product pursuant to Section 5.15(b) or (b) co-promotion

of such Product pursuant to Section 6.3(b).




1.57        “Sales Representative” means an employee or agent of a Party or

its Affiliate: (a) who is responsible for meeting with customers and others who

can buy (or influence the buying process and decision regarding) the applicable

Co-Promoted Product in its Co-Promoted Territory, and (b) whose success at such

activities is a significant factor in the ongoing employment or engagement of such

individual by such Party or Affiliate, provided that such individual is not

solely engaged in telemarketing, professional education or other indirect

activities in support of direct selling.




1.58        “Sales Representative Efforts” means the efforts, to be measured by

means of a methodology to be established or approved by the Parties, of Sales

Representatives to promote a particular Co-Promoted Product in its Co-Promoted

Territory.  In establishing the

methodology for measurement of Sales Representative Efforts, the Parties shall

take into consideration all factors that they determines to be relevant,

including, by way of example, the following: 

frequency of calls, positioning of calls, appropriateness of calls, nature

of contact and the role of the person contacted in influencing the buying

process and decision.




 




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1.59        “Sole Invention” means any Invention made, discovered or

developed solely by a Party and its employees or agents.




1.60          “Target Molecule” shall mean [*].




1.61         “Term” shall have the meaning assigned to it in Section

12.1.




1.62        “Third Party” means any person or entity other than a

Party or an Affiliate of a Party.




2.                                      Research Program Governance




2.1          Joint Research Committee Formation;

Joint Patent Committee.




(a)           The Research Program established by this Agreement

shall be overseen by a joint research committee composed of four (4) representatives from each Party (the

“Joint Research Committee” or “JRC”). 

The Parties shall designate their representatives on the JRC within ten

(10) days after the Effective Date.  An

alternate member designated by a Party may serve temporarily in the absence of

a permanent member of the JRC for such Party. 

Each Party shall designate one of its representatives as a Co-Chair of

the JRC.  Each Co-Chair of the JRC will

be responsible for the agenda of alternating JRC meetings.  From time to time, the JRC may establish

subcommittees or subordinate committees (which may or may not include members

of the JRC itself) to oversee particular projects or activities, and such

subcommittees or subordinate committees shall be constituted and shall operate

as the JRC agrees.




(b)           The Parties hereby establish a Joint Patent Committee

to serve as a subordinate committee of the JRC.  The Joint Patent Committee shall be composed of an equal number

of representatives of each Party, appointed from time to time by the JRC, and

shall include at least one patent attorney from each Party.  The Joint Patent Committee shall be

responsible for identifying Inventions made in the course of the Research

Program and making recommendations to the JRC regarding the identity of the

individual inventors and the nature of the patent protection to be sought for

such Inventions.




2.2          JRC Actions. 

Actions by the JRC pursuant to this Agreement shall be taken only with

unanimous approval of all of the JRC representatives.  If the JRC fails to reach unanimity on a matter before it for

decision, the matter shall be referred for resolution to senior officers of the

Parties.




2.3          Meetings of the JRC. 

The JRC:




(a)           shall hold meetings at such times and places as shall

be determined by the JRC (it being expected that meetings will alternate

between the offices of each Party) but in no event shall such meetings be held

in person less frequently than once every three (3) months during the Research

Term and during the first six (6) months after the end of the Research Term;




(b)           may conduct meetings in person, by videoconference or

by telephone conference, provided that meetings by videoconference or telephone

conference shall not reduce the number of meetings in person specified in

Section 2.3(a);




 




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(c)           may invite other senior personnel of the Parties to

attend meetings of the JRC;




(d)           may act without a meeting if, prior to such action, a

written consent thereto is signed by all members of the JRC; and




(e)           may, by unanimous written consent, amend or expand

upon the foregoing procedures for its internal operation.




2.4          Minutes.  At each

meeting, the JRC shall elect a secretary who will prepare, within ten business

(10) days after each meeting, minutes reporting in reasonable detail the

actions taken by the JRC during such meeting, the status of the Research

Program, issues requiring resolution, and resolutions of previously reported

issues.  Such minutes are to be reviewed

and, if reasonably complete and accurate, signed by one JRC member from each

Party.  The secretary shall revise such

minutes as necessary to obtain such signatures.




2.5          JRC Functions and Powers. The research activities of the Parties

under this Agreement shall be managed by the JRC only to the extent set forth

herein (unless otherwise mutually agreed in writing by the Parties).  The JRC shall foster the collaborative

relationship between the Parties, and shall in particular:




(a)           encourage and facilitate ongoing cooperation and

information exchange between the Parties;




(b)           monitor the progress of the Research Program and the

Parties’ diligence in carrying out their responsibilities thereunder;




(c)           set priorities, allocate tasks and coordinate

activities required to perform the Research Program;




(d)           define the pharmacokinetic, pharmacodynamic, stability

and solubility criteria for a compound to qualify as a Lead Compound;




(e)           identify those compounds which qualify as Hit

Compounds or Lead Compounds on account of their fulfillment of the criteria set

forth in the Research Plan for Hit Compounds and Lead Compounds, respectively;




(f)            clear scientific publications relating to the Research

Program, subject to the review and approval of both Parties pursuant to Section

10.6; and




(g)           perform such other functions as appropriate to further

the purposes of this Agreement as mutually determined by the Parties.




2.6          Limitations of Powers of the JRC. 

The JRC shall have no power to amend this Agreement and shall have only

such powers as are specifically delegated to it hereunder.




 




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2.7          Project Contact Persons.  The day-to-day interactions and project management of

the Research Program will be performed by a pair of project contact persons,

one to be appointed by each Party.




2.8          Obligations of Parties. 

Each Party shall provide the JRC and its authorized representatives with

reasonable access during regular business hours to all records and documents of

such Party that are specific to the Research Program and that the JRC may

reasonably require in order to perform its obligations hereunder, subject to

any bona fide obligations of confidentiality to a Third Party.




2.9          Research Program Guidelines.




(a)           General. 

In all matters related to the Research Program, the Parties shall be

guided by standards of reasonableness in economic terms and fairness to each of

the Parties, striving to balance as best they can the legitimate interests and

concerns of the Parties, to further the Research Program and to realize the

economic potential of the Products.




(b)           Independence.  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 Rigel and Daiichi is that of independent

contractors and neither Party shall have the power to bind or obligate the

other Party in any manner, other than as is expressly set forth in this

Agreement.




3.                                      Conduct of Research Program.




3.1          Overview. 

The goal of the Research Program is to identify Lead Compounds.  As described in greater detail in the

Research Plan and this Article 3, it is anticipated that Rigel will [*] and each Party shall [*]. 

Rigel shall also [*].  The Parties shall use [*] and other [*] to perform research on promising Pre-Hit Compounds to

determine whether they qualify as Hit Compounds.  [*].  Once a compound is designated or deemed to

be a Lead Compound, no further work shall be performed upon it pursuant to the

Research Program.  The Parties’ rights

to develop and commercialize products that incorporate Lead Compounds are set

forth in Articles 5, 6 and 7.




3.2          Research Term. 

The Research Term shall commence on the Effective Date and shall

continue until the earlier of (a) the [*]

anniversary of the Effective Date and (b) the effective date of any termination

of this Agreement pursuant to Section 12.2. 

The FTE funding commitments of Daiichi set forth in Section 3.4 and the

payment obligations of Daiichi set forth in Section 3.4 (b) shall remain in force until the end of

the Research Term. The Research Term may be extended by [*]

upon written agreement between the Parties at least [*] prior to the [*].




3.3          Research Plan. 

An initial Research Plan has been approved by the Parties concurrent

with the execution of this Agreement.  The

Research Plan may be amended by the JRC, during the Research Term, based upon

the results achieved in the Research Program, provided that the FTE commitments

set forth in Section 3.4, together with the definitions of Pre-Hit Compound,

Hit Compound and Lead Compound, remain unchanged and such amendment does not

violate or contradict any provision of this Agreement.  Any change of the portions of the Research

Plan specified in the previous sentence shall be made pursuant to the mechanism




 




10





























 




set forth in

Section 15.2.  In the event of an

inconsistency or disagreement between the Research Plan and this Agreement, the

terms of this Agreement shall prevail.




3.4          Research Effort and Support.




(a)           FTE Commitments. 

Rigel shall supply [*] FTEs

during each contract year of the Research Term.  In the event of an extension of the Research Term [*], the Parties shall agree at that time

on the number of FTEs that Rigel shall supply in such [*] of the Research Term.  Daiichi shall fund such FTEs as set forth in

Section 3.4 (b).  Daiichi

understands and agrees that Rigel retains complete discretion to change the

identity of the individuals who compose such FTEs and to alter the frequency

and time which any individual devotes to the Research Program.  All scientific work on or directly related

to the Research Program performed by such individuals shall count towards the

fulfillment of Rigel’s FTE commitment pursuant to this Section 3.4.  Such work may include, but is not limited

to, experimental laboratory work, recording and writing up results, reviewing

literature and references, holding scientific discussions, organizing and

attending scientific meetings and conferences, managing and leading scientific

staff, and carrying out Research Program management duties (including service

on the JRC).




(b)           Research Support.  To support Rigel’s efforts under the Research Program, during each

contract year of the Research Term, Daiichi shall pay Rigel an amount equal to [*]  for the [*] and [*] for

the [*], multiplied by the number of FTEs set

forth in Section 3.4 for such year. 

Each such amount shall be paid to Rigel in four equal, quarterly advance

payments.  Daiichi shall make its first

such payment within [*] of the Effective Date and each

subsequent payment on the first business day of each contract quarter during

the Research Term.  Within thirty

(30) days after the end of each contract year (i.e., each anniversary of the

Effective Date), Rigel shall submit to Daiichi a report confirming its actual

FTEs devoted to the conduct of the Research Program and the actual cost of such

research efforts during the preceding contract year.  If the total actual costs incurred by Rigel under the Research

Program in each contract year are less than the amount that Daiichi has paid in

each contract year, then [*] the [*] within [*] the [*] of [*].  If the total actual costs incurred by Rigel under the Research

Program in each contract year are more than the amount that Daiichi has paid in

each contract year, [*].




3.5          Conduct of Research. 

The Parties shall use Diligent Efforts to conduct their respective

tasks, as assigned under the Research Plan, throughout the Research Program,

provided that Rigel shall not be obligated to devote any resources to the

Research Program in excess of the FTEs funded by Daiichi pursuant to Section

3.4.  In addition, the Parties shall

conduct the Research Program 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 efficiently and expeditiously.




3.6          Technology Transfer. 

Rigel will transfer to Daiichi, on an orderly basis and as the Assays

are developed, the Assay Know-How and a copy of issued patents and patent

applications that are Assay Patents. 

Such transfer shall be managed and coordinated by the JRC.  To assist and direct the transfer to Daiichi

of the Assay Know-How, Daiichi may provide, at its cost and expense, [*] to work at Rigel for up to [*] for technical training related to the [*] and [*]

to work at Rigel for up to [*] for

technical training related to the [*],

provided that access or




 




11





























 




exposure to Rigel

Restricted Information by Daiichi scientists shall be subject to the provisions

of Article 10.  All [*] that work at Rigel under the terms of

this Section 3.6 shall be restricted from access to any Rigel facilities or

locations other than those necessary for completing the technology transfer and

training as provided above.  Further,

Rigel shall use reasonable efforts to limit and restrict such [*] from access or exposure to any

confidential information of Rigel that is not Assay Know-How.  All time spent by Rigel personnel in

carrying out the technology transfer to Daiichi pursuant to the terms of this

Section 3.6 shall count towards the fulfillment of Rigel’s obligation, pursuant

to Section 3.4, to provide a specified number of FTEs during each contract year

of the Research Term.




3.7          Identification of Pre-Hit Compounds,

Hit Compounds and Lead Compounds.




(a)           During the [*]

of the Research Term, Rigel shall [*]

to determine [*], and Daiichi

shall [*].




(b)           Each Party shall use Diligent Efforts to [*] other compounds pursued under the

Research Program.  Each Party shall

promptly report to the JRC the results of the further research performed by

such Party on each Pre-Hit Compound [*].  The JRC shall review such results and shall

determine whether such Pre-Hit Compound satisfies the technical criteria set

forth in the Research Plan for a Hit Compound. 

Each Pre-Hit Compound that satisfies such criteria shall be deemed a Hit

Compound, and each Party shall [*]

each such Hit Compound.




(c)           The JRC shall decide which Hit Compounds merit still

further research, prioritize each such compound relative to other compounds

pursued under the Research Program, and Daiichi shall have the primary

responsibility for conducting such further research.  Each Party shall use Diligent Efforts to perform the

responsibilities allocated to it by the JRC according to the priorities set by

the JRC.  Each Pre-Hit Compound that did

not satisfy the Hit Compound technical criteria specified in the Research Plan,

but is nevertheless chosen by the JRC for further research as described in the

Research Plan, shall be deemed a Hit Compound, and each Party shall promptly

disclose to the JRC the identity and structure of each such Hit Compound.  Each Party shall promptly report to the JRC

the results of the further research performed by such Party on each Hit

Compound and its derivatives, analogues and congeners.  The JRC shall review such results and shall

determine whether any such compound satisfies the technical criteria set forth

in the Research Plan for a Lead Compound. 

Each such compound that satisfies such criteria shall be deemed a Lead

Compound.  If such a compound does not

satisfy such criteria, but Daiichi designates such compound for any study

listed in the Research Plan, then it shall also be deemed a Lead Compound.




(d)           Once a compound is designated or deemed to be a Lead

Compound, no further work shall be performed upon it pursuant to the Research

Program, provided, however, that if Daiichi desires Rigel to perform further

work on such Lead Compound, [*].




3.8          Records.  Each Party

shall maintain complete and accurate records of all work conducted under the

Research Program and all results, data and developments made pursuant to its

efforts under the Research Program. 

Such records shall be complete and accurate and shall fully and properly

reflect all work done and results achieved in the performance of the Research




 




12





























 




Program in

sufficient detail and in good scientific manner appropriate for patent and

regulatory purposes.  Each Party shall

have the right to review and copy such records of the other Party at reasonable

times to the extent necessary for such Party to conduct its research or other

obligations under the Agreement.




3.9          Reports.  During the

Research Term, each Party shall report to the JRC no less than once per

quarter, which report shall include a written progress report summarizing the

work performed under the Research Program. 

The JRC shall define the format and the nature of the content of the

quarterly report, which shall be adopted by both Parties.




3.10        Daiichi’s Post-Research Term Activities. 

Daiichi shall use Diligent Efforts to further develop, and file INDs

for, the Lead

Compounds.  Subject to the terms and

conditions of this Agreement, Daiichi shall have the right to continue

screening its libraries to identify Pre-Hit Compounds, Hit Compounds and Lead

Compounds after the Research Term expires. 

All such Pre-Hit Compounds, Hit Compounds and Lead Compounds identified

by Daiichi shall be subject to the terms and conditions of this Agreement.




4.                                      License Grants; Noncompetition




4.1          Collaborative Research Licenses.




(a)           Grant by Rigel. 

Subject to the terms and conditions of this Agreement, Rigel hereby

grants to Daiichi a non-exclusive, non-transferable (except via assignment in

accordance with Section 15.9), worldwide, royalty-free license, under the Rigel

Technology, solely for the purpose of carrying out, during the Research Term,

Daiichi’s responsibilities under the Research Program.




(b)           Grant by Daiichi. 

Subject to the terms and conditions of this Agreement, Daiichi hereby

grants to Rigel a non-exclusive, non-transferable (except via assignment in

accordance with Section 15.9), worldwide, royalty-free license, under Daiichi

Technology, solely for the purpose of carrying out, during the Research Term,

Rigel’s responsibilities under the Research Program.




4.2          Assay Licenses.




(a)           Subject to the terms and conditions of this Agreement,

Rigel hereby grants to Daiichi an exclusive (except as to Rigel),

non-transferable (except via assignment in accordance with Section 15.9), worldwide,

royalty-bearing (as provided in Article 8) license, under the Assay Technology,

to use the Assays, during and after the end of the Research Term, to identify

and perform research upon Pre-Hit Compounds, Hit Compounds and Lead Compounds.  Rigel shall retain the right for

itself and its Affiliates to use the Assays under the Assay Technology, but shall not license

any Third Party to do so to identify and perform research upon Pre-Hit

Compounds, Hit Compounds and Lead Compounds.




(b)           Subject to the terms and conditions of this Agreement,

Rigel hereby grants to Daiichi a non-exclusive, non-transferable (except via

assignment in accordance with Section 15.9), worldwide, royalty-free license,

under the Assay Technology, to use the Assays during




 




13





























 




and after the end

of the Research Term, to identify compounds that fail to qualify as Pre-Hit

Compounds.




4.3          Development and Commercialization

Licenses.




(a)           Grant by Rigel. 

Subject to the terms and conditions of this Agreement, Rigel hereby

grants to Daiichi and its Affiliates a worldwide, sublicensable,

royalty-bearing (as provided in Article 8) license under the Rigel Compound

Know-How, Rigel Compound Patents, Rigel’s Sole Inventions and Rigel’s interest

in the Joint Inventions, to develop, use, make, have made, sell, offer for sale, import and export Products.  The license set forth in this Section 4.3(a) shall be exclusive

for all Products, provided, however, that Rigel shall retain the right,

to the extent of Rigel’s undertaking for co-development and co-promotion

hereunder, under the

Rigel Compound Know-How, Rigel Compound Patents, Rigel’s Sole Inventions and

Rigel’s interest in the Joint Inventions  in each country in the North American Territory, if Rigel has not exercised its Non Co-Development

Option or Non Co-Promotion Option (if available) for such country.




(b)           Grant by Daiichi. 

Subject to the terms and conditions of this Agreement, Daiichi hereby

grants to Rigel and its Affiliates a non-exclusive, non-transferable  (except via assignment in accordance with

Section 15.9), royalty-free license, under Daiichi Product Know-How, Daiichi Product

Patents, Daiichi’s Sole Inventions and Daiichi’s interest in the Joint

Inventions, (i) to develop, in the applicable Co-Developed Territories,

Co-Developed Products and (ii) to offer for sale, in the applicable Co-Promoted

Territories, Co-Promoted Products.




(c)           Restriction on Licensing.  Rigel shall not grant any license under

Rigel Compound Patents, Rigel’s Sole Inventions, or Rigel’s interest in Joint

Inventions [*].




4.4          Negative Covenant. 

Each Party covenants that it will not practice technology licensed to it

under this Agreement outside the scope of the licenses granted herein.  Except as specifically provided herein, no

Party grants to the other Party any license, express or implied, to any

technology, know-how, inventions, improvements, trade secrets or materials that

it possesses.




4.5          Noncompetition.




(a)           Exclusivity.  During [*],

each Party will work exclusively with the other Party (and pursuant to this

Agreement) with respect to (i) research directed toward the Target

Molecule and

inhibitors of the Target Molecule and (ii) development and commercialization of

products containing inhibitors of the Target Molecule. 

The foregoing shall not be interpreted as limiting Daiichi’s ability to

sublicense (in accordance with Section 4.3(a)) the license granted to it

therein.




(b)           Pre-Hit Compounds.  Each Party hereby covenants that it shall

not (except pursuant to this Agreement) research, develop or commercialize any

Pre-Hit Compound or any product containing, incorporation or comprising a

Pre-Hit Compound, [*].  The foregoing shall not be interpreted as

preventing either Party from using Pre-Hit Compounds to [*]. 

Such [*] are not subject to

the covenant set forth in this Section 4.5(b).




 




14





























 




(c)           Hit Compounds and Lead Compounds.  Each Party hereby covenants that it shall not

(except pursuant to this Agreement) research, develop or commercialize any Hit

Compound or Lead Compound or any product containing, incorporating or

comprising a Hit Compound or Lead Compound. 

For clarity, if any Hit Compound or Lead Compound is a member of a Party’s

screening library, then the covenant in this Section 4.5(c) does not obligate

such Party to take the step of removing such Hit Compound or Lead Compound from

its screening library.




5.                                      Co-Development




5.1          Co-Development Rights; Rigel Option to

Terminate.




(a)           Rigel Right to Co-Develop.  Rigel shall have the right to co-develop in the North American Territory each

Product for which Daiichi files an IND in a country of the North American

Territory.  If Rigel co-develops any Product hereunder, the Parties shall

conduct such development in the North American Territory and share Development

Costs for such Product as set forth in this Article 5.  The period of co-development shall commence with [*] for such Co-Developed Product and shall

terminate upon [*].  Generally, the [*] that the [*]

for a [*] shall be made [*] in which the [*] are [*] for

the [*].  Further, if Daiichi [*]

for such Product anywhere in the Co-Developed Territory, the co-development period shall terminate in the North

American Territory upon [*].




(b)           Option to Terminate Co-Development

Rights.  Daiichi hereby grants Rigel an option to

terminate its Co-Development rights under this Agreement.  Such option (the “Non Co-Development

Option”) may be exercised by Rigel at any time upon written notice to

Daiichi.  If Rigel exercises the Non Co-Development

Option, then (i) it shall not have any right to Co-Develop or Co-Promote any

future Products, and (ii) Daiichi shall be responsible for the

additional milestone payments pursuant to Section 8.3(a).




(c)           Exercise. 

Within [*] after [*], Daiichi shall provide Rigel with [*] related to such Product which Daiichi

owns and is reasonably useful for Rigel to exercise Non Co-Development Option. 

Within [*] of Rigel’s

receipt of such [*], Rigel shall

inform Daiichi in writing of whether Rigel wishes to exercise its Non

Co-Development Option with respect to such Product and such country.  If Rigel exercises such Non Co-Development

Option within such  [*] period, then such product shall remain

a “Product” and Rigel shall have no further co-development rights under this Agreement.  If Rigel does not exercise such Non

Co-Development Option, then such Product shall be deemed to be a “Co-Developed

Product” and such country shall be part of the Co-Developed Territory for such

product.




5.2          Joint Development Committee Formation.  Co-development of Co-Developed Products in their

applicable Co-Developed Territories shall be overseen by a joint development

committee composed of three (3) representatives from each Party (the “Joint

Development Committee” or “JDC”).  The

Parties shall designate their representatives on the JDC within ten (10) days

after Rigel first fails to exercise a Non Co-Development Option pursuant to

Section 5.1 within the applicable [*]

exercise period.  An alternate member

designated by a Party may serve temporarily in the absence of a permanent

member of the JDC for such Party.  Each

Party shall designate one of its representatives as a Co-Chair of the JDC.  Each Co-Chair of the JDC will be




 




15





























 




responsible for

the agenda of alternating JDC meetings. 

From time to time, the JDC may establish subcommittees or subordinate

committees (which may or may not include members of the JDC itself) to oversee

particular projects or activities, and such subcommittees or subordinate

committees shall be constituted and shall operate as the JDC agrees.




5.3          JDC Actions. 

Actions by the JDC pursuant to this Agreement shall be taken only with

unanimous approval of all of the JDC representatives.  If the JDC fails to reach unanimity on a matter before it for

decision, the matter shall be referred for resolution to the designated

officers of the Parties identified in Section 14.1.




5.4          Meetings of the JDC. 

The JDC:




(a)           shall hold meetings at such times and places as shall

be determined by the JDC (it being expected that meetings will alternate

between the offices of each Party) but in no event shall such meetings be held

in person less frequently than once every four (4) months during any period in

which there is at least one Co-Developed Product that the Parties are actively

developing;




(b)           may conduct meetings in person or by telephone

conference, provided that meetings by telephone conference shall not reduce the

number of meetings in person specified in Section 5.4(a);




(c)           may invite other senior personnel of the Parties to

attend meetings of the JDC;




(d)           may act without a meeting if, prior to such action, a

written consent thereto is signed by all members of the JDC; and




(e)           may, by unanimous written consent, amend or expand

upon the foregoing procedures for its internal operation.




5.5          Minutes. 

At each meeting, the JDC shall elect a secretary who will prepare,

within ten business (10) days after each meeting, minutes reporting in

reasonable detail the actions taken by the JDC during such meeting, the status

of the Parties’ efforts to co-develop Co-Developed Products in the applicable

Co-Developed Territories, issues requiring resolution, and resolutions of

previously reported issues.  Such

minutes are to be reviewed and, if reasonably complete and accurate, signed by

one JDC member from each Party.  The

secretary shall revise such minutes as necessary to obtain such signatures.




5.6          JDC Functions and Powers. 

Co-development of all Co-Developed Products in the applicable Co-Developed

Territories under this Agreement shall be managed by the JDC only to the extent

set forth herein (unless otherwise mutually agreed in writing by the

Parties).  The JDC shall in particular:




(a)           determine the overall strategy for clinical development

of each Co-Developed Product in its Co-Developed Territory through the [*], including (without limitation)

determining the principal indications for which the Co-Developed Products shall

be developed;




 




16





























 




(b)           coordinate the Parties’ co-development activities

hereunder;




(c)           prepare, revise and approve the Development Plan and

the Development Budget for each Co-Developed Product in accordance with Section

5.9;




(d)           monitor the progress of co-development and the

Parties’ diligence in carrying out their responsibilities under the Development

Plans; and




(e)           perform such other functions as appropriate to further

the purposes of this Agreement as mutually determined by the Parties.




5.7          Co-Development Guidelines. 

The JDC shall perform its functions in a manner consistent with the

co-development guidelines set forth in this Section 5.7.  The collaborative development of

Co-Developed Products in the applicable Co-Development Territories shall be

based on the principles of prompt and diligent development of the Co-Developed

Products consistent with good pharmaceutical practices and the maximization of

long-term profits derived from the sale of Co-Developed Products in the

applicable Co-Development Territories. 

It is the intent of the Parties, in working together to clinically

develop the Co-Developed Products [*],

to assign responsibilities for the various operational aspects of the

collaboration to those portions of their respective organizations which have

the appropriate resources, expertise and responsibility for such functions and,

consistent with this Agreement, to treat the Co-Developed Products as if they

were proprietary products solely of their own organization.  The Parties intend that their respective

organizations will work together to assure success of the collaboration.




5.8          Limitations of Powers of the JDC. 

The JDC shall have no power to amend this Agreement and shall have only

such powers as are specifically delegated to it hereunder.




5.9          Development Plan and Development

Budget.  The co-development of each Co-Developed

Product in its Co-Development Territory through the end of the time period

specified in Section 5.1(a) shall be governed by a comprehensive development

plan that describes the Parties’ development goals for such Co-Developed

Product, specifies that development-related activities to be performed in  the furtherance of such goals, and

allocates responsibility for such activities between the Parties (“Development

Plan”) and a detailed budget for performing such activities (“Development

Budget”).  The Development Budget shall

be completed [*] of the year in

which such Development Budget will operate, and such Development Budget shall

be consistent with the Development Plan. 

Promptly after Rigel fails to exercise its Non Co-Development Option

within the [*] period therefor

with respect to a particular Co-Developed Product, the Parties shall complete a

detailed Development Plan covering such Co-Developed Product and a Development

Budget for the first year of such development. 

Periodically thereafter (but not less than once every 12 months), the

JDC shall review and, if appropriate, revise such Development Plan.  The Parties shall prepare a new Development

Budget for each year.




5.10        Regulatory Matters.  The Parties shall share equally all responsibility for

communicating and negotiating with regulatory authorities in each country in

the applicable Co-Developed Territory regarding each Co-Developed Product.  Daiichi shall have the sole responsibility

for filing all regulatory documents. 

Notwithstanding the foregoing, after the filing




 




17





























 




of the IND and

prior to the time period specified in Section 5.1(a) for such Co-Developed

Product in such country, the Parties shall agree on the strategy for such

communications and Rigel will have the right to [*] all regulatory filings in such country and to [*]regulatory authorities in such

country.  Daiichi shall provide Rigel

with copies of all written regulatory reports for Co-Developed Products in the

applicable Co-Developed Territories, including but not limited to Drug Approval

Applications and periodic NDA, annual IND and safety updates, [*] Daiichi’s submission of such reports to

regulatory authorities.




5.11        Development Costs.




(a)           Subject to Sections 5.11(c) and 5.12, Development

Costs shall be borne [*].




(b)           In accordance with procedures to be established by the

JDC, each Party shall calculate and maintain records of Development Costs

incurred by it.  Within sixty (60) days

after the end of each six-month period (ending June 30 and December 31) during

which the Parties are co-developing at least one Co-Developed Product, each

Party shall send the other Party a report which specifies the Development Costs

incurred by such Party during such six-month period with respect to each

Co-Developed Product in the Co-Developed Territory.  The Parties shall seek to resolve any questions related to such

accounting statements within ninety (90) days following receipt.




(c)           If the reports for a particular six-month period show

that one Party’s Development Costs for such six-month period were greater than [*], then the other Party (the “Reimbursing

Party”) shall pay the first Party, within ninety (90) days after the end of

such six-month period, an amount equal to [*],

provided that the total Development Costs for each Co-Developed Product for

such six-month period did not exceed [*] for

such product for such six-month period.




(i)            If the total Development Costs exceed such [*] by more than [*] for such six-month period and the Reimbursing Party’s

Development Costs for such  six-month

period for such product were less than [*],

then the Reimbursing Party shall first pay the other Party an amount equal to

the difference between (A) the Development Costs incurred by the Reimbursing

Party for such product in such six-month period and (B) [*].




(ii)           The Reimbursing Party’s obligation to reimburse the

other Party for [*] of all such

Development Costs in excess of [*] shall

be limited to (A) those additional Development Costs approved by the JDC

(either before or after they are incurred) and (B) those additional Development

Costs that are the result of work carried out in response to a governmental

requirement (imposed or directed following preparation of such Development

Budget) to do such work.  If, after any

payment by the Reimbursing Party pursuant to Section 5.11(c)(i), the

Reimbursing Party’s total Development Cost expenditures, including such payment,

(collectively “Z”) are less than [*] where

X is [*] and Y is 100% of such

reimbursable additional Development Costs, then the Reimbursing Party shall pay

the other Party an amount equal to [*].  Failure of a Party to reimburse the other

Party for any Development Costs that are subject to a good faith dispute

hereunder shall not be deemed to be a material breach of this Agreement.




 




18





























 




5.12        Worldwide Dossier; Use of Data across

Territories.  The Parties recognize that development of the

Products within the Co-Developed Territory is likely to be part of a worldwide

development program, and that it will be efficient to use Product data

generated in one territory for purposes of development of and seeking

Regulatory Approvals for such Product worldwide.  Nonetheless, in order to assure that costs are allocated properly

as between the Co-Developed Territory and the Daiichi-Alone Territory, [*] or Phase II Trial for a Co-Developed

Product in its Co-Developed Territory [*]

in or to support any regulatory filing in any country outside such Co-Developed

Territory [*], and with a [*] of the [*] of the [*] that

[*] to [*], and [*] with

respect to a Co-Development Product in the course of a [*] in the [*] in or to support any regulatory filing in any country in

the Co-Developed Territory [*],

including a [*] of the [*] of the [*] that [*] and [*].




5.13        Obligations of Parties. 

Each Party shall use Diligent Efforts to perform the tasks assigned to

it under the Development Plan for each Co-Developed Product.  Each Party shall provide the JDC and its

authorized representatives with reasonable access during regular business hours

to all records and documents of such Party that are specific to the

co-development of any Co-Developed Product in its Co-Development Territory and

that the JDC may reasonably require in order to perform its obligations

hereunder, subject to any bona fide obligations of confidentiality to a Third

Party.




5.14        Daiichi Obligations.  Daiichi shall be solely responsible for and pay all

costs associated with (a) development of each Product in all countries of the

North American Territory through [*]

for such Product in such country, (b) [*]

and [*] and [*] of Co-Developed Products, (c) [*] each [*]

the [*] of [*] and (d) [*] including without limitation the [*]. 

Daiichi shall use Diligent Efforts to (i) develop Products in the North

American Territory [*] and (ii)

obtain Regulatory Approval in the Co-Developed Territory for each Co-Developed

Product.




5.15        Termination.




(a)           By Rigel. 

Rigel may terminate its co-development of any Co-Developed Product in

any country in the applicable Co-Developed Territory, by giving Daiichi [*] prior written notice of such

termination.  Rigel shall remain

responsible for its share of Development Costs for such Co-Developed Product in

such country until the effective date of such termination.  If, at the time of such notice, there are no

[*] for such Product in such

country, then such termination effective date shall be [*] after Daiichi’s receipt of such

notice.  If, at the time of such notice,

there is [*] for such Product in

such country, then such termination effective date shall be [*], provided that, commencing [*] after Daiichi’s receipt of such notice,

Rigel shall only be responsible for its share of those Development Costs that

are incurred in the course of [*].  Rigel shall make its personnel and other

resources available to Daiichi as necessary to effect an orderly transition of

development responsibilities by the termination effective date.  Thereafter, such country shall no longer be

part of the Co-Developed Territory for such product and, if no countries remain

in such Co-Developed Territory, then such product shall cease to be a

Co-Developed Product.  If Rigel elects to

terminate its co-development of a Co-Developed Product in a particular country

in the applicable Co-Developed Territory, then it may not recommence

co-development of such Product in such country [*].  In addition,

Rigel shall not receive any refund of its net (after Daiichi pays any amounts

due pursuant to Section 5.11(c)) co-development expenditures for such

Co-Developed Product in such country. 

Furthermore, Rigel




 




19





























 




shall not retain the right provided for in Section 4.3(a) in the territory in which termination

occurred with respect to such former Co-Developed Product.




(b)           By Daiichi. 

Daiichi may terminate its co-development of any Co-Developed Product in

any country in the applicable Co-Developed Territory, by giving Rigel [*] prior written notice of such

termination.  Daiichi shall remain

responsible for its share of Development Costs for such Co-Developed Product in

such country until the effective date of such termination.  If, at the time of such notice, there are no

[*] for such Product in such

country, then such termination effective date shall be [*] after Rigel’s receipt of such

notice.  If, at the time of such notice,

there is [*] for such Product in

such country, then such termination effective date shall be the date [*], provided that, commencing [*] after Rigel’s receipt of such notice,

Daiichi shall only be responsible for its share of those Development Costs that

are incurred in the course of [*].  Daiichi shall make its personnel and other

resources available to Rigel as necessary to effect an orderly transition of

development responsibilities by the termination effective date.  Thereafter, such country shall no longer be

part of the Co-Developed Territory for such product but shall be part of the

Rigel-Alone Territory.  If Daiichi

elects to terminate its co-development of a Co-Developed Product in a

particular country in the applicable Co-Developed Territory, then it may not

recommence co-development of such Product in such country [*]. 

In addition, Daiichi shall not receive any refund of its net (after

Rigel pays any amounts due pursuant to Section 5.11(c)) co-development

expenditures for such Co-Developed Product in such country.




6.                                      Co-Promotion




6.1          Option.




(a)           Rigel Right to

Co-Promote.  Rigel shall have the right to co-promote with Daiichi, under a single trademark,

in each country of the Co-Developed Territory each Co-Developed Product for

which Daiichi obtains Regulatory Approval in such country.  If Rigel co-promotes with Daiichi under this Agreement, the

Parties shall conduct such co-promotion in accordance with this Article 6.




(b)           Option to Terminate Co-Promotion

Rights.  Daiichi hereby grants Rigel an option to

terminate its co-promotion rights for each Co-Developed Product (the “Non

Co-Promotion Option”).




(c)           Exercise.  Within [*] after [*],

Daiichi shall provide Rigel with [*].  If Rigel wishes to exercise its Non

Co-Promotion Option with respect to such Product and such country, then Rigel

shall inform Daiichi in writing within [*]

of Rigel’s receipt of such [*].  If Rigel exercises such Non Co-Promotion

Option within such [*] then such

Co-Developed Product shall remain a “Co-Developed Product,” and Rigel shall

have no further obligation with respect to such Co-Developed Product in such

country.  Each Co-Developed Product for

which Rigel does not exercise its Non Co-Promotion Option shall immediately be

deemed to be a “Co-Promoted Product” (1). 

Rigel may elect to exercise its Non Co-Promotion Option for a particular

country or countries of the Co-Promotion Territory, in which case the

Co-Promoted Territory for




 




20





























 




such Product shall

[*] those countries in which Rigel

did not exercise its Non Co-Promotion Option.






















(1) It shall also remain a Product and a Co-Developed

Product.




(d)           Co-promotion agreement. If Rigel does not exercise its Non Co-Promotion Option

with respect to a Co-Developed Product in accordance with the

Section 6.1(c), then  [*]  the [*]  and [*]  for the [*].




6.2          Co-Promotion Principles. 

During the

Co-Promotion Period for a particular Co-Promoted Product in a particular

country in its Co-Promoted Territory, the Parties anticipate that Rigel’s

co-promotion activities shall equal [*]

Sales Representative Efforts for such Product in such country.  [*]

between their respective operating entities in order to maximize sales of each

Co-Promoted  Product in the

Co-Promoted Territory.  Rigel’s

Promotion Expenses during the Co-Promotion Period will be [*].




6.3          Termination.




(a)           By Rigel. 

During the applicable Co-Promotion Period, Rigel may terminate its

co-promotion of any Co-Promoted Product in any country in the applicable

Co-Promoted Territory, by giving Daiichi [*]

prior written notice of such termination. 

Rigel shall remain responsible for the Sales Representative Efforts for

such Co-Promoted Product in such country until the effective date of such

termination, which shall be [*]

after Daiichi’s receipt of such notice. 

Thereafter, such country shall no longer be part of the Co-Promoted

Territory for such product and, if no countries remain in such Co-Promoted

Territory, then such product shall cease to be a Co-Promoted Product.  If Rigel elects to terminate its

co-promotion of a Co-Promoted Product in a particular country in the applicable

Co-Promoted Territory, then it may not recommence co-promotion of such Product

in such country [*].




(b)           By Daiichi. 

During the applicable Co-Promotion Period, Daiichi may terminate its sale of any Co-Promoted Product in any

country in the applicable Co-Promoted Territory, by giving Rigel [*] prior written notice of such

termination.  Daiichi shall remain

responsible for its share of the Sales Representative Efforts for such

Co-Promoted Product in such country until the effective date of such termination,

which shall be [*] after Rigel’s

receipt of such notice.  Thereafter,

such country shall no longer be part of the Co-Promoted Territory for such

product but shall be part of the Rigel-Alone Territory.




7.                                      Development and Commercialization of

Daiichi Products and Rigel Products.  




7.1          Development of Daiichi Developed

Products




(a)           Daiichi shall have the sole right to develop (a) each

Product in the Daiichi-Alone Territory and (b) each Product in its Reverted

Territory (collectively, “Daiichi Developed Products”).  Daiichi shall use Diligent Efforts to obtain

Regulatory Approval for Daiichi Developed Products, and Daiichi shall bear all

expenses of development of Daiichi Developed Products.  Daiichi agrees to facilitate communication

and cooperation with Rigel to coordinate development of Daiichi Developed

Products with Co-Developed Products consistent with the principles of this

collaboration.




 




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(b)           In addition to the general undertaking provided in

Section 7.1(a), Daiichi agrees that, it shall diligently research, develop and

commercialize any Hit Compound, Lead Compound or Product [*]. 

If Rigel is concerned that Daiichi is not devoting sufficient effort [*] refer the matter to dispute resolution

pursuant to Article 14, and if the arbitrator determines that the standard set

forth in the first sentence of this Section 7.1(b) has not been satisfied, the

remedy shall be that [*] to the [*] and such [*] to [*] and [*], and [*]

the [*] and [*] that [*]

to [*] that [*] the [*]

of [*] the [*] of [*]

of [*].




7.2          Commercialization of Daiichi Promoted

Products.  Daiichi shall have the sole right to

commercialize (a) each Product in the Daiichi-Alone Territory, (b) each Product

in its Reverted Territory, and (c) each Co-Developed Product in all countries

in its Co-Developed Territory that are not part of its Co-Promoted Territory

(if any) (collectively, “Daiichi Promoted Products”).  Daiichi shall use Diligent Efforts to commercialize Daiichi

Promoted Products, and Daiichi shall bear all expenses of such commercialization.  Daiichi agrees to facilitate communication

and cooperation with Rigel to coordinate commercialization (including

promotion) of Daiichi Promoted Products with Co-Promoted Products consistent

with the principles of this collaboration.




7.3          Reporting.  Within [*] during the

Term, Daiichi shall provide Rigel with a written report that summarizes the

efforts, product status and accomplishments of Daiichi and its Affiliates and

sublicensees with respect to development of Daiichi Developed Products and

commercialization of Daiichi Promoted Products during such [*].




7.4          Option for Rigel-Alone Development and

Commercialization.




(a)           Grant.  Daiichi

hereby grants to Rigel the option, for each Co-Developed Product for which

Daiichi (i) terminated co-development pursuant to Section 5.15(b) or (ii)

terminated co-promotion pursuant to Section 6.3(b), to independently develop

and commercialize such Product in such country in which termination occurred

(the “Rigel-Alone Option”).




(b)           Exercise. 

If Rigel wishes to exercise its Rigel-Alone Option with respect to such

Product in its Rigel-Alone Territory, it shall inform Daiichi in writing within

[*] of Rigel’s receipt of

Daiichi’s termination notice pursuant to Section 5.15(b) or 6.3(b).  If Rigel exercises its Rigel-Alone Option

within such [*] period, then [*], and [*]

and [*] to [*]. 

Additionally, if Rigel exercises its Rigel-Alone Option within such [*] period, Daiichi, at [*]

reasonable expense, shall:  [*] in the [*], or, in the alternative, [*]

such Rigel Product in such Rigel-Alone Territory, and [*] assist Rigel in any other activity

necessary or useful for Rigel to develop or market such Rigel Product in the

Rigel-Alone Territory.  In return for

the [*] and based on the [*] in the development or commercialization

[*] Daiichi terminated

co-development or co-promotion of such Rigel Product.




8.                                      Economics.




8.1          Up-Front Payments. 

Within [*] days of the

Effective Date, Daiichi shall pay Rigel an up-front payment of [*].




 




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8.2          Milestone Payments.  Daiichi shall

pay Rigel the following amounts within [*]

of the achievement of the applicable event:




(a)           [*]




8.3          Additional Payments. 

Daiichi shall pay Rigel the following amounts within [*] of the achievement of the applicable

event:




(a)           [*]




8.4          Royalty Payments. 

Daiichi shall pay Rigel royalties on Net Sales of each Product at the

applicable royalty rate stated below:




(a)           [*]

of the Net Sales of such Product in the Daiichi-Alone Territory;




(b)           [*]

of the Net Sales of such Product in its Reverted Territory; and




(c)           [*]

of the Net Sales of such Product in its Co-Developed Territory.




8.5          Quarterly Payments. 

All royalties due under Section 8.5 shall be paid quarterly, on a

country-by-country basis, within [*]

of the end of the relevant calendar quarter for which royalties are due.




8.6          Term of Royalties. 

Rigel’s right to receive royalties under Section 8.5 for each Product

shall expire on a country-by-country basis upon the later of (a) [*] years from the first commercial sale of

such Product in such country, or (b) expiration of the last to expire issued

Patent in such country Controlled by a Party that claims [*].




8.7          Royalty Payment Reports. 

Each royalty payment shall be accompanied by a statement stating the

number, description, and aggregate Net Sales, by country, of each Product sold

during the relevant quarter.




8.8          Payment Method. 

All payments due under this Agreement to Rigel shall be made by bank

wire transfer in immediately available funds to an account designated by

Rigel.  All payments hereunder shall be

made in the legal currency of the United States of America, and all references

to “$” or “dollars” shall mean the legal currency of the United States of

America.




8.9          No Credits or Refunds. 

All payments to Rigel hereunder shall be noncreditable and

nonrefundable, except in the event that an audit confirms that Daiichi had

overpaid royalties to Rigel, in which case such overpayment will be credited

against future royalties due to Rigel, or refunded to Daiichi after the end of

the royalty term.




8.10        Taxes.  With respect

to all taxes including taxes that laws or regulations require that taxes be

withheld (“Withholding Taxes”), Rigel shall pay any and all such taxes that are

levied on account of all payments Rigel receives under this Agreement.  Daiichi shall (i) deduct the Withholding

Taxes from the remittable payment, (ii) pay all applicable Withholding Taxes to

the proper taxing authority, and (iii) send evidence of the obligation together

with proof of tax payment to Rigel within sixty (60) days following that tax

payment.




 




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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

Rigel in the country in local currency by deposit in a local bank designated by

Rigel, unless the Parties otherwise agree.




8.12        Sublicenses. 

In the event Daiichi grants licenses or sublicenses to others to sell

Products which are subject to royalties under Section 8.5, such licenses or

sublicenses shall include an obligation for the licensee or sublicensee to

account for and report its sales of Products on the same basis as if such sales

were Net Sales by Daiichi, and Daiichi shall pay to Rigel, with respect to such

sales, royalties as if such sales of the licensee or sublicensee were Net Sales

of Daiichi.




8.13        Foreign Exchange. 

Conversion of sales recorded in local currencies to U.S. dollars will be

performed in a manner consistent with [*].




8.14        Records; Inspection. 

Each Party shall keep or cause to be kept such records as are required

to determine, in a manner consistent with generally accepted accounting

principles in the United States, the sums or credits due under this Agreement,

including, but not limited to, Development Costs, Net Sales and Promotion

Expenses.  At the request (and expense)

of either Party, the other Party and its sublicensees shall permit an

independent certified public accountant appointed by such Party and reasonably

acceptable to the other Party, at reasonable times not more than once a year

and upon reasonable notice, to examine only those records as may be necessary

to determine, with respect to any calendar year ending not more than three

years prior to such Party’s request, the correctness or completeness of any

report or payment made under this Agreement. 

Results of any such examination shall be (i) limited to information

relating to the Products, (ii) made available to both Parties and (iii) subject

to Article 10.  The Party requesting the

audit shall bear the full cost of the performance of any such audit, unless

such audit discloses a variance of more than five percent (5%) from the amount

of the original report, royalty or payment calculation.  In such case, the Party being audited shall

bear the full cost of the performance of such audit.




8.15        Interest.  If Daiichi

fails to make any payment due to Rigel under this Agreement, then interest

shall accrue on a daily basis at a rate equal to [*] above the then-applicable prime commercial lending rate of

CitiBank, N.A. San Francisco, California, or at the maximum rate permitted by

applicable law, whichever is the lower.




9.                                      Intellectual Property.




9.1          Ownership. 

Inventorship of all Inventions will be determined under the patent laws

of the United States.  Each Party shall

own the entire right, title and interest in and to any and all of its Sole

Inventions, and Patents covering such Sole Inventions.  Each Party shall each own an undivided

one-half interest in and to any and all Joint Inventions and Patents and other

intellectual property rights claiming or covering or appurtenant to such Joint

Inventions.  Rigel and Daiichi as joint

owners shall each have the right to exploit without an accounting and to grant

licenses under such Joint Inventions, unless otherwise specified in this

Agreement.




 




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9.2          Patent Prosecution and Maintenance;

Abandonment.




(a)           Except as provided in Section 9.2(b), each Party shall

direct the filing, prosecution (including any interferences, reissue

proceedings and reexaminations) and maintenance of all Patents covering its

Sole Inventions.  [*] shall direct the filing, prosecution

(including any interferences, reissue proceedings and reexaminations) and

maintenance of all [*] Patents and

(except as provided in Section 9.2(b)) all Patents contained within the [*] Technology.  [*] shall direct the

filing, prosecution (including any interferences, reissue proceedings and

reexaminations) and maintenance of all [*]

Patents and Patents contained within the [*]

Technology.




(b)           [*]

shall direct the filing, prosecution (including any interferences, reissue

proceedings and reexaminations) and maintenance of all [*] Patents and all [*] Sole Inventions licensed to [*] under Section 4.3[*]. 

In carrying out the prosecution of patents and patent applications

pursuant to this Section 9.2(b), [*]

shall seek to obtain effective patent protection for Inventions and their uses [*]. All Patent prosecution and maintenance

described in this Section 9.2(b) shall be carried out by a primary outside law

firm selected by mutual consent of the Parties, which shall prepare the initial

application for such Inventions (which in most cases will be filed in the United

States).  [*] shall be responsible for the selection of counsel in

countries outside the United States to file and prosecute foreign counterparts

of the primary filing.  The Parties

shall have equal access to outside law firms doing work pursuant to this

Section 9.2(b) for purposes of giving and receiving communications regarding

the preparation and prosecution of such Patent applications, and [*] shall give fair consideration to the

comments of [*] regarding such

matters.  [*] Patent prosecution pursuant to this Section 9.2(b) shall

be made by [*].




(c)           The Party that, pursuant to Section 9.2(a) or 9.2(b),

directs the filing, prosecution and maintenance of a particular Patent shall

bear all expenses associated with such activities, except that in the case of [*] shall [*]

of [*] out-of-pocket costs

(including the fees and expenses of outside counsel) of such filing,

prosecution and maintenance.




(d)           The Parties shall establish the patent strategy for

all Joint Inventions, and shall determine, on a Joint Invention-by-Joint

Invention basis, which Party (the “Prosecuting Party”) shall be responsible

for, the filing, prosecution (including any interferences, reissue proceedings

and reexaminations) and maintenance of all Patents covering such Joint

Invention consistent with such strategy. 

The Prosecuting Party shall provide the other Party with (i) drafts of

any new patent application that covers a Joint Invention prior to filing that

application, allowing adequate time for review and comment by the other Party if

possible; provided, however, the Prosecuting Party shall not be obligated to

delay the filing of any patent application; and (ii) copies of all

correspondence from any and all patent offices concerning patent applications

covering Joint Inventions and an opportunity to comment on any proposed

responses, voluntary amendments and submissions of any kind to be made to any

and all such patent offices.  [*] expenses associated with the filing,

prosecution (including any interferences, reissue proceedings and reexaminations)

and maintenance of all Patents covering Joint Inventions that are exclusively

or co-exclusively licensed to Daiichi under Section 4.3(a).  The Parties shall mutually agree on the

percentage of such expenses that each Party shall bear with respect to other

Patents covering Joint Inventions (which in the absence of any other agreement

between the Parties shall be divided evenly).




 




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9.3          Enforcement of Patent Rights.




(a)           Enforcement of Daiichi Patents.  In the event that management or in-house counsel for

Rigel becomes aware of a suspected infringement of any Daiichi Product Patent

or any Patent covering a Sole Invention of Daiichi, Rigel shall notify Daiichi

promptly, and following such notification, the Parties shall confer.  Daiichi shall have the sole 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.




(b)           Enforcement of Rigel Patents.  In the event that management or in-house counsel for

Daiichi becomes aware of a suspected infringement of any Assay Patent, Rigel

Compound Patent or any Patent covering a Sole Invention of Rigel, Daiichi shall

notify Rigel promptly, and following such notification, the Parties shall

confer.  Except as provided in the

following sentence, Rigel shall have the sole 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.  In the event of an apparent

infringement by a Third Party of a Rigel Compound Patent or a Patent covering a

Sole Invention by Rigel that covers the manufacture, use or sale of a Product,

which infringement is based on the manufacture, use or sale of a product

directly competitive with a Product, Rigel shall, upon the written request of

Daiichi, either file a law suit against such infringer or (if permitted by law)

authorize Daiichi to file such law suit. 

If Rigel files such law suit in its own name, it shall diligently

prosecute such law suit provided that (i) Daiichi immediately reimburses Rigel,

upon receipt of invoices, for all out-of-pocket expenses associated with such

law suit (including the fees and expenses of outside counsel and experts) in

addition to the costs reasonably attributable to the time spent by its

employees on such case, (ii) Daiichi indemnifies Rigel for all costs, claims,

losses and causes of action arising from the commencement or prosecution of

such law suit, and (iii) Rigel shall give fair consideration to the

comments of Daiichi regarding such matters.  Rigel shall

not settle such law suit on terms which license the continued manufacture, use

or sale of the product that competes with a Product without the prior written

consent of Daiichi.




(c)           Enforcement of Joint Patents.  In the event that management or in-house counsel for

either Party becomes aware of a suspected infringement of any Patent claiming a

Joint Invention, such Party shall notify the other Party promptly.  Following such notification, the Parties

shall confer and determine the rights and obligations of the Parties to bring

an infringement action with respect to such Patent or to defend validity

proceedings regarding such Patent.




(d)           Recoveries.  In

the event either Party exercises the rights conferred in this Section 9.3 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 such Party in connection

therewith, including attorneys fees.  If

after such reimbursement any funds shall remain from such damages or other sums

recovered, and such funds shall be retained by such Party that controlled the

litigation.  In the case of a law suit

filed by Rigel under Section 9.3(b) but funded by Daiichi, such recovery, after

the reimbursement of expenses, shall be [*].




 




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9.4          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 Research Program infringes the intellectual property rights of such

Third Party, each Party will give prompt written notice to the other Party of

such claim.  Promptly upon receipt of

such notice, the Parties shall meet and discuss in good faith if such activity

infringes such Third Party’s intellectual property rights, and shall take

necessary steps on this matter.  In the

event of any Third Party claim against a Party with respect to the Research

Program or Products, each Party shall be entitled to defend itself in such

matter.




9.5          Copyright Registrations. 

Copyrights and copyright registrations on copyrightable subject matter

shall be filed, prosecuted, defended, and maintained in accordance with local laws

and regulations applicable, and the Parties shall have the right to pursue infringers of any

copyrights owned or Controlled by it, in substantially the same manner as the

Parties have allocated such responsibilities, and the expenses therefor, for

patent rights under this Article 9.




9.6          Trademarks. 

The trademarks on the Product shall be the trademark(s) owned or controlled

by [*].




9.7          Acquisition of Third Party Technology.




(a)           If a Party determines that a license to Third Party

technology is useful for the Research Program and such technology does not

relate to a [*] Compound, then

such Party shall notify the other Party in writing of such potential licensing

opportunity.  Promptly upon receipt of

such notice, the Parties shall meet and discuss, in good faith, the necessity

of acquiring a license to such Third Party technology.  If the Parties agree in writing to attempt

to acquire such Third Party license, then Rigel shall use commercially

reasonable efforts to acquire such Third Party license within a reasonable

time.  If Rigel is unable to obtain such

Third Party license within such reasonable time, then [*]. 

If Rigel obtains such Third Party license, then [*] all costs associated with obtaining and

maintaining such Third Party license, unless the Parties agree otherwise in

writing.




(b)           If any Party determines that Third Party technology

relates to a [*] Compound, then

such Party shall notify the other Party in writing of such potential licensing

opportunity.  Promptly upon receipt of

such notice, the Parties shall meet and discuss, in good faith, the utility of

acquiring such a Third Party license. 

If the Parties agree in writing to acquire such Third Party license,

then Daiichi shall attempt to acquire such Third Party license within a

commercially reasonable time.  If

Daiichi is unable to obtain such Third Party license, then [*]. 

If Daiichi obtains such Third Party license, then [*] costs associated with obtaining and

maintaining such Third Party license, unless the Parties agree otherwise in

writing.




10.                               Confidentiality.




10.1        Treatment of Confidential Information. 

The Parties agree that during the Term, and for a period of [*] after the end of the Term, a Party

receiving Confidential Information of the other Party will (a) maintain in

confidence such Confidential Information to the same extent such Party

maintains its own proprietary industrial information of similar kind




 




27





























 




and value (but at

a minimum each Party shall use commercially reasonable efforts), (b) not

disclose such Confidential Information to any Third Party without prior written

consent of the other Party, and (c) not use such Confidential Information for

any purpose except those permitted by this Agreement.




10.2        Exceptions. 

A Party shall not have the obligations set forth in Section 10.1 with

respect to any portion of such Confidential Information which it can show by

adequate documentation:




(a)           is publicly disclosed by the disclosing Party, either

before or after it becomes known to the receiving Party;




(b)           was known to the receiving Party, without obligation

to keep it confidential, prior to when it was received from the disclosing

Party;




(c)           is subsequently disclosed to the receiving Party by a

Third Party lawfully in possession thereof without obligation to keep it

confidential;




(d)           has been published by a Third Party; or




(e)           has been independently developed by the receiving

Party without the aid, application or use of Confidential Information.




10.3        Authorized Disclosure. 

Notwithstanding Section 10.2, a Party may disclose Confidential

Information belonging to the other Party to the extent such disclosure is

reasonably necessary in the following instances:




(a)           filing or prosecuting Patents relating to Joint

Inventions or Products;




(b)           regulatory filings;




(c)           prosecuting or defending litigation;




(d)           complying with applicable governmental regulations;

and




(e)                                  disclosure, in connection with the performance

of this Agreement, to Affiliates, licensees, sublicensees, 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 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.  Disclosure of the

terms of this Agreement (but not other Confidential Information received from

the other Party) may also be made, under binders of confidentiality and non-use

at least equivalent in scope to those set forth in this Article 10, to actual

or potential bankers, lenders and




 




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investors of the

disclosing Party.  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 any such

filing, such Party shall endeavor to obtain confidential treatment of economic

and trade secret information.  In any

event, the Parties agree to take all reasonable action to avoid disclosure of

Confidential Information except as permitted hereunder.




10.4        Termination of Prior Agreements. 

This Agreement supersedes the Mutual Confidential Disclosure Agreement dated November

30, 2000 between

Daiichi and Rigel.  All Information exchanged

between the Parties under such earlier Agreement shall be deemed Confidential

Information and shall be subject to the terms of this Article 10.




10.5        Publicity.  The public announcement of the execution of

this Agreement shall be mutually agreed upon between the Parties. 

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, which approval shall not be unreasonably

withheld; provided, however, that any disclosure which is required by law 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. 

Neither Party shall publish or present the results of studies carried

out under this Agreement without the opportunity for prior review by the other

Party.  Subject to Section 10.5, each

Party agrees to provide the other Party the opportunity to review any proposed

abstracts, manuscripts or presentations (including verbal presentations) which

relate to any Product at least [*]

prior to their 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.  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 decide whether to delay of publication and filing of patent

applications under certain circumstances. 

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 information necessary for a patent application,

provided the nonfiling Party is given a reasonable opportunity to review the

information to be included prior to submission of such patent application and

to request deletion of its Confidential Information (subject to Section

10.3(a)).




11.                               Representations and Warranties.




11.1        General Representations and Warranties. 

Each Party represents and warrants to the other that:




(a)           it is duly organized and validly existing under the

laws of its state or country of incorporation, and has full corporate power and

authority to enter into this Agreement and to carry out the provisions hereof.




 




29





























 




(b)           it is duly authorized to execute and deliver this

Agreement and to perform its obligations hereunder, and the person or persons

executing this Agreement on its behalf has been duly authorized to do so by all

requisite corporate action.




(c)           this Agreement is legally binding upon it and

enforceable in accordance with its terms. 

The execution, delivery and performance of this Agreement by it does not

conflict with any agreement, instrument or understanding, oral or written, to

which it is a party or by which it may be bound, nor violate any material law

or regulation of any court, governmental body or administrative or other agency

having jurisdiction over it.




(d)           it has not granted, and will not grant during the Term of the Agreement, any

right to any Third Party which would conflict with the rights granted to the

other Party hereunder.  It has (or will

have at the time performance is due) maintained and will maintain and keep in full

force and effect all agreements necessary to perform its obligations hereunder.




(e)           it is aware of no action, suit or inquiry or

investigation instituted by any governmental agency which questions or

threatens the validity of this Agreement.




11.2        Disclaimer Concerning Technology. 

THE PATENTS AND KNOW-HOW PROVIDED BY EACH PARTY HEREUNDER ARE PROVIDED

“AS IS” AND EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND,

EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY,

FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY

RIGHTS OF THIRD PARTIES OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE

PRACTICES, IN ALL CASES WITH RESPECT THERETO. 

Without limiting the generality of the foregoing, each Party expressly

does not warrant (i) the success of the Research Program or (ii) the safety or

usefulness for any purpose of the Patents or know-how it provides hereunder.




12.                               Term and Termination.




12.1        Term.




(a)           This Agreement shall become effective on

the Effective Date and shall continue until the earlier of (i) expiration of the last royalty

obligation with respect to any Product, as provided in Section 8.6, and (ii) the effective date of termination

pursuant to Section 12.2 (the “Term”).




(b)           Notwithstanding the provision

12.1(a) above, if any Product [*]  in any country in the world [*]  shall have the right to

terminate this Agreement upon written notice [*].  In the event of

termination pursuant to this Section 12.1(b), [*]  or [*]  prior to such [*].  [*]  after [*]  the terms and conditions of such an extended collaboration.




(c)           The Parties may terminate this Agreement by mutual

written consent, at any time.




 




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12.2        Termination for Breach.




(a)           If either Party believes that the other is in material

breach of this Agreement, then the non-breaching Party may deliver written

notice of such breach to the other Party. 

The allegedly breaching Party shall have [*] from receipt of such notice to either cure such breach or,

if cure cannot be reasonably effected within such [*] period, to deliver to the other Party a plan for curing

such breach which is reasonably sufficient to effect a cure.  Such a plan shall set forth a program for

achieving cure as rapidly as practicable. 

Following delivery of such plan, the breaching Party shall use Diligent

Efforts to carry out the plan and cure the breach.




(b)           If the Party receiving notice of breach fails to cure

such breach within the [*] period

and the Party providing the notice reasonably determines that the proposed

corrective plan (if any) or the actions being taken to carry it out is not

commercially practicable, the Party originally delivering the notice may

terminate this Agreement [*].




(c)           If a Party gives notice of termination under this

Section 12.2 and the other Party disputes whether such notice was proper, then

the issue of whether this Agreement has been terminated shall be resolved in

accordance with Article 14.  If as a

result of such dispute resolution process it is determined that the notice of

termination was proper, then such termination shall be deemed to have been

effective [*] following the date

of the notice of termination.  If as a

result of such dispute resolution process it is determined that the notice of

termination was improper, then no termination shall have occurred and this

Agreement shall remain in effect.




12.3        Effect of Termination; Survival.




(a)           The following provisions shall survive any expiration

or termination of this Agreement: Articles 1, 10, 13, 14, and 15, and Sections

8.14; 8.15; 9.1; 9.2 (as relates to [*]  patent costs incurred during the term of this

Agreement); 9.3, 9.4 and 9.5 (to the extent that each relates to claims of

infringement by  activities occurring

during the term of this Agreement); and 12.3.




(b)           Termination of this Agreement shall not relieve the

Parties of any liability which accrued hereunder prior to the effective date of

such termination nor preclude either Party from pursuing all rights and

remedies it may have hereunder or at law or in equity with respect to any

breach of this Agreement nor prejudice either Party’s right to obtain

performance of any obligation.  The

remedies provided in Section 12.3(b) are not exclusive of other remedies

available to a Party in law or equity.




13.                               Indemnification.




13.1        Mutual Indemnification. 

Subject to Section 13.3, each Party hereby agrees to indemnify, defend

and hold the other Party, its Affiliates, its licensees, and its and their

officers, directors, employees, consultants, contractors, sublicensees and

agents (collectively, the “Indemnitees”) harmless from and against any and all

damages or other amounts payable to a Third Party claimant, as well as any

reasonable attorneys’ fees and costs of litigation incurred by such Indemnitee

as to any such Claim (as defined in this Section 13.1) until the indemnifying

Party has acknowledged that it will provide indemnification hereunder with

respect to such Claim as provided below, (collectively, “Damages”) resulting

from claims, suits, proceedings or




 




31





























 




causes of action

(“Claims”) brought by such Third Party against such Indemnitee based on:

(a)  breach of warranty by the

indemnifying Party contained in this Agreement; (b) breach of this Agreement or

applicable law by such indemnifying Party; (c) negligence or willful misconduct

of a Party, its Affiliates or (sub)licensees, or their respective employees,

contractors or agents in the performance of this Agreement; and/or (d) breach

of a contractual or fiduciary obligation owed by it to a Third Party (including

without limitation misappropriation of trade secrets).




13.2        Indemnification by Daiichi. 

Subject to Section 13.3, Daiichi hereby agrees to indemnify, defend and

hold Rigel and its Affiliates, its licensees, and its and their officers,

directors, employees, consultants, contractors, sublicensees and agents

(collectively, the “Rigel Indemnitees”) harmless from and against any Damages

resulting from Claims brought by Third Party against such Rigel Indemnitee

resulting directly or indirectly from (a) development, manufacture, use,

handling, storage, sale, offer for sale, importation or other disposition of

Products by Daiichi, its Affiliates, agents or sublicensees, or (b) Daiichi’s

practice, after the end of the Research Term, of the license granted to it

pursuant to Section 4.2, except to the extent such Damages result from the

negligence or wrongdoing of any Rigel Indemnitee.




13.3        Conditions to Indemnification. 

As used herein, “Indemnitee” shall mean a party entitled to

indemnification under the terms of Section 13.1 or 13.2.  As a condition precedent to an Indemnitee’s

right to seek indemnification under such Section 13.1 or 13.2, such Indemnitee:




(a)           shall inform the indemnifying Party of a Claim as soon

as reasonably practicable after it receives notice of the Claim;




(b)           shall, if the indemnifying Party acknowledges that

such Claim 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 Claim (including the

right to settle the claim solely for monetary consideration); provided, that

the indemnifying Party shall seek the prior written consent (not to be

unreasonably withheld or delayed) 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)           shall 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 Claim.




Provided that an

Indemnitee has complied with the foregoing, the indemnifying Party shall

provide attorneys reasonably acceptable to the Indemnitee to defend against any

such Claim.  Subject to the foregoing,

an Indemnitee may participate in any proceedings involving such Claim using

attorneys of its/his/her choice and at its/his/her expense.  In no event may an Indemnitee settle or

compromise any Claim for which it/he/she intends to seek indemnification from

the indemnifying Party hereunder without the prior written consent of the

indemnifying Party, or the




 




32





























 




indemnification provided

under such Section 13.1 or 13.2 as to such Claim shall be null and void.




13.4        Exclusion of Damages. 

IN NO EVENT SHALL EITHER PARTY OR ITS 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 THIS AGREEMENT, UNLESS SUCH DAMAGES ARE DUE TO THE GROSS NEGLIGENCE OR

WILLFUL MISCONDUCT OF THE LIABLE PARTY. 

For clarification, the foregoing sentence shall not be interpreted to

limit or to expand the express rights specifically granted in the sections of

this Agreement.




14.                               Dispute Resolution




14.1        Disputes.  The Parties

recognize that disputes as to certain matters may from time to time arise

during the Term which relate to either Party’s rights and/or obligations

hereunder.  It is the objective of the

Parties to establish procedures to facilitate the resolution of disputes

arising under this Agreement in an expedient manner by mutual cooperation and

without resort to litigation.  To

accomplish this objective, the Parties agree to follow the procedures set forth

in this Article 14 if and when a dispute arises under this Agreement.  In the event of any disputes, controversies

or differences which may arise between the Parties, out of or in relation to or

in connection with this Agreement, or for the breach thereof, upon the request

of either Party, the Parties agree to meet and discuss in good faith a possible

resolution thereof.  If the matter is

not resolved within [*] following

the request for discussions, either Party may then invoke the provisions of

Section 14.2 below.




14.2        Alternative Dispute Resolution. 

Any dispute, controversy or claim arising out of or relating to the

validity, construction, enforceability or performance of this Agreement shall

be settled by binding Alternative Dispute Resolution (“ADR”) in the manner

described below:




(a)           If a Party intends to begin an ADR to resolve a

dispute, such Party shall provide written notice (the “ADR Request”) by

certified or registered mail to the other Party informing such other Party of

such intention and the issues to be resolved. 

The complaining Party’s notice shall include a detailed description of

the alleged dispute.  The notice shall

explain the nature of the complaint and refer to the relevant sections of the

Agreement upon which the complaint is based. 

The complaining Party shall also set forth a proposed solution to the

problem, including a suggested time frame within which the Parties must act.




(b)           The non-complaining Party must respond in writing

within 60 days of receiving the notice with an explanation, including

references to the relevant provisions of the Agreement and a response to the

proposed solution and suggested time frame for action.




(c)           Within 15 days of receipt of the response from the

non-complaining Party, the Parties shall meet and discuss options (e.g.,

mediation) for resolving the dispute. 

The complaining Party must initiate the scheduling of this resolution

meeting.  Each Party shall make




 




33





























 




available all

appropriate personnel to meet and confer with the other Party within the 15 day

period following the complaining Party’s receipt of the response by the

non-complaining Party.




Any and all disputes that

cannot be resolved pursuant to this Section 14.2 shall be submitted to final

and binding arbitration in accordance with the terms of this Agreement.  The arbitration will be conducted [*] except to the extent of any conflict

with this Article 14, and the Parties consent to the exclusive jurisdiction of

such dispute resolution mechanism.  Any

situation not expressly covered by this Agreement shall be decided in

accordance with [*].




14.3        Arbitrator.  The

arbitrator shall be one neutral, independent and impartial arbitrator selected

pursuant to the rules [*].




14.4        Governing Law. 

Resolution of all disputes arising out of or related to this Agreement

or the performance, enforcement, breach or termination of this Agreement and

any remedies relating thereto, shall be governed by and construed under the

substantive laws of [*] without

regard to conflicts of law rules that would provide for application of the law

of a jurisdiction outside [*].




14.5        Rules of Procedure.  The Parties

shall be entitled to discovery as provided in the [*].  To the extent

such rules of discovery are within the discretion of the neutral arbitrator, it

is the intent of the Parties that they be permitted to conduct meaningful

discovery in order to minimize the potential for surprise at the proceeding and

encourage settlement prior to such proceeding.




14.6        Decision.  The power of

the arbitrator to fashion procedures and remedies within the scope of this

Agreement is recognized by the Parties as essential to the success of the

arbitration process.  The arbitrator

shall not have the authority to fashion remedies which would not be available

to a judge hearing the same dispute. 

The arbitrator is encouraged to  operate

on  this premise in an effort to

reach a fair and just decision but shall fashion such rules and procedures to

best approximate judicial rules and procedures except with respect to

procedural time limits and delays (which shall be set by the arbitrator

pursuant to Section 14.5).  Reasons for

the arbitrator’s decisions should be complete and explicit.  A full transcript and record of the

proceedings as well as written decisions including all determinations of law

and fact shall be provided to the Parties. 

The written reasons should also include the basis for any damages

awarded and a statement of how the damages were calculated.  Such a written decision shall be rendered by

the arbitrator following a full comprehensive hearing, no later than eighteen

(18) months following the selection of the arbitrator as provided for in

Section 14.3 hereof.




14.7        Award.




(a)           Any monetary award shall be paid in U.S. dollars free

of any tax, deduction or offset; and any costs or fees incident to enforcing

the award shall, to the maximum extent permitted by law, be charged against the

Party resisting enforcement.




(b)           If as to any issue the arbitrator should determine

under the applicable law that the position taken by a Party is frivolous or

otherwise irresponsible or that any wrongdoing they find is in callous

disregard of law and equity or the rights of the other Party, the arbitrator

shall also award an appropriate allocation of the adversary’s reasonable

attorney fees, costs and




 




34





























 




expenses to be

paid by the offending Party, the precise sums to be determined after a bill of

attorney fees, expenses and costs consistent with such award has been presented

following the award on the merits.




(c)           Each Party agrees to abide by the award rendered in

any arbitration conducted pursuant to this Article 14, and agrees that such

judgment may be entered in a court of competent jurisdiction, if necessary to

its enforcement.




(d)           The award shall include interest from the date of any

damages incurred for breach of the Agreement, and from the date of the award

until paid in full, at a rate fixed by the arbitrator.




(e)           With respect to money damages, nothing contained

herein shall be construed to permit the arbitrator(s) or any court or any other

forum to award punitive, exemplary or consequential damages (except that

consequential damages may be recovered solely for a breach of Article 10).  By entering into this agreement to

arbitrate, the Parties expressly waive any claim for punitive, exemplary or

consequential damages (except for consequential damages in the event of a

breach of Article 10).  The only damages

recoverable under this Agreement are direct compensatory damages, together with

equitable (non-monetary) remedies as ordered by the Arbitrator.




14.8        Costs.  Except as set

forth in Section 14.7(b) above, each Party shall bear its own legal fees.  The arbitrator shall assess his or her

costs, fees and expenses against the Party losing the ADR unless he or she

believes that neither Party is the clear loser, in which case the arbitrator

shall divide his or her fees, costs and expenses according to his or her sole

discretion.




14.9        Injunctive Relief. 

Provided a Party has made a sufficient showing, the arbitrator shall

have the freedom to invoke, and the Parties agree to abide by, injunctive

measures after either Party submits in writing for arbitration claims requiring

immediate relief.




14.10      Confidentiality. 

The ADR proceeding shall be confidential and the arbitrator shall issue

appropriate protective orders to safeguard each Party’s Confidential

Information.  Except as required by law,

no Party shall make (or instruct the arbitrator to make) any public

announcement with respect to the proceedings or decision of the arbitrator

without prior written consent of each other Party.  The existence of any dispute submitted to ADR, and the award,

shall be kept in confidence by the Parties and the arbitrator, except as

required in connection with the enforcement of such award or as otherwise

required by applicable law.




14.11      Survivability. 

Any duty to arbitrate under this Agreement shall remain in effect and be

enforceable after termination of the contract for any reason.




15.                               Miscellaneous.




15.1        Export Control. 

This Agreement is made subject to any restrictions concerning the export

of products or technical information from the United States of America or other

countries which may be imposed upon or related to Rigel or Daiichi from time to

time.  Each Party agrees that it will

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




 




35





























 




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.




15.2        Entire Agreement; Amendment. 

This Agreement sets 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 herein and therein.  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.




15.3        Bankruptcy.




(a)           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 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, without limitation, a Title 11 Trustee)

shall, at the election of the Bankrupt Party made within 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 and without limitation, 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, without limitations, 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 15.3, 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.




 




36





























 




(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, without limitation, 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, without

limitation, 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 without limitation 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 licensed

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 15.3 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.




15.4        Force Majeure. 

Both Parties shall be excused from the performance of their obligations

under this Agreement to the extent that such performance is prevented by force

majeure and the nonperforming Party promptly provides notice of the prevention

to the 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 without

limitation, an act of God, voluntary or involuntary compliance with any

regulation, law or order of any government, war, terrorism, 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; provided, however, the payment of

invoices due and owing hereunder shall not be delayed by the payor because of a

force majeure affecting the payor.




15.5        Notices.  Any notice

required or permitted to be given under this Agreement shall be in writing,

shall specifically refer to this Agreement and shall be deemed to have been

sufficiently given for all purposes if mailed by first class certified or

registered mail, postage prepaid, express delivery service or personally

delivered.  Unless otherwise specified

in writing, the mailing addresses of the Parties shall be as described below.




	

  For

  Rigel:


  	

   


  	

  Rigel

  Pharmaceuticals, Inc.


  
	

   


  	

   


  	

  240

  East Grand Avenue


  
	

   


  	

   


  	

  South

  San Francisco, CA 94080


  
	

   


  	

   


  	

  Attn:  President


  





 




	

  With a copy to:


  	

   


  	

  Cooley Godward LLP


  
	

   


  	

   


  	

  Five Palo Alto Square


  
	

   


  	

   


  	

  Palo Alto, CA  94306-2155


  
	

   


  	

   


  	

  Attention:  Robert L. Jones, Esq.


  





 




 




37





























 




	

  For Daiichi:


  	

   


  	

  Daiichi Pharmaceutical

  Co., Ltd.


  
	

   


  	

   


  	

  16-13, Kita-Kasai 1

  Chome


  
	

   


  	

   


  	

  Edogawa-ku, Tokyo

  134-8630


  
	

   


  	

   


  	

  Japan


  
	

   


  	

   


  	

  Attention: General

  Manager of Research Planning Department


  





 




15.6        Consents Not Unreasonably Withheld or

Delayed.  Whenever provision is made in this Agreement

for either Party to secure the consent or approval of the other, that consent

or approval shall not unreasonably be withheld or delayed, and whenever in this

Agreement provisions are made for one Party to object to or disapprove a

matter, such objection or disapproval shall not unreasonably be exercised.




15.7        Maintenance of Records. 

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 Party upon request.




15.8        No Strict Construction. 

This Agreement has been prepared jointly and shall not be strictly

construed against either Party.




15.9        Assignment. 

Neither Party may assign or transfer this Agreement without the prior

written consent of the other, except a Party may make such an assignment

without the other Party’s consent to an Affiliate of such Party or to a

successor to substantially all of the related business of such Party, whether in

a merger, sale of stock, sale of assets or other transaction.  Any permitted successor or assignee of

rights and/or obligations hereunder shall, in a writing to the other Party,

expressly assume performance of such rights and/or obligations.  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 15.9 shall be null and void.




15.10      Performance by Affiliates. 

Each of Rigel and Daiichi acknowledge that obligations under this

Agreement may be performed by Affiliates of Rigel and Daiichi, and each of

Rigel and Daiichi guarantee performance of this Agreement by its

Affiliates.  In the event of any dispute

arising from the performance of this Agreement by an Affiliate, or the alleged

failure of an Affiliate to comply with the conditions and obligations of this

Agreement, the Party seeking to resolve such dispute may do so directly with

the other Party, without any obligation to first pursue an action against, or

recovery from, the Affiliate which is alleged to have caused a breach of this

Agreement.




15.11      Counterparts. 

This Agreement may be executed in two (2) or more counterparts, each of

which shall be deemed an original, but all of which together shall constitute

one and the same instrument.




15.12      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.




15.13      Severability. 

If any provision of this Agreement is held to be invalid or

unenforceable in the alternative dispute resolution proceedings specified in

Article 14 from




 




38





























 




which no court

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.




15.14      Ambiguities. 

Ambiguities, if any, in this Agreement shall not be construed against

any Party, irrespective of which Party may be deemed to have authored the

ambiguous provision.




15.15      Headings.  The headings

for each article and section in this Agreement have been inserted for

convenience of reference only and are not intended to limit or expand on the meaning

of the language contained in the particular article or section.




15.16      Translations. 

This Agreement is in the English language only, which language shall be

controlling in all respects, and all versions hereof in any other language

shall be for accommodation only and shall not be binding upon the Parties.  All communications and notices to be made or

given pursuant to this Agreement, and any dispute proceeding related to or

arising hereunder, shall be in the English language.  If there is a discrepancy between any Japanese translation of

this Agreement and this Agreement, this Agreement shall prevail.




15.17      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.




IN WITNESS

WHEREOF, the Parties have executed this Agreement in duplicate originals by

their proper officers as of the date and year first above written.




	

  DAIICHI PHARMACEUTICAL CO., LTD..


  	

   


  	

  RIGEL PHARMACEUTICALS, INC.


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

  /s/  Kiyoshi

  Morita


  	

   


  	

  By:


  	

  /s/  James M.

  Gower


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Name:


  	

  Mr. Kiyoshi Morita


  	

   


  	

  Name:


  	

  Mr. James M. Gower


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title:


  	

  President


  	

   


  	

  Title:


  	

  Chief Executive Officer


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Date:


  	

  8/1/2002


  	

   


  	

  Date:


  	

  7/25/2002


  





 




 




 




 




[ * ] = 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 ACT OF 1934, AS AMENDED.




 




39





























 




TABLE

OF CONTENTS




[ * ] = 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.




PAGE




	

  1.Definitions


  	

  1


  
	

  1.1“Affiliate”


  	

  1


  
	

  1.2“Assays”


  	

  1


  
	

  1.3“Assay Know-How”


  	

  2


  
	

  1.4“Assay Patents”


  	

  2


  
	

  1.5“Assay Technology”


  	

  2


  
	

  1.6“[*]”


  	

  2


  
	

  1.7“[*]”


  	

  2


  
	

  1.8“Co-Developed Product”


  	

  2


  
	

  1.9“Co-Developed Territory”


  	

  2


  
	

  1.10“Confidential Information”


  	

  2


  
	

  1.11“Controlled”


  	

  2


  
	

  1.12“Co-Promoted Product”


  	

  2


  
	

  1.13“Co-Promoted Territory”


  	

  2


  
	

  1.14“Co-Promotion Period”


  	

  3


  
	

  1.15“Daiichi Product Know-How”


  	

  3


  
	

  1.16“Daiichi Product Patents”


  	

  3


  
	

  1.17“Daiichi Technology”


  	

  3


  
	

  1.18“Daiichi-Alone Territory”


  	

  3


  
	

  1.19“Development Budget”


  	

  3


  
	

  1.20“Development Costs”


  	

  3


  
	

  1.21“Development Plan”


  	

  3


  
	

  1.22“Diligent Efforts”


  	

  3


  
	

  1.23“Drug Approval Application”


  	

  4


  
	

  1.24“FTE”


  	

  4


  
	

  1.25“Hit Compound”


  	

  4


  
	

  1.26 “IND”


  	

  4


  
	

  1.27“Information”


  	

  4


  
	

  1.28“Invention”


  	

  4


  
	

  1.29 “Joint Development Committee”


  	

  4


  
	

  1.30“Joint Invention”


  	

  4


  
	

  1.31“Joint Research Committee”


  	

  4


  
	

  1.32“Lead Compound”


  	

  4


  
	

  1.33 “Marketing Plan and Budget”


  	

  4


  
	

  1.34“NDA”


  	

  4


  
	

  1.35“Net Sales”


  	

  5


  
	

  1.36“Non Co-Development Option”


  	

  5


  





 




 




i





























 




	

  1.37”Non Co-Promotion Option”


  	

  5


  
	

  1.38”North American Territory”


  	

  5


  
	

  1.39”Patent”


  	

  6


  
	

  1.40”Phase I Trial”


  	

  6


  
	

  1.41”Phase II Trial”


  	

  6


  
	

  1.42”Phase III Trial”


  	

  6


  
	

  1.43”Pre-Hit Compound”


  	

  6


  
	

  1.44”Product”


  	

  6


  
	

  1.45”Promotion Expenses”


  	

  6


  
	

  1.46”Regulatory Approval”


  	

  6


  
	

  1.47”Research Plan”


  	

  6


  
	

  1.48”Research Program”


  	

  6


  
	

  1.49”Research Term”


  	

  7


  
	

  1.50”Reverted Territory”


  	

  7


  
	

  1.51”Rigel Compound Know-How”


  	

  7


  
	

  1.52”Rigel Compound Patents”


  	

  7


  
	

  1.53”Rigel Product”


  	

  7


  
	

  1.54”Rigel Restricted Information”


  	

  7


  
	

  1.55”Rigel Technology”


  	

  7


  
	

  1.56”Rigel-Alone Option”


  	

  7


  
	

  1.57”Rigel-Alone Territory”


  	

  7


  
	

  1.58”Sales Representative”


  	

  7


  
	

  1.59”Sales Representative Efforts”


  	

  8


  
	

  1.60”Sole Invention”


  	

  8


  
	

  1.61”Strategic Plan”


  	

  8


  
	

  1.63 “Term”


  	

  8


  
	

  1.64”Third Party”


  	

  8


  
	

  2.


  	

  Research Program Governance


  	

  8


  
	

   


  	

  2.1


  	

  Joint Research Committee Formation.


  	

  8


  
	

   


  	

  2.2


  	

  JRC Actions


  	

  8


  
	

   


  	

  2.3


  	

  Meetings of the JRC


  	

  8


  
	

   


  	

  2.4


  	

  Minutes


  	

  9


  
	

   


  	

  2.5


  	

  JRC Functions and Powers.


  	

  9


  
	

   


  	

  2.6


  	

  Limitations of Powers of the JRC


  	

  9


  
	

   


  	

  2.7


  	

  Project Contact Persons.


  	

  10


  
	

   


  	

  2.8


  	

  Obligations of Parties


  	

  10


  
	

   


  	

  2.9


  	

  Research Program Guidelines


  	

  10


  
	

  3.


  	

  Conduct of Research Program


  	

  10


  
	

   


  	

  3.1


  	

  Overview


  	

  10


  
					





 




ii





























 




	

   


  	

  3.2


  	

  Research Term


  	

  10


  
	

   


  	

  3.3


  	

  Research Plan


  	

  10


  
	

   


  	

  3.4


  	

  Research Effort

  and Support


  	

  11


  
	

   


  	

  3.5


  	

  Conduct of

  Research


  	

  11


  
	

   


  	

  3.6


  	

  Technology

  Transfer


  	

  11


  
	

   


  	

  3.7


  	

  Identification

  of Pre-Hit Compounds, Hit Compounds and Lead Compounds


  	

  12


  
	

   


  	

  3.8


  	

  Records


  	

  12


  
	

   


  	

  3.9


  	

  Reports


  	

  13


  
	

   


  	

  3.10


  	

  Daiichi’s

  Post-Research Term Activities


  	

  13


  
	

  4.


  	

  License Grants; Noncompetition


  	

  13


  
	

   


  	

  4.1


  	

  Collaborative

  Research Licenses


  	

  13


  
	

   


  	

  4.2


  	

  Assay Licenses


  	

  13


  
	

   


  	

  4.3


  	

  Development and

  Commercialization Licenses


  	

  14


  
	

   


  	

  4.5


  	

  Negative

  Covenant


  	

  14


  
	

   


  	

  4.7


  	

  Noncompetition


  	

  15


  
	

  5.


  	

  Co-Development


  	

  15


  
	

   


  	

  5.1


  	

  Option


  	

  15


  
	

   


  	

  5.2


  	

  Joint

  Development Committee Formation


  	

  15


  
	

   


  	

  5.3


  	

  JDC Actions


  	

  16


  
	

   


  	

  5.4


  	

  Meetings of the

  JDC


  	

  16


  
	

   


  	

  5.5


  	

  Minutes


  	

  16


  
	

   


  	

  5.6


  	

  JDC Functions

  and Powers


  	

  16


  
	

   


  	

  5.7


  	

  Co-Development

  Guidelines


  	

  17


  
	

   


  	

  5.8


  	

  Limitations of

  Powers of the JDC


  	

  17


  
	

   


  	

  5.9


  	

  Development Plan

  and Development Budget


  	

  17


  
	

   


  	

  5.10


  	

  Regulatory Matters


  	

  17


  
	

   


  	

  5.11


  	

  Development

  Costs


  	

  18


  
	

   


  	

  5.12


  	

  Territory-Specific

  Dossier


  	

  19


  
	

   


  	

  5.13


  	

  Obligations of

  Parties


  	

  19


  
	

   


  	

  5.14


  	

  Daiichi

  Obligations


  	

  19


  
	

   


  	

  5.16


  	

  Termination


  	

  19


  
	

  6.


  	

  Co-Promotion


  	

  20


  
	

   


  	

  6.1


  	

  Option


  	

  20


  
	

   


  	

  6.2


  	

  Co-Promotion

  Principles


  	

  21


  
	

   


  	

  6.15


  	

  Termination


  	

  21


  
	

  7.


  	

  Development & Commercialization of Daiichi Products and Rigel

  Products.


  	

  21


  
	

   


  	

  7.1


  	

  Development of

  Daiichi Developed Products


  	

  21


  
	

   


  	

  7.2


  	

  Commercialization

  of Daiichi Promoted Products


  	

  22


  
	

   


  	

  7.3


  	

  Reporting


  	

  22


  





 




iii





























 




	

   


  	

  7.4


  	

  Option for

  Rigel-Alone Development and Commercialization.


  	

  22


  
	

  8.


  	

  Economics


  	

  22


  
	

   


  	

  8.1


  	

  Up-Front

  Payments


  	

  22


  
	

   


  	

  8.3


  	

  Milestone

  Payments


  	

  23


  
	

   


  	

  8.4


  	

  Additional

  Payments


  	

  23


  
	

   


  	

  8.5


  	

  Royalty Payments


  	

  23


  
	

   


  	

  8.8


  	

  Quarterly

  Payments


  	

  23


  
	

   


  	

  8.9


  	

  Term of

  Royalties


  	

  23


  
	

   


  	

  8.10


  	

  Royalty Payment

  Reports


  	

  23


  
	

   


  	

  8.11


  	

  Payment Method


  	

  24


  
	

   


  	

  8.12


  	

  No Credits or

  Refunds


  	

  24


  
	

   


  	

  8.13


  	

  Taxes


  	

  24


  
	

   


  	

  8.14


  	

  Blocked Currency


  	

  24


  
	

   


  	

  8.15


  	

  Sublicenses


  	

  24


  
	

   


  	

  8.16


  	

  Foreign Exchange


  	

  24


  
	

   


  	

  8.17


  	

  Records;

  Inspection


  	

  24


  
	

   


  	

  8.18


  	

  Interest


  	

  24


  
	

  9.


  	

  Intellectual Property


  	

  24


  
	

   


  	

  9.1


  	

  Ownership


  	

  24


  
	

   


  	

  9.2


  	

  Patent

  Prosecution and Maintenance; Abandonment


  	

  25


  
	

   


  	

  9.3


  	

  Enforcement of

  Patent Rights


  	

  26


  
	

   


  	

  9.4


  	

  Defense of Third

  Party Claims


  	

  27


  
	

   


  	

  9.5


  	

  Copyright

  Registrations


  	

  27


  
	

   


  	

  9.6


  	

  Trademarks


  	

  27


  
	

   


  	

  9.7


  	

  Acquisition of

  Third Party Technology.


  	

  27


  
	

  10.


  	

  Confidentiality


  	

  27


  
	

   


  	

  10.1


  	

  Treatment of

  Confidential Information


  	

  27


  
	

   


  	

  10.2


  	

  Exceptions


  	

  28


  
	

   


  	

  10.3


  	

  Authorized

  Disclosure


  	

  28


  
	

   


  	

  10.4


  	

  Termination of

  Prior Agreements


  	

  29


  
	

   


  	

  10.5


  	

  Publicity


  	

  29


  
	

   


  	

  10.6


  	

  Publications


  	

  29


  
	

  11.


  	

  Representations and Warranties


  	

  29


  
	

   


  	

  11.1


  	

  General

  Representations and Warranties


  	

  29


  
	

   


  	

  11.2


  	

  Disclaimer

  Concerning Technology


  	

  30


  
	

  12.


  	

  Term and Termination


  	

  30


  
	

   


  	

  12.1


  	

  Term


  	

  30


  
	

   


  	

  12.2


  	

  Termination For

  Breach


  	

  31


  
	

   


  	

  12.3


  	

  Effect of

  Termination; Survival.


  	

  31


  





 




iv





























 




	

  13.


  	

  Indemnification


  	

  31


  
	

   


  	

  13.1


  	

  Mutual

  Indemnification


  	

  31


  
	

   


  	

  13.2


  	

  Indemnification

  by Daiichi


  	

  32


  
	

   


  	

  13.3


  	

  Conditions to

  Indemnification


  	

  32


  
	

   


  	

  13.4


  	

  Exclusion of

  Damages


  	

  33


  
	

  14.


  	

  Dispute Resolution.


  	

  33


  
	

   


  	

  14.1


  	

  Disputes


  	

  33


  
	

   


  	

  14.2


  	

  Alternative

  Dispute Resolution


  	

  33


  
	

   


  	

  14.3


  	

  Arbitrator


  	

  34


  
	

   


  	

  14.4


  	

  Governing Law


  	

  34


  
	

   


  	

  14.5


  	

  Rules of

  Procedure


  	

  34


  
	

   


  	

  14.7


  	

  Decision


  	

  34


  
	

   


  	

  14.8


  	

  Award


  	

  35


  
	

   


  	

  14.9


  	

  Costs


  	

  35


  
	

   


  	

  14.10


  	

  Injunctive

  Relief


  	

  35


  
	

   


  	

  14.11


  	

  Confidentiality


  	

  35


  
	

   


  	

  14.13


  	

  Survivability


  	

  35


  
	

  15.


  	

  Miscellaneous.


  	

  35


  
	

   


  	

  15.1


  	

  Export Control


  	

  35


  
	

   


  	

  15.2


  	

  Entire

  Agreement; Amendment


  	

  36


  
	

   


  	

  15.3


  	

  Bankruptcy


  	

  36


  
	

   


  	

  15.4


  	

  Force Majeure


  	

  37


  
	

   


  	

  15.5


  	

  Notices


  	

  37


  
	

   


  	

  15.6


  	

  Consents Not

  Unreasonably Withheld or Delayed


  	

  38


  
	

   


  	

  15.7


  	

  Maintenance of

  Records


  	

  38


  
	

   


  	

  15.8


  	

  No Strict

  Construction


  	

  38


  
	

   


  	

  15.9


  	

  Assignment


  	

  38


  
	

   


  	

  15.10


  	

  Performance by

  Affiliates and Local Operating Entities


  	

  38


  
	

   


  	

  15.11


  	

  Counterparts


  	

  38


  
	

   


  	

  15.12


  	

  Further Actions


  	

  38


  
	

   


  	

  15.13


  	

  Severability


  	

  38


  
	

   


  	

  15.14


  	

  Ambiguities


  	

  39


  
	

   


  	

  15.15


  	

  Headings


  	

  39


  
	

   


  	

  15.16


  	

  Translations


  	

  39


  
	

   


  	

  15.17


  	

  No Waiver


  	

  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 Act of 1934, as amended.




 




v