Document:

a554089ex10_1.htm

    Exhibit
      10.1

     

    COLLABORATION
      AGREEMENT

     

    AMONG

     

    ARIAD
      PHARMACEUTICALS, INC.

     

    ARIAD
      GENE THERAPEUTICS, INC.

     

    and

     

    MERCK
      & CO., INC.

     

    July
      11, 2007

     

    

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
          amended.

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    TABLE
      OF CONTENTS

    
      Page

    

     

    
      
        	
                1     
                  DEFINITIONS

              	5
	
                2    
                  ADMINISTRATION
                  OF THE
                  COLLABORATION

              	25
	 	
                2.1
                  Joint
                  Steering Committee.

              	
                25

              
	 	
                2.2
                  Dispute
                  Resolution

              	
                26

              
	 	
                2.3
                  Joint
                  Commercialization Committee.

              	
                29

              
	 	
                2.4
                  Joint
                  Manufacturing Committee.

              	
                32

              
	 	
                2.5
                  Alliance
                  Managers.

              	
                34

              
	 	
                2.6
                  Appointment
                  of JSC, JDC, JMC and JCC Members and Alliance Managers

              	
                35

              
	
                3    
                  DEVELOPMENT
                  AND COMMERCIALIZATION OF
                  PRODUCTS

              	35
	 	
                3.1
                  Implementation
                  of Development Program.

              	
                35

              
	 	
                3.2
                  Identification
                  of Back-up Compounds.

              	
                39

              
	 	
                3.3
                  Supply
                  of Proprietary Materials

              	
                39

              
	 	
                3.4
                  Opt-Out
                  Right; Limitations on Opt-Out.

              	
                40

              
	 	
                3.5
                  Product
                  Commercialization.

              	
                41

              
	 	
                3.6
                  Supply
                  of Products for Development and Commercialization

              	
                42

              
	 	
                3.7
                  Development
                  and Commercialization Diligence

              	
                43

              
	 	
                3.8
                  Compliance

              	
                44

              
	 	
                3.9
                  Cooperation

              	
                44

              
	 	
                3.1
                  Exchange
                  of Reports; Information; Updates.

              	
                44

              
	 	
                3.11
                  Product
                  Recalls

              	
                47

              
	 	
                3.12
                  Reconciliation
                  and Auditing of Development Costs.

              	
                47

              
	 	
                3.13
                  Co-Promotion
                  Right.

              	
                49

              
	 	
                3.14
                  Labeling

              	
                50

              
	
                4    
                  PAYMENTS

              	50 
	 	
                4.1
                  Upfront
                  Fee

              	
                50

              
	 	
                4.2
                  Development
                  Cost Advances

              	
                50

              
	 	
                4.3
                  Operating
                  Income Payments.

              	
                51

              
	 	
                4.4
                  Milestone
                  Payments.

              	
                52

              
	 	
                4.5
                  Payment
                  of Royalties; Royalty Rates; Accounting and Records.

              	
                56

              
	
                5    
                  TREATMENT
                  OF CONFIDENTIAL INFORMATION; PUBLICITY;
                  NON-SOLICITATION.

              	61
	 	
                5.1
                  Confidentiality.

              	
                61

              

      

      

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          i

          
            

          

        

        
          
          

        

         

      

      
        	 	
                5.2
                  Publicity

              	
                62

              
	 	
                5.3
                  Publications
                  and Presentations

              	
                62

              
	
                6    
                  LICENSE
                  GRANTS; EXCLUSIVITY; STANDSTILL
                  AGREEMENT

              	63
	 	
                6.1
                  Licenses.

              	
                63

              
	 	
                6.2
                  Right
                  to Sublicense.

              	
                66

              
	 	
                6.3
                  No
                  Other Rights

              	
                67

              
	 	
                6.4
                  Exclusivity.

              	
                69

              
	 	
                6.5
                  Standstill
                  Agreement.

              	
                69

              
	
                7     
                  INTELLECTUAL
                  PROPERTY RIGHTS

              	69
	 	
                7.1
                  ARIAD
                  Intellectual Property Rights

              	
                69

              
	 	
                7.2
                  MERCK
                  Intellectual Property Rights

              	
                69

              
	 	
                7.3
                  Joint
                  Technology Rights.

              	
                70

              
	 	
                7.4
                  Product
                  Technology and Product Patent Rights

              	
                70

              
	 	
                7.5
                  Patent
                  Coordinators

              	
                70

              
	 	
                7.6
                  Inventorship

              	
                70

              
	
                8     
                  FILING,
                  PROSECUTION AND MAINTENANCE OF PATENT
                  RIGHTS

              	70
	 	
                8.1
                  Patent
                  Filing, Prosecution and Maintenance.

              	
                70

              
	 	
                8.2
                  Legal
                  Actions.

              	
                72

              
	 	
                8.3
                  Trademark
                  Prosecution and Registration.

              	
                74

              
	
                9    
                  TERM
                  AND TERMINATION

              	75
	 	
                9.1
                  Term

              	
                75

              
	 	
                9.2
                  Termination

              	
                75

              
	 	
                9.3
                  Consequences
                  of Termination of Agreement

              	
                77

              
	 	
                9.4
                  Surviving
                  Provisions

              	
                79

              
	
                10    
                  REPRESENTATIONS
                  AND WARRANTIES

              	79
	 	
                10.1
                  Mutual
                  Representations and Warranties

              	
                79

              
	 	
                10.2
                  Additional
                  Representations of ARIAD

              	
                80

              
	
                11    
                  INDEMNIFICATION

              	81
	 	
                11.1
                  Indemnification
                  of MERCK by ARIAD

              	
                81

              
	 	
                11.2
                  Indemnification
                  of ARIAD by MERCK

              	
                81

              
	 	
                11.3
                  Conditions
                  to Indemnification

              	
                82

              
	 	
                11.4
                  Warranty
                  Disclaimer

              	
                82

              
	 	
                11.5
                  Limited
                  Liability

              	
                82

              

      

      

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          ii

          
            

          

        

        
          
          

        

         

      

      
        	
                12    
                  MISCELLANEOUS

              	83
	 	
                12.1
                  Arbitration

              	
                83

              
	 	
                12.2
                  Notices

              	
                84

              
	 	
                12.3
                  Governing
                  Law

              	
                85

              
	 	
                12.4
                  Binding
                  Effect

              	
                85

              
	 	
                12.5
                  Headings

              	
                85

              
	 	
                12.6
                  Counterparts

              	
                85

              
	 	
                12.7
                  Amendment;
                  Waiver

              	
                85

              
	 	
                12.8
                  No
                  Third Party Beneficiaries

              	
                86

              
	 	
                12.9
                  Purposes
                  and Scope

              	
                86

              
	 	
                12.1
                  Assignment
                  and Successors

              	
                86

              
	 	
                12.11
                  Force
                  Majeure

              	
                86

              
	 	
                12.12
                  Interpretation

              	
                86

              
	 	
                12.13
                  Integration;
                  Severability

              	
                87

              
	 	
                12.14
                  Further
                  Assurances

              	
                87

              
	 	
                12.15
                  Authority
                  of ARIAD Pharmaceuticals, Inc

              	
                87

              
	 	
                12.16
                  HSR
                  Filing

              	
                87

              

      

    

     

     

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
          amended.

        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    
      List
        of Exhibits and Schedules

       

    

    
      
        	
                Exhibit
                  A

              	
                Form
                  of Promissory Note

              
	
                Schedule
                  1

              	
                Description
                  of AP23573

              
	
                Schedule
                  2

              	
                Licensed
                  Patent Rights

              
	
                Schedule
                  3

              	
                Calculation
                  of Operating Income (Loss)

              
	
                Schedule
                  4

              	
                Form
                  of Press Release

              
	
                Schedule
                  5

              	
                Material
                  Terms to be Included in Form of Co-Promotion
                  Agreement

              

      

    

     

     

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
          amended.

        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    
       

      COLLABORATION
        AGREEMENT

       

      This
        COLLABORATION AGREEMENT (this “Agreement”) is entered into as of July 11, 2007
        (the “Effective Date”), by and among ARIAD Pharmaceuticals, Inc. and ARIAD Gene
        Therapeutics, Inc., both Delaware corporations with offices at 26 Landsdowne
        Street, Cambridge, Massachusetts 02139 (collectively, “ARIAD”), and Merck &
Co., Inc., a Corporation organized under the laws of New Jersey with offices
        at
One Merck Drive, Whitehouse
        Station, NJ 08889-0100 (“MERCK”).  Each of MERCK and ARIAD is
        sometimes referred to individually herein as a “Party” and collectively as the
“Parties.”

      

      WHEREAS,
        ARIAD has developed and controls certain technology and proprietary materials
        related to mTOR inhibitor compounds, including its proprietary compound AP23573;
        and

       

      WHEREAS,
        MERCK is engaged in the research, development and commercialization of human
        therapeutics; and

       

      WHEREAS,
        the Parties desire to enter into a collaboration for the purpose of developing
        and commercializing certain products containing or derived from such mTOR
        inhibitor compounds for the prevention, delay and treatment of certain cancer
        and, upon further agreement, non-cancer indications.

       

      NOW,
        THEREFORE, in consideration of the mutual covenants contained herein, and
        for
        other good and valuable consideration, the Parties hereto, intending to be
        legally bound, hereby agree as follows:

       

      1.       
        DEFINITIONS

       

      Whenever
        used in this Agreement with an initial capital letter, the terms defined
        in this
        Section 1 and in Schedule 3 attached hereto shall have the meanings
        specified.

       

      1.1  “AAA”
        means the American Arbitration Association.

       

      1.2  “Achievement
        of Clinical Proof of Concept” means demonstration that a
        Collaboration Compound has efficacy in a Phase 1 and/or Phase 2 Clinical
        Trial,
        as evidenced by clinical endpoints and/or by validated Biomarkers(s) that
        are
        jointly agreed-upon by both Parties, and that provide a statistically
        significant indication of clinical efficacy.

       

      1.3  “Adverse
        Event” means any unfavorable and unintended change in the structure
        (signs), function (symptoms), or chemistry (laboratory data), of the body
        temporally associated with the use of a Product, whether or not considered
        related to the use of the Product.  Changes resulting from normal
        growth and development which do not vary significantly in frequency or severity
        from expected levels are not to be considered adverse
        experiences.  Examples of changes that are not adverse events may
        include, but are not limited to, teething, typical crying in infants and
        children, and onset of menses or menopause occurring at a physiologically
        appropriate time.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -5-

          
            

          

        

        
          
          

        

         

      

      1.4  “Affiliate”
        means, with respect to any Person, any other Person that, directly or
        indirectly, controls, or is controlled by, or is under common control with,
        such
        Person. For purposes of this definition, “control” means (a) ownership of more
        than fifty percent (50%) of the shares of stock entitled to vote for the
        election of directors in the case of a corporation, or more than fifty percent
        (50%) of the equity interests in the case of any other type of legal entity,
        (b)
        status as a general partner in any partnership, or (c) any other arrangement
        whereby a Person controls or has the right to control the board of directors
        of
        a corporation or equivalent governing body of an entity other than a
        corporation.

       

      1.5  “Annual
        Global Development Plan” means, with respect to each Product and
        Calendar Year, the written plan for the Development Program to be conducted
        for
        such Product for such Calendar Year, as such written plan may be amended,
        modified or updated in accordance with Section 3.1.2(b); provided, however,
        that
        the initial Annual Global Development Plan shall cover the period from the
        Effective Date through December 31, 2008.

       

      1.6  “Annual
        Net Sales” means, with respect to any Calendar Year, the aggregate
        amount of the Net Sales for such Calendar Year.

       

      1.7  “AP23573”
        means the compound Controlled by ARIAD and described more
        fully on Schedule 1 attached hereto.

       

      1.8  “API”
        means the active pharmaceutical ingredient known as AP23573 or any other
        Collaboration Compound being Developed and Commercialized
        hereunder.

       

      1.9  “Applicable
        Laws” means any Federal, state, local, national and supra-national
        laws, statutes, rules and regulations, including any rules, regulations,
        guidance, guidelines or requirements of Regulatory Authorities, national
        securities exchanges or securities listing organizations, that are in effect
        from time to time during the Term and applicable to a particular activity
        hereunder.

       

      1.10  “ARIAD
        Background Technology” means any Technology that is used by ARIAD,
        or provided by ARIAD for use, in the Development Program and that is (a)
        Controlled by ARIAD as of the Effective Date, or (b) conceived or first reduced
        to practice by employees of, or consultants to, ARIAD after the Effective
        Date
        other than in the conduct of ARIAD Development Activities and without the
        use,
        in any material respect, of any MERCK Technology, MERCK Patent Rights or
        MERCK Materials.  For purposes of clarity, ARIAD
        Background Technology shall not include ARIAD Program Technology, Program
        Biomarker Technology or ARIAD’s interest in Joint Technology.

       

      1.11  “ARIAD
        Co-Development Percentage” means (a) except with
        respect to any Cancer Indication for which ARIAD exercises an Opt-Out Right,
        fifty percent (50%), and (b) with respect to any Cancer Indication for which
        ARIAD exercises an Opt-Out Right, zero percent (0%).

       

      1.12  “ARIAD
        Decision” means any decision with respect
        to  the Development and/or Commercialization (other than
        Manufacturing) of a Product for [***] in the U.S. Territory other than Pricing,
        Development and Commercialization budgets or global Branding, or (iii) the
        commencement and prosecution of actions to address [***] in the U.S. Territory
        unless a U.S. Commercialization Transfer has occurred.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -6-

          
            

          

        

        
          
          

        

         

      

      1.13  “ARIAD
        Development Activities” means the Development activities specified
        to be conducted by ARIAD in any Annual Global Development Plan (or amendment
        thereto).

       

      1.14  “ARIAD
        Materials” means any Proprietary Materials that are Controlled by
        ARIAD and used by ARIAD, or provided by ARIAD for use, in the Development
        Program.

       

      1.15  “ARIAD
        Patent Rights” means any Patent Rights that contain one or more
        claims that cover ARIAD Technology.  For purposes of clarity, ARIAD
        Patent Rights includes all Licensed Patent Rights and all ARIAD Program Patent
        Rights.

       

      1.16  “ARIAD
        Program Patent Rights” means any Patent Rights
        Controlled by ARIAD that contain one or more claims that cover ARIAD Program
        Technology.

       

      1.17  “ARIAD
        Program Technology” means (a) any Product Technology, and (b) any
        Program Technology other than Product Use Technology that is conceived or
        first
        reduced to practice by employees of, or consultants to, ARIAD, alone or jointly
        with any Third Party, without the use, in any material respect, of any MERCK
        Technology, MERCK Patent Rights, MERCK Materials or Joint
        Technology.

       

      1.18  “ARIAD
        Revenue Sharing Percentage” means the percentage obtained by
        subtracting MERCK Revenue Sharing Percentage from one
        hundred percent.

       

      1.19  “ARIAD
        Technology” means, collectively, ARIAD Background Technology and
        ARIAD Program Technology.

       

      1.20  “Back-Up
        Compound” means any Rapamycin Derived mTOR
        Inhibitor within the claims of [***] or any other Rapamycin Derived mTOR
        Inhibitor discovered by ARIAD, or jointly by ARIAD and MERCK, and covered
        by a
        patent application filed by ARIAD and/or MERCK, in either case that is
        designated by the JSC for further Development as a Back-Up Compound pursuant
        to
        Section 3.2.

       

      1.21  “Biomarker”
        means a specific protein, protein isoform, nucleic acid sequence, gene
        expression profile, single nucleotide polymorphism profile, microRNA profile,
        genomic alteration  profile, metabolite,  metabolic profile
        and/or other molecular feature, alone or in combination, the presence or
        level
        of which correlates with and/or predicts (a) the inhibition or activation
        of
        mTOR or the mTOR pathway, (b) the performance characteristics (including,
        without limitation, safety, efficacy and tolerability) of a Collaboration
        Compound, alone or in combination with other treatments, (c) the severity,
        characteristics or prognosis of a human condition or disease, or (d) the
        responsiveness of patients to a treatment or combination of
        treatments.

       

      1.22  “Biomarker
        Information” means any data, information or
        know-how that pertains to Biomarkers and that is discovered, created, or
        developed (i) in the Development Program, including as a result of any
        pre-clinical, non-clinical or clinical testing of a Collaboration Compound
        in
        cells, animals or humans, including testing of a biological material (such
        as
        fluid,  tissue or tumor samples, (ii) with the use of any biological
        materials, data or information developed in or resulting from the Development
        Program or otherwise funded by the Parties in the Collaboration, or (iii)
        with
        the use of any Biomarker Information described in the preceding clauses (i)
        or
        (ii).

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -7-

          
            

          

        

        
          
          

        

         

      

      1.23  “Branding”
        means determining all matters relating to branding of any Product, including
        without limitation, brand names, product logos, branding colors, positioning
        and
        key messages to be incorporated in promotional materials.

       

      1.24  “Calendar
        Quarter” means the period beginning on the Effective Date and
        ending on the last day of the calendar quarter in which the Effective Date
        falls, and thereafter each successive period of three (3) consecutive calendar
        months ending on March 31, June 30, September 30 or December 31.

       

      1.25  “Calendar
        Year” means each successive period of twelve (12) months commencing
        on January 1 and ending on December 31.

       

      1.26  “Cancer
        Indication” means any Sarcoma Indication, Major Cancer Indication,
        or Other Cancer Indication.

       

      1.27  “Challenge”
        means any challenge to the validity or enforceability of any of
        the
        ARIAD Patent Rights, including without limitation by (a) filing a declaratory
        judgment action in which any of the ARIAD Patent Rights is alleged to be
        invalid
        or unenforceable; (b) citing prior art pursuant to 35 U.S.C. §301, filing a
        request for re-examination of any of the ARIAD Patent Rights pursuant to
        35
        U.S.C. §302 and/or §311, or provoking or becoming a party to an interference
        with an application for any of the ARIAD Patent Rights pursuant to 35 U.S.C.
        §135; or (c) filing or commencing any re-examination, opposition, cancellation,
        nullity or similar proceedings against any of the ARIAD Patent Rights in
        any
        country.

       

      1.28  “Clinical
        Product” means Product, in the form appropriate for a particular
        use, for use by MERCK and ARIAD and their Affiliates and sublicensees in
        Clinical Trials, the Development Program or for other non-commercial
        purposes.

       

      1.29  “Clinical
        Product Transfer” shall have the meaning set forth in the Supply
        Agreement.

       

      1.30  “Clinical
        Trial” means a clinical study of a Product
        involving the administration of Product to patients for any Indication, and
        includes any Phase 1 Clinical Trial, Phase 2 Clinical Trial, Phase 3 Clinical
        Trial, Phase 4 Clinical Trial and Phase 5 Clinical Trial as
        applicable.

       

      1.31  “Clinical
        Trial Proposal” means a proposal submitted by
        either Party at any time on and after the date of Completion of a Phase 1
        Clinical Trial and after Achievement of Clinical Proof of
        Concept  involving a Product that describes in reasonable detail the
        proposed Late Stage Clinical Trial to be incorporated into the Development
        Program and which includes a final protocol, analysis plan and detailed synopsis
        for such Late Stage Clinical Trial and is designed to obtain Commercialization
        Regulatory Approval for such Product for a Major Cancer Indication or Other
        Cancer Indication (including, without limitation, an estimated budget and
        timeline with respect thereto).

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -8-

          
            

          

        

        
          
          

        

         

      

      1.32  “Collaboration”
        means the alliance of ARIAD and MERCK established pursuant to this Agreement
        for
        the purposes of Developing Products and Commercializing Products in the Field
        in
        the Territory.

       

      1.33  “Collaboration
        Compounds” means, collectively, (a) AP23573, and (b) any Back-Up
        Compounds.

       

      1.34   “Commercially
        Reasonable Efforts” means, with respect to activities
        of  a Party in the Development or the
        Commercialization of a particular Product, the efforts and resources typically
        used by that Party (or if the Party does not engage in that activity for
        other
        products or compounds, by  biotechnology and/or pharmaceutical
        companies that are similar in size) in the development of product candidates
        or
        the commercialization of products of comparable market potential, taking
        into
        account all relevant factors including, as applicable and without limitation,
        stage of development, mechanism of action, efficacy and safety relative to
        competitive products in the marketplace, actual or anticipated Regulatory
        Authority approved labeling, the nature and extent of market exclusivity
        (including patent coverage and regulatory exclusivity), cost and likelihood
        of
        obtaining Commercialization Regulatory Approval,  and actual or
        projected profitability. Commercially Reasonable Efforts shall be determined
        on
        a market-by-market and indication-by-indication basis for a particular Product,
        and it is anticipated that the level of effort will be different for different
        markets, and will change over time, reflecting changes in the status of the
        Product and the market(s) involved.

       

      1.35  “Commercialization”
        or “Commercialize” means any and all activities directed
        to the offering for sale and sale of a Product, both before and after
        Commercialization Regulatory Approval has been obtained, including activities
        related to marketing, promoting, Detailing, distributing, Manufacturing (other
        than  Manufacturing Development or Manufacturing for use in
        Development), importing, selling and offering to sell Product and/or conducting
        post-marketing human clinical studies (including Phase 5 Clinical Trials)
        with
        respect to any Targeted Indication with respect to which Commercialization
        Regulatory Approval has been received or for a use that is subject of an
        investigator-initiated study program, and interacting with Regulatory
        Authorities regarding the foregoing.  When used as a verb, “to
        Commercialize” and “Commercializing” means to engage in Commercialization and
“Commercialized” has a corresponding meaning.

       

      1.36  “Commercialization
        Regulatory Approval” means, with respect to any Product, the
        Regulatory Approval required by Applicable Laws to sell such Product for
        use for
        an Indication in the Field in a country or region in the Territory, as well
        as,
        to the extent applicable, pricing approvals and government reimbursement
        approvals, even if not legally required to sell Product in a
        country.  For purposes of clarity, (a)
“Commercialization Regulatory Approval” in the United States shall mean final
        approval of an NDA or sNDA permitting marketing of the applicable Product
        in
        interstate commerce in the United States; (b) “Commercialization Regulatory
        Approval” in the European Union shall mean marketing authorization for the
        applicable Product granted either by a Regulatory Authority in any Major
        European Country or by the EMEA pursuant to Council Directive 2001/83/EC,
        as
        amended, or Council Regulation 2309/93/EEC, as amended, together with the
        first
        pricing approval and government reimbursement approval for the applicable
        Product granted by a Regulatory Authority in any Major European Country or
        by
        the EMEA, as the case may be; and (c) “Commercialization Regulatory Approval” in
        Japan shall mean final approval of an application submitted to the Ministry
        of
        Health, Labor and Welfare and the publication of a New Drug Approval Information
        Package permitting marketing of the applicable Product in Japan, together
        with
        pricing approval and government reimbursement approval,  as any of the
        foregoing may be amended from time to time.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -9-

          
            

          

        

        
          
          

        

         

      

      1.37  “Completion”
        means, with respect to a Clinical Trial conducted by a Party, the
        date
        on which all material data reasonably expected to be derived therefrom has
        been
        generated and the final study report with respect thereto has been
        finalized.

       

      1.38  “Confidential
        Information” means (a) with respect to ARIAD, all tangible
        embodiments of ARIAD Technology, (b) with respect to MERCK, all tangible
        embodiments of MERCK Technology and (c) with respect to each Party, (i) all
        tangible embodiments of Joint Technology and (ii) all information, Technology
        and Proprietary Materials disclosed or provided by or on behalf of such Party
        (the “disclosing Party”) to the other Party (the “receiving Party”) or to any of
        the receiving Party’s employees, consultants, Affiliates or sublicensees;
        provided, that, none of the foregoing shall be Confidential Information if:
        (A)
        as of the date of disclosure, it is known to the receiving Party or its
        Affiliates as demonstrated by contemporaneous credible written documentation,
        other than by virtue of a prior confidential disclosure to such receiving
        Party;
        (B) as of the date of disclosure it is in the public domain, or it subsequently
        enters the public domain through no fault of the receiving Party; (C) it
        is
        obtained by the receiving Party from a Third Party having a lawful right
        to make
        such disclosure free from any obligation of confidentiality to the disclosing
        Party; or (D) it is independently developed by or for the receiving Party
        without reference to or use of any Confidential Information of the disclosing
        Party as demonstrated by contemporaneous credible written
        documentation.  For purposes of clarity, unless excluded from
        Confidential Information pursuant to the proviso at the end of the preceding
        sentence, any scientific, technical, manufacturing or financial information
        of a
        Party that is disclosed at any meeting of the JSC, the JDC, the JMC or the
        JCC
        or disclosed through an audit report shall constitute Confidential Information
        of the disclosing Party.

       

      1.39  “Contract
        Year” means (a) the period beginning on the Effective Date and
        ending on the first anniversary of the last day of the calendar month in
        which
        the Effective Date falls, and (b) each succeeding twelve (12) month period
        thereafter.

       

      1.40  “Control”
        or “Controlled” means (a) with respect to Technology
        (other than Proprietary Materials) or Patent Rights, the possession by a
        Party
        of the right to grant a license or sublicense to such Technology or Patent
        Rights as provided herein without the payment of additional consideration
        to,
        and without violating the terms of any agreement or arrangement with, any
        Third
        Party and without violating any Applicable Laws and (b) with respect to
        Proprietary Materials, the possession by a Party of the right to supply such
        Proprietary Materials to the other Party as provided herein without the payment
        of additional consideration to, and without violating the terms of any agreement
        or arrangement with, any Third Party and without violating any Applicable
        Laws.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -10-

          
            

          

        

        
          
          

        

         

      

      1.41  “Co-Promoted
        Product” means any quantity of Product that is not Royalty-Bearing
        Product.

       

      1.42  “Co-Promotion”
        or “Co-Promote” means, with respect to each Co-Promoted
        Product, the joint promotion and Detailing of such Co-Promoted Product under
        the
        same Product Trademark in the Co-Promotion Territory using a coordinated
        field
        sales force consisting of Representatives of both MERCK and ARIAD.

       

      1.43  “Co-Promotion
        Percentage” means, with respect to any Co-Promoted
        Product, the percentage of Detailing efforts to be provided by each Party
        in
        Co-Promoting such Co-Promoted Product, as determined by the JCC pursuant
        to
        Section 2.3.4(o); provided, that, under no circumstances shall the Co-Promotion
        Percentage of either Party be less than [***] percent ([***]%).

       

      1.44  “Detail”
        means with respect to a Co-Promoted Product, an
        interactive,  personal, live, contact of a Representative within the
        Co-Promotion Territory with a medical professional with prescribing authority
        or
        other individuals or entities that have a significant impact or influence
        on
        prescribing decisions, in an effort to increase physician prescribing
        preferences of such Co-Promoted Product for its approved uses within the
        Co-Promotion Territory.  When used as an adjective, “Detailing” means
        of or related to performing Details.

       

      1.45  “Development”
        or “Develop” means, with respect to each Product, (i)
        all non-clinical and clinical activities designed to obtain Regulatory Approval
        of such Product in accordance with this Agreement up to and including the
        obtaining of Commercialization Regulatory Approval of such Product, including
        without limitation, Phase 4 Clinical Trials, the development of Biomarkers,
        Biomarker Information and Program Biomarker Technology, regulatory toxicology
        studies, DMPK studies, statistical analysis and report writing, Clinical
        Trial
        design and operations, preparing and filing Drug Approval Applications, and
        all
        regulatory affairs related to the foregoing; and (ii) Manufacturing
        Development.  When used as a verb, “Developing” means to engage in
        Development and “Developed” has a corresponding meaning.

       

      1.46  “Development
        Costs” means the reasonable out-of-pocket costs and internal costs
        incurred by a Party (or for its account by an Affiliate or a Third Party)
        after
        the Effective Date that are generally consistent with the respective Development
        and Manufacturing Development activities of such Party in the applicable
        Annual
        Global Development Plan and are attributable to the Development of a
        Product.  For purposes of this definition (a) out-of-pocket costs
        means the actual amounts paid to a Third Party for  specific external
        Development activities applicable to a Product, including, without limitation
        all filing fees required for and other costs associated with, any Regulatory
        Filings and all patent expenses applicable to a Product; (b) internal costs
        means the applicable FTE Rate multiplied by the number of FTE hours utilized
        in
        the relevant period on activities directly relating to Development in accordance
        with the Annual Global Development Plan; and (c) the reasonable out-of-pocket
        and internal costs shall include the cost of Manufacturing or obtaining
        Collaboration Compounds or Products or raw materials or intermediates therefore
        for use in the activities in clause (a) or (b).  For the avoidance of
        doubt, Development Costs shall include the costs incurred by either Party
        (i) in
        conducting Clinical Trials other than Phase 5 Clinical Trials with respect
        to a
        Product, including, without limitation, all costs incurred with respect to
        the initial Phase 3 Clinical Trial for a Sarcoma Indication, and (ii) the
        cost
        of acquisition of raw materials, intermediates, AP23573 and Product on hand
        or
        ordered and paid for by ARIAD as of the Effective Date that are to be used
        in
        the Development Program.  Notwithstanding the above, costs incurred
        before the Effective Date with respect to the initial Phase 3 Clinical Trial
        for
        a Sarcoma Indication shall be included in Development Costs.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -11-

          
            

          

        

        
          
          

        

         

      

      1.47  “Development
        Program” means, with respect to each Product, the Development
        program (including the Manufacturing Development program) to be conducted
        by the
        Parties during the Term with respect to such Product pursuant to the Annual
        Global Development Plans.

       

      1.48  “Diagnostic
        Product” means a product or kit using Biomarker Information or
        Program Biomarker Technology which is developed by or on behalf of the Parties
        and intended to be commercialized to test, identify, diagnose,  screen
        or monitor a human condition or disease, or to predict or evaluate the
        responsiveness of a patient to  treatment or a combination of
        treatments, other than in the Excluded Uses.

       

      1.49  “Dimerizer”
        means a bivalent small-molecule compound used to bring into proximity two
        engineered fusion proteins.

       

      1.50  “Drug
        Approval Application” means, with respect to each Product in a
        particular country or region, an application for Commercialization Regulatory
        Approval for such Product in such country or region, including without
        limitation: (a) an NDA or sNDA; (b) a counterpart of an NDA or sNDA in any
        country or region in the Territory; and (c) all supplements and amendments
        to
        any of the foregoing.

       

      1.51  “DMF”
        shall mean a Drug Master File maintained with the FDA or its equivalent
        maintained with a Regulatory Authority in other countries within the
        Territory.

       

      1.52  “Effective
        Date” means the date set forth in the first recital
        above.

       

      1.53  “European
        Union” means all countries that comprise the
        European Union (whether on the Effective Date or at any time during the
        Term).

       

      1.54  “Excluded
        Uses” means the use of any Product (a) in a stent or other Medical
        Device  for which ARIAD has granted, or may hereafter grant, rights to
        a third Party or (b) as a Dimerizer for use in gene therapy, cell therapy
        or
        vaccines.

       

      1.55  “FDA”
        means the United States Food and Drug Administration or any successor agency
        or
        authority thereto.

       

      1.56  “FDCA”
        means the United States Federal Food, Drug, and Cosmetic Act, as
        amended.

       

      1.57  “Field”
        means all uses, including  without limitation the treatment, delay or
        prevention in humans of all Targeted Indications, other than the Excluded
        Uses.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -12-

          
            

          

        

        
          
          

        

         

      

      1.58  “First
        Commercial Sale” means, with respect to a Product in a country in
        the Territory, the first sale, transfer or disposition for value to an end
        user
        of such Product in such country; provided that any sale to an Affiliate or
        Sublicensee will not constitute a First Commercial Sale unless the Affiliate
        or
        Sublicensee is the last entity in the distribution chain of the Product;
        and
        provided further that any sale on a cost reimbursement
        basis for use in a Clinical Trial or other distribution for use in a Clinical
        Trial will not constitute a First Commercial Sale.

       

      1.59  “Force
        Majeure” means any occurrence beyond
        the reasonable control of a Party that (a) prevents or substantially interferes
        with the performance by such Party of any of its obligations hereunder and
        (b)
        occurs by reason of any act of God, flood, fire, explosion, earthquake, strike,
        lockout, labor dispute, casualty or accident, or war, revolution, civil
        commotion, act of terrorism, blockage or embargo, or any injunction, law,
        order,
        proclamation, regulation, ordinance, demand or requirement of any government
        or
        of any subdivision, authority or representative of any such
        government.

       

      1.60  “FTE”
        shall mean [***] ([***]) hours of work devoted to or in support of Development
        or Commercialization of Products in accordance with an Annual Global Development
        Plan or Product Commercialization Plan that is carried out by one or more
        employees, contract personnel or consultants of a Party (other than field
        sales
        force personnel), measured in accordance with such Party’s normal time
        allocation practices from time to time.  In no event shall an
        individual account for more than one FTE year in any Calendar Year.

       

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

       

      1.62  “FTE
        Rate” means a rate of [***] dollars ($ [***]) per FTE per annum for
        personnel engaged in Development. The FTE Rate shall be adjusted annually
        for
        each Calendar Year after 2008 to be equal to the FTE Rate for the previous
        Calendar Year plus a percentage increase equal to the [***], since the Effective
        Date, or if later, since the date of the last adjustment.

       

      1.63  “GAAP”
        means United States generally accepted accounting principles, consistently
        applied.

       

      1.64  “GLP”
        means the then current Good Laboratory Practice Standards promulgated or
        endorsed by the FDA or in the case of foreign jurisdictions, comparable
        regulatory standards promulgated or endorsed by the applicable Regulatory
        Authority, including those procedures expressed in or contemplated by any
        Regulatory Filings.

       

      1.65  “GMP"
        means current Good Manufacturing Practices that apply to the Manufacture
        of API
        and Clinical Product, including, without limitation, the United States
        regulations set forth under Title 21 of the United States Code of Federal
        Regulations, parts 210, 211 and 600-680, as may be amended from time-to-time,
        as
        well as all applicable guidance published by the FDA from time-to-time
        .  The Parties may agree to change this definition in the Supply
        Agreement.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -13-

          
            

          

        

        
          
          

        

         

      

      1.66  “Hatch-Waxman
        Act” means the Drug Price Competition and Patent Term Restoration
        Act of 1984, as amended.

       

      1.67  “HSR
        Act” means the Hart-Scott-Rodino Antitrust
        Improvements Act of 1976, as amended.

       

      1.68  “IND”
        means: (a) an Investigational New Drug Application as defined in the FDCA
        and
        regulations promulgated thereunder or any successor application or procedure
        required to initiate clinical testing of a Product in humans in the United
        States; (b) a counterpart of an Investigational New Drug Application that
        is
        required in any other country or region in the Territory before beginning
        clinical testing of a Product in humans in such country or region; and (c)
        all
        supplements and amendments to any of the foregoing.

       

      1.69  “Indication”
        means any human disease or condition in the Field which can be treated,
        prevented, cured or the progression of which can be delayed.

       

      1.70  “Initiation”
        means, with respect to a human Clinical Trial, the first date that a subject
        or
        patient is dosed in such Clinical Trial.

       

      1.71  “Joint
        Commercialization Committee” or “JCC” means
        the committee comprised of ARIAD and MERCK representatives established pursuant
        to Section 2.3.

       

      1.72  “Joint
        Development Committee” or
“JDC”
        means the
        committee composed of ARIAD and MERCK representatives
        established pursuant to Section 2.2.

       

      1.73  “Joint
        Manufacturing Committee” or “JMC” means the
        committee composed of ARIAD and MERCK representatives established pursuant
        to
        Section 2.4 of this Agreement and the Supply Agreement.

       

      1.74  “Joint
        Patent Rights” means Patent Rights that contain one or more claims
        that cover Joint Technology.

       

      1.75  “Joint
        Steering Committee” or “JSC” means the
        committee composed of ARIAD and MERCK representatives established pursuant
        to
        Section 2.1.

       

      1.76  “Joint
        Technology” means (i) any Program Technology, other than Product
        Technology, that is (a) jointly conceived or reduced to practice by one or
        more
        employees of or consultants to MERCK and one or more employees of or consultants
        to ARIAD or (b) conceived or first reduced to practice solely by one or more
        employees of, or consultants to, a Party resulting from the use in any material
        respect of (i) any Technology, Patent Rights or Proprietary Materials Controlled
        by the other Party and/or (ii) any Product Use Technology; provided however,
        that the use by a Party of fluid, tissue or tumor samples or data collected
        by
        either Party in the Development Program in the discovery or development of
        Biomarker Information or Biomarkers or otherwise other than used in connection
        with Biomarkers for use with mTOR Inhibitors shall not cause such Biomarker
        Information or Biomarkers or other inventions to be Joint
        Technology.  For clarity, Biomarkers for use with mTOR Inhibitors
        discovered or developed as a result of the use by a Party of
        fluid,  tissue or tumor samples or data collected by either Party in
        the Development Program shall be Joint Technology.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -14-

          
            

          

        

        
          
          

        

         

      

      1.77  “Knowledge”
        or “Known” means, with respect to ARIAD, [***] of
        ARIAD.

       

      1.78  “Late
        Stage Clinical Trials” means, with respect to any
        Product for any Cancer Indication, a Phase 2 Clinical Trial and/or a Phase
        3
        Clinical Trial or a combined Phase 2 and Phase 3 Clinical Trial, in each
        case
        for registration.

       

      1.79  “Launch”
        means, with respect to a Product in a country, First Commercial Sale of Product
        in the country after approval of an NDA or equivalent in such
        country.

       

      1.80  “LIBOR
        Rate” means, for any applicable interest period,
        the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
        LIBOR”), as published by Reuters (or, if Reuters does not publish quotations of
        BBA LIBOR, another commercially available source providing quotations of
        BBA
        LIBOR as selected by agreement of the Parties) at approximately 11:00 a.m.
        London time two (2) London Banking Days before the commencement of the interest
        period, for U.S. Dollar deposits (for delivery on the first day of such interest
        period) with a term equivalent to such interest period.  If such rate
        is not available at such time for any reason, then the rate for that interest
        period will be determined by such alternate method as reasonably selected
        by
        agreement of the Parties.  A “London Banking Day” is a day on which
        banks in London are open for business and dealing in offshore
        dollars.

       

      1.81  “Licensed
        Patent Rights” means any ARIAD Patent Rights and ARIAD’s interest
        in Joint Patent Rights that (a) contain one or more claims that cover any
        Product (including its Manufacture or its formulation or a method of its
        delivery or of its use); and (b) are
        necessary for MERCK to exercise the licenses granted to it pursuant to Sections
        6.1.1(a) and (b).  For purposes of clarity, the Licensed Patent Rights
        existing as of the Effective Date include, without limitation, the Patent
        Rights
        listed on Schedule 2 attached hereto.

       

      1.82  “Licensed
        Technology” means any ARIAD Technology and ARIAD’s interest in
        Joint Technology that (a) relates to any Product (including its Manufacture
        or
        its formulation or a method of its delivery or of its use) and (b)
        is   necessary  for MERCK to exercise the licenses
        granted to it pursuant to Sections 6.1.1(a) and (b) and
        the rights and obligations of MERCK under the Supply Agreement.

       

      1.83  “Major
        Cancer Indication” means, collectively, breast
        cancer, prostate cancer, colon cancer and non-small cell lung
        cancer.

       

      1.84  “Major
        European Country” means each of the United
        Kingdom, France, Germany, Italy or Spain.

       

      1.85  "Manufacture”
        or “Manufacturing” or
“Manufactured"
shall
        mean all
        operations involved in the manufacture, receipt, incoming inspections, storage
        and handling of Materials, and the manufacture, processing, fermentation,
        purification, formulation packaging, labeling, warehousing, quality control
        testing (including in-process release and stability testing), shipping and
        release of API or Product; as the case may be, provided that the Parties
        may
        agree to change such definition in the Supply
        Agreement.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -15-

          
            

          

        

        
          
          

        

         

      

      1.86  “Manufacturing
        Cost” shall mean, with respect to Clinical Product
        supplied by ARIAD prior to the execution of the Supply Agreement and the
        completion of Clinical Product Transfer, the sum of (a) all charges incurred
        by
        ARIAD for outsourcing the Manufacture of the Clinical Product (including
        API or
        any other intermediate thereof), (b) the cost of supervising and managing
        the
        toll manufacturers, and of receipt, incoming inspections, storage, packaging,
        handling, labeling warehousing, quality control testing and release of API
        and
        Clinical Product, and (c) [***] to the costs in (a) and (b) to cover an
        allocation of departmental overhead and general and administrative costs.
        The
        Parties may agree to change this definition in the Supply
        Agreement.

       

      1.87  “Manufacturing
        Development” means, with respect to API or Product, all activities
        related to the optimization of a commercial-grade Manufacturing process for
        the
        Manufacture of API or Product including, without limitation, test method
        development and stability testing, formulation, validation, productivity,
        trouble shooting and second generation formulation, process development,
        Manufacturing scale-up, strain improvements, development-stage Manufacturing,
        and quality assurance/quality control development.

       

      1.88  “Marketed
        Product” shall have the meaning set forth in the Supply
        Agreement.

       

      1.89  "Materials"
        shall  mean all raw materials, including without limitation, API,
        excipients, components, containers, labels and packaging materials necessary
        for
        the Manufacture of API, Clinical Product or Marketed Product.  For the
        avoidance of doubt, Materials shall not include API with respect to the
        Manufacture of API by ARIAD.  It is agreed that the Parties may agree
        to change the definition of Materials in the Supply Agreement.

       

      1.90  “Medical
        Device” means any device implanted permanently inside a blood
        vessel of a patient to release any formulation of a drug to the local area
        of
        treatment aimed at treatment of any structural abnormality or functional
        impairment of blood vessels which results from a medical condition other
        than
        cancer, excluding any device which (i) infuses or systemically delivers a
        drug
        into the blood, (ii) delivers a separately packaged drug (e.g., in a bottle)
        to
        the local area of treatment in the blood vessel, or (iii) delivers a drug
        from a
        reservoir or chamber packaged with or incorporated in such device to the
        local
        area of treatment in the blood vessel.  For clarity, any device for
        the treatment, prevention or delay of cancer will not be a Medical
        Device.

       

      1.91  “MERCK
        Background Technology” means any Technology that is used by MERCK,
        or provided by MERCK for use, in the Development Program
        and that is (a) Controlled by MERCK as of the Effective Date, or (b) conceived
        or first reduced to practice by employees of, or consultants
        to, MERCK after the Effective Date other than in the
        conduct of MERCK Development Activities and without the use in any material
        respect of any ARIAD Technology, ARIAD Patent Rights or ARIAD
        Materials.  For purposes of clarity, MERCK Background Technology shall
        not include MERCK Program Technology, Program Biomarker Technology or MERCK’s
        interest in Joint Technology.

       

      1.92  “MERCK
        Co-Development Percentage” means (a) except with
        respect to any Cancer Indication for which MERCK exercises an Opt-Out Right,
        fifty percent (50%), and (b) with respect to any Cancer Indication for which
        MERCK exercises an Opt-Out Right, zero percent (0%).

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -16-

          
            

          

        

        
          
          

        

         

      

      1.93  “MERCK
        Decision” means any decision with respect to (i)
        the Development (other than Manufacturing Development) and/or Commercialization
        of a Product for [***] in the ROW Territory, or (ii) the commencement and
        prosecution of actions to address [***] in the ROW Territory or, if a U.S.
        Commercialization Transfer has occurred, the U.S. Territory.

       

      1.94  “MERCK
        Development Activities” means the Development activities specified
        to be conducted by MERCK in any Annual Global Development Plan (or amendment
        thereto).

       

      1.95  “MERCK
        Materials” means any Proprietary Materials that are Controlled by
        MERCK and used by MERCK, or provided by MERCK for use, in the Development
        Program.

       

      1.96  “MERCK
        Patent Rights” means any Patent Rights Controlled by MERCK that
        contain one or more claims that cover
        MERCK Technology.

       

      1.97  “MERCK
        ROW Product Commercialization Plan” means, with
        respect to each Product, the written Product Commercialization Plan for the
        Commercialization of such Product by MERCK in the ROW Territory.

       

      1.98  “MERCK Program
        Patent Rights” means any Patent Rights that
        contain one or more claims that cover MERCK Program Technology.

       

      1.99  “MERCK
        Program Technology” means any Program Technology, other than
        Product Technology and Product Use Technology that is conceived or first
        reduced
        to practice by employees of, or consultants to, MERCK, alone or
        jointly with any Third Party, without the use in any material respect of
        any
        ARIAD Technology, ARIAD Patent Rights, ARIAD Materials or Joint
        Technology.

       

      1.100  “MERCK
        Revenue Sharing Percentage” means with respect to
        any Co-Promoted Product for which ARIAD is the Responsible Party and which
        is
        sold in the U.S. Territory for any Cancer Indication, a percentage equal
        to
        [***] percent ([***]%); provided, however, that in the event MERCK exercises
        an
        Opt-Out Right for any Major Cancer Indication, the MERCK Revenue Sharing
        Percentage shall be a percentage equal to [***] percent ([***]%).

       

      1.101  “MERCK
        Technology” means, collectively, MERCK Background Technology and
        MERCK Program Technology.

       

      1.102  “mTOR
        Inhibitor” means any compound that directly inhibits the activity
        or expression of the human protein known as mammalian target of Rapamycin
        or
“mTOR” (UniProtKB/SwissProt database entry P42345).

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -17-

          
            

          

        

        
          
          

        

         

      

      1.103  “NDA”
        means a New Drug Application, as defined in the FDCA and regulations promulgated
        thereunder or any successor application or procedure required to sell a Product
        in the United States.

       

      1.104  “Net
        Sales” means the [***] or any of its Affiliates or Sublicensees,
        [***] as the case may be, [***]for sales or other dispositions or transfers
        for
        value of [***]actually allowed and taken, [***]if prepaid by the Seller and
        included on Seller’s bill or invoice  or as a separate
        item[***]pursuant to agreements (including, without limitation, managed care
        agreements) or government regulations, to the extent actually
        allowed[***]similarly incurred  to the extent included on the bill or
        invoice  or as a separate item.  In addition, Net Sales are
        subject to the following:

       

      (a)           If
        the Seller or any of its Affiliates effects a sale, disposition or transfer
        of
        [***]the Net Sales of such Product to such customer shall be [***] of such
        Product.  For purposes of this subsection (a), [***]shall mean the
        value that would have been derived had[***](b)In the case of [***]all discounts
        and the like shall be allocated among products on the basis on which such
        discounts and the like were actually granted or, if such basis cannot be
        determined, [***](c)For purposes of clarity, (i) use of any[***] or other
        research or development activities, or disposal or transfer[***]give rise
        to any
        Net Sales and (ii) use of any Product in an [***]deemed sale for purposes
        of
        this definition unless the Seller or its Affiliates or
        sublicensees[***]of the Seller’s Manufacturing Cost to
        supply such Product.

       

      1.105  “Non-Cancer
        Indications” means any Indication that is not a
        Cancer Indication.

       

      1.106  “Operating
        Income (Loss)” has the meaning set forth on
Schedule 3 attached hereto.

       

      1.107  “Other
        Cancer Indications” means any type or class of
        cancer that is not a Major Cancer Indication or a [***], including without
        limitation, [***].

       

      1.108  “Participating
        Party” means the Party that participates in, but
        is not the Responsible Party for, the Development and/or the Commercialization
        of a Product for an Indication in a part of the Territory.

       

      1.109  “Patent
        Rights” means the rights and interests in and to issued patents and
        pending patent applications (which, for purposes of this Agreement, include
        certificates of invention, applications for certificates of invention and
        priority rights) in any country or region, including all provisional
        applications, substitutions, continuations, continuations-in-part, divisions,
        renewals, all letters patent granted thereon, and all reissues, re-examinations
        and extensions thereof, and all foreign counterparts of any of the
        foregoing.

       

      1.110  “Permitted
        Pre-Clinical Research” means pre-clinical research
        conducted by (a) ARIAD (or by an Affiliate of ARIAD or by a Third Party under
        an
        agreement with ARIAD) for any Non-Cancer Indication for any Collaboration
        Compound, and (ii) MERCK (or by an Affiliate of MERCK or by a Third Party
        under
        an agreement with MERCK) for any Non-Cancer Indication other than Excluded
        Uses
        for any Collaboration Compound.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -18-

          
            

          

        

        
          
          

        

         

      

      1.111  “Permitted
        Transactions” means any agreement by and between a
        Party and (a) any Third Party pursuant to which such Third Party conducts
        contract services permitted pursuant to Section 6.2.1(a) of this Agreement
        or
        (b) any Third Party non-profit or academic institution, which agreement provides
        for the grant to  the Party entering into the agreement of all rights
        to Technology and Patent Rights relating to the use of mTOR Inhibitors in
        the
        Field that are conceived or reduced to practice by any party under such
        agreement, with the right to sublicense to the other Party.

       

      1.112  “Person”
        means an individual, sole proprietorship, partnership, limited partnership,
        limited liability partnership, corporation, limited liability company, business
        trust, joint stock company, trust, incorporated association, joint venture
        or
        similar entity or organization, including a government or political subdivision,
        department or agency of a government.

       

      1.113  “Phase
        1 Clinical Trial” means a Clinical Trial in any country that would
        satisfy the requirements of 21 CFR 312.21(a).

       

      1.114  “Phase
        2 Clinical Trial” means, as to a particular Product for any
        Indication, a Clinical Trial conducted in any country that would satisfy
        the
        requirements of 21 CFR 312.21(b) .

       

      1.115  “Phase
        3 Clinical Trial” means,  a Clinical Trial  in
        any country that would satisfy the requirements of 21 CFR 312.21(c)
        .

       

      1.116  “Phase
        4 Clinical Trial” means a post-registrational
        Clinical Trial conducted in any country or countries and required as a condition
        to, or for the maintenance of, any Regulatory Approval for a Product in the
        Territory.

       

      1.117  “Phase
        5 Clinical Trial” means a post-registrational
        Clinical Trial conducted in any country or countries and not required as
        a
        condition to, or for the maintenance of, any Regulatory Approval for a Product
        in the Territory.  For avoidance of doubt, such Phase 5 Clinical
        Trials are commonly referred to as “marketing” Clinical Trials.

       

      1.118  “Pricing”
        means determining Product pricing at all levels, including wholesale, retail,
        hospital, clinic, health care provider, HMO, non-profit entity or government
        entities, including average sales price, average wholesale price and best
        price.

       

      1.119  “Product”
        means any pharmaceutical or medicinal item, substance or formulation that
        is
        comprised of or contains a Collaboration Compound (whether or not such
        Collaboration Compound is the sole active ingredient).  For purposes
        of clarity, Product includes Co-Promoted Product and Royalty-Bearing
        Products.

       

      1.120  “Product
        Commercialization Plan” means, with respect to each Product, the
        written plan for the Commercialization of such Product in the U.S. Territory
        (including, without limitation, expected Manufacturing requirements, for
        such
        Product; and a detailed strategy, budget and proposed timelines), as such
        plan
        may be amended or updated.  Each Product Commercialization Plan shall
        include, without limitation, (a) demographics and market dynamics, market
        strategies, a marketing plan (including advertising, Detailing forecasts,
        pricing strategies pertaining to discounts, samples and sales forecasts)
        for the
        U.S. Territory, (b) the specific Commercialization objectives, projected
        milestones, resource allocation requirements and activities to be performed
        over
        such period (including, without limitation, all anticipated Clinical Trials);
        (c) the Party responsible for such activities; (d) a timeline for such
        activities, including the estimated launch date(s) in the U.S. Territory;
        (e) a
        sales and expense forecast (including at least five (5) years of estimated
        sales
        and expenses) for the U.S. Territory, (f) Manufacturing plans and the expected
        product profile, (g) a “Commercialization Budget” including a
        budget of the expenses expected to be incurred in performing all activities
        therein contained, as well as any Third Parties proposed to be utilized and,
        to
        the extent applicable, any proposed Third Party arrangements, and (h) the
        expected Regulatory Filings to be required and prepared, and the expected
        timetable for making such Regulatory Filings.  Each Product
        Commercialization Plan, and each amendment, modification or update to each
        Product Commercialization Plan, shall be prepared by, or at the direction
        of,
        the JCC, and approved by the JSC at such time as JSC may from time to time
        direct and in any event, on or prior to the initiation of Commercialization
        activities with respect to the Product and shall be attached to the minutes
        of
        the meeting of the JSC at which such Product Commercialization Plan or
        amendment, modification or update is approved by the JSC.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -19-

          
            

          

        

        
          
          

        

         

      

      1.121  “Product
        Delivery Technology” means any Program Technology that covers the
        formulation or delivery of any Collaboration Compound or any
        Product.

       

      1.122   “Product
        Technology” means any Program Technology that
        covers the composition of matter of any Collaboration Compound or the final
        chemical synthesis step used to convert Rapamycin to API of any Collaboration
        Compound.

       

      1.123  “Product
        Trademark” means any trademark or trade name, whether or not
        registered, or any trademark application or renewal, extension or modification
        thereof, in the Territory, or any trade dress and packaging, in each case
        (a)
        that are applied to or used with any Product by the Responsible Party and
        (b)
        together with all goodwill associated therewith and promotional materials
        relating thereto.

       

      1.124  “Product
        Use Technology” means any Program Technology that covers (i) the
        use of any mTOR Inhibitor, and/or (ii) the use of any Biomarker with any
        mTOR
        Inhibitor.  Without limiting the generality of the foregoing, Product
        Use Technology includes methods of treatment, combinations with other drugs,
        and
        the use of Biomarkers in connection with the treatment of patients with an
        mTOR
        Inhibitor.

       

      1.125  “Program
        Biomarker Technology” means any Technology that constitutes a
        Biomarker or covers any Biomarker that is both (a) Program Technology and
        (b)
        conceived or first reduced to practice solely by one or more employees of,
        or
        consultants to, a Party, or jointly by one or more employees of, or consultants
        to, each Party, in either case resulting from use in any material respect
        of any
        biological materials, data, or information developed in, resulting from,
        or
        funded by the Parties in, the Collaboration.

       

      1.126  “Program
        Technology” means any Technology (including,
        without limitation, any new and useful process, method of manufacture or
        composition of matter) or Proprietary Material that is conceived and first
        reduced to practice (actually or constructively) by either Party or jointly
        by
        both Parties in the conduct of the Development Program and/or in the
        Commercialization of Products; provided however, that the use by a Party
        of
        fluid, tissue or tumor samples or data collected by either Party in the
        Development Program in the discovery or development of Biomarker Information
        or
        Biomarkers or otherwise other than used in connection with Biomarkers for
        use
        with mTOR Inhibitors shall not cause such  Biomarker Information or
        Biomarkers or other inventions to be Program Technology.  For clarity,
        Biomarkers for use with mTOR Inhibitors discovered or developed as a result
        of
        the use by a Party of fluid,  tissue or tumor samples or data
        collected by either Party in the Development Program shall be Program
        Technology.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -20-

          
            

          

        

        
          
          

        

         

      

      1.127  “Proprietary
        Materials” means tangible chemical, biological or physical
        materials (a) that are furnished by or on behalf of one Party to the other
        Party
        in connection with this Agreement, whether or not specifically designated
        as
        proprietary by the transferring Party, or (b) that are otherwise conceived
        or
        reduced to practice in the conduct of the Development Program and/or in
        connection with the Commercialization of Products.

       

      1.128  “Rapamycin
        Analog” means any chemical derivative of Rapamycin or any variant
        of Rapamycin produced by fermentation.

       

      1.129  “Rapamycin
        Derived mTOR Inhibitor” means an mTOR Inhibitor that is a Rapamycin
        Analog.

       

      1.130  “Regulatory
        Approval” means, with respect to any country or region in the
        Territory, any approval, product and establishment license, registration
        or
        authorization of any Regulatory Authority required for the Manufacture, use,
        storage, importation, exportation, transport, distribution or sale of a Product
        in such country or region. (including without limitation
        all applicable pricing and governmental reimbursement approvals even if not
        legally required to sell Product in a country).

       

      1.131  “Regulatory
        Authority” means the FDA, or any counterpart of the FDA outside the
        United States, or any other national, supra-national, regional, state or
        local
        regulatory agency, department, bureau, commission, council or other governmental
        entity with authority over the distribution, importation, exportation,
        Manufacture, production, use, storage, transport, clinical testing or sale
        of a
        Product.

       

      1.132  “Regulatory
        Filings” means, collectively: (a) all INDs, NDAs, BLAs,
        establishment license applications, DMFs, applications for designation as
        an
“Orphan Product(s)” under the Orphan Drug Act, for “Fast Track” status under
        Section 506 of the FDCA (21 U.S.C. § 356) or for a Special Protocol Assessment
        under Section 505(b)(4)(B) and (C) of the FDCA (21 U.S.C. § 355(b)(4)(B)) and
        all other similar filings (including, without limitation, counterparts of
        any of
        the foregoing in any country or region in the Territory); (b) all supplements
        and amendments to any of the foregoing; and (c) all data and other information
        contained in, and correspondence relating to, any of the foregoing.

       

      1.133  “Responsible
        Party” means the Party that is primarily
        responsible for the Development of a Product under a Development Program
        or the
        Commercialization of a Product.  For purposes of clarity, (a) ARIAD
        shall be the Responsible Party for (i) the conduct of the Development Program
        for any Product for the Sarcoma Indication in the U.S. Territory and the
        Commercialization of any Product for the Sarcoma Indication in the U.S.
        Territory, (ii) the Manufacture of Clinical Product,  and
        (iii)  subject to the terms of the Supply Agreement, the Manufacture
        and supply of API; (b) MERCK shall be the Responsible Party for (i) Development
        and Commercialization of Products for all Cancer Indications in the ROW
        Territory and (ii) subject to the terms of the Supply Agreement, the Manufacture
        and supply of Product for all Indications in the Territory ; and (c) the
        Parties
        shall jointly serve as Responsible Party for Development and Commercialization
        of Products for all Major Cancer Indications and other Cancer Indications
        in the
        U.S. Territory.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -21-

          
            

          

        

        
          
          

        

         

      

      1.134  “ROW
        Territory” means all of the countries and
        territories of the world other than the U.S. Territory.

       

      1.135  “Royalty-Bearing
        Product” means all quantities of Product that are sold by MERCK in
        the Royalty-Bearing Territory.

       

      1.136  “Royalty-Bearing
        Territory” means (a) the ROW Territory; and (b)
        the U.S. Territory following the occurrence of a U.S. Commercialization
        Transfer.

       

      1.137  “Royalty
        Term” means, (i) with respect to each Royalty-Bearing Product in
        each country in the ROW Territory, the period beginning on the date of First
        Commercial Sale of such Royalty-Bearing Product in such country and ending
        on
        the later to occur of (a) expiration of the last to expire Valid Claim of
        the
        ARIAD Patent Rights, MERCK Patent Rights or Joint Patent Rights in such country
        that covers the composition of matter or sale or import of the Collaboration
        Compound contained in such Royalty-Bearing Product or its use for any indication
        for which Commercialization Regulatory Approval has been obtained in such
        country, (b) [***] from the date of the First Commercial Sale of such
        Royalty-Bearing Product in such country, or (c) the last date upon which
        ARIAD
        supplies any Product to MERCK pursuant to the Supply Agreement; and (ii)
        with
        respect to each Royalty-Bearing Product in the U.S. Territory in the event
        of a
        U.S. Commercialization Transfer, the period beginning on the date of the
        U.S.
        Commercialization Transfer and ending on the latest to occur of (a) expiration
        of the last to expire Valid Claim of the ARIAD Patent Rights, MERCK Patent
        Rights or Joint Patent Rights in the U.S. that covers the composition of
        matter
        or sale or import of the Collaboration Compound contained in such
        Royalty-Bearing Product or its use for any indication for which
        Commercialization Regulatory Approval has been obtained in the U.S. Territory,
        (b) [***] from the date of the First Commercial Sale of such Royalty-Bearing
        Product in the U.S. Territory, (c) the last date upon which ARIAD [***] pursuant
        to the Supply Agreement, or (d) the last date upon which ARIAD co-promotes
        any
        Product in the U.S. Territory.

       

      1.138  “Sarcoma
        Indication” means any cancer of the connective or
        supportive tissue that is generally known in medical practice as a
        sarcoma.

       

      1.139  “Serious
        Adverse Event” means any untoward medical occurrences that at any
        dose results in any of the following: death, is life-threatening, requires
        inpatient hospitalization or prolongation of existing hospitalization, results
        in persistent or significant disability/incapacity, or, is a congenital
        anomaly/birth defect

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -22-

          
            

          

        

        
          
          

        

         

      

      1.140  “sNDA”
        means a Supplemental New Drug Application, as defined in the FDCA and applicable
        regulations promulgated thereunder.

       

      1.141  “Sublicensee”
        means any  Affiliate or Third Party to which a Party grants a
        sublicense in accordance with Section 6.2.

       

      1.142  “Sublicense
        Agreement” means any agreement by and between a
        Party and a Sublicensee which is entered into in accordance with Section
        6.2.

       

      1.143  “Targeted
        Indications” means, collectively, the following
        Indications: (a) [***] Indications; (b) [***] Indications; (c) [***]
        Indications; and (d) [***] Indications.

       

      1.144  “Technology”
        means, collectively, inventions, discoveries, improvements, trade secrets
        and
        proprietary methods, whether or not patentable, including without limitation:
        (a) methods of Manufacture or use of, and structural and functional information
        pertaining to, chemical compounds and (b) compositions of matter, data,
        formulations, processes, techniques, know-how and results (including any
        negative results).

       

      1.145  “Territory”
        means all countries and territories of the world, consisting of the U.S.
        Territory and the ROW Territory.

       

      1.146  “Third
        Party” means a Person other than MERCK and ARIAD and their
        respective Affiliates.

       

      1.147  “Third
        Party Data Provider” means [***] and/or any other
        Third Party reasonably acceptable to the Parties that performs market analyses
        and provides sales data for the biotechnology or pharmaceutical
        industry.

       

      1.148  “U.S.
        Territory” means the United States of America and
        its territories, including, without limitation, Puerto Rico and the U.S.
        Virgin
        Islands.

       

      1.149  “Valid
        Claim” means any claim of a pending patent application or an issued
        unexpired patent that (a) has not been finally cancelled, withdrawn, abandoned
        or rejected by any administrative agency or other body of competent
        jurisdiction, (b) has not been permanently revoked, held invalid, or declared
        unpatentable or unenforceable in a decision of a court or other body of
        competent jurisdiction that is unappealable or unappealed within the time
        allowed for appeal, (c) has not been rendered unenforceable through disclaimer
        or otherwise, and (d) is not lost through an interference
        proceeding.

       

      Additional
        Definitions.  In addition, each of the following
        definitions shall have the respective meanings set forth in the section of
        this
        Agreement indicated below:

       

      
        
          	
                  Definition

                	
                  Section

                
	
                  Abandonment
                    Party

                	
                  8.1.5

                
	
                  Advances

                	
                  4.2

                
	
                  Alliance
                    Manager

                	
                  2.5.1

                
	
                  Acquisition

                	
                  12.10

                

        

        

        
          
            Portions
              of this Exhibit were omitted and have been filed separately with the
              Secretary
              of the Commission pursuant to the Company’s application requesting confidential
              treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
              as
              amended.

            
            

          

          
            -23-

            
              

            

          

          
            
            

          

           

        

        
          	
                  Appointing
                    Party

                	
                  2.6.2

                
	
                  Arbitration
                    Matter

                	
                  12.1

                
	
                  ARIAD
                    Development Cost Cap

                	
                  4.2

                
	
                  ARIAD
                    Indemnitees

                	
                  11.2

                
	
                  Assuming
                    Party

                	
                  8.1.5

                
	
                  Claims

                	
                  11.1

                
	
                  Clinical
                    Supplies

                	
                  3.6.3(a)

                
	
                  Co-Development
                    Net Sales

                	
                  4.3.4

                
	
                  Collaborator
                    IP Rights

                	
                  6.4.3

                
	
                  Combination
                    Product

                	
                  4.6.1(c)

                
	
                  Competing
                    Drug

                	
                  4.6.1(a)(ii)

                
	
                  Co-Promoted
                    Product

                	
                  3.13.1

                
	
                  Co-Promotion
                    Agreement

                	
                  3.13.2(a)

                
	
                  Co-Promotion
                    Territory

                	
                  3.13.1

                
	
                  Co-Promotion
                    Trademarks

                	
                  8.3.1

                
	
                  Cost
                    Audited Party

                	
                  3.12.2(b)

                
	
                  Cost
                    Auditing Party

                	
                  3.12.2(b)

                
	
                  Date
                    First Learned

                	
                  3.10.5(a)

                
	
                  Development
                    Transfer

                	
                  3.4(b)(i)

                
	
                  Diagnostic
                    Product Agreement

                	
                  3.1.2(d)

                
	
                  Disputed
                    Matter

                	
                  2.1.5

                
	
                  Estimate

                	
                  4.3.2(c)

                
	 	 
	
                  Estimated
                    Loss

                	
                  4.3.2(c)

                
	
                  Estimated
                    Operating Income Payment

                	
                  4.3.2(c)

                
	 	 
	
                  Indemnified
                    Party

                	
                  11.3

                
	
                  Indemnifying
                    Party

                	
                  11.3

                
	
                  Infringement

                	
                  8.2.1(a)(i)

                
	
                  Infringement
                    Notice

                	
                  8.2.1(a)(i)

                
	
                  Losses

                	
                  11.1

                
	
                  MERCK
                    Indemnitees

                	
                  11.1

                
	
                  MERCK
                    Manufacturing Technology and Patent Rights

                	
                  6.1.2(c)

                
	
                  Operating
                    Income Payments

                	
                  4.3.1

                
	
                  Opting-Out
                    Party

                	
                  3.4(a)

                
	
                  Opt-Out
                    Notice

                	
                  3.4(a)

                
	
                  Opt-Out
                    Notice Period

                	
                  3.4(a)

                
	
                  Opt-Out
                    Right

                	
                  3.4(a)

                
	
                  Other
                    Products

                	
                  4.6.1(c)

                
	
                  Patent
                    Coordinator

                	
                  7.5

                
	
                  Phase
                    1/2 Clinical Trial

                	
                  4.5(c)

                
	
                  Phase
                    2/3 Clinical Trial

                	
                  4.5(d)

                
	
                  Program
                    Confidential Information

                	
                  6.4.4(c)

                
	
                  Promissory
                    Note

                	
                  4.2

                
	
                  Reasonably
                    Estimated Commercial Value

                	
                  4.6.1(c)

                
	
                  Representative

                	
                  Schedule
                    3

                

        

        

        
          
            Portions
              of this Exhibit were omitted and have been filed separately with the
              Secretary
              of the Commission pursuant to the Company’s application requesting confidential
              treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
              as
              amended.

            
            

          

          
            -24-

            
              

            

          

          
            
            

          

           

        

        
          	
                  ROW
                    Development Costs

                	
                  3.12.1

                
	
                  Recipient
                    Party

                	
                  3.3

                
	
                  Separation
                    Date

                	
                  3.4(a)

                
	
                  Supply
                    Agreement

                	
                  3.6

                
	
                  Term

                	
                  9.1(c)

                
	
                  Transfer
                    Date

                	
                  3.4(b)(ii)

                
	
                  Transferring
                    Party

                	
                  3.3

                
	
                  U.S.
                    Commercialization Transfer

                	
                  3.4(b)(ii)

                
	
                  Weighted
                    Average Sales Price

                	
                  4.6.1(c)

                

        

         

        
          2.    
            ADMINISTRATION
            OF THE
            COLLABORATION

           

          2.1           Joint
            Steering
            Committee.

           

          2.1.1                      Establishment.  ARIAD
            and MERCK hereby establish the Joint Steering Committee.  The JSC
            shall have and perform the responsibilities set forth in Section
            2.1.4.

           

          2.1.2                      Membership.  Each
            of ARIAD and MERCK shall designate in writing an equal (not less than
            two (2))
            number of representatives to the JSC, who shall be senior level
            personnel.  One (1) representative of each Party shall be designated
            as Co-Chairs of the JSC.  Each Party shall have the right at any time
            to substitute individuals, on a permanent or temporary basis, for any
            of its
            previously designated representatives to the JSC by giving written notice
            to the
            other Party.

           

          2.1.3                      Meetings.

           

          (a)           Schedule
            of Meetings; Agenda.  The JSC shall establish a schedule of times
            for regular meetings, taking into account, without limitation, the planning
            needs of the Development Program and the Commercialization of Products
            and the
            responsibilities of the JSC.  Special meetings of the JSC may be
            convened by any member upon not less than thirty (30) days (or, if such
            meeting
            is proposed to be conducted by teleconference, upon not less than ten
            (10) days)
            written notice to the other members; provided that (i) notice of any
            such
            special meeting may be waived at any time, either before or after such
            meeting
            and (ii) attendance of any member at a special meeting shall constitute
            a valid
            waiver of notice from such member.  In no event shall the JSC meet
            less frequently than once every six (6) months.  Regular and special
            meetings of the JSC may be held in person or by teleconference or
            videoconference; provided that meetings held in person shall alternate
            between
            the respective offices of the Parties in Cambridge, Massachusetts and
            Upper
            Gwynedd, PA or at other locations mutually agreeable to the JSC
            members.  The Co-Chairs shall alternate the responsibility for
            preparing and circulating to each JSC member an agenda for each JSC meeting
            not
            later than one (1) week prior to such meeting.

           

          (b)           Quorum;
            Voting; Decisions.  At each JSC meeting, (i) the presence in
            person of at least one (1) member designated by each Party
            shall constitute a quorum and (ii) each member who is present shall have
            one
            vote on all matters before the JSC at such meeting.  All decisions of
            the JSC, shall be made by majority vote; provided, that, any member designated
            by a Party shall have the right to cast the votes of any of such Party’s members
            on the JSC who are absent from the meeting.  Alternatively, the JSC
            may act by written consent signed by at least one (1)
            member designated by each Party.
 Whenever any action by the JSC is
            called for hereunder
            during a time period in which the JSC is not scheduled to meet, either
            Co-Chair
            shall cause the JSC to take the action in the requested time period by
            calling a
            special meeting or by circulating a written consent.  Representatives
            of each Party or of its Affiliates who are not members of the JSC (including,
            without limitation, the Patent Coordinators) may attend JSC meetings
            as
            non-voting observers at the request of either Co-Chair.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -25-

              
                

              

            

            
              
              

            

             

          

          (c)           Minutes.  The
            JSC shall keep minutes of its meetings that record all decisions and
            all actions
            recommended or taken in reasonable detail.  Drafts of the minutes
            shall be prepared and circulated to the members of the JSC within a reasonable
            time after the meeting, not to exceed thirty (30) business days, and
            the
            Co-Chairs shall alternate responsibility for the preparation and circulation
            of
            draft minutes.  Each member of the JSC shall have the opportunity to
            provide comments on the draft minutes.  Draft minutes shall be
            approved, disapproved and revised as soon as practicable.  Upon
            approval, final minutes of each meeting shall be circulated to the members
            of
            the JSC by the Co-Chair with responsibility for preparing such
            minutes.

           

        

        
          (d)           Expenses.  ARIAD
            and MERCK shall each bear all expenses of their respective JSC representatives
            related to their participation on the JSC and attendance at JSC
            meetings.

           

          2.1.4                      Responsibilities.  The
            JSC shall be responsible for overseeing the conduct and progress of the
            Development Program, and the global Development and Commercialization
            in the
            U.S. Territory of Products.  Without limiting the generality of the
            foregoing, the JSC shall have the following responsibilities:

           

          (a)           overseeing
            the activities and performance by each of the JDC, the JCC and the JMC
            of its
            respective responsibilities;

           

          (b)           reviewing
            data, reports or other information submitted to it by the JDC, the
            JCC or the JMC from time to time;

           

          (c)           determine
            whether to terminate the JDC or the JCC;

           

          (d)           review
            and approve Annual Global Development Plan and budget and the Product
            Commercialization Plan and Commercialization Budget;

           

          (e)           resolving
            all JDC, JCC or JMC matters that are in dispute;

           

          (f)           designating
            Back-Up Compounds; and

           

          (g)           making
            such other decisions as may be delegated to the JSC pursuant to this
            Agreement
            or by mutual written agreement of the Parties during the Term.

           

          2.1.5                      Dispute
            Resolution.  The JSC members
            shall use reasonable efforts to reach agreement on any and all
            matters.  In the event that, despite such reasonable efforts,
            agreement on a particular matter cannot be reached by the JSC within
            ten (10)
            days after the JSC first meets to consider such matter or such later
            date as may
            be mutually acceptable to the Parties (each such matter, a “Disputed Matter”),
            then, [***] shall refer such Disputed Matter to the [***] for MERCK and
            the
            [***] for ARIAD who shall promptly initiate discussions in good faith
            to resolve
            such Disputed Matter.  If the Disputed Matter is not resolved by the
            aforementioned senior executives, the Disputed Matter will [***] of MERCK
            (as
            appropriate) and the [***] for ARIAD.  If the Disputed Matter is not
            resolved by the [***] within the later of (i) ten (10) days after the
            date the
            [***] first meet to consider such Disputed Matter, or (ii) thirty (30)
            days
            after the date the JSC first met to consider such Disputed Matter, then
            (a) if
            the Disputed Matter involves an ARIAD Decision, the [***] of ARIAD shall
            have
            the right to make the final decision on such Disputed Matter, [***] (b)
            if the
            Disputed Matter involves a MERCK Decision, the [***] of
            MERCK (as appropriate) MERCK shall have the right to make
            the final decision on such Disputed Matter, [***] and (c) if the Disputed
            Matter
            involves any other matter (including, without limitation, Development
            and
            Commercialization decisions in the U.S. Territory for all Indications
            other than
            Sarcoma Indications, as well as all decisions in  the U.S. Territory
            relating to [***], such Disputed Matter must be promptly resolved by
            consensus
            of the JSC or the foregoing officers [***].

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -26-

              
                

              

            

            
              
              

            

             

          

          2.2           Joint
            Development Committee.

           

          2.2.1                      Establishment.  ARIAD
            and MERCK hereby establish the Joint Development Committee.  The JDC
            shall have and perform the responsibilities set forth in Section
            2.2.4.  Unless otherwise agreed by the Parties, the term for the JDC
            shall commence on the Effective Date and continue until the JSC determines
            to
            discontinue the JDC as a result of the completion of all Development
            activities
            for Products.

           

          2.2.2                      Membership.  Each
            of ARIAD and MERCK shall designate in writing an equal (not less than
            two (2))
            number of representatives to the JDC.  Unless otherwise agreed by the
            Parties, one representative of each Party shall be designated as Co-Chairs
            of
            the JDC.  Each Party shall have the right at any time to substitute
            individuals, on a permanent or temporary basis, for any of its previously
            designated representatives to the JDC by giving written notice to the
            other
            Party.

           

          2.2.3                      Meetings.

           

          (a)           Schedule
            of Meetings; Agenda.  The JDC shall establish a schedule of times
            for regular meetings, taking into account, without limitation, the planning
            needs of the Development Program and the responsibilities of the
            JDC.  Special meetings of the JDC may be convened by any member upon
            not less than thirty (30) days (or, if such meeting is proposed to be
            conducted
            by teleconference, upon not less than ten (10) days) written notice to
            the other
            members; provided that (i) notice of any such special meeting may be
            waived at
            any time, either before or after such meeting and (ii) attendance of
            any member
            at a special meeting shall constitute a valid waiver of notice from such
            member.  In no event shall the JDC meet less frequently than once each
            Calendar Quarter.  Regular and special meetings of the JDC may be held
            in person or by teleconference or videoconference; provided that meetings
            held
            in person shall alternate between the respective offices of the Parties
            in
            Cambridge, Massachusetts and Upper Gwynedd, PA or at other locations
            mutually
            agreeable to the JDC members.  The Co-Chairs shall alternate the
            responsibility for preparing and circulating to each JDC member an agenda
            for
            each JDC meeting not later than one (1) week prior to such meeting.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -27-

              
                

              

            

            
              
              

            

             

          

          (b)           Quorum;
            Voting; Decisions.  At each JDC meeting, (i) the presence in
            person of at least one (1) member designated by each Party
            shall constitute a quorum and (ii) each member who is present shall have
            one
            vote on all matters before the JDC at such meeting.  All decisions of
            the JDC, shall be made by majority vote; provided, that, any member designated
            by a Party shall have the right to cast the votes of any of such Party’s members
            on the JDC who are absent from the meeting.  Alternatively, the JDC
            may act by written consent signed by at least one (1)
            member designated by each Party.  Whenever any
            action by the JDC is called for hereunder during a time period in which
            the JDC
            is not scheduled to meet, either Co-Chair shall cause the JDC to take
            the action
            in the requested time period by calling a special meeting or by circulating
            a
            written consent.  Representatives of each Party or of its Affiliates
            who are not members of the JDC (including, without limitation, the Patent
            Coordinators) may attend JDC meetings as non-voting observers.  In the
            event that the JDC is unable to resolve any matter before it, such matter
            shall
            be resolved in accordance with Section 2.2.5.

           

          (c)           Minutes.  The
            JDC shall keep minutes of its meetings that record all decisions and
            all actions
            recommended or taken in reasonable detail.  Drafts of the minutes
            shall be prepared and circulated to the members of the JDC within a reasonable
            time after the meeting, not to exceed thirty (30) business days, and
            the Parties
            shall alternate responsibility for the preparation and circulation of
            draft
            minutes.  Each member of the JDC shall have the opportunity to provide
            comments on the draft minutes.  Draft minutes shall be approved,
            disapproved and revised as necessary at the next JDC meeting.  Upon
            approval, final minutes of each meeting shall be circulated to the members
            of
            the JDC by the by the Co-Chair with responsibility for preparing such
            minutes.

           

          (d)           Expenses.  ARIAD
            and MERCK shall each bear all expenses of their respective JDC representatives
            related to their participation on the JDC and attendance at JDC
            meetings.

           

          2.2.4                      Responsibilities.  The
            JDC shall be responsible for overseeing the conduct and progress of the
            Development Program and the global Development of Products.  Without
            limiting the generality of the foregoing, the JDC shall have the following
            responsibilities:

           

          (a)           preparing,
            or directing the preparation by the Parties of, each Annual Global Development
            Plan, including the budget;

           

          (b)           preparing,
            or directing the preparation by the Parties of, each amendment to any
            Annual
            Global Development Plan or the related budget;

           

          (c)           establishing
            guidelines and procedures for allocating FTEs of the Parties to the performance
            of the Annual Global Development Plans and determining the proportion
            of such
            FTEs to be allocated to the U.S. Territory and the ROW Territory and
            making any
            revisions to such allocations.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -28-

              
                

              

            

            
              
              

            

             

          

          (d)           monitoring
            the progress of the Development Program under each Annual Global Development
            Plan and of each Party’s activities thereunder;

           

          (e)           providing
            a forum for consensual decision making with respect to the Development
            Program,
            including making decisions regarding the form of drug product;

           

          (f)           reviewing
            and circulating to the Parties data, reports or other information submitted
            by
            either Party with respect to work conducted under the Development
            Program;

           

          (g)           reviewing
            any Clinical Trial Proposal submitted by either Party and integrating,
            or
            directing the integration of, such Clinical Trial Proposal into the applicable
            Annual Global Development Plan;

           

          (h)           reviewing
            and approving any agreement entered into by a Party with a Third Party
            pursuant
            to Section 6.2.1;

           

          (i)           determining
            and approving the overall strategy for publications and presentations
            in support
            of Product in the Territory and supervising the Publication
            Committee;

           

          (j)           making
            such other decisions as may be delegated to the JDC pursuant to this
            Agreement
            or by the JSC or by mutual written agreement of the Parties during the
            Term.

           

          (k)           determining
            whether studies in the Annual Global Development Plan will be conducted
            as
            company-sponsored or as investigator-initiated trials; and

           

          (l)           reconciling
            issues between the Parties with respect to the Parties’ respective share of
            Development Costs with respect to Co-Promoted Products.

           

          2.2.5                      Dispute
            Resolution.  The JDC members shall use reasonable efforts
            to reach agreement on any and all matters.  In the event that, despite
            such reasonable efforts, agreement on a particular matter cannot be reached
            by
            the JDC within ten (10) days after the JDC first meets to consider such
            matter,
            then the matter shall be referred to the JSC for resolution pursuant
            to Section
            2.1.5.

           

          2.3           Joint
            Commercialization
            Committee.

           

          2.3.1                      Establishment.  ARIAD
            and MERCK hereby establish the Joint Commercialization Committee.  The
            JCC shall have and perform the responsibilities set forth in Section
            2.3.4.  Unless otherwise agreed by the Parties, the term for the JCC
            shall commence at such time as the JSC determines and continue for so
            long as a
            Product is being Commercialized.

           

          2.3.2                      Membership.  Each
            of ARIAD and MERCK shall designate in writing an equal (not less than
            two (2))
            number of representatives to the JCC.  Unless otherwise agreed by the
            Parties, one representative of each Party shall be designated as Co-Chairs
            of
            the JCC.  Each Party shall have the right at any time to substitute
            individuals, on a permanent or temporary basis, for any of its previously
            designated representatives to the JDC by giving written notice to the
            other
            Party.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -29-

              
                

              

            

            
              
              

            

             

          

          2.3.3                      Meetings.

           

          (a)           Schedule
            of Meetings; Agenda.  The JCC shall establish a schedule of times
            for regular meetings, taking into account, without limitation, the planning
            needs for the Commercialization of Products and the responsibilities
            of the
            JCC.  Special meetings of the JCC may be convened by any member upon
            not less than thirty (30) days (or, if such meeting is proposed to be
            conducted
            by teleconference, upon ten (10) days) written notice to the other members;
            provided that (i) notice of any such special meeting may be waived at
            any time,
            either before or after such meeting and (ii) attendance of any member
            at a
            special meeting shall constitute a valid waiver of notice from such
            member.  In no event shall the JCC meet less frequently than once each
            Calendar Quarter.  Regular and special meetings of the JCC may be held
            in person or by teleconference or videoconference; provided that meetings
            held
            in person shall alternate between the respective offices of the Parties
            in
            Cambridge, Massachusetts and  Whitehouse Station,  New
            Jersey or at other locations mutually agreeable to the JCC
            members.  The Co-Chairs shall alternate responsibility for preparing
            and circulating to each JCC member an agenda for each JCC meeting not
            later than
            one (1) week prior to such meeting.

           

          (b)           Quorum;
            Voting; Decisions.  At each JCC meeting, (i) the presence in
            person of at least one (1) member designated by each Party
            shall constitute a quorum and (ii) each member who is present shall have
            one
            vote on all matters before the JCC at such meeting.  All decisions of
            the JCC, shall be made by majority vote; provided, that, any member designated
            by a Party shall have the right to cast the votes of any of such Party’s members
            on the JCC who are absent from the meeting.  Alternatively, the JCC
            may act by written consent signed by at least one (1)
            member designated by each Party.  Whenever any
            action by the JCC is called for hereunder during a time period in which
            the JCC
            is not scheduled to meet, the Co-Chairs shall cause the JCC to take the
            action
            in the requested time period by calling a special meeting or by circulating
            a
            written consent.  Representatives of each Party or of its Affiliates
            who are not members of the JCC (including, without limitation, the Patent
            Coordinators) may attend JCC meetings as non-voting observers. In the
            event that
            the JCC is unable to resolve any matter before it, such matter shall
            be resolved
            in accordance with Section 2.3.5.

           

          (c)           Minutes.  The
            JCC shall keep minutes of its meetings that record all decisions and
            all actions
            recommended or taken in reasonable detail.  Drafts of the minutes
            shall be prepared and circulated to the members of the JCC within a reasonable
            time after the meeting, not to exceed ten (10) business days, and the
            Parties
            shall alternate responsibility for the preparation and circulation of
            draft
            minutes.  Each member of the JCC shall have the opportunity to provide
            comments on the draft minutes.  Draft minutes shall be approved,
            disapproved and revised as necessary at the next JCC meeting.  Upon
            approval, final minutes of each meeting shall be circulated to the members
            of
            the JCC by the by the Co-Chair with responsibility for preparing such
            minutes.

           

          (d)           Expenses.  ARIAD
            and MERCK shall each bear all expenses of their respective JCC representatives
            related to their participation on the JCC and attendance at JCC
            meetings.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -30-

              
                

              

            

            
              
              

            

             

          

          2.3.4                      Responsibilities.  The
            JCC shall be responsible for overseeing the conduct and progress of the
            Commercialization of each Product in the U.S. Territory and the Co-Promotion
            of
            each Co-Promoted Product in the U.S. Territory.  Without limiting the
            generality of the foregoing, the JCC shall have the following
            responsibilities:

           

          (a)           preparing
            or directing the preparation by the Parties of, each Product Commercialization
            Plan, including the budget;

           

          (b)           preparing
            or directing the preparation by the Parties of, each amendment to any
            Product
            Commercialization Plan or the related budget;

           

          (c)           deciding
            Pricing and Branding matters in the U.S. Territory;

           

          (d)           deciding
            appearance of the Product, packaging and promotional materials;

           

          (e)           determining
            managed health care strategy and tactics, including pricing, rebates,
            discounts
            and charge-backs;

           

          (f)           agreeing
            upon the market definition against which the Product will be measured
            for
            internal and external reporting purposes;

           

          (g)           determining
            the appropriate use of medical science liaisons in support of the
            Product;

           

          (h)           determining
            the format and quantities of promotional sales, marketing and educational
            materials for the Product;

           

          (i)           reviewing
            and approving any proposals for development of additional Product or
            modifications of existing Products, including, without limitation, new
            formulations after First Commercial Sale and line extensions;

           

          (j)           agreeing
            upon the design and implementation of all Product launch
            activities;

           

          (k)           monitoring
            the progress of Commercialization of Products under each Annual Product
            Commercialization Plan and of each Party’s activities thereunder;

           

          (l)           reviewing
            and circulating to the Parties data, reports or other information submitted
            by
            either Party with respect to the Commercialization of Products;

           

          (m)           reconciling
            issues between, the Parties with respect to the Parties’ respective share of
            Operating Income (Loss) with respect to Co-Promoted Products;

           

          (n)           preparing
            or directing the preparation by the Parties of short-term and long-term
            sales
            forecasts for Products;

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -31-

              
                

              

            

            
              
              

            

             

          

          (o)           determining
            appropriate targets for sales force staffing and territory mapping purposes,
            determining the Co-Promotion Percentage of each Party, provided that
            the
            Co-Promotion percentage of neither Party shall be [***], and coordinating
            the
            Detailing efforts of both Parties with respect to Co-Promoted
            Products;

           

          (p)           overseeing
            all recalls, market withdrawals and any other corrective actions related
            to
            Products;

           

          (q)           receiving
            and providing to the Parties sales reports pertaining to Collaboration
            Products;

           

          (r)           subject
            to the requirement in the Co-Promotion Agreement that Third Parties shall
            only
            be used to Co-Promote if the other Party has been given the option to
            conduct
            the extra Details and be reimbursed on the basis set forth in the Co-Promotion
            Agreement and turned down the option, approving all Third Parties to
            be engaged
            by either Party to provide Representatives to Co-Promote Collaboration
            Products,
            any such approval to be reflected in the minutes of the JCC;

           

          (s)           monitoring
            compliance of marketing activities throughout the Territory with Applicable
            Laws
            and the corporate governance codes and policies of the Parties;

           

          (t)           making
            such other decisions as may be delegated to the JCC pursuant to this
            Agreement
            or by the JSC or by mutual written agreement of the Parties during the
            Term;

           

          (u)           reviewing
            the MERCK ROW Product Commercialization Plan as set forth in Section
            3.5.2 and
            providing a forum for discussion with respect to the Commercialization
            of
            Products in the ROW Territory.

           

          2.3.5                      Dispute
            Resolution.  The JCC members shall use reasonable efforts
            to reach agreement on any and all matters.  In the event that, despite
            such reasonable efforts, agreement on a particular matter cannot be reached
            by
            the JCC within ten (10) days after the JCC first meets to consider such
            matter,
            then the matter shall be referred to the JSC for resolution pursuant
            to Section
            2.1.5.

           

          2.4           Joint
            Manufacturing
            Committee.

           

          2.4.1                      Establishment.  ARIAD
            and MERCK hereby establish the Joint Manufacturing Committee, which shall
            report
            to the JSC.  The JMC shall have and perform the responsibilities set
            forth in the Supply Agreement.  Unless otherwise agreed by the
            Parties, the term for the JMC shall commence at such time as the JSC
            determines
            and shall continue as long as the Supply Agreement remains in
            effect.

           

          2.4.2                      Membership.  Each
            of ARIAD and MERCK shall designate in writing an equal (not less than
            two (2))
            number of representatives to the JMC.  Unless otherwise agreed by the
            Parties, one representative of each Party shall be designated as Co-Chairs
            of
            the JMC.  Each Party shall have the right at any time to substitute
            individuals, on a permanent or temporary basis, for any of its previously
            designated representatives to the JMC by giving written notice to the
            other
            Party.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -32-

              
                

              

            

            
              
              

            

             

          

          2.4.3                      Meetings.

           

          (a)           Schedule
            of Meetings; Agenda.  The JMC shall establish a schedule of times
            for regular meetings, taking into account, without limitation, the planning
            needs for the Manufacture of Products and the responsibilities of the
            JMC.  Special meetings of the JMC may be convened by any member upon
            not less than thirty (30) days (or, if such meeting is proposed to be
            conducted
            by teleconference, upon not less than ten (10) days) written notice to
            the other
            members; provided that (i) notice of any such special meeting may be
            waived at
            any time, either before or after such meeting and (ii) attendance of
            any member
            at a special meeting shall constitute a valid waiver of notice from such
            member.  In no event shall the JMC meet less frequently than
            quarterly.  Regular and special meetings of the JMC may be held in
            person or by teleconference or videoconference; provided that meetings
            held in
            person shall alternate between the respective offices of the Parties
            in
            Cambridge, Massachusetts and Whitehouse Station, New Jersey or at other
            locations mutually agreeable to the JMC members.  The Co-Chairs shall
            alternate the responsibility for preparing and circulating to each JMC
            member an
            agenda for each JMC meeting not later than one (1) week prior to such
            meeting.

           

          (b)           Quorum;
            Voting; Decisions.  At each JMC meeting, (i) the presence in
            person of at least one (1) member designated by each Party
            shall constitute a quorum and (ii) each member who is present shall have
            one
            vote on all matters before the JMC at such meeting.  All decisions of
            the JMC, shall be made by majority vote; provided, that, any member designated
            by a Party shall have the right to cast the votes of any of such Party’s members
            on the JMC who are absent from the meeting.  Alternatively, the JMC
            may act by written consent signed by at least one (1)
            member designated by each Party.  Whenever any
            action by the JMC is called for hereunder during a time period in which
            the JMC
            is not scheduled to meet, either Co-Chair shall cause the JMC to take
            the action
            in the requested time period by calling a special meeting or by circulating
            a
            written consent.  Representatives of each Party or of its Affiliates
            who are not members of the JMC may attend JMC meetings as non-voting
            observers.  In the event that the JMC is unable to resolve any matter
            before it, such matter shall be resolved in accordance with Section
            2.4.5.

           

          (c)           Minutes.  The
            JMC shall keep minutes of its meetings that record all decisions and
            all actions
            recommended or taken in reasonable detail.  Drafts of the minutes
            shall be prepared and circulated to the members of the JMC within a reasonable
            time after the meeting, not to exceed thirty (30) business days, and
            the Parties
            shall alternate responsibility for the preparation and circulation of
            draft
            minutes.  Each member of the JMC shall have the opportunity to provide
            comments on the draft minutes.  Draft minutes shall be approved,
            disapproved and revised as necessary at the next JMC meeting.  Upon
            approval, final minutes of each meeting shall be circulated to the members
            of
            the JMC by the by the Co-Chair with responsibility for preparing such
            minutes.

           

          (d)           Expenses.  ARIAD
            and MERCK shall each bear all expenses of their respective JMC representatives
            related to their participation on the JMC and attendance at JMC
            meetings.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -33-

              
                

              

            

            
              
              

            

             

          

          2.4.4                      Responsibilities.  The
            JMC shall be responsible for overseeing the Manufacture of
            Products.  Without limiting the generality of the foregoing, the JMC
            shall have the following  responsibilities below, which
            responsibilities shall be subject to revisions set forth in the Supply
            Agreement:

           

          (a)           providing
            input relating to the Specifications for Product to the JDC or JCC;

           

          (b)           reviewing
            issues relating to quality standards for Product;

           

          (c)           reviewing
            issues relating to, and monitoring the progress of, Manufacturing Development
            of
            Product and providing a forum for consensual decision making with respect
            to
            Manufacturing of Product;

           

          (d)           reviewing
            issues relating to supply (e.g., quantity forecast of Product,
            shortage, and regulatory information regarding Product) of Product by
            ARIAD to
            MERCK;

           

          (e)           providing
            CMC input to the JCC with respect to Product.

           

          2.4.5                      Dispute
            Resolution.  The JMC members shall use reasonable efforts
            to reach agreement on any and all matters.  In the event that, despite
            such reasonable efforts, agreement on a particular matter cannot be reached
            by
            the JMC within ten (10) days after the JMC first meets to consider such
            matter,
            then the matter shall be referred to the JSC for resolution pursuant
            to Section
            2.1.5.

           

          2.5           Alliance
            Managers.

           

          2.5.1                      Appointment.  Each
            Party shall have the right to appoint a person who shall oversee interactions
            between the Parties for all matters related to the Development and
            Commercialization of Products between meetings of the JSC, the JDC, the
            JMC and
            the JCC (each, an “Alliance Manager”).  The Alliance Managers shall
            have the right to attend all meetings of the JSC, JDC, JMC and the JCC,
            as the
            case may be, as non-voting participants and may bring to the attention
            of the
            JSC, JDC, JMC or the JCC, as the case may be, any matters or issues either
            of
            them reasonably believes should be discussed and shall have such other
            responsibilities as the Parties may mutually agree in writing.  Each
            Party may replace its Alliance Manager at any time or may designate different
            Alliance Managers with respect to Development and Commercialization,
            respectively, by notice in writing to the other Party.

           

          2.5.2                      Responsibilities.  The
            Alliance Managers, if appointed, shall have the responsibility of creating
            and
            maintaining a constructive work environment within the JSC, JDC, JMC
            and the JCC
            and between the Parties for all matters related to the
            Collaboration.  Without limiting the generality of the foregoing, each
            Alliance Managers shall:

           

          (a)           identify
            and bring to the attention of the JSC, as applicable, any disputes arising
            between the Parties related to the Collaboration in a timely manner,
            including,
            without limitation, any asserted occurrence of a material breach by a
            Party, and
            function as the point of first referral in the resolution of each
            dispute;

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -34-

              
                

              

            

            
              
              

            

             

          

          (b)           provide
            a single point of communication for seeking consensus within the Parties’
respective organizations and between the Parties with respect to the
            Collaboration;

           

          (c)           plan
            and coordinate cooperative efforts, internal communications and external
            communications between the Parties with respect to the Collaboration;
            and

           

          (d)           take
            such steps as may be required to ensure that meetings of the JSC, the
            JDC, the
            JMC and the JCC occur as set forth in this Agreement, that procedures
            are
            followed with respect to such meetings (including, without limitation,
            the
            giving or proper notice and the preparation and approval of minutes)
            and that
            relevant action items resulting from such meetings are appropriately
            carried out
            or otherwise addressed.

           

          2.6           Appointment
            of JSC, JDC, JMC and JCC Members and Alliance
            Managers

           

          2.6.1                      Appointment
            is a Right.  The appointment of members
            of the JSC, JDC, JMC and JCC and Alliance Managers is a right of each
            Party and
            not an obligation and shall not be a “deliverable” as defined in EITF Issue No.
            00-21.  Each Party shall be free to determine not to appoint members
            to the JSC, JDC, JMC and JCC and not to appoint an Alliance
            Manager.

           

          2.6.2                      Consequence
            of Non-Appointment.  If a Party
            (“Appointing Party”) does not appoint members of the JSC, JDC, JMC or JCC or an
            Alliance Manager, it shall not be a breach of this Agreement, nor shall
            any
            consideration be required to be returned, and unless and until such persons
            are
            appointed, the other Party may discharge the roles of the Committees
            for which
            members were not appointed by an Appointing Party.

           

          2.7           Interests
            of the Parties.  All decisions made and all actions taken
            by the JSC, the JDC, the JCC, the JMC or the officers of the Parties
            pursuant to
            Section 2.1.5 shall be made or taken with due interest of both Parties
            considered in good faith.  This provision shall not be subject to
            arbitration or other dispute resolution under this Agreement.

           

          
            3.    
              DEVELOPMENT AND
              COMMERCIALIZATION OF
              PRODUCTS

          

           

          3.1           Implementation
            of Development
            Program.

           

          3.1.1                      Objectives
            of the Development Program.  The
            objectives of the Development Program shall be the Development of Products
            in
            order to obtain Commercialization Regulatory Approval of Products in
            the Field
            in the Territory pursuant to the Annual Global Development Plans.

           

          3.1.2                      Global
            Development Plan.

           

          (a) Initial
            [***] Activities.  The Parties anticipate that the Development
            Program will include, during the [***] after the Effective Date, among
            other
            things: (i) a Phase 3 Clinical Trial in a Sarcoma Indication, (ii) specified
            [***] and [***] for [***] (i.e., [***], and (iii) specified [***] for
            any [***]
            (initially, [***]), (iv) additional Clinical Trials in the [***], (v)
            a [***] in
            a [***] population [***] and (vi) specific [***] intended to be pivotal
            trials
            for use in seeking [***] that are selected based on [***] listed in the
            preceding clauses. The parties anticipate that, subject to success in
            earlier
            required Clinical Trials in the case of Phase 3 Clinical Trials,  all
            of the Clinical Trials listed above will be conducted during the [***]
            after the
            Effective Date and that multiple Cancer Indications will be pursued
            concurrently.  Certain Phase 1 and Phase 2  Clinical Trials
            may be investigator initiated studies, as set forth in the Annual Global
            Development Plan.  In order to develop and finalize the definitive
            Development Program, ARIAD and MERCK will engage in further in-depth
            discussion,
            and will obtain external input from thought leaders in the appropriate
            scientific fields and from Regulatory Authorities. All aspects of the
            Development Program are subject to the approval of the JDC.

          

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -35-

              
                

              

            

            
              
              

            

             

          

          (b)           Preparation
            of Annual Global Development Plan. An initial Annual Global Development Plan
            and budget for the period from the Effective Date through December 31,
            2008 for
            each Product and Indication shall be prepared by the Parties at the direction
            of
            the JDC, and submitted to the JSC for approval within ninety (90) days
            after the
            Effective Date.  Thereafter, for Calendar Year 2009 and for each
            Calendar Year thereafter during the Term, an Annual Global Development
            Plan and
            budget for each Product and Indication shall be prepared by the Parties
            at the
            direction of the JDC and submitted to the JSC for approval as provided
            in
            Section 2.2.4(a) at least twenty (20) days before the meeting at which
            it will
            be considered; provided, that, the Parties shall manage the preparation
            of each
            such Annual Global Development Plan and budget in a manner designed to
            obtain
            such JSC approval no later than thirty (30) days prior to the end of
            the
            then-current Calendar Year.  Each Annual Global Development Plan
            shall: (a) set forth (i) the Development objectives, including pre-clinical
            studies, Clinical Trials and other activities, priorities, timelines,
            budget
            (taking into account, with respect to budgeting amounts for specific
            Clinical
            Trial activities to be conducted internally by ARIAD or MERCK, the amount
            of
            expenditure that would be incurred by that Party if it elected to outsource
            such
            activities to a qualified contract research organization) and resources
            for the
            initial period or Calendar Year covered by the Annual Global Development
            Plan
            with reasonable specificity, (ii) which activities are ARIAD Development
            Activities and/or MERCK Development Activities, (iii) with respect to
            such
            Development Activities, the number of FTEs to be allocated to perform
            such
            activities and the corresponding FTE Cost, and (iv) the allocation of
            the
            Development Cost for the Development Activities between the U.S. Territory
            and
            the ROW Territory, and (v) jointly determine which studies will be conducted
            as
            company-sponsored and which will be conducted as investigator-initiated;
            and (b)
            be consistent with the other terms of this Agreement.  Each amendment,
            modification and/or update to any Annual Global Development Plan shall
            include
            the resulting changes to the budget and shall be set forth in a written
            document
            prepared by, or at the direction of, the JDC and approved by the JDC
            in
            accordance with Section 2.2.4(b), shall specifically state that it is
            an
            amendment, modification or update to any Annual Global Development Plan
            and
            shall be attached to the minutes of the meeting of the JDC at which such
            amendment, modification or update was submitted.

          

          (c)
            Non-Cancer Indications.  Notwithstanding anything to the
            contrary in this Agreement, under no circumstances shall a Clinical Trial
            for a
            Non-Cancer Indication be initiated by either Party for any Collaboration
            Compound unless the Parties have agreed in writing to initiate such Clinical
            Trial and have agreed upon, inter alia, the funding, milestones,
            commercialization responsibility and revenue sharing applicable thereto,
            and the
            Party responsible for overseeing the conduct of such Clinical Trial and
            its
            trial design.  Each Party shall be free to conduct Permitted
            Pre-clinical Research, provided that it gives reasonable detailed advance
            written notice of such Permitted Pre-clinical Research in the Field to
            the other
            Party.  A Party conducting any Permitted Pre-clinical Research in the
            Field shall promptly disclose the results thereof to the other
            Party.  The cost of any Permitted Pre-clinical Research by either
            Party shall not be a Development Cost.  If either Party conducts any
            such Permitted Pre-clinical Research in the Field, any resulting Technology
            shall be Joint Technology and any Patent Rights covering such Joint Technology
            shall be Joint Patent Rights; provided however, that neither party may
            use
            outside the Collaboration, or license or sublicense to Affiliates and
            Third
            Parties for use outside the Collaboration, all or any portion of its
            interest in
            such Joint Technology or Joint Patent Rights created pursuant to this
            Section
            3.1.2(c) without the prior written consent of the other Party.

          

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -36-

              
                

              

            

            
              
              

            

          

          (d)           Diagnostic
            Products and Biomarkers.  Research to develop Biomarker
            Information and Biomarkers under this Agreement will be conducted as
            set forth
            in the Annual Global Development Plans as part of the Development
            Program.  Neither Party shall conduct activities to develop Biomarker
            Information or any Biomarker for use with Rapamycin Derived mTOR Inhibitors
            except as set forth in the Annual Global Development Plans, which shall
            set
            forth the experiments to be performed, the analyses to be conducted and
            the
            number of FTEs to be utilized and the budget for such
            activities.  Neither Party shall conduct activities to develop a
            Diagnostic Product or commercialize a Diagnostic Product or Biomarker
            for use
            with Rapamycin Derived mTOR Inhibitors unless the Parties have executed
            an
            agreement (a “Diagnostic Product Agreement”) setting forth, inter alia,
            a global development plan, funding, milestones, development and
            commercialization responsibility (including the use of Third Parties
            to conduct
            activities in furtherance thereof) and revenue sharing applicable
            thereto.  Each Diagnostic Product Agreement shall also include,
inter alia, provisions (i) for joint decision-making by ARIAD and MERCK
            with respect to the development activities, funding, milestones and such
            other
            matters as the Parties shall agree, (ii) for the grant by each Party
            of a
            license rights, as applicable, under its interest in the Licensed Technology,
            Licensed Patent Rights, MERCK Technology, MERCK Patent Rights Joint Technology,
            Joint Patent Rights, Product Use Technology, Biomarker Information and
            Program
            Biomarker Technology and Program Technology for the purpose of conducting
            activities to Develop and Commercialize the Diagnostic Products and Biomarkers
            which are the subject of such Diagnostic Product Agreement, (iii) that
            any
            Technology resulting from the Development of Diagnostic Products and
            Biomarkers
            shall be governed by the ownership rules set forth in Sections 7.1, 7.2,
            7.3 and
            7.6, and (iv) specifically dealing with the treatment of revenues from
            the
            combination of a Diagnostic Product sold with a Product for purposes
            of
            royalties and sharing of Operating Income hereunder.  No costs of
            Development or Commercialization of Biomarkers or Diagnostic Products
            shall be a
            Development Cost or Commercialization Expense unless set forth in a Diagnostic
            Product Agreement or incurred in activities specifically set forth in
            an Annual
            Global Development Plan as set forth above.

          

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -37-

              
                

              

            

            
              
              

            

             

          

          3.1.3                      Responsibility
            for Development of Products.  Prior to
            Clinical Product Transfer,  ARIAD shall be the Responsible Party and
            MERCK shall be the Participating Party for Manufacturing Development
            of API and
            Clinical Product.    After Clinical Product
            Transfer,   MERCK shall be the Responsible Party and ARIAD shall
            be the Participating Party for Manufacturing Development of Clinical
            Product  and Marketed Product; and ARIAD shall be the Responsible
            Party and MERCK shall be the Participating Party for Manufacturing Development
            of API provided, however, that such Party's status as a Responsible Party
            shall
            not make any Manufacturing Development matter an ARIAD Decision or a
            MERCK
            Decision, as the case may be. Both Parties will, in accordance with the
            provisions of the Supply Agreement or as agreed to by the parties in
            the Global
            Development Plan, participate and contribute to
            Manufacturing Development of  API, Clinical Product and Marketed
            Product.  Reference to “Development” below in this Section 3.1.3 shall
            not include Manufacturing Development.  Subject to the exercise by a
            Party of an Opt-Out Right and/or a Development Transfer pursuant to Section
            3.4(b)(i) and unless otherwise set forth in any Annual Global Development
            Plan,
            (a) ARIAD shall be the Responsible Party and MERCK will be the Participating
            Party for all aspects of the Development of Product for all Sarcoma Indications
            in the U.S. Territory in accordance with the applicable Annual Global
            Development Plan; (b) ARIAD and MERCK shall jointly be the Responsible
            Party for
            all aspects of the Development of Product for all Major Cancer Indications
            and
            Other Cancer Indications in the U.S. Territory in accordance with the
            applicable
            Annual Global Development Plan; and (c) MERCK shall be the Responsible
            Party and
            ARIAD will be the Participating Party for all aspects of the Development
            of
            Product for all Cancer Indications in the ROW Territory in accordance
            with the
            applicable Annual Global Development Plan. Each Party
            shall have the right to engage Third Party contractors to perform functions
            in
            connection with the Development or Commercialization of Products hereunder.
            Notwithstanding the foregoing, with respect to the Phase 3 Sarcoma Clinical
            Trial and other ongoing Clinical Trials in the ROW Territory as of the
            Effective
            Date, the Parties agree that ARIAD shall continue to conduct such trials
            in the
            ROW Territory.  Except as set forth in any Annual Global Development
            Plan, the Responsible Party for Development of a Product shall have the
            primary
            right and responsibility for the conduct of all non-clinical studies
            for such
            Product for use in seeking Regulatory Approvals in its Territory.  For
            Clinical Trials conducted in both the U.S. Territory and the ROW Territory
            or in
            the U.S. Territory only for an Indication other than Sarcoma, the Parties
            will
            be jointly responsible for the conduct of all activities related to such
            Clinical Trials except as set forth in the Annual Global Development
            Plan.  For Clinical Trials conducted only in the ROW Territory, MERCK
            will be responsible for the conduct of all activities related to such
            Clinical
            Trials except as set forth in the Annual Global Development
            Plan.  Notwithstanding the Parties’ designation as Responsible Party
            in various parts of the Territory, each Party may conduct Clinical Trials
            throughout the world as set forth in the Annual Global Development Plan;
            provided, that any Clinical Trial proposed to be conducted by MERCK in
            the U.S.
            Territory to be used in seeking any Regulatory Approval in the ROW Territory
            shall require the prior written consent of ARIAD (who shall be the holder
            of the
            IND for such Clinical Trials in the U.S.) and any Clinical Trial for
            a Sarcoma
            Indication proposed to be conducted in the ROW Territory to be used in
            seeking
            any Regulatory Approval in the U.S. Territory (other than the Phase 3
            Sarcoma
            Trial planned as of the Effective Date) shall require the prior written
            consent
            of MERCK.  Such approval may be withheld by ARIAD if such Clinical
            Trial is inconsistent with clinical development activities being conducted
            or
            proposed to be conducted by ARIAD in the U.S. Territory, but otherwise
            may not
            be unreasonably withheld.  Subject to Section 3.10.3, (i) ARIAD shall
            file all Regulatory Filings and Drug Approval Applications in the U.S.
            Territory
            in its own name, and (ii) MERCK shall file all Regulatory Filings and
            Drug
            Approval Applications in the ROW Territory in its own name; and all Regulatory
            Filings and Drug Approval Applications for Products shall be owned by
            ARIAD in
            the U.S. Territory and by MERCK in the ROW Territory.  ARIAD shall be
            responsible in the U.S. Territory for reporting all Adverse Events related
            to
            any Product to Regulatory Authorities if and to the extent required by
            Applicable Laws, unless ARIAD transfers Regulatory Approvals in the U.S
            to Merck
            pursuant to this Agreement, in which case MERCK shall have such
            responsibility.  MERCK shall be responsible in the ROW Territory for
            reporting all Adverse Events related to any Product to Regulatory Authorities
            if
            and to the extent required by Applicable Laws.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -38-

              
                

              

            

            
              
              

            

             

          

          3.1.4                      Global
            Coordination.  In addition to meetings of the JDC,
            representatives of the Parties will meet periodically to ensure that
            the
            clinical and regulatory activities and strategy are consistent on a global
            basis.  Both Parties will provide input into the global regulatory
            strategy, will review all significant Regulatory Filings prior to submission
            to
            Regulatory Authorities, will receive copies of all correspondence from
            Regulatory Authorities in a timely manner, and will have the right to
            attend all
            Regulatory Authority meetings/interactions in the U.S. Territory or with
            the
            EMEA or the Regulatory Authorities in any European Country or in
            Japan.  The Party that is the Responsible Party may schedule meetings
            with such Regulatory Authorities and shall give the other Party as much
            notice
            as is practicable of such meetings.

           

          3.2           Identification
            of Back-up
            Compounds.

           

          3.2.1                      Back-Up
            Compounds. If requested by
            the JSC, and upon agreement by the Parties on a research plan, including
            the
            allocation of research responsibilities, and a budget, one or both Parties
            will
            use Commercially Reasonable Efforts to deliver one (1) or more Rapamycin
            Derived
            mTOR Inhibitors in addition to AP23573 which may be Developed as a follow-up
            compound or simultaneously with AP23573 for Targeted Indications (each
            such
            compound, a “Back-Up Compound”).  All activities conducted by the
            Parties to identify each Back-Up Compound shall be performed and funded
            as
            Development Activities and the Annual Global Development Plan shall be
            amended
            accordingly.  The rights and obligations of the Parties relating to
            each Back-Up Compound shall be identical to those applicable to AP23573,
            except
            as otherwise expressly provided herein. Either Party shall
            notify the JSC in writing in the event it wishes to replace AP23573 with
            a
            specified Rapamycin Derived mTOR Inhibitor developed hereunder as a Back-Up
            Compound or to Develop such Rapamycin Derived mTOR Inhibitor as a Back-Up
            Compound in addition to AP23573.  Within thirty (30) days after its
            receipt of such notice, the JSC shall review the data information and
            determine
            whether to so designate the proposed Rapamycin Derived mTOR Inhibitor
            as a
            Back-Up Compound.  Subsequent to such designation, as applicable, any
            reference to the Product shall be deemed to include or to be made to
            the Back-Up
            Compound for the purposes of this Agreement.

           

          3.3           Supply
            of Proprietary
            Materials.  From time to time during
            the Term, either Party (the “Transferring Party”) may supply the other Party
            (the “Recipient Party”) with Proprietary Materials of the Transferring Party for
            use in the Development Program.  In connection therewith, each
            Recipient Party hereby agrees that (a) it shall not use such Proprietary
            Materials for any purpose other than exercising its rights or performing
            its
            obligations hereunder; (b) it shall use such Proprietary Materials only
            in
            compliance with all Applicable Laws; (c) it shall not transfer any such
            Proprietary Materials to any Third Party without the prior written consent
            of
            the Transferring Party, except for (i) the transfer of Products for use
            in
            Clinical Trails or (ii) in a Permitted Transaction or for Permitted Preclinical
            Research or as otherwise expressly permitted hereby; (d) the Recipient
            Party
            shall not acquire any right, title or interest in or to such Proprietary
            Materials as a result of such supply by the Transferring Party; and (e)
            upon the
            expiration or termination of the Development Program, the Recipient Party
            shall,
            if and as instructed by the Transferring Party, either destroy or return
            any
            such Proprietary Materials that are not the subject of the grant of a
            continuing
            license hereunder.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -39-

              
                

              

            

            
              
              

            

             

          

          3.4           Opt-Out
            Right; Limitations on
            Opt-Out.

           

          (a)           Opt-Out
            Right.  At any time on and after the date of Completion of a Phase
            1 Clinical Trial  and Achievement of Clinical Proof of
            Concept  for a Product for any [***] or [***], either Party may submit
            a Clinical Trial Proposal to the JDC.  The JDC shall meet to consider
            such Clinical Trial Proposal within sixty (60) days, and shall promptly
            integrate, or direct the integration of, such Clinical Trial Proposal
            into the
            Annual Global Development Plan.  Subject to Section 3.4(b), during the
            period commencing on the date of presentation to the JDC of a Clinical
            Trial
            Proposal and continuing for a period of sixty (60) days, the Party not
            submitting the Clinical Trial Proposal (the “Opting-Out Party”) shall have the
            right (the “Opt-Out Right”), in its sole discretion, to elect not to fund or
            otherwise participate in the Late Stage Clinical Trial(s) proposed in
            such
            Clinical Trial Proposal, by providing the other Party with written notice
            (the
“Opt-Out-Notice”) pursuant to Section 12.2 prior to the expiration of the
            Opt-Out Period which shall specify the Clinical Trial Proposal with respect
            to
            which the Opting-Out Party is exercising its Opt-Out Right and shall
            indicate
            the date (the “Separation Date”) on which the Opt-Out Right shall be effective,
            which shall under no circumstances be sooner than thirty (30) days from
            the date
            of the Opt-Out Notice (the “Opt-Out Notice Period”).  During the
            Opt-Out Notice Period, the Parties shall continue to Develop the Product
            in
            accordance with the applicable Annual Global Development Plan.  If an
            Opting-Out Party exercises its Opt-Out Right as provided in this Section
            3.4 and
            the Party submitting the Clinical Trial Proposal determines to proceed
            with the
            Late Stage Clinical Trial(s) proposed in the Clinical Trial Proposal,
            then, as
            of the Separation Date (a) the Party that receives the Opt-Out Notice
            shall
            thereafter be the Responsible Party for the conduct of the proposed Late
            Stage
            Clinical Trial(s) as set forth in the Clinical Trial Proposal that is
            the
            subject of the Opt-Out Notice; and (b) the Opting-Out Party shall have
            [***]
            with respect to the conduct of such Late Stage Clinical Trial(s) and
            the other
            Party shall fund [***].

           

          (b)           Consequences
            of Exercise of Opt-Out Right By ARIAD.  Notwithstanding anything
            to the contrary in this Agreement,

           

          (i)           Development
            Transfer.  In the event ARIAD exercises an Opt-Out Right on any
            occasion for Late Stage Clinical Trials proposed in a Clinical Trial
            Proposal
            submitted by MERCK for a Product for a [***] and MERCK proceeds with
            the Late
            Stage Clinical Trials for such [***], then, as of the Separation Date,
            MERCK
            shall be the Responsible Party and ARIAD will be the Participating Party
            for the
            Development of Products for [***] throughout the Territory (including,
            for the
            avoidance of doubt, the U.S. Territory) (a “Development Transfer”);and the
            license set forth in Section 6.1.1(a) shall become exclusive with respect
            to the
            conduct of Clinical Trials throughout the Territory.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -40-

              
                

              

            

            
              
              

            

             

          

          (ii)           U.S.
            Commercialization Transfer.  Upon the receipt of Commercialization
            Regulatory Approval in the United States of a Product for any Major Cancer
            Indication for which ARIAD exercised an Opt-Out Right, (a) [***] for
            all Cancer
            Indications throughout the Territory (including, for the avoidance of
            doubt, the
            U.S. Territory) (a “ U.S. Commercialization Transfer”), [***], and in any event
            within sixty (60) days after MERCK’s request: (A) [***] applicable to such
            Product, if any, other than Product Trademarks incorporating ARIAD’s name or
            logo; (B) [***] then in its name applicable to Products in the U.S. Territory,
            if any; and all Confidential Information Controlled by ARIAD relating
            to such
            Regulatory Filings, Drug Approval Applications and Regulatory Approvals;
            (C)
            [***] and take any other action reasonably necessary to effect such transfer;
            (D) [***] and such Regulatory Authorities relating to such Regulatory
            Filings,
            Drug Approval Applications and Regulatory Approvals; (E) unless expressly
            prohibited by any Regulatory Authority, [***] of such Product being conducted
            in
            the U.S. Territory by or on behalf of ARIAD as of the Separation Date
            and
            continue to conduct such trials, at MERCK’s sole expense, for up to [***] to
            enable such transfer to be completed without interruption of any such
            trial; (F)
            [***] with any Third Party with respect to the conduct of Clinical Trials
            for
            Products including, without limitation, agreements with contract research
            organizations, clinical sites and investigators, unless expressly prohibited
            by
            any such agreement (in which case ARIAD shall cooperate with
            MERCK in all reasonable respects to secure the consent of
            such Third Party to such assignment); and (G) [***] or its Affiliates
            pursuant
            to this Agreement that relate to any Product [***].  As of such grant
            date (the “Transfer Date”), (A) MERCK shall be deemed the Responsible Party for
            Commercialization of such Products for all Cancer Indications in the
            Territory
            [***], (B) the Parties will agree upon and implement a plan for the orderly
            transfer of [***] from ARIAD to MERCK, including responsibility for order
            fulfillment and distribution of Product in the U.S. Territory and upon
            implementation of  such plan (C) ARIAD shall have the right to
            Co-Promote Products in the U.S. Territory as set forth in Section 3.13,
            (D) if
            MERCK reduces ARIAD’s level of Co-Promotion effort, a reasonable transition
            period, but in no event less than [***] will be allowed to permit ARIAD
            to
            adjust its field sales force, and (E) ARIAD will receive from MERCK,
            in lieu of
            [***], the [***] described in [***] on [***] that occur in the U.S. Territory
            after the date of implementation of the plan for U.S. Commercialization
            Transfer. The exercise of an Opt–Out Right by ARIAD shall not change the
            Parties' responsibilities for Manufacturing  as provided in Section
            3.5.2 and the Supply Agreement.

           

          (iii)           Consequences
            of Exercise of Opt Out Right by MERCK. In the event MERCK exercises an
            Opt-Out Right on any occasion for Late Stage Clinical Trial(s) proposed
            in a
            Clinical Trial Proposal submitted by ARIAD for any Major Cancer Indication,
            and
            ARIAD proceeds with the Late Stage Clinical Trial(s) for such Major Cancer
            Indication, then upon subsequent FDA approval in the United States of
            the
            Product for that Major Cancer for which MERCK exercised its Opt-Out Right,
            MERCK
            Revenue Sharing Percentage shall be [***] percent ([***]%).  For
            clarity, the reduction in the MERCK Revenue Sharing Percentage shall
            apply
            attributable to sales of the Product in the U.S. Territory for all Indications.
            The exercise of an Opt–Out Right by MERCK shall not change the Parties'
            responsibilities for Manufacturing  as provided in Section 3.5.2 and
            the Supply Agreement.

           

          3.5           Product
            Commercialization.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -41-

              
                

              

            

            
              
              

            

             

          

          3.5.1                      Product
            Commercialization Plans.  Subject to
            resolution of disputes as set forth in Section 2.1.5, the JCC shall prepare,
            and/or direct the preparation of, and approve a Product Commercialization
            Plan
            for each Product, at such time as the JSC may direct.  Each such
            Product Commercialization Plan shall be updated and approved at such
            time as the
            JCC may determine, not less than annually.

           

          3.5.2                      Responsibility
            for Commercialization of Products. Subject to the
            exercise by a Party of an Opt-Out Right pursuant to Section 3.4 and unless
            otherwise set forth in any Product Commercialization Plan (a) ARIAD shall
            be the
            Responsible Party and MERCK will be the Participating Party for all Sarcoma
            Indications in the U.S. Territory other than budgets, Pricing and Branding
            and
            the Parties shall jointly be the Responsible Party and have the right
            and
            responsibility for all aspects of the Commercialization of Products for
            all
            Major Cancer Indications and Other Cancer Indications in the U.S. Territory
            and
            for budgets, Pricing and Branding for all Indications in the U.S. Territory
            in
            accordance with the applicable Product Commercialization Plan; provided
            that
            ARIAD shall have responsibility for Manufacturing  all API
            for  Product under the Supply Agreement and Clinical Product
            (prior to Clinical Product Transfer) and for order fulfillment and distribution
            of Product in the U.S. Territory and shall book all sales in the U.S.
            Territory;
            and (b) MERCK shall be the Responsible Party and have the sole right
            and
            responsibility for all aspects of the Commercialization of Products for
            all
            Cancer Indications in the ROW Territory in accordance with the applicable
            MERCK
            ROW Product Commercialization Plan and shall book all sales in the ROW
            Territory
            and shall have responsibility for Manufacturing all
            Product, including Clinical Product
            (after Clinical Product Transfer), under the Supply
            Agreement.  Without limiting the foregoing, the Responsible Party (or
            Parties) shall have the right and responsibility for the conduct of all
            pre-marketing, marketing, promotion, sales, distribution, import and
            export
            activities (including securing reimbursement, sales and marketing and
            conducting
            any post-marketing trials or post-marketing safety surveillance or maintaining
            databases), subject to the oversight of the JSC with respect to Co-Promoted
            Products.  MERCK will provide ARIAD with a draft or update of the
            MERCK ROW Product Commercialization Plan annually, not later than March
            31 of
            each Calendar Year and will give good faith consideration to ARIAD’s comments on
            such draft.  MERCK will review the MERCK ROW Product Commercialization
            Plan with ARIAD at a meeting of the JCC and will provide ARIAD with an
            annual
            roll-up of the MERCK ROW Product Commercialization Plan.

           

          3.6           Supply
            of Products for Development and
            Commercialization. 

           

          3.6.1                      Negotiation
            and Execution.  As soon as possible after the execution
            hereof, ARIAD and MERCK shall negotiate in good faith and enter into
            a supply
            agreement (the “Supply Agreement”) providing for the terms of Manufacture and
            supply of API by ARIAD and Product in tablet form by MERCK for the Collaboration
            in such form and substance as mutually agreed by the Parties.  If it
            is determined pursuant to this Agreement to Develop and Commercialize
            Product in
            a form other than tablets, a separate supply agreement or an amendment
            to the
            Supply Agreement shall be negotiated for supply of such Product.  The
            Parties agree that no Collaboration Compound or Product shall be sold
            by either
            Party for use in the Field until the Supply Agreement has been executed
            by the
            Parties.  ARIAD shall be the Responsible Party for (i) supply of
            Clinical Product in tablet form until the Supply Agreement is executed
            and a
            Clinical Product Transfer has been completed and (ii) for supply of Clinical
            Product in any form other than tablets until an additional supply agreement
            or
            an amendment to the Supply Agreement has been executed.  The Parties
            further agree that the definitions and other provisions of this Agreement
            concerning supply of Clinical Product shall not be precedent for the
            terms of
            the Supply Agreement.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -42-

              
                

              

            

            
              
              

            

             

          

          3.6.2                      Dispute
            Resolution.  In the event the Parties fail to execute and
            deliver the Supply Agreement within thirty (30) days after the Effective
            Date,
            (i) the Parties shall use reasonable efforts to complete such negotiations
            and
            to execute and deliver the Supply Agreement as soon as possible after
            such
            thirty (30) day period and (ii) without limiting the generality of the
            foregoing, after the expiration of such thirty (30) day period, either
            Party may
            by written notice to the other Party require that each Party produce
            a list of
            issues on which they have failed to reach agreement and submit its list
            to the
            JSC to be resolved in accordance with Section 2.1.5.  For clarity, no
            issue referred to the JSC pursuant to this Section 3.6.2 shall be an
            ARIAD
            Decision or a MERCK Decision.

           

          3.6.3                      Non-Commercial
            Supply of Product.

           

          (a)           Prior
            to Clinical Product Transfer, ARIAD shall have Manufactured API, Product
            and
            intermediates thereof for Clinical Trials, pre-clinical studies, and
            start-up,
            pre-validation and other non-commercial purposes in the Territory
            (“Clinical Supplies”), and ARIAD shall supply MERCK with
            Clinical Supplies for use by MERCK in Clinical Trials and otherwise in
            the
            Development Program.  The Manufacturing Cost of such Clinical Supplies
            shall be a Development Cost.

           

          (b)           Prior
            to Clinical Product Transfer, ARIAD shall have Manufactured the Clinical
            Supplies in accordance with all applicable laws, rules and regulations,
            including applicable cGMPs.

           

          (c)           ARIAD
            shall notify MERCK in writing of any deviations from applicable regulatory
            or
            legal requirements relating to the Clinical Supplies provided by ARIAD
            to
            MERCK.  ARIAD hereby certifies that it will not and has not employed
            or otherwise used in any capacity the services of any person debarred
            under
            Section 21 USC 335a in performing any portion of the Manufacture of Clinical
            Supplies.

           

          (d)           ARIAD
            shall maintain complete and accurate records of all relevant data and
            information relating to the performance by ARIAD of its obligations under
            this
            Section 3.6.3.  ARIAD shall maintain original batch records for seven
            (7) years and, at such time thereafter as ARIAD intends to dispose of
            such batch
            records, ARIAD shall notify MERCK in advance, and shall permit MERCK,
            at its
            discretion, to take possession of such batch records.

           

          (e)           Upon
            execution of the Supply Agreement, the terms of the Supply Agreement
            shall
            govern Clinical Supplies supplied to MERCK by ARIAD and to ARIAD by
            MERCK.

           

          3.7           Development
            and Commercialization
            Diligence.  During the Term, each
            Party shall use Commercially Reasonable Efforts to (a) conduct the Development
            Activities assigned to it as set forth in each Annual Global Development
            Plan;
            and (b) Commercialize Products for Indications in the portions of the
            Territory
            for which it is the Responsible Party, and each Party shall commit such
            resources (including employees, consultants, contractors, facilities,
            equipment
            and materials) as each deems necessary to conduct such Development Activities
            and Commercialize Products.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -43-

              
                

              

            

            
              
              

            

             

            
              3.8           Compliance.  Each
                Party shall perform its obligations under each Annual Global Development
                Plan
                and Product Commercialization Plan in good scientific manner and
                in compliance
                in all material respects with all Applicable Laws.  For purposes of
                clarity, with respect to each activity performed under an Annual
                Global
                Development Plan and Product Commercialization Plan that will or
                would
                reasonably be expected to be submitted to a Regulatory Authority
                in support of a
                Regulatory Filing or Drug Approval Application, the Party performing
                such
                activity shall comply in all material respects with GLPs, GMPs or
                Good Clinical
                Practices (or, if and as appropriate under the circumstances, International
                Conference on Harmonization (ICH) guidance or other comparable regulation
                and
                guidance of any Regulatory Authority in any country or region in
                the
                Territory).

               

              3.9           Cooperation.  Scientists
                at ARIAD and MERCK shall cooperate in the performance of the Development
                Program
                and, subject to the terms of this Agreement and any confidentiality
                obligations
                to Third Parties, shall exchange such data, information and materials
                as is
                reasonably necessary for the other Party to perform its obligations
                under any
                Annual Global Development Plan and Product Commercialization Plan.

               

              3.10           Exchange
                of Reports; Information;
                Updates.

               

              3.10.1                      Development
                Program Reports.  The Responsible Party
                shall keep the JDC and the Participating Party regularly informed
                of the
                progress of its efforts to Develop Products in the Field in the
                Territory.  Without limiting the generality of the foregoing, the
                Responsible Party shall, on at least a quarterly basis, provide the
                JDC with
                reports in reasonable detail regarding the status of all preclinical
                IND-enabling studies and activities (including toxicology and pharmacokinetic
                studies), Clinical Trials, Manufacturing Development and other activities
                conducted under the Development Program, together with all raw data
                and results
                generated in each such preclinical IND-enabling study and/or activity,
                Clinical
                Trial and such additional information that it has in its possession
                as may be
                reasonably requested from time to time by the JDC.  The Participating
                Party shall, on at least a quarterly basis, provide the JDC with
                reports in
                reasonable detail regarding the status of all Development Activities
                of the
                Participating Party and such additional information that it has in
                its
                possession as may be reasonably requested from time to time by the
                JDC.

               

              3.10.2                      Commercialization
                Reports.  The Responsible Party shall
                keep the JCC and the Participating Party regularly informed of the
                progress of
                the Responsible Party’s efforts to Commercialize Products in the Field in the
                Territory through periodic updates to the JCC.  Without limiting the
                generality of the foregoing, the Responsible Party shall provide
                the JCC and the
                Participating Party with semi-annual written updates to each Product
                Commercialization Plan, which shall (a) summarize the Responsible
                Party’s
                efforts to Commercialize Products, (b) identify the Regulatory Filings
                and Drug
                Approval Applications with respect to such Product that the Responsible
                Party or
                any of its Affiliates or Sublicensees have filed, sought or obtained
                in the
                prior twelve (12) month period or reasonably expect to make, seek
                or attempt to
                obtain in the following twelve (12) month period, and (c) summarize
                all clinical
                and other data generated by the Responsible Party with respect to
                such
                Products.  All such updates and notices to the Participating Party
                shall be sent to the attention of the Participating Party’s Alliance Manager
                unless the Participating Party otherwise notifies the Responsible
                Party.  A Party shall not be required to deliver to the other Party’s
                Alliance Manager any information which has been previously delivered
                in writing
                to the other Party’s representatives on the JSC, JDC, JCC or JMC.

               

              
                
                  Portions
                    of this Exhibit were omitted and have been filed separately with
                    the Secretary
                    of the Commission pursuant to the Company’s application requesting confidential
                    treatment under Rule 24b-2 of the Securities Exchange Act of
                    1934, as
                    amended.

                  
                  

                

                
                  -44-

                  
                    

                  

                

                
                  
                  

                

                 

              

              3.10.3                      Right
                of Access.  The Responsible Party shall
                promptly provide the Participating Party with access to all data,
                results and
                information produced in connection with the conduct of Development
                activities in
                its original format, without translation.  Notwithstanding anything to
                the contrary in this Agreement, the Participating Party (a) may use
                such data,
                results and information for the performance of its obligations and
                exercise of
                its rights under this Agreement; (b) have a right of access, a right
                of
                reference and a right to use and incorporate all such data, results
                and
                information in any Regulatory Filings and Drug Approval Applications
                regarding
                the Product; and (c) to the extent required by Applicable Laws, disclose
                all
                such data, results and information and all investigator safety letters
                furnished
                pursuant to Section 3.10.5 to other licensees conducting Clinical
                Trials
                anywhere in the world in any patent population with the relevant
                Collaboration
                Compound and, to the extent required by Applicable Laws, permit such
                licensees
                to reference, incorporate, and use the same in regulatory filings
                or drug
                approval applications inside or outside the Field.  The Parties shall
                cooperate so that such data, results and information is transferred
                to the
                Participating Party as expeditiously as possible.

               

              3.10.4                      Information
                in Support of Regulatory Approvals and Maintenance of the
                DMF.

               

              (a)           ARIAD
                shall disclose all Licensed Technology to the extent necessary or
                useful for
                MERCK to obtain Commercialization Regulatory Approvals.  In connection
                with the foregoing, ARIAD shall, to the extent required by Regulatory
                Authorities in the U.S. Territory, file, have filed, maintain and
                have
                maintained the DMF for the key intermediates, Collaboration Compounds
                and
                Product with the applicable Regulatory Authorities in the U.S. Territory
                and
                shall promptly provide MERCK with copies of any updates to the open
                part of such
                DMF and shall ensure that MERCK and its Affiliates shall have the
                right to
                cross-reference such DMF for the purposes of enabling MERCK, its
                Affiliates to
                obtain the Commercialization Regulatory Approval  for the
                ROW  Territory  or the U.S. Territory in the event of a U.S.
                Commercialization Transfer.

               

              (b)           ARIAD
                and MERCK shall each use Commercially Reasonable Efforts to assist
                the other
                Party to obtain all necessary Regulatory Approvals for the Development
                and
                Commercialization of the Product under this Agreement.

               

              3.10.5                      Adverse
                Event Reports; Review of Regulatory Filings and
                Correspondence.

               

              (a)           Adverse
                Events.  Each Party shall, and shall cause its respective
                Affiliates to, furnish timely notice (as required by applicable worldwide
                regulations, i.e., currently seven (7) calendar days for deaths,
                immediately for
                life-threatening adverse reactions and fifteen calendar (15) days
                for serious
                adverse reactions) to all competent governmental agencies within
                both the U.S.
                Territory and the ROW Territory of all side effects, drug interactions
                and other
                adverse effects identified or suspected with respect to the Products
                for the
                Targeted Indications administered, distributed, marketed and sold
                under
                authority of any IND, NDA or Regulatory Approvals issued by such
                governmental
                agencies to such Party.  Each Party shall provide the other Party
                hereto with all necessary assistance in complying with all adverse
                reaction
                reporting requirements established by, or required under, any applicable
                IND,
                NDA or Regulatory Approvals and/or Applicable Law within both the
                U.S. Territory
                and the ROW Territory.  Each Party shall, and shall cause its
                Affiliates to, furnish the other Party within five (5) calendar days
                of “date
                first learned” (2 calendar days for death and life-threatening reactions from
                studies) written notice of all such side effects, drug interactions
                and other
                adverse effects reported to such Party or its Affiliates regarding
                Products.  Each Party shall also use its best efforts to obtain, and
                to furnish to the other Party hereto, such information, including,
                but not
                limited to, patients, circumstances, consequences and sources of
                information,
                reasonably sufficient to permit that other Party to evaluate such
                side effects,
                drug interactions or other adverse effects of the Products for the
                Targeted
                Indications.  Each Party shall, in addition, furnish to the other
                Party copies of all investigator safety letters provided by the Party
                or its
                Affiliates or licensees with respect to Collaboration Compounds or
                Products.  Each Party shall retain all documents, reports, studies and
                other materials relating to any and all such side effects, drug interactions,
                or
                other adverse effects, as the case may be. Upon reasonable written
                notice, and
                each Party shall permit the other Party hereto to inspect, and to
                make copies
                of, all such documents, reports, studies and other materials. Within
                ninety (90)
                days after the Effective Date, the Parties shall enter into a separate
                and more
                detailed agreement concerning adverse event reporting.

               

              
                
                  Portions
                    of this Exhibit were omitted and have been filed separately with
                    the Secretary
                    of the Commission pursuant to the Company’s application requesting confidential
                    treatment under Rule 24b-2 of the Securities Exchange Act of
                    1934, as
                    amended.

                  
                  

                

                
                  -45-

                  
                    

                  

                

                
                  
                  

                

                 

              

              (b)           Preparation
                of Drug Approval Applications.  The Responsible Party shall
                consult with the Participating Party in good faith in the preparation
                of all
                Drug Approval Applications for Products.  The Responsible Party shall
                consider all comments of the Participating Party in good faith, taking
                into
                account the due interests of the Participating Party and the Development
                and
                Commercialization of the applicable Product on a global basis.

               

              (c)           Regulatory
                Meetings; Review of Other Regulatory Filings and
                Correspondence.  The Responsible Party shall use reasonable
                efforts to provide the Participating Party with at least thirty (30)
                days
                advance notice of any meeting with the FDA or other Regulatory Authority
                regarding a Drug Approval Application relating to, or Regulatory
                Approval for,
                any Product and the Participating Party may elect to send one person
                to
                participate as an observer (at the Participating Party’s sole cost and expense)
                in such meeting.  In addition, subject to any Third Party
                confidentiality obligations, the Responsible Party shall (i) provide
                the
                Participating Party with drafts of each Regulatory Filing or other
                document or
                correspondence pertaining to any Product and prepared for submission
                to the FDA
                or other Regulatory Authority sufficiently in advance of submission
                so that the
                Participating Party may review and comment on the substance of such
                Regulatory
                Filing or other document or correspondence and (ii) promptly provide
                the
                Participating Party with copies of any document or other correspondence
                received
                from the FDA pertaining to any Product.  If the Participating Party
                has not commented on such Regulatory Filing or other document or
                correspondence
                within ten (10) days (or, in the case of an IND or NDA (or equivalent),
                thirty
                (30) days) after it is provided to the Participating Party, then
                the
                Participating Party shall be deemed to have no comments on such Regulatory
                Filing or other documents or correspondence.  The Responsible Party
                shall consider all comments of the Participating Party in good faith,
                taking
                into account the best interests of the Collaboration and of the Development
                or
                Commercialization of the applicable Product on a global basis.

               

              
                
                  Portions
                    of this Exhibit were omitted and have been filed separately with
                    the Secretary
                    of the Commission pursuant to the Company’s application requesting confidential
                    treatment under Rule 24b-2 of the Securities Exchange Act of
                    1934, as
                    amended.

                  
                  

                

                
                  -46-

                  
                    

                  

                

                
                  
                  

                

                 

              

              3.10.6                      Safety.  Each
                Party shall immediately (and, in any event, within sufficient time
                to allow the
                other Party to comply with applicable law or regulations) notify
                the other Party
                of any information of which it is aware concerning a Product which
                may affect
                the  approved claims made for the Product or the continued marketing
                of the Product.  Any such notification will include all related
                information in reasonable detail.  Upon receipt of any such
                information, the Parties shall (unless action is required by applicable
                law,
                rules, regulations or Regulatory Authority requirements before a
                meeting can be
                held, in which event the Responsible Party shall take any required
                action in the
                portion of the Territory for which it is the Responsible Party with
                out a
                meeting) immediately consult with each other in an effort to arrive
                at a
                mutually acceptable procedure for taking appropriate action; subject,
                in the
                case of recalls, to the procedures and responsibilities set forth
                in Section
                3.11. Following such meeting, the Responsible Party shall determine
                the course
                of action to be taken and shall make such report of such matter to
                the  appropriate Regulatory Authority in the portion of the Territory
                for which it is the Responsible Party or take other action with respect
                to such
                portion of the Territory that it deems to be required by applicable
                law, rules,
                regulations or Regulatory Authority requirements

               

              3.11           Product
                Recalls.  In the event that any
                Regulatory Authority issues or requests a recall or takes similar
                action in
                connection with a Product, or in the event a Party reasonably believes
                that an
                event, incident or circumstance has occurred that may result in the
                need for a
                recall, market withdrawal or other corrective action regarding a
                Product, such
                Party shall promptly advise the designated senior officer (the Chief
                Executive
                Officer in the case of ARIAD and the President of Global Human Health
                in the
                case of MERCK) of the other Party thereof by telephone or
                facsimile.  Following such notification, the Responsible Party shall
                decide and have control of whether to conduct a recall or market
                withdrawal
                (except in the event of a recall or market withdrawal mandated by
                a Regulatory
                Authority, in which case it shall be required) or to take other corrective
                action in any country and the manner in which any such recall, market
                withdrawal
                or corrective action shall be conducted; provided that the Responsible
                Party
                shall keep the Participating Party regularly informed regarding any
                such recall,
                market withdrawal or corrective action.  In the U.S. Territory, either
                Responsible Party may elect to require (following discussions among
                the
                designated senior officers of the Parties) a recall or market withdrawal
                of the
                Product. ARIAD shall be responsible for conducting any recall or
                market
                withdrawal of the Product in the U.S. Territory. Subject
                to any contrary provisions specifically set forth in the Supply Agreement,
                all
                expenses incurred by the Responsible Party in connection with any
                such recall,
                market withdrawal or corrective action (including, without limitation,
                expenses
                for notification, destruction and return of the affected Product
                and any refund
                to customers of amounts paid for such Product) shall (a) with respect
                to
                Royalty-Bearing Products, be the sole responsibility of MERCK and
                (b) with
                respect to Co-Promoted Product, be a Commercialization Expense. 

               

              3.12           Reconciliation
                and Auditing of Development
                Costs.

               

              3.12.1                      Responsibility
                for Development Costs.  Subject to the
                exercise by a Party of an Opt-Out Right and to the remainder of this
                Section
                3.12.1, ARIAD
                and MERCK shall each
                be responsible for funding fifty percent (50%) of the Development
                Costs
                allocable to Co-Promoted Products for all Cancer Indications; provided,
                that,
                notwithstanding the foregoing, (a) MERCK shall be responsible for
                funding one
                hundred percent (100%) of all incremental Development Costs that
                are specific to
                the Development of any Product in any country in the ROW Territory
                (“ROW
                Development Costs”) (e.g., toxicology studies or Clinical Trials required for
                Regulatory Approval under Applicable Laws in Japan).  If the
                activities that resulted in such ROW Development Costs subsequently
                result in a
                claim in the product label for which Commercialization Regulatory
                Approval is
                received in the U.S. Territory, then ARIAD shall reimburse MERCK
                for one-half of
                those ROW Development Costs that resulted in such claim.  ROW
                Development Costs shall include, without limitation, the cost of
                any Phase 4
                Clinical Trial, and such other Development Costs as the Parties shall
                agree upon
                in writing, but shall not include the cost of any Phase 5 Clinical
                Trial.

               

              
                
                  Portions
                    of this Exhibit were omitted and have been filed separately with
                    the Secretary
                    of the Commission pursuant to the Company’s application requesting confidential
                    treatment under Rule 24b-2 of the Securities Exchange Act of
                    1934, as
                    amended.

                  
                  

                

                
                  -47-

                  
                    

                  

                

                
                  
                  

                

                 

                3.12.2                      Reconciliation
                  of Development Costs.

              

               

              (a)           Reports;
                Reconciliation Payments.  Subject to the exercise by a Party of an
                Opt-Out Right, within thirty (30) days following the end of each
                Calendar
                Quarter during the Term on and after the date of commencement of
                the Development
                Program, each of ARIAD and MERCK shall submit to the JDC a written
                report
                setting forth in reasonable detail all Development Costs incurred
                by each such
                Party over such Calendar Quarter applicable to the conduct of the
                Development
                Program.  ARIAD shall include in the first such report the cost of
                acquisition of raw materials, intermediates, AP23573 and Product
                on hand or
                ordered and paid for by ARIAD as of the Effective Date that are to
                be used in
                the Development Program. Within  ten (10) days following the receipt
                by the JDC of such written reports, the JDC shall prepare and submit
                to each
                Party a written report setting forth in reasonable detail (a) the
                calculation of
                all such Development Costs incurred by both Parties over such Calendar
                Quarter
                and (b) the calculation of the net amount owed by MERCK to ARIAD
                or by ARIAD to
                MERCK in order to ensure the appropriate sharing of such Development
                Costs in
                accordance with the ARIAD Co-Development Percentage and MERCK Co-Development
                Percentage, respectively.  The net amount payable shall be paid by
                ARIAD or MERCK to the other Party, as applicable, within ten (10)
                days after the
                distribution by the JDC of such written report.

               

              (b)           Records;
                Audit Rights.  Each Party shall keep and maintain for [***] years
                complete and accurate records of Development Costs incurred with
                respect to
                Co-Promoted Products in sufficient detail to allow confirmation of
                same by the
                JSC and the other Party, including without limitation confirmation
                of the proper
                allocation of FTEs to Development of Products.  Each Party (the “Cost
                Auditing Party”) shall have the right for a period of [***] years after such
                Development Cost is reconciled in accordance with Section 3.12.2(a)
                to appoint
                at its expense an independent certified public accountant reasonably
                acceptable
                to the other Party (the “Cost Audited Party”) to audit the relevant records of
                the Cost Audited Party and its Affiliates to verify that the amount
                of such
                Development Costs was correctly determined.  The Cost Audited Party
                and its Affiliates shall each make its records available for audit
                by such
                independent certified public accountant during regular business hours
                at such
                place or places where such records are customarily kept, upon thirty
                (30) days
                written notice from the Cost Auditing Party.  Such audit right shall
                not be exercised by the Cost Auditing Party more than once in any
                Calendar Year
                and the records of Development Costs for a given period may not be
                audited more
                than once.  All records made available for audit shall be deemed to be
                Confidential Information of the Cost Audited Party.  The results of
                each audit, if any, shall be binding on both Parties.  In the event
                there was an error in the amount of Development Costs reported by
                the Cost
                Audited Party hereunder, (a) if the amount of Development Costs was
                over
                reported, the Cost Audited Party shall promptly (but in any event
                no later than
                thirty (30) days after the Cost Audited Party’s receipt of the report so
                concluding) make payment to the Cost Auditing Party of the over reported
                amount
                and (b) if the amount of Development Costs was underreported, the
                Cost Auditing
                Party shall promptly (but in any event no later than thirty (30)
                days after the
                Cost Auditing Party’s receipt of the report so concluding) make payment to the
                Cost Audited Party of the underreported amount.  The Cost Auditing
                Party shall bear the full cost of such audit unless such audit discloses
                an over
                reporting by the Cost Audited Party of the greater of [***]% of the
                aggregate
                amount of Development Costs reportable in any Calendar Year or $[***],
                in which
                case the Cost Audited Party shall reimburse the Cost Auditing Party
                for all
                costs incurred by the Cost Auditing Party in connection with such
                audit.

               

              
                
                  Portions
                    of this Exhibit were omitted and have been filed separately with
                    the Secretary
                    of the Commission pursuant to the Company’s application requesting confidential
                    treatment under Rule 24b-2 of the Securities Exchange Act of
                    1934, as
                    amended.

                  
                  

                

                
                  -48-

                  
                    

                  

                

                
                  
                  

                

                 

              

              3.13           Co-Promotion
                Right.

               

              3.13.1                      Co-Promotion.  Whether
                or not a Party exercises its Opt-Out Right with respect to any Indication
                for a
                Product, ARIAD and MERCK shall Co-Promote each Product for
                all Cancer Indications in the U.S. Territory (the “Co-Promotion Territory”) in
                accordance with this Section 3.13 (each such Product, a “Co-Promoted Product”).

               

              3.13.2                      Negotiation
                of Co-Promotion Agreement.

               

              (a)           Negotiation,
                Execution and Delivery.  As soon as practicable following the
                Initiation of  first Phase 3 Clinical Trial with respect to any Cancer
                Indication, the Parties shall (i) commence the preparation of a Co-Promotion
                Agreement (the “Co-Promotion Agreement”) which shall set forth the terms
                applicable to the Co-Promotion of such Co-Promoted Product; (ii)
                conform in all
                material respects with the terms and conditions set forth in Schedule 5
                attached hereto; and (iii) include such additional provisions as
                are usual and
                customary for inclusion in a co-promotion agreement between companies
                in the
                pharmaceutical industry of comparable sizes to the respective Parties;
                provided,
                that, the Parties hereby agree that (i) each Party will bear the
                costs of its
                own field sales force, except that, in the event of a U.S. Commercialization
                Transfer, MERCK will compensate ARIAD for its Co-Promotion activities
                at a rate
                set forth in the Co-Promotion Agreement., (ii) ARIAD shall provide
                no more than
                [***] percent ([***]%) and MERCK shall provide no more than [***]
                percent
                ([***]%) of the field sales force for [***], (iii) except for [***],
                the JCC
                shall determine the appropriate level of field sales force deployment
                of each
                Party depending upon the Indications that have obtained Commercialization
                Regulatory Approval, and (iv) under no circumstances shall either
                Party have the
                responsibility to provide less than [***] percent ([***]%) of the
                collective
                sales force efforts applicable to a Co-Promoted Product.  For purposes
                of clarity, such additional terms shall supplement and shall not
                materially
                expand, limit or change the terms set forth on Schedule 5.  The
                Parties shall negotiate the Co-Promotion Agreement in good faith
                and with
                sufficient diligence as is required to execute and deliver the Co-Promotion
                Agreement within one hundred and twenty (120) days.

               

              (b)           Dispute
                Resolution.  In the event the Parties fail to execute and deliver
                the Co-Promotion Agreement within the one hundred and twenty (120)
                day period
                described in Section 3.12.2(a), the Parties shall (i) use reasonable
                efforts to
                complete such negotiations and to execute and deliver the Co-Promotion
                Agreement
                as soon as possible after such one hundred and twenty (120) day period
                and (ii)
                without limiting the generality of the foregoing, after the expiration
                of such
                one hundred and twenty (120) day period, each produce a list of issues
                on which
                they have failed to reach agreement and submit its list to the JSC
                to be
                resolved in accordance with Section 2.1.5. For clarity, no issue
                referred to the
                JSC pursuant to this Section 3.13.2(b) shall be an ARIAD Decision
                or a MERCK
                Decision.

               

              
                
                  Portions
                    of this Exhibit were omitted and have been filed separately with
                    the Secretary
                    of the Commission pursuant to the Company’s application requesting confidential
                    treatment under Rule 24b-2 of the Securities Exchange Act of
                    1934, as
                    amended.

                  
                  

                

                
                  -49-

                  
                    

                  

                

                
                  
                  

                

                 

              

              3.14           Labeling.  All
                product
                labels and Promotional Materials for Co-Promoted Products shall include,
                in
                equal prominence, the names and logos of both ARIAD and MERCK to
                the extent
                feasible under applicable law.  ARIAD agrees, to the extent feasible
                under applicable law and to the extent such statements are accurate
                at the time
                of the sale of the Product, that product labels for Co-Promoted Product
                will
                identify MERCK as manufacturing the Product, as co-marketing the
                Product with
                ARIAD and as a licensee of the trademark for the Product.
 The JCC shall have the
                responsibility of deciding whether changes in the particular appearance
                in
                labeling of packaging and containers of Co-Promoted Products or in
                the product
                information is required.

               

              4.    
                PAYMENTS

               

              4.1           Up-front
                Fee.  MERCK shall pay ARIAD a
                non-refundable, non-creditable up-front fee in the aggregate amount
                of
                Seventy-Five Million Dollars (U.S. $75,000,000), payable by wire
                transfer of
                immediately available funds within fifteen (15) days of the effectiveness
                of
                this Agreement as provided in Section 12.16 according to instructions
                that ARIAD
                shall provide.

               

              4.2           Development
                Cost
                Advances.  If, at any time during
                the Term, (i) ARIAD has paid an aggregate of at least One Hundred
                Fifty Million
                Dollars (U.S. $150,000,000) in Development Costs (the “ARIAD Development Cost
                Cap”) subsequent to the Effective Date, (ii) a Product has obtained [***],
                (iii)
                ARIAD has not [***], and (iv) no condition or event exists which
                constitutes an
                Event of Default or Potential Default (as defined in Exhibit A) and
                no material
                breach of this Agreement by ARIAD has occurred and is
                continuing.  ARIAD may, at its sole discretion and upon not less than
                forty-five (45) days’ written notice to MERCK, elect to obtain development
                funding advances from MERCK (the “Advances”) to fund all or part of ARIAD’s
                further Development Costs in excess of the ARIAD Development Cost
                Cap on the
                terms and subject to the conditions of a promissory note in the form
                of Exhibit
                A attached hereto, to be executed contemporaneously with the delivery
                by ARIAD
                of such notice (the “Promissory Note”).  Unless otherwise agreed by
                the Parties, (a) the Advances shall be available for draw-downs not
                more than
                [***] per Calendar Quarter based on the amount of Development Costs
                incurred by
                ARIAD over such Calendar Quarter; (b) the Advances shall accrue interest
                (beginning on the date paid by MERCK, or if the Advance relates to
                an amount due
                from ARIAD to MERCK, beginning on the date such amount is due) at
                a rate equal
                to the [***] [***] reset quarterly; (c) fifty percent ([***]%) of
                any milestone
                payments, royalty payments, and/or Operating Income Payments accruing
                after the
                date of the first Advance  to be paid by MERCK to ARIAD and/or
                retained by ARIAD, as the case may be, with respect to Product, shall
                be applied
                against the outstanding principal and interest of the Advances until
                such
                principal and interest have been paid in full; (d) the maximum aggregate
                amount
                advanced by MERCK under the Advances will be $200 million; (e) in
                the event the
                principal plus accrued interest on the Advances exceeds $[***], ARIAD
                will [***]
                [***] to be paid by MERCK to ARIAD or retained by ARIAD, and (f)
                any remaining
                Advances plus accrued interest shall be repaid by ARIAD to MERCK
                on the earlier
                of (i) quarterly payments over the [***] following termination of
                this
                Agreement, (ii) a Change of Control of ARIAD, or (iii) the [***]
                of the first
                draw-down.

               

              
                
                  Portions
                    of this Exhibit were omitted and have been filed separately with
                    the Secretary
                    of the Commission pursuant to the Company’s application requesting confidential
                    treatment under Rule 24b-2 of the Securities Exchange Act of
                    1934, as
                    amended.

                  
                  

                

                
                  -50-

                  
                    

                  

                

                
                  
                  

                

                 

              

              4.3           Operating
                Income
                Payments.

               

              4.3.1                      Operating
                Income Payments.  Unless and until there
                is a U.S. Commercialization Transfer with respect to a Co-Promoted
                Product,
                ARIAD shall pay to MERCK a percentage of the Operating Income, or
                MERCK shall
                pay to ARIAD a percentage of the Operating Loss, from Commercialization
                of that
                Co-Promoted Product in the U.S. Territory equal to the MERCK Revenue
                Sharing
                Percentage for as long as there are Commercialization activities
                by MERCK or
                ARIAD and its Affiliates or Sublicensees for such Co-Promoted Product
                in the
                U.S. Territory (such payments, the “Operating Income Payments”).  For
                clarity, it is acknowledged that Commercialization Expenses will
                be incurred
                prior to Commercialization Regulatory Approval of any Co-Promoted
                Product, and
                that such Commercialization Expenses will result in an Operating
                Loss which will
                be borne by the Parties as set forth in this Section 4.3.

               

              4.3.2                      Monthly
                Estimated Operating Income/(Loss) Report and
                Payment.

               

              (a)             Within
                ten (10) days after the end of each calendar month, ARIAD shall deliver
                to MERCK
                a  written report indicating  estimated  gross
                sales and Net Sales of each Co-Promoted Product in the U.S. Territory
                during
                such calendar month.

               

              (b)           
                Within ten (10) days after the end of each calendar month, each of
                ARIAD and
                MERCK shall deliver to the other  Party a written  estimate
                of their Commercialization Expenses incurred during such calendar
                month.

               

              (c)           Within
                thirty (30) days after the end of each calendar month, ARIAD shall
                provide MERCK
                with a written estimate (the "Estimate") of the amount of Operating
                Income
                Payments payable to MERCK, or Loss payable by MERCK for such calendar
                month (the
                "Estimated Operating Income Payment" or "Estimated Loss") and shall
                pay to MERCK
                the Estimated Operating Income Payment, if any.  MERCK shall pay to
                ARIAD the Estimated Loss if any, within 10 days of receiving the
                Estimate.

               

              (d)             If
                ARIAD, after delivering the Estimate, becomes aware of additional
                information
                which would cause it to adjust its estimates of Operating Income/(Loss)
                for a
                calendar month, such information shall be reported in the next monthly
                report
                and the Estimated Operating Income Payment or Estimated Loss for
                the following
                calendar month shall be adjusted accordingly.

               

              4.3.3                      Quarterly
                Reports, Payments.

               

              (a)           Within
                forty five (45) days following the end of each Calendar Quarter commencing
                on
                and after the Effective Date, each of ARIAD and MERCK shall submit
                to the JSC
                and the other Party all Commercialization Expenses and License Fees
                (defined in
                Schedule 3 to this Agreement) incurred by it with respect to, as
                well
                as  for ARIAD the Net Sales and Cost of Goods applicable to, such
                Co-Promoted Product in the U.S. Territory.  In addition, ARIAD shall
                submit a report setting forth in reasonable detail (i) the calculation
                of
                Operating Income (Loss) for such Co-Promoted Product, determined
                in accordance
                with Schedule 3 attached hereto and (ii) the calculation of the amount of
                Operating Income Payments payable to MERCK or Loss payable by MERCK
                in
                accordance with the MERCK Revenue Sharing Percentage for that Co-Promoted
                Product, net of the Estimated Operating Income Payment or Estimated
                Loss already
                paid by each Party with respect to such Calendar Quarter.

               

              
                
                  Portions
                    of this Exhibit were omitted and have been filed separately with
                    the Secretary
                    of the Commission pursuant to the Company’s application requesting confidential
                    treatment under Rule 24b-2 of the Securities Exchange Act of
                    1934, as
                    amended.

                  
                  

                

                
                  -51-

                  
                    

                  

                

                
                  
                  

                

                 

              

              (b)           The
                amount of the Operating Income Payments payable to MERCK shall be
                paid by ARIAD
                within thirty (30) days following issuance of such written report;
                provided,
                that, in the event that a Co-Promoted Product experiences a Loss
                over any
                Calendar Quarter, MERCK shall pay ARIAD the MERCK Revenue Share Percentage
                of
                such Loss within thirty (30) days of the issuance of such written
                report, in
                each case net of the Estimated Operating Income Payment or Estimated
                Loss
                already paid by each Party with respect to such Calendar Quarter

               

              4.3.4                      Audit
                Rights.  ARIAD shall keep and maintain
                for [***] years complete and accurate records of all Commercialization
                Expenses
                incurred in the Commercialization of Co-Promoted Products and of
                Net Sales of
                Co-Promoted Products (“Co-Development Net Sales”) in the
                U.S. Territory in sufficient detail to allow confirmation
                of same by the JSC and MERCK.  MERCK shall have the right for a period
                of [***] years after such Commercialization Expenses and Co-Development
                Net
                Sales are reconciled in accordance with Section 4.3.2 to appoint
                at its expense
                an independent certified public accountant reasonably acceptable
                to ARIAD to
                audit the relevant records of ARIAD and its Affiliates to verify
                that the amount
                of such Commercialization Expenses and Co-Development Net Sales are
                correctly
                determined.  ARIAD and its Affiliates shall each make its records
                available for audit by MERCK or such independent certified public
                accountant
                during regular business hours at such place or places where such
                records are
                customarily kept, upon [***] days written notice from MERCK.  Such
                audit right shall not be exercised by MERCK more than once in any
                Calendar Year
                and no period may be audited more than once.  All records made
                available for audit shall be deemed to be Confidential Information
                of
                ARIAD.  The results of each audit, if any, shall be binding on both
                Parties.  In the event there was an error in the amount of such
                Commercialization Expenses and Co-Development Net Sales reported
                by ARIAD
                hereunder, (a) if the effect of the error resulted in an underpayment,
                ARIAD
                shall promptly (but in any event no later than [***] days after ARIAD’s receipt
                of the report so concluding) make payment to MERCK of the underpayment
                amount
                and (b) if the effect of the error resulted in an overpayment, MERCK
                shall
                promptly (but in any event no later than [***] days after MERCK’s receipt of the
                report so concluding) make payment to ARIAD of the overpayment
                amount.  MERCK shall bear the full cost of such audit unless such
                audit discloses an underpayment by ARIAD of the greater of [***]
                percent
                ([***]%) of the aggregate amount of MERCK’s share of Operating Income in any
                Calendar Year or $[***], in which case ARIAD shall reimburse MERCK
                for all costs
                incurred by MERCK in connection with such audit.

               

              4.4           Milestone
                Payments.

               

              4.4.1     Milestones.

               

              (a)           Regulatory
                Milestones.  MERCK shall make
                the following non-refundable payments to ARIAD within thirty (30)
                days after the
                occurrence of each of the following milestone events for each Product
                that
                achieves each such milestone:

               

              
                
                  Portions
                    of this Exhibit were omitted and have been filed separately with
                    the Secretary
                    of the Commission pursuant to the Company’s application requesting confidential
                    treatment under Rule 24b-2 of the Securities Exchange Act of
                    1934, as
                    amended.

                  
                  

                

                
                  -52-

                  
                    

                  

                

                
                  
                  

                

                 

              

              
                
                  	
                           

                          Milestone
                            Event

                        	
                          Milestone

                          Payment

                        
	
                          Initiation
                            of a Phase 3 Clinical Trial for a Product for a Sarcoma
                            Indication

                        	
                          $13.5
                            million

                        
	
                          Acceptance
                            of [***] for a [***] for a [***] in the first of [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of (i) receipt of [***] [***] or (ii) [***] in the [***]
                            for a [***] for a
                            [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of (i) receipt of [***] [***] or (ii) [***] in the first
                            of [***] for a
                            [***] for a [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of (i) receipt of [***] [***] or (ii) [***] in [***]
                            for a [***] for a
                            [***]

                        	
                          $[***]
                            million

                        
	
                          Initiation
                            of [***] for a Product for the [***]

                        	
                          $[***]
                            million

                        
	
                          Initiation
                            of [***] for a Product for the [***]

                        	
                          $[***]
                            million

                        
	
                          Initiation
                            of [***] for a Product for the [***]

                        	
                          $[***]
                            million

                        
	
                          Initiation
                            of a [***] for a Product for the [***]

                        	
                          $[***]
                            million

                        
	
                          Initiation
                            of a [***] for a Product for the [***]

                        	
                          $[***]
                            million

                        
	
                          Initiation
                            of a [***] for a Product for the [***]

                        	
                          $[***]
                            million

                        
	
                          Acceptance
                            of [***] for a Product for the [***] in the [***]

                        	
                          $[***]
                            million

                        
	
                          Acceptance
                            of [***] for a Product for the [***] in the [***]

                        	
                          $[***]
                            million

                        
	
                          Acceptance
                            of [***] for a Product for the [***] in the [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of (i) receipt of [***] or (ii) [***] in the [***] for
                            a Product for the
                            [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of (i) receipt of [***] or (ii) [***] in the [***] for
                            a Product for the
                            [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of (i) receipt of [***] or (ii) [***] in the [***] for
                            a Product for the
                            [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of (i) receipt of [***] or (ii) [***] in the [***] for
                            a Product for the
                            first Major Cancer Indication

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of (i) receipt of [***] or (ii) [***] in the [***] for
                            a Product for the
                            [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of (i) receipt of [***] or (ii) [***] in the [***] for
                            a Product for the
                            third Major Cancer Indication

                        	
                          $[***]
                            million

                        

                

                

                
                  
                    Portions
                      of this Exhibit were omitted and have been filed separately
                      with the Secretary
                      of the Commission pursuant to the Company’s application requesting confidential
                      treatment under Rule 24b-2 of the Securities Exchange Act of
                      1934, as
                      amended.

                    
                    

                  

                  
                    -53-

                    
                      

                    

                  

                  
                    
                    

                  

                   

                

                
                  	
                          Earlier
                            of (i) receipt of [***] or (ii) [***]  for a Product for the
                            [***] [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of (i) receipt of [***] or (ii) [***] in [***]  for a Product
                            for the [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of (i) receipt of [***] or (ii) [***] in [***] for a
                            Product for the
                            [***]

                        	
                          $[***]
                            million

                        
	
                          First
                            initiation of [***] for a Product for [***]

                        	
                          $[***]
                            million

                        
	
                          First
                            initiation of [***] for a Product for [***]

                        	
                          $[***]
                            million

                        
	
                          First
                            acceptance of [***] in the [***] for a Product for [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of first (i) receipt of [***] or (ii) [***] in the [***]
                            for a Product for
                            [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of first (i) receipt of [***] or (ii) [***] in the first
                            of the [***] for
                            a Product for [***]

                        	
                          $[***]
                            million

                        
	
                          Earlier
                            of first (i) receipt of [***] or (ii) [***] for a Product
                            for
                            [***]

                        	
                          $[***]
                            million

                        

                

              

            

          

        

      

    

     

    
      (b)           Sales
        Milestones.  In addition to the milestone payments contemplated by
        Section 4.4.1(a), MERCK shall make each of the following non-refundable,
        non-creditable payments to ARIAD within thirty (30) days after the first
        occurrence of the corresponding milestone event for the applicable
        Product:

    

     

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
          amended.

        
        

      

      
        -54-

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                   

                  Milestone
                    Event

                	
                  Milestone
                    Payment

                
	
                  Worldwide
                    Net Sales in a Calendar Year of Product of $[***]

                	
                  $[***]
                    million

                
	
                  Worldwide
                    Net Sales in a Calendar Year of Product of $[***]

                	
                  $[***]
                    million

                
	
                  Worldwide
                    Net Sales in a Calendar Year of Product of $[***]

                	
                  $[***]
                    million

                
	
                  Worldwide
                    Net Sales in a Calendar Year of Product of $[***]

                	
                  $[***]
                    million

                

        

      

       

    

    
      4.5           Determination
        that Milestone Events have Occurred; Treatment of Combinations; Treatment
        of
        Combined Phase 1/2 or Phase 2/3 Clinical
        Studies.

       

      (a)           MERCK
        shall provide ARIAD with prompt written notice upon each occurrence of a
        milestone event set forth in Section 4.4.1.  In the event that,
        notwithstanding the fact that MERCK has not given such a
        notice, ARIAD believes any such milestone event has occurred, it shall so
        notify
        MERCK in writing and shall provide to
        MERCK data, documentation or other information that
        supports its belief.  Any dispute under this Section 4.5 that relates
        to whether or not a milestone event has occurred shall first be referred
        to the
        JSC to be resolved in accordance with Section 2.1.5, but if not resolved
        as set
        forth in Section 2.1.5, it shall be subject to arbitration under Section
        12.1.

       

      (b)           A
        Combination Product containing a Product shall not be entitled to any milestone
        that has already been earned by that Product or any other Combination Product
        containing that same Collaboration Compound as that Combination
        Product.

       

      (c)           In
        the event of a Clinical Trial which is both a Phase 1 Clinical Trial and
        a Phase
        2 Clinical Trial (commonly referred to as a “Phase 1/2 Clinical Trial”), the
        milestone payable upon the occurrence of Initiation of the Phase 2 Clinical
        Trial shall be payable by MERCK (x) upon Initiation of the Phase 2 segment
        if
        there are separate segments delineated in the protocol for such Clinical
        Trial
        as Phase 1 and Phase 2 or (y) upon Initiation of the Phase 1/2 Clinical Trial
        if
        there are not separate segments delineated in the protocol for such Clinical
        Trial as Phase 1 and Phase 2.

       

      (d)           In
        the event of a Phase 2 Clinical Trial used as a pivotal trial for seeking
        Commercialization Regulatory Approval for a Product  for an Indication
        (commonly referred to as a “Phase 2/3 Clinical Trial”), the milestone payable
        upon occurrence of Initiation of the Phase 2 Clinical Trial  shall be
        payable by MERCK upon Initiation of such trial and the milestone payable
        upon
        occurrence of Initiation of the Phase 3 Clinical Trial shall be payable by
        MERCK
        upon the date when either Responsible Party determines that it will file
        for
        Commercialization Regulatory Approval in its Territory based on the results
        of
        said Phase 2/3 Clinical Trial.

       

      (e)           In
        the event that a milestone is paid for an Indication for a Product and
        Development of such Product for such Indication is subsequently terminated,
        such
        milestone payment shall be creditable against the same milestone payment
        earned
        for a different Product for the same Indication.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -55-

          
            

          

        

        
          
          

        

         

      

      (f)           For
        purposes of determination of the occurrence of the milestone events, all
        Products containing the same single active pharmaceutical ingredient or the
        same
        combination of active pharmaceutical ingredients shall be considered the
        same
        Product, regardless of differences in formulation.

       

      4.6           Payment
        of Royalties; Royalty Rates; Accounting
        and Records.

       

      4.6.1                      Payment
        of Royalties.

       

      (a)           Royalties
        Applicable in ROW Territory.

       

      (i)           MERCK shall
        pay ARIAD a royalty based on Annual Net Sales of each Royalty-Bearing Product
        in
        each Calendar Year (or partial Calendar Year) commencing with the First
        Commercial Sale of such Product in any country in the ROW Territory and ending
        upon the last day of the last Royalty Term for such Product, at the following
        rates:

       

      
        
          	
                  Annual
                    Net Sales Increment in ROW Territory

                	
                  Royalty
                    Rate (%)

                
	
                  Up
                    to $[***]

                	
                  [***]%

                
	
                  Above
                    $[***], but less than $[***]

                	
                  [***]%

                
	
                  Above
                    $[***]

                	
                  [***]%

                

        

      

       

      
        (ii)           In
          the event that one or more  Third Parties sell a Competing Drug (as
          defined below) in any country in the ROW Territory in which a Royalty-Bearing
          Product is then being sold by MERCK, then, during any Calendar
          Quarter  in which sales of the Competing Drug by such Third Parties
          are greater than [***] percent ([***]%) of MERCK aggregate unit sales of
          Products and Competing Drugs in such country for the treatment of cancer
          (as
          measured by prescriptions or other similar information available from a
          Third
          Party Data Provider and applicable to such country) the applicable royalties
          in
          effect with respect to such Royalty-Bearing Product in such country as
          specified
          in Section 4.6.1(a)(i) [***] percent ([***]%).  Notwithstanding the
          foregoing, MERCK’s obligation to pay royalties at the full royalty rates shall
          be reinstated on the first day of the Calendar Quarter immediately following
          the
          Calendar Quarter in which sales of such Competing Drugs account for [***]
          percent ([***]%) or less of MERCK aggregate unit sales of Products and
          Competing
          Drugs for the treatment of cancer in such country.  For purposes of
          this Section 4.6.1(a)(ii), a “Competing Drug” means a pharmaceutical product
          that contains a Collaboration Compound as an active ingredient and is
          bioequivalent to such Product.

         

        (b)           Royalties
          Applicable in U.S. Territory.

         

        
          
            Portions
              of this Exhibit were omitted and have been filed separately with the
              Secretary
              of the Commission pursuant to the Company’s application requesting confidential
              treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
              as
              amended.

            
            

          

          
            -56-

            
              

            

          

          
            
            

          

           

        

        (i)           On
          and after the date of U.S. Commercialization Transfer with respect to a
          Product,
          (x) such Product shall thereafter be a Royalty-Bearing Product for purposes
          of
          this Agreement; and (y) MERCK shall pay ARIAD a royalty
          based on Annual Net Sales of each such Royalty-Bearing Product in each
          Calendar
          Year (or partial Calendar Year) commencing with the First Commercial Sale
          of
          such Royalty-Bearing Product in the U.S. Territory after the U.S.
          Commercialization Transfer and ending upon the last day of the Royalty
          Term for
          such Product in the U.S. Territory, at the following rates:

         

        
          	
                  Annual
                    Net Sales Increment  in U.S. Territory

                	
                  Royalty
                    Rate (%)

                
	
                  Up
                    to $[***]

                	
                  [***]%

                
	
                  Above
                    $[***]

                	
                  [***]%

                

        

        

         

        The
          following hypothetical example
          illustrates the calculation of royalties under this Section
          4.6.1(b)(i):  If, in any Calendar Year during the Term, Annual Net
          Sales of a Royalty-Bearing Product are $[***], the applicable royalty would
          be
          $[***], [***]% of Net Sales for Net Sales up to $[***] ($[***]), and [***]%
          of
          Net Sales for Net Sales of $[***] ($[***] [***]).

         

        (ii)           In
          the event that one or more  Third Parties  sell a Competing
          Drug (as defined above) in the U.S. Territory, then, during any Calendar
          Quarter
          in which sales of the Competing Drug by such Third Party are greater than
          [***]
          percent ([***]%) of the aggregate unit sales of Products and Competing
          Drugs
          in  the U.S. Territory for the treatment of cancer (as measured by
          prescriptions or other similar information available from a Third Party
          Data
          Provider and applicable to the U.S. Territory ) the applicable royalties
          in
          effect with respect to such Royalty-Bearing Product in the U.S. Territory
          as
          specified in Section 4.6.1(b)(i) shall be reduced by [***] percent
          ([***]%).  Notwithstanding the foregoing, MERCK’s obligation to pay
          royalties at the full royalty rates shall be reinstated on the first day
          of the
          Calendar Quarter immediately following the Calendar Quarter in which sales
          of
          such Competing Drugs account for [***] percent ([***]%) or less  of
          aggregate sales of Products and Generic Products for the treatment of cancer
          in
          the U.S. Territory.

         

        (c)           Combination
          Products.  In the event that a Royalty-Bearing Product is sold as
          part of a Combination Product, where “Combination Product” means any unified
          dose (e.g. not a kit of two separate and distinct drug dosage forms) of
          a
          pharmaceutical product which is comprised of Royalty-Bearing Product and
          one or
          more other compound(s) and/or ingredients having independent therapeutic
          effect
          (collectively the “Other Products”), Net Sales of Royalty-Bearing Product, for
          the purposes of determining royalty payments, shall be determined by multiplying
          the Net Sales of the Combination Product by the fraction, [***] where
          [***].  In the event that no such separate sales are made of either
          the Royalty-Bearing Product or the Other Products, the reasonably estimated
          commercial value thereof will be used instead of the sale price.  Each
          of “weighted average sale price” and “reasonably estimated commercial value”
shall be determined as follows:

         

        
          
            Portions
              of this Exhibit were omitted and have been filed separately with the
              Secretary
              of the Commission pursuant to the Company’s application requesting confidential
              treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
              as
              amended.

            
            

          

          
            -57-

            
              

            

          

          
            
            

          

           

        

        “Weighted
          average sale price” and
“reasonably estimated commercial value,” as the case may be, for a
          Royalty-Bearing Product and Other Products shall be calculated once at
          the
          commencement of each Calendar Year and such amount shall be used during
          all
          applicable royalty reporting periods for the entire following Calendar
          Year.  When determining the weighted average sale price of a
          Royalty-Bearing Product or Other Products, the weighted average sale price
          shall
          be calculated by dividing the Net Sales (translated into U.S. dollars in
          accordance with Section 4.6.5 hereof) by the units of active ingredient
          sold
          during the [***] (or the number of [***]) of the preceding Calendar Year
          for the
          respective Royalty-Bearing Product or Other Products.  “Reasonably
          estimated commercial value” shall be determined by agreement of the Parties
          using criteria to be mutually agreed upon by the Parties.  If the
          Parties do not agree, such dispute shall be resolved in accordance with
          Section
          12.1 hereof.  [***] a forecasted weighed average sale price will be
          used for the Royalty-Bearing Product and Other Products, if
          applicable.  Any over or under payment due to a difference between
          forecasted and actual weighted average sale prices will be paid or credited
          in
          the first royalty payment [***].

         

        (d)           Combinations
          of Product with a Diagnostic Product.  In the event that a
          Royalty-Bearing Product is sold with a Diagnostic Product that is not the
          subject of a Diagnostic Product Agreement, the allocation of the combined
          price
          of the Royalty-Bearing Product and such Diagnostic Product will be allocated
          between the Royalty-Bearing Product and such Diagnostic Product by agreement
          of
          the Parties based on the reasonably estimated commercial value
          thereof.

         

        (e)           Royalty
          Stacking.  The amount of (A) royalties owing to ARIAD under
          Section 4.6.1(a)(i) and (B) royalties owing to ARIAD under Section
          4.6.1(b)(i),  in each case, for any Royalty-Bearing Product in any
          country, shall be [***] percent ([***]%) of the amount of royalties incurred
          by
          MERCK or any of its Affiliates  to any Third Party in consideration
          for the license of Patent Rights in such country if, at the time of sale
          of the
          Royalty-Bearing Product such Patent Rights would be infringed by the use,
          sale
          or import of the Royalty-Bearing Product in such country in the Field in
          the
          absence of such a license; provided, however, that in no event
          shall the royalties owed under Section 4.6.1(a)(i) or Section 4.6.1(b)(i),
          with
          respect to a Royalty-Bearing Product in a country be reduced by operation
          of
          this Section 4.6.1(e), together with either Section 4.6.1(a)(ii) or Section
          4.6.1(b)(ii), [***] percent ([***]%) of what would otherwise be owed
          under  4.6.1(a)(i) or Section 4.6.1(b)(i) with respect to such
          Royalty-Bearing Product.  For purposes of this Section 4.6.1(e), the
          amount of royalties owing to ARIAD under Section 4.6.1(a)(i) or Section
          4.6.1(b)(i) for Annual Net Sales of any Royalty-Bearing Product in a given
          country (prior to the [***]% [***] provided for herein)shall be deemed
          to be
          that amount which would be owed if Annual Net Sales of such Royalty-Bearing
          Product in such country subject to each of the royalty rates under Section
          4.6.1(a)(i) or Section 4.6.1(b)(i) were proportional to Net Sales of such
          Royalty-Bearing Products in all countries subject to royalties under Section
          4.6.1(a)(i) or Section 4.6.1(b)(i).  For clarity, an example of the
          application of the preceding sentence is as follows:  If sales in a
          calendar year in countries in the ROW Territory without royalty owed to
          Third
          Parties are $[***] [***] and sales in countries in the ROW Territory with
          a
          [***] percent ([***]%) royalty owed to Third Parties are $[***], the royalties
          will be $[***], calculated as follows:  ($[***] [***] x [***]% + [***]
          x [***]%) + ($[***] x [***]% + [***] x [***]%) = $[***].

         

        (f)           Limit
          on Royalty Reductions.  Notwithstanding Sections
          4.6.1(a)(ii),  4.6.1(b)(ii) or 4.6.1(c), in no event shall the
          royalties owed under Section 4.6.1(a)(i) or Section 4.6.1(b)(i), with respect
          to
          a Royalty-Bearing Product in a country be reduced by operation
          of  Section 4.6.1(c), together with either Section 4.6.1(a)(ii) or
          Section 4.6.1(b)(ii), [***] percent ([***]%) of what would otherwise be
          owed
          under  4.6.1(a)(i) or Section 4.6.1(b)(i) with respect to such
          Royalty-Bearing Product in such country.

         

        
          
            Portions
              of this Exhibit were omitted and have been filed separately with the
              Secretary
              of the Commission pursuant to the Company’s application requesting confidential
              treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
              as
              amended.

            
            

          

          
            -58-

            
              

            

          

          
            
            

          

           

        

        (g)           Application
          of Reductions to Royalty Tiers.  For purposes of Sections
          4.6.1(a)(ii), 4.6.1(b)(ii) or 4.6.1(c), the amount of royalties owing to
          ARIAD
          under Section  4.6.1(a)(i) or Section 4.6.1(b)(i) for Annual Net Sales
          of any  Royalty-Bearing Product in a given country (prior to any [***]
          provided for therein)shall be deemed to be that amount which would be owed
          if
          Annual Net Sales of such Royalty-Bearing Product in such country subject
          to each
          of the royalty rates under  4.6.1(a)(i) or Section
          4.6.1(b)(i)  were proportional to Net Sales of such Royalty-Bearing
          Product in all countries subject to royalties under
          Section  4.6.1(a)(i) or Section 4.6.1(b)(i), whichever is
          applicable.

         

        (h)           Know-How
          Payments.  The Parties hereby acknowledge and agree that any
          royalties that may be payable for a Product for which no Patent Rights
          exist
          shall be in consideration of (i) ARIAD’s expertise and know-how concerning mTOR
          Inhibitor Compounds, including its development of the ARIAD Background
          Technology and its other development activities conducted prior to the
          Effective
          Date; (ii) the performance by ARIAD of the Development Program; (iii) the
          disclosure by ARIAD to MERCK of results obtained in the
          Development Program; (iv) the licenses granted to
          MERCK hereunder with respect to Licensed Technology
          and Joint Technology that are not within the claims of any Patent
          Rights Controlled by ARIAD; (v) the restrictions on ARIAD in Section 6.4.1;
          (vi) the “head start” afforded to MERCK by each of the
          foregoing; and (vii) ARIAD’s co-promotion of Products in the U.S.
          Territory.

         

        (i)           Payment
          Dates and Reports.  Royalty payments shall be made by MERCK within
          thirty (30) days after the end of each calendar month, commencing with
          the
          calendar month in which the First Commercial Sale of a Royalty-Bearing
          Product
          occurs.  MERCK shall also provide, at the same time each such payment
          is made, a report showing: (a) the Net Sales of each Royalty-Bearing Product
          by
          type of Royalty-Bearing Product and country in the Territory; (b) the total
          amount of deductions from gross sales to determine Net Sales; (c) the applicable
          royalty rates for Royalty Bearing Product in each country in the Territory
          after
          applying any reductions set forth above; and (d) a calculation of the amount
          of
          royalty due to ARIAD.

         

        4.6.2                      Records;
          Audit
          Rights.  MERCK and
          its Affiliates and Sublicensees shall keep and maintain for [***] years
          from the
          date of each payment of royalties hereunder complete and accurate records
          of
          gross sale and Net Sales by MERCK and its Affiliates and
          Sublicensees of each Royalty-Bearing Product, in sufficient detail to allow
          royalties to be determined accurately.  ARIAD shall have the right for
          a period of [***] years after receiving any such payment to appoint at
          its
          expense an independent certified public accountant reasonably acceptable
          to
          MERCK to audit, the relevant records of
          MERCK and its Affiliates and Sublicensees to verify that
          the amount of such payment was correctly
          determined.  MERCK and its Affiliates and
          Sublicensees shall each make its records available for audit by such independent
          certified public accountant during regular business hours at such place
          or
          places where such records are customarily kept, upon thirty (30) days written
          notice from ARIAD.  Such audit right shall not be exercised by ARIAD
          more than once in any Calendar Year or more than once with respect to sales
          of a
          particular Product in a particular period.  All records made available
          for audit shall be deemed to be Confidential Information of
          MERCK.  The results of each audit, if any, shall be binding on both
          Parties.  In the event there was an underpayment
          by MERCK hereunder, shall promptly
          (but in any event no later than thirty (30) days after MERCK’s receipt of the
          report so concluding) make payment to the ARIAD of any
          shortfall.  ARIAD shall bear the full cost of such audit unless such
          audit discloses an underreporting by MERCK of the greater of
          [***]  percent ([***]%) of the aggregate amount of royalties payable
          in any Calendar Year or $[***], in which
          case MERCK shall reimburse ARIAD for
          all costs incurred by ARIAD in connection with such audit.

         

        
          
            Portions
              of this Exhibit were omitted and have been filed separately with the
              Secretary
              of the Commission pursuant to the Company’s application requesting confidential
              treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
              as
              amended.

            
            

          

          
            -59-

            
              

            

          

          
            
            

          

           

        

        4.6.3                      Overdue
          Royalties and Milestones.  All royalty
          payments not made within the time period set forth in Section 4.6.1 or
          Operating
          Income payments not made within the time period set forth in Section 4.3.2,
          including underpayments discovered during an audit, and all milestone payments
          not made within the time period specified in Section 4.4.1, shall bear
          interest
          at a rate of [***] percent ([***]%) per month from the due date until paid
          in
          full or, if less, the maximum interest rate permitted by Applicable
          Laws.  Any such overdue royalty or milestone payment shall, when made,
          be accompanied by, and credited first to, all interest so accrued.

         

        4.6.4                      Payments;Withholding
          Tax.

         

        (a)           All
          payments made by a Party under this Article 4 shall be made by wire transfer
          from a banking institution in the United States in U.S. Dollars in accordance
          with instructions given in writing from time to time by the other
          Party.

         

        (b)           If
          applicable laws, rules or regulations require withholding of income or
          other
          taxes imposed upon any payments made by MERCK to ARIAD under Agreement,
          MERCK
          shall make such withholding payments as may be required and shall subtract
          such
          withholding payments from such payments.  MERCK shall submit
          appropriate proof of payment of the withholding taxes to ARIAD within a
          reasonable period of time. MERCK shall promptly provide ARIAD with the
          official
          receipts. MERCK shall render ARIAD reasonable assistance in order to allow
          ARIAD
          to obtain the benefit of any present or future treaty against double taxation
          which may apply to such payments.  If MERCK did not withhold taxes, in
          whole or in part, in connection with any payment it made to ARIAD under
          the
          Agreement and a tax authority subsequently disagrees with MERCK's interpretation
          of the withholding rules and finds that MERCK had a duty to withhold taxes
          and such taxes were assessed against and paid by MERCK, then ARIAD will
          indemnify and hold harmless MERCK from and against such taxes (excluding
          penalties).  If MERCK makes a claim under this section, it will comply
          with the obligations imposed by this section as if MERCK had withheld taxes
          from
          a payment to ARIAD.

         

        4.6.5                      Foreign
          Currency Exchange. All payments
          to be made by MERCK to ARIAD under this Agreement shall be made in United
          States
          dollars and may be paid by check made to the order of ARIAD or bank wire
          transfer in immediately available funds to such bank account in the United
          States as may be designated in writing by ARIAD from time to time.  In
          the case of sales outside the United States, the rate of exchange to be
          used in
          computing the monthly amount of currency equivalent in United States dollars
          due
          ARIAD shall be made at the monthly rate of exchange utilized by MERCK in
          its
          worldwide accounting system, prevailing on the third to the last business
          day of
          the month preceding the month in which such sales are recorded by
          MERCK.

         

        
          
            Portions
              of this Exhibit were omitted and have been filed separately with the
              Secretary
              of the Commission pursuant to the Company’s application requesting confidential
              treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
              as
              amended.

            
            

          

          
            -60-

            
              

            

          

          
            
            

          

        

         

        
          5.           
            TREATMENT OF CONFIDENTIAL INFORMATION;
            PUBLICITY;
            NON-SOLICITATION.

           

        

         

        5.1           Confidentiality.

         

        5.1.1                      Confidentiality
          Obligations.  ARIAD and MERCK each
          recognizes that the other Party’s Confidential Information and Proprietary
          Materials constitute highly valuable assets of such other
          Party.  ARIAD and MERCK each agrees that, subject to Section 5.1.2, it
          will not disclose, and will cause its Affiliates and Sublicensees not to
          disclose, any Confidential Information or Proprietary Materials of the
          other
          Party and it will not use, and will cause its Affiliates and Sublicensees
          not to
          use, any Confidential Information or Proprietary Materials of the other
          Party
          except as expressly permitted hereunder; provided that such obligations
          shall
          apply during the Term and for an additional five (5) years
          thereafter.

         

        5.1.2                      Limited
          Disclosure.  ARIAD and MERCK each agrees
          that disclosure of its Confidential Information or any transfer of its
          Proprietary Materials may be made by the other Party to any employee, consultant
          or Affiliate of such other Party or Third Party subcontractor engaged by
          a Party
          under an agreement approved by the JDC pursuant to Section 6.2.1 to enable
          such
          other Party to exercise its rights or to carry out its responsibilities
          under
          this Agreement; provided that any such disclosure or transfer shall only
          be made
          to Persons who are bound by written obligations as described in Section
          5.1.3.  In addition, ARIAD and MERCK each agrees that the other Party
          may disclose its Confidential Information (a) to its licensees as expressly
          permitted pursuant to Section 3.10.3 hereof, (b) on a need-to-know basis
          to such
          other Party’s legal and financial advisors, (c) as reasonably necessary in
          connection with an actual or potential (i) permitted sublicense of such
          other
          Party’s rights hereunder, (ii) debt or equity financing of such other Party or
          (iii) merger, acquisition, consolidation, share exchange or other similar
          transaction involving such Party and any Third Party, (d) to any Third
          Party
          that is or may be engaged by a Responsible Party to perform services in
          connection with the Research Program or the Commercialization of Products
          as
          necessary to enable such Third Party to perform such services, and (e)
          for any
          other purpose with the other Party’s consent, not to be unreasonably
          withheld.  In addition, each Party agrees that the other Party may
          disclose such Party’s Confidential Information or provide Proprietary Materials
          (A) as reasonably necessary to file, prosecute or maintain Patent Rights,
          or to
          file, prosecute or defend litigation related to Patent Rights, in accordance
          with this Agreement; or (B) as required by Applicable Laws; provided that,
          in
          the case of any disclosure under this clause (B), the disclosing Party
          shall (1)
          if practicable, provide the other Party with reasonable advance notice
          of and an
          opportunity to comment on any such required disclosure and (2) if requested
          by
          the other Party, cooperate in all reasonable respects with the other Party’s
          efforts to obtain confidential treatment or a protective order with respect
          to
          any such disclosure, at the other Party’s expense.

         

        5.1.3                      Employees
          and Consultants.  ARIAD and MERCK each
          hereby represents that all of its employees and consultants, and all of
          the
          employees and consultants of its Affiliates, who participate in the activities
          of the Collaboration or have access to Confidential Information or Proprietary
          Materials of the other Party are or will, prior to their participation
          or
          access, be bound by written obligations to maintain such Confidential
          Information or Proprietary Materials in confidence.  Each Party agrees
          to use, and to cause its Affiliates to use, reasonable efforts to enforce
          such
          obligations and to prohibit its employees and consultants from using such
          information except as expressly permitted hereunder.  Each Party will
          be liable to the other for any disclosure or misuse by its employees of
          Confidential Information or Proprietary Materials of the Other
          Party.

         

        
          
            Portions
              of this Exhibit were omitted and have been filed separately with the
              Secretary
              of the Commission pursuant to the Company’s application requesting confidential
              treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
              as
              amended.

            
            

          

          
            -61-

            
              

            

          

          
            
            

          

           

        

        5.2           Publicity.  Notwithstanding
          anything to the contrary in Section 5.1, the Parties, upon the execution
          of this
          Agreement, shall jointly issue a press release with respect to this Agreement,
          in the form attached here to as Schedule 4, and either Party may make
          subsequent public disclosure of the contents of such press release without
          further approval of the other Party.  After issuance of such press
          release, except as required by Applicable Laws (including those relating
          to
          disclosure of material information to investors), neither Party shall issue
          a
          press or news release or make any similar public announcement (it being
          understood that publication in scientific journals, presentation at scientific
          conferences and meetings and the like are intended to be covered by Section
          5.3
          and not subject to this Section 5.2) related to the Development Program
          that
          contains Confidential Information of the other
          Party without the prior written consent of the other
          Party; provided that (a) notwithstanding the foregoing, ARIAD shall be
          expressly
          permitted to publicly announce the occurrence of any milestone event under
          Section 4.4.1 and any other event that ARIAD reasonably believes is material
          to
          ARIAD and (b) MERCK (i) expressly acknowledges that ARIAD is an emerging
          company
          the success of which is substantially dependent on its ability to attract
          and
          raise capital and that ARIAD’s ability to attract and raise capital is
          substantially dependent on its ability to announce publicly developments
          in its
          research and development programs, product development pipeline and
          commercialization activities, and (ii) agrees that it
          shall  take  (i) above into account and not unreasonably
          withhold, condition or delay its consent to any request by ARIAD to announce
          publicly developments in the Collaboration. ARIAD agrees that it shall
          not
          unreasonably withhold, condition or delay its consent to any request by
          MERCK to
          announce publicly developments in the Collaboration.

         

        
          5.3           Publications
            and
            Presentations.  The Parties
            acknowledge that scientific and medical publications and presentations
            will be
            made in a manner consistent with Third Party agreements in effect as
            of the
            Effective Date and industry standards for the development and Commercialization
            of drugs in the Field, but must be strictly monitored to prevent any
            adverse
            effect from premature publication or dissemination of results of the
            activities
            hereunder.  The Parties will form a Publication Committee which will
            establish rules and procedures for scientific and medical publications
            and
            presentations, including publications and presentations relating to Biomarkers,
            Biomarker Information and Program Biomarker Technology.  Such rules
            and procedures will include requirements for reasonable advance notice
            and
            expeditious review of proposed publications and presentations, both before
            and
            after Commercialization Regulatory Approval is obtained.  The
            Publication Committee shall report to the JDC until such time as the
            JSC
            determines that the Publication Committee shall report to a different
            entity.  Notwithstanding the foregoing, (i) except for disclosures
            permitted pursuant to Section 5.2, either Party, its employees or consultants
            wishing to make a publication shall deliver to the other Party a copy
            of the
            proposed written publication or an outline of an oral disclosure at least
            sixty
            (60) days (or, in the case of consulting agreements, such shorter period
            (but
            not less than thirty (30) days) as required
            by  the  consulting or other agreement with such consultant)
            prior to submission for publication or presentation, (ii) the reviewing
            Party
            shall have the right to require a delay of up to ninety (90) days (or,
            in the
            case of consulting agreements, such shorter period (but not less than
            sixty (60)
            days)  as required by the consulting or other agreement with such
            consultant) in publication or presentation in order to enable patent
            applications protecting each Party’s rights in such information to be filed, and
            (iii) each Party shall have the right to prohibit disclosure of any of
            its
            Confidential Information in any such proposed publication or
            presentation.  In any permitted publication or presentation by a
            Party, the other Party’s contribution shall be duly recognized, and co-ownership
            shall be determined in accordance with customary standards.  In
            negotiating consulting agreements, each Party shall use Commercially
            Reasonable
            Efforts to obtain the agreement of the consultant to the sixty (60) and
            ninety
            (90) day periods set forth in clauses (i) and (ii) above.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -62-

              
                

              

            

            
              
              

            

             

          

          5.4           Prior
            Approved Publication.  Notwithstanding Sections 5.2 and
            5.3, either Party may include in a public disclosure or in a scientific
            or
            medical publication or representation, without prior delivery  to or
            approval by the other Party, any information which has previously been
            included
            in a public disclosure or scientific or medical publication that has
            been
            approved pursuant to Section 5.2 or reviewed pursuant to Section 5.3
            or
            published or publicly disclosed by the other Party.  A Party relying
            on this Section 5.4 shall bear the burden of establishing that information
            has
            previously been included in a public disclosure or scientific or medical
            publication that has been approved pursuant to Section 5.2 or reviewed
            pursuant
            to Section 5.3 or published or publicly disclosed by the other
            Party.

           

          6.    
            LICENSE GRANTS; EXCLUSIVITY;
            STANDSTILL
            AGREEMENT

           

          6.1           Licenses.

           

          6.1.1                      ARIAD
            License Grants.

           

          (a)           Development
            Program.  Subject to the other terms of this Agreement, ARIAD
            hereby grants to MERCK a co-exclusive (together with ARIAD), royalty-free,
            worldwide license during the Term, with the right to grant sublicenses
            solely as
            provided in Section 6.2.1, under Licensed Technology and Licensed Patent
            Rights
            for the sole purpose of conducting MERCK Development Activities as part
            of the
            Development Program.

           

          (b)           Commercialization
            Licenses.  Subject to the other terms of this Agreement, ARIAD
            hereby grants to MERCK (i) a co-exclusive (together with ARIAD), license
            during
            the Term, including the right to grant sublicenses as provided in Section
            6.2,
            under Licensed Technology and Licensed Patent Rights for the sole purpose
            of
            Commercializing Co-Promoted Products in the Field in the Co-Promotion
            Territory
            and (ii) an exclusive, royalty-bearing license during the Term, including
            the
            right to grant sublicenses as provided in Section 6.2, under Licensed
            Technology
            and Licensed Patent Rights for the sole purpose of Commercializing
            Royalty-Bearing Products in the Field in the Royalty-Bearing
            Territory.

           

          (c)           Manufacturing
            Technology.  Subject to the other terms of this Agreement, ARIAD
            hereby grants to MERCK a royalty-free, worldwide license during the Term,
            with
            the right to grant sublicenses solely as provided in Section 6.2.3, under
            Licensed Technology and Licensed Patent Rights for the sole purpose of
            performing its obligations and exercising its rights under the Supply
            Agreement.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -63-

              
                

              

            

            
              
              

            

             

          

          6.1.2                      MERCK
            License Grants.

           

          (a)           Development
            Program.  Subject to the other terms of this Agreement, MERCK
            hereby grants to ARIAD a co-exclusive (together with MERCK), royalty-free,
            worldwide license during the Term, with the right to grant sublicenses
            solely as
            provided in Section 6.2.1, under MERCK Technology, MERCK Patent Rights
            and
            MERCK’s interest in Joint Technology and Joint Patent Rights for the sole
            purpose of conducting ARIAD Development Activities as part of the Development
            Program.

           

          (b)           Commercialization
            License.  Subject to the other terms of this Agreement, MERCK
            hereby grants to ARIAD a co-exclusive (together with MERCK), license
            during the
            Term, without the right to grant sublicenses, under MERCK Technology
            and MERCK
            Patent Rights and MERCK’s interest in Joint Technology and Joint Patent Rights
            for the sole purpose of Commercializing Co-Promoted Products in the Field
            in the
            Co-Promotion Territory.

           

          (c)           Manufacturing
            Technology.  MERCK will, in the case of MERCK Program Technology
            and MERCK Program Patent Rights, and may, in the case of MERCK Background
            Technology and MERCK Patent Rights containing claims covering MERCK Background
            Technology, make MERCK Technology and MERCK Patent Rights available to
            ARIAD for
            use in Manufacturing Development and/or commercial Manufacturing, as
            set forth
            in the Supply Agreement, of API, Product and/or Collaboration Compounds
            (all
            such MERCK Technology and MERCK Patent Rights being referred to as “MERCK
            Manufacturing Technology and Patent Rights”).  Subject to the other
            terms of this Agreement and to the applicable terms of any agreement
            with a
            Third Party limiting MERCK's rights to grant any such license, which
            MERCK shall
            disclose to ARIAD promptly upon becoming aware that such Third Party
            agreement
            imposes any restriction on MERCK’s ability to grant the licenses set forth in
            this sentence, MERCK hereby grants to ARIAD a perpetual, non-exclusive,
            royalty-free (except for any fees or royalties that MERCK is required
            to pay
            based on ARIAD’s use), worldwide license, with the right to grant sublicenses
            except as set forth below, to (i) any MERCK Manufacturing Technology
            and Patent
            Rights that  is MERCK Background Technology and MERCK Patent Rights
            claiming MERCK Background Technology that Merck chooses to make available
            to
            ARIAD (it being understood that MERCK has no obligation to make MERCK
            Background
            Technology and MERCK Patent Rights claiming MERCK Background Technology
            available to ARIAD), and (ii) all MERCK Manufacturing Technology and
            Patent
            Rights that is MERCK Program Technology and MERCK Program Patent Rights,
            solely
            to Manufacture or have Manufactured (x) API, Product and Collaboration
            Compound
            as set forth in the Supply Agreement, and (y) any Rapamycin Analog or
            Rapamycin
            Derived mTOR Inhibitor (including the right to manufacture Rapamycin
            for use in
            manufacture of any Rapamycin Analog or Rapamycin Derived mTOR Inhibitor)
            and to
            use and sell or have sold any such Product, Collaboration Compound, Rapamycin
            Analog or Rapamycin Derived mTOR Inhibitor for any purpose except as
            prohibited
            by this Agreement and the Supply Agreement.  ARIAD’s right to
            sublicense MERCK Manufacturing Technology and Patent Rights shall not
            apply to
            any MERCK Manufacturing Technology and Patent Rights that relate to the
            Manufacture of Product from API or Collaboration Compound, except for
            a
            sublicense to a toll manufacturer that Manufactures Product from API
            or
            Collaboration Compound for ARIAD.  Notwithstanding the foregoing,
            ARIAD shall have no obligation to pay any fees or royalties based on
            ARIAD’s use
            of any MERCK Manufacturing Technology and Patent Rights in the manufacture
            of a
            product that arise under any agreement to which MERCK is a party or any
            Third
            Party obligation of which MERCK is otherwise aware unless MERCK provides
            ARIAD
            with prior written notice of such Third Party obligation at the time
            of
            disclosure of the MERCK Manufacturing Technology and Patent Rights to
            ARIAD.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -64-

              
                

              

            

            
              
              

            

             

          

          6.1.3                      Disclosure
            of Technology.  Subject to Section
            6.1.2(c), each Party shall disclose to the other all Technology and Patent
            Rights Controlled by such Party that is necessary, or useful in the reasonable
            determination of the disclosing Party, for the Development, or Commercialization
            of Products, and all such Technology and Patent Rights shall be included
            in the
            licenses granted in this Section 6.1.  Such disclosures shall include
            ongoing disclosures of Technology developed in the course of Manufacturing
            Development of  API, Clinical Product and Marketed
            Product.  For Technology developed  in the course of
            Manufacturing Development of  API, Clinical Product and Marketed
            Product, MERCK shall not be required to make such disclosure more often
            than
            once per Calendar Quarter and all such disclosures shall be in document
            form and
            shall not require instruction of ARIAD Personnel by MERCK
            personnel.  This Section 6.1.3 does not otherwise apply to MERCK
            Manufacturing Technology and Patent Rights.

           

          6.1.4                      Clinical
            Samples, Biomarker Information and Program Biomarker
            Technology

           

          (a)           Fluids,
            tissue or tumor samples collected by either Party in the Development
            Program
            shall only be used as agreed.

           

          (b)           Each
            Party shall disclose to the other Party all Program Biomarker Technology
            owned
            by it and will provide the other Party with all Biomarker Information
            within
            clause (i) of Section 1.22 and all raw data contained in such Biomarker
            Information developed by it or its Affiliates. Such Program Biomarker
            Technology, Biomarker Information and raw data shall be provided in a
            mutually
            agreed and readily useable and decipherable format.

           

          (c)           Subject
            to the other terms of this Agreement, each Party hereby grants to the
            other
            Party a worldwide, royalty-free, irrevocable right and license, with
            the
            unrestricted right to grant sublicenses, to use all raw data contained
            in
            Program Biomarker Technology and Biomarker Information within clause
            (i) of
            Section 1.22 for any and all purposes consistent with its obligations
            under
            Section 3.1.2(d) and 6.4 of this Agreement.

           

          (d)           Subject
            to the other terms of this Agreement, each Party hereby grants to the
            other
            Party a worldwide, royalty-free, irrevocable license, with the unrestricted
            right to grant sublicenses, under all Patent Rights Controlled by the
            granting
            Party that claim any Program Biomarker Technology and all Patent Rights
            or other
            intellectual property rights pertaining to Biomarker Information within
            clause
            (i) of Section 1.22 Controlled by the granting Party to use such Program
            Biomarker Technology and Biomarker Information in connection with the
            discovery,
            development (including in Clinical Trials), manufacture, use, sale, import
            or
            other commercialization of any mTOR Inhibitor.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -65-

              
                

              

            

            
              
              

            

             

          

          6.2           Right
            to
            Sublicense.

           

          6.2.1                      Development
            Program Licenses. Notwithstanding anything
            contained herein to the contrary, either Party shall have the right to
            grant
            sublicenses under the license granted to it under Sections 6.1.1(a) and
            6.1.2(a)
            solely to Third Party subcontractors engaged by such Party to perform
            designated
            functions related to the conduct of Development activities under the
            Development
            Program or to Affiliates; provided however,
            that (a) such Party shall obtain the prior approval of the JDC, as reflected
            in
            minutes of the JDC,  to each sublicense grant; (b) such Party shall
            remain responsible for the satisfactory accomplishment of such work in
            accordance with the terms and conditions of this Agreement; and (c) each
            such
            subcontractor shall enter into a written agreement containing such provisions
            as
            are normal and customary for similar types of agreements.

           

          6.2.2                      Co-Promotion
            Products and Royalty-Bearing
            Products.  MERCK shall have the right to
            grant sublicenses to Sublicensees under the Commercialization license
            granted to
            it under Section 6.1.1(b), with respect to Royalty Bearing Product in
            the Field;
            provided that: (a) it shall be a condition of any such sublicense that
            such
            Sublicensee agrees to be bound by all terms of this Agreement applicable
            to the
            Commercialization of Royalty-Bearing Products in the Field in the
            Royalty-Bearing Territory (including, without limitation, Article 5);
            (b) MERCK
            shall provide written notice to ARIAD of any such proposed sublicense
            at least
            thirty (30) days prior to such execution and provide copies to the other
            Party
            of each such sublicense within ten (10) days of its execution; (c) if
            MERCK
            grants a sublicense to a Sublicensee, MERCK shall be deemed to have guaranteed
            that such Sublicensee will fulfill all of MERCK’s obligations under this
            Agreement applicable to the subject matter of such sublicense; (d) MERCK
            shall
            not be relieved of its obligations pursuant to this Agreement as a result
            of
            such sublicense.

           

          6.2.3                      Manufacturing
            Technology.  Notwithstanding anything
            contained herein to the contrary, (i) either Party shall have the right
            to grant
            sublicenses under the license granted to it under Sections 6.1.1(c) and
            6.1.2(c)
            solely to Third Party subcontractors engaged by such Party to Manufacture
            API,
            Collaboration Compound or Product or to Affiliates; provided however,
            that; (a) such Party shall remain responsible for the satisfactory
            accomplishment of such work in accordance with the terms and conditions
            of this
            Agreement; and (b) each such subcontractor shall enter into a written
            agreement
            containing such provisions as are normal and customary for similar types
            of
            agreements, and (ii) subject to the limitation set forth in Section
            6.1.2(c) with respect Merck Manufacturing Technology and Merck Patent
            rights that relate to the Manufacture of Product from API, ARIAD shall
            have the
            right to grant sublicenses under the license granted to it under Section
            6.1.2(c) to Third Parties to manufacture API, Product, Collaboration
            Compound,
            Rapamycin Analogs, Rapamycin Derived mTOR Inhibitors and Rapamycin for
            use in
            manufacture of Rapamycin Analogs or Rapamycin Derived mTOR Inhibitors,
            and to
            use and sell the same for any purpose except as prohibited by this Agreement
            and
            the Supply Agreement.

           

          6.3           No
            Other
            Rights.  MERCK shall have no rights
            to use or otherwise exploit ARIAD Technology, ARIAD Patent Rights, or
            ARIAD
            Proprietary Materials, and ARIAD shall have no rights to use or otherwise
            exploit MERCK Technology, MERCK Patent Rights or MERCK Proprietary Materials,
            in
            each case, except as expressly set forth herein.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -66-

              
                

              

            

            
              
              

            

             

          

          6.4           Exclusivity.

           

          6.4.1                      ARIAD.  Until
            the later to occur of (a) expiration of the last to expire Valid Claim
            of the
            ARIAD Patent Rights, MERCK Patent Rights or Joint Patent Rights in any
            country
            that covers the composition of matter or sale or import of a Product
            or a
            Collaboration Compound contained in a Product or its use for any indication
            for
            which Commercialization Regulatory Approval has been obtained in any
            country, or
            (b) twelve (12) years from the date of the First Commercial Sale of such
            Royalty-Bearing Product in every country in which a Product is sold,
            ARIAD shall
            not, and shall cause each of its Affiliates to not, conduct any activity,
            either
            on its own, or with, for the benefit of, or sponsored by any Third Party,
            that
            is designed to research, develop or commercialize, or grant any license
            or other
            rights to any Third Party to utilize any Technology or Patent Rights
            Controlled
            by ARIAD or any of its Affiliates for the express purpose of researching,
            developing or commercializing (i) Rapamycin or any Rapamycin Derived
            mTOR
            Inhibitor in the Field except (a) hereunder in the Development Program,
            or the
            Development or Commercialization of Products and (b) in connection with
            the
            conduct of any Permitted Transactions, or (ii) any Collaboration Compound
            for
            use as a Dimerizer.

           

          6.4.2                      MERCK.  Until
            the later to occur of (a) expiration of the last to expire Valid Claim
            of the
            ARIAD Patent Rights, MERCK Patent Rights or Joint Patent Rights in any
            country
            that covers the composition of matter or sale or import of a Product
            or a
            Collaboration Compound contained in a Product or its use for any indication
            for
            which Commercialization Regulatory Approval has been obtained in any
            country, or
            (b) twelve (12) years from the date of the First Commercial Sale of such
            Royalty-Bearing Product in every country in which a Product is sold,
            MERCK shall
            not, and shall cause each of its Affiliates to not, conduct any activity,
            either
            on its own, or with, for the benefit of, or sponsored by any Third Party,
            that
            is designed to research, develop or commercialize, or grant any license
            or other
            rights to any Third Party to utilize any Technology or Patent Rights
            Controlled
            by MERCK or any of its Affiliates for the express purpose
            of  researching, developing or commercializing (i) Rapamycin or any
            Rapamycin Derived mTOR Inhibitor in the Field except (a) hereunder in
            the
            Development Program or the Development or Commercialization of Products
            and (b)
            in connection with the conduct of any Permitted Transactions, or (ii)
            any
            Collaboration Compound for use as a Dimerizer.

           

          6.4.3                      Permitted
            Transactions.  If either Party enters into an agreement
            for a Permitted Transaction, all Technology and Patent Right granted
            to such
            Party under the Permitted Transaction (“Collaborator IP Rights”) shall be
            included without further action in the licenses granted to the other
            Party by
            Section 6.1.1 or 6.1.2.  If a Permitted Transaction entered into by
            MERCK or ARIAD involves the use of any Collaboration Compound, data or
            information relating to any Collaboration Compound or Confidential Information
            of ARIAD or MERCK the Party entering into such Permitted Transaction
            agrees that
            it shall not utilize (or permit an Affiliate to utilize or license any
            Third
            Party to utilize) any Collaborator IP Rights to research, develop or
            commercialize in the Field any mTOR Inhibitor other than a Collaboration
            Compound, except that ARIAD may utilize Collaborator IP Rights to research,
            develop or commercialize mTOR Inhibitors for use with stents or Medical
            Devices.  If a Permitted Transaction entered into by ARIAD involves
            use of any Confidential Information of MERCK, ARIAD agrees that it shall
            not
            utilize (or permit an Affiliate to utilize or license any Third Party
            to
            utilize) any Collaborator IP Rights to research, develop or commercialize
            any
            mTOR Inhibitor.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -67-

              
                

              

            

            
              
              

            

             

          

          6.4.4                      Acquisitions
            by a Party Involving Rapamycin Derived mTOR
            Inhibitors.

           

          (a)           Notwithstanding
            the provisions of Section 6.4.2, if during the Term MERCK or any of its
            Affiliates acquires or agrees to acquire (whether by purchase of assets
            or
            shares, share exchange, merger or consolidation or similar transaction),
            an
            entity that is developing or commercializing a Rapamycin Derived mTOR
            Inhibitor,
            MERCK shall have [***] from the date of public announcement of the acquisition
            or merger (or if there is no public announcement, from the closing of
            such
            acquisition or merger) to notify ARIAD in writing as to whether MERCK
            or its
            Affiliate intends to divest its interest in such Rapamycin Derived mTOR
            Inhibitor.  If  MERCK or its Affiliate elects to divest its
            interest in such Rapamycin Derived mTOR Inhibitor, MERCK or its Affiliate
            shall
            use reasonable efforts to identify a Third Party purchaser to whom the
            MERCK or
            its Affiliate will divest its interest in such Rapamycin Derived mTOR
            Inhibitor
            and enter into a definitive agreement with such Third Party for such
            divestiture
            as soon as reasonably practicable under the circumstances.  If MERCK
            or its Affiliate elects not to divest its interest in such Rapamycin
            Derived
            mTOR Inhibitor, or fails to divest its interest in such Rapamycin Derived
            mTOR
            Inhibitor within [***] after the closing of the transaction for which
            MERCK  has provided ARIAD with notice, then ARIAD shall have the
            option, upon written notice to MERCK, as applicable, given no later than
            [***]
            after the earlier of:  (a) MERCK’s written notice, as applicable, of
            its election not to divest such Rapamycin Derived mTOR Inhibitor; and
            (b) the
            end of such [***] period described above, to require MERCK to take such
            actions
            as may be necessary to treat such Rapamycin Derived mTOR inhibitor as
            a
            Collaboration Compound for all purposes of this Agreement, except that
            ARIAD
            shall not have a right to manufacture a Rapamycin Derived mTOR Inhibitor
            that is
            acquired by MERCK or its Affiliate.

           

          (b)           Notwithstanding
            the provisions of Section 6.4.1, if during the Term ARIAD or any of its
            Affiliates acquires or agrees to acquire (whether by purchase of assets
            or
            shares, share exchange, merger or consolidation or similar transaction),
            an
            entity that is developing or commercializing a Rapamycin Derived mTOR
            Inhibitor,
            ARIAD shall have [***] from the date of public announcement of the acquisition
            or merger (or if there is no public announcement, from the closing of
            such
            acquisition or merger) to notify MERCK in writing as to whether ARIAD
            or its
            Affiliate intends to divest its interest in such Rapamycin Derived mTOR
            Inhibitor.  If ARIAD or its Affiliate elects to divest its interest in
            such Rapamycin Derived mTOR Inhibitor, ARIAD or its Affiliate shall use
            reasonable efforts to identify a Third Party purchaser to whom ARIAD
            or its
            Affiliate will divest its interest in such Rapamycin Derived mTOR Inhibitor
            and
            enter into a definitive agreement with such Third Party for such divestiture
            as
            soon as reasonably practicable under the circumstances.  If ARIAD or
            its Affiliate elects not to divest its interest in such Rapamycin Derived
            mTOR
            Inhibitor, or fails to divest its interest in such Rapamycin Derived
            mTOR
            Inhibitor within [***] after the closing of the transaction for which
            ARIAD has
            provided MERCK with notice, then MERCK shall have the option, upon written
            notice to ARIAD, as applicable, given no later than [***] after the earlier
            of:  (a) ARIAD’s written notice, as applicable, of its election not to
            divest such Rapamycin Derived mTOR Inhibitor; and (b) the end of such
            [***]
            period described above, to require ARIAD to take such actions as may
            be
            necessary to treat such Rapamycin Derived mTOR inhibitor as a Collaboration
            Compound for all purposes of this Agreement, except that MERCK shall
            not have a
            right to manufacture a Rapamycin Derived mTOR Inhibitor that is acquired
            by
            ARIAD or its Affiliate, even if MERCK otherwise obtains the right to
            Manufacture
            Products.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -68-

              
                

              

            

            
              
              

            

             

          

          (c)           In
            the event a Party is acquired (whether by purchase of assets or shares,
            share
            exchange, merger or consolidation) by an entity that is developing or
            commercializing a Rapamycin Derived mTOR Inhibitor, such Party agrees
            to keep
            all Confidential Information resulting from the Development, Commercialization
            or Manufacture of any Collaboration Compound or Product (“Program Confidential
            Information”) separate and apart from all programs and personnel for such other
            Rapamycin Derived mTOR Inhibitor and not use such Program Confidential
            Information in connection with such other Rapamycin Derived mTOR
            Inhibitor.  The non-acquired Party shall have the right to require the
            acquired Party and the acquiror to adopt commercially reasonable procedures
            to
            prevent the disclosure or use of Program Confidential Information as
            provided
            above.  The purpose of such procedures shall be to strictly limit such
            disclosures to only those personnel having a need-to-know Program Confidential
            Information in order to perform the acquired Party’s obligations and exercise
            its rights under this Agreement.

           

          6.5           Standstill
            Agreement.

           

          (a)           Standstill
            Obligation.  Except as permitted [***], during the Term of this
            Agreement, without the prior written consent of the Board of Directors
            [***] or
            encourage others to) directly or indirectly in any manner: [***]directly
            or
            indirectly, alone or in concert with others, [***]or in any way participate
            in,
            directly or indirectly, alone or in concert with others, any [***]or
            in any way
            participate in a [***]directly or indirectly, alone or in concert with
            others,[***]other than in the ordinary course of business[***]with others
            to do
            any of the actions [***]otherwise act in concert with others[***]The
            provisions
            of Section 6.5(a) shall [***]announces publicly that it is seeking, or
            considering seeking, [***]or that it is otherwise exploring, or considering
            exploring[***]which would result in [***]or one or more of its subsidiaries
            to a
            third party[***]immediately prior to [***]For clarity, the foregoing
            provisions
            shall prohibit[***]unless one of the exceptions in the preceding
            sentence[***]For avoidance of doubt, nothing in the Agreement shall prevent
            [***]Notwithstanding the above, [***]shall not be deemed a breach of
            this
            provision.

           

          7.    
            INTELLECTUAL PROPERTY
            RIGHTS

           

          7.1           ARIAD
            Intellectual Property
            Rights.  ARIAD shall have sole and
            exclusive ownership of all right, title and interest on a worldwide basis
            in and
            to any and all ARIAD Technology and ARIAD Patent Rights.

           

          7.2           MERCK
            Intellectual Property
            Rights.  MERCK shall have sole and
            exclusive ownership of all right, title and interest on a worldwide basis
            in and
            to any and all MERCK Technology and MERCK Patent Rights.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -69-

              
                

              

            

            
              
              

            

             

          

          7.3           Joint
            Technology
            Rights.  MERCK and ARIAD shall
            jointly own all Joint Technology and Joint Patent
            Rights.  Notwithstanding anything to the contrary contained herein or
            under Applicable Law, except to the extent set forth herein, the Parties
            hereby
            agree that (i) either Party may use or license or sublicense to Affiliates
            or
            Third Parties all or any portion of its interest in Joint
            Technology,  Joint Patent Rights or jointly owned Confidential
            Information or Proprietary Materials for any purposes inside or outside
            the
            Field other than the discovery, development, manufacture, use, sale or
            importation of  a Rapamycin Derived mTOR Inhibitor, for use in the
            Field, without the prior written consent of the other Party, without
            restriction
            and without the obligation to provide compensation to the other Party;
            (ii)
            neither Party may use or license or sublicense to Affiliates or Third
            Parties
            all or any portion of its interest in Joint Technology, Joint Patent
            Rights or
            jointly owned Confidential Information or Proprietary Materials for the
            discovery, development, manufacture, use, sale or importation of a Rapamycin
            Derived mTOR Inhibitor, for use in the Field,  without the prior
            written consent of the other Party, which may be granted or withheld
            in its sole
            discretion; and (iii) either Party may use or license or sublicense to
            Affiliates or Third Parties all or any portion of its interest in Joint
            Technology, Joint Patent Rights or jointly owned Confidential Information
            or
            Proprietary Materials for the discovery, development, manufacture, use,
            sale or
            importation of a Rapamycin Derived mTOR Inhibitor, for use outside the
            Field,
            without the prior written consent of the other Party, without restriction
            and
            without the obligation to provide compensation to the other Party.

           

          7.4           Product
            Technology and Product Patent
            Rights.  For clarity, it is acknowledged that all
            Product Technology and Patent Rights with respect thereto shall be owned
            solely
            by ARIAD and that all Product Use Technology and Patent Rights with respect
            thereto shall be jointly owned, regardless of inventorship.  Ownership
            of all Product Delivery Technology and any other Program Technology and
            Patent
            Rights with respect thereto shall be determined in accordance with Section
            7.6
            it being understood that the owner thereof shall have the exclusive right
            to use
            such Program Technology and Patent Rights outside the
            Collaboration.  

           

          7.5           Patent
            Coordinators.  ARIAD and MERCK
            shall, by written notice to the other Party,  each appoint a patent
            coordinator reasonably acceptable to the other Party (each, a “Patent
            Coordinator”) to serve as such Party’s primary liaison with the other Party on
            matters relating to patent filing, prosecution, maintenance and
            enforcement.  Each Party may replace its Patent Coordinator at any
            time by notice in writing to the other Party.  

           

          7.6           Inventorship.  The
            Patent Coordinators shall initially determine inventorship of Program
            Technology
            under U.S. patent law.  In case of a dispute between the Patent
            Coordinators over inventorship and, as a result, whether any particular
            Technology is ARIAD Technology, MERCK Technology or Joint Technology,
            such
            dispute shall be resolved according to U.S. patent law by patent counsel
            who
            (and whose firm) is not at the time of the dispute, and was not at any
            time
            during the five (5) years prior to such dispute, performing services
            for either
            of the Parties, such patent counsel to be selected by the
            JSC.  Expenses of such patent counsel shall be shared equally by the
            Parties.

           

          8.    
            FILING, PROSECUTION AND MAINTENANCE
            OF PATENT
            RIGHTS

           

          8.1           Patent
            Filing, Prosecution and
            Maintenance.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -70-

              
                

              

            

            
              
              

            

             

          

          8.1.1                      ARIAD
            Prosecution Rights.  ARIAD, acting
            through patent counsel or agents of its choice, shall be solely responsible
            for
            the preparation, filing, prosecution and maintenance of the ARIAD Patent
            Rights.  MERCK shall cooperate with and assist ARIAD in all reasonable
            respects, in connection with ARIAD’s preparation, filing, prosecution (including
            review and comments regarding responses to office actions and/or official
            actions from worldwide patent offices) and maintenance of such Patent
            Rights.  The costs and expenses incurred by ARIAD in connection with
            the preparation, filing, prosecution and maintenance of such Patent Rights
            shall
            be Development Costs.

           

          8.1.2                      MERCK
            Prosecution Rights.  MERCK, at its sole
            expense and acting through patent counsel or agents of its choice, shall
            be
            responsible for the preparation, filing, prosecution and maintenance
            of all
            MERCK Patent Rights.  At MERCK’s request, ARIAD shall cooperate with
            and assist MERCK in all reasonable respects, in connection with MERCK’s
            preparation, filing, prosecution and maintenance of MERCK Program Patent
            Rights.  The costs and expenses incurred by MERCK in connection with
            the preparation, filing, prosecution and maintenance of MERCK Program
            Patent
            Rights shall be Development Costs.

           

          8.1.3                      Joint
            Patent Rights.  Within ten (10) days after it is
            determined pursuant to Section 7.6 that any particular Program Technology
            is
            Joint Program Technology, the Parties will determine whether one Party
            or the
            other will undertake the prosecution of Joint Program Patent Rights with
            respect
            thereto, based on the respective expertise of the Parties.  If the
            Parties fail to agree, then prosecution of such Joint Program Patent
            Rights
            shall be jointly controlled by the Parties, using patent counsel agreed
            upon by
            the Patent Coordinators or, if they fail to agree, selected by the
            JSC.  The costs and expenses incurred in connection with the
            preparation, filing, prosecution and maintenance of Joint Patent Rights
            shall be
            Development Costs.

           

          8.1.4                      Information
            and Cooperation.  Each filing Party
            shall (a) promptly notify the other Party, through its Patent Coordinator,
            of
            any Program Technology or Program Biomarker Technology and discuss with
            the
            other Party, through its Patent Coordinator, the filing of any patent
            application with respect thereto; (b) regularly provide the other Party
            with
            copies of all patent applications filed hereunder for any Program Technology,
            or
            Program Biomarker Technology and other material submissions and correspondence
            with the patent offices, in sufficient time to allow for review and comment
            by
            the other Party; and (b) provide the other Party and its patent counsel
            with an
            opportunity to consult with the Party and its patent counsel regarding
            the
            filing and contents of any such application, amendment, submission or
            response,
            and the advice and suggestions of the other Party and its patent counsel
            shall
            be taken into consideration in good faith by such Party and its patent
            counsel
            in connection with such filing.  Each filing Party shall pursue in
            good faith all reasonable claims requested by the other Party in the
            prosecution
            of any Patent Rights under this Section 8.1.

           

          8.1.5                      Abandonment.  If
            either Party decides to cease prosecution on, to abandon or to allow
            to lapse
            any of the Patent Rights covering any Product, Product Technology, Product
            Use
            Technology, Product Delivery Technology or Program Biomarker Technology
            in any
            country or region in the Territory, such Party ("Abandonment
            Party")  shall inform the other Party ("Assuming Party") of such
            decision promptly and, in any event, so as to provide the  Assuming
            Party a reasonable amount of time to meet any applicable deadline to
            establish
            or preserve such Patent Rights in such country or region.  The
            Assuming Party shall have the right to assume responsibility for continuing
            the
            prosecution of such Patent Rights in such country or region and paying
            any
            required fees to maintain such Patent Rights in such country or region
            or
            defending such Patent Rights, all at the Abandonment Party’s sole expense,
            through patent counsel or agents of its choice.  The Assuming Party
            shall not become an assignee of any such Patent Rights as a result of
            its
            assumption of any such responsibility.  Upon transfer of the
            Abandonment Party’s responsibility for prosecuting, maintaining and defending
            any of the Patent Rights to the Assuming Party under this Section 8.1.5,
            the  Abandonment Party shall promptly deliver to
            the  Assuming Party copies of all necessary files related to the
            Patent Rights with respect to which responsibility has been transferred
            and
            shall take all actions and execute all documents reasonably necessary
            for the
            Assuming Party to assume such prosecution, maintenance and defense.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -71-

              
                

              

            

            
              
              

            

             

          

          8.2           Legal
            Actions.

           

          8.2.1                      Third
            Party Infringement.

           

          (a)           In
            General.

           

          (i)           Notice.  In
            the event either Party becomes aware of (i) any suspected infringement
            of any
            ARIAD Patent Rights or MERCK Patent Rights through the development or
            commercialization of an mTOR Inhibitor in the Field, or (ii) the submission
            by
            any Third Party of an abbreviated new drug application under the Hatch-Waxman
            Act for a product in the Field that includes a Collaboration Compound
            (each, an
“Infringement”), that Party shall promptly notify the other Party and provide it
            with all details of such Infringement of which it is aware (each, an
            “Infringement Notice”).  The JSC shall promptly meet to discuss the
            Infringement and to determine the collective overall strategy for patent
            enforcement.

           

          (ii)           ARIAD
            Right to Enforce.  Unless otherwise determined by the JSC as part
            of its consideration of an overall patent strategy for Patent Rights
            involving
            Products, in the event that such an Infringement occurs in the U.S. Territory
            and a U.S. Commercialization Transfer has not occurred, ARIAD shall have
            the
            first right and option to address such Infringement by taking reasonable
            steps,
            which may include the institution of legal proceedings or other
            action.  All costs, including, without limitation, attorneys’ fees,
            relating to such legal proceedings or other action shall be borne by
            ARIAD and
            shall be Commercialization Expenses.  If ARIAD does not
            take or initiate commercially reasonable steps to eliminate the Infringement
            within one hundred twenty (120) days from any Infringement Notice (or
            twenty
            (20) days in the case of an Infringement resulting from the submission
            by any
            Third Party of an abbreviated new drug application under the Hatch-Waxman
            Act),
            then MERCK shall have the right and option to do so at its expense, which
            shall
            be a Commercialization Expense.

           

          (iii)           MERCK
            Right to Enforce.  Unless otherwise determined by the JSC as part
            of its consideration of an overall patent strategy for Patent Rights
            involving
            Products, in the event that such an Infringement occurs in the ROW Territory
            or
            in the event such Infringement occurs in the U.S. Territory after a U.S.
            Commercialization Transfer, MERCK shall have the first right and option
            to
            address such Infringement by taking reasonable steps, which may include
            the
            institution of legal proceedings or other action.  All costs,
            including, without limitation, attorneys’ fees, relating to such legal
            proceedings or other action shall be borne by MERCK.  If
            MERCK does not take or initiate commercially reasonable steps to eliminate
            the
            Infringement within one hundred twenty (120) days from any Infringement
            Notice
            (or twenty (20) days in the case of an Infringement resulting from the
            submission by any Third Party of an abbreviated new drug application
            under the
            Hatch-Waxman Act), then ARIAD shall have the right and option to do so
            at its
            expense.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -72-

              
                

              

            

            
              
              

            

             

          

          (iv)           No
            Settlement.  Neither Party shall settle any Infringement claim or
            proceeding under Section 8.2.1(a)(ii) or (iii) without the prior written
            consent
            of the other Party, which consent shall not be unreasonably withheld,
            conditioned or delayed.

           

          (b)           Right
            to Representation.  Each Party shall have the right to participate
            and be represented by counsel that it selects, in any legal proceedings
            or other
            action instituted under Section 8.2.1(a)(ii) or (iii) by the other
            Party.  If a Party with the right to initiate legal proceedings under
            Section 8.2.1(a) to eliminate an Infringement lacks standing to do so
            and the
            other Party has standing to initiate such legal proceedings, then the
            Party with
            the right to initiate legal proceedings under Section 8.2.1(a) may name
            the
            other Party as plaintiff in such legal proceedings or may require the
            Party with
            standing to initiate such legal proceedings at the expense of the other
            Party.

           

          (c)           Cooperation.  In
            any action, suit or proceeding instituted under this Section 8.2.1, the
            Parties
            shall cooperate with and assist each other in all reasonable
            respects.  Upon the reasonable request of the Party instituting such
            action, suit or proceeding, the other Party shall join such action, suit
            or
            proceeding and shall be represented using counsel of its own choice,
            at the
            requesting Party’s expense.

           

          (d)           Allocation
            of Proceeds.

           

          (i)           Co-Promoted
            Products.  Any amounts recovered by either Party pursuant to
            actions under Section 8.2.1(a)(ii) or (iii) with respect to any Infringement
            through the development or commercialization of an mTOR Inhibitor in
            the U.S.
            Territory when no U.S. Commercialization Transfer has occurred, whether
            by
            settlement or judgment, shall be allocated in the following order: (A)
            first, to
            reimburse MERCK and ARIAD for their reasonable out-of-pocket expenses
            in making
            such recovery (which amounts shall be allocated pro rata if insufficient
            to
            cover the totality of such expenses); and (B) then, to MERCK and ARIAD
            in the
            same proportion as their respective Revenue Sharing Percentages.

           

          (ii)           Royalty-Bearing
            Products.  Any amounts recovered by either Party pursuant to
            actions under Sections 8.2.1(a)(ii) or (iii) with respect to any Infringement
            through the development or commercialization of an mTOR Inhibitor in
            the ROW
            Territory or in the U.S. Territory after a U.S. Commercialization Transfer
            has
            occurred, whether by settlement or judgment, shall be allocated in the
            following
            order: (A) first, to reimburse MERCK and ARIAD for their reasonable
            out-of-pocket expenses in making such recovery (which amounts shall be
            allocated
            pro rata if insufficient to cover the totality of such expenses); and
            (B) then,
            to MERCK and ARIAD in the same proportion as MERCK’s historic profits on Net
            Sales of the Royalty-Bearing Product affected by the Infringement bears
            to
            MERCK’s historic royalties paid to ARIAD hereunder in respect of such Net Sales,
            in each case as determined by the JSC in good faith.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -73-

              
                

              

            

            
              
              

            

             

          

          8.2.2                      Defense
            of Claims.  In the event that any
            action, suit or proceeding is brought against either Party or any Affiliate
            or
            Sublicensee of either Party alleging the infringement of the Technology
            or
            Patent Rights of a Third Party by reason of or the Development or
            Commercialization, including, without limitation, the Manufacture, use
            or sale,
            of any Product, such Party shall notify the other Party within five (5)
            days of
            the earlier of (i) receipt of service of process in such action, suit
            or
            proceeding, or (ii) the date such Party becomes aware that such action,
            suit or
            proceeding has been instituted and the JSC shall meet as soon as possible
            to
            discuss the overall strategy for defense of such matter.  Except as
            unanimously agreed by the JSC, (a) the Responsible Party for Commercialization
            in the portion of the Territory in which the infringement is alleged
            to have
            occurred shall have the obligation to defend such action, suit or proceeding
            at
            its sole expense; (b) the Participating Party or any of its Affiliates
            or
            Sublicensees shall have the right to separate counsel at its own expense
            in any
            such action, suit or proceeding; and (c) the Parties shall cooperate
            with each
            other in all reasonable respects in any such action, suit or
            proceeding.  If no U.S. Commercialization Transfer has occurred, all
            such expenses with respect to any such action, suit or proceeding in
            the U.S.
            Territory shall be Commercialization Expenses.  Each Party shall
            promptly furnish the other Party with a copy of each communication relating
            to
            the alleged infringement that is received by such Party including all
            documents
            filed in any litigation.  In no event shall either Party settle or
            otherwise resolve any such action, suit or proceeding brought against
            the other
            Party or any of its Affiliates or sublicensees without the other Party’s prior
            written consent.

           

          8.3           Trademark
            Prosecution and
            Registration.

           

          8.3.1                      The
            Product Trademark under which each Co-Promoted Product shall be marketed
            in the
            U.S. Territory and the ROW Territory shall be determined by the
            JSC.  To the extent possible, the same Product Trademark(s) will be
            used throughout the Territory.  ARIAD shall register the Co-Promotion
            Trademarks in the U.S. Territory, shall be the exclusive owner of the
            Co-Promotion Trademarks throughout the world and shall take all such
            actions as
            are required to continue and maintain in full force and effect and defend
            in the
            U.S Territory the Co-Promotion Trademarks and the registrations thereof,
            and
            shall be solely responsible for all expenses incurred in connection therewith,
            which shall be Commercialization Expenses.  The Parties shall market
            each Co-Promoted Product in the U.S. Territory exclusively under such
            Product
            Trademark (all such trademarks being hereinafter referred to as the
“Co-Promotion Trademarks”) and under ARIAD’s NDC number, and ARIAD shall grant
            MERCK a license to use such Co-Promotion Trademarks solely for such Co-Promotion
            in the U.S Territory and for the sales of Royalty-Bearing Products in
            the ROW
            Territory.

           

          8.3.2                      MERCK
            shall be responsible for the filing, prosecution, defense and maintenance
            before
            all trademark offices in the ROW Territory of the Product Trademarks
            applicable
            to the Product, which may include the Co-Promotion Trademarks and shall
            be
            solely responsible for all expenses incurred in connection therewith.
            MERCK
            shall consult with ARIAD with respect to all matters relating to the
            Co-Promotion Trademarks.  If MERCK determines to use any trademark in
            the ROW Territory other than the trademark used in the U.S. Territory,
            MERCK
            will license such trademark to ARIAD for use on Product in the U.S. Territory
            and will not use such trademark for any product other than Product.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -74-

              
                

              

            

            
              
              

            

             

          

          8.3.3                      In
            all Product primary and secondary packages and labels and all marketing
            and
            promotional literature, ARIAD shall be presented and described as the
            Party who
            developed the Product, and the ARIAD name and logo shall appear in the
            same in
            size and prominence as the MERCK name and logo on all Product primary
            and
            secondary packages and labels and all marketing and promotional literature
            used
            in the Territory, unless prohibited by Applicable Laws.

           

          9.    
            TERM AND TERMINATION

           

          9.1           Term.  This
            Agreement
            shall commence on the Effective Date and shall continue in full force
            and effect
            unless otherwise terminated pursuant to Section 9.2.

           

          (a)           In
            the U.S. Territory, unless a U.S. Commercialization Transfer has occurred,
            for
            as long as a Product is being sold by either Party in the U.S.
            Territory;

           

          (b)           In
            the ROW Territory, until the expiration of all obligations of MERCK to
            pay
            royalties or milestones with respect to the ROW Territory;

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -75-

              
                

              

            

            
              
              

            

             

          

          (c)           In
            the U.S. Territory if a U.S. Commercialization Transfer has occurred,
            until the
            expiration of both (i) all obligations of MERCK to pay royalties or milestone
            payments with respect to the U.S. Territory and (ii) all rights of ARIAD
            to
            Co-Promote Products in the U.S. Territory (the “Term”).

           

          Upon
            the expiration of this Agreement
            as set forth in this Section 9.1, the license rights granted hereunder
            shall be
            converted to perpetual and fully paid-up licenses.

           

          9.2           Termination.  Subject
            to Section 12.1(d), this Agreement may be terminated by either Party
            as
            follows:

           

          9.2.1                      Unilateral
            Right to Terminate.

           

          (a)           MERCK
            may terminate this Agreement, effective on any anniversary of the Effective
            Date
            on or after the third anniversary of the Effective Date, by providing
            written
            notice to ARIAD not less than twelve (12) months prior to such anniversary
            of
            the Effective Date.

           

          (b)           MERCK
            may terminate this Agreement (i) at its sole discretion, after meeting
            with
            ARIAD as set forth below in Section 9.2.1(c), on written notice to ARIAD
            in the
            event that the President of Merck Research Laboratories, following such
            meeting,
            determines in good faith that it is not advisable for MERCK to continue
            Development or Commercialization of the Product for use in a Cancer Indication
            as a result of a serious safety issue regarding the use of the Product
            in a
            Cancer Indication, or (ii) effective upon not less than six (6) months
            prior
            written notice to ARIAD, given within ninety (90) days after ARIAD notifies
            MERCK of the determination in the following clause (x) or the termination
            in
            clause (y), in the event that (x) ARIAD has made a final determination
            that the
            initial Phase 3 Clinical Trial for a Sarcoma Indication has failed to
            meet its
            primary endpoint, or (y) ARIAD terminates such Clinical Trial based on
            the
            recommendation of the data monitoring committee of such trial, as specified
            in
            the statistical analysis plan for the trial, to terminate the trial early
            for a
            reason other than on the basis of  significant evidence of efficacy,
            unless the Product has received Commercialization Regulatory Approval
            (other
            than pricing and government reimbursement approval) in the U.S. Territory
            or the
            European Union or the Parties have agreed to file a Drug Approval Application
            for Commercialization Regulatory Approval in a Sarcoma Indication on
            the basis
            of results other than meeting the primary endpoint.  MERCK agrees
            that, in determining whether to terminate this Agreement pursuant to
            Section
            9.2.1(b)(ii), it will consider ARIAD’s achievement of any secondary endpoint
            and/or other efficacy data toward meeting any endpoint.  For clarity,
            MERCK’s right to terminate this Agreement under clause (ii)(x) or (ii)(y) shall
            not be conditioned on ARIAD giving notice of the determination or termination
            described in such clauses.

           

          (c)           In
            the event that MERCK believes in good faith that it is not advisable
            for MERCK
            to continue Development or Commercialization of the Product as a result
            of a
            serious safety issue regarding the use of the Product in a Cancer Indication,
            MERCK and ARIAD agree to meet promptly following notice of such belief
            from
            MERCK to ARIAD in person or by videoconference. The President of Merck
            Research
            Laboratories will attend the meeting, and at such meeting, MERCK will
            (i)
            provide ARIAD with any preclinical and clinical data related to the Product
            not
            previously provided in writing by MERCK to ARIAD that demonstrates such
            serious
            safety issue; and (ii) explain in detail to ARIAD the basis for MERCK’s good
            faith belief that it is not advisable for MERCK to continue Development
            or
            Commercialization of the Product as a result of such serious safety issue,
            including the factors supporting MERCK’s belief, and ARIAD may provide to MERCK
            any preclinical and clinical data related to the Product that ARIAD believes
            will demonstrate that it is not inadvisable to continue Development or
            Commercialization of the Product for use in Cancer Indications.

           

          (d)           Except
            to the extent the following is unenforceable under the law of a particular
            jurisdiction where a patent application with the ARIAD Patent Rights
            is pending
            or a patent within the ARIAD Patent Rights is issued, ARIAD may terminate
            this
            Agreement immediately upon written notice to MERCK in the event that
            MERCK or
            any of its Affiliates or Sublicensees Challenges any ARIAD Patent Right
            or
            voluntarily assists a Third Party in initiating a Challenge of any ARIAD
            Patent
            Right.

           

          9.2.2                      Termination
            for Breach.  Except as set forth herein,
            (i) either Party may terminate this Agreement, effective immediately
            upon
            written notice to the other Party, for a material breach by the other
            Party of
            any term of this Agreement that remains uncured sixty (60) days (thirty
            (30)
            days in the event that the breach is a failure of a Party to make any
            payment
            required hereunder) after the non-breaching Party first gives written
            notice to
            the other Party of such breach and its intent to terminate this Agreement
            if
            such breach is not cured.

           

          9.2.3                      Termination
            for Insolvency.  In the event that
            either Party makes an assignment for the benefit of creditors, appoints
            or
            suffers appointment of a receiver or trustee over all or substantially
            all of
            its property, files a petition under any bankruptcy or insolvency act
            or has any
            such petition filed against it which is not discharged within sixty (60)
            days of
            the filing thereof, then the other Party may terminate this Agreement
            effective
            immediately upon written notice to such Party.  In connection
            therewith, all rights and licenses granted under this Agreement are,
            and shall
            be deemed to be, for purposes of Section 365(n) of the United States
            Bankruptcy
            Code, licenses of rights to “intellectual property” as defined under Section
            101(56) of the United States Bankruptcy Code.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -76-

              
                

              

            

            
              
              

            

             

          

          9.3           Consequences
            of Termination of
            Agreement.  In the event of the
            termination of this Agreement pursuant to Section 9.2, the following
            provisions
            shall apply, as applicable.

           

          9.3.1                      Termination
            by ARIAD under 9.2.1(d),  9.2.2 or 9.2.3 or by MERCK under Section
            9.2.1.  If this Agreement is terminated
            by MERCK pursuant to Section 9.2.1 or by ARIAD pursuant to Section 9.2.1(d),
            9.2.2 or 9.2.3:

           

          (a)           all
            licenses and rights granted to MERCK, including without limitation, all
            licenses
            granted to MERCK under Article 6, shall immediately terminate and ARIAD
            shall no
            longer be subject to any obligations under Section 6.4.1, 3.1.2(b)  or
            Section 7.3.1(ii);

           

          (b)           the
            licenses and rights granted by MERCK to ARIAD, including, without limitation,
            all licenses granted to ARIAD pursuant to Sections 6.1.2(a), (b) and
            (c) shall
            survive and shall, except as limited by the rights of third parties,
            become,
            fully-paid and royalty-free (but otherwise remain subject to the same
            limitations set forth in those Sections and otherwise in this Agreement),
            with
            the unrestricted right to grant sublicenses, and shall apply to all
            Collaboration Compounds, and in the case of termination by ARIAD pursuant
            to
            Section 9.2.2,  MERCK shall continue to be subject to the obligations
            set forth in Section 6.4.2 for one (1) year following such
            termination.

           

          (c)           each
            Party shall promptly return all Confidential Information and Proprietary
            Materials of the other Party that are not subject to a continuing license
            hereunder; provided that each Party may retain one copy of the Confidential
            Information of the other Party in its archives solely for the purpose
            of
            establishing the contents thereof and ensuring compliance with its obligations
            hereunder; and

           

          (d)           upon
            request of ARIAD, MERCK shall promptly, and in any event within sixty
            (60) days
            after ARIAD’s request (which request may specify any or all of the actions in
            clauses (i) through (viii):  (i) grant to ARIAD an exclusive,
            worldwide, royalty-free, paid-up license under all Product Trademarks
            applicable
            to Products, if any, other than Product Trademarks incorporating the
            MERCK name
            or logo; (ii) transfer to ARIAD all of its right, title and interest
            in all
            Regulatory Filings, Drug Approval Applications and Regulatory Approvals
            then in
            its name applicable to Products, if any, and all Confidential Information
            Controlled by it as of the date of termination relied on by such Regulatory
            Filings, Drug Approval Applications and Regulatory Approvals; (iii) notify
            the
            applicable Regulatory Authorities and take any other action reasonably
            necessary
            to effect such transfer; (iv) provide ARIAD with copies all correspondence
            between MERCK and such Regulatory Authorities relating to such Regulatory
            Filings, Drug Approval Applications and Regulatory Approvals; (v) unless
            expressly prohibited by any Regulatory Authority, transfer sponsorship
            and
            control to ARIAD of all Clinical Trials of Products being conducted as
            of the
            effective date of termination and continue to conduct such trials after
            the
            effective date of termination to enable such transfer to be completed
            without
            interruption of any such trial, as follows: (A) in the case of termination
            by
            MERCK under Section 9.2.1, MERCK will not be obligated to continue to
            conduct
            such Clinical Trials beyond the effective date of termination, but until
            the
            effective date of termination, the cost of such Clinical Trials shall
            be a
            Development Cost, (B) in the case of termination by ARIAD under Section
            9.2.1(d), 9.2.2 or 9.2.3, MERCK will be obligated to continue to conduct
            such
            trials beyond the effective date of termination for up to twelve (12)
            months
            from the effective date of termination, with the cost of such Clinical
            Trials
            until the effective date of termination being a Development Cost and
            the cost of
            such Clinical Trials after the effective date of termination being at
            ARIAD’s
            expense, (C) in the case of termination by MERCK pursuant to Section
            9.2.1(b)(i), if ARIAD requests the transfer of sponsorship and control
            of
            Clinical Trials, MERCK will be obligated to continue to conduct such
            Clinical
            Trials beyond the effective date of termination for up to three (3) months
            from
            the effective date of termination unless MERCK concludes, on the advice
            of
            counsel, that for legal or ethical reasons MERCK  should not continue
            to conduct such trials, with the cost of such Clinical Trials being subject
            to
            Section 9.3.1(e), and (D) in the case of termination by MERCK and Section
            9.2.1(b)(ii), MERCK will be obligated to continue to conduct such trials
            beyond
            the effective date of termination for up to six (6) months from the effective
            date of termination, with the cost of such Clinical Trials being at ARIAD’s
            expense; (vi) cooperate with ARIAD, cause its Affiliates to cooperate
            with ARIAD
            and use Commercially Reasonable Efforts to require any Third Party with
            which
            MERCK has an agreement with respect to the conduct of Clinical Trials
            for
            Products or the Manufacture of Products (including, without limitation,
            agreements with contract manufacturing organizations, contract research
            organizations, clinical sites and investigators), to cooperate with ARIAD
            in
            order to accomplish the transfer to ARIAD of similar rights as held by
            MERCK
            under its agreements with such Third Parties; (vii) provide ARIAD at
            cost all
            supplies of Collaboration Compounds and Products in the possession of
            MERCK or
            any Affiliate or contractor of MERCK; and (viii) provide ARIAD with copies
            of
            all reports and data generated or obtained by MERCK or its Affiliates
            pursuant
            to this Agreement that relate to any Product that have not previously
            been
            provided to ARIAD.  The Parties will agree upon and implement a plan
            for the orderly transition of Development and Commercialization from
            MERCK to
            ARIAD in a manner consistent with Applicable Law and standards of ethical
            conduct of human Clinical Trials and will seek to replace all MERCK personnel
            engaged in any Development or Commercialization activities, in each case,
            as
            promptly as practicable.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -77-

              
                

              

            

            
              
              

            

             

          

          (e)           In
            the event this Agreement is terminated by MERCK pursuant to Section 9.2.1(b)(i),
            (i) if ARIAD agrees with MERCK that it is not advisable to continue Development
            or Commercialization of the Product as a result of a serious safety issue
            regarding the  use of the Product in a Cancer Indication, then the
            Parties will promptly wind-down and terminate all Development and
            Commercialization of the Product and all costs of such wind-down and
            termination
            will be Development Costs or Commercialization Expenses, as the case
            may be, to
            be borne in the case of any recall as set forth in Section 3.11 and in
            other
            cases as otherwise set forth in this Agreement, depending on the activity
            involved; and (ii) if ARIAD does not so agree, and requests the transfer
            of
            sponsorship and control of Clinical Trials pursuant to clause (v) of
            Section
            9.3.1(d), then the cost of such Clinical Trials for the shorter of (x)
            three (3)
            months or (y) until transfer of sponsorship and control thereof to
            ARIAD,  shall be a Development Cost, to be borne as otherwise set
            forth in this Agreement.  In all cases where ARIAD request the
            transfer of sponsorship and control of ongoing Clinical Trials, MERCK
            and ARIAD
            agree to work together to transfer sponsorship and control of any ongoing
            Clinical Trials to ARIAD  as soon as possible.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -78-

              
                

              

            

            
              
              

            

             

          

          9.3.2                      Termination
            by MERCK.  If this Agreement is
            terminated by MERCK pursuant to Section 9.2.2 or 9.2.3:

           

          (a)           a
            U.S. Commercialization Transfer shall take place and all licenses granted
            by
            ARIAD to MERCK pursuant to Section 6.1.1 (including any additional licenses
            required to Manufacture API as provided in the Supply Agreement), shall
            survive
            the termination in each case subject to MERCK’s continued payment of all
            milestone, royalty and other payments under and in accordance with this
            Agreement with respect thereto;

           

          (b)           all
            licenses granted by MERCK to ARIAD pursuant to Section 6.1.2(a) and 6.1.2(b)
            shall terminate, and in the case of termination by MERCK pursuant to
            Section
            9.2.2, ARIAD shall continue to be subject to the obligations set forth
            in
            Section 6.4.1 for one (1) year following such termination;

           

          (c)           the
            licenses granted by MERCK to ARIAD pursuant to Section 6.1.2(c) shall
            survive;

           

          (d)           MERCK
            shall have the right to Manufacture API and Product as set forth in the
            Supply
            Agreement;

           

          (e)           ARIAD’s
            rights to Co-Promote the Product under Section 3.13 shall terminate;
            and

           

          (f)           each
            Party shall promptly return all Confidential Information and Proprietary
            Materials of the other Party that are not subject to a continuing license
            hereunder; provided that each Party may retain one copy of the Confidential
            Information of the other Party in its archives solely for the purpose
            of
            establishing the contents thereof and ensuring compliance with its obligations
            hereunder.

           

          9.4           Surviving
            Provisions.  Termination or
            expiration of this Agreement for any reason shall be without prejudice
            to:

           

          (a)           Survival
            of rights specifically stated in this Agreement to survive, including
            without
            limitation as set forth in Section 9.3;

           

          (b)           the
            rights and obligations of the Parties provided in Sections 3.12.2(b),
            4.3.4,
            4.6.2, 4.6.3, 4.6.4, 4.6.5, 5.1, 5.4, 6.1.4(c), 6.1.4(d), 6.2 (only as
            applied
            to licenses that survive), 6.3, 8.1.1, 8.1.2 and 8.1.3 and Articles 1,
            7, 9, 10,
            11 and 12 (including all other Sections or Articles referenced in any
            such
            Section or Article), all of which shall survive such termination except
            as
            provided in this Article 9; and

           

          (c)           any
            other rights or remedies provided at law or equity which either Party
            may
            otherwise have.

           

          10.    
            REPRESENTATIONS AND
            WARRANTIES

           

          10.1           Mutual
            Representations and
            Warranties.  ARIAD and MERCK each
            represents and warrants to the other, as of the Effective Date, as
            follows:

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -79-

              
                

              

            

            
              
              

            

             

          

          10.1.1                      Organization.  It
            is a corporation duly organized, validly existing and in good standing
            under the
            laws of the jurisdiction of its organization, and has all requisite power
            and
            authority, corporate or otherwise, to execute, deliver and perform this
            Agreement.

           

          10.1.2                      Authorization.  The
            execution and delivery of this Agreement and the performance by it of
            the
            transactions contemplated hereby have been duly authorized by all necessary
            corporate action and will not violate (a) such Party’s certificate of
            incorporation or bylaws, (b) any agreement, instrument or contractual
            obligation
            to which such Party is bound in any material respect, (c) any requirement
            of any
            Applicable Law, or (d) any order, writ, judgment, injunction, decree,
            determination or award of any court or governmental agency presently
            in effect
            applicable to such Party.

           

          10.1.3                      Binding
            Agreement.  This Agreement is a legal,
            valid and binding obligation of such Party enforceable against it in
            accordance
            with its terms and conditions.

           

          10.1.4                      No
            Inconsistent Obligation.  It is not
            under any obligation, contractual or otherwise, to any Person that conflicts
            with or is inconsistent in any respect with the terms of this Agreement
            or that
            would impede the diligent and complete fulfillment of its obligations
            hereunder.

           

          10.2           Additional
            Representations of
            ARIAD.  ARIAD further represents and
            warrants to MERCK, as of the Effective Date, as follows:

           

          10.2.1                      Licensed
            Patent Rights and Licensed
            Technology.

           

          (a)           All
            Licensed Patent Rights listed on Schedule 2 are existing and, to ARIAD’s
            Knowledge, no issued patents which are part of Licensed Patent Rights
            listed on
            Schedule 2 are invalid or unenforceable.  All ARIAD Patent Rights that
            (a) contain one or more claims that cover any Collaboration Compound
            or Product
            (including its Manufacture or its formulation or a method of its delivery
            or of
            its use); and (b) are necessary for
            MERCK to exercise the licenses granted to it pursuant to Sections 6.1.1(a),
            (b)
            and ( c) that are existing on the Effective Date are listed on Schedule
            2.

           

          (b)           There
            are no claims, judgment or settlements against ARIAD pending, or to ARIAD’s
            Knowledge, threatened, that invalidate or seek to invalidate the Licensed
            Patent
            Rights.

           

          (c)           ARIAD
            has not previously assigned, transferred, conveyed or otherwise encumbered
            its
            right, title and interest in the Licensed Patent Rights and Licensed
            Technology
            in manner inconsistent with the terms hereof..

           

          (d)           To
            ARIAD's Knowledge, it is the sole and exclusive owner of the Licensed
            Patent
            Rights and Licensed Technology all of which are free and clear of any
            liens,
            charges and encumbrances, and no other person, corporate or other private
            entity, or governmental entity or subdivision thereof, has or shall have
            any
            claim of ownership whatsoever with respect to the Licensed Patent Rights
            and
            Licensed Technology.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -80-

              
                

              

            

            
              
              

            

             

          

          (e)           ARIAD
            has disclosed to MERCK all reasonably relevant information Known to ARIAD
            regarding the Licensed Patent Rights and Licensed Technology.

           

          (f)           ARIAD
            has disclosed to MERCK the existence of any patent opinions related to
            the
            Licensed Patent Rights and Licensed Technology.

           

          (g)           There
            are no License Fees (as defined in Schedule 3) that will be required
            to be paid
            to a Third Party as the result of inclusion of AP23573 in the Product
            that arise
            under any agreement to which ARIAD is a party.

           

          (h)           
            To ARIAD’s Knowledge, there are no License Fees that will be required to be paid
            to a Third Party as the result of inclusion of AP23573 in the
            Product.

           

          10.2.2                      
            Intellectual Property.  (a) To ARIAD's Knowledge, it has
            sufficient legal and/or beneficial title under its Licensed Patents and
            Licensed
            Technology necessary to grant the rights contained in and to carry out
            its
            obligations under this Agreement; and (b) to ARIAD's Knowledge, the development,
            Manufacture, use or sale of AP23573, and Clinical Product in its current
            form,
            does not infringe any valid and enforceable patents issued as of the
            Effective
            Date owned by any Third Party.

           

          11.    
            INDEMNIFICATION

           

          11.1           Indemnification
            of MERCK by
            ARIAD.  ARIAD shall indemnify,
            defend and hold harmless MERCK, its Affiliates, their respective directors,
            officers, employees and agents, and their respective successors, heirs
            and
            assigns (collectively, the “MERCK Indemnitees”), against all liabilities,
            damages, losses and expenses (including, without limitation, reasonable
            attorneys’ fees and expenses of litigation) (collectively, “Losses”) incurred by
            or imposed upon the MERCK Indemnitees, or any of them, as a direct result
            of
            claims, suits, actions, demands or judgments of Third Parties, including,
            without limitation, personal injury and product liability claims (collectively,
            “Claims”), arising out of the Manufacture, use or sale by ARIAD or any of its
            Affiliates, sublicensees, distributors or agents of any Product, except
            with
            respect to any Claim or Losses that result from a breach of this Agreement
            or
            the Supply Agreement by, or the gross negligence or willful misconduct
            of,
            MERCK; provided that, with respect to any Claim for which ARIAD has an
            obligation to any MERCK Indemnitee pursuant to this Section 11.1 and
            MERCK has
            an obligation to any ARIAD Indemnitee pursuant to Section 11.2, each
            Party shall
            indemnify each of the other Party’s Indemnitees for its Losses to the extent of
            its responsibility, relative to the other Party, for the facts underlying
            the
            Claim.

           

          11.2           Indemnification
            of ARIAD by
            MERCK. MERCK shall indemnify, defend and
            hold
            harmless ARIAD, its Affiliates, their respective directors, officers,
            employees
            and agents, and their respective successors, heirs and assigns (collectively,
            the “ARIAD Indemnitees”), against all Losses incurred by or imposed upon the
            ARIAD Indemnitees, or any of them, as a direct result of Claims arising
            out of
            the Manufacture, use or sale by MERCK or any of its Affiliates, sublicensees,
            distributors or agents of any Product, except with respect to any Claim
            or
            Losses that result from a breach of this Agreement or the Supply Agreement
            by,
            or the gross negligence or willful misconduct of, ARIAD; provided that
            with
            respect to any Claim for which ARIAD has an obligation to any MERCK Indemnitee
            pursuant to Section 11.1 and MERCK has an obligation to any ARIAD Indemnitee
            pursuant to this Section 11.2, each Party shall indemnify each of the
            other
            Party’s Indemnitees for its Losses to the extent of its responsibility, relative
            to the other Party, for the facts underlying the Claim.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -81-

              
                

              

            

            
              
              

            

             

          

          11.3           Conditions
            to
            Indemnification.  A Person seeking
            recovery under this Article 11 (the “Indemnified Party”) in respect of a Claim
            shall give prompt notice of such Claim to the Party from which indemnification
            is sought (the “Indemnifying Party”) and, provided that the Indemnifying Party
            is not contesting its obligation under this Article 11, shall permit
            the
            Indemnifying Party to control any litigation relating to such Claim and
            the
            disposition of such Claim; provided that the Indemnifying Party shall
            (a) act
            reasonably and in good faith with respect to all matters relating to
            the
            settlement or disposition of such Claim as the settlement or disposition
            relates
            to such Indemnified Party and (b) not settle or otherwise resolve such
            claim
            without the prior written consent of such Indemnified Party (which consent
            shall
            not be unreasonably withheld, conditioned or delayed).  Each
            Indemnified Party shall cooperate with the Indemnifying Party in its
            defense of
            any such Claim in all reasonable respects and shall have the right to
            be present
            in person or through counsel at all legal proceedings with respect to
            such
            Claim.

           

          11.4           Indemnification
            Cap.  The total aggregate liability of
            the Indemnifying Party to the Indemnified Party under this Article 11,
            or under
            the Supply Agreement or any other basis of action (including without
            limitation
            common law tort and indemnity law) arising out of this Agreement, shall
            not
            exceed [***] dollars ($[***]); provided, however, failure of either Party
            to pay
            amounts due hereunder other than for indemnification (including, without
            limitation, payments due under Article 4 hereof, shall not be subject
            to the
            limitation of liability contained in this Section 11.4.

           

          11.5           Warranty
            Disclaimer.  EXCEPT AS OTHERWISE
            EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY
            WITH
            RESPECT TO ANY TECHNOLOGY, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER
            OF
            THIS AGREEMENT AND EACH PARTY HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS
            OR
            IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY,
            FITNESS
            FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.

           

          11.5.1                      No
            Warranty of Success.  Nothing contained
            in this Agreement shall be construed as a warranty, either express or
            implied,
            on the part of either Party that (a) the Development Program will yield
            a
            Product or otherwise be successful or meet its goals, time lines or budgets,
            or
            (b) the outcome of the Development Program will be commercially exploitable
            in
            any respect.

           

          11.6           Limited
            Liability.  NOTWITHSTANDING ANYTHING
            TO THE CONTRARY IN THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE
            OTHER
            PARTY OR ANY OF ITS AFFILIATES FOR (I) ANY SPECIAL, PUNITIVE, INDIRECT,
            INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST
            PROFITS
            OR LOST REVENUES, OR (II) COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY
            OR
            SERVICES, WHETHER UNDER ANY CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY
            OR
            OTHER LEGAL OR EQUITABLE THEORY.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -82-

              
                

              

            

            
              
              

            

             

          

          12.    
            MISCELLANEOUS

           

          12.1           Arbitration.  In
            the event of any dispute, difference or question arising between the
            Parties in
            connection with this Agreement, the construction thereof, or the rights,
            duties
            or liabilities of either Party hereunder (each, an “Arbitration Matter”), the
            arbitration proceeding shall be conducted in accordance with the Commercial
            Arbitration Rules and Supplementary Procedures for Large Complex Disputes
            of the
            AAA and otherwise as follows:

           

          (a)           The
            arbitration shall be conducted by a panel of three (3) persons experienced
            in
            the pharmaceutical or biotechnology business who are independent of both
            Parties.  Within thirty (30) days after initiation of arbitration,
            each Party shall select one person to act as arbitrator and the two
            Party-selected arbitrators shall select a third arbitrator within thirty
            (30)
            days of their appointment.  If a Party fails to select an arbitrator
            or the arbitrators selected by the Parties are unable or fail to agree
            upon the
            third arbitrator, such arbitrator shall be appointed by the AAA.  The
            place of arbitration shall be Boston, Massachusetts, if the notice of
            arbitration is brought by MERCK, and New York City, New York if the notice
            of
            arbitration is brought by ARIAD, and all proceedings and communications
            shall be
            in English.

           

          (b)           Either
            Party may apply to the arbitrators for interim injunctive relief until
            the
            arbitration decision is rendered or the Arbitration Matter is otherwise
            resolved. Either Party also may, without waiving any right or remedy
            under this
            Agreement, seek from any court having jurisdiction any injunctive or
            provisional
            relief necessary to protect the rights or property of that Party pending
            resolution of the Arbitration Matter pursuant to this Section
            12.1.  The arbitrators shall have no authority to award punitive or
            any other type of damages not measured by a Party’s compensatory
            damages.  Each Party shall bear its own costs and expenses and
            attorneys’ fees, and the Party that does not prevail in the arbitration
            proceeding shall pay the arbitrators’ fees and any administrative fees of
            arbitration.

           

          (c)           Except
            to the extent necessary to confirm an award or decision or as may be
            required by
            Applicable Laws, neither a Party nor an arbitrator may disclose the existence,
            content, or results of an arbitration without the prior written consent
            of both
            Parties.  In no event shall arbitration be initiated after the date
            when commencement of a legal or equitable proceeding based on the Arbitration
            Matter would be barred by the applicable New York statute of
            limitations.

           

          (d)           The
            Parties agree that, in the event of an Arbitration Matter involving the
            alleged
            breach of this Agreement (including, without limitation, whether a Party
            has
            satisfied its diligence obligations hereunder), neither Party may terminate
            this
            Agreement until resolution of the Arbitration Matter pursuant to this
            Section
            12.1, and any time period for cure will only commence after such
            resolution.

           

          (e)           The
            Parties hereby agree that any disputed performance or suspended performance
            pending the resolution of an Arbitration Matter that the arbitrators
            determine
            to be required to be performed by a Party must be completed within a
            reasonable
            time period following the final decision of the arbitrators.

           

          
            
              Portions
                of this Exhibit were omitted and have been filed separately with
                the Secretary
                of the Commission pursuant to the Company’s application requesting confidential
                treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
                as
                amended.

              
              

            

            
              -83-

              
                

              

            

            
              
              

            

             

          

          (f)           The
            Parties hereby agree that any monetary payment to be made by a Party
            pursuant to
            a decision of the arbitrators shall be made in United States dollars,
            free of
            any tax or other deduction.

           

          (g)           The
            Parties further agree that the decision of the arbitrators shall be the
            sole,
            exclusive and binding remedy between them regarding determination of
            Arbitration
            Matters presented.

           

          12.2           Notices.  All
            notices and communications shall be in writing and delivered personally
            or by
            internationally-recognized overnight express courier providing evidence
            of
            delivery or mailed via certified mail, return receipt requested, addressed
            as
            follows, or to such other address as may be designated from time to
            time:

           

          
            If
              to
              MERCK:

          

           

          
            
              	 	
                      Merck
                        & Co., Inc.

                      One
                        Merck Drive

                      P.O.
                        Box 100, WS3A-65

                      Whitehouse
                        Station, NJ 08889-0100

                      Attention:
                        Office of Secretary

                      Facsimile
                        No.: (908)735-1246

                    
	 	 
	
                      And

                    	
                      Merck
                        & Co., Inc.

                      One
                        Merck Drive

                      Attention:
                        Chief Licensing Officer

                      P.O.
                        Box 100, WS2A-30

                      Whitehouse
                        Station, NJ 08889-0100

                      Facsimile:
                        (908)735-1214

                    

            

          

        

      

    

     

    
      
        	
                If
                  to ARIAD

              	
                ARIAD
                  Pharmaceuticals, Inc.

              
	 	
                26
                  Landsdowne Street

              
	 	
                Cambridge,
                  MA  02139

              
	 	
                Tel:  (617)
                  494-0400

              
	 	
                Fax:  (617)
                  494-8144

              
	 	
                Attention:  Chief
                  Executive Officer

              
	 	
                      and
                  Chief Legal Officer

              
	 	 
	 	
                ARIAD
                  Gene Therapeutics, Inc.

              
	 	
                26
                  Landsdowne Street

              
	 	
                Cambridge,
                  MA  02139

              
	 	
                Tel:  (617)
                  494-0400

              
	 	
                Fax:  (617)
                  494-8144

              
	 	
                Attention:  Chief
                  Executive Officer

              

      

      

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -84-

          
            

          

        

        
          
          

        

         

      

      
        	 	
                With
                  a copy to:

              
	 	
                Mintz,
                  Levin, Cohn, Ferris, Glovsky

              
	 	
                and
                  Popeo, P.C.

              
	 	
                One
                  Financial Center

              
	 	
                Boston,
                  Massachusetts  02111

              
	 	
                Attention:  Jeffrey
                  M. Wiesen, Esq.

              
	 	
                Tel:  (617)
                  542-6000

              
	 	
                Fax:  (617)
                  542-2241

              

      

    

     

    
      In
        addition, all notices to the JSC, JDC, JMC or JCC shall be sent to each Party’s
        designated members of such committees at such Party’s address stated above or to
        such other address as such Party may designate by written notice given in
        accordance with this Section 12.2.

       

      Except
        as
        otherwise expressly provided in this Agreement or mutually agreed in writing,
        any notice, communication or document (excluding payment) required to be
        given
        or made shall be deemed given or made and effective upon actual receipt or,
        if
        earlier, (a) three (3) business days after deposit with an
        internationally-recognized overnight express courier with charges prepaid,
        or
        (b) five (5) business days after mailed by certified, registered or regular
        mail, postage prepaid, in each case addressed to a Parties at its address
        stated
        above or to such other address as such Party may designate by written notice
        given in accordance with this Section 12.2.

       

      12.3           Governing
        Law.  This Agreement shall be
        governed by and construed in accordance with the laws of
        the State of New York (U.S.A.),
        without regard to the application of principles of conflicts of
        law.

       

      12.4           Binding
        Effect.  This Agreement shall be
        binding upon and inure to the benefit of the Parties and their respective
        legal
        representatives, successors and permitted assigns.

       

      12.5           Headings.  Section
        and subsection headings are inserted for convenience of reference only and
        do
        not form a part of this Agreement.

       

      12.6           Counterparts.  This
        Agreement may be executed simultaneously in two or more counterparts, each
        of
        which shall be deemed an original and both of which, together, shall constitute
        a single agreement.

       

      12.7           Amendment;
        Waiver.  This Agreement may be
        amended, modified, superseded or canceled, and any of the terms of this
        Agreement may be waived, only by a written instrument executed by each Party
        or,
        in the case of waiver, by the Party or Parties waiving
        compliance.  The delay or failure of either Party at any time or times
        to require performance of any provisions shall in no manner affect the rights
        at
        a later time to enforce the same.  No waiver by either Party of any
        condition or of the breach of any term contained in this Agreement, whether
        by
        conduct, or otherwise, in any one or more instances, shall be deemed to be,
        or
        considered as, a further or continuing waiver of any such condition or of
        the
        breach of such term or any other term of this Agreement.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -85-

          
            

          

        

        
          
          

        

         

      

      12.8           No
        Third Party
        Beneficiaries.  Except as set forth
        in Sections 11.1 and 11.2, no Third Party (including, without limitation,
        employees of either Party) shall have or acquire any rights by reason of
        this
        Agreement.

       

      12.9           Purposes
        and
        Scope.  The Parties hereto
        understand and agree that this Collaboration is limited to the activities,
        rights and obligations as set forth in this Agreement and the Supply
        Agreement.  Nothing in this Agreement shall be construed (a) to create
        or imply a general partnership between the Parties, (b) to make either Party
        the
        agent of the other for any purpose, (c) to alter, amend, supersede or vitiate
        any other arrangements between the Parties with respect to any subject matters
        not covered hereunder, (d) to give either Party the right to bind the other,
        (e)
        to create any duties or obligations between the Parties except as expressly
        set
        forth herein, or (f) to grant any direct or implied licenses or any other
        right
        other than as expressly set forth herein.

       

      12.10                      Assignment
        and Successors: Effect of Acquisition of
        ARIAD.  Neither this Agreement nor any
        obligation of a Party hereunder may be assigned by either Party without the
        consent of the other which shall not be unreasonably withheld, except that
        each
        Party may assign this Agreement and the rights, obligations and interests
        of
        such Party, (i) in whole or in part, to any of its Affiliates, or (ii) in
        whole,
        but not in part, to any purchaser of all of its assets or all of its assets
        to
        which this Agreement relates or shares representing a majority of its common
        stock voting rights or to any successor corporation resulting from any merger,
        consolidation, share exchange or other similar transaction.  In the
        event of any proposed acquisition of ARIAD Pharmaceuticals, Inc., whether by
        purchase of assets or shares, share exchange, merger or consolidation or
        similar
        transaction (an "Acquisition") ARIAD Pharmaceuticals, Inc. may give notice
        thereof to MERCK in advance of the consummation thereof.  In the event
        of an Acquisition of ARIAD Pharmaceuticals, Inc., MERCK shall have the option,
        which shall be exercised by written notice to ARIAD Pharmaceuticals, Inc.
        at
        least ten (10) days prior to the consummation of the Acquisition if ARIAD
        Pharmaceuticals, Inc. has given notice thereof to MERCK at least thirty (30)
        days prior to such consummation or within thirty (30) days after the
        consummation of the Acquisition if ARIAD Pharmaceuticals, Inc. has not given
        such notice, (a)  to elect to be the Responsible Party for Development
        the Products throughout the Territory, (b) to require that the [***] (other
        than
        [***]) and [***] of Products throughout the Territory, and (c) to require
        ARIAD
        to take the actions set forth in clauses (B) through (G) of Section 3.4(b)(ii),
        but this Agreement shall otherwise not be changed by an
        Acquisition.  For clarity, if a U.S. Commercialization Transfer has
        not taken place prior to the Acquisition, the Acquisition will not be grounds
        for MERCK to require a U.S. Commercialization Transfer.

       

      12.11                      Force
        Majeure.  Neither
        MERCK nor ARIAD shall be liable for failure of or delay in performing
        obligations set forth in this Agreement, and neither shall be deemed in breach
        of its obligations, if such failure or delay is due to a Force
        Majeure.  In event of such Force Majeure, the Party affected shall use
        reasonable efforts to cure or overcome the same and resume performance of
        its
        obligations hereunder.

       

      12.12                      Interpretation.  The
        Parties hereto acknowledge and agree that: (a) each Party and its counsel
        reviewed and negotiated the terms and provisions of this Agreement and have
        contributed to its revision; (b) the rule of construction to the effect that
        any
        ambiguities are resolved against the drafting Party shall not be employed
        in the
        interpretation of this Agreement; and (c) the terms and provisions of this
        Agreement shall be construed fairly as to each Party and not in a favor of
        or
        against either Party, regardless of which Party was generally responsible
        for
        the preparation of this Agreement.  In addition, unless a context
        otherwise requires, wherever used, the singular shall include the plural,
        the
        plural the singular, the use of any gender shall be applicable to all genders,
        the word “or” is used in the inclusive sense (and/or) and the word “including”
is used without limitation and shall mean “including without
        limitation”.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -86-

          
            

          

        

        
          
          

        

         

      

      12.13                      Integration;
        Severability.  This Agreement and
        the Supply Agreement set forth  the entire agreement with respect to
        the subject matter hereof and thereof and supersede all other agreements
        and
        understandings between the Parties with respect to such subject
        matter.  If any provision of this Agreement is or becomes invalid or
        is ruled invalid by any court of competent jurisdiction or is deemed
        unenforceable, it is the intention of the Parties that the remainder of the
        Agreement shall not be affected.

       

      12.14                      Further
        Assurances.  Each of ARIAD and MERCK
        agrees to duly execute and deliver, or cause to be duly executed and delivered,
        such further instruments and do and cause to be done such further acts and
        things, including, without limitation, the filing of such additional
        assignments, agreements, documents and instruments, as the other Party may
        at
        any time and from time to time reasonably request in connection with this
        Agreement or to carry out more effectively the provisions and purposes of,
        or to
        better assure and confirm unto such other Party its rights and remedies under,
        this Agreement.

       

      12.15                      Authority
        of ARIAD Pharmaceuticals,
        Inc.  ARIAD Gene Therapeutics, Inc. hereby appoints
        ARIAD Pharmaceuticals, Inc. as its exclusive agent for all purposes of this
        Agreement and the Collaboration and hereby instructs MERCK to deal solely
        with
        ARIAD Pharmaceuticals, Inc. hereunder.

       

      12.16                      HSR
        Filing.  Each
        Party shall, within fifteen (15) days after the Effective Date (or such later
        time as the Parties mutually agree in writing) file with the Federal Trade
        Commission any filing required under the HSR Act, in connection with the
        transactions contemplated hereby. The Parties shall cooperate with each other
        to
        the extent necessary in the preparation of any such filing.  Each
        party shall be responsible for such Party's costs, expenses, and filing fees
        associated with any such filing.  Neither Party shall be required in
        connection with any filing under the HSR Act to resort to or respond to
        litigation or to agree to hold separate or divest any business or
        assets.  If a filing under the HSR Act is required in connection with
        the transactions contemplated by this Agreement, then this Agreement will
        not
        become effective until the waiting period required under the HSR Act with
        respect to such filing has expired or been terminated; it being understood
        that
        the Effective Date shall remain as specified for all purposes hereunder once
        the
        Agreement becomes effective.

       

      [Remainder
        of page intentionally left blank.]

       

      

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -87-

          
            

          

        

        
          
          

        

      

       

      

       

      IN
        WITNESS
        WHEREOF, the Parties have caused this Agreement to be executed by their duly
        authorized representatives.

       

      
        	 	ARIAD
                PHARMACEUTICALS, INC.	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ Harvey
                J. Berger	 
	 	 	
                Harvey
                  J. Berger

              	 
	 	 	
                Chairman
                  and Chief Executive Officer 

              	 

      

       

       

      
        	 	ARIAD
                GENE THERAPEUTICS, INC.	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ Harvey
                Berger	 
	 	 	Harvey
                J. Berger	 
	 	 	Chairman
                and Chief Executive Officer	 
	 	 	 	 

      

      

      

      
        	 	MERCK
                & CO., INC.	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ Richard
                Clark	 
	 	 	Richard
                T. Clark	 
	 	 	Chairman,
                President and CEO	 
	 	 	 	 

      

       

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -88-

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

       

      Form
        of Promissory Note

       

      Promissory
        Note

       

      

      UP
        TO

       

      
        
          	
                  $200,000,000

                	
                   Date:  [date
                    of first Advance]

                

        

      

       

                 For
        value received, ARIAD PHARMACEUTICALS, INC. and ARIAD GENE THERAPEUTICS,
        INC.,
        both Delaware corporations (collectively “ARIAD”), intending to be legally
        bound, jointly and severally promise to pay to the order of Merck & Co.,
        Inc., a corporation organized under the laws of New Jersey (“MERCK”), at the
        time and in the manner set forth herein, the aggregate unpaid principal amount
        of all advances by MERCK to ARIAD from time to time as provided in Section
        1
        below (the “Advances”), as such repayable amount may be reduced pursuant to
        Subsection 3(a) and Section 4 hereof.  ARIAD further promises to pay
        to the order of MERCK interest on the unpaid principal amount hereof from
        time
        to time outstanding in accordance with the terms and at the rate per annum
        set
        forth below.

       

                 This
        promissory note (the “Promissory Note”) evidences the advances contemplated by
        and referenced in Section 4.2 of that certain Collaboration Agreement between
        MERCK and ARIAD dated as of July 11, 2007 (as the same may be amended,
        supplemented or modified from time to time, the “Collaboration Agreement”), and
        is entitled to the rights and benefits described therein.  Capitalized
        terms not otherwise defined herein shall have the respective meanings ascribed
        to them in the Collaboration Agreement.

       

                 1.           Development
        Advances.

       

                 Subject
        to the conditions precedent set forth in Section 8 hereof and so long as
        no
        Event of Default (defined in Section 9) or an event which, with the giving
        of
        notice or the passage of time, or both, would constitute an Event of Default
        (a
        "Potential Default") has occurred and is continuing, and no material breach
        of
        the Collaboration Agreement by ARIAD has occurred and is continuing, ARIAD
        may
        request, and upon such request MERCK will advance up to an aggregate principal
        amount of Two Hundred Million Dollars ($200,000,000) in the form of Development
        Cost Advances with respect to ARIAD’s fifty percent (50%) share of Development
        Costs otherwise payable pursuant to Section 3.12.1 of the Collaboration
        Agreement, including any reimbursement by ARIAD to MERCK of one-half of certain
        ROW Development Costs pursuant to the penultimate sentence of Section
        3.12.1.  If ARIAD desires an Advance under this Section 1, it will
        give notice to MERCK to such effect setting forth the amount of the Advance
        (which shall not exceed [***] percent ([***]%) of the total Development Costs
        incurred by ARIAD and MERCK in the [***]) within the ten (10) day period
        following the distribution of the written report of the JDC of the calculation
        of the net amount owed by one Party to the other under Section 3.12.2(a)
        of the
        Collaboration Agreement for a given Calendar Quarter.  Upon receipt of
        such notice, MERCK shall not be entitled to receive the amount, if
        any,  otherwise payable by ARIAD to MERCK up to the requested
        Advance,  and to the extent the requested Advance exceeds the amount
        payable by ARIAD to MERCK, MERCK shall pay to ARIAD such excess within
        forty-five (45) days of receipt of ARIAD’s request.  MERCK shall
        reflect such non-payment by ARIAD and/or payment by MERCK to ARIAD as an
        Advance
        in the Advance Account (as described in Section 5 below), the repayment
        obligation of which is evidenced by, and subject to the terms of, this
        Promissory Note.  The effective date of each credit to the Advance
        Account as provided in this Section 1 shall be an “Advance Date.”

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -89-

          
            

          

        

        
          
          

        

         

      

                 2.           Interest
        Rate.  Each Advance shall bear interest on the outstanding
        principal amount thereof from the Advance Date until paid at a rate per annum
        (based on a year of 360 days and actual days elapsed) equal to the [***],
        adjusted quarterly on the first day of each calendar quarter, starting with
        the
        rate applicable on the first day of the calendar quarter in which the Advance
        is
        made.

       

                 3.           Payment.

       

                            (a)           Principal
        and all accrued and unpaid interest due and payable under this Promissory
        Note
        shall be paid by ARIAD through (i) the offset by MERCK of [***] percent ([***]%)
        of the amount of milestone payments otherwise payable to ARIAD pursuant to
        Section 4.4 of the Collaboration Agreement and [***] percent ([***]%) of
        the
        amount of royalty payments otherwise payable to ARIAD pursuant to Section
        4.6 of
        the Collaboration Agreement, in each case payable after the first Advance
        Date,
        and (ii) payment by ARIAD of [***] percent ([***]%) of the ARIAD Revenue
        Sharing
        Percentage of Operating Income retained by ARIAD after payment to MERCK of
        the
        MERCK Revenue Sharing Percentage of Operating Income (the amounts in clauses
        (i)
        and (ii) being referred to herein as the “Payment Sources”).  Payments
        under clause (ii) shall be made with the payments to MERCK of the MERCK Revenue
        Sharing Percentage.  Payments under this Promissory Note will be
        applied first to accrued interest and then to principal.

       

      (b)           In
        the event that any Advances or accrued interest thereon remain outstanding
        on
        the [***] of the first Advance Date (the “Maturity Date”), all such amounts
        shall automatically become immediately due and payable. MERCK’s obligation to

      make
        Advances to ARIAD shall cease on the Maturity Date.

       

                 4.           Prepayment.  ARIAD
        may prepay any principal or interest under this Promissory Note at any time
        without premium or penalty.

       

                 5.           Advance
        Account.  MERCK shall record in an account (the “Advance Account”)
        on its books and records the amount of each Advance, the interest rate
        applicable, all payments or other credits of principal and interest thereon
        and
        the principal balance thereof from time to time outstanding.  MERCK
        shall furnish ARIAD with a statement of the Advance Account (the “Statement”),
        showing all entries therein within thirty (30) days after the end of each
        calendar quarter.  If ARIAD disagrees with MERCK’s Statement, it will
        notify MERCK in writing and, if ARIAD and MERCK do not resolve the matter
        within
        sixty (60) days of ARIAD’s notice, the Parties will resolve the matter in
        accordance with Section 12.1 of the Collaboration Agreement.  Any
        failure to so record or any error in doing so shall not, however, limit or
        otherwise affect the obligation of ARIAD hereunder to pay any amount owing
        with
        respect to the Advances, which obligation shall be based on actual Advances,
        interest charges and payments, and not on the Advance Account, or provide
        the
        basis for any claim against MERCK.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -90-

          
            

          

        

        
          
          

        

         

      

                 6.           [***].  In
        the event the outstanding amount of the Advances and accrued interest thereon
        exceeds [***] Dollars ($[***]) as of the end of any calendar quarter, MERCK
        shall notify ARIAD in writing, and ARIAD may, within thirty (30) days of
        such
        notice, make a payment to reduce the amount below [***] dollars
        ($[***]).  If ARIAD does not make such payment, then ARIAD will be
        deemed, without any further action, [***].

       

      7.           Recovery
        of Costs and Expenses.  ARIAD agrees to pay, in addition to all
        other sums payable hereunder, the reasonable costs and expenses incurred
        by
        MERCK in connection with all actions taken to enforce collection of this
        Promissory Note when due, whether by legal proceedings or otherwise, including
        without limitation reasonable attorneys’ fees and court costs.

       

      8.           Conditions
        Precedent To The Advances.  The obligation of MERCK to make any
        Advance hereunder is subject to the satisfaction of each of the following
        conditions precedent:

       

      
        
          	 	
                  (a)

                	
                  ARIAD
                    shall have paid an aggregate of at least One Hundred Fifty Million
                    Dollars
                    ($150,000,000) in Development Costs.

                
	 	 	 
	 	
                  (b)

                	
                  A
                    Product shall have obtained [***]

                
	 	 	 
	 	
                  (c)

                	
                  ARIAD
                    shall not have [***]

                
	 	 	 
	 	
                  (d)

                	
                  No
                    condition or event shall exist which constitutes an Event of
                    Default or
                    Potential Default, and no material breach of the Collaboration
                    Agreement
                    by ARIAD has occurred and is continuing.

                
	 	 	 
	
                  9.

                	
                  Events
                    of Default.  The occurrence of any of the events described
                    below shall constitute an “Event of Default:” 

                
	 	 
	 	
                  (a)

                	
                  ARIAD
                    fails to make any payment of principal or interest under this
                    Promissory
                    Note when due; or

                
	 	 	 
	 	
                  (b)

                	
                  ARIAD
                    makes an assignment for the benefit of creditors, appoints or
                    suffers
                    appointment of a receiver or trustee over all or substantially
                    all of its
                    property, or files a petition under any bankruptcy or insolvency
                    act or
                    

                
	has
                  any such petition filed against it which is not discharged within
                  sixty
                  (60) days of the filing thereof.
	 	 	 
	
                  10.

                	
                  Remedies.

                	 

        

      

                          

      (a)           Upon
        the occurrence of an Event of Default described in Subsection
        9(a) above which remains uncured for thirty (30) days
        after written notice from MERCK to ARIAD describing such Event of Default,
        then
        this Promissory Note and all sums due hereunder shall automatically become
        due
        and payable.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -91-

          
            

          

        

        
          
          

        

         

      

      (b)           Upon
        the occurrence of an Event of Default described in Subsection 9(b) above,
        all
        principal and interest under this Promissory Note shall automatically become
        due
        and payable.

       

      (c)           In
        addition to the rights and remedies specifically set forth herein, but subject
        to the limitations on repayment set forth herein, MERCK shall be entitled
        to
        such other rights and remedies as are available at law or in
        equity.  The rights and remedies of MERCK hereunder are cumulative and
        not exclusive of any rights or remedies that MERCK would otherwise
        have.  No single or partial exercise of any such right or remedy by
        MERCK, and no discontinuance of steps to enforce any such right or remedy,
        shall
        preclude any further exercise thereof or of any other right or remedy of
        MERCK.

       

      11.           Payment
        on Termination of Collaboration Agreement or Upon Acquisition of
        ARIAD.

       

      (a)           Upon
        the occurrence of an Acquisition of ARIAD Pharmaceuticals, Inc., all principal
        and interest outstanding on the date of the Acquisition shall become due
        and
        payable, and shall be paid within ten (10) days of the consummation of the
        Acquisition.

       

      (b)           Upon
        termination of the Collaboration Agreement, ARIAD shall pay to MERCK, on
        the
        first day of each calendar quarter following such termination, all accrued
        interest through such date plus one-twelfth (1/12) of the principal outstanding
        on the date of termination, until all principal and interest are paid in
        full.

       

                 12.           Miscellaneous.

       

                            (a)           All
        notices and communications shall be in writing and delivered personally or
        by
        internationally-recognized overnight express courier providing evidence of
        delivery or mailed via certified mail, return receipt requested, addressed
        as
        follows, or to such other address as may be designated from time to
        time:

       

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -92-

          
            

          

        

        
          
          

        

      

    

     

    
      If
        to
        MERCK:

       

      
        	 	
                Merck
                  & Co., Inc.

                One
                  Merck Drive

                P.O.
                  Box 100, WS3A-65

                Whitehouse
                  Station, NJ 08889-0100

                Attention:
                  Office of Secretary

                Facsimile
                  No.: (908)735-1246

              
	 	 
	
                And

              	
                Merck
                  & Co., Inc.

                One
                  Merck Drive

                Attention:
                  Chief Licensing Officer

                P.O.
                  Box 100, WS2A-30

                Whitehouse
                  Station, NJ 08889-0100

                Facsimile:
                  (908)735-1214

              

      

      

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -93-

          
            

          

        

        
          
          

        

         

      

      If
        to
        ARIAD

       

    

    
      
        	 	
                ARIAD
                  Pharmaceuticals, Inc.

              
	 	
                26
                  Landsdowne Street

              
	 	
                Cambridge,
                  MA  02139

              
	 	
                Tel:  (617)
                  494-0400

              
	 	
                Fax:  (617)
                  494-8144

              
	 	
                Attention:  Chief
                  Executive Officer

              
	 	
                      and
                  Chief Legal Officer

              
	 	 
	 	
                ARIAD
                  Gene Therapeutics, Inc.

              
	 	
                26
                  Landsdowne Street

              
	 	
                Cambridge,
                  MA  02139

              
	 	
                Tel:  (617)
                  494-0400

              
	 	
                Fax:  (617)
                  494-8144

              
	 	
                Attention:  Chief
                  Executive Officer

              
	 	 
	 	
                With
                  a copy to:

              
	 	 
	 	
                Mintz,
                  Levin, Cohn, Ferris, Glovsky

              
	 	
                and
                  Popeo, P.C.

              
	 	
                One
                  Financial Center

              
	 	
                Boston,
                  Massachusetts  02111

              
	 	
                Attention:  Jeffrey
                  M. Wiesen, Esq.

              
	 	
                Tel:  (617)
                  542-6000

              
	 	
                Fax:  (617)
                  542-2241

              

      

    

     

    (b)           To
      the extent permitted by applicable law, ARIAD waives diligence, presentment
      for
      payment, protest and notice of nonpayment, dishonor, default and
      acceleration.

    
       

                            (c)           This
        Promissory Note may be amended only by a writing signed by ARIAD and
        MERCK.

       

                            (d)           The
        due performance or observance by ARIAD of its obligations hereunder shall
        not be
        waived, and the rights and remedies of MERCK hereunder shall not be affected,
        by
        any course of dealing or performance or by any delay or failure of MERCK
        in
        exercising any such right or remedy.  The due performance or
        observance by ARIAD of its obligations hereunder may be waived only by a
        writing
        signed by MERCK, and any such waiver shall be effective only to the extent
        specifically set forth in such writing.

       

                            (e)           The
        successors and permitted assigns of ARIAD shall be bound by the terms of
        this
        Promissory Note; the rights and privileges of MERCK under this Promissory
        Note
        shall inure to the benefit of its successors and assigns.  ARIAD may
        not assign or delegate its rights or obligations hereunder except to a party
        to
        whom ARIAD assigns the Collaboration Agreement in accordance with Section
        12.10
        thereof.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -94-

          
            

          

        

        
          
          

        

         

      

                            (f)           This
        Promissory Note shall be governed by and construed and enforced in accordance
        with the laws of the State of New York, without regard to the application
        of
        principles of conflicts of laws.

       

                            (g)           
        In the event of any dispute, difference or question arising between MERCK
        and
        ARIAD in connection with this Promissory Note, the construction thereof,
        or the
        rights, duties or liabilities of either MERCK or ARIAD, then such dispute
        shall
        be resolved in accordance with the procedures set forth in Section 12.1 of
        the
        Collaboration Agreement.

       

                 13.           SUBORDINATION.  MERCK’S
        RIGHT TO RECEIVE CASH PAYMENTS UNDER THE TERMS OF THIS INSTRUMENT, BOTH
        PRINCIPAL AND INTEREST, AND ALL OTHER INDEBTEDNESS EVIDENCED HEREBY, IS
        SUBORDINATE, SUBJECT AND MADE JUNIOR IN RIGHT OF PAYMENT TO THE PRIOR RIGHTS
        OF
        THE PAYEES OF ARIAD’S (I) SECURED DEBT EXISTING ON THE DATE
        HEREOF.  AT THE REQUEST OF ANY SUCH PAYEE, MERCK WILL EXECUTE SUCH
        REASONABLE INSTRUMENTS AS MAY BE REQUESTED TO FURTHER EVIDENCE SUCH
        SUBORDINATION.  NOTHING IN THIS NOTE SHALL PROHIBIT OR OTHERWISE LIMIT
        MERCK’S RIGHTS OF OFFSET AND RECOUPMENT AGAINST ROYALTY
        AND MILESTONE PAYMENTS DUE TO ARIAD UNDER THE COLLABORATION AGREEMENT AS
        SET
        FORTH IN SECTION 3(a) HEREOF OR OTHERWISE PERMITTED BY APPLICABLE
        LAW.

       

      
        [signature
          page follows]

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -95-

          
            

          

        

        
          
          

        

      

    

     

    
      ARIAD
        PHARMACEUTICALS, INC.

      

      

      

      By:  _______________________________

      Name:

      Title:

      

      

      ARIAD
        GENE
        THERAPEUTICS, INC.

      

      By:  _______________________________

      Name:

      Title:

      

      

      

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          -96-

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
        1

       

      

       

      DESCRIPTION
        OF AP23573

       

      
        [***][***][***][***][***][***]

      

       

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      SCHEDULE
        2

       

      LICENSED
        PATENT RIGHTS

       

      U.S.
        Patents

       

      US
        Patent
        No. [***]

       

      US
        Patent
        No. [***]

       

      

       

      U.S.
        Patent Applications

       

      US
        APPLN.
        Serial No. [***]

       

      US
        Appln.
        Serial No.[***]”

       

      US
        Appln.
        Serial No.[***]

       

      US
        Appln.
        Serial No.[***]

       

      US
        Appln.
        Serial No.[***]

       

      US
        Appln.
        Serial No.[***]”

       

      US
        Appln.
        Serial No.[***]

       

      US
        Appln.
        Serial No.[***]

       

      

      International
        Patent Applications

       

      [***][***][***][***][***][***][***]

      

      

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
        3

       

       

      CALCULATION
        OF OPERATING INCOME (LOSS) FOR THE U.S. TERRITORY

       

      

       

      “Advertising”
        means the advertising and promotion of the [***]through any means, including,
        without limitation[***]including related costs for[***]visual aids and other
        selling materials[***]committee presentations[***]provided, however, that
        Advertising shall exclude [***]With regard to advertising and promotion that
        include products other than [***]the JCC shall determine the
        [***]“Commercialization Expense” means the [***]any reasonable
        internal and [***]incurred in prosecuting, maintaining, enforcing and
        defending[***]or expense expressly stated to be[***] in this Agreement or
        under
        the[***]Where an item of [***]it will be allocated by the[***]“Cost of
        Goods” means [***]attributable to the [***]including the cost
        of[***]and/or the cost of purchase of a[***]“Detail” has the
        meaning provided in Section 1.44.

       

      “General
        Public Relations” means any public relations activity [***]the business
        of a company or deals in a [***] with the activities of such company[***]the
        fact that such company or its Affiliates[***]related to this Agreement or
        that
        concern primarily the [***]upon by both Parties in writing prior to
        release.

       

      “License
        Fees” means [***]or other payments, payable to any[***]agreement
        following the first[***]to the extent such payments are attributable to
        sale[***]If the rights under [***]are also attributable to products [***]then
        only an equitable portion of any amounts payable[***]“Net
        Sales” has the meaning provided in Section 1.104.

       

      “Operating
        Income (Loss)” means, with respect to[***]minus the sum of
        [***]applicable to the [***]in each case, incurred in a given Calendar Quarter
        for[***]“Product Trademark” has the meaning provided in Section
        1.123.

       

      “Representative”
        means [***]employed and trained by[***]employed by[***] and trained by or
        on
        behalf of [***]“Sales and Marketing Expense” means[***]
        including , without limitation[***]functions (as agreed upon by the JCC))
        and[***]for those individuals dedicated or allocated to the[***]that are
        directly attributable to the following functions for the sale, promotion
        and
        marketing[***]including, without limitation, public relations targeted
        specifically[***]trade shows, sales meetings[***]promotional materials and
        printing of promotional materials[***]including, without limitation,
        fully[***]or purchasing costs for [***]market development activities and
        other
        similar pre-launch activities.  Sales and Marketing Expense
        shall[***]or any other activities that promote the business of a Party[***]In
        calculating the Operating Income the following principles shall
        apply:

       

      1.               
        There shall[***]of any costs or expenses or of any revenues, and to the extent
        a
        cost or expense [***]similarly, to the extent any revenue has[***]2. [***]under
        this Agreement, each Party shall utilize
        the same policies and principles as it utilizes[***]3. 

       

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      To
        the
        extent an item[***]and is necessary and specifically and directly identifiable,
        attributable and allocable to the[***] and shall be permitted[***]4. All
        costs
        and expenses shall be determined, and all calculations shall be made, in
        accordance with GAAP, as applicable.

       

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      SCHEDULE
        4

       

      FORM
        OF PRESS RELEASE

       

       

      
        	 	
                 

                News
                  Release

              

      

      
        
          

        

      

      

      [FOR
        IMMEDIATE RELEASE]

      

      Contacts

      

      
        
          	
                  For
                    ARIAD:

                	
                  Edward
                    Fitzgerald

                	
                  For
                    Merck:

                	
                  Graeme
                    Bell

                
	 	
                  Investor
                    Relations

                	
                   

                	
                  Investor
                    Relations

                
	 	
                  617-621-2345

                	
                   

                	
                  908-423-5185

                
	 	 	 	 
	 	
                  Andrea
                    Johnston

                	
                   

                	
                  Amy
                    Rose

                
	 	
                  Media
                    Relations

                	
                   

                	
                  Media
                    Relations

                
	 	
                  910-616-5858

                	
                   

                	
                  908-423-6537

                

        

      

       

       

      ARIAD
        and Merck & Co., Inc. Announce Global Collaboration to Jointly Develop and
        Commercialize AP23573 – ARIAD’s Novel mTOR Inhibitor – for
        Cancer

      

      ARIAD
        to Host Investor Call Today at 9:00 am (ET)

      

      Cambridge,
        MA and Whitehouse Station, NJ, July 12, 2007– ARIAD Pharmaceuticals,
        Inc. (NASDAQ: ARIA) and Merck & Co., Inc. (NYSE: MRK) today announced that
        they have entered into a global collaboration to jointly develop and
        commercialize AP23573, ARIAD’s novel mTOR inhibitor, for use in cancer. It is
        expected that AP23573 will enter into Phase III clinical development for
        the
        treatment of metastatic sarcomas beginning this quarter.

      

      The
        agreement provides for an initial payment of $75 million to ARIAD, up to
        $452
        million more in milestone payments to ARIAD based on the successful development
        of AP23573 in multiple cancer indications (including $13.5 million for the
        initiation of the Phase III clinical trial in metastatic sarcomas and $114.5
        million for the initiation of other Phase II and Phase III clinical trials),
        up
        to $200 million more based on achievement of significant sales thresholds,
        at
        least $200 million in estimated contributions by Merck to global development,
        up
        to $200 million in interest-bearing repayable development-cost advances from
        Merck to cover a portion of ARIAD’s share of global-development costs (after
        ARIAD has paid $150 million in global development costs), and potential
        commercial returns from profit sharing in the U.S. or royalties paid by Merck
        outside the U.S.

       “We
        are very excited to be entering into this partnership with ARIAD for the
        development and potential commercialization of AP23573, as it has the promise
        to
        allow us to bring an important new medicine to cancer patients
        globally.  Merck is fully committed to the field of oncology, and this
        partnership further demonstrates that commitment as we strive to meet unmet
        medical needs in cancer,” said Vlad Hogenhuis, M.D., General Manager, Oncology,
        Specialty & Neuroscience Franchise of Merck.

      

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      The
        companies anticipate conducting a broad-based global development program
        in
        which clinical trials and biomarker studies will be conducted concurrently
        in
        multiple cancer indications.  Each party will fund 50% of the cost of
        global development of AP23573, except that Merck will fund 100% of the cost
        of
ex-U.S. development that is specific to the development or
        commercialization of AP23573 outside the U.S. In certain circumstances, either
        party may opt-out of conducting and funding certain late-stage clinical
        development of AP23573, which would result in changes in development and
        commercialization responsibilities and compensation arrangements.

      

      Both
        companies will share overall responsibility for global commercialization
        and
        development of AP23573.  In the U.S., ARIAD will distribute and sell
        AP23573 for all cancer indications and book all sales, and ARIAD and Merck
        will
        co-promote and will each receive 50% of the income from such
        sales.  Outside the U.S., Merck will distribute, sell and promote
        AP23573 and book all sales; Merck will pay ARIAD tiered double-digit royalties
        on such end-market sales of AP23573.  On a global basis, ARIAD will be
        responsible for manufacturing the active pharmaceutical ingredient used in
        the
        product, and Merck will be responsible for the formulation and packaging
        of the
        finished product (tablets).

      

      In
        the
        U.S., ARIAD will have primary responsibility for development of AP23573 in
        the
        metastatic sarcoma indication.  Merck and ARIAD will have joint
        responsibility in the U.S. for development of all other cancer indications
        being
        pursued.  Outside the U.S., Merck will have primary responsibility for
        development in all cancer indications being pursued.

      

      Stephen
        Friend, M.D., Ph.D., Executive Vice President and Oncology Franchise Head
        of
        Merck said, “mTOR is a validated target for therapeutic intervention in human
        cancer and resides at a crucial intersection point controlling cell growth
        and
        survival of many tumor types.  We are delighted to partner with ARIAD
        to develop and commercialize AP23573 for major unmet medical needs in
        oncology.”

      

      “This
        partnership aligns our interests directly with those of Merck – one of the
        leading global pharmaceutical companies dedicated to developing and
        commercializing new oncology drugs and with a demonstrated expertise in
        biomarker development,” said Harvey J. Berger, M.D., Chairman and Chief
        Executive Officer of ARIAD.  “From the beginning, our top corporate
        priority has been to establish a partnership that will maximize the commercial
        and clinical potential of our lead oncology product and allow us to realize
        our
        vision of becoming a fully integrated oncology company.  We
        implemented a rigorous partnering process that generated substantial interest
        from multiple companies and ultimately enabled us to select Merck as our
        partner
        of choice.”

      

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      Richard
        W.
        Pascoe, Chief Commercial Officer of ARIAD, added, “We look forward to working
        closely with our clinical, manufacturing, marketing and sales colleagues
        from
        Merck to bring AP23573 to cancer patients as quickly as possible.  The
        structure of this partnership allows the partners to pursue the clinical
        development of AP23573 in multiple indications concurrently throughout the
        world.”

      

      Today’s
        Conference Call

      

      ARIAD
        will
        hold a live webcast and conference call today at 9:00 am (ET) to discuss
        the
        partnering agreement with Merck.  The live webcast can be accessed by
        visiting the investor relations section of the Company’s website at
        http://www.ariad.com/investor.  The call can be accessed by dialing
        1-xxx-xxx-xxxx (domestic) or xxx-xxx-xxxx (international) five minutes prior
        to
        the start time and providing the passcode xxxxxx.  A replay of the
        call will be available on the ARIAD website approximately two hours after
        completion of the call and will be archived for two weeks.

      

      About
        AP23573

      

      ARIAD’s
        lead product candidate, AP23573, is a novel small-molecule inhibitor of the
        protein mTOR, a “master switch” in cancer cells.  Blocking mTOR
        creates a starvation-like effect in cancer cells by interfering with cell
        growth, division, metabolism, and angiogenesis.  AP23573 is currently
        in Phase I and II clinical trials in patients with solid tumors and hematologic
        cancers.  AP23573 has been designated both as a fast-track product and
        an orphan drug by the U.S. Food and Drug Administration and as an orphan
        drug by
        the European Medicines Agency for the treatment of soft-tissue and bone
        sarcomas.  ARIAD is collaborating with Merck & Co., Inc. to
        develop and commercialize AP23573 in oncology and with Medinol Ltd to develop
        stents and other medical devices that deliver AP23573 to prevent reblockage
        at
        sites of vascular injury following stent-assisted angioplasty.

      

      About
        ARIAD

      

      ARIAD
        is
        engaged in the discovery and development of breakthrough medicines to treat
        cancer by regulating cell signaling with small molecules.  ARIAD is
        developing a comprehensive approach to patients with cancer that addresses
        the
        greatest medical need – aggressive and advanced-stage cancers for which current
        treatments are inadequate.  ARIAD has a global partnership with Merck
& Co., Inc. to develop and commercialize AP23573, ARIAD’s lead cancer
        product candidate. Medinol Ltd. also is developing stents and other medical
        devices that deliver AP23573 to prevent reblockage at sites of vascular injury
        following stent-assisted angioplasty.  ARIAD has an exclusive license
        to pioneering technology and patents related to certain NF-kB treatment
        methods,
        and the discovery and development of drugs to regulate NF-kB cell-signaling
        activity, which may be useful in treating certain
        diseases.  Additional information about ARIAD can be found on the web
        at http://www.ariad.com.

      

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      About
        Merck

      

      Merck
        & Co., Inc. is a global research-driven pharmaceutical company dedicated to
        putting patients first.  Established in 1891, Merck currently
        discovers, develops, manufactures and markets vaccines and medicine to address
        unmet medical needs.  The company devotes extensive efforts to
        increase access to medicines through far-reaching programs that not only
        donate
        Merck medicines but help deliver them to the people who need
        them.  Merck also publishes unbiased health information as a
        not-for-profit service.  For more information, visit
        http://www.merck.com.

      

      ARIAD
        Forward-looking Statement

      

      This
        press
        release contains “forward-looking statements,” including statements related to
        the potential value of payments, which may be received pursuant to our
        collaboration with Merck & Co., Inc., the anticipated development of AP23573
        pursuant to the collaboration in several cancers, and the future
        responsibilities of the parties under the collaboration
        agreements.  Forward-looking statements are based on management's
        expectations and are subject to certain factors, risks and uncertainties
        that
        may cause actual results, outcome of events, timing and performance to differ
        materially from those expressed or implied by such statements.  These
        risks and uncertainties include, but are not limited to, the costs associated
        with our research, development, manufacturing and other activities, the conduct
        and results of pre-clinical and clinical studies of our product candidates,
        difficulties or delays in obtaining regulatory approvals to market products
        resulting from our development efforts, our reliance on partners, including
        Medinol and Merck, and other key parties for the successful development,
        manufacturing and commercialization of products, the adequacy of our capital
        resources and the availability of additional funding, patent protection and
        third-party intellectual property claims relating to our and any partner's
        product candidates, the timing, scope, cost and outcome of legal and patent
        office proceedings concerning our NF-kB patent
        portfolio,
        the potential acquisition of or other strategic transaction regarding the
        minority stockholders' interests in our 80%-owned subsidiary, ARIAD Gene
        Therapeutics, Inc., future capital needs, key employees, markets, economic
        conditions, prices, reimbursement rates, competition and other factors detailed
        in the Company's public filings with the U.S. Securities and Exchange
        Commission.  The information contained in this document is believed to
        be current as of the date of original issue.  The Company does not
        intend to update any of the forward-looking statements after the date of
        this
        document to conform these statements to actual results or to changes in the
        Company's expectations, except as required by law.

      

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      Merck
        Forward-looking Statement

      

      This
        press
        release contains "forward-looking statements" as that term is defined in
        the
        Private Securities Litigation Reform Act of 1995.  These statements
        are based on management's current expectations and involve risks and
        uncertainties, which may cause results to differ materially from those set
        forth
        in the statements.  The forward-looking statements may include
        statements regarding product development, product potential or financial
        performance.  No forward-looking statement can be guaranteed and
        actual results may differ materially from those projected.  Merck
        undertakes no obligation to publicly update any forward-looking statement,
        whether as a result of new information, future events, or
        otherwise.  Forward-looking statements in this press release should be
        evaluated together with the many uncertainties that affect Merck's business,
        particularly those mentioned in the risk factors and cautionary statements
        in
        Item 1A of Merck's Form 10-K for the year ended December 31, 2006, and in
        its
        periodic reports on Form 10-Q and Form 8-K, which the Company incorporates
        by
        reference.

      

      ###

      

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        5

       

      

       

      MATERIAL
        TERMS TO BE INCLUDED IN

       

      FORM
        OF CO-PROMOTION AGREEMENT

       

      

       

      The
        Co-Promotion Agreement to be
        negotiated by the Parties shall contain the following material
        terms.  Capitalized terms used in this Schedule 5 and not
        otherwise defined have the meanings given to them in the Agreement.

       

      1.           Co-Promotion
        Rights.

       

      (a)           ARIAD
        and MERCK hereby acknowledge and agree that the overall objective of
        co-promotion in the U.S. Territory is to reach a broad customer audience,
        ensure
        consistency of the marketing message for Co-Promoted Products and maximize
        the
        particular strengths that the Parties bring to the Co-Promotion of Co-Promoted
        Products.  All Detailing calls shall be made in such markets as the
        JCC reasonably considers to be appropriate for the successful Commercialization
        of such Co-Promoted Product based on objective, quantifiable information
        and
        market research data with the objectives of allocating to each of ARIAD and
        MERCK target audience and accounts from which each such Party will have the
        opportunity to attain its Co-Promotion Detailing Target and of maximizing
        Operating Income.  Notwithstanding the commercially reasonable and
        diligent efforts of the Parties to effect an objective allocation of individual
        accounts and target audience between the Parties, the Parties recognize that
        it
        may be necessary from time to time to reassign individual accounts and/or
        target
        audience between the Parties and the JCC shall be entitled to review the
        allocation of accounts as it reasonably determines to be
        appropriate.

       

      (b)           ARIAD
        will provide up to [***] percent ([***]%) (at ARIAD’s discretion) of the
        Detailing effort, and MERCK shall provide [***] than [***] percent ([***]%)
        of
        the Detailing effort for Sarcoma Indications. The allocation of Detailing
        effort
        between the Parties for all other Indications shall be determined by the
        JCC,  depending upon the Indications that have obtained
        Commercialization Regulatory Approval, provided that under no circumstances
        shall either Party have the responsibility to provide [***] percent ([***]%)
        of
        the collective Detailing effort applicable to a Co-Promoted Product for any
        Indication.   Neither Party shall engage a Third Party to perform
        activities with respect to its Detailing effort unless the other Party has
        already declined to assume such extra details and obtain reimbursement
        therefor.

       

      (c)           ARIAD
        and MERCK shall use an integrated sales force to Detail each Co-Promoted
        Product.  In connection therewith, neither Party will, without the
        other Party’s prior written consent, use a Representative to Detail a
        Co-Promoted Product if that Representative is also Detailing a product that
        is
        approved for an indication that is directly competitive with the Co-Promoted
        Product.  ARIAD and MERCK hereby agree that each such Party shall be
        responsible for ensuring that its Representatives Detail each Co-Promoted
        Product in a manner consistent with the Product Commercialization Plan and/or
        the decisions of the JCC.  Notwithstanding the foregoing, in
        performing their respective Detailing obligations hereunder, each of the
        Parties
        agrees to (i) use Representatives with an experience profile appropriate
        for the
        target audience and Detailing role as described in the Product Commercialization
        Plan and (ii) provide its own sales management organization and infrastructure
        for its Representatives.  All ARIAD Representatives will have been
        recruited by ARIAD at ARIAD's sole expense, and all MERCK representatives
        will
        have been recruited by MERCK at MERCK's sole expense.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      2.           Commercialization
        Efforts.  Each Party shall use Commercially Reasonable Efforts to
        execute its obligations under each Product Commercialization Plan, consistent
        with the applicable Commercialization Budget and in accordance with all
        Applicable Laws, and to cooperate diligently with each other in carrying
        out
        such Product Commercialization Plan.

       

      3.           Product
        Commercialization Plan and Commercialization Budget.

       

      (a)           Preparation
        of Annual Plan and Budget. [***], shall develop, annually, a Product
        Commercialization Plan for,
        each Co-Promoted Product for
        the [***] and the [***] prepare the Product Commercialization Plan
        for
        each Co-Promoted Product for [***].  Each such Product
        Commercialization Plan shall be reviewed and approved by the JCC; provided
        that
        each such Product Commercialization Plan shall be consistent with
        [***].  Each Product Commercialization Plan and Commercialization
        Budget shall be submitted to the JCC for review and approval by a date to
        be
        established by the JCC, taking into account MERCK’s and ARIAD’s annual budget
        planning calendars, but no later than September 30 of each year.  It
        is contemplated that each Product Commercialization Plan and Commercialization
        Budget will become more comprehensive as the Co-Promotion of the applicable
        Co-Promoted Product evolves.

       

      (b)           Changes
        to Plans/Budgets.  Any significant change in a Product
        Commercialization Plan or Commercialization Budget during the course of the
        year
        will be communicated promptly to the JCC.  In addition, ARIAD shall
        provide an update on each Product Commercialization Plan and Commercialization
        Budget for the Sarcoma indication to the JCC in a manner (with respect to
        timing
        and content) determined by the JCC, and the Parties will jointly provide
        an
        update on each Product Commercialization Plan and Commercialization Budget
        for
        all Major Cancer Indications and Other Cancer Indications to the JCC no less
        frequently than semi-annually.

       

      (c)           Detail
        Audit Rights.  Each of MERCK and ARIAD shall maintain written
        records of Details performed for a period of [***] years from the date of
        performance.  Each such Party shall have the right to inspect such
        records of the other Party to verify Detailing reports provided to the JCC
        under
        this Agreement.  Each Audited Party shall make its records available
        for inspection by appropriate representatives of the Auditing Party during
        regular business hours at such place or places where such records are
        customarily kept, upon reasonable notice from the Auditing Party, solely
        to
        verify the accuracy of such statements.  Such inspection right shall
        not be exercised more than once in any Calendar Year.  All information
        concerning such statements, and all information learned in the course of
        any
        audit or inspection, shall be Confidential Information of the Audited
        Party.  The Auditing Party shall pay the costs of such inspections,
        except that in the event there is any downward adjustment in the number of
        Details shown by such inspection of more than
        [***] percent ([***]%) of the number of Details reported
        in such statement, the Audited Party shall pay the costs of such
        inspection.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      4.           Control
        Over Advertising and Detailing.

       

      (a)           [***]
        shall be responsible for the creation, preparation, production and reproduction
        of all promotional materials, as approved by the JCC pursuant to procedures
        and
        timelines to be mutually agreed upon, consistent with the Product
        Commercialization Plan for the [***],.  The JCC shall determine which
        Party shall be responsible for such activities for [***] other than
        [***].  [***] will file all Product promotional materials with the
        FDA.

       

      (b)           Neither
        Party shall engage in any Advertising or use any label, package, literature
        or
        other written material (other than General Public Relations) in connection
        with
        a Co-Promoted Product in the Co-Promotion Territory, unless the specific
        form
        and content thereof is approved by the JCC.

       

      (c)           General
        Public Relations on the part of either Party need not be approved by the
        JCC,
        but all representations and statements pertaining to Co-Promoted Products
        that
        appear in General Public Relations of ARIAD or MERCK and include subject
        matter
        not previously approved by the JCC shall be subject to the approval of the
        JCC.

       

      (d)           All
        Advertising and Detailing undertaken by either Party hereto shall be undertaken
        in good faith with a view towards maximizing the sales of the applicable
        Co-Promoted Product.

       

      (e)           Except
        with the prior written consent of the other Party, neither Party shall use
        the
        name of the other Party or any Affiliate of the other Party in Advertising,
        Detailing or General Public Relations except in materials approved by the
        JCC.

       

      (f)           [***]
        for deciding on Pricing. [***] for conducting all billing and collections
        for
        Co-Promoted Products.

       

      (g)           [***]
        shall have sole responsibility for arranging for the distribution and
        warehousing of Co-Promoted Products.

       

      (h)           Each
        Party shall annually certify to the other Party that its field sales force
        (including persons responsible for managing the field sales force) is properly
        trained with respect to both Product information and compliance with Applicable
        Laws.

       

      5.           Sales
        Efforts in the U.S. Territory.  As part of each Product
        Commercialization Plan for the U.S. Territory, the JCC shall determine the
        targeted level of sales of the applicable Co-Promoted Product for the
        Co-Promotion target audience for the Calendar Year covered by such Product
        Commercialization Plan.  The Product Commercialization Plan shall
        include the number of Details and the allocation between the Parties of such
        Details to the defined target audience.  The Product Commercialization
        Plan shall also establish a minimum and maximum number of total Details by
        position (i.e., first or second position) to be conducted by the Parties
        each
        year for the Co-Promoted Product.  All Details will be in the first or
        second position.  During the launch period for a Product for an
        Indication, a majority of Details will be in the first position.  The
        Co-Promoted Product shall be included in each Party’s respective sales incentive
        bonus program for the corresponding sales representatives, with specified
        links
        to sales performance.  Each Product Commercialization Plan shall
        provide each Party the opportunity to perform a percentage of the Detailing
        calls to the target audience each calendar year as the JCC reasonably considers
        to be appropriate for the successful Commercialization of such Co-Promoted
        Product.  The Parties shall allocate physicians in the Co-Promotion
        target audience in an unbiased manner based on objective, quantifiable
        information and market research data with the objectives of allocating to
        each
        Party those physicians in the Co-Promotion target audience with the appropriate
        Detailing frequency to optimize the penetration of such Co-Promoted Product
        and
        achieve such Co-Promotion’s sales target.  Notwithstanding the
        commercially reasonable efforts of the Parties to effect an objective allocation
        between them, the Parties recognize that it may be necessary from time to
        time
        to reassign individual medical professionals in the target audience to optimize
        the targeted market opportunity, and, as a result, the JCC shall be entitled
        to
        review the allocation of medical professionals in the target audience as
        it
        reasonably determines to be appropriate. Neither Party may utilize Third
        Party
        contracted sales representatives without the express written consent of the
        other Party.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      6.           Performance
        Criteria/Detailing Shortfall.   The Parties shall agree on
        criteria for measuring each Party's performance under the Co-Promotion
        Agreement.  In the event that either Party fails to provide a number
        of Representatives or Details to satisfy its Co-Promotion responsibilities
        as
        set forth in the Co-Promotion Product Marketing and Sales Plan, the other
        Party
        can choose to provide additional sales representatives to cover the Detailing
        shortfall, in which case the defaulting Party shall reimburse the other Party
        for the cost to that Party of all the Details delivered by that Party to
        cover
        the Detailing shortfall.

       

      7.           Training
        Program.  The Parties shall (a) develop a training program for the
        promotion of all Products (including, without limitation, all Co-Promoted
        Products in the U.S. Territory) and (b) train all Representatives of both
        Parties to be used for the Co-Promotion of Co-Promoted Products in the U.S.
        Territory prior to commencement of Detailing.  The Parties agree to
        utilize such training programs on an ongoing basis to assure a consistent,
        focused promotional strategy and all such training shall be carried out at
        a
        time that is mutually acceptable to ARIAD and MERCK.  No
        Representative of either Party may Detail a Co-Promotion Product unless such
        representative successfully completes the training program described in this
        Section 7.  Except as provided herein, it is agreed that for the
        Product specific training, the internal costs and the out-of-pocket costs
        of
        such training programs (including, without limitation, the out-of-pocket
        costs
        of the development, production, printing of such training materials) shall
        be
        included as a Commercialization Expense under this Agreement.

       

      8.           Co-Promotion
        Mechanism.

       

      (a)           Sales.  All
        sales of Co-Promoted Products in the U.S. Territory shall be booked by
        ARIAD.  If, during the term of the Co-Promotion Agreement, MERCK
        receives orders from customers for a Co-Promoted Product, it shall refer
        such
        orders to ARIAD.

       

      (b)           Processing
        of Orders for Co-Promoted Products.

       

      
        
          Portions
            of this Exhibit were omitted and have been filed separately with the
            Secretary
            of the Commission pursuant to the Company’s application requesting confidential
            treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
            amended.

          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (i)           All
        orders for Co-Promoted Products received and accepted by ARIAD during the
        term
        of the Co-Promotion Agreement shall be executed by ARIAD in a reasonably
        timely
        manner consistent with the general practices applied by it in executing orders
        for other pharmaceutical products sold by it or its Affiliates.

       

      (ii)           ARIAD
        shall have the discretion to reject any order received by it for a Co-Promoted
        Product; provided, however, that ARIAD shall not reject such orders on an
        arbitrary basis, but only with reasonable justification and consistent with
        the
        general policies applied by it with respect to orders for other pharmaceutical
        products sold by it or its Affiliates.

       

      (iii)           ARIAD
        shall comply with all Applicable Laws in selling any Co-Promoted.

       

      9.           Cost
        of Detailing.  Prior to a U.S. Commercialization Transfer, each
        Party shall be responsible for paying the cost of all Detailing incurred
        by it
        for all Co-Promoted Products. Such costs shall not be Sales and Marketing
        Expenses or be included in Commercialization Expenses. In the event of a
        U.S.
        Commercialization Transfer, MERCK will compensate ARIAD for its Co-Promotion
        activities, on a fee-for-Detail basis, commensurate with MERCK standards
        for
        oncology specialty sales representatives.  The fee-for-Detail
        reimbursement includes costs for Representative salary and benefits, auto
        leases, incentive bonus and allocated business manager salary.

       

      10.           Sales
        Information Integration.  The Parties will strive to establish a
        transparent and compatible sales reporting system for Co-Promoted Products
        to
        facilitate call planning and Representatives activities, and all costs related
        to such integration shall be Commercialization Expenses.

      

      11.           Miscellaneous.  Other
        customary terms, including confidentiality, indemnification and
        termination.

       

      
        

         

        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as
          amended.Exhibit 10.184

                                                                  Execution Copy

                              STANDARD DEFINITIONS

            "50/50  Loan"  shall mean a  Timeshare  Loan where the  Obligor  has
elected to make a down payment equal to at least 50% of the total purchase price
of the Timeshare  Property or Timeshare  Properties  with the remaining  balance
(together  with  interest)  due within one year of the  origination  date,  such
balance to be paid either in 12 monthly amortizing installments of principal and
interest or all principal and interest due in a lump sum payment on the one year
anniversary of the origination of the Timeshare Loan.

            "ACH  Form"  shall  mean  the ACH  authorization  form  executed  by
Obligors  substantially  in the form  attached  as Exhibit C to each of the Sale
Agreement, the Transfer Agreement and the Bluegreen Purchase Agreement.

            "Act"  shall  have  the  meaning  specified  in  Section  1.4 of the
Indenture.

            "Additional Servicing Compensation" shall mean any late fees related
to late payments on the Timeshare  Loans,  any  non-sufficient  funds fees,  any
processing fees, any Liquidation  Expenses  collected by and due to the Servicer
and any  unpaid  out-of-pocket  expenses  incurred  by the  Servicer  during the
related Due Period.

            "Adjusted  Note Balance"  shall equal,  for any Class of Notes,  the
Outstanding  Note  Balance  of such  Class  of Notes  immediately  prior to such
Payment Date, less any Note Balance  Write-Down  Amounts  previously  applied in
respect  of such  Class of Notes;  provided,  however,  to the  extent  that for
purposes of consents, approvals, voting or other similar acts of the Noteholders
under any of the  Transaction  Documents,  "Adjusted Note Balance" shall exclude
Notes which are held by Bluegreen or any Affiliate thereof, if any.

            "Administration  Agreement" shall mean the administration agreement,
dated as of  September  15,  2007,  by and  among the  Administrator,  the Owner
Trustee,  the Issuer and the Indenture Trustee,  as amended from time to time in
accordance with the terms thereof.

            "Administrator"  shall mean  Bluegreen  or any  successor  under the
Administration Agreement.

            "Administrator Fee" shall equal on each Payment Date an amount equal
to the product of (i)  one-twelfth  and (ii) (A) if  Bluegreen  or an  affiliate
thereof is the  Administrator,  $1,000.00 and (B) if Wilmington Trust Company is
the Administrator, $20,000.00.

            "Adverse  Claim"  shall  mean any  claim of  ownership  or any lien,
security  interest,  title retention,  trust or other charge or encumbrance,  or
other type of preferential  arrangement having the effect or purpose of creating
a lien or  security  interest,  other  than  the  interests  created  under  the
Indenture or any other  Transaction  Document in favor of the Indenture  Trustee
and the Noteholders.

<PAGE>

            "Affiliate" shall mean any Person:  (a) which directly or indirectly
controls,  or is controlled by, or is under common control with such Person; (b)
which  directly or  indirectly  beneficially  owns or holds five percent (5%) or
more of the voting stock of such  Person;  or (c) for which five percent (5%) or
more of the voting stock of which is directly or indirectly  beneficially  owned
or held by such Person; provided, however, that under no circumstances shall (i)
the Owner Trustee be deemed to be an Affiliate of the Issuer,  or the Depositor,
nor shall any of such parties be deemed to be an Affiliate of the Owner  Trustee
or (ii)  Bluegreen be deemed an Affiliate  of any 5% or greater  shareholder  of
Bluegreen or any Affiliate of such shareholder who is not a Direct Affiliate (as
defined herein) of Bluegreen,  nor shall any such shareholder be deemed to be an
Affiliate of Bluegreen.  The term "control"  means the  possession,  directly or
indirectly,  of the power to direct or cause the direction of the management and
policies of a Person,  whether  through the ownership of voting  securities,  by
contract or otherwise.  For purposes of this definition,  any entity included in
the  same  GAAP  consolidated  financial  statements  as  Bluegreen  shall be an
Affiliate of Bluegreen (a "Direct Affiliate").

            "Aggregate  Closing Date  Collateral  Balance" is an amount equal to
$151,332,130.13.

            "Aggregate  Initial Note Balance" is equal to the sum of the Initial
Note Balances for all Classes of Notes.

            "Aggregate  Loan Balance" means the sum of the Loan Balances for all
Timeshare Loans (other than Defaulted Timeshare Loans).

            "Aggregate  Outstanding  Note  Balance"  is  equal to the sum of the
Outstanding Note Balances for all Classes of Notes.

            "Aruba Club Loans" shall mean all timeshare loans  originated by the
Aruba Originator on or after January 26, 2004 each secured by Co-op Shares.

            "Aruba Originator" shall mean Bluegreen  Properties,  N.V., an Aruba
corporation.

            "Assignment of Mortgage"  shall mean,  with respect to a Deeded Club
Loan, a written  assignment of one or more Mortgages from the related Originator
or Seller to the Indenture Trustee, for the benefit of the Noteholders, relating
to one or more Timeshare  Loans in recordable  form, and signed by an Authorized
Officer of all necessary parties,  sufficient under the laws of the jurisdiction
wherein the  related  Timeshare  Property is located to give record  notice of a
transfer of such Mortgage and its proceeds to the Indenture Trustee.

            "Association"   shall  mean  the   not-for-profit   corporation   or
cooperative association responsible for operating a Resort.

            "Assumption  Date"  shall have the meaning  specified  in the Backup
Servicing Agreement.

            "Authorized  Officer" shall mean,  with respect to any  corporation,
limited  liability  company or  partnership,  the  Chairman  of the  Board,  the
President,  any Vice  President,  the

                                     - 2 -
<PAGE>

Secretary,  the Treasurer,  any Assistant  Secretary,  any Assistant  Treasurer,
Managing Member and each other officer of such corporation or limited  liability
company or the general partner of such  partnership  specifically  authorized in
resolutions of the Board of Directors of such  corporation or managing member of
such  limited  liability  company  to  sign  agreements,  instruments  or  other
documents  in  connection  with the  Indenture  on behalf  of such  corporation,
limited liability company or partnership, as the case may be.

            "Available  Funds" shall mean for any Payment Date, (A) all funds on
deposit in the  Collection  Account  after  making all  transfers,  deposits  or
payments from (i) the Lockbox Account  pursuant to the Lockbox  Agreement,  (ii)
the General Reserve Account  pursuant to Section 3.2(b) of the Indenture,  (iii)
the Prefunding  Account  pursuant to Section  3.2(c) of the Indenture,  (iv) the
Capitalized Interest Account pursuant to Section 3.2(d) of the Indenture (v) the
Club Originator or the Depositor, as the case may be, pursuant to Section 4.6 of
the Indenture,  and (vi) the Servicer  pursuant to the  Indenture,  plus (B) all
investment  earnings  on funds on deposit  in the  Collection  Account  from the
immediately  preceding  Payment Date through such Payment Date, if any, less (C)
amounts on deposit in the Collection  Account related to collections  related to
any Due Periods  subsequent to the Due Period related to such Payment Date, less
(D) any Additional Servicing  Compensation on deposit in the Collection Account,
less  (E)  Misdirected  Deposits,  if  any.   Notwithstanding  anything  in  the
Transaction  Documents  to the  contrary,  Available  Funds  shall only  include
amounts described in the foregoing sentence and not amounts otherwise  deposited
voluntarily by Bluegreen or any of its Affiliates.

            "Backup  Servicer"  shall mean  Concord  Servicing  Corporation,  an
Arizona corporation, and its permitted successors and assigns.

            "Backup  Servicing   Agreement"  shall  mean  the  backup  servicing
agreement,  dated as of  September  15,  2007,  by and  among  the  Issuer,  the
Depositor,  the Servicer,  the Backup Servicer and the Indenture Trustee, as the
same may be amended, supplemented or otherwise modified from time to time.

            "Backup  Servicing  Fee"  shall  on each  Payment  Date  (so long as
Concord Servicing Corporation is the Backup Servicer), be equal to:

            (A) prior to the removal or resignation  of Bluegreen,  as Servicer,
the greater of (i)  $1,000.00  and (ii) the product of (1)(x)  $0.10 and (y) the
number of  Timeshare  Loans in the Trust  Estate at the end of the  related  Due
Period up to 20,000 and (2)(x)  $0.075 and (y) the number of Timeshare  Loans in
the Trust Estate at the end of the related Due Period in excess of 20,000, and

            (B) after the removal or resignation of Bluegreen,  as Servicer,  an
amount equal to the product of (i)  one-twelfth  of 1.50% and (ii) the aggregate
Loan Balance as of the first day of the related Due Period.

            "Bankruptcy Code" shall mean the federal Bankruptcy Code, as amended
(Title 11 of the United States Code).

                                     - 3 -
<PAGE>

            "Beneficiary" shall be as defined in the Club Trust Agreement.

            "Benefit  Plan" shall mean an "employee  benefit plan" as defined in
Section 3(3) of ERISA,  or any other "plan" as defined in Section  4975(e)(1) of
the Code,  that is subject to the  prohibited  transaction  rules of ERISA or of
Section  4975 of the  Code or any  plan  that is  subject  to any  substantially
similar provision of federal, state or local law.

            "Bluegreen"  shall  mean  Bluegreen  Corporation,   a  Massachusetts
corporation, and its permitted successors and assigns.

            "Bluegreen  Owned  Resorts" shall mean a Resort even if Bluegreen no
longer owns substantial  vacation ownership interests in the Resort and includes
the following resorts: Casa del Mar Resort, Daytona SeaBreeze(TM), The Fountains
(f/k/a  Oasis  Lakes  Resort),  Grande  VillasTM at World Golf  Village(R),  The
Hammocks  at  MarathonTM   Resort,   Orlando's   Sunshine   Resort(TM),   Solara
Surfside(TM)  Resort,  Mountain Run at BoyneTM,  The Falls VillageTM Resort, The
Suites at Hershey(TM),  Carolina Grande(TM),  Harbour LightsTM Resort,  SeaGlass
TowerTM, The Lodge Alley Inn(TM), Shore Crest Vacation VillasTM,  Laurel CrestTM
Resort,   MountainLoftTM  Resort,  Shenandoah  CrossingTM,   Christmas  Mountain
VillageTM  and La  Cabana  Resort  and any  Future  Resorts  in which  Bluegreen
acquired or developed a significant number of the vacation  ownership  interests
associated with the Resort.

            "Bluegreen   Purchase   Agreement"   shall  mean  the  purchase  and
contribution  agreement,  dated  as of  September  15,  2007,  between  the Club
Originator  and the  Depositor  pursuant  to  which  the Club  Originator  sells
Timeshare  Loans and the Closing Date Eligible  Investments  to the Depositor on
the Closing Date and Subsequent Timeshare Loans during the Prefunding Period.

            "Book-Entry  Note"  shall mean a  beneficial  interest in the Notes,
ownership  and  transfers  of which shall be made  through  book-entries  by the
Depository.

            "Boyne  Resort" shall mean the Resort  located in Michigan  known as
Mountain Run at Boyne(TM).

            "Business  Day"  shall  mean any day other  than (i) a  Saturday,  a
Sunday,  or  (ii)  a day  on  which  banking  institutions  in  New  York  City,
Wilmington,  Delaware,  the State of Florida,  the city in which the Servicer is
located or the city in which the Corporate Trust Office of the Indenture Trustee
is located, are authorized or obligated by law or executive order to be closed.

            "BXG  Timeshare  I" shall  mean BXG  Timeshare  Trust I, a  Delaware
statutory trust.

            "Capitalized  Interest Account" shall mean the account maintained by
the Indenture Trustee pursuant to Section 3.2(d) of the Indenture.

            "Capitalized   Interest   Account   Initial   Deposit"  shall  equal
$787,999.12.

                                     - 4 -
<PAGE>

            "Capitalized Interest Requirement" shall mean for each Determination
Date  during  the  Prefunding  Period,  an amount  equal to the  product  of (i)
one-twelfth  of the weighted  average Note Rates of each Class of Notes and (ii)
the amount on deposit in the Prefunding Account.

            "Casa del Mar Resort" shall mean the Resort located in Florida known
as Casa del Mar Beach Resort.

            "Cede & Co." shall mean the initial  registered holder of the Notes,
acting as nominee of The Depository Trust Company.

            "Certificate" shall mean the Residual Interest Certificate.

            "Certificate  Distribution Account" shall have the meaning specified
in Section 5.01 of the Trust Agreement.

            "Certificate  of Trust" shall mean the  Certificate  of Trust in the
form attached as Exhibit A to the Trust Agreement.

            "Certificateholders" shall mean the holders of the Certificate.

            "Class" shall mean,  as the context may require,  any of the Class A
Notes, the Class B Notes, the Class C Notes, the Class D, the Class E Notes, the
Class F Notes or the Class G Notes.

            "Class A Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Class B Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Class C Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Class D Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Class E Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Class F Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Class G Notes" shall have the meaning  specified in the Recitals of
the Issuer in the Indenture.

            "Closing Date" shall mean September 28, 2007.

                                     - 5 -
<PAGE>

            "Closing Date Resorts" shall mean those  Bluegreen  Owned Resorts in
respect of which the Timeshare  Property related to an Initial Timeshare Loan is
located.

            "Closing  Date  Eligible   Investments"  shall  mean  those  certain
Eligible  Investments listed in the Schedule of Eligible Investments sold on the
Closing Date by Bluegreen to the Depositor  pursuant to the  Bluegreen  Purchase
Agreement and by the Depositor to the Issuer pursuant to the Sale Agreement.

            "Club" shall mean Bluegreen Vacation Club Trust,  formed pursuant to
the Club Trust Agreement, doing business as Bluegreen Vacation Club.

            "Club  Loans"  means,  collectively,  the Deeded  Club Loans and the
Aruba Club Loans.

            "Club  Management  Agreement"  shall mean that  certain  Amended and
Restated  Management  Agreement  between the Club  Managing  Entity and the Club
Trustee, dated as of May 18, 1994, as amended from time to time.

            "Club  Managing  Entity" shall mean  Bluegreen  Resorts  Management,
Inc., a Delaware  corporation,  in its capacity as manager of the Club and owner
of the Club's reservation system, and its permitted successors and assigns.

            "Club  Originator"  shall  mean  Bluegreen,  in its  capacity  as an
Originator.

            "Club Property" shall mean Timeshare  Properties,  Owner Beneficiary
Rights and Vacation Points,  and with respect to the definition of Upgrade,  may
also mean,  as  applicable,  timeshare  property  unrelated to  Timeshare  Loans
subject to the Lien of the Indenture.

            "Club  Trust  Agreement"  shall  mean,  collectively,  that  certain
Bluegreen  Vacation  Club  Trust  Agreement,  dated as of May 18,  1994,  by and
between the Developer and the Club  Trustee,  as amended,  restated or otherwise
modified from time to time,  together with all other  agreements,  documents and
instruments governing the operation of the Club.

            "Club   Trustee"  shall  mean  Vacation   Trust,   Inc.,  a  Florida
corporation,  in its capacity as trustee under the Club Trust Agreement, and its
permitted successors and assigns.

            "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and any successor statute,  together with the rules and regulations
thereunder.

            "Collection   Account"  shall  mean  the  account   established  and
maintained by the Indenture Trustee pursuant to Section 3.2(a) of the Indenture.

            "Collection  Policy"  shall  mean  the  collection  policies  of the
initial  servicer  in effect on the  Closing  Date  attached as Exhibit K to the
Indenture,  as may be amended from time to time in accordance with the Servicing
Standard.

                                     - 6 -
<PAGE>

            "Completed  Unit" shall mean a Unit at a Resort which has been fully
constructed  and  furnished,  has  received  a valid  permanent  certificate  of
occupancy, is ready for occupancy and is subject to a time share declaration.

            "Confidential   Information"  means  information   obtained  by  any
Noteholder including,  without limitation, the Preliminary Confidential Offering
Circular dated September 12, 2007 or the  Confidential  Offering  Circular dated
September 27, 2007 related to the Notes and the Transaction  Documents,  that is
proprietary  in  nature  and  that  was  clearly  marked  or  labeled  as  being
confidential  information  of the  Issuer,  the  Servicer  or their  Affiliates,
provided that such term does not include information that (a) was publicly known
or otherwise known to the Noteholder prior to the time of such  disclosure,  (b)
subsequently  becomes  publicly  known  through  no  act  or  omission  by  such
Noteholder  or any Person acting on its behalf,  (c) otherwise  becomes known to
the  Noteholder  other than through  disclosure  by the Issuer,  the Servicer or
their Affiliates or (d) any other public disclosure  authorized by the Issuer or
the Servicer.

            "Continued  Errors" shall have the meaning  specified in Section 5.4
of the Indenture.

            "Co-op  Shares"  shall  mean  a  share  certificate  issued  by  the
timeshare cooperative association of La Cabana Resort.

            "Corporate  Trust  Office"  shall mean the  office of the  Indenture
Trustee  located in the State of  Minnesota,  which office is at the address set
forth in Section 13.3 of the Indenture.

            "Credit Card Account" shall mean the deposit account (account number
008981728487)  established  at the Lockbox Bank,  which shall be a  non-interest
bearing account.

            "Credit Card  Timeshare  Loan" shall mean a Timeshare Loan where the
Obligor makes its payments due on such  Timeshare  Loan with credit card payment
arrangements.

            "Credit Policy" shall mean the credit and  underwriting  policies of
the  Originators  in effect on the  Closing  Date  attached  as Exhibit C to the
Indenture.

            "Custodial  Agreement" shall mean the custodial agreement,  dated as
of September 15, 2007 by and among the Issuer, the Depositor,  the Servicer, the
Backup  Servicer,  and the Indenture  Trustee and Custodian,  as the same may be
amended,  supplemented or otherwise modified from time to time providing for the
custody  and  maintenance  of  the  Timeshare  Loan  Documents  relating  to the
Timeshare Loans.

            "Custodian"  shall mean U.S. Bank National  Association,  a national
banking association, or its permitted successors and assigns.

            "Custodian's  Certification"  shall have the  meaning  specified  in
Section 2.2(a) of the Custodial Agreement.

            "Custodian  Fees" shall mean for each Payment Date,  the fee payable
by the Issuer to the Custodian in  accordance  with Section 2.4 of the Custodial
Agreement.

                                     - 7 -
<PAGE>

            "Cut-Off Date" shall mean, with respect to (i) the Initial Timeshare
Loans,  the Initial  Cut-Off Date, and (ii) any Qualified  Substitute  Timeshare
Loan or Subsequent Timeshare Loan, the related Subsequent Cut-Off Date.

            "Cut-Off  Date  Loan  Balance"  shall  mean  the Loan  Balance  of a
Timeshare Loan on its related Cut-Off Date.

            "Deeded  Club Loan" shall mean a Timeshare  Loan  originated  by the
Club Originator and evidenced by a Mortgage Note and secured by a first Mortgage
on a fractional fee simple timeshare interest in a Unit or an undivided interest
in a Resort associated with a Unit.

            "Default"  shall mean an event  which,  but for the passage of time,
would constitute an Event of Default under the Indenture.

            "Default  Level" shall mean for any Due Period,  the aggregate  Loan
Balance  (without regard to recoveries) of Timeshare Loans that became Defaulted
Timeshare Loans during such Due Period and not repurchased or substituted by the
last day of such Due Period (less the Loan Balances of Defaulted Timeshare Loans
that subsequently  became current during such Due Period which are still subject
to the Lien of the Indenture at such time) divided by the Aggregate Loan Balance
on the first day of such Due Period, expressed as a percentage.

            "Defaulted  Timeshare  Loan" is a Timeshare Loan (i) for which,  the
Servicer has commenced  cancellation  or termination  proceedings on the related
Timeshare  Loan after  collection  efforts  have failed in  accordance  with its
credit  and  collection  policies,  (ii) for which,  all or part of a  scheduled
payment under the Timeshare Loan is more than 120 days  delinquent  from the due
date,  provided,  that with respect to this clause (ii), if a Timeshare  Loan is
not more than 120 days delinquent as of the last day of the Due Period, it shall
not be a  Defaulted  Timeshare  Loan as of that date,  or (iii)  that  otherwise
ceases to be an Eligible Timeshare Loan.

            "Defective  Timeshare  Loan"  shall have the  meaning  specified  in
Section 4.6 of the Indenture.

            "Deferred  Interest  Amount" shall mean,  with respect to a Class of
Notes and a Payment  Date,  the sum of (i) interest  accrued at the related Note
Rate during the related Interest Accrual Period on such Note Balance  Write-Down
Amounts applied in respect of such Class and (ii) any unpaid  Deferred  Interest
Amounts from any prior  Payment  Date,  together  with  interest  thereon at the
applicable Note Rate from the date any such Note Balance  Write-Down  Amount was
applied in respect of such Class, to the extent permitted by law.

            "Definitive Note" shall have the meaning specified in Section 2.2 of
the Indenture.

            "Delinquency  Level"  shall mean for any Due Period,  the sum of the
Loan Balances of Timeshare Loans (other than Defaulted Timeshare Loans) that are
61 days or more  delinquent  on the last day of such Due  Period  divided by the
Aggregate  Loan  Balance  on the first day of such Due  Period  (expressed  as a
percentage).

                                     - 8 -
<PAGE>

            "Depositor"   shall  mean  BRF   Corporation   2007-A,   a  Delaware
Corporation, and its permitted successors and assigns.

            "Depository"  shall mean an  organization  registered as a "clearing
agency"  pursuant  to Section 17A of the  Securities  Exchange  Act of 1934,  as
amended. The initial Depository shall be The Depository Trust Company.

            "Depository  Agreement"  shall  mean the  letter of  representations
dated as of September 26, 2007, by and among the Issuer,  the Indenture  Trustee
and the Depository.

            "Depository  Participant"  shall mean a securities broker or dealer,
bank, trust company, clearing corporation,  other financial institution or other
Person for whom from time to time a Depository  directly or  indirectly  effects
book-entry transfers and pledges securities deposited with the Depository.

            "Determination  Date" shall mean,  with respect to any Payment Date,
the day that is five Business Days prior to such Payment Date.

            "Developer"  shall  mean  Bluegreen  Vacations  Unlimited,  Inc.,  a
Florida corporation, and its permitted successors and assigns.

            "DTC" shall mean The  Depository  Trust  Company,  and its permitted
successors and assigns.

            "Due Period" shall mean with respect to any Payment Date, the period
from the 16th day of the second preceding  calendar month to the 15th day of the
preceding  calendar month. The Due Period for the Initial Payment Date, shall be
the period from and including September 16, 2007 to October 15, 2007.

            "Early  Amortization  Event" shall occur on a Determination  Date if
the average of the Default  Levels for the last three Due Periods  exceeds 0.60%
and shall  continue  until the Default  Level is equal to or less than 0.60% for
three consecutive Due Periods.

            "Eligible Bank Account" shall mean a segregated  account,  which may
be an  account  maintained  by  the  Indenture  Trustee,  which  is  either  (a)
maintained  with a  depositary  institution  or trust  company  whose  long-term
unsecured debt  obligations  are rated at least "A" by Fitch and "A2" by Moody's
and whose short-term unsecured obligations are rated at least "A-1" by Fitch and
"P-1" by Moody's;  or (b) a trust account or similar  account  maintained at the
corporate trust department of the Indenture  Trustee held in the name of and for
the benefit of the Noteholders.

            "Eligible Investments" shall mean one or more of the following:

                  (a)  obligations  of, or  guaranteed  as to timely  payment of
            principal  and  interest  by,  the  United  States or any  agency or
            instrumentality thereof when such obligations are backed by the full
            faith and credit of the United States;

                                     - 9 -
<PAGE>

                  (b) federal funds,  certificates of deposit, time deposits and
            bankers'  acceptances,  each of which  shall  not  have an  original
            maturity  of more than 90 days,  of any  depository  institution  or
            trust  company  incorporated  under the laws of the United States or
            any state; provided that the long-term unsecured debt obligations of
            such  depository  institution  or  trust  company  at  the  date  of
            acquisition  thereof have been rated by each Rating Agency in one of
            the three highest rating categories  available from S&P and no lower
            than A2 by  Moody's;  and  provided,  further,  that the  short-term
            obligations of such depository institution or trust company shall be
            rated in the highest rating category by such Rating Agency;

                  (c)  commercial   paper  or  commercial  paper  funds  (having
            original  maturities  of not more  than 90 days) of any  corporation
            incorporated  under  the  laws of the  United  States  or any  state
            thereof; provided that any such commercial paper or commercial paper
            funds shall be rated in the highest  short-term  rating  category by
            each Rating Agency;

                  (d) any  no-load  money  market  fund rated  (including  money
            market  funds  managed  or advised  by the  Indenture  Trustee or an
            Affiliate  thereof) in the  highest  short-term  rating  category or
            equivalent  highest long-term rating category by each Rating Agency;
            provided  that,  Eligible  Investments  purchased  from funds in the
            Eligible  Bank  Accounts  shall  include  only such  obligations  or
            securities that either may be redeemed daily or mature no later than
            the Business Day next preceding the next Payment Date; or

                  (e) demand and time deposits in,  certificates  of deposit of,
            bankers'  acceptances  issued  by,  or  federal  funds  sold  by any
            depository  institution  or trust company  (including  the Indenture
            Trustee or any  Affiliate of the  Indenture  Trustee,  acting in its
            commercial  capacity)  incorporated  under  the  laws of the  United
            States of America or any State  thereof and  subject to  supervision
            and examination by federal and/or state authorities,  so long as, at
            the  time  of  such  investment,   the  commercial  paper  or  other
            short-term deposits of such depository  institution or trust company
            are rated at least P-1 by Moody's and at least A-1 by S&P;

and provided, further, that (i) no instrument shall be an Eligible Investment if
such instrument evidences a right to receive only interest payments with respect
to the obligations  underlying such instrument,  and (ii) no Eligible Investment
may be purchased at a price in excess of par.  Eligible  Investments may include
those  Eligible  Investments  with respect to which the Indenture  Trustee or an
Affiliate thereof provides services.

            "Eligible Owner Trustee" shall have the meaning specified in Section
10.01 of the Trust Agreement.

            "Eligible  Timeshare  Loan" shall mean a Timeshare  Loan which meets
all of the criteria set forth in Schedule I of the Sale Agreement.

                                     - 10 -
<PAGE>

            "Equity" shall mean the "Total  Shareholder's  Equity"  specified in
Bluegreen's  Consolidated  Balance Sheet as reported in Bluegreen's  most recent
filing with the Securities and Exchange Commission.

            "ERISA" shall mean the Employee  Retirement  Income  Security Act of
1974, as amended.

            "Errors"  shall have the  meaning  specified  in Section  5.4 of the
Indenture.

            "Event of Default"  shall have the meaning  specified in Section 6.1
of the Indenture.

            "Force Majeure  Delay" shall mean with respect to the Servicer,  any
cause or event which is beyond the control and not due to the  negligence of the
Servicer,  which delays,  prevents or prohibits  such  Person's  delivery of the
reports  required  to be  delivered  or the  performance  of any  other  duty or
obligation of the Servicer under the Indenture,  as the case may be,  including,
without limitation, computer, electrical and mechanical failures, acts of God or
the elements and fire; provided,  that no such cause or event shall be deemed to
be a Force  Majeure  Delay  unless the Servicer  shall have given the  Indenture
Trustee  written notice  thereof as soon as  practicable  after the beginning of
such delay.

            "Foreclosure Properties" shall have the meaning specified in Section
5.3(a)(xiii) of the Indenture.

            "Future  Resort"  shall  mean a Resort  which is not a Closing  Date
Resort.

            "GAAP" shall mean  generally  accepted  accounting  principles as in
effect from time to time in the United States of America.

            "General Reserve  Account" shall mean the account  maintained by the
Indenture Trustee pursuant to Section 3.2(b) of the Indenture.

            "General Reserve Account Initial Deposit" shall mean an amount equal
to 2.50% of the Aggregate Closing Date Collateral Balance.

            "General  Reserve Account  Required  Balance" shall equal,  for each
Payment Date, the greater of (i) 1.50% of the Aggregate  Closing Date Collateral
Balance and (ii) the Target Amount;  provided,  however,  that in no event shall
the General  Reserve Account  Required  Balance equal an amount greater than the
Aggregate  Outstanding  Note Balance as of such Payment Date  regardless of what
the  Target  Amount  or the  General  Reserve  Account  Required  Balance  would
otherwise be.

            "Global Note" shall have the meaning specified in Section 2.2 of the
Indenture.

            "Governmental  Authority"  shall mean any nation or government,  any
state  or  other  political   subdivision  thereof  and  any  entity  exercising
executive,  legislative,  judicial, regulatory or administrative functions of or
pertaining to government.

                                     - 11 -
<PAGE>

            "Grant"  shall mean to grant,  bargain,  convey,  assign,  transfer,
mortgage,  pledge,  create and grant a security interest in and right of set-off
against, deposit, set over and confirm.

            "Highest Lawful Rate" shall have the meaning  specified in Section 3
of the Sale Agreement.

            "II" shall mean Interval International, Inc.

            "Indenture"  shall mean the  indenture,  dated as of  September  15,
2007,  by and among the  Issuer,  the Club  Trustee,  the  Servicer,  the Backup
Servicer and the Indenture Trustee.

            "Indenture  Trustee"  shall mean U.S. Bank National  Association,  a
national  banking  association,  not in its  individual  capacity  but solely as
Indenture Trustee under the Indenture, and any successor as set forth in Section
7.9 of the Indenture.

            "Indenture Trustee Fee" shall mean for each Payment Date, the sum of
(A) $875.00  and (B) until the  Indenture  Trustee  shall  become the  successor
Servicer,  the  greater of (i) the  product of  one-twelfth  of 0.0175%  and the
Aggregate  Loan  Balance as of the first day of the  related Due Period and (ii)
$1,500.00.

            "Initial Cut-Off Date" shall mean the close of business on September
15, 2007.

            "Initial Note Balance" shall mean with respect to the Class A Notes,
the Class B Notes,  the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes  and the  Class G Notes,  $52,500,000,  $26,500,000,  $43,000,000,
$14,500,000, $15,000,000, $15,000,000 and $10,500,000, respectively.

            "Initial  Payment  Date" shall mean the Payment  Date  occurring  in
November 2007.

            "Initial  Purchaser" shall mean BB&T Capital Markets,  a division of
Scott & Stringfellow, Inc.

            "Initial  Timeshare  Loans" shall mean the Timeshare Loans listed on
the  Schedule  of  Timeshare  Loans  purchased  by the Issuer and pledged to the
Indenture Trustee on the Closing Date.

            "Intended Tax Characterization"  shall have the meaning specified in
Section 4.2(b) of the Indenture.

            "Interest Accrual Period" shall mean with respect to (i) any Payment
Date other than the Initial  Payment  Date,  the period from the 16th day of the
second preceding  calendar month to the 15th day of the preceding calendar month
and (ii) the Initial  Payment  Date,  the period from the Closing  Date  through
October 15, 2007.

            "Interest Distribution Amount" shall equal, for a Class of Notes and
on any Payment Date, the sum of (i) interest accrued during the related Interest
Accrual Period at the

                                     - 12 -
<PAGE>

related  Note  Rate on the  Outstanding  Note  Balance  of such  Class  of Notes
immediately  prior to such  Payment  Date (or,  if any Note  Balance  Write-Down
Amounts have been applied to such Class of Notes,  the Adjusted  Note Balance of
such Class of Notes) and (ii) the amount of unpaid Interest Distribution Amounts
from prior Payment Dates for such Class of Notes,  plus, to the extent permitted
by applicable law,  interest on such unpaid amount at the related Note Rate. The
Interest  Distribution Amount shall be calculated on the basis of a 360-day year
consisting of twelve 30-day months.

            "Issuer" shall mean BXG Receivables  Note Trust 2007-A,  a statutory
trust  formed  under the laws of the  State of  Delaware  pursuant  to the Trust
Agreement.

            "Issuer  Order" shall mean a written  order or request  delivered to
the  Indenture  Trustee  and signed in the name of the  Issuer by an  Authorized
Officer of the Issuer or Administrator.

            "Knowledge"  shall  mean (a) as to any  natural  Person,  the actual
awareness of the fact, event or circumstance at issue or receipt of notification
by proper delivery of such fact,  event or circumstance and (b) as to any Person
that is not a  natural  Person,  the  actual  awareness  of the  fact,  event or
circumstance at issue by a Responsible  Officer of such Person or receipt,  by a
Responsible  Officer of such Person,  of notification by proper delivery of such
fact, event or circumstance.

            "La Cabana  Resort" shall mean the Resort  located in Aruba known as
the La Cabana Beach Resort and Racquet Club.

            "Lien" shall mean any mortgage,  pledge,  hypothecation,  assignment
for security, security interest, claim, participation,  encumbrance,  levy, lien
or charge.

            "Liquidation"  means with respect to any Timeshare Loan, the sale or
compulsory  disposition  of  a  Foreclosure  Property,   following  foreclosure,
termination  or other  enforcement  action or the  taking of a  deed-in-lieu  of
foreclosure, to a Person other than the Servicer or an Affiliate thereof.

            "Liquidation  Expenses"  shall mean, with respect to the Foreclosure
Property related to a Defaulted Timeshare Loan, as of any date of determination,
any reasonable  out-of-pocket expenses (exclusive of overhead expenses) incurred
by the Servicer or the  Remarketing  Agent in connection with the performance of
its obligations  under Section  5.3(a)(xiii) in the Indenture or the Remarketing
Agreement,  as applicable,  including,  but not limited to, (i) any foreclosure,
deed-in-lieu  of  foreclosure  or termination  and other  repossession  expenses
incurred  with  respect  to such  Foreclosure  Property,  (ii)  commissions  and
marketing and sales expenses  incurred by the Servicer or the Remarketing  Agent
with respect to the remarketing of the related  Foreclosure  Property (including
the Remarketing Fee), and (iii) any other fees and expenses  reasonably  applied
or allocated in the ordinary  course of business with respect to the Liquidation
of a Foreclosure  Property  (including any assessed and unpaid  Association fees
and real estate taxes).

                                     - 13 -
<PAGE>

            "Liquidation  Proceeds" means with respect to the Liquidation of any
Foreclosure Property related to a Defaulted Timeshare Loan, the amounts actually
received  by the  Servicer  or the  Remarketing  Agent in  connection  with such
Liquidation.

            "Loan  Balance"  shall  mean,  for any  date of  determination,  the
outstanding  principal  balance  due under or in  respect  of a  Timeshare  Loan
(including a Defaulted Timeshare Loan).

            "Lockbox  Account" shall mean the deposit account  maintained at the
Lockbox Bank pursuant to the Lockbox  Agreement,  which shall be a  non-interest
bearing account.

            "Lockbox   Agreement"   shall  mean  the  deposit   account  control
agreement,  dated as of  September  15,  2007,  by and  among  the  Issuer,  the
Indenture Trustee and the Lockbox Bank.

            "Lockbox Bank" shall mean Bank of America, N.A.

            "Lockbox  Fee" shall mean on each Payment  Date,  the fee payable by
the Issuer to the Lockbox Bank in accordance with the Lockbox Agreement.

            "Misdirected  Deposits"  shall  mean  such  payments  that have been
deposited to the Collection Account in error.

            "Monthly  Servicer  Report"  shall  have the  meaning  specified  in
Section 5.5 of the Indenture.

            "Moody's" shall mean Moody's Investors Service, Inc.

            "Mortgage"  shall  mean,  with  respect to a Deeded  Club Loan,  any
purchase money mortgage, deed of trust, purchase money deed of trust or mortgage
deed creating a first lien on a Timeshare Property to secure debt granted by the
Club Trustee on behalf of an Obligor to the Club  Originator with respect to the
purchase of such Timeshare  Property and/or the  contribution of the same to the
Club and otherwise encumbering the related Timeshare Property to secure payments
or other obligations under such Timeshare Loan.

            "Mortgage  Note" shall mean, with respect to a Deeded Club Loan, the
original,  executed  promissory note  evidencing the  indebtedness of an Obligor
under a Deeded  Club  Loan,  together  with any  rider,  addendum  or  amendment
thereto, or any renewal, substitution or replacement of such note.

            "Net Liquidation Proceeds" shall mean with respect to a Liquidation,
the positive difference between Liquidation Proceeds and Liquidation Expenses.

            "New  Servicing  Fee Proposal"  shall have the meaning  specified in
Section 5.4 of the Indenture.

            "Non-Bluegreen  Owned  Resort"  shall  mean a  Resort  that is not a
Bluegreen Owned Resort.

                                     - 14 -
<PAGE>

            "Note  Balance  Write-Down  Amount"  shall mean with  respect to any
Payment Date, an amount equal to the excess,  if any, of the aggregate  Adjusted
Note Balance of all Classes  (immediately  after the  distribution  of Available
Funds) over the sum of (i) the  Aggregate  Loan Balance as of the end of the Due
Period  related to such  Payment Date and (ii) amounts on deposit in the General
Reserve Account and the Prefunding Account, if any.

            "Note Owner" shall mean,  with  respect to a  Book-Entry  Note,  the
Person who is the beneficial  owner of such Book-Entry Note, as reflected on the
books of the Depository or on the books of a Person  maintaining an account with
such Depository (directly or as an indirect participant,  in accordance with the
rules of such Depository).

            "Note  Purchase  Agreement"  shall mean that certain  note  purchase
agreement  dated  September  27,  2007,  between the Initial  Purchaser  and the
Issuer.

            "Note Rate" shall mean with respect to the Class A Notes,  the Class
B Notes,  the Class C Notes,  the Class D Notes,  the Class E Notes, the Class F
Notes and the Class G Notes, 5.828%,  6.474%, 7.463%, 7.611%, 8.283%, 9.680% and
11.149%, respectively.

            "Note Register"  shall have the meaning  specified in Section 2.4(a)
of the Indenture.

            "Note Registrar" shall have the meaning  specified in Section 2.4(a)
of the Indenture.

            "Noteholder" shall mean any holder of a Note of any Class.

            "Notes"  shall  mean  collectively,  the Class A Notes,  the Class B
Notes,  the  Class C Notes,  the Class D Notes,  the Class E Notes,  the Class F
Notes and the Class G Notes.

            "Obligor" shall mean the related obligor under a Timeshare Loan.

            "Offering  Circular" shall mean that certain  Confidential  Offering
Circular,  dated  September  27, 2007  related to the Notes and the  Transaction
Documents.

            "Officer's  Certificate"  shall  mean a  certificate  executed  by a
Responsible Officer of the applicable party.

            "Opinion of  Counsel"  shall mean a written  opinion of counsel,  in
each case acceptable to the addressees thereof.

            "Optional  Purchase  Limit" shall mean, on any date, an amount equal
to (x) 15% of the  Aggregate  Closing  Date  Collateral  Balance,  less  (y) the
aggregate Loan Balances (as of the related  purchase dates or release dates,  as
applicable) of all Defaulted  Timeshare  Loans (i)  previously  purchased by the
Club Originator  pursuant to the Sale Agreement,  the Transfer  Agreement or the
Bluegreen  Purchase  Agreement or (ii) previously  released  pursuant to Section
4.7(c) of the Indenture.

                                     - 15 -
<PAGE>

            "Optional  Redemption  Date"  shall mean the first date in which the
Aggregate Outstanding Note Balance is less than or equal to 10% of the Aggregate
Initial Note Balance.

            "Optional  Substitution  Limit" shall mean,  on any date,  an amount
equal to (x) 20% of the Aggregate  Closing Date Collateral  Balance less (y) the
aggregate  Loan  Balances (as of the related  Transfer  Dates) of all  Defaulted
Timeshare Loans  previously  substituted by the Club Originator  pursuant to the
Sale Agreement, the Transfer Agreement or the Bluegreen Purchase Agreement.

            "Original  Club  Loan"  shall  mean a  timeshare  loan for which the
related obligor has elected to effect an Upgrade and an Originator has agreed to
effect such Upgrade.

            "Originator"  shall  mean  either the Club  Originator  or the Aruba
Originator.

            "Outstanding"  shall mean, with respect to the Notes, as of any date
of determination,  all Notes  theretofore  authenticated and delivered under the
Indenture except:

            (a) Notes theretofore canceled by the Indenture Trustee or delivered
to the Indenture Trustee for cancellation;

            (b)  Notes  or  portions  thereof  for  whose  payment  money in the
necessary amount has been theretofore  irrevocably  deposited with the Indenture
Trustee in trust for the holders of such Notes; and

            (c) Notes in exchange  for or in lieu of which other Notes have been
authenticated and delivered  pursuant to the Indenture unless proof satisfactory
to the Indenture  Trustee is presented  that any such Notes are held by a Person
in  whose  hands  the Note is a valid  obligation;  provided,  however,  that in
determining  whether the holders of the requisite  percentage of the Outstanding
Note  Balance  of the Notes  have  given  any  request,  demand,  authorization,
direction,  notice,  consent, or waiver hereunder,  Notes owned by the Issuer or
any  Affiliate  of  the  Issuer  shall  be  disregarded  and  deemed  not  to be
Outstanding,  except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request,  demand,  authorization,  direction,
notice,  consent,  or  waiver,  only  Notes  that a  Responsible  Officer of the
Indenture Trustee actually has notice are so owned shall be so disregarded.

            "Outstanding   Note   Balance"   shall   mean  as  of  any  date  of
determination  and Class of Notes,  the  Initial  Note  Balance of such Class of
Notes less the sum of Principal Distribution Amounts actually distributed to the
Noteholders of such Class of Notes as of such date;  provided,  however,  to the
extent that for purposes of consents,  approvals, voting or other similar act of
the  Noteholders  under  any of the  Transaction  Documents,  "Outstanding  Note
Balance"  shall  exclude  Notes  which are held by  Bluegreen  or any  Affiliate
thereof.

            "Owner  Beneficiary"  shall have the meaning  specified  in the Club
Trust Agreement.

            "Owner  Beneficiary  Agreement"  shall mean the  purchase  agreement
entered into by each Obligor and the Developer with respect to the Club Loans.

                                     - 16 -
<PAGE>

            "Owner  Beneficiary  Rights" shall have the meaning specified in the
Club Trust Agreement.

            "Owner  Trustee" shall mean  Wilmington  Trust  Company,  a Delaware
banking  corporation,  or any successor  thereof,  acting not in its  individual
capacity but solely as owner trustee under the Trust Agreement.

            "Owner  Trustee  Corporate  Trust  Office"  shall mean Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001.

            "Owner  Trustee Fee" shall mean an annual fee equal (A) prior to the
Owner Trustee becoming successor Administrator, $6,000.00 and (B) upon the Owner
Trustee becoming successor Administrator,  $5,000.00, which fee shall be due and
payable on the first Payment Date of each year during the term hereof  occurring
after the Issuer's receipt of an invoice therefor.

            "Paying Agent" shall mean any Person  authorized under the Indenture
to make the  distributions  required under Sections 3.4 of the Indenture,  which
such Person initially shall be the Indenture Trustee.

            "Payment  Date"  shall mean the 2nd day of each  month,  or, if such
date is not a Business Day, then the next succeeding Business Day, commencing on
the Initial Payment Date.

            "Payment  Default  Event"  shall have  occurred if (i) each Class of
Notes shall become due and payable  pursuant to Section  6.2(a) of the Indenture
or (ii) each Class of Notes shall otherwise become due and payable  following an
Event of Default under the Indenture and the Indenture  Trustee has, in its good
faith  judgment,  determined  that the value of the assets  comprising the Trust
Estate is less than the Aggregate Outstanding Note Balance.

            "Percentage Interest" for a Class of Notes shall mean the following:

            (i)   initially, for the Class A Notes, the Class B Notes, the Class
                  C Notes,  the Class D Notes,  the  Class E Notes,  the Class F
                  Notes and the Class G Notes, 26.25%,  13.25%,  21.50%,  7.25%,
                  7.50%, 7.50% and 5.25%, respectively;

            (ii)  if an Early Amortization Event has occurred and is continuing,
                  for each Class of Notes,  the then Outstanding Note Balance of
                  such Class  divided  by the then  Aggregate  Outstanding  Note
                  Balance,   expressed  as  a   percentage,   until  such  Early
                  Amortization  Event is  cured,  at which  time the  Percentage
                  Interest  for  each  Class  of  Notes  shall  equal  the  then
                  Outstanding Note Balance of such Class of Notes divided by the
                  then Aggregate Loan Balance, expressed as a percentage; and

            (iii) if a Trigger  Event has  occurred and is  continuing,  for the
                  most senior Class of Notes  outstanding at any time,  100% and
                  the remaining  Classes of Notes,  0%, until such Trigger Event
                  is cured,  at which time,  the

                                     - 17 -
<PAGE>

                  Percentage  Interest  for each Class of Notes  shall equal the
                  then  Outstanding  Note Balance of such Class of Notes divided
                  by the then Aggregate Loan Balance, expressed as a percentage.

            "Permitted  Liens" shall mean (a) with respect to Timeshare Loans in
the Trust  Estate,  (i) Liens for state,  municipal or other local taxes if such
taxes  shall  not at the  time be due and  payable,  (ii)  Liens in favor of the
Depositor and the Issuer  created  pursuant to the  Transaction  Documents,  and
(iii) Liens in favor of the Trust and the Indenture  Trustee created pursuant to
the  Indenture;  (b)  with  respect  to  the  related  Timeshare  Property,  (i)
materialmen's,  warehousemen's,  mechanic's and other Liens arising by operation
of law in the  ordinary  course of  business  for sums not due,  (ii)  Liens for
state, municipal or other local taxes if such taxes shall not at the time be due
and payable,  and (iii) the Obligor's  interest in the Timeshare  Property under
the Timeshare  Loan whether  pursuant to the Club Trust  Agreement or otherwise;
and (c) with  respect  to  Timeshare  Loans and  Related  Security  in the Trust
Estate,  any and all rights of the  Beneficiaries  referred to in the Club Trust
Agreement under such Club Trust Agreement.

            "Person"  means  an   individual,   general   partnership,   limited
partnership, limited liability partnership,  corporation,  business trust, joint
stock company,  limited liability company,  trust,  unincorporated  association,
joint venture, Governmental Authority, or other entity of whatever nature.

            "Predecessor Servicer Work Product" shall have the meaning specified
in Section 5.4(b) of the Indenture.

            "Prefunding   Account"  shall  be  the  account  maintained  by  the
Indenture Trustee pursuant to Section 3.2(c) of the Indenture.

            "Prefunding Account Initial Deposit" shall equal $43,071,064.83.

            "Prefunding  Period" shall mean the period commencing on the Closing
Date and ending on the Prefunding Termination Date.

            "Prefunding  Termination  Date"  shall mean the  Determination  Date
immediately  following the earliest of (i) 90 days after the Closing Date,  (ii)
the date on which the amount on deposit in the  Prefunding  Account is less than
$10,000 and (iii) the date on which an Event of Default occurs.

            "Principal Distribution Amount" shall equal for any Payment Date and
Class of Notes,  the sum of the following,  without  duplication with respect to
any Timeshare Loan:

            (i)   the product of (a) such Class' Percentage Interest and (b) the
                  amount of  principal  collected  in respect of each  Timeshare
                  Loan during the related Due Period (including, but not limited
                  to,  principal  in  respect  of  scheduled  payments,  partial
                  prepayments,  prepayments in full, liquidations,  Substitution
                  Shortfall Amounts and Repurchase Prices, if any, but excluding
                  principal  received in respect of Timeshare  Loans that became
                  Defaulted  Timeshare  Loans during prior Due Periods that have
                  not been

                                     - 18 -
<PAGE>

                  released  from the Lien of the  Indenture)  or, if the Cut-Off
                  Date for a  Qualified  Substitute  Timeshare  Loan  shall have
                  occurred  during  the  related  Due  Period,   the  amount  of
                  principal  collected in respect of such  Qualified  Substitute
                  Timeshare Loan after such Cut-Off Date;

            (ii)  the product of (a) such Class' Percentage Interest and (b) the
                  aggregate  Loan  Balance of all  Timeshare  Loans which became
                  Defaulted  Timeshare  Loans during the related Due Period less
                  the sum of (x) the  aggregate  Loan  Balance of all  Qualified
                  Substitute  Timeshare  Loans which were  conveyed to the Trust
                  Estate in  respect of  Defaulted  Timeshare  Loans  during the
                  related Due Period,  (y) the  principal  portion of Repurchase
                  Prices paid in respect of Defaulted Timeshare Loans during the
                  related  Due  Period,   and  (z)  the  principal   portion  of
                  Liquidation Proceeds received during the related Due Period;

            (iii) on the first  Payment  Date after the  Prefunding  Termination
                  Date,  the product of (a)(1) such Class'  Percentage  Interest
                  divided  by (2) 88.5% and (b) the  amount  deposited  into the
                  Collection  Account from the  Prefunding  Account  pursuant to
                  Section 3.2(c) of the Indenture, if any; and

            (iv)  any unpaid Principal  Distribution Amounts for such Class from
                  prior Payment Dates.

            "Qualified  Substitute  Timeshare  Loan" shall mean a Timeshare Loan
(i) that, when aggregated with other Qualified  Substitute Timeshare Loans being
substituted on such Transfer Date, has a Loan Balance,  after application of all
payments  of  principal  due and  received  during  or  prior  to the  month  of
substitution,  not in excess of the Loan  Balance  of the  Timeshare  Loan being
substituted on the related Transfer Date, (ii) that complies,  as of the related
Transfer Date, with each of the representations and warranties  contained in the
Sale Agreement,  the Transfer  Agreement and the Bluegreen  Purchase  Agreement,
including that such Qualified Substitute Timeshare Loan is an Eligible Timeshare
Loan;  provided  that  there will be no  seasoning  requirement  if a  Qualified
Substitute  Timeshare  Loan is an Upgrade Club Loan  replacing an Original  Club
Loan with the same  Obligor,  (iii)  that shall not cause the  weighted  average
coupon  rate  of  the  Timeshare  Loans  to  be  less  than  14.75%  after  such
substitution,  (iv) that shall not cause the weighted  average  months of age on
the Timeshare Loans to be less than 3 months after such  substitution,  (v) that
shall not cause the weighted average remaining term to maturity of the Timeshare
Loans to be equal to or greater  than 117 months,  and (vi) that does not have a
stated maturity later than October 2020.

            "Rating Agency" shall mean Moody's and S&P.

            "RCI" shall mean Resort Condominiums  International,  LLC (or one of
its wholly owned subsidiaries).

            "Receivables"  means the payments  required to be made pursuant to a
Timeshare Loan.

                                     - 19 -
<PAGE>

            "Receivables Collateral" shall have the meaning specified in Section
3 of the Sale Agreement.

            "Record  Date" shall mean,  with  respect to any Payment  Date,  the
close of business on the last day of the related Interest Accrual Period.

            "Redemption  Date" shall mean with respect to the  redemption of the
Notes on or after the  Optional  Redemption  Date,  the date fixed  pursuant  to
Section 10.1 of the Indenture.

            "Redemption  Price" shall mean, with respect to each Class of Notes,
the sum of the  Outstanding  Note Balance of such Class of Notes,  together with
interest  accrued  and  unpaid  thereon  at the  applicable  Note Rate up to and
including the Redemption Date.

            "Related  Security"  shall mean with respect to any Timeshare  Loan,
(i) all of the Issuer's  interest in the Timeshare  Property arising under or in
connection with the related Mortgage, if any, Owner Beneficiary Rights, Vacation
Points and the related Timeshare Loan Files,  (ii) all other security  interests
or liens and property  subject  thereto from time to time  purporting  to secure
payment of such Timeshare Loan, together with any Mortgages,  signed by the Club
Trustee  on  behalf  of an  Obligor  describing  any  collateral  securing  such
Timeshare  Loan,  (iii)  all  guarantees,  insurance  and  other  agreements  or
arrangements  of whatever  character  from time to time  supporting  or securing
payment of such  Timeshare  Loan,  (iv) any  assignments  of  Mortgages  and any
financing statements, and (v) all other security and books, records and computer
tapes relating to the foregoing.

            "Remarketing Agent" shall mean Bluegreen.

            "Remarketing   Agreement"   shall  mean  that  certain   remarketing
agreement,  dated as of September  15, 2007,  by and among,  the  Servicer,  the
Issuer,  the  Remarketing  Agent and the Indenture  Trustee,  as the same may be
amended,  modified,  or  supplemented  from time to time in accordance  with the
terms thereof.

            "Repurchase Price" shall mean (i) with respect to any Timeshare Loan
to be purchased by the Club Originator pursuant to the Transfer  Agreement,  the
Bluegreen Purchase Agreement or the Sale Agreement,  an amount equal to the Loan
Balance of such  Timeshare  Loan as of the date of such purchase or  repurchase,
together  with all accrued and unpaid  interest  on such  Timeshare  Loan at the
related  Timeshare  Loan Rate to,  but not  including,  the due date in the then
current  Due  Period;  and  (ii)  with  respect  to any  Closing  Date  Eligible
Investment  to be purchased  by the Club  Originator  pursuant to the  Bluegreen
Purchase Agreement or the Sale Agreement,  an amount equal to the par balance of
such  Closing  Date  Eligible  Investment  together  with all accrued and unpaid
interest on such Closing Date Eligible  Investment at the related coupon rate as
of the date of such repurchase.

            "Request  for  Release"  shall be a request for release of Timeshare
Loan Documents in the form required by the Custodial Agreement.

            "Required  Payments"  shall mean each of the items  described in (i)
through (xxiii) of Section 3.4 of the Indenture.

                                     - 20 -
<PAGE>

            "Reservation  System":  The reservation  system utilized by the Club
and owned by the Club  Managing  Entity or the services  contracted  by the Club
Managing Entity with a third party.

            "Residual  Interest  Certificate"  shall mean the certificate issued
under the Trust Agreement,  which represents the economic  residual  interest of
the Trust formed thereunder.

            "Residual  Interest  Owner"  shall  mean the  owner of the  Residual
Interest Certificate issued by the Issuer pursuant to the Trust Agreement, which
shall initially be the Depositor.

            "Resort"  shall mean,  as the context shall  require,  the resort at
which the Timeshare Property related to a Timeshare Loan is located.

            "Resort   Interests"  shall  mean  as  defined  in  the  Club  Trust
Agreement.

            "Responsible  Officer"  shall mean (a) when used with respect to the
Owner  Trustee or the  Indenture  Trustee,  any  officer  assigned  to the Owner
Trustee  Corporate  Trust Office or the Corporate  Trust  Office,  respectively,
including  any  Managing  Director,   Senior  Vice  President,  Vice  President,
Assistant Vice President,  Secretary,  Assistant Secretary, Assistant Treasurer,
any trust  officer  or any other  officer  such  Person  customarily  performing
functions  similar to those performed by any of the above  designated  officers,
and also,  with respect to a particular  matter,  any other officer to whom such
matter is referred  because of such officer's  knowledge of and familiarity with
the particular  subject;  (b) when used with respect to the Servicer,  the Chief
Financial  Officer,  a Vice President,  an Assistant Vice  President,  the Chief
Accounting Officer or the Secretary of the Servicer; and (c) with respect to any
other Person, the chairman of the board, chief financial officer, the president,
a vice  president,  the treasurer,  an assistant  treasurer,  the secretary,  an
assistant secretary, the controller,  general partner, trustee or the manager of
such Person.

            "S&P" shall mean Standard & Poor's Ratings  Services,  a division of
The McGraw-Hill Companies, Inc.

            "Sale Agreement" shall mean that certain sale agreement, dated as of
September 15, 2007,  between the Depositor and the Issuer  pursuant to which the
Depositor sells the Closing Date Eligible  Investments and Timeshare Loans, from
time to time, to the Issuer.

            "Sampler Loan" shall mean a loan originated by Bluegreen pursuant to
the terms of a Sampler Program Agreement.

            "Sampler Converted Loan" shall mean a Timeshare Loan, the obligor of
which,  previously had a Sampler Loan and converted the same to a Timeshare Loan
pursuant to the terms of a Sampler Program Agreement.

            "Sampler  Program  Agreement"  shall mean an  agreement  pursuant to
which a purchaser  thereunder  obtains those certain  benefits set forth therein
which comprise the "Sampler Membership" and, subject to the terms and conditions
thereof,  has the  opportunity  to convert

                                     - 21 -
<PAGE>

such Sampler  Membership  into full  ownership in the  Bluegreen  Vacation  Club
multi-site timeshare plan.

            "Schedule of Eligible  Investments"  shall mean the list of Eligible
Investments  delivered pursuant to the Bluegreen Purchase Agreement and the Sale
Agreement, as amended from time to time to reflect repurchases, which list shall
set  forth  the  following  information  with  respect  to  each  such  Eligible
Investment in numbered columns:

            1     Eligible Investment
            2     Interest Rate Per Annum
            3     Maturity
            4     Par Balance
            5     Type

            "Schedule of Timeshare Loans" shall mean the list of Timeshare Loans
delivered  pursuant  to the Sale  Agreement,  as  amended  from  time to time to
reflect  repurchases,  substitutions,  Subsequent  Timeshare Loans and Qualified
Substitute  Timeshare  Loans  conveyed  pursuant to the terms of the  Indenture,
which list shall set forth the  information  with respect to each Timeshare Loan
as of the related Cut-Off Date, as applicable, in numbered columns.

            If the Schedule of Timeshare Loans is provided in electronic format,
it shall be  substantially  in the form of Exhibit E to the Custodial  Agreement
(which, in any event, shall contain all the information specified above).

            "Securities Act" shall mean the Securities Act of 1933, as amended.

            "Seller" shall mean with respect to (i) the Transfer Agreement,  BXG
Timeshare I, (ii) the Bluegreen Purchase Agreement, Bluegreen and (iii) the Sale
Agreement, the Depositor.

            "Sequential  Pay Event" shall mean either a Payment Default Event or
a Trust Estate Liquidation Event.

            "Servicer"  shall mean  Bluegreen in its capacity as servicer  under
the Indenture, the Backup Servicing Agreement, the Remarketing Agreement and the
Custodial Agreement, and its permitted successors and assigns.

            "Servicer  Credit  Card  Processing  Cost"  shall  have the  meaning
specified in Section 5.3(b) of the Indenture.

            "Servicer  Event of  Default"  shall have the meaning  specified  in
Section 5.4 of the Indenture.

            "Servicing  Fee" shall mean for any  Payment  Date,  the  product of
(i)(A) if Bluegreen or an affiliate  thereof is Servicer,  one-twelfth  of 1.50%
and (B) if the  Indenture  Trustee is the  successor  Servicer,  one-twelfth  of
1.55%,  and (ii) the  aggregate  Loan Balance of all  Timeshare  Loans as of the
first day of the related Due Period;  provided that if the Indenture

                                     - 22 -
<PAGE>

Trustee  is the  successor  Servicer,  it shall,  after  payment  of the  Backup
Servicing Fee, be entitled to a minimum monthly payment of $5,500.00.

            "Servicing  Officer"  shall  mean  those  officers  of the  Servicer
involved  in, or  responsible  for,  the  administration  and  servicing  of the
Timeshare  Loans, as identified on the list of Servicing  Officers  furnished by
the Servicer to the Indenture Trustee and the Noteholders from time to time.

            "Servicing  Standard"  shall mean,  with respect to the Servicer and
the Backup Servicer a servicing standard which complies with applicable law, the
terms of the Transaction Documents,  the terms of the respective Timeshare Loans
and,  to the  extent  consistent  with the  foregoing,  in  accordance  with the
customary standard of prudent servicers of loans secured by timeshare  interests
similar to the  Timeshare  Properties,  but in no event lower than the standards
employed by it when servicing  loans for its own account or other third parties,
but, in any case,  without regard for (i) any relationship that it or any of its
Affiliates  may have with the  related  Obligor,  and (ii) its right to  receive
compensation  for its  services  under  the  Indenture  or with  respect  to any
particular transaction.

            "Servicer   Termination   Costs"   shall   mean  any   extraordinary
out-of-pocket  expenses  incurred by the Indenture  Trustee  associated with the
transfer of servicing.

            "Similar  Law" shall mean the  prohibited  transaction  rules  under
ERISA or section  4975 of the Code or any  substantially  similar  provision  of
federal, state or local law.

            "Stated  Maturity"  shall mean the Payment Date occurring in October
2022.

            "Statutory  Trust Statute" shall mean the Delaware  Statutory  Trust
Act,  Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. ss. 3801, et seq.,
as the same may be amended from time to time.

            "Subsequent  Cut-Off  Date" shall mean with  respect to any Transfer
Date,  (i) the close of business  on the last day of the Due Period  immediately
preceding such Transfer Date or (ii) such other date designated by the Servicer.

            "Subsequent  Timeshare Loans" shall mean the Timeshare Loans meeting
the criteria  specified in Section 4.3 of the Indenture,  sold by the Depositor,
purchased by the Issuer and pledged to the Indenture  Trustee on a Transfer Date
during the Prefunding Period.

            "Subsequent  Transfer  Notice"  shall have the meaning  specified in
Section 4.2(a) of the Indenture.

            "Substitution  Shortfall  Amount"  shall  mean with  respect  to any
Transfer  Date, an amount equal to the excess of the aggregate  Loan Balances of
the  substituted  Timeshare  Loans  over  the  aggregate  Loan  Balances  of the
Qualified Substitute Timeshare Loans.

                                     - 23 -
<PAGE>

            "Target Amount" shall mean, for any Payment Date, an amount equal to
the product of (i) the Target Amount  Percentage and (ii) the Aggregate  Closing
Date Collateral Balance.

            "Target  Amount  Percentage"  shall mean (i) for each  Payment  Date
until and  including  the Payment  Date in April  2009,  5.00% and (ii) for each
Payment Date thereafter,  5.00% less the product of (A) 0.75% and (B) the number
of Target Amount Reduction Dates after the Payment Date in April 2009;  provided
that in no circumstances will the Target Amount Percentage be less than 1.50%.

            "Target Amount Reduction Date" shall mean a Payment Date in which no
Early Amortization Event or Trigger Event exists and is continuing.

            "Timeshare Declaration" shall mean the declaration or other document
recorded in the real estate records of the applicable municipality or government
office where a Resort is located for the purpose of creating and  governing  the
rights of owners of Timeshare Properties related thereto, as it may be in effect
from time to time.

            "Timeshare  Loan" shall mean a Club Loan,  Initial  Timeshare  Loan,
Subsequent  Timeshare Loan or a Qualified  Substitute Timeshare Loan, subject to
the  Lien of the  Indenture.  As used in the  Transaction  Documents,  the  term
"Timeshare Loan" shall include the related Mortgage Note, Mortgage,  if any, the
Owner Beneficiary  Agreement and other Related Security contained in the related
Timeshare Loan Documents.

            "Timeshare  Loan  Acquisition  Price" shall mean with respect to any
Timeshare  Loan, an amount equal to the Loan Balance of such Timeshare Loan plus
all interest received up to and including the related Cut-Off Date.

            "Timeshare Loan Documents" shall mean with respect to each Timeshare
Loan and each Obligor,  the related (i) Timeshare Loan Files, and (ii) Timeshare
Loan Servicing Files.

            "Timeshare Loan Files" shall mean, with respect to a Timeshare Loan,
all documents related to such Timeshare Loan, including:

            1.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  the original  Mortgage Note executed by the Obligor,  endorsed
                  either as (i) "Pay to the order of ________, without recourse,
                  representation  or warranty"  (either directly on the Mortgage
                  Note or on an allonge placed with such Mortgage  Note),  by an
                  Authorized  Officer of the  related  Seller  (such  Authorized
                  Officer's  signature  may be  computer  generated),  or (ii) a
                  chain of  endorsement  as  follows:  "Pay to the  order of BRF
                  Corporation  2007-A,   without  recourse,   representation  or
                  warranty",  "Pay to the order of BXG  Receivables  Note  Trust
                  2007-A, without recourse, representation or warranty" and "Pay
                  to the order of U.S. Bank National  Association,  as Indenture
                  Trustee,  without recourse,  representation or warranty except
                  as provided in the  Indenture  dated as of September 15, 2007"
                  (either  directly on the Mortgage Note or on an allonge placed
                  with such  Mortgage  Note),

                                     - 24 -
<PAGE>

                  by an Authorized  Officer of the related Seller, the Depositor
                  and the Issuer (such  Authorized  Officer's  signature  may be
                  computer generated), respectively (in the case of both clauses
                  (i)  and  (ii)  above,  together  with  a  complete  chain  of
                  endorsements from the original payee to the related Seller, if
                  applicable);

            2.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  (i) an original  Mortgage with evidence that such Mortgage has
                  been recorded in the appropriate  recording  office or (ii) if
                  such Mortgage has not yet been returned to the related  Seller
                  by  such  recording  office,  a  photocopy  of the  unrecorded
                  Mortgage  that has been  delivered  to such  recording  office
                  (with  evidence that such  Mortgage has been  delivered to the
                  appropriate recording office for recording);

            3.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  (i) original recorded  Assignment(s) of Mortgage (which may be
                  a part of a blanket  assignment  of more than one Club Loan in
                  which  case,  a  copy  thereof,   with  the  original  blanket
                  Assignments  of Mortgage  held by the Custodian in the related
                  master pool header file),  showing the assignment of such Club
                  Loan from the record  mortgagee to the Indenture  Trustee,  or
                  (ii)  if such  Assignments  of  Mortgage  have  not  yet  been
                  returned by the related  recording  office, a photocopy of the
                  unrecorded Assignments of Mortgage that have been delivered to
                  such  recording  office  (which  may  be a part  of a  blanket
                  assignment of more than one Club Loan), showing the assignment
                  of such Club Loan from the record  mortgagee to the  Indenture
                  Trustee (with evidence (a copy of (A) the Federal  Express (or
                  similar service) receipt and (B) the check made payable to the
                  applicable  recording office,  being sufficient evidence) that
                  such  Assignments  of  Mortgage  have  been  delivered  to the
                  appropriate  recording office for recording),  or (iii) if the
                  related  Mortgage  has not yet  been  returned  such  that the
                  related  Assignment(s)  of Mortgage can not yet be filed,  (A)
                  evidence  that that such  Mortgage  has been  delivered to the
                  appropriate  recording office for recordation (the evidence in
                  paragraph 2 above being  sufficient)  and (B)  Assignments  of
                  Mortgage in recordable form (other than the Mortgage recording
                  information)  duly  executed by the last record  holder of the
                  Mortgage  showing  the  assignment  of such Club Loan from the
                  record mortgagee to the Indenture Trustee; provided,  however,
                  that with respect to clauses (ii) and (iii) of this  paragraph
                  3,  photocopies  held by the Custodian in the related investor
                  file shall be sufficient.

            4.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  the UCC  financing  statement,  if any,  evidencing  that  the
                  security  interest  granted under such Timeshare Loan, if any,
                  has been perfected under applicable state law;

                                     - 25 -
<PAGE>

            5.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  (i) a copy of any recorded  warranty deed  transferring  legal
                  title to the related  Timeshare  Property to the Club Trustee,
                  or  (ii) if  such  recorded  warranty  deed  has not yet  been
                  returned to the related Seller, a copy of a warranty deed sent
                  for recording;

            6.    with  respect to a Club Loan  (other than an Aruba Club Loan),
                  either (i) a final original  lender's title  insurance  policy
                  (which may  consist of one master  policy  referencing  one or
                  more Mortgages)  showing no exceptions to coverage (other than
                  Permitted Liens) or (ii) a binding unconditional commitment to
                  issue  a title  insurance  policy  showing  no  exceptions  to
                  coverage  (other than Permitted  Liens) (which may be a master
                  commitment  referencing  one or more  Mortgages,  the original
                  master  commitment  to be held by the Custodian in the related
                  master  pool  header  file),  in all  cases  referencing  such
                  Timeshare  Loan and  insuring  Bluegreen  Corporation  and its
                  successors and/or assigns;

            7.    the original of any related  assignment  or  guarantee  or, if
                  such original is unavailable,  a copy thereof  certified by an
                  Authorized  Officer  of the  related  Seller  to be a true and
                  correct copy, current and historical computerized data files;

            8.    the original of any  assumption  agreement or any  refinancing
                  agreement;

            9.    all   related   Owner    Beneficiary    Agreements,    finance
                  applications, sale and escrow documents executed and delivered
                  by the  related  Obligor  with  respect to the  purchase  of a
                  Timeshare Property;

            10.   all other papers and records of whatever kind or  description,
                  whether  developed or  originated  by an Originator or another
                  Person,  required to document,  service or enforce a Timeshare
                  Loan; and

            11.   any   additional    amendments,    supplements,    extensions,
                  modifications or waiver agreements required to be added to the
                  Timeshare  Loan Files  pursuant to the  Indenture,  the Credit
                  Policy,   the  Collection  Policy  or  the  other  Transaction
                  Documents, if any.

            "Timeshare Loan Rate" shall mean with respect to any Timeshare Loan,
the specified coupon rate thereon.

            "Timeshare  Loan  Servicing  Files"  shall mean with respect to each
Timeshare  Loan and each  Obligor,  the  portion  of the  Timeshare  Loan  Files
necessary  for the Servicer to service such  Timeshare  Loan  including  but not
limited to (i) a copy of the  truth-in-lending  disclosure statement executed by
such Obligor, as applicable,  (ii) all writings pursuant to which such Timeshare
Loan arises or which  evidences  such  Timeshare  Loan and not  delivered to the
Custodian,  (iii) all papers and computerized records customarily  maintained by
the Servicer in servicing  timeshare loans  comparable to the Timeshare Loans in
accordance with the Servicing

                                     - 26 -
<PAGE>

Standard and (iv) each Timeshare  Program Consumer  Document (not the original),
if applicable, related to the applicable Timeshare Property.

            "Timeshare  Program"  shall  mean the  program  under  which  (1) an
Obligor  has  purchased a Timeshare  Property  and (2) an Obligor  shares in the
expenses associated with the operation and management of such program.

            "Timeshare  Program  Consumer  Documents" shall mean, as applicable,
the Owner  Beneficiary  Agreement,  Mortgage Note,  Mortgage,  rescission  right
notices,  public offering statements and other documents and disclosures used or
to be used by an Originator in connection with the sale of Timeshare Properties.

            "Timeshare  Program Governing  Documents" shall mean the articles of
organization or articles of  incorporation  of each  Association,  the rules and
regulations  of each  Association,  the Timeshare  Program  management  contract
between each Association and a management company,  and any subsidy agreement by
which an  Originator  is obligated to  subsidize  shortfalls  in the budget of a
Timeshare  Program  in lieu of paying  assessments,  as they may be from time to
time in effect and all amendments,  modifications and restatements of any of the
foregoing.

            "Timeshare  Property"  shall mean (i) with  respect to a Deeded Club
Loan, a  fractional  fee simple  timeshare  interest in a Unit in a resort or an
undivided  interest in a resort  associated with a Unit and (ii) with respect to
an Aruba Club Loan, Co-op Shares.

            "Transaction  Documents"  shall mean the  Indenture,  the  Bluegreen
Purchase  Agreement,  the Transfer  Agreement,  the Sale Agreement,  the Lockbox
Agreement,  the Backup Servicing Agreement,  the Administration  Agreement,  the
Remarketing Agreement,  the Custodial Agreement, the Note Purchase Agreement and
all other  agreements,  documents or instruments  (other than the Timeshare Loan
Documents) delivered in connection with the transactions contemplated thereby.

            "Transfer Agreement" shall mean the transfer agreement,  dated as of
September  15, 2007, by and among  Bluegreen,  the Depositor and BXG Timeshare I
pursuant to which certain Initial Timeshare Loans are sold to the Depositor.

            "Transfer  Date"  shall  mean  with  respect  to  (i)  a  Subsequent
Timeshare  Loan,  the date  during  the  Prefunding  Period on which the  Issuer
purchases  such  Subsequent  Timeshare  Loan  from a  Seller  and  pledges  such
Timeshare  Loan to the  Indenture  Trustee to be  included  as part of the Trust
Estate,  and (ii) a Qualified  Substitute  Timeshare Loan, the date on which the
Club  Originator  substitutes  one or more  Timeshare  Loans in accordance  with
Section 4.6 of the Indenture.

            "Treasury Regulations" shall mean the regulations, included proposed
or  temporary  regulations,  promulgated  under the Code.  References  herein to
specific provisions of proposed or temporary regulations shall include analogous
provisions  of  final   Treasury   Regulations  or  other   successor   Treasury
Regulations.

                                     - 27 -
<PAGE>

            "Trigger  Event"  shall occur on any  Determination  Date if (a) the
average of the Delinquency  Levels for the last three Due Periods is equal to or
greater  than 6%, (b) the average of the  Default  Levels for the last three Due
Periods  exceeds 1.40% and shall continue until the Default Level is equal to or
less than  1.40% for three  consecutive  Due  Periods  or (c) the  Servicer  (if
Bluegreen) fails to have at least $75,000,000 in financing facilities in place.

            "Trust" shall mean the Issuer.

            "Trust Accounts" shall mean collectively,  the Lockbox Account,  the
Collection Account,  the General Reserve Account,  the Prefunding  Account,  the
Credit Card Account and the Capitalized Interest Account.

            "Trust   Agreement"  shall  mean  the  amended  and  restated  trust
agreement,  dated the Closing  Date,  by and among the  Depositor  and the Owner
Trustee.

            "Trust  Estate"  shall have the meaning  specified  in the  Granting
Clause of the Indenture.

            "Trust Estate Liquidation Event" shall have the meaning specified in
Section 6.6(b) of the Indenture.

            "Trust  Paying  Agent"  shall have the meaning  specified in Section
3.13 of the Trust Agreement.

            "UCC" shall mean the Uniform Commercial Code as from time to time in
affect in the applicable jurisdiction or jurisdictions.

            "Unit(s)":  One individual air-space condominium unit, cabin, villa,
cottage, townhome or lot within a resort, together with all furniture,  fixtures
and furnishings therein, if applicable,  and together with any and all interests
in common elements  appurtenant  thereto,  as provided in the related  Timeshare
Program Governing Documents.

            "Upgrade"  shall mean the process in which an obligor of an Original
Club Loan elects to (a)(i)  reconvey  the  existing  Club  Property for new Club
Property (such new Club Property having a greater dollar value than the existing
Club Property) and (ii) cancel the Original Club Loan in exchange for an Upgrade
Club Loan secured by such new Club Property or (b)(i)  acquires  additional Club
Property and (ii) cancels the Original Club Loan in exchange for an Upgrade Club
Loan from the Club  Originator  secured by the  existing  Club  Property and the
additional Club Property.

            "Upgrade Club Loan" shall mean the new timeshare loan  originated by
an Originator in connection with an Upgrade.

            "Vacation Points" shall have the meaning specified in the Club Trust
Agreement.

                                     - 28 -

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