Document:

exv10w3

Exhibit 10.3

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (“Agreement”) is made effective as of the 2nd day of June, 2011 (the
“Effective Date”), by and between Clovis Oncology, Inc., a corporation organized and existing under
the laws of Delaware with offices at 2525 28th Street, Boulder, CO 80301 (“LICENSEE”)
and PFIZER Inc., a corporation organized and existing under the laws of Delaware with offices at
235 East 42nd Street, New York, NY 10017 (“PFIZER”). LICENSEE and PFIZER may, from
time-to-time, be individually referred to as a “Party” and collectively referred to as the
“Parties”.

RECITALS

WHEREAS, PFIZER Controls the Licensed Technology (hereinafter defined); and

WHEREAS, LICENSEE wishes to obtain, and PFIZER wishes to grant, certain licenses under the
Licensed Technology on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth herein and
other good and valuable consideration, the receipt and sufficiency of which the Parties hereby
acknowledge, the Parties, intending to be legally bound hereby, agree to the foregoing and as
follows:

	1.	 	DEFINITIONS

	 	1.1.	 	“Affiliate” means, with respect to a Party, any Person that controls, is
controlled by, or is under common control with that Party. For the purpose of this
definition, “control” shall refer to: (a) the possession, directly or indirectly, of
the power to direct the management or policies of an entity, whether through the
ownership of voting securities, by contract or otherwise, or (b) the ownership,
directly or indirectly, of fifty percent (50%) or more of the voting securities of such
entity.

	 
	 	1.2.	 	“Applicable Laws” means all applicable laws, statutes, rules, regulations and
guidelines, including, without limitation, all good manufacturing practices and all
applicable standards or guidelines promulgated by the appropriate Regulatory Authority.

	 
	 	1.3.	 	“Business Day” means any day other than a Saturday, a Sunday or a day on which
commercial banks located in New York, New York are authorized or required by law to
remain closed.

	 
	 	1.4.	 	“Calendar Quarter” means the respective periods of three (3) consecutive
calendar months ending on March 31, June 30, September 30 and December 31.

	 
	 	1.5.	 	“Calendar Year” means any twelve (12) month period commencing on January 1.

 

 

	 	1.6.	 	“Collaboration Agreement” means the Collaboration Agreement between PFIZER, MDx
Health, SA, University of Newcastle upon Tyne and Cancer Research Technology Limited
(formerly Cancer Research Campaign Technology Limited) entered into as of
14th December 2010.

	 
	 	1.7.	 	“Collaboration and License Agreement” means the Collaboration and License
Agreement entered into as of 23rd September 1997 between Cancer Research
Campaign Technology Limited, University of Newcastle upon Tyne and Agouron
Pharmaceuticals, Inc (now an Affiliate of PFIZER), as amended by a First Amendment to
Collaboration and License Agreement dated 23 January 2000, as amended by a Second
Amendment to Collaboration and License Agreement dated 23 January 2001, and as amended
by an Amendment dated 1 January 2006 between Cancer Research Technology Limited
(formerly Cancer Research Campaign Technology Limited) and PFIZER.

	 
	 	1.8.	 	“Commercialize” or “Commercialization” means to manufacture for sale, market,
promote, otherwise offer for sale, distribute, and sell.

	 
	 	1.9.	 	“Commercially Reasonable Efforts” means, with respect to the Development or
Commercialization of a Product, that level of efforts and resources commonly dedicated
in the research-based pharmaceutical industry by a company to the development or
commercialization, as the case may be, of a product of similar commercial potential at
a similar stage in its lifecycle, in each case taking into account issues of safety and
efficacy, product profile, the proprietary position, the then current competitive
environment for such product and the likely timing of such product’s entry into the
market, the regulatory environment and status of such product, and other relevant
scientific, technical and commercial factors.

	 
	 	1.10.	 	“Compound” means the compound designated by PFIZER as PF-01367338, that
inhibits poly (ADP-ribose) polymerase (“PARP”) and all salts, polymorphs and
formulations thereof.

	 
	 	1.11.	 	“Control” or “Controlled” means, with respect to any Intellectual Property
Rights, the legal authority or right (whether by ownership, license or otherwise) of a
Party to grant a license or a sublicense of or under such Intellectual Property Rights
to the other Party without breaching the terms of any agreement with a Third Party.
For clarity, if a Party only can grant a license or sublicense to Intellectual
Property, or provide access to a material or document, of a limited scope due to an
encumbrance imposed by a Third Party, “Control” or “Controlled” shall be construed to
so limit the license or sublicense to such Intellectual Property or the provision of,
or provision of access to, such materials or documents (as applicable).

	 
	 	1.12.	 	“Develop” or “Development” means to conduct research and development
activities (including related manufacturing activities) under conditions designed to
yield data suitable for inclusion in an application for Regulatory Approval of a
Product by the FDA or a comparable agency in another country or regulatory jurisdiction
within the Territory.

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	 	1.13.	 	“Distributor” means a Third Party, other than a sublicensee of LICENSEE, that
(i) purchases any Products in finished form from or at the direction of LICENSEE or any
of its Affiliates or sublicensees, and (ii) has the right to Commercialize such
Products in one or more regions, or has an option to do the foregoing.

	 
	 	1.14.	 	“Existing Trials” means the PFIZER 1014 Study and the Other Compound Studies.

	 
	 	1.15.	 	“FDA” means the United States Food and Drug Administration, or a successor
federal agency thereto.

	 
	 	1.16.	 	“Field” means all human and animal therapeutic, prophylactic and diagnostic
uses of the Product, including the treatment of human disease with the Product.

	 
	 	1.17.	 	“First Commercial Sale” means with respect to a Product, the first sale for
use or consumption of the Product following receipt of Regulatory Approval for such
Product in a country in the Territory.

	 
	 	1.18.	 	“GAAP” means the generally accepted accounting principles in the United
States, consistently applied.

	 
	 	1.19.	 	“IND” means: (a) an investigational new drug application filed with the FDA
for authorization for the investigation of the Product, and (b) any of its foreign
equivalents as filed with the applicable Regulatory Authorities in other countries or
regulatory jurisdictions in the Territory, as applicable.

	 
	 	1.20.	 	“Indication” for a Product means the use of such Product for treating a
particular disease or medical condition.

	 
	 	1.21.	 	“Intellectual Property Rights” means all trade secrets, copyrights, patents
and other patent rights, Trademarks, moral rights, know-how and any and all other
intellectual property or proprietary rights now known or hereafter recognized in any
jurisdiction.

	 
	 	1.22.	 	“Know-How” means all confidential and proprietary information and data
Controlled by PFIZER as of the Effective Date related to the Compound or related to the
Product as it exists on the Effective Date contained within the Documentation
transferred pursuant to Section 3.

	 
	 	1.23.	 	“Licensed Technology” means collectively, the Patent Rights and Know-How.

	 
	 	1.24.	 	“MAA” means a Marketing Authorization Application filed with the EMA under the
centralized European procedure (including amendments and supplements thereto).

	 
	 	1.25.	 	“Milestone” means each milestone as set forth in Sections 5.1.2 and 5.1.3.

	 
	 	1.26.	 	“NDA/BLA” means: (a) a new drug application or a new biologic
license application filed with the FDA for authorization for marketing the Product, and
(b)

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	 	 	 	any of its foreign equivalents as filed with the applicable Regulatory Authorities
in other countries or regulatory jurisdictions in the Territory, as applicable.

	 
	 	1.27.	 	“Net Sales” means the gross amount invoiced by or on behalf of LICENSEE, its
Affiliates and their respective sublicensees (each a “Selling Party”) for sales of the
Product, less the following deductions if and to the extent they are included in the
gross invoiced sales price of the Product or otherwise directly incurred by LICENSEE,
its Affiliates and their respective sublicensees with respect to the sale of the
Product: (a) rebates, quantity and cash discounts, and other usual and customary
discounts to customers, (b) taxes and duties paid, absorbed or allowed which are
directly related to the sale of the Product, (c) credits, allowances, discounts and
rebates to, and chargebacks for spoiled, damaged, out-dated, rejected or returned
Product, (d) actual freight and insurance costs incurred in transporting the Product to
customers, provided that in no event shall deductions for freight and insurance exceed
three percent (3%) of the gross amount invoiced, (e) discounts or rebates or other
payments required by Applicable Law, including any governmental special medical
assistance programs, and (f) customs duties, surcharges and other governmental charges
incurred in connection with the exportation or importation of the Product.
Subsections (a) through (f) shall be collectively referred to as “Deductions”.

	 
	 	 	 	The following principles shall apply in the calculation of Net Sales:

 

	 	 	 	1.27.1. Products will be considered “sold” when a sale by a Selling Party is
recognized in accordance with revenue recognition policies mandated by GAAP.

	 
	 	 	 	1.27.2. Nothing herein will prevent a Selling Party from selling, distributing or
invoicing Products at a discounted price for shipments to Third Parties in
connection with clinical studies, compassionate sales, or an indigent program or
similar bona fide arrangements in which the Selling Party agrees to forego a normal
profit margin for good faith business reasons.

	 
	 	 	 	1.27.3. A sale or transfer of Products between any of the Selling Parties will not
result in any Net Sales, and Net Sales instead will be based on subsequent sales or
distribution to a non-Selling Party, unless such Products are consumed by a Selling
Party in the course of its commercial activities. Sales to Distributors shall be
treated identically to any other sales to Third Parties

	 
	 	 	 	1.27.4. In the case of any sale or other disposal of Product for non-cash
consideration, Net Sales shall be calculated as the fair market price of the
Product in the country of sale or disposal. Notwithstanding the foregoing,
provision of the Product for the purpose of conducting pre-clinical or clinical
research shall not be deemed to be a sale, so long as the Product is provided at a
price which does not exceed the reasonably estimated cost of production and
distribution thereof.

	 
	 	 	 	1.27.5. Net Sales means, in the case of “Combination Product” which is defined as
any pharmaceutical product containing: (a) the Product and (b) one or more other
active therapeutically active ingredients, which is not a Product:

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	 	(a)	 	if LICENSEE and/or its Affiliates and/or any Third Party
separately sells in such country during such year when it sells such
Combination Product both (1) one or more Products as a single chemical entity,
and (2) other products containing active ingredient(s) as a single entity that
are also contained in such Combination Product, the Net Sales attributable to
such Combination Product during such year shall be calculated by multiplying
actual Net Sales of such Combination Product by the fraction A/(A+B) where: A
is LICENSEE’s (or its Affiliates or Third Parties, as applicable) average Net
Sales price per daily dose during such year for each Product in such
Combination Product in such country and B is the sum of the average of
LICENSEE’s (or its Affiliates or Third Parties, as applicable) Net Sales price
per daily dose during such year in such country, for each product(s)
containing, the active ingredient(s) in such Combination Product (other than
the Product);

	 
	 	(b)	 	if LICENSEE and/or its Affiliates and/or any Third Party
separately sells, in such country during such year when it sells such
Combination Product, one or more Products as a single chemical entity but do
not separately sell, in such country, other products containing active
ingredient(s) that are also contained in such Combination Product, the Net
Sales attributable to such Combination Product during such year shall be
calculated by multiplying the Net Sales of such Combination Product by the
fraction A/C where: A is LICENSEE’s (or its Affiliates or Third Parties, as
applicable) average Net Sales price per daily dose during such year for each
Product in such Combination Product in such country, and C is LICENSEE’s (or
its Affiliates or Third Parties, as applicable) average Net Sales price per
daily dose during such year for the Combination Product in such country; and

	 
	 	(c)	 	if LICESEE and/or its Affiliates and/or Third Parties do not
separately in such country during such year sell each Product contained in the
Combination Product, then the Net Sales attributable to such Combination
Product shall be D/(D+E) where D is the fair market value of the portion of the
Combination Product that contains the Product and E is the fair market value of
the portion of the Combination Product containing the other active
ingredient(s) included in such Combination Product, as such fair market values
are determined by mutual agreement of the parties.

	 

	 	 	 	1.27.6. Net Sales shall be calculated in accordance with GAAP generally and
consistently applied.

	 	1.28.	 	“Other Compound Studies” means those studies in addition to the Pfizer 1014
Study that are listed in Schedule B-1.

	 
	 	1.29.	 	“Patent Rights” means all of PFIZER’S rights in patents and patent
applications listed in Schedule A in so far as they related to the Compound, and all
continuations, divisionals and renewals of such patents and patent applications, any
continuations-in-part (to the extent the claims thereof are entirely supported by the
patents and patent applications to which it claims priority), and any other subsequent
filings in

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	 	 	 	any country in the Territory, in each case to the extent claiming priority from such
patents and patent applications, all letters of patent granted with respect to any
of the foregoing, and all patents of addition, restorations, extensions,
supplementary protection certificates, registration or confirmation patents,
reissues and re-examinations of any of the foregoing. “Patent Rights” shall also
include any patent applications or patents referred to in Section 14.1.4 of this
Agreement.

	 
	 	1.30.	 	“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental authority or
any other form of entity not specifically listed herein.

	 
	 	1.31.	 	“PFIZER 1014 Study” means the PFIZER sponsored clinical study of the Compound
known as A4991014.

	 
	 	1.32.	 	“Product” means any and all pharmaceutical, diagnostic or veterinary products:
(i) for which the manufacture, use, offer for sale, sale, import or export would, if
not for the license granted to LICENSEE, infringe a valid claim of a Patent Right in
the country for which such products are used, offered for sale, sold, manufactured or
imported; or (ii) that contain the Compound.

	 
	 	1.33.	 	“Regulatory Approval” means, with respect to the Product in any country or
jurisdiction, any approval (including where required, pricing and reimbursement
approvals), registration, license or authorization that is required by the applicable
Regulatory Authority to market and sell the Product in such country or jurisdiction.

	 
	 	1.34.	 	“Regulatory Authority” means any governmental agency or authority responsible
for granting Regulatory Approvals for the Product in the Territory.

	 
	 	1.35.	 	“Regulatory Filings” means, with respect to the Product, any submission to a
Regulatory Authority of any appropriate regulatory application, including, without
limitation, any IND, NDA/BLA, any submission to a regulatory advisory board, any
marketing authorization application, and any supplement or amendment thereto.

	 
	 	1.36.	 	“Royalty Term” means, on a Product-by-Product and country-by country basis,
the period commencing on the First Commercial Sale of the Product in a country and
expiring upon the later of: (a) expiration or abandonment of the last Valid Claim of
the Patent Rights which covers the Use of the Product in such country , or (b) ten (10)
years following the date of First Commercial Sale of the Product in such country.

	 
	 	1.37.	 	“Territory” means worldwide.

	 
	 	1.38.	 	“Third Party” means any Person other than a Party or an Affiliate of a Party.

	 
	 	1.39.	 	“Trademarks” has the meaning as set forth in Section 13.4.5(c).

	 
	 	1.40.	 	“Use” means to make, have made, use, sell, offer for sale, and import and export.

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	 	1.41.	 	“Valid Claim” means either: (a) a claim of an issued and unexpired patent
included within the Patent Rights, which has not been permanently revoked or declared
unenforceable or invalid by an unreversed and unappealable or unreversed and unappealed
decision of a court or other appropriate body of competent jurisdiction, or (b) a claim
of a pending patent application included within the Patent Rights, which claim was
filed in good faith and has not been abandoned or finally disallowed without the
possibility of appeal or refiling of such application.

	2.	 	LICENSE GRANT

	 	2.1.	 	License Grant.

	 

	 	 	 	2.1.1. Patent Rights. Subject to the terms and conditions of this Agreement PFIZER
hereby grants to LICENSEE an exclusive (even as to PFIZER except as expressly
provided in Section 2.3 below (“Retained Rights”)), sublicensable (subject to
Section 2.2), royalty-bearing right and license under the Patents Rights to Use the
Product in the Field within the Territory. For clarity, the license rights include
an exclusive sub-license of PFIZER’s rights under the Collaboration and License
Agreement and the Collaboration Agreement.

	 
	 	 	 	2.1.2. Know How. Subject to the terms and conditions of this Agreement including
the Retained Rights, PFIZER hereby grants to LICENSEE a non-exclusive,
sublicensable (subject to Section 2.2), royalty-bearing right and license to use
the Know-How for the purpose of the Development and Commercialization of the
Product in the Field within the Territory.

	 
	 	 	 	2.1.3. Affiliates. To the extent that any of the Licensed Technology is Controlled
by an Affiliate of PFIZER, then promptly following the Effective Date, PFIZER shall
procure that such Affiliate undertakes all necessary actions to give effect to the
licenses granted under this Section. In addition, during the course of the
implementation by the Parties of the Transition Plan, to the extent (i) requested
by LICENSEE, (ii) reasonably practicable and (iii) any such assignment would not
jeopardize any intellectual property rights of PFIZER, the Parties will seek to
obtain the consent of the Third Party to the Collaboration Agreement and the
Collaboration and License Agreement to an assignment of one or both of such
agreements to LICENSEE.

	 

	 	2.2.	 	Sublicense Rights. LICENSEE may, subject to Section 2.6, sublicense the rights
granted to it by PFIZER under this Agreement to any of its Affiliates or to any Third
Party which has reasonably demonstrated the necessary financial and technical capacity
to carry out the LICENSEE’s obligations under this Agreement. Any and all sublicenses
shall be subject to the following requirements:

	 

	 	 	 	2.2.1. All sublicenses shall be subject to and consistent with the terms and
conditions of this Agreement and shall: (a) preclude the assignment or further
sub-licensing of such sublicense without the prior written approval of PFIZER
(provided, however, that the foregoing restriction on further
sublicensing shall not apply if the sub-licensee is a publicly-traded company with
a market capitalization

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	 	 	 	of at least $1 Billion at the time of the proposed transaction), and (b) include
PFIZER as a third party beneficiary under the sublicense with the right to enforce
the terms of such sublicense. In no event shall any sublicense relieve LICENSEE of
any of its obligations under this Agreement.

	 
	 	 	 	2.2.2. LICENSEE shall furnish to PFIZER a true and complete copy of each sublicense
agreement and each amendment thereto, within thirty (30) days after the sublicense
or amendment has been executed.

	 
	 	2.3.	 	Retained Rights. LICENSEE acknowledges and agrees that PFIZER retains the
right to make, have made and use and have used the Licensed Technology for all internal
research purposes and LICENSEE hereby grants to PFIZER a worldwide, irrevocable,
non-exclusive, fully paid up license (with the right to sub-license to any Affiliate
without the need for LICENSEE’S consent) to such Licensed Technology for such purposes
without the consent of LICENSEE.

	 
	 	2.4.	 	Residuals. PFIZER may use for any purpose the Residuals resulting from access
to or work with the Compound, Product and Know-How. As used herein, “Residuals” means
information in non-tangible form which may be retained by persons who have had access
to the Compound, Product and Know-How, including ideas, concepts, know-how or
techniques contained therein.

	 
	 	2.5.	 	No Additional Rights. Nothing in this Agreement shall be construed to confer
any rights upon LICENSEE by implication, estoppel, or otherwise as to any technology or
Intellectual Property Rights of PFIZER or it Affiliates other than the Licensed
Technology.

	 
	 	2.6.	 	Rights of First Negotiation. If LICENSEE decides, other than as part of a
merger or sale of LICENSEE as a whole or a sale of substantially all of the assets of
LICENSEE , to seek to sublicense the Licensed Technology to a Third Party in any one of
the following territories: US, UK, Germany, France, Spain, Italy, China or Japan for
Development and/or Commercialization of a Product, then LICENSEE shall first notify
PFIZER in writing of its plans for such a sublicense, including the specific territory
to be covered (“Transaction Notice”). If PFIZER desires to evaluate whether to seek
such sublicense in such notified territory (the “Subject Territory”) for itself, then
PFIZER shall notify LICENSEE within thirty (30) days of receipt of the Transaction
Notice (“Negotiation Notice”). For the sixty (60) days following receipt of the
Negotiation Notice (“Exclusivity Period”), PFIZER shall have the exclusive right to
negotiate an exclusive sublicense to the Product in the Subject Territory with
LICENSEE, such negotiations to include at least one face-to-face meeting and to be
conducted on a good faith basis using reasonable efforts. If PFIZER does not provide
such Negotiation Notice to LICENSEE, does not provide a written proposal during the
Exclusivity Period, or the two Parties do not come to agreement during the Exclusivity
Period, then LICENSEE shall be free to pursue such a sublicense with any Third Party;
provided, however, that LICENSEE shall not be entitled to subsequently grant
Development or Commercialization rights to a Third Party for the Subject Territory
unless, in the reasonable and informed good faith judgment of the Board of Directors of LICENSEE, the terms and 

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	 	 	 	provisions of the proposed agreement with such Third Party
are, in the aggregate, more favorable to LICENSEE than the terms and provisions set
forth in the last offer submitted in writing by PFIZER to LICENSEE in the course of
the negotiations between PFIZER and LICENSEE.

	3.	 	TRANSFER ACTIVITIES

	 	3.1.	 	Transition Coordinators. Each Party shall appoint one Transition coordinator
(each a “Transition Coordinator” and collectively, the “Transition Coordinators”) who
shall serve as the principal contacts for PFIZER and LICENSEE for matters relating to
the implementation of the Technical Transfer Transition Plan (“Transition Plan”) and
shall have the authority from the Party that designated such Coordinator to modify the
Transition Plan. The initial Transition Coordinator for LICENSEE
shall be ***,
and the initial Transition Coordinator for PFIZER shall be ***. Any
Transition Coordinator may be replaced by the Party so appointing him or her from time
to time upon notice to the other Party.

	 
	 	 	 	The Transition Coordinators shall meet, in person or by telephone, not less than
once every week during the first three (3) months of the implementation of the
Transition Plan to (i) review the progress being made under the Transition Plan,
(ii) discuss future activities to be conducted under the Transition Plan and the
extent to which additional resources need to be applied by either Party or both to
complete the transition, and (iii) review and agree upon any necessary or desired
revisions to the Transition Plan. Upon the request of either Transition
Coordinator, other personnel from a Party may attend and participate in such
meetings. It is the objective of the Parties, working through their Transition
Coordinators, and in accordance with the terms and conditions of this Agreement
including the Schedules hereto, to insure as smooth and efficient a transition from
PFIZER to LICENSEE as reasonably practical of all relevant documentation, materials,
contractual obligations and regulatory responsibilities related to the Compound, the
Product and the Existing Trials.

	 
	 	3.2.	 	Initial Transfer. PFIZER shall use reasonable efforts to: (a) make available
to LICENSEE currently available records as set forth in Schedule B which exist
and are Controlled by PFIZER as of the Effective Date and are necessary for LICENSEE to
continue Developing the Product (collectively, “Documentation”), and (b) perform other
activities with respect to Regulatory Filings and/or Regulatory Approvals as set forth
in Schedule B (where the activities under subsections (a) and (b) shall be
collectively referred to as “Transfer Activities”). PFIZER shall use reasonable
efforts to perform the Transfer Activities and complete such Activities within the time
periods specified in Schedule B, and PFIZER shall provide written notice to
LICENSEE upon completion of such efforts (“PFIZER Transfer Notice”).

	 
	 	3.3.	 	Existing Trials and Agreements. In connection with its efforts to Develop the
Product, LICENSEE shall assume all financial responsibility, at its sole cost, for the
Existing Trials with effect from the Effective Date. For clarity, the obligations in
the preceding sentence include the assumption of financial responsibility for
outstanding financial obligations related to the Existing Trials as particularized in
the Third Party

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	 	 	 	Agreements set out in Schedule B-1. In addition, LICENSEE shall assume
operational responsibility for the Existing Trials under the time lines and
mechanisms set out in Section 4.3.1 and Schedule B and the Transition Plan that will
be developed under the terms of Schedule B.

	 
	 	3.4.	 	Follow-up Period. For a period of six (6) months following LICENSEE’s receipt
of the PFIZER Transfer Notice, if LICENSEE discovers or learns of any incomplete
Transfer Activities, LICENSEE shall provide written notice to PFIZER, and PFIZER shall
use reasonable efforts to perform such Transfer Activities provided that PFIZER’s
efforts to engage in the Transfer Activities under this Section 3 shall not exceed a
total of forty (40) hours.

	4.	 	DEVELOPMENT, MANUFACTURING, REGULATORY AND COMMERCIALIZATION

	 	4.1.	 	Development.

	 
	 	 	 	4.1.1. LICENSEE shall itself, or through its Affiliates or sublicensees, use
Commercially Reasonable Efforts to Develop the Product in the Territory, and
LICENSEE shall undertake all Development activities at its sole expense. Without
limiting the foregoing, in connection with its efforts to Develop the Product,
LICENSEE shall bear all responsibility and expense for filing Regulatory Filings in
LICENSEE’s name and obtaining Regulatory Approval for the Product. LICENSEE’s
Development activities will be undertaken in accordance with a Development plan
(the “Development Plan”), the initial Development Plan being attached to the
Agreement as Schedule D (the “Initial Development Plan”). PFIZER acknowledges that
(a) the Initial Development Plan has been based on the due diligence carried out by
LICENSEE prior to the Effective Date, largely utilizing information furnished to
LICENSEE by PFIZER; (b) such Plan is predicated, in part, on clinical data that has
not yet been generated; and (c) such Plan is subject to revision from time to time
to take into account, among other factors: safety or efficacy concerns, matters
related to Patent coverage, or issues related to present or future marketability or
profitability, including existing or anticipated competition, and that such
revisions may include seeking regulatory approval for different indications than
are contained in the Initial Development Plan. Each Development Plan or amendment
shall be treated by both Parties as a good faith statement of LICENSEE’s intentions
for the Development of the Product, but such Development Plan shall not be deemed
to be a contractual commitment by LICENSEE to undertake all of the efforts
described in such Plan or to refrain from making adjustments to such Plan that, in
LICENSEE’s reasonable judgment, are necessary in light of factors described in the
preceding sentence. LICENSEE shall provide to PFIZER reports regarding LICENSEE’s
progress and future plans, including amendments to the Development Plan, every six
(6) months during the terms of this Agreement, and Pfizer will be provided with an
opportunity to comment on all amendments to the Development Plan as well as all
Development and Commercialization activities.

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	 	 	 	4.1.2. Notwithstanding the provisions of the foregoing Section 4.1.1, LICENSEE
shall, at a minimum, complete the PFIZER 1014 Study as well as initiating and
completing the Phase I Monotherapy Study as described in Schedule D. The
initiation of the Phase I Monotherapy Study will occur no later than by the end of
the first quarter of 2012.

	 
	 	4.2.	 	Commercialization. LICENSEE shall itself, or through its Affiliates,
sublicensees or Distributors, use Commercially Reasonable Efforts to Commercialize the
Product in the U.S., the European Union, major Asian markets (which shall include
China, Japan and South Korea) and in each other country within the Territory where
Commercializing the Products would be Commercially Reasonable. LICENSEE shall
undertake such activities at its sole expense.

	 
	 	4.3.	 	Regulatory and Pharmacovigilance.

	 
	 	 	 	4.3.1. Within ten (10) days after the Effective Date, PFIZER shall notify the
appropriate Regulatory Authorities and any necessary Third Party that it is
transferring responsibility for the PFIZER 1014 Study so as to permit an assignment
to LICENSEE of the existing IND for the Product and its foreign Regulatory
Authority counterparts as promptly as possible.

	 
	 	 	 	4.3.2. During the implementation of the Transition Plan, the safety units of each
of the Parties shall discuss whether or not it may be necessary to put in place a a
written agreement for exchanging adverse event and other safety information
relating to the Product prior to PFIZER’s transfer of the existing IND to LICENSEE,
and if they agree that such an agreement is necessary, they shall promptly meet and
agree upon such an agreement (‘the Pharmacovigiance Agreement”). Such
Pharmacovigilance Agreement shall ensure that adverse events and other safety
information is exchanged upon terms that will permit each Party to comply with
Applicable Laws and requirements of Regulatory Authorities

	 
	 	 	 	4.3.3. In the event that one or more Regulatory Authorities contact PFIZER
regarding an audit of any of the research and development done prior to the
Effective Date, by, or under the direction of, PFIZER regarding the Compound or the
Product, PFIZER shall promptly notify LICENSEE and shall coordinate with LICENSEE
and provide reasonable co-operation to furnish or provide access to such Regulatory
Authority as may be required to comply with the audit so requested.

	 
	 	4.4.	 	Manufacturing. Subject to Section 2.3 and subject to any rights needed by
PFIZER in order to complete the manufacturing of drug substance or drug product of the
Product for LICENSEE contemplated by this Agreement, LICENSEE shall have the sole right
to manufacture, or have manufactured, Products, and it shall be entitled to use, and to
sublicense the manufacturing rights under the Patent Rights for such purposes. Except
as provided below, LICENSEE shall be responsible for all aspects of manufacturing of
the Product.

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	 	 	 	4.4.1. PFIZER shall transfer free of charge (except for transportation costs which
shall be borne by LICENSEE) existing inventories of API inventory and bulk drug
inventory (as further particularized in Schedule E hereto) to LICENSEE including
documentation to support the use of those materials in clinical trials.

	 
	 	 	 	4.4.2. PFIZER shall also provide background research information and technical
assistance as reasonably requested by LICENSEE, including analytical methods
utilized by PFIZER in the manufacture of the drug substance and drug product, to
support development of the Product in the Field and in the Territory All
manufacturing development expenses incurred from and after the Effective Date shall
be the responsibility of LICENSEE.

	 
	 	 	 	4.4.3. Prior to the Effective Date, PFIZER had already scheduled a production run
of drug product of the Product (as further particularized in Schedule E hereto and
PFIZER hereby undertakes to complete such production run and sell such drug product
to LICENSEE in the quantities, at a price and with scheduled delivery dates as set
forth in Schedule E if requested by LICENSEE.

	 
	 	 	 	4.4.4. In addition, PFIZER hereby undertakes to manufacture additional drug
substance and drug product of the Product for LICENSEE (as further particularized
in Schedule E hereto) and to sell such drug product to LICENSEE in the quantities,
at a price and with scheduled delivery dates as set forth in Schedule E if
requested by LICENSEE.

	5.	 	PAYMENT TERMS

	 	5.1.	 	Payment Terms.

	 
	 	 	 	5.1.1. Equity. In partial consideration of the licenses and rights granted to
LICENSEE hereunder, LICENSEE shall, contemporaneously with the execution of this
Agreement and pursuant to a Convertible Note Agreement signed by PFIZER and
LICENSEE on the date hereof, issue to PFIZER seven million dollars ($7,000,000) of
aggregate principal amount of its 5% Convertible Promissory Notes due 2012, in the
form attached to such Convertible Note Agreement.

	 
	 	 	 	5.1.2. Milestone Payments. LICENSEE shall notify PFIZER as soon as practicable
upon achievement of each Milestone. In further consideration of the licenses and
rights granted to LICENSEE, within fifteen (15) days upon achievement of each
Milestone set forth below, LICENSEE shall pay to PFIZER the corresponding
non-creditable and non-refundable milestone payment (each, a “Milestone Payment”).

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	 	(i)	 	Development and Regulatory Milestones.

	 	 	 	 	 	 
	 
	 	DEVELOPMENT	 	 	MILESTONE	 
	 	AND REGULATORY MILESTONES	 	 	PAYMENT	 
	 	PAYABLE UNDER THE	 	 	 	 
	 	COLLABORATION AND LICENSE AGREEMENT	 	 	 	 
	 	Commencement of Pivotal Registration Study

	 	 	US$***	 
	 	Acceptance for filing by the FDA of an NDA for the first Indication

	 	 	US$***	 
	 	Acceptance for filing by the EMA of an MAA for the first Indication

	 	 	US$***	 
	 	Grant of the first NDA approval of a Product in the USA

	 	 	US$***	 
	 	Granting of the first European approval located in a country located in the European Union

	 	 	US$***	 
	 

	 	(ii)	 	Product Approval and Sales Milestones

	 	 	 	 	 	 
	 
	 	PRODUCT APPROVAL	 	 	MILESTONE	 
	 	AND SALES MILESTONES	 	 	PAYMENT	 
	 	Upon FDA approval of an NDA for 1st Indication in US

	 	 	US$***	 
	 	Upon EMA approval of an MAA for 1st Indication in EU

	 	 	US$***	 
	 	Upon FDA approval of an NDA for a 2nd Indication in US

	 	 	US$***	 
	 	Upon EMA approval of an MAA for a 2nd Indication in EU

	 	 	US$***	 
	 	Upon FDA approval of an NDA for a 3rd Indication in US

	 	 	US$***	 
	 	Upon EMA approval of an MAA for a 3rd Indication in EU

	 	 	US$***	 
	 	The completion of the Calendar Year in which Net Sales first
exceed $***

	 	 	US$***	 
	 	The completion of the Calendar Year in which Net Sales first
exceed $***

	 	 	US$***	 
	 	The completion of the Calendar Year in which Net Sales first
exceed $***

	 	 	US$***	 
	 

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	 	(b)	 	As used, herein:

	 	(i)	 	“Commencement” when used with respect to a
clinical trial, means the first dosing of the first patient for such
trial.

	 
	 	(ii)	 	“Pivotal Registration Study” means a clinical
study designed to provide the efficacy data required to enable an NDA
to be filed in the USA or an MAA to be filed in the EU.

	 	(c)	 	For the avoidance of doubt: (i) each Milestone Payment shall be
payable only once upon achievement of the applicable Milestone; and (ii)
satisfaction of a Milestone by a sublicensee or assignee of, or Third Party
retained by, LICENSEE or its Affiliates shall be deemed to have been satisfied
by LICENSEE for purposes of this Section 5.1.2.

	 	5.1.3. Royalty Payments.

	 	(a)	 	In consideration of the licenses and rights granted to LICENSEE
hereunder, LICENSEE shall pay to PFIZER the royalties of *** percent (*** %) on
Net Sales during the Royalty Term.

	 
	 	(b)	 	In addition, through the payments made to PFIZER below in this
sub-clause 5.1.3(b) LICENSEE shall assume responsibility for payment of the
following royalties under the Collaboration and License Agreement:

	 
	 	 	 	*** % of Net Sales in any Calendar Year up to $*** Million;

	 
	 	 	 	*** % of Net Sales in any Calendar Year over $*** Million and up to $***
Million; and

	 
	 	 	 	*** % of Net Sales in any Calendar Year over $*** Million

	 
	 	 	 	For the purposes of this sub-clause 5.1.3(b) Net Sales shall have the
meaning set out in the Collaboration and License Agreement.

	 
	 	(c)	 	LICENSEE shall pay to PFIZER the applicable Royalties set out
in sub-sections (a) and (b) above (collectively “Royalties”) within thirty (30)
days following the expiration of each Calendar Quarter after the date of the
First Commercial Sale. Royalties will be payable on a country by country basis
commencing as of the First Commercial Sale of a Product in each country until
expiration of the Royalty Term for such Product in each country.

	 
	 	(d)	 	If LICENSEE (a) reasonably determines in good faith that, in
order to avoid infringement of any patent not licensed hereunder, it is
reasonably necessary to obtain a license from a Third Party in order to sell or
offer for sale a Product in a country in the Territory and to pay a royalty
under such license (including in connection with the settlement of a patent
infringement claim),

 

- 14 -

 

	 	 	 	or (b) shall be subject to a final court or other binding order or ruling
requiring any payments, including the payment of a royalty to a Third Party
patent holder in respect of sales of any Product in a country in the
Territory, then*** of such third party royalties shall be deductible from
the amount of LICENSEE’s royalty payments under Section 5.1.3 (a) with
respect to Net Sales for such Product in such country, provided, however,
that in no event will a deduction, or deductions, under this Section 5.1(d),
in the aggregate, reduce any royalty payment made by LICENSEE under Section
5.1.3(a) in respect of Net Sales of such Product by more than ***.

	 
	 	(e)	 	All payments shall be accompanied by a report that includes
reasonably detailed information regarding a total monthly sales calculation of
gross sales of Products on a country by country basis and Net Sales of Product
(including all Deductions) and all Royalties payable to PFIZER for the
applicable Calendar Quarter (including any foreign exchange rates employed).

	 	 	 	5.1.4. Other Payments. LICENSEE shall pay to PFIZER any other amounts due under
this Agreement within thirty (30) days following receipt of invoice.

	 
	 	 	 	5.1.5. Late Payments. Any late payments shall bear interest, to the extent
permitted by law, at five percent (5%) above the Prime Rate of interest as reported
in the Wall Street Journal on the date payment is due.

	 
	 	5.2.	 	Payment Method.

	 
	 	 	 	5.2.1. With respect to Net Sales invoiced in U.S. dollars, the Net Sales and the
amounts due for Royalties hereunder will be expressed in U.S. dollars. With respect
to Net Sales invoiced in a currency other than U.S. dollars, payments will be
calculated based on currency exchange rates for the Calendar Quarter for which
remittance is made for Royalties. Conversion of Net Sales recorded in local
currencies to U.S. dollars will be performed in a manner consistent with PFIZER’s
normal practices used to prepare its audited financial statements for external
reporting purposes, provided that such practices use a widely accepted source of
published exchange rates. For purposes of calculating the Net Sales thresholds set
forth in Sections 5.1.2 and 5.1.3(b), the aggregate Net Sales with respect to each
Calendar Quarter within a Calendar Year will be calculated based on the currency
exchange rates for the Calendar Quarter in which such Net Sales occurred, in a
manner consistent with the exchange rate procedures set forth in the immediately
preceding sentence.

	 
	 	 	 	5.2.2. All payments from LICENSEE to PFIZER shall be made by wire transfer in U.S.
Dollars to the credit of such bank account as may be designated by PFIZER in
writing to LICENSEE. Any payment which falls due on a date which is not a Business
Day may be made on the next succeeding Business Day.

 

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	 	5.3.	 	Taxes.

	 
	 	 	 	5.3.1. It is understood and agreed between the Parties that any amounts payable by
LICENSEE to PFIZER hereunder are exclusive of any and all applicable sales, use,
VAT, GST, excise, property, and other taxes, levies, duties or fees (collectively,
“Taxes”) which shall be added thereon as applicable. LICENSEE shall be responsible
for billing and collection from its customers and remitting to the appropriate
taxing authority any and all Taxes which it is required to collect or remit. Each
Party shall be responsible for its own income and property taxes.

	 
	 	 	 	5.3.2. LICENSEE may withhold from payments due to PFIZER amounts for payment of any
withholding tax that is required by law to be paid to any taxing authority with
respect to such payments. LICENSEE will provide PFIZER all relevant documents and
correspondence, and will also provide to PFIZER any other cooperation or assistance
on a reasonable basis as may be necessary to enable PFIZER to claim exemption from
such withholding taxes and to receive a refund of such withholding tax or claim a
foreign tax credit. LICENSEE will give proper evidence from time to time as to the
payment of any such tax. The Parties will cooperate with each other in seeking
deductions under any double taxation or other similar treaty or agreement from time
to time in force. Such cooperation may include LICENSEE making payments from a
single source in the U.S., where possible. Apart from any such permitted
withholding and those deductions expressly included in the definition of Net Sales,
the amounts payable LICENSEE to PFIZER hereunder will not be reduced on account of
any taxes, charges, duties or other levies. Notwithstanding the foregoing, if
LICENSEE is required to make a payment to PFIZER subject to a deduction of
withholding tax (a “LICENSEE Withholding Tax Action”) then, the sum payable by
LICENSEE (in respect of which such deduction or withholding is required to be made)
shall be increased to the extent necessary to ensure that PFIZER receives a sum
equal to the sum which it would have received had no such LICENSEE Withholding Tax
Action occurred, if (i) such withholding or deduction obligation arises as a direct
result of any action by LICENSEE, including any assignment or sublicense, or any
failure on the part of LICENSEE to comply with applicable tax laws or filing or
record retention requirements, that has the effect of modifying the tax treatment
of the Parties hereto, and (ii) such tax cannot be recovered by PFIZER or credited
to PFIZER.

	 
	 	 	 	5.3.3. The Parties agree to cooperate and produce on a timely basis any tax forms
or reports, including an IRS Form W-8BEN, reasonably requested by the other Party
in connection with any payment made by LICENSEE to PFIZER under this Agreement.

	6.	 	RECORDS; AUDIT RIGHTS

	 	6.1.	 	Relevant Records.

	 
	 	 	 	6.1.1. Relevant Records. LICENSEE shall keep, and will cause each of its
Affiliates or sublicensees, as applicable, to keep, accurate books and records of
accounting for the purpose of calculating all Milestone Payments and Royalties

- 16 -

 

	 	 	 	(collectively, “Fees”) (collectively, “Relevant Records”). For the three (3) years
following the end of the Calendar Year to which each will pertain, such Relevant
Records will be kept by LICENSEE or such Affiliate or sublicensee at each of their
principal place of business.

	 
	 	 	 	6.1.2. Audit Request. At the request of PFIZER, LICENSEE shall, and, shall cause
each of its Affiliates or sublicensees to, permit PFIZER and its representatives
(including an independent auditor), at reasonable times and upon reasonable notice,
to examine the Relevant Records. Such examinations may not (i) be conducted for
any Calendar Year more than three (3) years after the end of such year, (ii) be
conducted more than once in any twelve (12) month period or (iii) be repeated for
any Calendar Year. Such audit shall be requested in writing at least seven (7)
days in advance, and shall be conducted during LICENSEE’s normal business hours and
otherwise in manner that minimizes any interference to LICENSEE’s business
operations.

	 
	 	 	 	6.1.3. Audit Fees and Expenses. PFIZER shall bear any and all fees and expenses it
may incur in connection with any such audit of the Relevant Records; provided,
however, in the event an audit reveals an underpayment of LICENSEE of more than
five percent (5%) as to the period subject to the audit, LICENSEE shall reimburse
PFIZER for any reasonable and documented out-of-pocket costs and expenses of the
audit within thirty (30) days after receiving invoices thereof.

	 
	 	 	 	6.1.4. Payment of Deficiency. Unless disputed as described below, if such audit
concludes that additional payments were owed or that excess payments were made
during such period, LICENSEE will pay the additional royalties or amounts or PFIZER
will reimburse such excess payments, with interest from the date originally due as
provided in Section 5.1.7, within sixty (60) days after the date on which a written
report of such audit is delivered to the Parties. In the event of a dispute
regarding such Relevant Records, the Parties will work in good faith to resolve the
disagreement. If the Parties are unable to reach a mutually acceptable resolution
of any such dispute within thirty (30) days, such dispute will be resolved in
accordance with Section 16.3.2. PFIZER shall treat all information subject to
review under this Section 6.1 in accordance with the confidentiality provisions of
Section 9 and the Parties will cause any auditor or arbitrator to enter into a
reasonably acceptable confidentiality agreement with LICENSEE obligating such firm
to retain all such financial information in confidence pursuant to such
confidentiality agreement.

	7.	 	INTELLECTUAL PROPERTY RIGHTS

	 	7.1.	 	Pre-existing IP. Subject only to the rights expressly granted to the other
Party under this Agreement, each Party shall retain all rights, title and interests in
and to any Intellectual Property Rights that are owned, licensed or sublicensed by such
Party prior to or independent of this Agreement.

	 
	 	7.2.	 	Developed IP. LICENSEE shall own all rights, title and interests in and to any
Intellectual Property Rights that are both: (a) related to the Product, and (b)

- 17 -

 

	 	 	 	conceived solely by LICENSEE, its Affiliates or sublicensees following the Effective
Date (collectively, “Developed IP”).

	 
	 	7.3.	 	Patent Prosecution and Maintenance of Patent Rights

 

	 	(a)	 	LICENSEE shall be responsible for filing, prosecuting
(including in connection with any reexaminations, oppositions and the like) and
maintaining the Patent Rights in the Territory. LICENSEE shall file, prosecute
and maintain the Patent Rights using qualified outside patent counsel and
foreign patent associates selected by LICENSEE; provided that
LICENSEE identifies such counsel for PFIZER in advance and PFIZER consents to
such counsel (such consent not to be unreasonably withheld or delayed).
LICENSEE shall be responsible for all costs and expenses in connection with
such filing, prosecution and maintenance; provided that if
LICENSEE provides PFIZER with a written request to abandon, or not file a
patent application included in, any of the Patent Rights at least sixty (60)
days in advance of the relevant deadline: (a) LICENSEE shall no longer be
responsible for such costs and expenses relating to filing, prosecuting and
maintaining (as applicable) such Patent Right; (b) PFIZER may, or may allow a
Third Party to, file, prosecute and maintain (in its sole discretion) such
Patent Right; (c) upon PFIZER’s request, LICENSEE shall promptly provide all
files related to filing, prosecuting and maintaining such Patent Right to
counsel designated by PFIZER; and (d) the term “Patent Rights” automatically
shall be modified to exclude such Patent Right as of the date LICENSEE provides
such written request to PFIZER.

	 
	 	(b)	 	Upon the written request of PFIZER, LICENSEE shall provide
PFIZER with (1) material correspondence with the relevant patent offices
pertaining to LICENSEE’s prosecution of the Patent Rights and (2) a report
detailing the status of all Patent Rights. Upon the written request of PFIZER,
LICENSEE shall provide PFIZER a reasonable opportunity to review and comment on
proposed material submissions to any patent office with respect to the Patent
Rights prior to submission and LICENSEE shall reasonably consider any comments
provided by PFIZER.

	8.	 	ACTUAL OR THREATENED INFRINGEMENT, DISCLOSURE OR MISAPPROPRIATION.

 

	 	(a)	 	Notification. Each Party shall promptly notify the
other Party in writing of its becoming aware of (a) any actual or threatened
infringement, misappropriation or other violation or challenge to the validity,
scope or enforceability by a Third Party of any Licensed Technology (“Third
Party Infringement”) or (b) initiation by a Third Party of an opposition
proceeding against any Patent Rights, or initiation by LICENSEE of an
opposition against a Third Party or any allegation by a Third Party that
Intellectual Property owned by it is infringed, misappropriated or violated by
the Development, Commercialization and/or Use of any Product (“Defense
Action”).

- 18 -

 

	 	(b)	 	LICENSEE shall have the first right (but not the obligation),
at its own expense, to control enforcement of the Licensed Technology against
any Third Party Infringement. Prior to commencing involvement in any such
suit, action or proceeding, LICENSEE shall consult with PFIZER and shall
consider PFIZER’s recommendations regarding the proposed suit, action or
proceeding, except to the extent delay would result in the loss of rights by
LICENSEE or PFIZER. LICENSEE shall give PFIZER timely notice of any proposed
settlement of any such suit, action or proceeding that LICENSEE controls and
LICENSEE shall not settle, stipulate to any facts or make any admission with
respect to any Third Party Infringement without PFIZER’s prior written consent
(not to be unreasonably withheld or delayed) if such settlement, stipulation or
admission would: (a) adversely affect the validity, enforceability or scope, or
admit non-infringement, of any of the Licensed Technology; (b) give rise to
liability of PFIZER or its Affiliates; (c) grant to a Third Party a license or
covenant not to sue under, or with respect to, any Intellectual Property
Controlled by PFIZER (including the Licensed Technology); or (d) otherwise
impair PFIZER’s, any of its Affiliates’ rights in any Licensed Technology or
PFIZER’s or any of its Affiliates’ rights in this Agreement.

	 
	 	(c)	 	PFIZER shall have the right (but not the obligation) to
control, enforcement of the Licensed Technology against any Third Party
Infringement if LICENSEE provides PFIZER with written notice that it is not
exercising its right to control such enforcement or if such Third Party does
not desist such Third Party Infringement or LICENSEE fails to initiate, or file
the relevant response to (as applicable), a suit, action or proceeding with
respect to such Third Party Infringement upon the earlier of: (a) expiration
of the ninety (90) day period following first receipt by either Party of notice
from the other Party of such Third Party Infringement or (b) fifteen (15) prior
to the deadline for filing, or filing the applicable response to (as
applicable), such suit, action or proceeding (including suits, actions or
proceedings based on a Third Party’s filing of a Paragraph IV Certification
under 21 CFR §314.94(a)(12)(i)(A)(4)).

	 
	 	(d)	 	Notwithstanding anything to the contrary herein, the Party that
is not controlling the suit, action or proceeding pertaining to enforcement of
the Licensed Technology against Third Party Infringement as described in this
Section 8 may, at its sole discretion and expense (subject to Section 8(f)),
join as a party to such suit, action or proceeding; provided
that such Party shall join as a party to such suit, action or
proceeding upon the reasonable request and expense of the Party controlling
such action if necessary for standing purposes. The Party that is not
controlling such a suit, action or proceeding shall have the right to be
represented by counsel (which shall act in an advisory capacity only, except
for matters solely directed to such Party) of its own choice and at its own
expense (subject to Section 8(f)) in any such suit, action or proceeding.

- 19 -

 

	 	(e)	 	Any and all recoveries resulting from a suit, action or
proceeding relating to a claim of Third Party Infringement shall first be
applied to reimburse each Party’s costs and expenses in connection with such
suit, action or proceeding, with any remaining recoveries retained by the Party
that controlled such suit, action or proceeding pursuant to this Section 8(e)
(the “Remaining Recoveries”). Notwithstanding the foregoing, LICENSEE
shall pay PFIZER a Royalty in accordance with Section 5.1.3 on the Remaining
Recoveries retained or received by LICENSEE as if such Remaining Recoveries
retained or received by LICENSEE were Net Sales in the Calendar Year in which
the recoveries were retained or received.

	 
	 	(f)	 	Upon LICENSEE’s request, PFIZER shall reasonably cooperate with
LICENSEE, to the extent necessary to defend LICENSEE or any sublicensee of
LICENSEE in a Defense Action related to LICENSEE’s or its sublicensee’s Use of
the Compound (as such Compound exists as of the Effective Date) or the Know-How
(in accordance with Section 2). LICENSEE shall have all authority with respect
to any Defense Action, including the right to exclusive control of the defense
of any such suit, action or proceeding and the exclusive right to compromise,
litigate, settle or otherwise dispose of any such suit, action, or proceeding;
provided that LICENSEE shall keep PFIZER timely informed of the
proceedings and filings, and provide PFIZER with copies of all material
communications, pertaining to each Defense Action and LICENSEE shall not
settle, stipulate to any facts or make any admission with respect to any
Defense Action without PFIZER’s prior written consent (not to be unreasonably
withheld or delayed) if such settlement, stipulation or admission would (a)
adversely affect the validity, enforceability or scope, or admit infringement,
of any of the Licensed Technology; (b) give rise to liability of PFIZER or its
Affiliates; (c) grant to a Third Party a license or covenant not to sue under,
or with respect to, any Intellectual Property Controlled by PFIZER (including
the Licensed Technology); or (d) otherwise impair PFIZER’ or any of its
Affiliates’ rights in any Licensed Technology or PFIZER’s or any of its
Affiliates’ rights in this Agreement.

	9.	 	CONFIDENTIALITY

	 	9.1.	 	Definition. “Confidential Information” means the terms and provisions of this
Agreement and other proprietary information and data of a financial, commercial or
technical nature that the disclosing Party or any of its Affiliates has supplied or
otherwise made available to the other Party or its Affiliates, which are: (a) disclosed
in writing or (b) if disclosed orally, summarized in writing and provided to the
receiving Party after disclosure. All Know-How shall be considered PFIZER’s
Confidential Information

	 
	 	9.2.	 	Obligations. The receiving Party shall protect all Confidential Information
against unauthorized disclosure to Third Parties with the same degree of care as the
receiving Party uses for its own similar information, but in no event less than a
reasonable degree of care. The receiving Party may disclose the Confidential

- 20 -

 

	 	 	 	Information to its Affiliates, and their respective directors, officers, employees,
subcontractors, sublicensees, consultants, attorneys, accountants, banks and
investors (collectively, “Recipients”) who have a need-to-know such information for
purposes related to this Agreement, provided that the receiving Party shall hold
such Recipients to written obligations of confidentiality with terms and conditions
at least as restrictive as those set forth in this Agreement.

	 
	 	9.3.	 	Exceptions.

	 
	 	 	 	9.3.1. The obligations under this Section 9 shall not apply to any information to
the extent the receiving Party can demonstrate by competent evidence that such
information:

	 	(a)	 	is (at the time of disclosure) or becomes (after the time of
disclosure) known to the public or part of the public domain through no breach
of this Agreement by the receiving Party or any Recipients to whom it disclosed
such information;

	 
	 	(b)	 	was known to, or was otherwise in the possession of, the
receiving Party prior to the time of disclosure by the disclosing Party;

	 
	 	(c)	 	is disclosed to the receiving Party on a non-confidential basis
by a Third Party who is entitled to disclose it without breaching any
confidentiality obligation to the disclosing Party; or

	 
	 	(d)	 	is independently developed by or on behalf of the receiving
Party or any of its Affiliates, as evidenced by its written records, without
use or access to the Confidential Information.

	 	 	 	9.3.2. The restrictions set forth in this Section 9 shall not apply to any
Confidential Information that the receiving Party is required to disclose under
Applicable Laws or a court order or other governmental order or to enforce any
Patent Rights under Section 8, provided that the receiving Party: (a) provides the
disclosing Party with prompt notice of such disclosure requirement if legally
permitted, (b) affords the disclosing Party an opportunity to oppose or limit, or
secure confidential treatment for such required disclosure and (c) if the
disclosing Party is unsuccessful in its efforts pursuant to subsection (b),
discloses only that portion of the Confidential Information that the receiving
Party is legally required to disclose as advised by the receiving Party’s legal
counsel.

	 
	 	 	 	9.3.3. In the event that PFIZER wishes to assign, pledge or otherwise transfer its
rights to receive some or all of the Milestone Payments and Royalties payable
hereunder, PFIZER may disclose to a Third Party Confidential Information of
LICENSEE in connection with any such proposed assignment, provided that PFIZER
shall hold such Third Parties to written obligations of confidentiality with terms
and conditions at least as restrictive as those set forth in this Agreement.

	 
	 	 	 	9.3.4. In the event that LICENSEE wishes to enter into a sublicense in accordance
with Section 2, LICENSEE may disclose to a Third Party Confidential

- 21 -

 

	 	 	 	Information of PFIZER in connection with any such proposed sublicense, provided
that LICENSEE shall hold such Third Parties to written obligations of
confidentiality with terms and conditions at least as restrictive as those set
forth in this Agreement.

	 
	 	9.4.	 	Right to Injunctive Relief. Each Party agrees that breaches of this Section 9
may cause irreparable harm to the other Party and shall entitle such other Party, in
addition to any other remedies available to it (subject to the terms of this
Agreement), the right to seek injunctive relief enjoining such action.

	 
	 	9.5.	 	Ongoing Obligation for Confidentiality. Upon expiration or termination of this
Agreement, the receiving Party shall, and shall cause its Recipients to, destroy,
delete or return (as requested by the disclosing Party) any Confidential Information of
the disclosing Party, except for one copy which may be retained in its confidential
files for archive purposes.

	10.	 	REPRESENTATIONS, WARRANTIES AND COVENANTS

	 	10.1.	 	Representations and Warranties by Each Party. Each Party represents and
warrants to the other Party as of the Effective Date that:

	 	(a)	 	it is a corporation duly organized, validly existing, and in
good standing under the laws of its jurisdiction of formation;

	 
	 	(b)	 	it has full corporate power and authority to execute, deliver,
and perform under this Agreement, and has taken all corporate action required
by Applicable Law and its organizational documents to authorize the execution
and delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement;

	 
	 	(c)	 	this Agreement constitutes a valid and binding agreement
enforceable against it in accordance with its terms;

	 
	 	(d)	 	all consents, approvals and authorizations from all
governmental authorities or other Third Parties required to be obtained by such
Party in connection with this Agreement have been obtained; and

	 
	 	(e)	 	the execution and delivery of this Agreement and all other
instruments and documents required to be executed pursuant to this Agreement,
and the consummation of the transactions contemplated hereby do not and shall
not: (i) conflict with or result in a breach of any provision of its
organizational documents, (ii) result in a breach of any agreement to which it
is a party that would impair the performance of its obligations hereunder; or
(iii) violate any Applicable Law.

	 	10.2.	 	Representations and Warranties by PFIZER.

	 
	 	 	 	10.2.1. PFIZER represents and warrants to LICENSEE as of the Effective Date that:

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	 	(a)	 	PFIZER Controls the Patent Rights and the Know-How, and is
entitled to grant the licenses specified herein; PFIZER has not caused any
Patent Rights to be subject to any liens or encumbrances and PFIZER has not
granted to any Third Party any rights or licenses under any of the Patent
Rights or Know-How that would conflict with the licenses granted to Licensee
hereunder; and PFIZER does not hold Control any patents that dominate the
Patent Rights;

	 
	 	(b)	 	PFIZER is not subject to any royalty or similar payment
obligation to any Third Party with respect to the grant of rights to PFIZER to
practice the Licensed Technology, except as set forth in the Collaboration and
License Agreement (a true copy of which, including all amendments, has been
provided to LICENSEE). The Collaboration and License Agreement remains in full
force and effect and, to PFIZER’s Knowledge, Cancer Research Technology Limited
is not in material breach under the Collaboration and License Agreement. PFIZER
has paid all amounts due and payable under the Collaboration and License
Agreement to the extent accrued on or before the Effective Date and is not in
material breach of the Collaboration and License Agreement;

	 
	 	(c)	 	to its Knowledge, the Patent Rights have been procured from the
respective Patent offices in accordance with Applicable Law;

	 
	 	(d)	 	to its Knowledge, PFIZER has not received any communication
from a Third Party alleging that the Use of the Product in the Field within the
Territory infringes, misappropriates or otherwise violates the Intellectual
Property Rights of a Third Party;

	 
	 	(e)	 	to its Knowledge, there is no claim pending or threatened by
PFIZER alleging that a Third Party is or was infringing, misappropriating or
otherwise violating the Licensed Technology in the Field within the Territory;
and

	 
	 	(f)	 	PFIZER has not, up through and including the Effective Date,
Knowingly withheld any material information, including reports of Adverse Event
Experiences and warning letters from Regulatory Authorities, in PFIZER’s
possession from LICENSEE in connection with its due diligence relating to the
Compound, Products, this Agreement and the underlying transaction. To PFIZER’s
Knowledge, the clinical data related to Compound or Product that PFIZER has
provided to LICENSEE prior to the Effective Date was, when access was provided
to LICENSEE, up-to-date and accurate in all material respects and PFIZER has
provided LICENSEE with any material updates to such clinical data that have
occurred since the time such access was provided to LICENSEE.

	 	 	 	10.2.2. As used in Section 10.2.1, “Knowledge” means first hand and actual
knowledge of the officers of PFIZER and is not meant to require or imply that any
particular inquiry or investigation has been undertaken including, without
limitation, obtaining any type of search (independent of that performed by the

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	 	 	 	actual governmental authority during the normal course of patent prosecution, as
applicable, in a jurisdiction) or opinion of counsel.

	 
	 	10.3.	 	Covenants and Representations and Warranties by LICENSEE. LICENSEE represents
warrants and covenants to PFIZER as of the Effective Date that:

	 	(a)	 	it shall, and shall ensure all Third Parties that it engages,
comply with all Applicable Law with respect to the performance of its
obligations hereunder.

	 
	 	(b)	 	Without limiting the generality of Section 10.3(a), LICENSEE
shall comply with the U.S. Foreign Corrupt Practices Act of 1977 (as modified
or amended). LICENSEE represents warrants and covenants that it has not and
will not directly or indirectly offer or pay, or authorize such offer or
payment of, any money, or transfer anything of value, to improperly seek to
influence any Government Official. If LICENSEE is itself a Government
Official, LICENSEE represents warrants and covenants that it has not accepted,
and will not accept in the future, such a payment or transfer. As used herein,
“Governmental Official” means: (a) any elected or appointed government official
(e.g., a member of a ministry of health), (b) any employee or person acting for
or on behalf of a government official, agency, or enterprise performing a
governmental function, (c) any political party officer, employee, or person
acting for or on behalf of a political party or candidate for public office,
(d) an employee or person acting for or on behalf of a public international
organization, or (e) any person otherwise categorized as a government official
under local law. “Government” is meant to include all levels and subdivisions
of non-U.S. governments (i.e., local, regional, or national and administrative,
legislative, or executive).

	 	10.4.	 	No Other Warranties. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 10, NEITHER
PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO WARRANTIES OF TITLE,
NON-INFRINGEMENT, VALIDITY, ENFORCEABILITY, MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. ANY INFORMATION PROVIDED BY PFIZER OR ITS AFFILIATES IS MADE
AVAILABLE ON AN “AS IS” BASIS WITHOUT WARRANTY WITH RESPECT TO COMPLETENESS, COMPLIANCE
WITH REGULATORY STANDARDS OR REGULATIONS OR FITNESS FOR A PARTICULAR PURPOSE OR ANY
OTHER KIND OF WARRANTY WHETHER EXPRESS OR IMPLIED.

	11.	 	INDEMNIFICATION

	 	11.1.	 	Indemnification by LICENSEE. LICENSEE agrees to indemnify, hold harmless and
defend PFIZER and its Affiliates, and their respective officers, directors, employees,
contractors, agents and assigns (collectively, “PFIZER Indemnitees”), from and against
any Claims arising or resulting from: (a) the Development of a Product by LICENSEE, its
Affiliates, subcontractors or sublicensees, (b) the

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	 	 	 	Commercialization of a Product by LICENSEE, its Affiliates, subcontractors or
sublicensees, (c) the negligence, recklessness or wrongful intentional acts or
omissions of LICENSEE, its Affiliates, subcontractors or sublicensees, (d) breach by
LICENSEE of any representation, warranty or covenant as set forth in this Agreement
or (e) breach by LICENSEE of the scope of the license set forth in Section 2.1. As
used herein, “Claims” means collectively, any and all Third Party demands, claims,
actions and proceedings (whether criminal or civil, in contract, tort or otherwise)
for losses, damages, liabilities, costs and expenses (including reasonable
attorneys’ fees).

	 
	 	11.2.	 	Indemnification Procedure. In connection with any Claim for which PFIZER
seeks indemnification from LICENSEE pursuant to this Agreement, PFIZER shall: (a) give
LICENSEE prompt written notice of the Claim; provided, however, that failure to provide
such notice shall not relieve LICENSEE from its liability or obligation hereunder,
except to the extent of any material prejudice as a direct result of such failure; (b)
cooperate with LICENSEE, at LICENSEE’s expense, in connection with the defense and
settlement of the Claim; and (c) permit LICENSEE to control the defense and settlement
of the Claim; provided, however, that LICENSEE may not settle the Claim without
PFIZER’s prior written consent, which shall not be unreasonably withheld or delayed, in
the event such settlement materially adversely impacts PFIZER’s rights or obligations.
Further, PFIZER shall have the right to participate (but not control) and be
represented in any suit or action by advisory counsel of its selection and at its own
expense.

	12.	 	LIMITATION OF LIABILITY

	 	12.1.	 	Consequential Damages Waiver. EXCEPT FOR A BREACH OF SECTION 9 OR OBLIGATIONS
ARISING UNDER SECTION 11, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT OR
CONSEQUENTIAL, DAMAGES, INCLUDING DAMAGES FOR LOST PROFITS OR LOST REVENUES REGARDLESS
OF WHETHER IT HAS BEEN INFORMED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH DAMAGES OR THE
TYPE OF CLAIM, CONTRACT OR TORT (INCLUDING NEGLIGENCE).

	 	12.2.	 	Liability Cap. EXCEPT FOR PFIZER’S BREACH OF SECTION 9, IN NO EVENT SHALL
PFIZER’S LIABILITY FOR DAMAGES IN CONNECTION WITH THIS AGREEMENT EXCEED THE CAP,
REGARDLESS OF WHETHER PFIZER HAS BEEN INFORMED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH
DAMAGES OR THE TYPE OF CLAIM, CONTRACT OR TORT (INCLUDING NEGLIGENCE). “Cap” means ***
Dollars ($***).

	13.	 	TERM; TERMINATION

	 	13.1.	 	Term. The term of this Agreement shall commence as of the Effective Date and
shall expire upon the last-to-expire Patent Right in every country within the Territory
or ten (10) years from the First Commercial Sale of the last Product to be introduced
in any country within the Territory, whichever is later.

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	 	13.2.	 	Termination for Cause. Each Party shall have the right, without prejudice to
any other remedies available to it at law or in equity, to terminate this Agreement in
the event the other Party breaches any of its material obligations hereunder and fails
to cure such breach within sixty (60) days of receiving notice thereof;
provided, however, if such breach is capable of being cured, but cannot
be cured within such sixty (60) day period, and the breaching Party initiates actions
to cure such breach within such period and thereafter diligently pursues such actions,
the breaching Party shall have such additional period as is reasonable to cure such
breach, but in no event will such additional period exceed sixty (60) days. Any
termination by a Party under this Section 13.2 shall be without prejudice to any
damages or other legal or equitable remedies to which it may be entitled from the other
Party. For the avoidance of doubt, LICENSEE’s failure to use Commercially Reasonable
Efforts to Develop and Commercialize the Product shall constitute a material breach by
LICENSEE under this Agreement.

	 	13.3.	 	Termination by LICENSEE. LICENSEE will have the right to terminate this
Agreement in full ninety (90) days after delivery of written notice to PFIZER if the
Board of Directors of LICENSEE concludes due to scientific, technical, regulatory or
commercial reasons, including (i) safety or efficacy concerns, including adverse events
of the Product, (ii) concerns relating to the present or future marketability or
profitability of the Product, (iii) reasons related to Patent coverage or (iv) existing
and anticipated competition, renders the Development of the Product or the
Commercialization of the Product no longer commercially practicable for LICENSEE.
Notwithstanding the foregoing, LICENSEE shall not have the right to terminate the
Agreement under this Section 13.3 prior to the completion of the trial activities
specified in Section 4.1.2 other than for reasons of safety or efficacy as specified in
the protocols for such trial activities.

	 	13.4.	 	Termination for a Bankruptcy Event. Each Party shall have the right to
terminate this Agreement in the event of a Bankruptcy Event with respect to the other
Party. “Bankruptcy Event” means the occurrence of any of the following: (a) the
institution of any bankruptcy, receivership, insolvency, reorganization or other
similar proceedings by or against a Party under any bankruptcy, insolvency, or other
similar law now or hereinafter in effect, including any section or chapter of the
United States Bankruptcy Code, as amended or under any similar laws or statutes of the
United States or any state thereof (the “Bankruptcy Code”), where in the case of
involuntary proceedings such proceedings have not been dismissed or discharged within
ninety (90) days after they are instituted, (b) the insolvency or making of an
assignment for the benefit of creditors or the admittance by a Party of any involuntary
debts as they mature, (c) the institution of any reorganization, arrangement or other
readjustment of debt plan of a Party not involving the Bankruptcy Code, (d) appointment
of a receiver for all or substantially all of a Party’s assets, or (e) any corporate
action taken by the board of directors of a Party in furtherance of any of the
foregoing actions.

	 	13.5.	 	Effect of Termination or Expiration.

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	 	 	 	13.5.1. Upon termination or expiration of this Agreement, LICENSEE shall pay to
PFIZER all amounts due to PFIZER as of the effective date of termination or
expiration within thirty (30) days following the effective date of termination or
expiration.

	 
	 	 	 	13.5.2. Upon expiration of this Agreement, PFIZER hereby grants to LICENSEE a
royalty-free right and license to use the Know-How for the purpose of the
Development and Commercialization of the Product in the Field within the Territory.

	 
	 	 	 	13.5.3. Subject to Section 13.5.5(d), upon termination of this Agreement, LICENSEE
shall have the right to sell its remaining inventory of Product following the
termination of this Agreement so long as LICENSEE has fully paid, and continues to
fully pay when due, any and all Royalties and Milestone Payments owed to PFIZER,
and LICENSEE otherwise is not in material breach of this Agreement.

	 
	 	 	 	13.5.4. A termination of this Agreement, other than a termination under Section
13.3, will not automatically terminate any sublicense granted by LICENSEE pursuant
to Section 2.2 with respect to a non-Affiliated sublicensee, provided that (i) such
sublicensee is not then in breach of any provision of this Agreement or the
applicable sublicense agreement, (ii) PFIZER will have the right to step into the
role of LICENSEE as sublicensor, with all the rights that LICENSEE had under such
sublicense prior to termination of this Agreement (including the right to receive
any payments to LICENSEE by such Sublicensee that accrue from and after the date of
the termination of this Agreement) and (iii) PFIZER will only have those
obligations to such Sublicensee as PFIZER had to LICENSEE hereunder. LICENSEE
shall include in any sublicense agreement a provision in which said sublicensee
acknowledges its obligations to PFIZER hereunder and the rights of PFIZER to
terminate this Agreement with respect to any sublicensee for material breaches of
this Agreement by such sublicensee. The failure of LICENSEE to include in a
sublicense agreement the provision referenced in the immediately preceding sentence
will render the affected sublicense void ab initio.

	 
	 	 	 	13.5.5. With the exception of termination of this Agreement by LICENSEE pursuant to
Section 13.2, upon termination of this Agreement:

	 	(a)	 	LICENSEE hereby grants to PFIZER a non-exclusive, fully
paid-up, royalty-free, worldwide, transferable, perpetual and irrevocable
license, with the right to sublicense, to Use any and all Developed IP for Use
of the Product.

	 
	 	(b)	 	To the extent permitted by applicable Regulatory Authorities,
LICENSEE shall: (i) transfer to PFIZER all Regulatory Filings and Regulatory
Approvals held by LICENSEE with respect to the Product, and (ii) to the extent
subsection (i) is not permitted by the applicable Regulatory Authority, permit
PFIZER to cross-reference and rely upon any Regulatory Approvals and Regulatory
Filings filed by LICENSEE with respect to the Product.

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	 	(c)	 	LICENSEE, if requested in writing by PFIZER, shall provide any
and all (i) material correspondence with the relevant patent offices pertaining
to the LICENSEE’s prosecution of the Patent Rights to the extent not previously
provided to PFIZER during the course of the Agreement and (ii) a report
detailing the status of all Patent Rights at the time of termination or
expiration.

	 
	 	(d)	 	Effective as of the date of termination, LICENSEE hereby grants
to PFIZER a fully paid-up, royalty-free, worldwide, transferable,
sublicensable, perpetual and irrevocable license to use the Trademarks
identifying a Product for the purpose of manufacturing, marketing, distributing
and selling the Product. As used herein, “Trademarks” means all registered and
unregistered trademarks, service marks, trade dress, trade names, logos,
insignias, domain names, symbols, designs, and combinations thereof.

	 
	 	(e)	 	LICENSEE will responsibly wind-down, in accordance with
accepted pharmaceutical industry norms and ethical practices, any on-going
clinical studies for which it has responsibility hereunder in which patient
dosing has commenced or, if reasonably practicable and requested by PFIZER,
allow PFIZER or its CRO to complete such trials (and then assign all related
Regulatory Documentation and investigator and other agreements relating to such
studies). LICENSEE shall be responsible for any Development costs associated
with such wind-down. PFIZER shall pay all Development Costs incurred by either
Party to complete such studies should PFIZER request that such studies be
completed. During any such winding down of ongoing trials, LICENSEE shall
provide such knowledge transfer and other training to PFIZER or its Affiliates
or a Third Party that is designated in writing by PFIZER (“Designated
Affiliate/Third Party”) as reasonably necessary for PFIZER or the Designated
Affiliate/Third Party to continue such trial. In connection with such
transfer, LICENSEE shall, at PFIZER’s option: (i) transfer to PFIZER or the
Designated Affiliate/Third Party all Product at the cost paid by LICENSEE to
manufacture such Product, (ii) transfer to PFIZER or the Designated
Affiliate/Third Party all LICENSEE Inventory owned by LICENSEE at the cost paid
by LICENSEE for such LICENSEE Inventory, and (iii) assign to PFIZER or the
Designated Affiliate/Third Party any agreements with Third Parties with respect
to the Development or Commercialization of the Product. As used herein,
“LICENSEE Inventory” means all components and works in process produced or held
by LICENSEE with respect to the manufacture of Products.

	 	13.6.	 	Survival. Expiration or termination of this Agreement shall not relieve the
Parties of any obligation accruing hereunder prior to such expiration or termination.
Without limiting the foregoing, the provisions of Sections 6, 7.1, 9, 11, 12, 13.5, 15,
16, 17.3 and 17.8 shall survive expiration or termination of this Agreement.

	14.	 	PUBLICITY AND PUBLICATIONS

	 	14.1.	 	Publicity and Publications.

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	 	 	 	14.1.1. Subject to PFIZER’s rights pursuant to Section 13.5.5(d), neither Party
(nor any of its Affiliates or agents) shall use the Trademarks of the other Party
or its Affiliates in any press release, publication or other form of promotional
disclosure without the prior written consent of the other Party in each instance.

	 
	 	 	 	14.1.2. Each Party agrees not to issue any press release or other public statement,
whether written, electronic, oral or otherwise, disclosing the existence of this
Agreement, the terms hereof or any information relating to this Agreement without
the prior written consent of the other Party, provided however,
that neither Party will be prevented from complying with any duty of disclosure it
may have pursuant to Applicable Law or the rules of any recognized stock exchange
so long as the disclosing Party provides the other Party at least ten (10) Business
Days prior written notice to the extent practicable and only discloses information
to the extent required by Applicable Law or the rules of any recognized stock
exchange.

	 
	 	 	 	14.1.3. LICENSEE acknowledges that PFIZER personnel may desire to publish in
scientific journals or present at scientific conferences scientific, pre-clinical
or clinical data derived from research and development related to the Compound that
was conducted by PFIZER prior to the Effective Date. Both Parties understand that
a reasonable commercial strategy may require delay of publication of information,
filing of patent applications, or, in some instances, disapproval of publication
altogether. Accordingly, no such publication will be submitted and no such
presentation shall be made without the prior written consent of LICENSEE, in its
sole discretion. Any such publication or presentation shall be submitted in
writing to LICENSEE for review by LICENSEE’s management. After receipt of the
proposed publication by LICENSEE’s management’s, such written approval or
disapproval will be provided within thirty (30) days

	 
	 	 	 	14.1.4. To the extent inventions are disclosed (or proposed to be disclosed) that
relate to the Compound in such publications, as to which PFIZER has not, prior to
the Effective Date, yet made patent filings, any patent applications filed
following the Effective Date at the discretion of either LICENSEE or PFIZER in
respect of such inventions, and any patents that issue therefrom shall be deemed to
be Patent Rights for all purposes of this Agreement.

	15.	 	LICENSEE INSURANCE

	 	15.1.	 	Insurance Requirements. LICENSEE shall maintain during the term of this
Agreement and until the later of: (a) three (3) years after termination or expiration
of this Agreement, or (b) the date that all statutes of limitation covering claims or
suits that may be instituted for personal injury based on the sale or use of the
Product have expired, commercial general liability insurance from a minimum “A-” AM
Bests rated insurance company or insurer reasonably acceptable to PFIZER, including
contractual liability and product liability or clinical trials, if applicable, with
coverage limits of not less than *** (***) million US dollars per occurrence and ***
(***) million US dollars in the aggregate. LICENSEE has the right to provide the total
limits required by any combination of primary and umbrella/excess coverage. The
minimum level of insurance set forth herein shall not be construed to create a limit

- 29 -

 

	 	 	 	on LICENSEE’s liability hereunder. Such policies shall name PFIZER and its
Affiliates as additional insured and provide a waiver of subrogation in favor of
PFIZER and its Affiliates. Such insurance policies shall be primary and
non-contributing with respect to any other similar insurance policies available to
PFIZER or its Affiliates. Any deductibles for such insurance shall be assumed by
LICENSEE.

	 
	 	15.2.	 	Policy Notification. LICENSEE shall provide PFIZER with original certificates
of insurance (which may be done through the submission of an electronic copy of such
certificate) evidencing such insurance: (a) promptly following execution by both
Parties of this Agreement, and (b) prior to expiration of any one coverage. PFIZER
shall be given at least thirty (30) days written notice prior to cancellation,
termination or any change to restrict the coverage or reduce the limits afforded.

	16.	 	DISPUTE RESOLUTION

	 	16.1.	 	General. Except for disputes for which injunctive or other equitable relief
is sought to prevent the unauthorized use or disclosure of proprietary materials or
information or prevent the infringement or misappropriation of a Party’s Intellectual
Property Rights, the following procedures shall be used to resolve all disputes arising
out of or in connection with this Agreement.

	 
	 	16.2.	 	Dispute Escalation. Promptly after the written request of either Party, each
of the Parties shall appoint a designated representative to meet in person or by
telephone to attempt in good faith to resolve any dispute. If the designated
representatives do not resolve the dispute within fifteen (15) Business Days of such
request, then an executive officer of each Party shall meet in person or by telephone
to review and attempt to resolve the dispute in good faith. The executive officers
shall have twenty (20) Business Days to attempt to resolve the dispute.

	 
	 	16.3.	 	Arbitration.

	 
	 	 	 	16.3.1. Full Arbitration. Unless Section 16.3.2 is applicable, in the event the
Parties are not able to resolve such dispute through the dispute escalation
procedure described above, either Party may at any time after such 20 Business Day
period submit such dispute to be finally settled by arbitration administered in
accordance with the rules of Judicial Administration and Arbitration Services
(“JAMS”) in effect at the time of submission, as modified by this Section 16. The
arbitration will be heard and determined by three (3) arbitrators who are retired
judges or attorneys with at least ten (10) years of experience with intellectual
property license agreements in the pharmaceutical or biotechnology industry, each
of whom will be a neutral as to both Parties. Each Party will appoint one
arbitrator and the third arbitrator will be selected by the two Party-appointed
arbitrators, or, failing agreement within thirty (30) days following the date of
receipt by the respondent of the claim, by JAMS. Such arbitration will take place
in New York, NY. The arbitration award so given will be a final and binding
determination of the dispute, will be fully enforceable in any court of competent
jurisdiction, and will not include any damages expressly prohibited by Section 12.
Fees, costs and expenses of arbitration are to be divided by the Parties in the
following manner: LICENSEE

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	 	 	 	will pay for the arbitrator it chooses, PFIZER will pay for the arbitrator it
chooses, and the Parties will share payment for the third arbitrator. Except in a
proceeding to enforce the results of the arbitration or as otherwise required by
law, neither Party nor any arbitrator may disclose the existence, content or
results of any arbitration hereunder without the prior written agreement of both
Parties.

	 
	 	 	 	16.3.2. Accelerated Arbitration. To the extent the arbitration matter involves a
dispute that is submitted to arbitration by a Party under Section 6.1.4 or any
dispute regarding the proper characterization of a dispute subject to resolution
under this Section 16.3.2 as opposed to Section 16.3.1, the following procedures
will also apply:

	 	(a)	 	For purposes of arbitration under this Section 16.3.2, the
arbitrator will be appointed pursuant to Section 16.3.1, but will be a single
independent, conflict-free arbitrator with the requisite licensing and
pharmaceutical industry experience (such arbitrator, the “Expert”). The
Parties may select a different Expert for each dispute depending on the nature
of the issues presented and desired expertise.

	 
	 	(b)	 	Each Party will prepare and submit a written summary of such
Party’s position and any relevant evidence in support thereof to the Expert
within thirty (30) days of the selection of the Expert. Upon receipt of such
summaries from both Parties, the Expert will provide copies of the same to the
other Party. The Expert will be authorized to solicit briefing or other
submissions on particular questions. Within fifteen (15) days of the delivery
of such summaries by the Expert, each Party will submit a written rebuttal of
the other Party’s summary and may also amend and re-submit its original
summary. Oral presentations will not be permitted unless otherwise requested
by the Expert. The Expert will make a final decision with respect to the
arbitration matter within thirty (30) days following receipt of the last of
such rebuttal statements submitted by the Parties and will make a determination
by selecting the resolution proposed by one of the Parties that as a whole is
the most fair and reasonable to the Parties in light of the totality of the
circumstances and will provide the Parties with a written statement setting
forth the basis of the determination in connection therewith. For purposes of
clarity, the Expert will only have the right to select a resolution proposed by
one of the Parties in its entirety and without modification.

	 
	 	(c)	 	The Parties further agree that the decision of the Expert will
be the sole, exclusive and binding remedy between them regarding determination
of the arbitration matter so presented. Confirmation of, or judgment upon any
award rendered pursuant to this Section 16.3.2 may be entered by any court of
competent jurisdiction. The Expert will have no authority to award any type of
damages excluded under Section 12.

	 	 	 	16.3.3. Injunctive Relief. Notwithstanding the dispute resolution procedures set
forth in this Section 16, in the event of an actual or threatened breach hereunder,
the aggrieved Party may seek equitable relief (including restraining orders,
specific

 

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	 	 	 	performance or other injunctive relief) in any court or other forum, without first
submitting to any dispute resolution procedures hereunder.

	 
	 	 	 	16.3.4. Tolling. The Parties agree that all applicable statutes of limitation and
time-based defenses (such as estoppel and laches) will be tolled while the dispute
resolution procedures set forth in this Section 16 are pending, and the Parties
will cooperate in taking all actions reasonably necessary to achieve such a result.
In addition, during the pendency of any arbitration under this Agreement initiated
before the end of any applicable cure period under Section 13.2, (i) this Agreement
will remain in full force and effect, (ii) the provisions of this Agreement
relating to termination for material breach will not be effective, (iii) the time
periods for cure under Section 13 as to any termination notice given prior to the
initiation of arbitration will be tolled, and (iv) neither Party will issue a
notice of termination pursuant to such sections, until the arbitral tribunal has
confirmed the existence of the facts claimed by a Party to be the basis for the
asserted material breach.

	17.	 	GENERAL PROVISIONS

	 	17.1.	 	Assignment

	 
	 	 	 	17.1.1. Neither Party may assign its rights and obligations under this Agreement
without the other Party’s prior written consent, except that: (a) PFIZER may assign
to a Third Party its rights to receive some or all of the Fees payable hereunder,
(b) each Party may assign its rights and obligations under this Agreement to one or
more of its Affiliates without the consent of the other Party and (c) either Party
may assign this Agreement in the event of a Change in Control. As used herein,
“Change in Control” means the acquisition of a party by a Third Party or the sale
of all or substantially all of its business to which this Agreement relates. The
assigning Party shall provide the other Party with prompt written notice of any
such assignment. Any permitted assignee pursuant to clauses (b) and (c) above
shall assume all obligations of its assignor under this Agreement, and no permitted
assignment shall relieve the assignor of liability for its obligations hereunder.
Any attempted assignment in contravention of the foregoing shall be void. As used
herein, “Fees” means collectively, any and all Milestone Payments and Royalties.

	 
	 	 	 	17.1.2. Prior to any proposed assignment by the LICENSEE of any of the Licensed
Technology PFIZER shall have a right of first negotiation as more fully
particularized in Section 2.6.

	 
	 	17.2.	 	Severability. Should one or more of the provisions of this Agreement become
void or unenforceable as a matter of law, then such provision will be ineffective only
to the extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement, and the Parties agree to substitute a valid and enforceable provision
therefor which, as nearly as possible, achieves the desired economic effect and mutual
understanding of the Parties under this Agreement.

	 
	 	17.3.	 	Governing Law; Exclusive Jurisdiction.

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	 	 	 	17.3.1. This Agreement shall be governed by and construed under the laws in effect
in the State of New York, US, without giving effect to any conflicts of laws
provision thereof or of any other jurisdiction that would produce a contrary
result, except that issues subject to the arbitration clause and any arbitration
hereunder shall be governed by the applicable commercial arbitration rules and
regulations.

	 
	 	 	 	17.3.2. The courts of New York shall have exclusive jurisdiction over any action
for injunctive relief contemplated by Section 16.1 or for the enforcement of any
arbitral award resulting from arbitrations brought in accordance with Section 16,
and each of the Parties hereto irrevocably: (a) submits to such exclusive
jurisdiction for such purpose; (b) waives any objection which it may have at any
time to the laying of venue of any proceedings brought in such courts; (c) waives
any claim that such proceedings have been brought in an inconvenient forum, and (d)
further waives the right to object with respect to such proceedings that any such
court does not have jurisdiction over such Party. Notwithstanding the foregoing,
application may be made to any court of competent jurisdiction with respect to the
enforcement of any judgment or award.

	 
	 	17.4.	 	Force Majeure. Except with respect to delays or nonperformance caused by the
negligent or intentional act or omission of a Party, any delay or nonperformance by
such Party (other than payment obligations under this Agreement) will not be considered
a breach of this Agreement to the extent such delay or nonperformance is caused by acts
of God, natural disasters, acts of the government or civil or military authority, fire,
floods, epidemics, quarantine, energy crises, war or riots or other similar cause
outside of the reasonable control of such Party (each, a “Force Majeure Event”),
provided that the Party affected by such Force Majeure Event will promptly begin
or resume performance as soon as reasonably practicable after the event has abated. If
the Force Majeure Event prevents a Party from performing any of its obligations under
this Agreement for one hundred eighty (180) days or more, then the other Party may
terminate this Agreement immediately upon written notice to the non-performing Party.

	 
	 	17.5.	 	Waivers and Amendments. The failure of any Party to assert a right hereunder
or to insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to perform any
such term or condition by the other Party. No waiver shall be effective unless it has
been given in writing and signed by the Party giving such waiver. No provision of this
Agreement may be amended or modified other than by a written document signed by
authorized representatives of each Party.

	 
	 	17.6.	 	Relationship of the Parties. Nothing contained in this Agreement shall be
deemed to constitute a partnership, joint venture, or legal entity of any type between
PFIZER and LICENSEE, or to constitute one Party as the agent of the other. Moreover,
each Party agrees not to construe this Agreement, or any of the transactions
contemplated hereby, as a partnership for any tax purposes. Each Party shall act
solely as an independent contractor, and nothing in this Agreement shall be construed
to give any Party the power or authority to act for, bind, or commit the other Party.

- 33 -

 

	 	17.7.	 	Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and permitted assigns.

	 
	 	17.8.	 	Notices. All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when: (a)
delivered by hand (with written confirmation of receipt), (b) sent by fax (with written
confirmation of receipt), provided that a copy is sent by an internationally recognized
overnight delivery service (receipt requested), or (c) when received by the addressee,
if sent by an internationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and fax numbers set forth below
(or to such other addresses and fax numbers as a Party may designate by written
notice):

If to PFIZER:

PFIZER INC.

235 East 42nd Street

New York, NY 10017

Fax: 646-348-8157

Attention: General Counsel

If to LICENSEE:

CLOVIS ONCOLOGY, INC.

2525 28th Street, Suite 180

Boulder, CO 80301

Fax: (303) 245-0361

Attention: Chief Executive Officer

	 	17.9.	 	Further Assurances. LICENSEE and PFIZER hereby covenant and agree without the
necessity of any further consideration, to execute, acknowledge and deliver any and all
such other documents and take any such other action as may be reasonably necessary or
appropriate to carry out the intent and purposes of this Agreement.

	 
	 	17.10.	 	No Third Party Beneficiary Rights. This Agreement is not intended to and shall not
be construed to give any Third Party any interest or rights (including, without
limitation, any third party beneficiary rights) with respect to or in connection with
any agreement or provision contained herein or contemplated hereby.

	 
	 	17.11.	 	Entire Agreement; Confidentiality Agreement.

	 	(a)	 	This Agreement, together with its Schedules, sets forth the
entire agreement and understanding of the Parties as to the subject matter
hereof and supersedes all proposals, oral or written, and all other prior
communications between the Parties with respect to such subject matter,
including, without limitation, that certain Confidentiality Agreement by and
between the Parties, 

- 34 -

 

	 	 	 	dated April 18, 2011 (“CDA”). The Parties acknowledge
and agree that, as of the Effective Date, all Evaluation Material (as defined in the CDA)
disclosed by PFIZER or its Affiliates pursuant to the CDA shall be
considered PFIZER’s Confidential Information and subject to the terms set
forth in this Agreement.

	 
	 	(b)	 	In the event of any conflict between a material provision of
this Agreement and any Schedule hereto, the Agreement shall control.

	 	17.12.	 	Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and
the same instrument.

	 
	 	17.13.	 	Cumulative Remedies. No remedy referred to in this Agreement is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy referred to
in this Agreement or otherwise available under law.

	 
	 	17.14.	 	Waiver of Rule of Construction. Each Party has had the opportunity to consult with
counsel in connection with the review, drafting and negotiation of this Agreement.
Accordingly, any rule of construction that any ambiguity in this Agreement shall be
construed against the drafting Party shall not apply.

	 
	 	17.15.	 	Construction. For purposes of this Agreement: (a) words in the singular shall be held
to include the plural and vice versa as the context requires; (b) the words “including”
and “include” shall mean “including, without limitation,” unless otherwise specified;
(c) the terms “hereof,” “herein,” “herewith,” and “hereunder,” and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement; and (d) all references to
“Section”, “Schedule” and “Exhibit,” unless otherwise specified, are intended to refer
to a Section, Schedule or Exhibit of or to this Agreement.

[Signatures on next page]

- 35 -

 

          IN WITNESS WHEREOF, the Parties intending to be bound have caused this Agreement to be
executed by their duly authorized representatives as of the Effective Date.

	 	 	 

	PFIZER INC.

	 	CLOVIS ONCOLOGY INC.
	 
	 	 
	By: /s/ GARRY NICHOLSON

	 	By:/s/ PATRICK J. MAHAFFY
	 
	 	 
	Name:  Garry Nicholson

	 	Name: Patrick J. Mahaffy
	 
	 	 
	Title: President, General Manager

	 	Title: President and CEO

- 36 -

 

     

SCHEDULE A – PATENT RIGHTS

***

1

 

SCHEDULE B - TECHNICAL TRANSFER TRANSITION PLAN

THIS TECHNICAL TRANSFER PLAN (“PLAN”) IS ENTERED INTO AS OF THE EFFECTIVE DATE BY AND BETWEEN
(I) LICENSEE AND (II) PFIZER ALL CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL
HAVE THE MEANING SET OUT IN THE AGREEMENT.

The Parties agree as follows with respect to the Compound and Licensed Technology and Regulatory
Filings:

	 	1.	 	Transitional Services

	 	1.1	 	Transition Plan/Hours Cap/Additional Consulting Services

	 	1.1.1	 	Detailed Transition Plan. As soon as reasonably
possible after the Effective Date, the Transition Coordinators will work
together in good faith to agree upon a transition plan which will identify,
among other elements, joint functional area kick-off meetings and regular
meetings during the Initial Transition Period (as defined below), as
appropriate, to ensure transfer of project knowledge, to establish
communication plans with external collaborators and vendors such that
LICENSEE will begin to be included in ongoing activities and communications
as soon as possible following the Effective Date, and to prioritize the
transfer of documents and records, all within the framework of the following
Sections of this Schedule B. While the sections below set forth outside
completion dates for various tasks, both Parties shall use good faith efforts
to complete the various tasks earlier than such outside dates.

	 	1.1.2	 	PFIZER shall make available to LICENSEE certain expertise
for consultation with LICENSEE’s representatives via telephone or
correspondence for the purpose of conducting the following activities related
to the Transition Plan contemplated by this Schedule B: (a) conveying and
transferring information, (b) answering inquiries and (c) conducting research
for the purpose of responding to such inquiries (the activities pursuant to
these activities shall be collectively referred to as the “Consulting
Services”). LICENSEE shall reimburse PFIZER for any travel expenses incurred
by PFIZER if PFIZER representatives travel to LICENSEE site(s) or other
non-PFIZER locations, and time devoted to such travel and Consultation
Services at such locations shall be either Consulting Services or Additional
Consulting Services in accordance with Section 1.

	 	1.1.3	 	PFIZER shall provide such Consulting Services upon
reasonable notice from LICENSEE to PFIZER and during PFIZER’s normal business
hours. Such Consulting Services shall be provided by PFIZER at no charge for
the first three (3) months after the Effective Date (the “Initial Transition
Period”) for all consultations. For the three (3) month period following the
Initial Transition Period, PFIZER shall provide Consulting Services at no
charge for up to *** hours (the “Hours Cap”). The calculation of the Hours
Cap shall include the number of hours expended by PFIZER in answering
inquiries from LICENSEE related to Transition Plan, but shall not include the
hours of effort incurred by transferring to LICENSEE the Documentation of the
Included Assets. All hours of Consultation beyond *** hours shall be
considered “Additional Consulting Services”.

 

 

	 	1.1.4	 	Any time devoted by PFIZER personnel on preparation or
review of publications (either sole PFIZER, joint PFIZER with external
collaborators or joint PFIZER and LICENSEE) of research results will not be
considered as Consulting Services and will not count against the Hours Cap.

	 	1.1.5	 	Fees for any Additional Consulting Services shall include:

	 	1.1.5.1	 	Any out-of-pocket travel and hotel costs and expenses incurred by
PFIZER representatives in performing the Consulting Services.

	 	1.1.5.2	 	All hours of Consultation beyond *** hours shall be charged at a
rate of $*** per hour.

	 	1.2	 	Document, Information, and Material Transfer

	 	1.2.1	 	Initial Request. No later than *** months
after the Effective Date (unless otherwise specified herein or agreed to in
writing by the Parties), PFIZER shall provide to LICENSEE all Licensed
Technology to the extent it exists as of the Effective Date; provided that
PFIZER has the right, but not the obligation to retain (a) copies of all such
documents and records, (b) copies of Regulatory Filings and correspondence,
and clinical trial data, and (c) any records reasonably required by PFIZER
for the conduct of its activities under the terms of its previous
obligations.

	 	1.2.2	 	Records to be transferred: Notwithstanding the
foregoing, the Parties agree as follows with respect to the Licensed
Technology (“Included Assets”): (i) no later than *** Business Days
after the Effective Date PFIZER shall provide electronic copies (in
Microsoft Office format and/or in other non-proprietary format) of relevant
documents, information, records, and data (“Documentation”), by a method
reasonably acceptable to LICENSEE. To the extent such Documentation exists
as of the Effective Date in an electronic format, including scanned versions
of a hardcopy, PFIZER shall provide to LICENSEE only an electronic copy of
such Documentation. For Documentation which does not exist in an electronic
format as of the Effective Date, PFIZER shall provide to LICENSEE a physical
copy of the Documentation. Notwithstanding the foregoing, in no event shall
PFIZER be required to provide: (i) data or records that include technology
or products other than those that relate to the Included Assets or (ii)
laboratory notebooks, personal notes of PFIZER employees or any of PFIZER’s
contractors or subcontractors, or internal intra-PFIZER correspondence;
provided, however, PFIZER shall provide to LICENSEE summary information that
pertains to the Included Assets to the extent such summary information: (x)
exists as of the Effective Date; (y) is retained by or on behalf of PFIZER;
and (z) is reasonably retrievable by PFIZER.

	 	1.3	 	Transfer of Specimens; Inventory

	 	1.3.1	 	GLP Studies: Within *** Business Days of the
Effective Date, PFIZER shall identify and produce specimens/data records
that were identified in final reports of GLP studies as having been archived
at or by PFIZER. Such Items will be shipped within thirty (30) Business
Days following PFIZER’s receipt of notice from LICENSEE to an archival
facility of LICENSEE choice at

 

 

	 	 	 	LICENSEE expense and direction. This facility must be identified within
*** months of the Effective Date. LICENSEE shall bear all costs and
expenses incurred by PFIZER after the Effective Date related to packaging
and shipping the Items pursuant to this Section.

	 	1.3.2	 	Items to be Transferred: For Items in the possession of
a Third Party, LICENSEE shall coordinate with such Third Party to transfer
the Items, including, without limitation, transfer of the GMP protocols,
receiving documentation, insurance requirements and temperature monitors.
For Items in the possession of PFIZER, PFIZER shall package and ship such
Items within thirty (30) Business Days following PFIZER’s receipt of notice
from LICENSEE. This shipping notification must take place within the first
*** months after the Effective Date to allow sufficient time to
accomplish the transfer before the *** month transition period
completes. LICENSEE shall bear all costs and expenses incurred by PFIZER
after the Effective Date related to packaging and shipping the Items
pursuant to this Section.

	 	1.4	 	Regulatory Applications

	 	1.4.1	 	United States INDs. Within *** Business
Days after written notification from LICENSEE that LICENSEE is able to
assume all clinical, regulatory, and safety obligations, PFIZER shall execute
all documents (in a form reasonably acceptable to LICENSEE) required to
transfer the sponsorship of all United States INDs for the Compound to
LICENSEE This transfer notification must take place within the first *** months after the Effective Date to allow for sufficient time to
accomplish the full IND transfer before the *** month transition period
completes.

	 	1.4.2	 	Maintenance of IND. For the period beginning on
the Effective Date and ending on the effective date of the transfer of the
applicable IND (i.e., the date that the LICENSEE serves official
confirmation of acceptance of Regulatory transfer of responsibility) PFIZER
shall continue to maintain the relevant INDs for the Compound, at LICENSEE’s
direction and expense.

	 	1.4.3	 	Electronic Versions of Documents. Within *** Business Days after the Effective Date, PFIZER shall deliver electronic
files of the sections of all open INDs for the Compound, and any subsequent
updates thereto. For Regulatory filings other than INDs, PFIZER shall
deliver electronic versions of these filings within *** Business Days
of the Effective Date.

	 	1.4.4	 	Other Regulatory Filings. Where appropriate,
within thirty (30) Business Days after written notification from LICENSEE
that LICENSEE is able to assume all clinical, regulatory, and safety
obligations, PFIZER shall execute all documents (in a form reasonably
acceptable to LICENSEE) required to transfer the sponsorship of all other
Regulatory filings for the Compound to LICENSEE. This transfer notification
must take place within the first *** months after the Effective Date to
allow for sufficient time to accomplish the full IND transfer before the *** month transition period completes.

	 	1.4.5	 	Trial Master Files. PFIZER shall forward Trial
Master Files (TMF’s) or equivalent, for all completed clinical studies for
the Compound (i.e, studies with signed-off final clinical study reports), to
LICENSEE, as promptly as practicable

 

 

	 	 	 	but in no event no later than sixty (60) calendar days after receipt of
such written request from LICENSEE. This transfer notification must take
place within the first *** months after the Effective Date to allow
for sufficient time to accomplish the full document transfer before the
*** month transition period completes. This transfer is subject to the
conditions in Section 1.1.3 above. For study A4991014, which is currently
ongoing, the trial master file will remain at PFIZER until thirty (30)
calendar days after operational control has been transitioned to LICENSEE.

	 	1.4.6	 	Interaction with Regulatory Authorities. For the
period beginning on the Effective Date and ending on the effective date of
the transfer of the applicable Regulatory Filing, LICENSEE shall
lead1 all interactions with any Regulatory Authority
relating to the Compound. Notwithstanding the foregoing, for the period
beginning after the Effective Date and ending on the effective date of the
transfer of the applicable Regulatory Filing in such country, if LICENSEE so
reasonably requests, PFIZER will participate, by telephone, in certain
interactions with Regulatory Authorities relating to the Compound, at
LICENSEE’s direction and expense, provided that LICENSEE shall provide PFIZER
written notice at least ten (10) Business Days prior to any such meetings.

	 	1.4.7	 	Ongoing Responsibilities. In connection with the
United States IND, an annual report is due in ***. The data
cut-off for this report is ***. In order to allow for a smooth
transitioning of responsibility regarding this report: (a) after the
Effective Date, PFIZER shall continue to run the clinical safety tables for
this report, at its cost; (b) LICENSEE shall take responsibility for drafting
such annual report and submitting it to the FDA, and (c) PFIZER shall provide
Consulting Services for input and review on such annual report as may be
requested by LICENSEE according to the agreement on Consulting Services
described in Section 1.1.3 of this Schedule B.

	 	1.5	 	Miscellaneous Carry-Over Activities

	 	1.5.1	 	*** 

	 	1.5.2	 	CRUK Resupply. From its existing inventory of
drug product, PFIZER shall complete its commitment to package and ship at
its cost to Cancer Research UK (“CRUK”) the requested resupply of Product
for the CRUK IIR Phase II trial.

	 	1.5.3	 	***

 

1            Clovis cannot lead interactions with
Regulatory Authorities until Pfizer submits the letter to change sponsorship
and the Authorities acknowledge receipt. Therefore, Pfizer will need to lead
the interactions until this occurs. Following that time, Clovis will lead.

 

 

	 	1.6	 	Safety Reporting

	 	1.6.1	 	Unless otherwise directed by LICENSEE, PFIZER shall
submit PFIZER-generated CIOMS/serious adverse event reports for all
Compounds, to the relevant Regulatory Authority for the period beginning on
the Effective Date and ending on the effective date of the transfer of the
applicable IND to LICENSEE.

	 	1.7	 	Pharmaceutical Sciences/Manufacturing

	 	1.7.1	 	Document Transfer and Management. PFIZER shall
disclose all Licensed Technology, including, summary reports, formulation
folders, data related to the pharmaceutical development of the Compounds, to
LICENSEE no later than *** Business Days after the Effective
Date.

	 	1.7.2	 	Inventory Transfer and Management. PFIZER shall
transfer all outstanding inventories of non-GMP and GMP API for the Compounds
to LICENSEE within *** Business Days after the Effective Date,
unless subject to a separate written supplies agreement. Such shipment will
occur following PFIZER’s receipt of notice from LICENSEE to a storage
facility of LICENSEE choice at LICENSEE expense and direction. LICENSEE
shall bear all costs and expenses incurred by PFIZER after the Effective Date
related to packaging and shipping the Items pursuant to this Section. After
the Effective Date, except as permitted under a separate Supplies Agreement,
or as required for the completion of this Transition Plan, PFIZER shall not
provide any Compound(s), whether API or finished drug product, to any Third
Party without the prior consent of LICENSEE. After the Effective Date,
PFIZER shall not provide any documents, information or data relating to
Compound to any Third Party without the prior consent of LICENSEE.

 

 

	 	1.7.2.1	 	Finished drug product identified as in Schedule E shall be
transferred to LICENSEE – within *** Business Days after the
Effective Date.

	 
	 	1.7.2.2	 	For so long as PFIZER maintains ongoing stability testing and
manufacture of API and finished drug product, it shall retain
manufacturing reference standards. Thereafter, the Parties will
cooperate to transfer portions of the remaining reference standards
to such contract manufacturing organizations as LICENSEE shall have
selected for its ongoing manufacturing needs.

	 
	 	1.7.2.3	 	On-going API and drug product clinical stability studies –
currently stability set-up and testing is taking place in Sandwich.
Within *** days of the Effective Date the LICENSEE will
identify a contract laboratory wherein which these stability programs
will be conducted. PFIZER will support the transition of these
studies to this new contract laboratory, including transfer of all
materials set-up on stability (at the cost of LICENSEE), reference
standards, analytical methods and data to date within a subsequent
*** day period.

	 
	 	1.7.2.4	 	Currently scheduled production is identified in Schedule E. It
will be sold by PFIZER to LICENSEE in the quantities, at the price
and with the delivery dates specified in Schedule E if requested by
LICENSEE. All such sales will be effected under a purchase order and
will otherwise be under standard PFIZER terms and conditions.

	 
	 	1.7.2.5	 	LICENSEE has requested future manufacture of additional 40/60 mg
tablets for ongoing Existing Trials, beyond what is currently in
inventory and beyond currently scheduled product, as set forth in
Schedule E. PFIZER shall manufacture and sell to LICENSEE such
future production in the quantities, at the price and with the
delivery dates specified in Schedule E if requested by LICENSEE. All
such sales will be effected under a purchase order and will otherwise
be under standard PFIZER terms and conditions.

	 
	 	1.7.2.6	 	Except as provided in Section 1.5.1 above, from and after the
Effective Date, API or DP supply for currently ongoing investigator
initiated research studies – requests for investigator initiated
research studies are to be provided by LICENSEE.

	 
	 	1.7.2.7	 	Packaging, labeling, expiry updates and inventory management for
Existing Trials will continue to be managed by PFIZER for a period of
*** days after the Effective Date. Following
this period, LICENSEE will assume responsibility for these
activities, unless otherwise specified in Schedule E.

	 	1.7.3	 	Compensation. LICENSEE shall reimburse PFIZER
for (i) all invoiced costs and expenses incurred after the Effective Date in
a manner consistent with the customary invoice practices of any ongoing or
agreed manufacturing or packing effort and all invoiced costs and expenses in
a manner consistent with the

 

 

	 	 	 	customary invoice practices for on-going formulation, materials management and stability.

	 	1.8	 	Intellectual Property.

	 	1.8.1	 	For *** days following the Effective Date, PFIZER
shall monitor the intellectual property within the Patent Rights definition
and promptly forward to LICENSEE (but not later than ten (10) Business Days
of receipt thereof by PFIZER) (a) all correspondence received by PFIZER from
the relevant patent offices with respect to such intellectual property, and
(b) a schedule of applicable extension and expiration dates. Other than the
foregoing responsibility, PFIZER shall have no obligations with respect to
prosecuting or maintaining the intellectual property, including, without
limitation, filing any assignments or applications for renewal with the
relevant government offices; excepting, however, PFIZER shall be obligated to
reasonably cooperate with any requests from LICENSEE pertaining to, or in
furtherance of, prosecuting or maintaining the Patent Rights and filing any
assignments related thereto.

	 	1.9	 	Third Party Contracts.

	 	1.9.1	 	Assigned Agreements. Any relevant Third Party
Contracts (whether identified in Schedule B-1 or otherwise) shall be dealt
with after the Effective Date by the Parties in such manner as they may
mutually agree consistent with the rights and obligations of the Parties
under the Agreement.

	 	1.9.1.1	 	PFIZER shall cooperate with LICENSEE and interface with Third
Parties to achieve assignment or termination of existing Third Party
Contracts as mutually agreed by the Parties and to ensure transition
of all clinical trials and research relating to Compound, and
transfer of all materials and specimens

	 
	 	1.9.1.2	 	To the extent any Third Party Contracts related to the API or
finished drug product of the Compound, or to clinical trials ongoing
for the Product are Master Service Agreements which include other
activities of PFIZER, such Master Service Agreements shall not be
assigned to LICENSEE. PFIZER shall, however, identify such Master
Service Agreements and the services covered thereby, in connection
with the documentation transfer contemplated by Section 1.1 above,
including the identity and contact information of the Third Party
that is a party to such Master Service Agreement.

	 	1.10	 	Subsequent Requests. LICENSEE may request other documents, information,
records or data that are Licensed Technology on an as-needed basis during the *** month
Transition Period but no later than one month prior to the expiration of the *** month
Transition Period to accomplish the full document transfer with the *** Transition
Period. All such LICENSEE requests made after the Transition Period will be allocated
against the Consulting Services specified in Section 1.1.3 above.

	 	2.	 	Records, documents, samples and data to be transferred to LICENSEE.

PFIZER shall transfer to LICENSEE records, documents, samples and data including, but not limited
to the following, where such records exist as of the Effective Date and are reasonably
retrievable:

 

 

	 	2.1	 	Pharmaceutical Product and Supplies.

	 	2.1.1	 	Existing physical material inventory held by PFIZER to
include Active Pharmaceutical Ingredient (API),( non-GMP and GMP) and
clinical supplies; unless otherwise subject to a Supplies Agreement.

	 	2.1.2	 	Schedule of inventory held external to PFIZER including
quantity, expiration date and location

	 	2.1.3	 	Records of Inventory and Supply.

	 	2.1.4	 	Records pertaining to synthesis, formulation and
manufacture of the Compound

	 	2.1.5	 	Summaries of GLP or GMP audits, copies of which shall be
transferred to LICENSEE.

	 	2.2	 	Intellectual Property (“IP”).

	 	2.2.1	 	A listing of all patents and patent applications
encompassed by the term Patent Rights, including U.S. and foreign
equivalents, with docket and status reports to be delivered to LICENSEE,
within ***  Business Days of the Effective Date.

	 	2.2.2	 	Copies of file wrappers for the PFIZER Product Patent
Rights will be Delivered to LICENSEE within ***  calendar days of the
Effective Date. Records will be provided electronically in non-proprietary
format.

	 	2.2.3	 	After entering into a Community of Interest Agreement,
Pfizer will provide copies of all written searches, prior art, and written
opinions of counsel related to the Patent Rights or Products.

	 	2.2.4	 	LICENSEE shall inform PFIZER in writing within *** Business Days of the Effective Date the names of the outside counsel and
foreign patent counsel selected to maintain and prosecute the Patent Rights.
Upon receipt of the names of the outside counsel and foreign patent counsel
PFIZER shall inform its outside patent counsel, and any annuity services,
that transfer of responsibility for Patent Rights to LICENSEE’s counsel is
permitted or that it has no objection to Pfizer’s outside patent counsel or
annuity services representing Licensee in the future if they wish to do so.
LICENSEE is responsible for all costs and expenses incurred for the Patent
Rights ***  days after the Effective Date.

	 	2.3	 	Research and Development.

	 	2.3.1	 	Pre-clinical: Copies of all protocols, data, results, and
reports related to pivotal (e.g., GLP) pre-clinical studies for the
Compound(s):

	 	2.3.1.1	 	Animal efficacy studies;

	 
	 	2.3.1.2	 	Animal safety and toxicity studies;

 

 

	 	2.3.1.3	 	Specimens/data records associated with final reports of GLP toxicology
studies

	 
	 	2.3.1.4	 	Studies and reports prepared in support of IND submission(s);

	 
	 	2.3.1.5	 	For pre-clinical studies performed prior to the IND preparatory phase,
results will be provided in summary documents for studies or portions of
non-GLP studies already completed, where no report was intended to be
generated.

	 	2.3.2	 	Clinical: Copies of all protocols and amendments, study
reports and results (including tables, figures and data) related to the
Compound(s).

                              2.3.2.1 Adverse event reports (e.g., Medwatch or equivalent forms) for any and all clinical
trials (either investigator-initiated or PFIZER-sponsored)

                              2.3.2.2 Copies of Case Report Forms (CRFs) or equivalent for all completed clinical
studies for the Compound(s) (i.e. studies with signed off final clinical study reports)

                              2.3.2.3 Copies of the clinical study databases for all completed clinical studies for the
Compound(s) (ie studies with signed off final clinical study reports)

                              2.3.2.4 Summaries of any internal GCP audits – to the extent they exist.

	 	2.3.3	 	Ongoing clinical studies: the Parties will collaborate to
identify and prioritize the transfer of the working study management files
for study A4991014 and such other documents and data related to
such study as may not have been specifically identified in this Schedule B
but the transfer of which nevertheless would facilitate a smooth transition
of such trial. In addition, the Parties will meet during the first *** months following the Effective Date at the request of either Transition
Coordinator, to discuss such other exchanges of information or steps as shall
ensure a smooth transition of such trial.

	 	2.4	 	Regulatory.

	 	2.4.1	 	Filings, correspondence, and teleconference and meeting
minutes by Regulatory Agencies and PFIZER or its subsidiaries with any
federal, state, local or foreign governmental agency since inception (in this
regard, all filings and correspondence with the FDA, or any other national
regulatory agency).

	 	2.4.2	 	Copies of all Trial Master Files (TMF’s) equivalent, for
all completed clinical studies for the Compound(s) (i.e, studies with
signed-off final clinical study reports and to include but not limited to
copies of all clinical trial protocols and amendments, IRB/EC approvals,
forms 1572, informed consent forms, financial disclosure forms, Investigator
Brochures, related to the Compounds).

 

 

SCHEDULE B-1 – EXISTING TRIALS

***

 

 

SCHEDULE C:

[INTENTIONALLY LEFT BLANK]

 

 

SCHEDULE D –Development Plan

***

 

 

SCHEDULE E

Existing Inventory

***

 

PFIZER provides the quotation below for additional manufacturing related services. LICENSEE shall
have 90 days from the Effective Date to request these services at the prices specified in this
quotation. If LICENSEE does not request these services in writing to PFIZER by day 90 PFIZER shall
have no obligation to manufacture additional API for LICENSEE.

Work Order #1: API Campaign targeted to deliver ~***            Quote: $*** USD

Description: PFIZER will manufacture and release an API campaign targeted to deliver ~***kg of API
for shipment (paid by LICENSEE) to LICENSEE

 

Work Order #2: Tabletting of API from Work Order #1                      Quote: $*** USD

Description: PFIZER will perform bulk tabletting and release. Expected delivery timing is by ***.

	 	•	 	Prepare and tablet a *** kg blend into 40 mg tablets (~*** anticipated)

	 
	 	•	 	Prepare and tablet a *** kg blend into 60 mg tablets (~*** anticipated)

	 
	 	•	 	Complete release testing for all lots and package into bulk drums for shipment (paid by
LICENSEE) to LICENSEE

 

Work Order #3: API Campaign targeted to deliver ~***kg of API            Quote: $*** USD

Description: PFIZER will manufacture and release an API campaign in addition to Work Order #1, that
is targeted to deliver ~***kg of API for shipment (paid by LICENSEE) to LICENSEE

PFIZER will initiate ordering of raw materials and manufacture of an additional *** kg of API,
estimated to take *** weeks from placement of orders to delivery of released API. Estimated
delivery time is by ***.

 

Work Order #4: Tabletting of API from Work Order #3                      Quote: $*** USD

Description: PFIZER will perform bulk tabletting and release.

	 	•	 	Prepare and tablet *** mg tablets (ratio of tablets TBD)

 

 

	 	•	 	Prepare and tablet *** mg tablets (ratio of tablets TBD)

	 
	 	•	 	Complete release testing for all lots and package into bulk drums for shipment (paid by
LICENSEE) to LICENSEEexv10w4

Exhibit 10.4

CLOVIS ONCOLOGY, INC.

2009 EQUITY INCENTIVE PLAN

     1. Purposes of the Plan. The purposes of this Plan are:

	 	•	 	to attract and retain the best available personnel for positions of
substantial responsibility,
	 
	 	•	 	to provide additional incentive to Employees, Directors and Consultants, and
	 
	 	•	 	to promote the success of the Company’s business.

          The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock
Appreciation Rights, Restricted Stock and Restricted Stock Units.

     2. Definitions. As used herein, the following definitions will apply:

          (a) “Administrator” means the Board or any of its Committees as will be administering
the Plan, in accordance with Section 4 of the Plan.

          (b) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.

          (c) “Award” means, individually or collectively, a grant under the Plan of Options,
Stock Appreciation Rights, Restricted Stock, or Restricted Stock Units.

          (d) “Award Agreement” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan. The Award Agreement is
subject to the terms and conditions of the Plan.

          (e) “Board” means the Board of Directors of the Company.

          (f) “Change in Control” means the occurrence of any of the following events:

               (i) Change in Ownership of the Company. A change in the ownership of the Company
which occurs on the date that any one person, or more than one person acting as a group (“Person”),
acquires ownership of the stock of the Company that, together with the stock held by such Person,
constitutes more than 50% of the total voting power of the stock of the Company; or

               (ii) Change in Effective Control of the Company. If the Company has a class of
securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control
of the Company which occurs on the date that a majority of members of the Board is

 

 

replaced during any twelve (12) month period by Directors whose appointment or election is not
endorsed by a majority of the members of the Board prior to the date of the appointment or
election. For purposes of this clause (ii), if any Person is considered to be in effective control
of the Company, the acquisition of additional control of the Company by the same Person will not be
considered a Change in Control; or

               (iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A change
in the ownership of a substantial portion of the Company’s assets which occurs on the date that any
Person acquires (or has acquired during the twelve (12) month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company that have a total gross fair
market value equal to or more than 50% of the total gross fair market value of all of the assets of
the Company immediately prior to such acquisition or acquisitions. For purposes of this subsection
(iii), gross fair market value means the value of the assets of the Company, or the value of the
assets being disposed of, determined without regard to any liabilities associated with such assets.

               For purposes of this Section 2(f), persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of
stock, or similar business transaction with the Company.

               Further and for the avoidance of doubt, a transaction will not constitute a Change in Control
if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole
purpose is to create a holding company that will be owned in substantially the same proportions by
the persons who held the Company’s securities immediately before such transaction.

          (g) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code herein will be a reference to any successor or amended section of the Code.

          (h) “Committee” means a committee of Directors or of other individuals satisfying
Applicable Laws appointed by the Board, or by the compensation committee of the Board, in
accordance with Section 4 hereof.

          (i) “Common Stock” means the common stock of the Company.

          (j) “Company” means Clovis Oncology, Inc., a Delaware corporation, or any successor
thereto.

          (k) “Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services to such entity.

          (l) “Director” means a member of the Board.

          (m) “Disability” means total and permanent disability as defined in Code Section
22(e)(3), provided that in the case of Awards other than Incentive Stock Options, the Administrator
in its discretion may determine whether a permanent and total disability exists in accordance with
uniform and non-discriminatory standards adopted by the Administrator from time to time.

-2-

 

          (n) “Employee” means any person, including officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
director’s fee by the Company will be sufficient to constitute “employment” by the Company.

          (o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (p) “Exchange Program” means a program under which (i) outstanding Awards are
surrendered or cancelled in exchange for Awards of the same type (which may have higher or lower
exercise prices and different terms), Awards of a different type, and/or cash, (ii) Participants
would have the opportunity to transfer any outstanding Awards to a financial institution or other
person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding
Award is reduced or increased. The Administrator will determine the terms and conditions of any
Exchange Program in its sole discretion.

          (q) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:

               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market or
the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

               (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and
low asked prices for the Common Stock on the day of determination (or, if no bids and asks were
reported on that date, as applicable, on the last trading date such bids and asks were reported),
as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

               (iii) In the absence of an established market for the Common Stock, the Fair Market Value will
be determined in good faith by the Administrator, calculated in a manner consistent with Section
409A of the Code..

          (r) “Incentive Stock Option” means an Option that by its terms qualifies and is
otherwise intended to qualify as an incentive stock option within the meaning of Code Section 422
and the regulations promulgated thereunder.

          (s) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or
is not intended to qualify as an Incentive Stock Option.

          (t) “Option” means a stock option granted pursuant to the Plan.

          (u) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Code Section 424(e).

-3-

 

          (v) “Participant” means the holder of an outstanding Award.

          (w) “Period of Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of
target levels of performance, or the occurrence of other events as determined by the Administrator.

          (x) “Plan” means this 2009 Equity Incentive Plan.

          (y) “Restricted Stock” means Shares issued pursuant to an Award of Restricted Stock
under Section 8 of the Plan, or issued pursuant to the early exercise of an Option.

          (z) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock Unit
represents an unfunded and unsecured obligation of the Company.

          (aa) “Service Provider” means an Employee, Director or Consultant.

          (bb) “Share” means a share of the Common Stock, as adjusted in accordance with Section
13 of the Plan.

          (cc) “Stock Appreciation Right” means an Award, granted alone or in connection with an
Option, that pursuant to Section 7 is designated as a Stock Appreciation Right.

          (dd) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Code Section 424(f).

     3. Stock Subject to the Plan.

          (a) Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan,
the maximum aggregate number of Shares that may be subject to Awards and sold under the Plan is
1,500,000 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

          (b) Lapsed Awards. If an Award expires or becomes unexercisable without having been
exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted
Stock or Restricted Stock Units, is forfeited to or repurchased by the Company due to the failure
to vest, the unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights the
forfeited or repurchased Shares) which were subject thereto will become available for future grant
or sale under the Plan (unless the Plan has terminated). With respect to Stock Appreciation
Rights, only Shares actually issued pursuant to a Stock Appreciation Right will cease to be
available under the Plan; all remaining Shares under Stock Appreciation Rights will remain
available for future grant or sale under the Plan (unless the Plan has terminated). Shares that
have actually been issued under the Plan under any Award will not be returned to the Plan and will
not become available for future distribution under the Plan; provided, however, that if Shares
issued pursuant to Awards of Restricted Stock or Restricted Stock Units are repurchased by the
Company or are forfeited to the Company due to the failure to vest, such Shares will become
available for future grant under the Plan. Shares used to pay the exercise price of an Award or to
satisfy the tax withholding obligations related to an Award will become available for future grant
or sale under the

-4-

 

Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash
payment will not result in reducing the number of Shares available for issuance under the Plan.
Notwithstanding the foregoing and, subject to adjustment as provided in Section 13, the maximum
number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the
aggregate Share number stated in Section 3(a), plus, to the extent allowable under Code Section 422
and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance
under the Plan pursuant to Section 3(b).

          (c) Share Reserve. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as will be sufficient to satisfy the requirements
of the Plan.

     4. Administration of the Plan.

	 	(a)	 	Procedure.

               (i) Multiple Administrative Bodies. Different Committees with respect to different
groups of Service Providers may administer the Plan.

               (ii) Other Administration. Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which Committee will be constituted to satisfy
Applicable Laws.

          (b) Powers of the Administrator. Subject to the provisions of the Plan, and in the
case of a Committee, subject to the specific duties delegated by the Board to such Committee, the
Administrator will have the authority, in its discretion:

               (i) to determine the Fair Market Value;

               (ii) to select the Service Providers to whom Awards may be granted hereunder;

               (iii) to determine the number of Shares to be covered by each Award granted hereunder;

               (iv) to approve forms of Award Agreements for use under the Plan;

               (v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise
price, the time or times when Awards may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such factors as the
Administrator will determine;

               (vi) to institute and determine the terms and conditions of an Exchange Program;

-5-

 

               (vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

               (viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of satisfying applicable
foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;

               (ix) to modify or amend each Award (subject to Section 18(d) of the Plan), including but not
limited to the discretionary authority to extend the post-termination exercisability period of
Awards and to extend the maximum term of an Option (subject to Section 6(d));

               (x) to allow Participants to satisfy withholding tax obligations in a manner prescribed in
Section 14;

               (xi) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Administrator;

               (xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of
Shares that otherwise would be due to such Participant under an Award; and

               (xiii) to make all other determinations deemed necessary or advisable for administering the
Plan.

          (c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations
and interpretations will be final and binding on all Participants and any other holders of Awards.

     5. Eligibility. Nonstatutory Stock Options, Stock Appreciation Rights, Restricted
Stock, and Restricted Stock Units may be granted to Service Providers. Incentive Stock Options may
be granted only to Employees.

     6. Stock Options.

          (a) Grant of Options. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Options in such amounts as the
Administrator, in its sole discretion, will determine.

          (b) Option Agreement. Each Award of an Option will be evidenced by an Award Agreement
that will specify the exercise price, the term of the Option, the number of Shares subject to the
Option, the exercise restrictions, if any, applicable to the Option, and such other terms and
conditions as the Administrator, in its sole discretion, will determine.

          (c) Limitations. Each Option will be designated in the Award Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. Notwithstanding such designation, however,
to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by the Participant during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars
($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this

-6-

 

Section 6(c), Incentive Stock Options will be taken into account in the order in which they
were granted, the Fair Market Value of the Shares will be determined as of the time the Option with
respect to such Shares is granted, and calculation will be performed in accordance with Code
Section 422 and Treasury Regulations promulgated thereunder.

          (d) Term of Option. The term of each Option will be stated in the Award Agreement;
provided, however, that the term will be no more than ten (10) years from the date of grant
thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term
of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as
may be provided in the Award Agreement.

          (e) Option Exercise Price and Consideration.

               (i) Exercise Price. The per Share exercise price for the Shares to be issued pursuant
to the exercise of an Option will be determined by the Administrator, but will be no less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant. In addition, in
the case of an Incentive Stock Option granted to an Employee who owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of the
Fair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of this
Section 6(e)(i), Options may be granted with a per Share exercise price of less than one hundred
percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction
described in, and in a manner consistent with, Code Section 424(a).

               (ii) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and will determine any
conditions that must be satisfied before the Option may be exercised.

               (iii) Form of Consideration. The Administrator will determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator will determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory
note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have
a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as
to which such Option will be exercised and provided further that accepting such Shares will not
result in any adverse accounting consequences to the Company, as the Administrator determines in
its sole discretion; (5) consideration received by the Company under cashless exercise program
(whether through a broker or otherwise) implemented by the Company in connection with the Plan; (6)
by net exercise, (7) such other consideration and method of payment for the issuance of Shares to
the extent permitted by Applicable Laws, or (8) any combination of the foregoing methods of
payment. In making its determination as to the type of consideration to accept, the Administrator
will consider if acceptance of such consideration may be reasonably expected to benefit the
Company.

          (f) Exercise of Option.

-7-

 

               (i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder
will be exercisable according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.

                    An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such
form as the Administrator may specify from time to time) from the person entitled to exercise the
Option, and (ii) full payment for the Shares with respect to which the Option is exercised
(together with applicable tax withholding). Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Award Agreement and the
Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or,
if requested by the Participant, in the name of the Participant and his or her spouse. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends or any other
rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding
the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly
after the Option is exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided in Section 13 of the
Plan.

                    Exercising an Option in any manner will decrease the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.

               (ii) Termination of Relationship as a Service Provider. If a Participant ceases to be
a Service Provider, other than upon the Participant’s termination as the result of the
Participant’s death or Disability, the Participant may exercise his or her Option within thirty
(30) days of termination, or such longer period of time as is specified in the Award Agreement (but
in no event later than the expiration of the term of such Option as set forth in the Award
Agreement) to the extent that the Option is vested on the date of termination. Unless otherwise
provided by the Administrator, if on the date of termination the Participant is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the Option will revert to
the Plan. If after termination the Participant does not exercise his or her Option within the time
specified by the Administrator, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.

               (iii) Disability of Participant. If a Participant ceases to be a Service Provider as
a result of the Participant’s Disability, the Participant may exercise his or her Option within six
(6) months of termination, or such longer period of time as is specified in the Award Agreement
(but in no event later than the expiration of the term of such Option as set forth in the Award
Agreement) to the extent the Option is vested on the date of termination. Unless otherwise
provided by the Administrator, if on the date of termination the Participant is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the Option will revert to
the Plan. If after termination the Participant does not exercise his or her Option within the time
specified herein, the Option will terminate, and the Shares covered by such Option will revert to
the Plan.

               (iv) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised within six (6) months following the Participant’s death, or within such

-8-

 

longer period of time as is specified in the Award Agreement (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement) to the extent that the
Option is vested on the date of death, by the Participant’s designated beneficiary, provided such
beneficiary has been designated prior to the Participant’s death in a form acceptable to the
Administrator. If no such beneficiary has been designated by the Participant, then such Option may
be exercised by the personal representative of the Participant’s estate or by the person(s) to whom
the Option is transferred pursuant to the Participant’s will or in accordance with the laws of
descent and distribution. Unless otherwise provided by the Administrator, if at the time of death
Participant is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will immediately revert to the Plan. If the Option is not so exercised
within the time specified herein, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.

     7. Stock Appreciation Rights.

          (a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the
Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to
time as will be determined by the Administrator, in its sole discretion.

          (b) Number of Shares. The Administrator will have complete discretion to determine
the number of Shares subject to any Award of Stock Appreciation Rights.

          (c) Exercise Price and Other Terms. The per Share exercise price for the Shares that
will determine the amount of the payment to be received upon exercise of a Stock Appreciation Right
as set forth in Section 7(f) will be determined by the Administrator and will be no less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant. Otherwise, the
Administrator, subject to the provisions of the Plan, will have complete discretion to determine
the terms and conditions of Stock Appreciation Rights granted under the Plan.

          (d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be
evidenced by an Award Agreement that will specify the exercise price, the term of the Stock
Appreciation Right, the conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.

          (e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under
the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set
forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(d) relating to
the maximum term and Section 6(f) relating to exercise also will apply to Stock Appreciation
Rights.

          (f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation
Right, a Participant will be entitled to receive payment from the Company in an amount determined
by multiplying:

               (i) The difference between the Fair Market Value of a Share on the date of exercise over the
exercise price; times

               (ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.

-9-

 

     At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may
be in cash, in Shares of equivalent value, or in some combination thereof.

     8. Restricted Stock.

          (a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, will determine.

          (b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by
an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and
such other terms and conditions as the Administrator, in its sole discretion, will determine.
Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of
Restricted Stock until the restrictions on such Shares have lapsed.

          (c) Transferability. Except as provided in this Section 8 or as the Administrator
determines, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

          (d) Other Restrictions. The Administrator, in its sole discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

          (e) Removal of Restrictions. Except as otherwise provided in this Section 8, Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released
from escrow as soon as practicable after the last day of the Period of Restriction or at such other
time as the Administrator may determine. The Administrator, in its discretion, may accelerate the
time at which any restrictions will lapse or be removed.

          (f) Voting Rights. During the Period of Restriction, Service Providers holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.

          (g) Dividends and Other Distributions. During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares, unless the Administrator provides otherwise. If
any such dividends or distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid.

          (h) Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company
and again will become available for grant under the Plan.

     9. Restricted Stock Units.

          (a) Grant. Restricted Stock Units may be granted at any time and from time to time as
determined by the Administrator. After the Administrator determines that it will grant

-10-

 

Restricted Stock Units, it will advise the Participant in an Award Agreement of the terms,
conditions, and restrictions related to the grant, including the number of Restricted Stock Units.

          (b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in
its discretion, which, depending on the extent to which the criteria are met, will determine the
number of Restricted Stock Units that will be paid out to the Participant. The Administrator may
set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals
(including, but not limited to, continued employment or service), or any other basis determined by
the Administrator in its discretion.

          (c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the
Participant will be entitled to receive a payout as determined by the Administrator.
Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to
receive a payout.

          (d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made
as soon as practicable after the date(s) determined by the Administrator and set forth in the Award
Agreement. The Administrator, in its sole discretion, may settle earned Restricted Stock Units in
cash, Shares, or a combination of both.

          (e) Cancellation. On the date set forth in the Award Agreement, all unearned
Restricted Stock Units will be forfeited to the Company.

     10. Compliance With Code Section 409A. Awards will be designed and operated in such a
manner that they are either exempt from the application of, or comply with, the requirements of
Code Section 409A, except as otherwise determined in the sole discretion of the Administrator. The
Plan and each Award Agreement under the Plan is intended to meet the requirements of Code Section
409A and will be construed and interpreted in accordance with such intent, except as otherwise
determined in the sole discretion of the Administrator. To the extent that an Award or payment, or
the settlement or deferral thereof, is subject to Code Section 409A the Award will be granted,
paid, settled or deferred in a manner that will meet the requirements of Code Section 409A, such
that the grant, payment, settlement or deferral will not be subject to the additional tax or
interest applicable under Code Section 409A.

     11. Leaves of Absence/Transfer Between Locations. Unless the Administrator provides
otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of
absence. A Participant will not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or between the Company,
its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed
three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the Company is not so
guaranteed, then six (6) months following the first (1st) day of such leave, any
Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock
Option and will be treated for tax purposes as a Nonstatutory Stock Option.

     12. Limited Transferability of Awards.

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          (a) Unless determined otherwise by the Administrator, Awards may not be sold, pledged,
assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws of
descent and distribution, and may be exercised, during the lifetime of the Participant, only by the
Participant. If the Administrator makes an Award transferable, such Award may only be transferred
(i) by will, (ii) by the laws of descent and distribution, or (iii) as permitted by Rule 701 of the
Securities Act of 1933, as amended (the “Securities Act”).

          (b) Further, until the Company becomes subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, or after the Administrator determines that it is, will, or may no longer
be relying upon the exemption from registration under the Exchange Act as set forth in Rule
12h-1(f) promulgated under the Exchange Act, an Option, or prior to exercise, the Shares subject to
the Option, may not be pledged, hypothecated or otherwise transferred or disposed of, in any
manner, including by entering into any short position, any “put equivalent position” or any “call
equivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act,
respectively), other than to (i) persons who are “family members” (as defined in Rule 701(c)(3) of
the Securities Act) through gifts or domestic relations orders, or (ii) to an executor or guardian
of the Participant upon the death or disability of the Participant. Notwithstanding the foregoing
sentence, the Administrator, in its sole discretion, may determine to permit transfers to the
Company or in connection with a Change in Control or other acquisition transactions involving the
Company to the extent permitted by Rule 12h-1(f).

     13. Adjustments; Dissolution or Liquidation; Merger or Change in Control.

          (a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Shares or other securities of the Company, or other change in the corporate structure
of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or
enlargement of the benefits or potential benefits intended to be made available under the Plan,
will adjust the number and class of Shares that may be delivered under the Plan and/or the number,
class, and price of Shares covered by each outstanding Award; provided, however, that the
Administrator will make such adjustments to an Award required by Section 25102(o) of the California
Corporations Code to the extent the Company is relying upon the exemption afforded thereby with
respect to the Award.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of such proposed action.

          (c) Merger or Change in Control. In the event of a merger or Change in Control, each
outstanding Award will be treated as the Administrator determines without a Participant’s consent,
including, without limitation, that (i) Awards will be assumed, or substantially equivalent Awards
will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with
appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to
a Participant, that the Participant’s Awards will terminate upon or immediately prior to the
consummation of such merger or Change in Control (subject to the provisions of the proceeding

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paragraph); (iii) outstanding Awards will vest and become exercisable, realizable, or payable,
or restrictions applicable to an Award will lapse, in whole or in part prior to or upon
consummation of such merger or Change in Control, and, to the extent the Administrator determines,
terminate upon or immediately prior to the effectiveness of such merger of Change in Control; (iv)
(A) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to
the amount that would have been attained upon the exercise of such Award or realization of the
Participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of
doubt, if as of the date of the occurrence of the transaction the Administrator determines in good
faith that no amount would have been attained upon the exercise of such Award or realization of the
Participant’s rights, then such Award may be terminated by the Company without payment), or (B) the
replacement of such Award with other rights or property selected by the Administrator in its sole
discretion; or (v) any combination of the foregoing. In taking any of the actions permitted under
this subsection 13(c), the Administrator will not be obligated to treat all Awards, all Awards held
by a Participant, or all Awards of the same type, similarly.

          In the event that the successor corporation does not assume or substitute for the Award (or
portion thereof), the Participant will fully vest in and have the right to exercise all of his or
her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards
would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted
Stock Units will lapse, and, with respect to Awards with performance-based vesting, all performance
goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target
levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation
Right is not assumed or substituted in the event of a merger or Change in Control, the
Administrator will notify the Participant in writing or electronically that the Option or Stock
Appreciation Right will be exercisable for a period of time determined by the Administrator in its
sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of
such period.

          For the purposes of this subsection 13(c), an Award will be considered assumed if, following
the merger or Change in Control, the Award confers the right to purchase or receive, for each Share
subject to the Award immediately prior to the merger or Change in Control, the consideration
(whether stock, cash, or other securities or property) received in the merger or Change in Control
by holders of Common Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen by the holders of
a majority of the outstanding Shares); provided, however, that if such consideration received in
the merger or Change in Control is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the
payout of a Restricted Stock Unit, for each Share subject to such Award, to be solely common stock
of the successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or Change in Control.

          Notwithstanding anything in this Section 13(c) to the contrary, an Award that vests, is earned
or paid-out upon the satisfaction of one or more performance goals will not be considered assumed
if the Company or its successor modifies any of such performance goals without the Participant’s
consent; provided, however, a modification to such performance goals only to reflect

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the successor corporation’s post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.

          Notwithstanding anything in this Section 13(c) to the contrary, if a payment under an Award
Agreement is subject to Code Section 409A and if the change in control definition contained in the
Award Agreement does not comply with the definition of “change of control” for purposes of a
distribution under Code Section 409A, then any payment of an amount that is otherwise accelerated
under this Section will be delayed until the earliest time that such payment would be permissible
under Code Section 409A without triggering any penalties applicable under Code Section 409A.

     14. Tax Withholding.

          (a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to
an Award (or exercise thereof), the Company will have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local, foreign or other taxes (including the Participant’s FICA obligation)
required to be withheld with respect to such Award (or exercise thereof).

          (b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may permit a Participant to satisfy such
tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii)
electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal
to the minimum statutory amount required to be withheld, (iii) delivering to the Company
already-owned Shares having a Fair Market Value equal to the statutory amount required to be
withheld, provided the delivery of such Shares will not result in any adverse accounting
consequences, as the Administrator determines in its sole discretion, or (iv) selling a sufficient
number of Shares otherwise deliverable to the Participant through such means as the Administrator
may determine in its sole discretion (whether through a broker or otherwise) equal to the amount
required to be withheld. The amount of the withholding requirement will be deemed to include any
amount which the Administrator agrees may be withheld at the time the election is made, not to
exceed the amount determined by using the maximum federal, state or local marginal income tax rates
applicable to the Participant with respect to the Award on the date that the amount of tax to be
withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will
be determined as of the date that the taxes are required to be withheld.

     15. No Effect on Employment or Service. Neither the Plan nor any Award will confer
upon a Participant any right with respect to continuing the Participant’s relationship as a Service
Provider with the Company, nor will they interfere in any way with the Participant’s right or the
Company’s right to terminate such relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.

     16. Date of Grant. The date of grant of an Award will be, for all purposes, the date
on which the Administrator makes the determination granting such Award, or such other later date as
is determined by the Administrator. Notice of the determination will be provided to each
Participant within a reasonable time after the date of such grant.

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     17. Term of Plan. Subject to Section 21 of the Plan, the Plan will become effective
upon its adoption by the Board. Unless sooner terminated under Section 18, it will continue in
effect for a term of ten (10) years from the later of (a) the effective date of the Plan, or (b)
the earlier of the most recent Board or stockholder approval of an increase in the number of Shares
reserved for issuance under the Plan.

     18. Amendment and Termination of the Plan; Amendment of Awards.

          (a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

          (b) Stockholder Approval. The Company will obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws. The repricing or
exchange of any Award pursuant to an Exchange Program shall be expressly permitted under the Plan
without the requirement of additional stockholder approval.

          (c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise
between the Participant and the Administrator, which agreement must be in writing and signed by the
Participant and the Company. Termination of the Plan will not affect the Administrator’s ability
to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior
to the date of such termination.

          (d) Amendment of Awards. The Board, at any time, and from time to time, may amend the
terms of any one or more Awards; provided, however, that no such amendment will impair the rights
of any Participant, unless mutually agreed otherwise between the Participant and the Administrator,
which agreement must be in writing and signed by the Participant and the Company (it being
understood that no action taken by the Board that is expressly permitted under the Plan, including,
without limitation, any actions described in Section 13 hereof, shall constitute an amendment of an
Award for such purpose). Notwithstanding the foregoing, subject to the limitations of applicable
law, if any, and without an affected Participant’s consent, the Board may amend the terms of any
one or more Awards if necessary to bring the Award into compliance with Section 409A of the Code
and Department of Treasury regulations and other interpretive guidance issued thereunder.

     19. Conditions Upon Issuance of Shares.

          (a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares will comply with
Applicable Laws and will be further subject to the approval of counsel for the Company with respect
to such compliance.

          (b) Investment Representations. As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

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     20. Inability to Obtain Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority will not have been obtained.

     21. Stockholder Approval. The Plan will be subject to approval by the stockholders of
the Company within twelve (12) months after the date the Plan is adopted by the Board. Such
stockholder approval will be obtained in the manner and to the degree required under Applicable
Laws.

     22. Information to Participants. Beginning on the earlier of (i) the date that the
aggregate number of Participants under this Plan is five hundred (500) or more and the Company is
relying on the exemption provided by Rule 12h-1(f)(1) under the Exchange Act and (ii) the date that
the Company is required to deliver information to Participants pursuant to Rule 701 under the
Securities Act, and until such time as the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, is no longer relying on the exemption provided by Rule
12h-1(f)(1) under the Exchange Act or is no longer required to deliver information to Participants
pursuant to Rule 701 under the Securities Act, the Company shall provide to each Participant the
information described in paragraphs (e)(3), (4), and (5) of Rule 701 under the Securities Act not
less frequently than every six (6) months with the financial statements being not more than 180
days old and with such information provided either by physical or electronic delivery to the
Participants or by written notice to the Participants of the availability of the information on an
Internet site that may be password-protected and of any password needed to access the information.
The Company may request that Participants agree to keep the information to be provided pursuant to
this section confidential. If a Participant does not agree to keep the information to be provided
pursuant to this section confidential, then the Company will not be required to provide the
information unless otherwise required pursuant to Rule 12h-1(f)(1) under the Exchange Act or Rule
701 of the Securities Act.

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