Document:

EXHIBIT 10.29

 

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

 

LICENSE
AND COLLABORATION AGREEMENT

 

THIS
LICENSE AND COLLABORATION AGREEMENT (the “Agreement”)
is entered into as of the Effective Date by and between RIGEL
PHARMACEUTICALS, INC., a Delaware corporation having its principal
place of business at 1180 Veterans Boulevard, South San Francisco, CA  94080 (“Rigel”) and ASTRAZENECA AB, a Swedish corporation having its principal
place of business at SE-151-85, Södertälje, Sweden (“AZ”).  Rigel and AZ are sometimes referred to herein
individually as a “Party” and
collectively as the “Parties”.

 

RECITALS

 

I.                                         AZ is a world
leading pharmaceutical company having expertise in the development,
manufacture and commercialization of human therapeutic products.

 

II.                                     Rigel is a
clinical-stage drug development company that discovers and develops novel,
small-molecule drugs for the treatment of inflammatory and autoimmune diseases,
cancer, and viral and metabolic diseases.

 

III.                                 Rigel has
developed, and owns rights to, the product comprising Rigel’s proprietary
Compound (as defined below), and has completed or initiated Phase 2 Clinical
Trials for such product for the treatment of rheumatoid arthritis (“RA”), lymphoma, and immune thrombocytopenic purpura (“ITP”).

 

IV.                                 AZ and Rigel
desire to establish a collaboration for the development and commercialization
of such product in the Field (as defined below) on the terms of this Agreement.

 

NOW
THEREFORE, in consideration of the foregoing premises and the
mutual promises, covenants and conditions contained in this Agreement, the Parties
agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

As used in this
Agreement, the following initially capitalized terms, whether used in the
singular or plural form, shall have the meanings set forth in this Article 1.  In addition, the terms “includes,” “including,”
“include” and derivative forms of them shall be deemed followed by the phrase “without
limitation” (regardless of whether it is actually written there (and drawing no
implication from the actual inclusion of such phrase in some instances after such
terms but not others)).

 

1.1                               “Additional Indication”
shall mean asthma and COPD.

 

1

 

1.2                               “Adverse Drug Reaction” means an Adverse Event suspected to be
causally related to a product.

 

1.3                               “Adverse Event” means any untoward medical occurrence in
a patient or clinical investigation subject administered a pharmaceutical
product and which does not necessarily have a causal relationship with this
treatment.

 

1.4                               “Affiliate” means, with respect to a particular Person,
any other Person that controls, is controlled by or is under common control
with such first Person.  For the purposes
of this definition, the term “control” (including, with correlative meaning,
the terms “controlled by” or “under the common control with”) means the actual
power, either directly or indirectly through one or more intermediaries, to
direct or cause the direction of the management and policies of an entity,
whether by the ownership of more than fifty percent (50%) of the voting stock of
such entity, or by contract or otherwise.

 

1.5                               “Applicable Laws” means all laws, statutes, rules,
regulations, ordinances and other pronouncements having the effect of law of
any federal, national, multinational, state, provincial, country, city or other
political subdivision, domestic or foreign that are applicable to the
particular situation, obligation or circumstance.

 

1.6                               “Autoimmune Disorders” means a disorder characterized by a
pathological response of the sufferer’s immune system to one or more of his own
tissues whether or not the disorder was ultimately triggered by reaction to an
extrinsic antigen.  For the avoidance of doubt RA and [ * ] will always be
classified as Autoimmune Disorders.

 

1.7                               “[ * ]” means

 

a
[ * ]:

 

(i)                                    [ * ]; and

 

(ii)                                [ * ]; and

 

(iii)                            [ * ].

 

1.8                               “AZ
Know-How” means all Information (excluding any published AZ
Patents) that is Controlled as of the Effective Date or thereafter during the Term by AZ and/or its
Affiliates and is reasonably necessary for the development, Manufacture, use,
importation, offer for sale or sale of the Compound or Product(s) in the
Field, including any such Information made by or on behalf of AZ or its
Affiliates or Sublicensees in the course of performing AZ’s obligations or
exercising AZ’s rights under this Agreement which is Controlled by AZ or such
Affiliates.  For clarity, the use of “Affiliate”
in this definition shall exclude any Third Party that becomes an Affiliate due
to such Third Party’s acquisition of AZ.

 

1.9                               “AZ Patents” means all patents and patent applications
that are Controlled as of the Effective Date or thereafter during the Term by
AZ and/or its Affiliates and rights to which 

 

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

 

2

 

are reasonably necessary
for the development, Manufacture, use, importation, offer for sale or sale of
the Compound or Product(s) in the Field, including: (i) all
substitutions, divisions, continuations, continuations-in-part thereof (to the
extent directed to the subject matter disclosed in a patent or patent application
described above) and requests for continued examination of any of the
foregoing, (ii) all patents issued from any of the foregoing patent
applications, (iii) all reissues, renewals, registrations, confirmations,
re-examinations, extensions, and supplementary protection certificates of any
of the foregoing, and (iv) all foreign equivalents of any of the
foregoing.  For clarity, the use of “Affiliate”
in this definition shall exclude any Third Party that becomes an Affiliate due
to such Third Party’s acquisition of AZ.

 

1.10                        “AZ Technology” means the AZ Patents and AZ Know-How.

 

1.11                        “Business Days” means any day other than a Saturday, a
Sunday or a day on which commercial banks located in Sweden or California, USA
are authorized or required by law to remain closed.

 

1.12                        “Calendar Quarter” means the respective period of three
consecutive calendar months ending on March 31, June 30, September 30
and December 31.

 

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

 

1.14                        “Change of Control” means any of the following events: (a) any
Third Party (or group of Third Parties acting in concert) becomes the
beneficial owner, directly or indirectly, of more than fifty percent (50%) of
the total voting power of the stock then outstanding of Rigel normally entitled
to vote in elections of directors; (b) Rigel consolidates with or merges
into another corporation or entity, or any corporation or entity consolidates
with or merges into Rigel, in either event pursuant to a transaction in which
more than fifty percent (50%) of the total voting power of the stock
outstanding of the surviving entity normally entitled to vote in elections of
directors is not held by the parties holding at least fifty percent (50%) of
the outstanding shares of Rigel preceding such consolidation or merger; or (c) Rigel
conveys, transfers or leases all or substantially all of its assets to any
Third Party.

 

1.15                        “Claim” has the meaning set forth in Section 11.3.

 

1.16                        “Clinical Trial” means a Phase 1 Clinical Trial, Phase 2
Clinical Trial, Phase 3 Clinical Trial, Phase 4 Clinical Trial or any
combination thereof.

 

1.17                        “Combination Product” means any pharmaceutical product (in any
formulation) containing one or more active pharmaceutical ingredients
(excluding formulation components such as coatings, stabilizers, excipients or
solvents, or controlled release technologies) in addition to the Compound.

 

1.18                        “Commencement”
with respect to a Clinical Trial for a Product, means the first [ * ] of the
first human subject using the Product in such Clinical Trial; “[ * ]” for the
purposes of this definition means the first patient has [ * ] and subsequently
[ * ] which have been [ * ].

 

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

 

3

 

1.19                        “Commercialize” means to conduct any pre-launch
activities or any activities after Marketing Approval for a particular Product,
including any activities that relate to the commercial marketing and sale of
such Product including advertising, marketing, promotion, distribution, and
Phase 4 Clinical Trials.

 

1.20                        “Commercialization Plan” has the meaning set forth in Section 5.2.

 

1.21                        “Compound” means collectively, all Rigel Compounds
[ * ].

 

1.22                        “Compound Assay Criteria”
means those assay criteria used to determine Syk inhibition activity of a
compound as set forth on Exhibit B.

 

1.23                        “Confidential Information” means, with respect to a Party, all
Information of such Party that is disclosed to the other Party under this
Agreement.  All confidential information
which has been disclosed by either Party pursuant to the Existing
Confidentiality Agreement shall be deemed to be such Party’s Confidential
Information hereunder.

 

1.24                        “Control” means, with respect to any material,
Information, or intellectual property right, that a person or entity owns or
has a license to such material, Information, or intellectual property right and
has the ability to grant access, a license, or a sublicense (as applicable) to
such material, Information, or intellectual property right on the terms and
conditions set forth herein without violating the terms of any agreement or
other arrangement with any Third Party existing at the time such access,
license, or sublicense is first required to be granted.

 

1.25                        “Development Plan” means the plan for the development of
the Product in the Territory, as set forth in Section 3.1(a).

 

1.26                        “Diligent Efforts” means, with respect to a Party’s
obligations under this Agreement to research, develop, manufacture or
Commercialize a Product, the carrying out of such obligations or tasks in an
ongoing program in a manner consistent with such Party’s own compounds and
products  with a similar commercial and
scientific potential and at a similar stage in their lifecycle, taking into
account their [ * ] and [ * ], their [ * ], the [ * ] of [ * ] and the [ * ]
and [ * ] of their [ * ] (including [ * ] and [ * ]), the [ * ] of [ * ], their
[ * ], including the [ * ] of [ * ] and [ * ] with respect to any Product and
all other relevant factors.  Diligent
Efforts shall be determined on a [ * ] basis for each Compound and
Product.  For clarity, the requirement
for a Party to use Diligent Efforts to carry out an obligation shall not be
construed as requiring such Party to [ * ], so long as the performance of such
Party, [ * ], meets the standard for Diligent Efforts as set forth in this Section 1.26.

 

1.27                        “Distributor” has the meaning set forth in Section 7.2(b).

 

1.28                        “Dollars” or “$” means a
U.S. dollar.

 

1.29                        “Effective Date” means the Execution Date unless either
Party makes a filing under the Hart-Scott-Rodino Antitrust Improvement Act (“HSR Act”), in which case it will be 

 

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

 

4

 

the later of (a) the
Execution Date or (b) the Business Day immediately following the earlier
of: (i) the date upon which the waiting period under the HSR Act expires
or terminates early or (ii) the date upon which a closing letter is
received from the Federal Trade Commission or the Justice Department, as the
case may be, with regard to the transaction contemplated by this Agreement
indicating that all requests have been satisfactorily met and no objection on
the part of the Federal Trade Commission or the Justice Department remains.

 

1.30                        “EMEA” means the European Medicines Agency, or
its successor.

 

1.31                        “Encumbrances” means any claim, charge, equitable
interest, lien, mortgage, pledge, option, license, assignment, power of sale,
retention of title, right or pre-emption, right of first refusal or security
interest of any kind.

 

1.32                        “European Union” or “EU” means all of the European Union member
states as of the applicable time during the Term.

 

1.33                        “Excluded Indications” means all human diseases and disorders
resulting from allergic reaction to an antigen, or primarily involving
respiratory or pulmonary dysfunction, and shall include asthma and chronic
obstructive pulmonary disease (“COPD”).  Excluded Indication shall not include
Autoimmune Disorders, provided that asthma and COPD shall always be considered
Excluded Indications even if the underlying basis of asthma or COPD is an
Autoimmune Disorder.

 

1.34                        “Execution Date” means February 16, 2010, the date
upon which this Agreement has been executed and delivered by both Parties.

 

1.35                        “Existing Confidentiality
Agreement” means
the Mutual Confidentiality Agreement by and between the Parties, effective on July 13,
2009.

 

1.36                        “Exploit” means to make, have made, import, use,
sell, or offer for sale and Commercialize, including to research, develop,
register, modify, enhance, improve, Manufacture, have Manufactured, hold/keep
(whether for disposal or otherwise), formulate, optimize, have used, export,
transport, distribute, promote, market or have sold or otherwise dispose or
offer to dispose of, a product or process.

 

1.37                        “FDA” means the US Food and Drug Administration
or its successor.

 

1.38                        “FD&C Act” means the US Federal Food, Drug and
Cosmetic Act, as amended.

 

1.39                        “Field” means
the treatment, prevention and diagnosis of all indications in humans and
animals including allergic rhinitis, other than Excluded Indications.

 

1.40                        “First Commercial Sale” means, with respect to a Product and
country, the first sale to a Third Party of such Product in such country after
Marketing Approval for such Product has been obtained in such country.

 

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

 

5

 

1.41                        “Follow-On Product” means any Product other than an R788
Product[ * ] comprises [ * ] a Rigel Compound.

 

1.42                        “FTE” means a full-time equivalent person year
of [ * ] ([ * ]) hours of scientific or technical work on studies or activities
performed in accordance with this Agreement.

 

1.43                        “FTE Rate” means a rate of [ * ] Dollars ($[ * ])
per annum per FTE to be pro-rated on a daily basis if necessary, such rate to
exclude managerial activities (other than direct management of scientific or
technical work) and to be restricted to scientific or technical work related
directly to the Compound or Products. For the avoidance of doubt, such rate
shall include all travel expenses and employee benefits (including pensions and
bonus payments).

 

1.44                        “Generic Equivalent” means, with respect to a Product, any
product comprising the same active ingredient(s) as such Product and which
(a) [ * ] or [ * ] the same [ * ] as the Product and (b) is sold by a
Third Party who is not a Sublicensee or Distributor of AZ or its Affiliates,
and is not otherwise authorized by AZ or any of its Affiliates, Sublicensees or
Distributors to sell such product.

 

1.45                        “Governmental Authority” means any multi-national, federal,
state, local, municipal or other government authority of any nature (including
any governmental division, subdivision, department, agency, bureau, branch,
office, commission, council, court or other tribunal).

 

1.46                        “IND” means (a) an Investigational New
Drug Application as defined in the FD&C Act and applicable regulations
promulgated thereunder by the FDA, or (b) the equivalent application to
the equivalent agency in any other regulatory jurisdiction, the filing of which
is necessary to initiate or conduct clinical testing of a pharmaceutical product in humans in such jurisdiction.

 

1.47                        “Indication”
means a disease or condition, the inclusion of which on the label of a Product
for its treatment or management requires the conduct of human clinical trial(s) and
approval by the Regulatory Authority.

 

1.48                        “Indirect Taxes” means value added taxes, sales taxes,
consumption taxes and other similar taxes.

 

1.49                        “Information” means any data, results, and information
of any type whatsoever, in any tangible or intangible form, including know-how,
trade secrets, practices, techniques, methods, processes, inventions,
developments, specifications, formulations, formulae, materials or compositions
of matter of any type or kind (patentable or otherwise), software, algorithms,
marketing reports, customer information, business or financial information,
expertise, stability, technology, test data including pharmacological,
biological, chemical, biochemical, toxicological, and clinical test data,
analytical and quality control data, stability data, studies and procedures.

 

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

 

6

 

1.50                        “Insolvency Event” means in relation to either Party, any
one of the following: (a) that Party admits in writing its inability
generally to pay its debts when they become due; (b) that Party is the
subject of voluntary or involuntary bankruptcy proceedings instituted on behalf
of or against such Party (except for involuntary bankruptcy proceedings which
are dismissed within sixty (60) days); (c) an administrative receiver,
receiver and manager, interim receiver, custodian, sequestrator or similar
officer is appointed for all or a substantial portion of that Party’s assets; (d) a
resolution has been passed by that Party’s directors to wind up that
Party;  (e) that Party makes a
general assignment or enters into a composition or arrangement with or for the
benefit of all or a substantial portion of that Party’s creditors; or (f) that
Party otherwise becomes legally insolvent.

 

1.51                        “ITP” has the
meaning set forth in paragraph III of the recitals.

 

1.52                        “Joint Invention” has the meaning set forth in Section 9.1.

 

1.53                        “Joint Patent” has the meaning
set forth in Section 9.3(c).

 

1.54                        “Joint Steering Committee” or “JSC”
means the
committee formed by the Parties as described in Section 2.2(a).

 

1.55                        “Loss of Market Exclusivity” means with respect to any Product in any
country in any Calendar Year, the following has occurred (a) the Net Sales
of such Product in that country in any Calendar Year are less than [ * ]
percent ([ * ]%) of the Net Sales of such Product in that country in [ * ] and (b) the
decline in such sales is [ * ] the marketing or sale in such country of a
Generic Equivalent of such Product.

 

1.56                        “Major EU Country” means, individually or collectively, the
United Kingdom, France, Germany, Italy and Spain.

 

1.57                        “Major Indication” means RA, together with [ * ] and
associated [ * ], including [ * ] and [ * ] but excluding [ * ] and [ * ].

 

1.58                        “Major Market” means the US, each of the Major EU
Countries and Japan.

 

1.59                        “Major Three RA Trials” mean the three major Phase 3 Clinical
Trials in RA as identified in the Initial Development Plan.

 

1.60                        “Manufacture” and “Manufacturing” means,
with respect to a product or compound, the synthesis, manufacturing,
processing, formulating, packaging, labeling, holding and quality control
testing of such product or compound.

 

1.61                        “Marketing Approval”  means, with respect to a particular Product for a
particular Indication, all approvals necessary for the manufacture, marketing,
importation and sale of such Product for such Indication in a country or
regulatory jurisdiction, which shall include any pricing and reimbursement
approvals.

 

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

 

7

 

1.62                        “Marketing Authorization
Application” or “MAA” means an application for the authorization for marketing of a Product
in a country or group of countries other than the US.

 

1.63                        “[ * ]” means a Product with [ * ]:

 

(i)                                    Treatment of the signs and symptoms of
RA;

 

(ii)                                [ * ]; and

 

(iii)                            [ * ].

 

In addition, the Product label will [ * ] for [ * ]
that [ * ] in the [ * ]. For clarity, the conduct of a [ * ] for [ * ] or other
[ * ] studies shall not be deemed a [ * ] for [ * ].

 

For the purposes of this definition, “[ * ]” — means
those RA patients who have had an [ * ] to [ * ] or [ * ] ([ * ]), including [
* ].

 

1.64                        “[ * ]” means a Product with [ * ]:

 

(i)                                    Reduction in signs and symptoms of RA;

 

(ii)                                [ * ];

 

(iii)                            [ * ]; and

 

(iv)                               [ * ].

 

In addition, the Product
label will [ * ] for [ * ] that [ * ] in the [ * ]. For clarity, the conduct of
a [ * ] for [ * ] or other [ * ] studies shall not be deemed a [ * ] for [ * ].

 

For the purposes of this
definition, “[ * ]” — means those RA patients who have had an [ * ] to [ * ] or
[ * ] ([ * ]), including [ * ].

 

1.65                        “NCI Agreement”
means the Cooperative Research and Development Agreement for Extramural-PHS
Clinical Research by and between the U.S. Department of Health and Human
Services, as represented by the National Cancer Institute and Rigel, effective
as of February 17, 2009.

 

1.66                        “NDA” means a New Drug Application, as defined
in the FD&C Act and applicable regulations promulgated thereunder by the
FDA for authorization for marketing of a Product.

 

1.67                        “Net Sales” means, with respect to any Product, the
gross amount invoiced by AZ, its Affiliate, or any Sublicensee of AZ for sales
of such Product to a Third Party (including Distributors) less, to the extent
included in such invoiced amount: (a) normal and customary trade, quantity
or prompt settlement discounts (including chargebacks and allowances actually
allowed); (b) amounts repaid or credited by reason of rejection, returns,
or recalls of goods, 

 

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

 

8

 

rebates or bona fide
price reductions determined by AZ or its Affiliates in good faith; (c) rebates
and similar payments made with respect to sales paid for by any governmental or
regulatory authority such as, by way or illustration and not in limitation of
the Parties’ rights hereunder, Federal or state Medicaid, Medicare or similar
state programs in the US or equivalent governmental programs in any other
country; (d) any invoiced amounts 
which are not collected by AZ or its Affiliates, including bad debts; (e) excise
taxes, Indirect Taxes, customs duties, customs levies and import fees imposed
on the sale, importation, use or distribution of Products;  (f) any other similar and customary
deductions that are consistent with generally accepted accounting principles,
or in the case of non-US sales, other applicable accounting standards for the
jurisdiction at issue; and  (g) [ *
], [ * ] percent ([ * ]%) of [ * ]. 
Sales between AZ and its Affiliates and Sublicensees shall be
disregarded for purposes of calculating Net Sales.

 

Net
Sales shall be calculated using [ * ], as applied consistently among AZ’s
products.

 

For clarity:

 

(i) in the event the first sale of a product
comprising a Compound by AZ, its Affiliates or Sublicensees to a Third Party
(including Distributors) [ * ], but is in the form of [ * ] (such product, an “[
* ]”), then for the calculation of Net Sales for such [ * ], the Net Sales
shall be deemed to include the invoiced amount by AZ, its Affiliate or
Sublicensee to such Third Party for such [ * ] together with such other
consideration received by AZ, its Affiliates or Sublicensee as may be reasonably
apportioned to the sale of such [ * ] to such Third Party;

 

(ii) the transfer of Products for sampling
purposes without monetary consideration shall be disregarded for purposes of
calculating Net Sales.

 

In the event the Product
is sold as a Combination Product, the Net Sales of the Product, for the
purposes of determining royalty payments, shall be determined by multiplying
the Net Sales of the Combination Product by the fraction, A/(A+B) where A is
the weighted (by sales volume) average sale price in a particular country of
the Product when sold separately in finished form and B is the weighted average
sale price in that country of the other product(s) sold separately in
finished form.  In the event that such
average sale price cannot be determined for both the Product and the other
product(s) in combination, Net Sales for purposes of determining royalty
payments shall be agreed by the Parties based on the relative fair market value
contributed by each component, such agreement not to be unreasonably withheld.

 

1.68                        “On-Going Clinical Trials” means the human clinical trials of the
R788 Product ongoing as of the Execution Date, as identified on Exhibit I.

 

1.69                        “Open Label Extension Study”
means the open label extension study being conducted by Rigel as of the
Execution Date and as described in further detail in the Development Plan.

 

1.70                        “Open Label Extension Study
Transfer Date”
has the meaning given to it in Section 3.7.

 

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

 

9

 

1.71        “Other Indication”
means any Indication that is not a Major Indication, including [ * ] and [ * ].

 

1.72        “Out-of-Pocket Expenses” means costs and expenses paid to Third
Parties (or payable to Third Parties and accrued in accordance with such Party’s
accounting standards as generally and consistently applied throughout such
Party’s organization) by either Party and/or its Affiliates and which costs
cannot be reasonably incurred by such Party using its own internal resource or
FTEs or consultants otherwise engaged by a Party in connection with activities
outside the scope of this Agreement. For the avoidance of doubt “Out-of-Pocket
Expenses” shall exclude all travel expenses.

 

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

 

1.74        “Pfizer Agreement” means the collaborative research and
license agreement entered into by and between Rigel and Pfizer Inc., as of January 18,
2005.

 

1.75        “Phase I Clinical Trial” means a human clinical trial of a
product, the principal purpose of which is to determine initial tolerance or
safety of such product in the target patient population, as described in 21
C.F.R. § 312.21(a), or a similar clinical study prescribed by the Regulatory
Authorities in a country other than the US.

 

1.76        “Phase 2 Clinical Trial” means a human clinical trial of a
product, the principal purpose of which is to evaluate the effectiveness of
such product in the target patient population, as described in 21 C.F.R. §
312.21(b), or a similar clinical study prescribed by the Regulatory Authorities
in a country other than the US.

 

1.77        “Phase 3 Clinical Trial” means a human clinical trial of a product
on a sufficient number of subjects that is designed to (a) evaluate
overall benefit risk profile; (b) define possible warnings, precautions
and adverse reactions that are associated with such product in the dosage range
to be prescribed; and (c) support Marketing Approval of such product, as
described in 21 C.F.R. § 312.21(c), or a similar clinical study prescribed by
the Regulatory Authorities in a country other than the US.

 

1.78        “Phase 4 Clinical Trial” means a human clinical trial of a
product conducted after Marketing Approval of such product has been obtained
from an appropriate Regulatory Authority, which trial is (a) conducted
voluntarily by a Party to enhance marketing or scientific knowledge of the
product, or (b) conducted due to a request or requirement of a Regulatory
Authority.

 

1.79        “[ * ]” means the compounds listed in Exhibit A which
comprise: (a)  all compounds [ * ] as of the Execution Date [ * ] meet the
compound assay criteria set forth in

 

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

 

10

 

Exhibit B; and (b) any
[ * ] or [ * ] of any compounds listed in Exhibit A [ * ] provided
that in each case the [ * ] of such [ * ] or [ * ] the [ * ] of [ * ].

 

1.80        “Product” means a product
incorporating or comprising the Compound in finished dosage pharmaceutical form, including, in each
case, all formulations and modes of administration thereof.

 

1.81        “Publication” has the meaning set forth in Section 12.4.

 

1.82        “R406” means the
Compound having the chemical structure set forth on Exhibit B.

 

1.83        “R423” means the
Compound having the chemical structure set forth on Exhibit B.

 

1.84        “R531” means the
Compound having the chemical structure set forth on Exhibit B.

 

1.85        “R788” means the
Compound having the chemical structure set forth on Exhibit B.

 

1.86        “R788 Product”
means any Product comprising as an active ingredient R788, R406 or any [ * ] or
[ * ] of R788 or R406.

 

1.87        “R788 Product Royalty Term” means the Royalty Term for the R788
Product.

 

1.88        “RA” has the
meaning set forth in paragraph III of the Recitals.

 

1.89        “Regulatory Authority” means, in a particular country or
regulatory jurisdiction, any applicable Governmental Authority involved in
granting Marketing Approval and/or, to the extent required in such country or
regulatory jurisdiction, pricing or reimbursement approval of a Product in such
country or regulatory jurisdiction, including: (a) the FDA, (b) the
European Medicines Agency, (c) the European Commission, and (d) Japanese
Ministry of Health, Labour and Welfare, and in each of (a) through (d),
including any successor thereto.

 

1.90        “Regulatory Materials” means regulatory applications,
submissions, notifications, registrations, Marketing Approvals and/or other
filings made to or with a Regulatory Authority that are necessary or AZ deems
reasonably desirable in order to develop, manufacture, market, sell or
otherwise Commercialize a Product in a particular country or regulatory
jurisdiction.  Regulatory Materials
include INDs, MAAs, and NDAs.

 

1.91        “Rigel Compounds”
means: (a) R788, R406, R423 and R531; (b) any compound Controlled by
Rigel or its Affiliates having SYK Activity during the Term; and (c) any [
* ] or [ * ] of any compound covered by the foregoing clause (a) or
(b) that is Controlled by Rigel or any of its Affiliates; provided that in
(b) or due to the modification of (c), such compound has an [ * ] in [ * ]
of [ * ].

 

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

 

11

 

1.92        “Rigel Know-How” means all Information (excluding any
published Rigel Patents) that is Controlled as of the Effective Date or
thereafter during the Term by Rigel and/or its Affiliates and is reasonably
necessary to Exploit the Compound or Product(s) in the Field, including
any such Information made by or on behalf of Rigel or its Affiliate in the
course of performing Rigel’s obligations or exercising Rigel’s rights under
this Agreement which is Controlled by Rigel or such Affiliates.   For clarity, the use of “Affiliate” in this
definition shall exclude any Third Party that becomes an Affiliate due to such
Third Party’s acquisition of Rigel.

 

1.93        “Rigel Patents” means all patents and patent applications
that are Controlled as of the Effective Date or thereafter during the Term by
Rigel and/or its Affiliates and rights to which are reasonably necessary to
Exploit the Compound(s) or Product(s) in the Field, including: (i) all
substitutions, divisions, continuations, continuations-in-part thereof (to the
extent directed to the subject matter disclosed in a patent or patent
application described above) and requests for continued examination of any of
the foregoing, (ii) all patents issued from any of the foregoing patent
applications, (iii) all reissues, renewals, registrations, confirmations,
re-examinations, extensions, and supplementary protection certificates of any
of the foregoing, and (iv) all foreign equivalents of any of the
foregoing. For clarity, the use of “Affiliate” in this definition shall exclude
any Third Party that becomes an Affiliate due to such Third Party’s acquisition
of Rigel.  Rigel Patents as of the
Effective Date are listed in Exhibit C.

 

1.94        “Rigel Technology” means the Rigel Patents and Rigel
Know-How.

 

1.95        “Royalty Term” has the meaning set forth in Section 8.5(h).

 

1.96        “Serious Adverse Event” means an Adverse Event/Adverse Drug
Reaction that at any dose: results in death; is life threatening; requires
in-patient hospitalization or prolongation of existing hospitalization; results
in persistent or significant disability/incapacity; or is a congenital
anomaly/birth defect; or is another important medical event that would normally
fall within the scope of ICH Topic E 2 A Clinical Safety Data Management:
Definitions and Standards for Expedited Reporting.

 

1.97        “SEC” means the US Securities and Exchange Commission.

 

1.98        “Sole Inventions” has the meaning set forth in Section 9.1.

 

1.99        “Sublicensee” has the meaning set forth in Section 7.2(a).

 

1.100      “SYK” means an enzyme comprised of the amino acid sequence
for spleen tyrosine kinase as identified on Exhibit B, including all
allelic variations or derivatives thereof, or homologues whose amino acid
sequence has [ * ]% or greater homology with such sequence.

 

1.101      “SYK Activity” means the ability of a compound to
selectively inhibit the activity of SYK in a manner that meets the criteria set
forth in the Compound Assay Criteria.

 

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

 

12

 

1.102      “Systemic SYK Activity”
means, with respect to a compound, that such compound exhibits SYK Activity and [ * ], as
determined using the [ * ] assay as described in the publication by [ * ] in
the [ * ] in [ * ] entitled “[ * ].”

 

1.103      “[ * ]” means a Product with [ * ]:

 

(i)            Treatment of the signs and symptoms of RA; and

 

(ii)           [ * ].

 

In addition, the Product
label will [ * ] for [ * ] that [ * ] in the [ * ]. For clarity, the conduct of
a [ * ] for [ * ] or other [ * ] studies shall not be deemed a [ * ] for [ * ].

 

For the purposes of this
definition, “[ * ]” means those RA patients who have had an [ * ] to a [ * ].

 

1.104      “[ * ]” means a Product with [ * ]:

 

(i)            Reduction in signs and symptoms of RA; and

 

(ii)           [ * ].

 

In addition, the Product
label will not [ * ] for [ * ] that [ * ] in the [ * ]. For clarity, the
conduct of a [ * ] for [ * ] or other [ * ] studies shall not be deemed a [ * ]
for [ * ].

 

For the purposes of this
definition, “[ * ]” means those RA patients who have had an [ * ] to a [ * ].

 

1.105      “Term” has the meaning set forth in Section 13.1.

 

1.106      “Territory” means all countries and territories in the world.

 

1.107      “Third Party” means any entity other than Rigel or AZ
or an Affiliate of either of them.

 

1.108      “Transition Plan” means a transition plan agreed upon by
the Parties that governs the initial technology transfer from Rigel to AZ after
the Effective Date, a copy of which is attached hereto as Exhibit D.

 

1.109      “U.S.” means the United States and all its possessions and
territories, including Puerto Rico.

 

1.110      “Valid Claim” means: (a) a
claim (including [ * ]) of an issued and unexpired patent which has not been
held invalid or unenforceable by a court of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, and which has
not been admitted to be invalid by the owner through reissue, disclaimer or
otherwise, or an enforceable supplementary protection certificate or equivalent
resulting therefrom; or (b) a claim (including [

 

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

 

13

 

*
]) of a pending patent application which has not been pending for more than [ *
] ([ * ]) years from the date of [ * ].

 

ARTICLE 2

 

GOVERNANCE

 

2.1          Overview.  AZ shall be
primarily responsible for the development, Manufacture and Commercialization of
the Products in the Field in the Territory as set forth in this Agreement.  AZ agrees to use Diligent Efforts to develop
and Commercialize the Product in the Field throughout the Territory and in
particular, AZ agrees to use Diligent Efforts to pursue the development and
Commercialization of the R788 Product in RA as set forth in this Agreement.

 

2.2          Joint Steering Committee.

 

(a)           Purpose; Formation. 
The Parties hereby establish a joint steering committee (the “JSC”) that will monitor and oversee AZ’s activities under
this Agreement and facilitate communications between the Parties with respect
to the development and commercialization of the Product.

 

(b)           Composition. 
The JSC shall consist of six (6) members, with three (3) members
appointed by each Party.  Each Party
shall appoint its initial members of the JSC by providing written notification
to the other Party within [ * ] ([ * ]) days after the Effective Date.  The JSC shall be comprised of an appropriate
representation from each Party and with appropriate experience to facilitate
discussion of the issues within the remit of the JSC, it being acknowledged
that such representation may change over time. The JSC may change its size from
time to time by mutual consent of its members provided that the JSC shall at
all times consist of an equal number of representatives of each of Rigel and
AZ.  Each Party may replace its JSC
representatives at any time upon written notice to the other Party.  The JSC may invite non-members to participate
in the discussions and meetings of the JSC, provided that such participants
shall have no voting authority at the JSC. 
The JSC will be chaired by a representative selected by AZ.  The role of the chairperson shall be to
convene and preside at meetings of the JSC, but the chairperson shall have no
additional powers or rights beyond those held by the other JSC representatives.

 

(c)           Specific Responsibilities. 
In addition to its overall responsibility for monitoring and providing a
forum to discuss AZ’s activities under this Agreement, the JSC shall in
particular:

 

(i)            oversee AZ’s activities under this Agreement relating
to Products comprising Rigel Compounds, including the development, Manufacture
and Commercialization of the Products in the Field in the Territory;

 

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

 

14

 

(ii)           review and comment on the Development Plan and
amendments thereto, including reviewing and commenting on the overall strategy
and design of all human clinical trials and other studies conducted under the
Development Plan;

 

(iii)         approve any change in the Development Plan that would
[ * ], or [ * ], of the [ * ];

 

(iv)          discuss the requirements for Marketing Approval of
Products in the Territory;

 

(v)            facilitate the flow of Information between the Parties
with respect to the development of, and obtaining Marketing Approval for the
Products;

 

(vi)          review the results of Phase 3 Clinical Trials of
Products;

 

(vii)         review AZ’s proposed timing for announcing the top
line results of each of the Major Three RA Trials following the unblinding of
such trial results; for the avoidance of doubt AZ shall notify Rigel either
directly or via the JSC of its decision to unblind clinical data in whichever
of the Three Major RA Trials shall be the first to report clinical data as further
described in Section 15.13;

 

(viii)        discuss and agree the reimbursement of any costs and
expenses between the Parties at the FTE Rate as further described in herein;

 

(ix)          discuss and agree any amendments to the Transition
Plan;

 

(x)           review strategies for obtaining, maintaining and
enforcing patent protection for the Products within the Territory consistent
with Article 9 herein;

 

(xi)          review the Commercialization Plan to be prepared by
AZ;

 

(xii)         review and discuss AZ’s scientific presentation and publication
strategy relating to the Products in the Territory, and review and facilitate
discussion of any requests in relation to Publications pursuant to Section 12.4;

 

(xiii)       establish such additional joint subcommittees as it
deems necessary to achieve the objectives and intent of this Agreement; and

 

(xiv)        perform such other functions as appropriate to further
the purposes of this Agreement as allocated to it in writing by the Parties.

 

(d)           Meetings. 
The JSC shall meet on a [ * ] basis  during
the Term unless the Parties mutually agree in writing to a different frequency
for such meetings.    The JSC may meet in
person or by videoconference or by teleconference.  Notwithstanding the foregoing, at least [ * ]
([ * ]) meetings per Calendar Year shall be in person unless the Parties
mutually agree in writing to waive such requirement in exchange for a
videoconference or teleconference.  In-

 

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

 

15

 

person JSC meetings will
be held [ * ]. Each Party will bear the expense of its respective JSC members’
participation in JSC meetings.  Meetings
of the JSC shall be effective only if at least one (1) representative of
each Party is present or participating in such meeting.  The chairperson of the JSC will be
responsible for preparing reasonably detailed written minutes of all JSC
meetings that reflect, without limitation, material decisions made at such
meetings.  The JSC chairperson shall send
draft meeting minutes to each member of the JSC for review and approval within
[ * ] ([ * ]) Business Days after each JSC meeting.  Such minutes will be deemed approved unless
one or more members of the JSC objects to the accuracy of such minutes within [
* ] ([ * ]) Business Days of receipt.

 

(e)           Decision-Making. 
The JSC shall act by consensus. 
The representatives from each Party will have, collectively, one (1) vote
on behalf of that Party.  If the JSC
cannot reach consensus then, (i) for any disputes relating to Section [
* ] ([ * ]) or Section [ * ] ([ * ]), either Party shall have the right to
[ * ]; and (ii) for all other disputes within the JSC, the final
determination on any matter shall be made [ * ], provided that in the event of
disagreement by the JSC on any matter which [ * ] the [ * ] or [ * ] for [ * ]
of the [ * ] for [ * ] under the [ * ], such matter shall be submitted to the [
* ] of each Party (or equivalent senior officers having [ * ] responsibilities
and designated by the [ * ]) for resolution. Such officers shall use good faith
efforts to resolve promptly such matter, provided that if such individuals are
unable to mutually agree upon the resolution to such matter within a [ * ] ([ *
]) Business Day period, then [ * ].

 

2.3          General Committee Authority.  The JSC shall have solely the powers expressly
assigned to it in this Article 2 and elsewhere in this Agreement and shall
not have any power to otherwise amend, modify, or waive compliance with this
Agreement.

 

2.4          Alliance Managers.

 

(a)           Within [ * ] ([ * ]) days following the Effective
Date, each Party will appoint (and notify the other Party of the identity of) a
representative having the appropriate qualifications including a general
understanding of pharmaceutical development and commercialization issues to act
as its alliance manager under this Agreement (“Alliance
Manager”).  The Alliance
Managers will serve as the primary contact points between the Parties for the
purpose of providing each Party with information on the progress of the other
Party’s development and Commercialization of the Products and will be primarily
responsible for facilitating the flow of information and otherwise promoting
communication, coordination and collaboration between the Parties, providing
single point communication for seeking consensus both internally within each
Party’s respective organization (including facilitating review of external
corporate communications), and raising cross-Party and/or cross-functional
disputes in a timely manner.  Each Party
may replace its Alliance Manager on written notice to the other Party.

 

(b)           In addition to the periodic reports provided by AZ to
Rigel through the JSC, AZ shall make available to Rigel such information about
the development and Commercialization of the Compounds and the Products as may
be reasonably requested by Rigel from time to time, through the Alliance
Managers of the Parties. For the avoidance of doubt, Rigel acknowledges and
agrees that AZ may refuse any request which it considers unreasonable

 

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

 

16

 

with respect to any
country that is not a Major Market, including any request to provide country
specific commercialization reports, or reports on field-force activity or
allocation.

 

2.5          Discontinuation of Participation on
the JSC.  The JSC shall continue to exist until the first to
occur of (a) expiry of the first Royalty Term of a Product comprising a
Rigel Compound; (b) the Parties mutually agreeing to disband the JSC, or (c) Rigel
providing to AZ written notice of its intention to no longer participate in the
JSC.  Following discontinuation of the
JSC as described in (a), (b) or (c) above, the JSC shall have no
further obligations under this Agreement and [ * ]. In addition, AZ may, [ * ],
[ * ] following any [ * ].

 

ARTICLE 3

 

DEVELOPMENT

 

3.1          Development Plan.

 

(a)           General. 
The development of each Product comprising a Rigel Compound shall be
governed by a development plan (the “Development
Plan”) that sets forth all non-clinical studies and human clinical
trials of the Product in the Territory. 
The Development Plan shall also specify the plans and timeline for
preparing the necessary Regulatory Materials and for obtaining Marketing
Approval for each Product in the Field in the Territory.  In addition, the Development Plan shall
describe the high level global development strategy for the Products in the
Territory.  AZ shall be solely
responsible for the development of the Products in the Field in the Territory,
and shall assume responsibility to fund the On-Going Clinical Trials following
the Effective Date and to conduct the On-Going Clinical Trials as soon as
practicable following the Effective Date, except that Rigel shall continue to
conduct [ * ] the Open Label Extension Study until the Open Label Extension
Study Transfer Date as set forth in Section 3.7 below.  AZ shall have the sole right and
responsibility for preparing the Development Plan for each Product, subject to
review and comment by the JSC.  With
respect to JSC’s review on matters, AZ will consider in good faith Rigel’s
comments via the JSC.

 

(b)           Initial Development Plan.  The initial Development Plan is attached hereto as Exhibit E,
which describes the overall plan and timeline to develop the R788 Product in the
RA Indication in the Territory.

 

3.2          AZ Development Activities.

 

(a)           AZ shall use Diligent Efforts to develop the Products
in the Territory, including using Diligent Efforts to carry out the development
and pursue Marketing Approval for the R788 Product in the RA Indication in
accordance with the Development Plan (including the global development strategy
set forth therein) and shall, subject to AZ’s obligation to use Diligent
Efforts to develop the R788 Product in the RA Indication (inclusive of the
provisions set forth in Section 3.2(b)), have the right to [ * ].  In the event that AZ determines to [ * ], AZ
shall promptly provide Rigel with written notification of such determination
and shall use Diligent Efforts to [ * ] in the Territory. For the avoidance of
doubt, AZ may, subject to its obligation to

 

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

 

17

 

use Diligent Efforts, have
the option to prioritize any development in any indications beyond the RA
Indication.

 

(b)           Specifically and without limiting the foregoing, AZ
shall Commence each of the [ * ] Trials within [ * ] ([ * ]) months after the
Effective Date, provided that such timeline shall be reasonably extended [ * ].
For the avoidance of doubt the “Commencement” of each of the Major Three RA
Trials may be undertaken, at AZ’s sole discretion, either by AZ itself or
through its Affiliate or its subcontractor.

 

(c)           The status, progress and results of AZ’s development
activities shall be discussed in reasonable detail at meetings of the JSC, and
AZ shall provide the JSC with a written report on the status and progress of
its activities on a [ * ] basis prior to each JSC meeting.  AZ shall report to Rigel material adverse
regulatory developments with respect to Products, promptly after reporting such
results and developments to AZ management. In addition, AZ shall report to
Rigel the results of the Major Three RA Trials, promptly after the results of
all of the Major Three RA Trials have been reported to AZ management and in
accordance with AZ’s then internal policies relating to the reporting of such
results, as generally and consistently applied throughout AZ’s organization. For
the avoidance of doubt, Rigel acknowledges and agrees that the [ * ].

 

(d)           Except as provided elsewhere in this Agreement
including in the Transition Plan, AZ shall bear one hundred percent (100%) of
the costs and expenses incurred by it in connection with the conduct of AZ’s
development activities under this Agreement. 
In the event AZ requests Rigel to perform any development activities
hereunder (such as requesting Rigel to [ * ]), AZ shall reimburse Rigel for all
costs and expenses reasonably incurred by Rigel (including Rigel’s internal
costs and Out-of-Pocket Expenses) in connection with such activities, at the
FTE Rate.

 

(e)           AZ shall maintain complete and accurate records, as
generally and consistently applied throughout AZ’s organization, of all work
conducted by it under the Development Plan and all Information resulting from
such work.  Solely to the extent
reasonably believed by Rigel to be required for patent or regulatory purposes
or for other legal proceedings in connection with this Agreement, Rigel may, by
submitting requests to AZ’s Alliance Manager, request copies of such records,
and AZ shall comply with Rigel’s reasonable requests.

 

3.3          [ * ].

 

(a)           AZ represents and warrants that as of the Execution Date the compounds
listed in Exhibit A [ * ] which AZ reasonably believes [ * ].

 

(b)           In the event that during the Term AZ intends to
Commence any Clinical Trial in the Field relating to a compound, other than a
Rigel Compound, where [ * ], AZ shall notify Rigel in writing (i) whether
such compound [ * ] and (ii) if so, whether such compound [ * ]. In the
event that Rigel disputes whether such compound should have been [ * ], the
Parties shall discuss in good faith such dispute and AZ shall provide Rigel
with access to [ * ]

 

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

 

18

 

reasonably determines
necessary in order to [ * ]. In the event that the Parties fail to resolve such
dispute, either Party may seek to resolve such matter through the dispute
resolution process set forth in Article 14.

 

3.4          Development Decision
Making.  Except as otherwise expressly provided in this
Agreement, all matters regarding the development activities hereunder shall be
decided by AZ.

 

3.5          Development Standards of
Conduct.  AZ shall use Diligent Efforts to carry out the Development
Plan and in a good scientific manner, in compliance in all material respects
with all Applicable Laws.

 

3.6          Subcontracts. 
AZ may perform any of the obligations assigned to it under the
Development Plan through, at its sole discretion, one or more subcontractors or
consultants, provided that: (a) AZ remains responsible for the work
allocated to, and the payment to, the subcontractors and consultants retained
by it; and (b) the subcontractor or consultant undertakes in writing
obligations of confidentiality and non-use regarding Confidential Information,  that are substantially the same as those
undertaken by the Parties pursuant to Article 12 hereof.

 

3.7          Open Label Extension Study.

 

(a)           Responsibility as of the Execution
Date. The Parties
acknowledge that, as of the Execution Date, Rigel is conducting the Open Label
Extension Study.  The Parties agree that
Rigel shall continue to conduct such Open Label Extension Study on behalf of AZ
[ * ] following the Effective Date and for a period of [ * ] following such
date (the end of such [ * ] period, the “Open Label Extension Study
Transfer Date”), notwithstanding the date of transfer to AZ.  Rigel shall conduct such Open Label Extension
Study in a good scientific manner, in compliance in all material respects with
all Applicable Laws and all applicable portions of the Transition Plan. Rigel
acknowledges and agrees that in the event that (i) Rigel has failed to
comply with its material obligations under the Transition Plan, solely to the
extent relevant to the Open Label Extension Study; and (ii) AZ is not in
material breach of its obligations under the Transition Plan, solely to the
extent relevant to the Open Label Extension Study, then, solely with respect to
[ * ] the Open Label Extension Study Transfer Date shall be extended until such
time as Rigel has fulfilled its material obligations under the Transition Plan
with respect to the Open Label Extension Study. To the extent such transfer is
set forth in the Transition Plan, the allocation of costs and expenses in
connection with such transfer shall be in accordance with Section 6.2(k).  In the event that either Party requests the
other Party to perform any development activities relating to the Open Label
Extension Study which are not specific to transition activities and which are
not otherwise covered in the Transition Plan during such [ * ] period, the
requesting Party shall reimburse the other Party for all costs and expenses
reasonably incurred by such other Party (including internal costs and Out-of-Pocket
Expenses) in connection with such activities, at the FTE Rate.  Prior to the Open Label Extension Study
Transfer Date, the Parties shall in good faith agree on a process to transfer
to AZ the responsibility for the conduct of such Open Label Extension Study,
and shall cooperate to ensure that such transfer be complete by the Open Label
Extension Transfer Date.

 

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

 

19

 

(b)           Responsibility following the Open
Label Extension Study Transfer Date. Following the Open Label Extension Study Transfer
Date, AZ shall be solely responsible for the conduct of such Open Label
Extension Study, at its sole cost and expense. For the avoidance of doubt, AZ
shall be responsible for [ * ] the Open Label Extension Study [ * ] following
the Effective Date.  AZ hereby grants
Rigel a non-exclusive license under the AZ Technology solely for the purpose of
conducting the Open Label Extension Study pursuant to this Section 3.7.  Rigel shall have the right to engage
subcontractors and consultants for the purpose of conducting such Open Label
Extension Study, provided that: (a) Rigel remains responsible for the work
allocated to, and the payment to, the subcontractors and consultants retained
by it; (b) the subcontractor or consultant undertakes in writing
obligations of confidentiality and non-use regarding Confidential Information,
that are substantially the same as those undertaken by the Parties pursuant to Article 12
hereof; and (c) the subcontractor or consultant agrees in writing to
assign all intellectual property developed in connection with the performance
of any such work to Rigel. For the avoidance of doubt all such intellectual
property shall be deemed Rigel Technology and shall form part of the license
granted to AZ as set forth in Section 7.1. 
Except with the prior approval of AZ, Rigel shall not engage
subcontractors and consultants for the performance of the Open Label Extension
Study other than those with which it is working as of the Execution Date.

 

3.8          Reimbursement of Costs. 
Each Party shall reimburse the other Party for any costs and expenses
which the JSC approves in accordance with Section 2.2(c)(viii). Any
payments made by a Party shall be made quarterly in arrears within [ * ] ([ *
]) days following receipt of invoice from the other Party for such costs and
expenses during a given Calendar Quarter, which invoice shall set out the FTEs
authorized by the JSC and shall be issued by the Party seeking reimbursement no
later than [ * ] ([ * ]) days following the relevant Calendar Quarter. In no
event shall a Party be obligated to pay for FTEs in excess of those authorized
unless prior approval has been granted by the JSC.

 

ARTICLE 4

 

REGULATORY MATTERS

 

4.1          Regulatory Transition.  Within [ * ] ([ * ]) days after the
Effective Date, Rigel shall assign to AZ or its designee all Regulatory
Materials and all electronic documents related to all such Regulatory Materials
regarding the Products that are Controlled by Rigel and/or its Affiliates as of
the Effective Date; provided, however,
that all original copies of any such documents shall be transferred to AZ
within [ * ] ([ * ]) days following the Effective Date.  Upon request by AZ, Rigel shall deliver
notices of any such assignment to the applicable Regulatory Authorities within
[ * ] ([ * ]) days after the Effective Date. 
Thereafter, AZ shall become responsible for: (a) making all
regulatory filings with respect to the Products, either itself or through its
Affiliates or Sublicensees; (b) obtaining and maintaining Marketing
Approvals throughout the Territory in the name of AZ, or its Affiliates or
Sublicensees; and (c) determining the label for the Products, including
whether or not to accept changes proposed by any Regulatory Authority. In
addition, upon request by AZ, Rigel shall (i) at any time during the Term,
deliver notices of any such assignment to the applicable Regulatory Authorities
directly or

 

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

 

20

 

via AZ, together with any
other certification required from the Product owner, to enable any IND, CTA,
NDA or MAA to be accepted for review by the relevant Regulatory Authority; and (ii) provide
AZ with any advice regarding studies conducted by Rigel or on behalf of Rigel
regarding the Product that is required to allow AZ to respond to any Regulatory
Authority that raises a question in relation to such studies during evaluation
of any regulatory submission.  Further,
Rigel shall provide to AZ the following items to the extent Controlled by Rigel
and/or its Affiliates:

 

(a)           original documents and word electronic versions of
Regulatory Materials as required by AZ to support NDA and MAA filings,
including all Information required by AZ to generate the quality section of the
NDA and the MAA; and

 

(b)           all non-clinical study reports and clinical study
reports for any data in each case regarding the Products generated by Rigel
directly or via any contract research organization, including electronic data
sets of the source information.

 

For the avoidance of doubt, Rigel shall bear its
internal costs incurred in connection with all assistance and activities to be
undertaken by Rigel as described in this Article 4, and AZ shall reimburse
Rigel for all Out-of-Pocket Expenses incurred by Rigel in connection therewith.

 

4.2          Regulatory Materials and Approvals.

 

(a)           Rights and Obligations.

 

(i)            AZ shall own and submit all Regulatory Materials and
documents related to the development of the Products;

 

(ii)           AZ shall keep Rigel informed, via participation on the
JSC of regulatory developments specific to Products throughout the Territory;

 

(iii)         AZ shall provide to Rigel an electronic copy of the
complete NDA together with any updates to the NDA, together with electronic
copies of modules 1 and 2 of the European MAA, together with the equivalent
sections of any variations to the MAA; and

 

(iv)          AZ shall, so far as practicable, provide Rigel with
reasonable advance notification of any significant in-person meeting or
teleconference with the FDA and EMEA, and Rigel shall have the right to [ * ]
have its representatives attend and participate in all significant meetings
between AZ (or its Affiliates or Sublicensees) and the FDA and EMEA relevant to
any Product at Rigel’s cost. AZ shall in good faith [ * ] and if AZ [ * ] AZ
will notify Rigel of such and its reasoning.

 

4.3          Product Withdrawals and Recalls. 
In the event that any Regulatory Authority (a) threatens or
initiates any action to remove any Product from the market in any country in
the Territory or (b) requires AZ, its Affiliates, or its Sublicensees to
distribute a “Dear Doctor” letter or its equivalent regarding use of such
Product in the Field, AZ shall notify Rigel of such event within [ * ] ([ * ])
Business Days after AZ becomes aware of the action, threat, or requirement (as

 

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

 

21

 

applicable).  AZ shall, so far as practicable, consult with
Rigel prior to initiating a recall or withdrawal of Product in any country or
regulatory jurisdiction in the Territory; provided, however, that the final
decision as to whether to recall or withdraw a Product shall be made by AZ. AZ
shall be responsible, at its sole expense, for conducting any recalls or taking
such other necessary remedial action in the Territory.

 

4.4          Adverse Event Reporting; Safety Data
Exchange and Medical Inquiries.  Representatives of each Party will begin
meeting as soon as possible but no later than [ * ] ([ * ]) days after the
Effective Date of this Agreement and will work in good faith together to
develop safety procedures for safety data transfers, and adverse event handling
and reporting to Regulatory Authorities and sharing of emerging safety
information from the clinical or pre-clinical work conducted by Rigel relating
to the Products.

 

ARTICLE 5

 

COMMERCIALIZATION

 

5.1          Overview. 
AZ shall be responsible for commercializing the Products in the Field in
the Territory and shall have the sole right to make decisions relating to such
activities, with the oversight of the JSC. 
AZ shall use Diligent Efforts to Commercialize the Products for the RA
Indication and all other approved Indications. 
Notwithstanding the foregoing, AZ’s application of such Diligent Efforts
shall not require AZ to Commercialize a Product in any country or territory in
which AZ determines it is not commercially reasonable to do so for such
Product.

 

5.2          Commercialization Plan. 
The strategy for the commercialization of each Product in the Territory
shall be described in a global plan that describes the pre-launch, launch and
subsequent commercialization activities for such Product (each such plan, a “Commercialization Plan”).  The Commercialization Plan shall be drafted
by AZ and shall be shared with Rigel via the JSC.  AZ shall consider any Rigel comments on such
plan in good faith, provided that the final determination as to the content of
the Commercialization Plan shall be made by AZ.

 

5.3          Commercialization
Activities.  AZ shall carry out the tasks under the
Commercialization Plan in compliance in all material respects with all
Applicable Laws and regulations, including the Foreign
Corrupt Practices Act of 1977, as amended (“FCPA”),
and laws applicable to the sale and promotion of pharmaceutical products.

 

5.4          Commercialization Costs. 
AZ shall be solely responsible for all costs
and expenses incurred in connection with the commercialization of the Products
in the Territory.

 

5.5          Sales and Distribution. 
AZ shall be responsible for receiving and filling orders, controlling
invoicing, collection of payments, returns, charge-backs and rebates on sales
of the Products in the
Territory, and shall have sole control over distribution of the Product in the
Territory.  Rigel may not accept orders
for the Products or make sales for its own account or for

 

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

 

22

 

AZ’s account.  If Rigel receives any order for the Products
in the Territory, it shall refer such orders to AZ for acceptance or rejection.

 

5.6          Commercialization Updates. 
AZ shall keep the JSC fully informed regarding the progress of all
material commercialization activities for the Products in the Territory.

 

5.7          Pricing. 
AZ shall be solely responsible for determining pricing and pricing and
reimbursement strategy for the Products.

 

ARTICLE 6

 

TECHNOLOGY TRANSFER, MANUFACTURE AND SUPPLY

 

6.1          Overview.  Subject to Section 6.2
below, AZ will be
solely responsible for the manufacture of the Compound and Products in bulk and
finished form for use by AZ under the Development Plan and for use and
distribution by AZ under the Commercialization Plan.

 

6.2          Transfer of Technology and
Manufacturing Responsibilities.

 

(a)           Technology Transfer.  Promptly after the Effective Date, Rigel shall, [ * ],
transfer to AZ the Rigel Know-How existing as of the Effective Date, including (i) all
Rigel Know-How relating to any On-Going Clinical Trials; and (ii) all
Rigel Know-How that is necessary for AZ to replicate the process employed by or
on behalf of Rigel to manufacture the Compound and R788 Product as of the
Effective Date.  Such initial technology
transfer shall be carried out in accordance with the Transition Plan and shall
be completed within [ * ] ([ * ]) days after the Effective Date.  After Rigel has performed the technology
transfer as set forth in the Transition Plan, Rigel shall continue to provide
AZ with all Rigel Know-How and all reasonable assistance required in order to
assist AZ to develop and/or manufacture the Compound and the Products then
under development by AZ under this Agreement, including such assistance as is
reasonably required by AZ to replicate the process employed by or on behalf of
Rigel to manufacture the Compound and R788 Product as of the Effective Date at
AZ’s reasonable request.  AZ shall
reimburse Rigel for Rigel’s internal (at the FTE Rate) and Out-of-Pocket
Expenses incurred in connection with the rendering of any such assistance
unless such assistance requires only de minimus efforts by Rigel personnel and
does not require the engagement of any Third Party.

 

(b)           Right to Manufacture. 
Subject to the limited rights granted to Rigel and to any Third Parties
under the Existing Compound Manufacturing Agreement and the Existing Product
Manufacturing Agreement (each as defined below), AZ shall have the sole and
exclusive right to (a) conduct or have conducted Manufacturing with
respect to Compounds and Products and (b) Manufacture or have Manufactured
Compound and Products.  For clarity, AZ
shall have the right, in its sole discretion, to determine the specifications
with respect to any Compound or Product.

 

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

 

23

 

(c)           Existing Manufacturers.  Rigel represents and warrants that as of the Effective
Date, (i) [ * ] and [ * ] (together “[ * ]” or the “Existing
Compound Manufacturer”) is manufacturing and supplying to Rigel R788
in bulk form under the Master Terms and Conditions by and between Rigel and the
Existing Manufacturer, effective [ * ] (the “Existing
Compound Manufacturing Agreement”); and (ii) [ * ] (the “Existing Product Manufacturer”) is manufacturing and
supplying to Rigel the R788 Product in packaged form under the Master Services
Agreement by and between Rigel and the Existing Product Manufacturer, effective
[ * ]  (the “Existing
Product Manufacturing Agreement”). 
In order to minimize supply interruption, the Parties intend to continue
to engage the Existing Compound Manufacturer for the supply of the bulk R788
and the Existing Product Manufacturer for the supply of packaged R788 Product
during the conduct of a program of Phase 3 Clinical Trials for the R788 Product
for RA.  As part of the initial
technology transfer under the Transition Plan, Rigel shall assign to AZ or its
designee, at no additional cost and expense to AZ, all of Rigel’s rights and
obligations under the Existing Compound Manufacturing Agreement and the
Existing Product Manufacturing Agreement, to the extent Rigel is permitted to
do so under such Existing Compound Manufacturing Agreement and the Existing
Product Manufacturing Agreement, and AZ shall cooperate with Rigel to carry out
such assignment. For the avoidance of doubt, except as expressly set forth in Section 6.2(i),
Rigel shall remain fully responsible for its acts, omissions, liabilities and
breaches connected with the Existing Compound Manufacturing Agreement and the
Existing Product Manufacturing Agreement existing prior to the date of any
assignment to AZ.

 

(d)           Existing Starting Material Suppliers. 
As part of the initial technology transfer under the Transition Plan, to
the extent set forth in such Transition Plan, Rigel shall assign to AZ or its
designee, at no additional cost and expense to AZ, all of Rigel’s rights and
obligations under supply agreements in place with suppliers for R788 starting
materials (RIG-A, RIG2-05, RIG2-12, RIG2-13 & RIG2-15), to the extent
Rigel is permitted to do so under such agreements,  and AZ shall cooperate with Rigel to carry
out such assignment.

 

(e)           Existing R788 Supply Chain Services
Suppliers.  As part of the initial technology transfer
under the Transition Plan, to the extent set forth in such Transition Plan,
Rigel shall assign to AZ or its designee, at no additional cost and expense to
AZ, all of Rigel’s rights and obligations under services agreements in place
with suppliers of R788 supply chain services, to the extent Rigel is permitted
to do so under such agreements,  and AZ
shall cooperate with Rigel to carry out such assignment.

 

(f)            Interim Supply.  Until AZ establishes a direct contractual relationship
with the Existing Compound Manufacturer and the Existing Product Manufacturer
as described in Section 6.2(c) above, to the extent necessary for AZ
to carry out its development obligations under the Development Plan, Rigel
shall obtain supply from its Existing Compound Manufacturer and Existing
Product Manufacturer R788 in bulk form and the R788 Product in packaged form,
at AZ’s request (to the extent consistent with the Existing Compound
Manufacturing Agreement and the Existing Product Manufacturing Agreement) and
at AZ’s expense, for AZ’s development activities under this Agreement. For the
avoidance of doubt there shall be [ * ] to obtain supply from its Existing
Compound Manufacturer and Existing Product

 

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

 

24

 

Manufacturer, provided
that AZ agrees to reasonably co-operate with Rigel and to negotiate with the
Existing Compound Manufacturer and Existing Product Manufacturer in good faith
to assist Rigel in ensuring such assignment to AZ.

 

(g)           Transfer of Supplier Relationships. 
Promptly after the Effective Date, the Parties shall use Diligent Efforts
to establish a direct contractual relationship between AZ and the Existing
Compound Manufacturer and the Existing Product Manufacturer, either by AZ’s
assumption of the Existing Compound Manufacturing Agreement and the Existing
Product Manufacturing Agreement or otherwise.

 

(h)           Existing Inventory.  The Parties acknowledge that, as of the Effective
Date, Rigel is in possession of an existing inventory of: (i) cGMP-grade
Compound and R788 Product in bulk and finished form; (ii) with respect to
R788 Product, cGMP-grade materials of the following: work-in-progress, starting
materials, analytical standards, samples, radio-labeled compounds; and (iii) certain
equipment specifically designed to produce the R788 Product (the “R788 Inventory”), and an estimate of the quantities of such
R788 Inventory is set forth on Exhibit F
attached hereto.  Rigel agrees to assign
to AZ, [ * ], all of its rights, title and interest in the R788 Inventory as
part of the initial technology transfer under the Transition Plan, except that
Rigel may retain sufficient quantities of R788 Inventory solely for its use in
the conduct of the Open Label Extension Studies and to fulfill its obligations
under the NCI Agreement as such agreement exists as of the Execution Date.

 

(i)            API Transfer. AZ agrees that it shall be responsible
for the costs for final supply of a [ * ] campaign of R788 active
pharmaceutical ingredient which as of the Execution Date is being manufactured
by [ * ] for Rigel under the Existing Compound Manufacturing Agreement, [ *
].  The Parties understand that Rigel
intends to assign such Existing Compound Manufacturing Agreement to AZ under Section 6.2(c),
and accordingly, in the event that such contract has been assigned to AZ at the
time such costs become due, AZ shall be directly responsible for paying such
costs to [ * ].  If, at the time any
portion of such costs becomes due to [ * ], such agreement has not been
assigned to AZ, then Rigel shall be responsible for paying such portion of
costs to [ * ] and shall subsequently invoice AZ and within [ * ] ([ * ]) days
of payment to [ * ], following which AZ shall pay such portion of costs to
Rigel within [ * ] ([ * ]) days of receipt of invoice. In no event shall AZ be
liable for [ * ] except as expressly set forth in this Agreement or as
otherwise agreed in writing between the Parties or as agreed between AZ and [ *
].

 

(j)            Assignment of Rights.  The assignment by Rigel of any of the agreements to AZ
as contemplated in this Section 6.2 shall not require Rigel to assign its
rights and/or interest in and to any of the Rigel Patents and/or Rigel
Know-How, regardless of whether Rigel obtained the rights to such Rigel Patents
or Rigel Know-How under such agreements.

 

(k)           Transition Plan Costs.  Except as specifically provided in the Transition Plan
or elsewhere under this Article 6, each Party shall bear all of its
internal costs incurred in connection with the activities, work, technology
transfer and assignments described in the Transition Plan as of the Execution
Date, and AZ shall reimburse Rigel for Rigel’s Out-of-Pocket Expenses incurred
in connection with the activities, work, technology transfer and assignments
described in the Transition Plan as of the Execution Date.  AZ shall bear all costs and expenses, and shall
reimburse Rigel for its internal and Out-of-

 

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

 

25

 

Pocket Expenses, incurred
by Rigel in connection with any activities that are requested by AZ and that
are not included in the Transition Plan as of the Execution Date unless such
activities require only de minimus efforts by Rigel personnel and do not
require the engagement of any Third Party.

 

ARTICLE 7

 

LICENSES AND EXCLUSIVITY

 

7.1          License to AZ under Rigel Technology.

 

(a)           License
Grant.  Subject to the terms and conditions of this Agreement
(including Rigel’s retained rights under Section 7.3 below), Rigel hereby
grants AZ a royalty-bearing, fully sublicenseable exclusive license, under
Rigel’s and its Affiliate’s rights, titles, and interests in and to the Rigel
Technology, to Exploit the Compound and the Product(s) in the Field in the
Territory.

 

(b)           Access to Safety Information. 
Rigel hereby grants AZ a royalty-free, fully sublicensable,
non-exclusive license to any safety Information relating to any Rigel Compounds
[ * ] that are Controlled by Rigel, solely as required pursuant to the request
or notification of any Regulatory Authority or as otherwise required pursuant
to Applicable Laws. AZ acknowledges and agrees that Rigel has certain existing
contractual obligations as of the Execution Date which preclude such disclosure
to AZ and that Rigel shall not be required to make such disclosure under this Section 7.1(b) to
the extent prohibited under such other contractual obligations.

 

(c)           Exclusions.  For avoidance of doubt, the licenses granted to AZ
under this Agreement shall not include any rights for AZ to (i) modify,
enhance, improve, optimize or otherwise derivatize a Compound in a manner than
results in a molecule that is not a Compound, or (ii) research, develop,
make, have made, use, sell, offer for sale or import any other proprietary
compound of Rigel (including any proprietary compound which Rigel licenses to a
Third Party) that is not a Compound.

 

7.2          Sublicenses and Distributorships.

 

(a)           Scope of Permissible Sublicensing. 
The license granted by Rigel to AZ in Section 7.1 may be
sublicensed by AZ through multiple tiers of Sublicensees: (i) to its
Affiliates in the Territory or in any country of the Territory without Rigel’s
prior written consent; (ii) to a Third Party in the U.S. or in any of the
Major EU Countries, which sublicense shall require the prior written consent of
Rigel ([ * ]) if granted [ * ] the First Commercial Sale of a Product in the
first to occur of the U.S. or any Major EU Country; and (iii) to a Third
Party in any other country(ies) of the Territory without the prior written
consent of Rigel. AZ shall remain primarily responsible for the performance of
its Sublicensees and shall use Diligent Efforts to 

 

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

 

26

 

cause its Sublicensees to
comply with the terms and conditions of this Agreement.  For the avoidance of doubt, where AZ grants a
sublicense to a Person that is not an Affiliate of AZ, and such Person is not a
Distributor, such Person shall be a “Sublicensee” for the purposes of this
Agreement.

 

(b)           Distributorships.  AZ shall have the right, in its sole discretion, to
appoint its Affiliates, and AZ and its Affiliates shall have the right, in
their sole discretion, to appoint any other Persons, in the Territory or in any
country of the Territory, to distribute, market and sell the Products, in
circumstances where the Person purchases its requirements of Products from AZ
or its Affiliates but does not otherwise make any royalty or other payment to
AZ with respect to its intellectual property rights, provided that AZ shall
remain primarily responsible for the performance of such Distributors. For the
avoidance of doubt, where AZ appoints such a Person and where such Person is
not an Affiliate of AZ, that Person shall be a “Distributor” for the purposes
of this Agreement.

 

7.3          Rigel Retained Rights.  Rigel retains the right to practice and license the
Rigel Technology outside the scope of the license granted to AZ under Section 7.1.  In addition, Rigel retains the right to
collaborate with Third Parties on the Compound solely for research purposes
only and solely as described under the material transfer agreements, research
agreements and cooperative research and development agreement existing as of the
Execution Date between Rigel and each such Third Party (collectively, the “Research Agreements”). Rigel shall remain fully responsible
for its acts and omissions under such Research Agreements and, except as
described in the Transition Plan, no responsibility or liability for such
agreements shall pass to AZ by virtue of this Agreement.

 

7.4          Negative Covenant.

 

(a)           Each Party covenants that it will not use or practice
any of the other Party’s intellectual property rights licensed to it under this
Article 7 except for the purposes expressly permitted in the applicable
license grant.

 

(b)           Specifically and without limiting the foregoing, AZ
covenants that it will not, except as expressly permitted under this Agreement
and in particular under Section 7.1, use or practice any of Rigel’s
intellectual property rights licensed to it under this Article 7: (i) in
an Excluded Indication; or (ii) in connection with any compound other than
a Compound except as part of a Combination Product, subject in any case to Section 7.1(c)(ii).

 

7.5          No Implied Licenses. 
Except as explicitly set forth in this Agreement, neither Party grants
to the other Party any license, express or implied, under its intellectual
property rights.

 

7.6          Exclusivity.

 

(a)           No Existing Oral SYK Inhibitor
Program.  AZ hereby represents and warrants that, except as
provided under this Agreement with respect to the Rigel Compounds, as

 

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

 

27

 

of the Execution Date, it
does not have commercial rights (including by means of an option agreement) to
any Compound for which an IND has been filed, or equivalent action taken, by or
on behalf of AZ or its Affiliates.

 

(b)           Until the [ * ] of (i) [ * ]; and (ii) the [
* ] ([ * ]) anniversary of the First Commercial Sale of a R788 Product, except
as permitted under this Agreement, neither Party nor its Affiliates will,
directly or indirectly (including by means of any collaboration, license or
option agreement with any Third Party), [ * ] any [ * ] any product comprising
a compound [ * ].

 

(c)           Until the [ * ] of (i) [ * ]; and (ii) [ *
], except as permitted under this Agreement, AZ and its Affiliates will not,
directly or indirectly (including by means of any collaboration, license or
option agreement with any Third Party), [ * ] in any [ * ] or [ * ], of any
compound [ * ].

 

(d)           Until [ * ], Rigel and its Affiliates will not,
directly or indirectly (including by means of any collaboration, license or
option agreement with any Third Party), [ * ] in the [ * ] with a compound that
exhibits [ * ].

 

7.7          AZ Diligence. With respect to any compound which
exhibits SYK Activity or any product comprising a compound which exhibits SYK
Activity which AZ or its Affiliates acquire after the Effective Date (including
by means of any collaboration, license or option agreement with any Third
Party), and which compound or product AZ or its Affiliates intend to Commence
any Clinical Trial or Commercialize in either the Major Indication or any
Autoimmune Disorder, in each case via the oral route, AZ agrees that in
assessing whether to Commence any Clinical Trial or Commercialize (i) such
acquired compound or product; and/or (ii) any [ * ] Rigel Compound or
associated Product, AZ shall have regard to the commercial and scientific
potential of such opportunities, taking into account their [ * ] and [ * ],
their [ * ], the [ * ] of [ * ] and the [ * ] and [ * ] of their [ * ]
(including [ * ] and [ * ]), the [ * ] of [ * ], their [ * ], [ * ] in making
such determination.  This Section 7.7
shall not be construed to limit AZ’s exclusivity obligations under Section 7.6.

 

7.8          Right of First Negotiation in the
Additional Indication.  In the event that Rigel wishes
to either itself develop and/or Commercialize or grant rights to a Third Party
to develop and/or commercialize any Rigel Compound or corresponding Product in
any Additional Indication, then Rigel shall first notify AZ in writing.  AZ shall within [ * ] ([ * ]) days notify
Rigel if it is interested in obtaining such rights.  If AZ notifies Rigel of its interest in
obtaining such rights, then Rigel and AZ shall negotiate in good faith the
terms and conditions under which AZ will obtain from Rigel the right to develop
and Commercialize the Rigel Compound or corresponding Product in such
Additional Indication.  If, despite good
faith negotiations, Rigel and AZ do not enter into an agreement on the terms
and conditions under which AZ would obtain such right within [ * ] ([ * ]) days
after AZ provides Rigel written notice of its interest to obtain such right,
then Rigel shall have the right to either by itself or via a Third Party
develop and Commercialize the Rigel Compound and corresponding Product in such
Additional Indication without further obligation to AZ provided that with
respect to any such agreement with a Third

 

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

 

28

 

Party, such agreement
shall not be on terms which are more favorable to such Third Party than those
last offered to AZ.

 

ARTICLE 8

 

FINANCIALS

 

8.1          Upfront Fee.  In
consideration of the rights and licenses granted under this Agreement, no later
than [ * ] ([ * ]) days after the Effective Date, AZ shall pay to Rigel a
non-refundable, non-creditable upfront fee of one hundred million dollars
($100,000,000) in cash by wire transfer of immediately available funds into an
account designated by Rigel.

 

8.2          [ * ] Milestone and [ * ]
Milestone.  AZ shall make each of the following
non-refundable, non-creditable milestone payments to Rigel for the achievement
of the following milestone events: (i) in consideration of the services
performed by Rigel relating to the [ * ], [ * ] Dollars ($[ * ]) within [ * ]
([ * ]) days after the [ * ]; and (ii) [ * ] Dollars ($[ * ]) within [ * ]
([ * ]) days after the [ * ] of the [ * ], in each case following receipt of
invoice from Rigel.

 

8.3          Development and Regulatory Milestone
Payments.  AZ shall make milestone payments to Rigel
based on achievement of certain development and regulatory milestone events in
the specified indications as set forth in this Section 8.3 relating to
Products comprising a Rigel Compound.  AZ
shall notify and pay to Rigel the amounts set forth in this Section 8.3
within [ * ] ([ * ]) days after the achievement of the applicable milestone
event (as notified by AZ to Rigel and following receipt of invoice from
Rigel).  Each such payment shall be
non-refundable and non-creditable against any other payment due under this
Agreement. For the avoidance of doubt, [ * ].

 

(a)           Major Indication.  AZ shall make each of the following milestone payments
to Rigel for the first Product comprising a Rigel Compound to achieve the
corresponding milestone event for a Major Indication for which such milestone
event has been met.

 

	
  Milestone Event

  	
   

  	
  Milestone

  Payment for

  First Product

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  

 

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

 

29

 

	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  

 

Each milestone in Section 8.3(a) shall be paid only once for
the first Product to achieve such milestone. 
Each milestone event conditioned upon the Product meeting [ * ] shall be
deemed to have been achieved if such Product meets [ * ], so that upon the
triggering of a particular milestone event conditioned upon a Product meeting
of [ * ], both the milestone payment corresponding to such [ * ] trigger and
the milestone payment corresponding to the applicable [ * ] trigger will become
due, if the milestone payment corresponding to such applicable [ * ] trigger
has not been previously paid by AZ.  In
addition, if a Product achieves a First Commercial Sale in the Major Indication
in a Major Market, such Product shall be deemed to have achieved at least [ *
], and the milestone payment corresponding to the First Marketing Approval of
such Product for [ * ] in such country will become due if such milestone
payment has not been previously paid by AZ.

 

(b)           First Other Indication.  AZ shall make each of the following milestone payments
to Rigel for the first Product comprising a Rigel Compound to achieve the
corresponding milestone event for the first Indication that is an Other
Indication (the “First Other Indication”) for which
such milestone event has been met.

 

	
  Milestone Event

  	
   

  	
  Milestone

  Payment for

  First Product

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  

 

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

 

30

 

	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  

 

Each milestone in Section 8.3(b) shall be paid only once for
the first Product to achieve such milestone.

 

(c)           Second Other Indication.  AZ shall make each of the following milestone payments
to Rigel for the first Product comprising a Rigel Compound to achieve the
corresponding milestone event for the second Indication that is an Other
Indication (the “Second Other Indication”) for
which such milestone event has been met.

 

	
  Milestone Event

  	
   

  	
  Milestone

  Payment for

  First Product

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  
	
  [ * ]

  	
   

  	
  $

  	
  [ *  

  	
  ]

  

 

Each milestone in Section 8.3(c) shall be paid only once for
the first Product comprising a Rigel Compound to achieve such milestone.

 

8.4          Commercialization Milestone Payments. 
AZ shall make each of the milestone payments indicated below to Rigel
when aggregate, cumulative Net Sales of all Product(s) comprising Rigel
Compounds across all indications in the Territory first reach the specified
dollar values in any Calendar Year.  Each
such milestone payment shall be non-refundable and non-creditable against any
other payment due under this Agreement.

 

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

 

31

 

	
  Aggregate Net Sales in the
  Territory for all Products

  in a Calendar Year

  	
   

  	
  Payment

  	
   

  
	
  $

  	
  [ *  

  	
  ]

  	
  $

  	
  [ *  

  	
  ]

  
	
  $

  	
  [ *  

  	
  ]

  	
  $

  	
  [ *  

  	
  ]

  
	
  $

  	
  [ *  

  	
  ]

  	
  $

  	
  [ *  

  	
  ]

  
	
  $

  	
  [ *  

  	
  ]

  	
  $

  	
  [ *  

  	
  ]

  
	
  $

  	
  [ *  

  	
  ]

  	
  $

  	
  [ *  

  	
  ]

  

 

AZ shall notify and pay to Rigel the amounts set forth in this Section 8.4
within [ * ] ([ * ]) days after the end of the Calendar Quarter in which the
applicable milestone event is achieved and following receipt of invoice from
Rigel.  Each milestone in this Section 8.4 shall be paid
only once, and the maximum total amount of payment to Rigel pursuant to this Section 8.4
shall be eight hundred million dollars ($800,000,000).  If more than one commercial milestone has
been met for the first time during the same Calendar Year, then AZ shall remain
obligated to make payments to Rigel for milestone payments triggered by the
occurrence of each and every such commercial milestone event.

 

8.5          Royalty Payments.

 

(a)           Royalties for R788 Products.

 

(i)            AZ shall pay to Rigel non-refundable, non-creditable
royalties on the amount of Net Sales of all R788 Products sold in all countries
of the Territory outside the U.S. (the “Ex US Territory”),
as calculated by multiplying the applicable royalty rates by the corresponding
amount of incremental Net Sales of all R788 Products in the Ex US Territory in
such Calendar Year.

 

	
  Annual Net Sales for all R788
  Products in the

  Ex US Territory

  	
   

  	
  Royalty Rate

  	
   

  
	
  Portion less than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than or equal to $[ * ] and less
  than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than or equal to $[ * ] and less
  than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  

 

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

 

32

 

	
  Portion greater than or equal to $[ * ] and less
  than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than or equal to $[ * ] and less
  than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than or equal to $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  

 

(ii)           AZ shall pay to Rigel non-refundable, non-creditable
royalties on the amount of Net Sales of all R788 Products sold in the U.S., as
calculated by multiplying the applicable royalty rates by the corresponding
amount of incremental Net Sales in the U.S. of all R788 Products in such
calendar year.

 

	
  Annual Net Sales for all R788
  Products in the

  U.S.

  	
   

  	
  Royalty Rate

  	
   

  
	
  Portion less than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than or equal to $[ * ] and less
  than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than or equal to $[ * ] and less
  than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than or equal to $[ * ] and less
  than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than or equal to $[ * ] and less
  than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than or equal to $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  

 

(b)           Royalties for Follow-On
Products.  AZ shall pay to Rigel non-refundable,
non-creditable royalties on the amount of Net Sales of all Follow-On Products
sold in all countries of the Territory, as calculated by multiplying the
applicable royalty rates by the 

 

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

 

33

 

corresponding amount of
incremental Net Sales of all Follow-On Products in the Territory in such
Calendar Year, subject to adjustment as provided below in this paragraph (b).

 

(i)            In respect of Net Sales of Follow-On Products in any
Major Indication, the applicable royalty rates shall be as described in Section 8.5(a)(i) with
respect to Net Sales of R788 Products in the Ex U.S. Territory.

 

(ii)           In respect of Net Sales of Follow-On Products in any
Other Indication, the applicable royalty rates shall be as described below:

 

	
  Annual Net Sales for all
  Follow-On Products in

  any Other Indication in the Ex US Territory

  	
   

  	
  Royalty Rate

  	
   

  
	
  Portion less than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than or equal to $[ * ] and less
  than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than or equal to $[ * ] and less
  than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  
	
  Portion greater than $[ * ]

  	
   

  	
  [ *  

  	
  ]%

  

 

For clarity, (i) the royalty rates set forth in Section 8.5(a)(i) shall
apply to all of the Net Sales of any Follow-On Product for which Marketing
Approval is obtained by AZ, its Affiliates or Sublicensees for any of the Major
Indications, regardless of whether Marketing Approval is also obtained for such
Follow-On Product for any indication other than a Major Indication; (ii) such
royalty rates shall not apply retrospectively in the event that Marketing
Approval is first obtained for any indication other than a Major Indication.

 

(c)           Know-How Royalty.  In any country in the Territory where the sale of a
Product in such country is not covered by a Valid Claim [ * ] of such Product
or [ * ] such Product [ * ] in such country, AZ shall owe royalties under Section 8.5(a) or
(b), as applicable, on the Net Sales of such Product in such country at rates
that are [ * ] percent ([ * ]%) of the rates otherwise payable under Section 8.5(a) or
(b), as applicable.  If a Valid Claim
later issues that covers such [ * ] in such country, then this paragraph (c) shall
no longer apply, but the later issuance of such Valid Claim shall not have any
retroactive effect.

 

(d)           Loss of Market Exclusivity.  In the event of a Loss of Market Exclusivity in any
country, then the royalty rates applicable to Net Sales under Section 8.5(a) and
(b) of such Product in such country shall be reduced by [ * ] percent ([ *
]%).

 

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

 

34

 

(e)           Compulsory License.  In the event that a court or governmental agency of
competent jurisdiction requires AZ or an AZ Affiliate to grant a compulsory
license to a Third Party permitting such Third Party to make and sell the
Product in a country, then for the purposes of calculating the royalties of
such Product under Section 8.5(a) and (b), [ * ] percent ([ * ]%) of
the Net Sales in such country shall be disregarded.

 

(f)            Third Party Payments and Obligations. 
Rigel shall remain responsible for the payment of royalty, milestone and
other payment obligations, if any, due to Third Parties under any Rigel Patents
or Rigel Know-How which has been licensed to Rigel prior to the Effective Date
and is sublicensed to AZ under this Agreement. 
All such payments shall be made promptly by Rigel in accordance with the
terms of its license agreement.  In the
event that AZ determines that rights to intellectual property owned or
controlled by a Third Party are required to fully Commercialize the Products
under this Agreement, AZ shall have the right to negotiate and acquire such
rights through a license or otherwise and to deduct from the royalty payments
due to Rigel [ * ] percent ([ * ]%) of the amounts paid (including milestone
payments, royalties or other license fees) by AZ to such Third Party; provided,
however, that in no event shall the amounts due to Rigel from AZ be reduced by
more than [ * ] percent ([ * ]%) in respect of a particular royalty payment or
in any Calendar Quarter.  [ * ]. Rigel
agrees to fully cooperate with AZ to acquire such rights.

 

(g)           Maximum Amount of Royalty Reduction.  In no event shall the royalty rate payable to Rigel
under Section 8.5(a) or (b) in respect of any particular country
be reduced by more than [ * ] percent ([ * ]%) in any Calendar Quarter as a
result of the reductions set forth in Sections 8.5(c), (d), (e) or (f). [
* ].

 

(h)           Royalty Term. 
Subject to Section 8.6, royalties due under Sections 8.5(a) or
(b), as applicable, with respect to a particular Product in a particular
country, will commence upon the First Commercial Sale of such Product in such country
and will be payable until the later of (i) the expiration of the last to
expire Valid Claim [ * ] in such country that covers the Product, [ * ], and (ii) [
* ] ([ * ]) years after the First Commercial Sale of such Product in such
country (such period, the “Royalty Term”).  Following the
Royalty Term with respect to a particular Product and country, the license to
AZ set forth in Section 7.1 shall continue in effect but shall become
fully paid-up, royalty-free, transferable, perpetual and irrevocable with
respect to such Product and such country.

 

(i)            Royalty Payments and Reports. 
All amounts payable to Rigel pursuant to this Section 8.5 shall be
paid in Dollars within [ * ] ([ * ]) days after the end of each Calendar
Quarter (as reported by AZ to Rigel and invoiced by Rigel). For the purposes of
calculating the royalty payment in any Calendar Quarter, AZ shall calculate the
cumulative royalty payments for the current Calendar Year and deduct royalty
payments made in respect of previous Calendar Quarters, if any, for such
Calendar Year to establish the current royalty payment with respect to such
Calendar Quarter.  AZ shall submit to
Rigel a statement, on a country-by-country basis, of the sales volume of Product
in the Territory during the applicable Calendar Quarter, Net Sales and a
calculation of the amount of royalty payment due on such sales for such
Calendar Quarter,

 

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

 

35

 

sufficiently in advance
before the royalty payment becomes due to allow Rigel to issue the invoice to
AZ for such royalty payments.

 

8.6          Applicable Royalty Term in the Event
of Multiple Products.  The Parties acknowledge and
agree that the royalty rates described in Section 8.5(a) for R788
Products reflect the fact that as of the Execution Date, R788 is the most
advanced Compound in development in a Major Indication. Accordingly, in the
event that during the R788 Product Royalty Term any Follow-On Product is
Commercialized, with respect to Net Sales of such Follow-on Product, then
notwithstanding the provisions of Section 8.5, the Parties agree as follows:

 

(a)           For any Follow-On-Product comprising [ * ] in any
Other Indication, the applicable royalty rate for Net Sales of such Follow-On
Product shall be as described in Section 8.5[ * ] (ie [ * ]%, [ * ]%, [ *
]% or [ * ]% respectively) during the R788 Product Royalty Term and [ * ]
percent ([ * ]%) for Net Sales following the expiry of the R788 Product Royalty
Term;

 

(b)           For any Follow-On-Product comprising [ * ] in any
Other Indication, the applicable royalty rate for Net Sales of such Follow-On
Product shall be as described in Section 8.5[ * ] (ie [ * ]%, [ * ]%, [ *
]% or [ * ]% respectively) during the Royalty Term of such Follow-On-Product,
irrespective of when the R788 Product royalty Term expires;

 

(c)           For any Follow-On-Product comprising [ * ] in a Major
Indication, the applicable royalty rate for Net Sales of such Follow-On Product
shall be as described in Section 8.5[ * ] (ie [ * ]%, [ * ]%, [ * ]%, [ *
]%, [ * ]% or [ * ]% respectively) during the R788 Product Royalty Term and [ *
] percent ([ * ]%) for Net Sales following the expiry of the R788 Product
Royalty Term;

 

(d)           For any Follow-On-Product comprising [ * ] in a Major
Indication, the applicable royalty rate for Net Sales of such Follow-On Product
shall be as described in Section 8.5[ * ] (ie [ * ]%, [ * ]%, [ * ]%, [ *
]%, [ * ]% or [ * ]% respectively) during the R788 Product Royalty Term and as
described in Section 8.5[ * ] (ie [ * ]%, [ * ]%, [ * ]% or [ * ]%
respectively) following the expiry of the R788 Product Royalty Term and for the
remainder of the Royalty Term of such Follow-On-Product;

 

(e)           For any Follow-On-Product comprising [ * ] which has
First Commercial Sale in an Other Indication and achieves subsequent Marketing
Approval in a Major Indication, the applicable royalty rate for Net Sales of
such Follow-On-Product shall be (i) as described in Section 8.5[ * ]
(ie [ * ]%, [ * ]%, [ * ]% or [ * ]% respectively) with respect to Net Sales in
the Other Indication prior to First Commercial Sale in a Major Indication; (ii) thereafter
as described in Section 8.5[ * ] (ie [ * ]%, [ * ]%, [ * ]%, [ * ]%, [ *
]% or [ * ]% respectively) for all Net Sales of such Follow-On-Product
(irrespective of the Indication) during the R788 Product Royalty Term; and (iii) thereafter
[ * ] percent ([ * ]%) for Net Sales of such Follow-On-Product (irrespective of
the Indication) following the expiry of the R788 Product Royalty Term;

 

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

 

36

 

(f)            For any Follow-On-Product comprising [ * ] which has
First Commercial Sale in an Other Indication and achieves subsequent Marketing
Approval in a Major Indication, the applicable royalty rate for Net Sales of
such Follow-On-Product shall be (i) as described in Section 8.5[ * ]
(ie [ * ]%, [ * ]%, [ * ]% or [ * ]% respectively) with respect to Net Sales in
the Other Indication prior to First Commercial Sale in a Major Indication; (ii) thereafter
as described in Section 8.5[ * ] (ie [ * ]%, [ * ]%, [ * ]%, [ * ]%, [ *
]% or [ * ]% respectively) for all Net Sales of such Follow-On-Product
(irrespective of the Indication) during the R788 Product Royalty Term; and (iii) thereafter
as described in Section 8.5[ * ] (ie [ * ]%, [ * ]%, [ * ]% or [ * ]%
respectively) (irrespective of the Indication) following the expiry of the R788
Product Royalty Term and for the remainder of the Royalty Term of such
Follow-On-Product;

 

(g)           For any Follow-On-Product comprising [ * ] which has
First Commercial Sale in a Major Indication and achieves subsequent Marketing
Approval in an Other Indication, the applicable royalty rate for Net Sales of
such Follow-On-Product shall be (i) as described in Section 8.5[ * ]
(ie [ * ]%, [ * ]%, [ * ]%, [ * ]%, [ * ]% or [ * ]%  respectively) for all Net Sales of such
Follow-On-Product (irrespective of the Indication) during the R788 Product
Royalty Term; and (ii) thereafter [ * ] percent ([ * ]%) for Net Sales of
such Follow-On-Product (irrespective of the Indication) following the expiry of
the R788 Product Royalty Term;

 

(h)           For any Follow-On-Product comprising [ * ] which has
First Commercial Sale in a Major Indication and achieves subsequent Marketing
Approval in an Other Indication, the applicable royalty rate for Net Sales of
such Follow-On-Product shall be (i) as described in Section 8.5[ * ]
(ie [ * ]%, [ * ]%, [ * ]%, [ * ]%, [ * ]% or [ * ]% respectively) for all Net
Sales of such Follow-On-Product (irrespective of the Indication) during the
R788 Product Royalty Term; and (ii) thereafter as described in Section 8.5[
* ] (ie [ * ]%, [ * ]%, [ * ]% or [ * ]% respectively) (irrespective of the
Indication) following the expiry of the R788 Product Royalty Term and for the
remainder of the Royalty Term of such Follow-On-Product;

 

(i)            In the event that (i) there is no R788 Product
Royalty Term (ie no First Commercial Sale of the R788 Product); and (ii) two
or more Follow-On-Products achieve First Commercial Sale, the provisions set
forth above in sub-sections (a)-(h) shall apply with respect to the
Royalty Term of the first Follow-On-Product and all references to the R788
Product Royalty Term as described in (a)-(h) above shall be replaced by
references to the Royalty Term of the first Follow-On-Product;

 

(j)            For the avoidance of doubt, notwithstanding the
provisions of this Section 8.6, the royalty reductions set forth in
Sections 8.5(c), (d), (e) and (f) shall apply with respect to each
respective Product.

 

8.7          Taxes.

 

(a)           The royalties, milestones and other amounts payable by
AZ to Rigel pursuant to this Agreement (“Payments”) shall not be reduced on
account of any taxes unless required by Applicable Laws.  AZ shall deduct and withhold from the
Payments any taxes that it is required by Applicable Laws to deduct or withhold
on Rigel’s behalf. Notwithstanding the

 

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

 

37

 

foregoing, if Rigel is
entitled under any applicable tax treaty to a refund, reduction of rate, or the
elimination of, applicable withholding tax, it may deliver to AZ or the
appropriate Governmental Authority with the assistance of AZ, to the extent
that this is reasonably required, the prescribed forms necessary to obtain such
refund or to reduce the applicable rate of withholding or to relieve AZ of its
obligation to withhold tax, and AZ shall apply the reduced rate of withholding,
or dispense with withholding, as the case may be provided that AZ has received
evidence, in a form reasonably satisfactory to AZ, of Rigel’s delivery of all
applicable forms (and, if necessary, its receipt of appropriate governmental
authorization) at least [ * ] ([ * ]) days prior to the time that the Payments
are due. The Parties shall cooperate in accordance with Applicable Laws to
minimize withholding taxes.  If, in
accordance with the foregoing, AZ withholds any amount, it shall pay to Rigel
the balance when due, make timely payment to the proper taxing authority of the
withheld amount on Rigel’s behalf, and send to Rigel proof of such payment
within [ * ] ([ * ]) days following that payment.

 

(b)           Subject to Section 8.7(c), if AZ (or AZ’s
Affiliates or successors) is required to make a payment to Rigel subject to a
deduction or withholding of tax, then if such deduction or withholding of tax
obligation arises or is increased solely as a result of the [ * ], as a result
of which the Payments arise in a territory other than [ * ], or there is a
change in [ * ], or the payments arise or are deemed to arise [ * ] (an “AZ Withholding Tax Action”),  then notwithstanding Section 8.7(a),
the payment by AZ (in respect of which such deduction and withholding of tax is
required to be made) shall be increased by the amount necessary (the “Additional Amount”) to ensure that Rigel receives an amount
equal to the same amount that it would have received had no AZ Withholding Tax
Action occurred.

 

(c)           Section 8.7(b) shall only apply if each of
the following applies: (i) Rigel has not [ * ] or [ * ]; and (ii) Rigel
is the [ * ];  (iii) Rigel is not
able to obtain a credit for, refund of or relief from any taxation liability by
reason of the deduction or withholding of tax; and (iv) at the time the
Payment is due, Rigel has not [ * ] intellectual property [ * ] that [ *
].    Furthermore, (x) if any
Additional Amount is paid pursuant to Section 8.7(b) and Rigel
subsequently obtains a credit for, or refund of any tax that gave rise to the
payment of the Additional Amount, or Rigel subsequently obtains relief from any
taxation liability by reason of such tax, Rigel shall pay to AZ (or AZ’s
Affiliates or successors, as the case may be) the full amount of such tax
credit, refund or relief; and (y) Rigel shall take all reasonable steps
and make all available claims and elections to maximize its entitlement to
receive such credit, refund or relief at the earliest opportunity. For each
Calendar Year during such Additional Amount has been paid, within [ * ] ([ * ])
days after filing its U.S. federal income return for such Calendar Year, Rigel
shall provide AZ with a schedule that sets forth (i) the year in which
each Additional Amount was paid, (ii) the amount of such Additional
Amount, (iii) the year in which Rigel realized a credit, refund or other
corresponding relief for the Additional Amount, and (iv) the amount so
realized.

 

(d)           All Payments are exclusive of Indirect Taxes. If any
Indirect Taxes are chargeable in respect of any Payments, the remitting Party
shall pay such Indirect Taxes at the applicable rate in respect of any such
Payments following the receipt, where applicable, of an invoice in the
appropriate form issued by the receiving Party in respect of those Payments,
such

 

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

 

38

 

Indirect Taxes to be
payable on the due date of the Payment to which such Indirect Taxes relate. The
Parties shall issue invoices for all goods and services supplied under this
Agreement consistent with Indirect Tax requirements and irrespective of whether
the sums may be netted for settlement purposes. The Parties shall cooperate in
accordance with Applicable laws to minimize Indirect Taxes.

 

(e)           For the avoidance of doubt, the Parties acknowledge
and agree that none of the amounts payable under Article 8 of this
Agreement are related to the license (or right) to import or any import of
Existing Inventory.  AZ shall be responsible for any import clearance,
including payment of any import duties and similar charges, in connection with
any Existing Inventory transferred to AZ under this Agreement.  The
Parties shall co-operate to ensure that the Party responsible for shipping
values the clinical product in accordance with Applicable Laws and minimizes
where permissible any such duties and any related import taxes that are not
reclaimable from the relevant authorities.

 

8.8          Payment. 
AZ shall make payment under this Article 8 in Dollars by wire
transfer of immediately available funds to the bank account as may be
designated by Rigel in writing to AZ from time to time.

 

8.9          Foreign Exchange. 
For the purpose of computing the Net Sales of Products sold in a currency
other than Dollars, such currency shall be converted from local currency to
Dollars by AZ in accordance with the rates of exchange for the relevant month
for converting such other currency into Dollars used by AZ’s internal
accounting systems, which are independently audited on an annual basis.

 

8.10        Late Payments. 
If Rigel does not receive payment of any sum due to it on or before the
due date, simple interest shall thereafter accrue on the sum due to Rigel from
the due date until the date of payment at a rate of [ * ] percentage point ([ *
]%) over the then-current 30-day LIBOR rate, or the maximum rate allowable by
applicable law, whichever is less.

 

8.11        Financial Records; Audits.  AZ
shall maintain complete and accurate records in sufficient detail to permit
Rigel to confirm the accuracy of the royalty payments and commercial milestone
calculations under this Agreement.  Upon
reasonable prior written notice, such records shall be open during regular
business hours for a period of [ * ] ([ * ]) years from the creation of
individual records for examination at Rigel’s expense, and not more often than
[ * ] each Calendar Year, by an independent certified public accountant
selected by Rigel and reasonably acceptable to AZ for the sole purpose of verifying
for Rigel the accuracy of the financial reports or commercialization milestone
notices furnished by AZ pursuant to this Agreement.  Any amounts shown to be owed but unpaid shall
be paid within [ * ] ([ * ]) days after the accountant’s report, plus interest
(as set forth in Section 8.10) from the original due date.  Rigel shall bear the full cost of such audit
unless such audit discloses an underpayment of [ * ] percent ([ * ]%) or more
for AZ’s payment obligation for a particular payment (in the case of commercial
milestone payments) or a particular Calendar Quarter (in the case of royalty
payments), in which case AZ shall bear the full cost of such audit.

 

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

 

39

 

ARTICLE 9

 

INTELLECTUAL PROPERTY

 

9.1          Ownership of Inventions. 
Each Party shall own all inventions and Information made solely by it
and its Affiliates and their respective employees agents and independent
contractors in the course of conducting such Party’s activities under this
Agreement (collectively, “Sole Inventions”).  All inventions and Information that are made
jointly by employees, Affiliates, agents, or independent contractors of each
Party in the course of performing activities under this Agreement
(collectively, “Joint Inventions”)
shall be owned jointly by the Parties in accordance with joint ownership
interests of co-inventors under US patent laws. 
Inventorship shall be determined in accordance with US patent laws.

 

9.2          Disclosure of Inventions.  Each Party shall promptly disclose to the other all
Sole Inventions and Joint Inventions, including all invention disclosures or
other similar documents submitted to such Party by its, or its Affiliates’,
employees, agents or independent contractors describing such Sole Inventions or
Joint Inventions.  Such Party shall also
respond promptly to reasonable requests from the other Party for more
Information relating to such inventions.

 

9.3          Prosecution
of Patents.

 

(a)           Rigel Patents Other Than Joint
Patents.  Except as otherwise provided in this Section 9.3(a),
as between the Parties, Rigel shall have the sole right and authority to
prepare, file, prosecute (including any interferences, reissue proceedings,
reexaminations and other administrational proceedings) and maintain the Rigel
Patents other than Joint Patents in any jurisdiction in the Territory, at [ * ]
costs and expense other than as set forth below.  Rigel shall provide AZ reasonable opportunity
to review and comment on such prosecution efforts regarding such Rigel Patents
in the Territory and, [ * ], AZ shall have final say over all decisions
relating to such prosecution efforts with respect to Rigel Patents that
specifically claim the [ * ] of, or the [ * ] of, any Compound or Product
provided that such decisions made by AZ do not result in any reduction of AZ’s
payment obligation to Rigel (including royalty payments and/or the Royalty
Term).  Rigel shall provide AZ with a
copy of material communications from any patent authority in the Territory
regarding such Rigel Patents, and shall provide drafts of any material filings
or responses to be made to such patent authorities a reasonable amount of time
in advance of submitting such filings or responses.  If Rigel determines in its sole discretion to
abandon, not file or not maintain a Rigel Patent anywhere in the Territory,
then Rigel shall provide AZ written notice of such determination at least [ * ]
([ * ]) days before any deadline for taking action to avoid abandonment of such
Rigel Patent.  AZ shall have the right,
but not the obligation, to prepare, file, prosecute and maintain such Rigel
Patent in the Territory on behalf of Rigel at AZ’s expense.  If AZ desires Rigel to file, in a particular
jurisdiction in the Territory, a Rigel Patent that claims priority to another
Rigel Patent, AZ shall provide written notice to Rigel requesting that Rigel
file such patent application in such jurisdiction, and Rigel shall file and
prosecute such patent application and maintain any patent issuing thereon in
such jurisdiction at AZ’s expense.  AZ’s
rights under this Section 9.3 with respect to any Rigel Patent licensed to
Rigel by a Third

 

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

 

40

 

Party shall be subject to
the rights of such Third Party to file, prosecute, and/or maintain such Rigel
Patent.

 

(b)           AZ Patents Other Than Joint Patents. 
Except as otherwise provided in this Section 9.3(b), AZ shall have
the sole right and authority to prepare, file, prosecute (including any
interferences, reissue proceedings, reexaminations and other administrational
proceedings) and maintain the AZ Patents other than Joint Patents in any
jurisdiction in the Territory, at AZ’s costs and expense and discretion.

 

(c)           Joint Patents.  With respect to any potentially patentable Joint
Invention, the Parties shall confer and agree upon which Party, if any, shall
prepare, file, prosecute (including any interferences, reissue proceedings,
reexaminations and other administrational proceedings) and maintain patent
applications covering such Joint Invention (any such patent application and any
patents issuing therefrom a “Joint Patent”)
in any jurisdictions throughout the Territory, at [ * ] expense.  It is the intention of the Parties that,
unless otherwise agreed in writing, [ * ] would prepare, file, prosecute and
maintain any Joint Patents in the Territory.  The
Party that prosecutes a patent application in the Joint Patents (the “Prosecuting Party”) shall provide the other
Party reasonable opportunity to review and comment on such prosecution efforts
regarding the applicable Joint Patents in the particular jurisdictions, and
such other Party shall provide the Prosecuting Party reasonable assistance in
such efforts.  The Prosecuting Party
shall provide the other Party with a copy of all material communications from
any patent authority in the applicable jurisdictions regarding the Joint Patent
being prosecuted by such Party, and shall provide drafts of any material
filings or responses to be made to such patent authorities a reasonable amount
of time in advance of submitting such filings or responses.  In particular, each Party agrees to provide
the other Party with all information necessary to enable the other Party to
comply with the duty of candor/duty of disclosure requirements of any patent
authority.  Should [ * ] determine that
it will no longer support the continued prosecution or maintenance of a
particular Joint Patent in a country or jurisdiction, [ * ] shall provide [ * ]
with written notice of such determination at least [ * ] ([ * ]) days before
any deadline for taking action to avoid abandonment of such Joint Patent.  [ * ] shall have the right, but not
obligation, to file, prosecute and maintain such Joint Patent in the applicable
jurisdiction.  If [ * ] decides to
exercise such right, then:  (i) [ *
] shall, if requested in writing by [ * ], assign its ownership interest in
such Joint Patent in such country or jurisdiction to [ * ] for no additional
consideration, and (ii) if such assignment is effected, any such Joint
Patent would thereafter be deemed a [ * ] Patent in the case of assignment to [
* ] and Section 9.3[ * ] would apply to the preparation, filing,
prosecution and maintenance thereof.

 

(d)           Cooperation in Prosecution and Orange
Book Listing.  Each Party shall provide the other Party all
reasonable assistance and cooperation in the patent prosecution efforts
provided above in this Section 9.3, including providing any necessary
powers of attorney and executing any other required documents or instruments
for such prosecution and including reasonable assistance and cooperation in
determining a complete and correct list of Rigel Patents and Joint Patents for
Orange Book Listing.  Such assistance
shall include the provision by Rigel to AZ of all Information, including a
complete list of Rigel Patents covering the Products, as reasonably necessary
to enable AZ to make filings with Regulatory Authorities with respect to

 

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

 

41

 

the Rigel Patents,
including as required in connection with (i) any Orange Book Listing; and (ii) outside
the U.S. under the national implementations of Article 10.1(a)(iii) of
Directive 2001/EC/83 or other international equivalents.

 

9.4          Infringement of Patents and Know-How.

 

(a)           Notification.  If a Party becomes aware of any
infringement, threatened infringement, or alleged infringement of the Rigel
Patents or any Joint Patent or Rigel Know-How on account of a Third Party’s
manufacture, use or sale of a Product in the Field including any “patent
certification” filed in the US under 21 U.S.C. §355(b)(2) or 21 U.S.C.
§355(j)(2) or similar provisions in other jurisdictions in connection with
the sale or proposed sale of a Product (in each case, a “Product
Infringement”), then such Party shall promptly notify the other
Party and within [ * ] ([ * ]) Business Days in writing of any such Product
Infringement and shall provide evidence in such Party’s possession
demonstrating such Product Infringement.

 

(b)           Enforcement Rights.  AZ shall have the first right, but not the obligation,
to bring an appropriate claim, suit or other action against any person or
entity engaged in Product Infringement of a Rigel Patent or Joint Patent or
Rigel Know-How in the Territory.  AZ
shall have a period of [ * ] ([ * ]) days after its receipt or delivery of such
notice and evidence (as applicable) to elect to enforce such Rigel Patent or
Joint Patent or Rigel Know-How against such Third Party.  In the event AZ does not so elect, it shall
notify Rigel in writing within such [ * ] days, and Rigel shall have the right
to commence a suit or take action to enforce the applicable Rigel Patent or
Joint Patent or Rigel Know-How with respect to such Product Infringement.  The other Party shall provide to the Party
enforcing any such rights under this Section 9.4(b) reasonable
assistance in such enforcement, at the enforcing Party’s request and expense,
including joining such claim, suit or action as a party plaintiff, if required
by applicable law, to pursue such claim, suit or action.  The enforcing Party shall keep the other
Party regularly informed of the status and progress of such enforcement
efforts, and shall reasonably consider the other Party’s comments on any such
efforts.

 

(c)           Third Party Litigation. 
Except as otherwise set forth in Article 11, in the event of any
actual or threatened suit against Rigel, AZ or its Affiliates that (i) the
Exploitation of Rigel Compounds or associated Products in the Field in the
Territory or (ii) the practice of a Rigel Patent, Joint Patent or the
Rigel Know-How or any part thereof in connection with the activities set forth
in subsection (i) above, in each case by or on behalf of AZ under this
Agreement infringes the patent or intellectual property rights of any Third
Party (an “Infringement Suit”), the Party first becoming aware of
such Infringement Suit shall promptly give written notice to the other
Party.  AZ shall have the first right,
but not the obligation, through counsel of its choosing, to assume direction
and control of the defense of claims arising therefrom (including the right to
settle such claims in its sole discretion) on behalf of both Parties; provided, however, that AZ shall obtain the written consent
of Rigel prior to ceasing to defend, settling or otherwise compromising such
claims.  If AZ notifies Rigel in writing
that it does not wish to assume such direction and control, Rigel shall have
the right, but not the obligation to, at its sole cost and expense, defend
against such claims on behalf of both Parties; provided,
however, that Rigel shall obtain the written consent of AZ prior to
ceasing to defend, 

 

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

 

42

 

settling or otherwise
compromising such claims. The other Party shall provide to the Party
controlling any such defense under this Section 9.4(c) reasonable
assistance in such enforcement, at the defending Party’s request and
expense.  The defending Party shall keep
the other Party regularly informed of the status and progress of such defense
efforts, and shall reasonably consider the other Party’s comments on any such
efforts.  If
either Party elects to defend both itself and the other Party from a claim
pursuant to this Section 9.4(c), the defending Party shall indemnify the
other Party, and its officers, directors, employees and agents, and hold them
harmless from and against any and all damages or other amounts payable to such
Third Party claimant arising from such claims, as well as any reasonable
attorneys’ fees and costs of litigation incurred by such other Party.  If neither Party elects to defend such claims
on behalf of both Parties, each Party shall have the right to defend itself
from such claims on its own behalf, at its sole cost and expense.  This Section 9.4(c) shall not be
construed to modify either Party’s rights or obligations under Article 11.

 

(d)           Settlement.  Except as expressly provided under Section 9.4(c) above,  prior written consent of the other Party is required for
either Party to settle any claim, suit or action that it brought under this Section 9.4
involving a Rigel Patent or Joint Patent or Rigel Know-How in any manner that
would negatively impact such intellectual property or that would limit or
restrict AZ’s ability to sell the Product anywhere in the Territory.

 

(e)           Expenses and Recoveries.  If monetary damages are recovered from a Third Party
in a claim, suit or action under Section 9.4(b) against any person or
entity engaged in Product Infringement of the Rigel Patents or Joint Patents in
the Territory, such recovery shall be allocated first to the reimbursement of
any expenses incurred by the Parties in such litigation, and any remaining
amount shall be distributed as follows:  (i) if
AZ is the Party enforcing such Rigel Patent or Joint Patent, then any remaining
amount shall be retained by AZ and treated as Net Sales subject to Section 8.5;
and (ii) if Rigel is the Party enforcing such Rigel Patent or Joint
Patent, then any remaining amount shall be retained by Rigel.

 

9.5          Confirmatory Patent Licenses. 
Rigel shall, if requested to do so by AZ and at AZ’s expense, promptly
enter into confirmatory license agreements in a customary form reasonably
requested by AZ for the purposes of recording the licenses granted under this
Agreement with such patent offices in the Territory as AZ considers
appropriate.

 

9.6          Patent Marking. 
AZ shall, at its option, require its Affiliates and Sublicensees to,
mark the Product sold by it hereunder with appropriate patent numbers or
indicia to the extent permitted by Applicable Law.

 

9.7          Employee Obligations.  Prior to beginning work under this Agreement,
AZ and Rigel shall each use Diligent Efforts to ensure that their respective
employees, agents or independent contractors, and those of their respective
Affiliates engaged in activities under this Agreement are bound by written
obligations of non-disclosure and invention assignment, including: (a) promptly
reporting to the applicable Party any invention, discovery, process or other
intellectual property right arising in the course of this Agreement; (b) assigning
to the applicable Party all of his or her right, title and interest in and to
any invention, discovery,

 

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

 

43

 

process or other
intellectual property right arising in the course of this Agreement; (c) cooperating
in the preparation, filing, prosecution, maintenance and enforcement of any
patent and patent application covering the inventions described in subsection (b) above;
(d) performing all acts and signing, executing, acknowledging and
delivering any and all documents required for effecting the obligations and
purposes of this Section 9.7; and (e) abiding by the obligations of
confidentiality and non-use set forth in Article 12.  It is understood and agreed that such
non-disclosure and invention assignment agreement need not reference or be
specific to this Agreement.

 

9.8          Patent Term Extensions.

 

(a)           The Parties shall cooperate in obtaining patent term
extensions (under but not limited to Drug Price Competition and Patent Term
Restoration Act), supplemental protection certificates, or their equivalents,
with respect to the Rigel Patents and/or Joint Patents covering Products in any
country and/or region where applicable.

 

(b)           [ * ] shall determine which Rigel Patent it will apply
to extend, after consulting with [ * ] and reasonably considering any opinion
provided, and shall file for such adjustment and extension at [ * ] cost and
expense.

 

9.9          Trademarks.  AZ shall be responsible at its sole cost and
discretion for the selection, registration, maintenance and defense of all
trademarks for use in connection with the sale or marketing of the Product in
the Field in the Territory (the “Marks”). AZ
shall own all rights, title and interest in such Marks.

 

ARTICLE 10

 

REPRESENTATIONS AND WARRANTIES

 

10.1        Mutual Representations and Warranties. 
Each Party hereby represents, warrants, and covenants (as applicable) to
the other Party as of the Effective Date as follows:

 

(a)           Corporate Existence and Power.  It
is a company or corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction in which it is incorporated, and
has full corporate power and authority and the legal right to own and operate
its property and assets and to carry on its business as it is now being
conducted and as contemplated in this Agreement, including the right to grant
the licenses granted by it hereunder.

 

(b)           Authority and Binding Agreement.  As
of the Execution Date, (i) it has the corporate power and authority and
the legal right to enter into this Agreement and perform its obligations
hereunder; (ii) it has taken all necessary corporate action on its part
required to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder; and (iii) this Agreement has
been duly executed and delivered on behalf of such Party, and constitutes a
legal, valid, and binding obligation of such Party that is enforceable against
it in accordance with its terms.

 

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

 

44

 

(c)           No Conflict. 
It is not a party to and will not enter into any agreement that would
materially prevent it from granting the rights granted to the other Party under
this Agreement or performing its obligations under this Agreement.

 

(d)           No Debarment.  In
the course of the development of the Product, such Party has not used prior to
the Execution Date and shall not use, during the Term, any employee, agent or
independent contractor who has been debarred by any Regulatory Authority, or,
to the best of such Party’s knowledge, is the subject of debarment proceedings
by a Regulatory Authority.

 

(e)           Notice of Infringement or Misappropriation. 
As of the Execution Date, except as already disclosed, such Party has
not received any written notice from any Third Party asserting or alleging that
any research or development of any Compound or Product by such Party prior to
the Execution Date infringed or misappropriated the intellectual property
rights of such Third Party.

 

(f)            Tax Resident. 
It is a resident of the jurisdiction in which it is incorporated as such
term is defined pursuant to Applicable Laws.

 

10.2        Representations and Warranties by
Rigel.  Rigel hereby represents and warrants to AZ as of the
Effective Date as follows:

 

(a)           Title; Encumbrances. 
Except in relation to the rights granted under the Pfizer Agreement, it
is the sole and exclusive owner of the Rigel Patents and it has the right to
grant to AZ the license under the Rigel Technology that Rigel purports to grant
hereunder.

 

(b)           No Material Impact. The provisions of the Research
Agreements and the rights granted by Rigel to any Third Party thereunder do not
materially adversely affect AZ’s right to develop and/or commercialize the
Products hereunder.

 

(c)           Full Disclosure. Complete and correct copies of all
material transfer agreements, research agreements, cooperative research and
development agreements and any other agreements or contracts entered into by or
on behalf of Rigel and its Affiliates with any Third Parties relating to the
Compound that have a material impact on AZ’s right to develop and/or
commercialize the Products hereunder have been disclosed to AZ.

 

(d)           Serious Adverse Events. To the best of Rigel’s knowledge, there
have been no Serious Adverse Events relating to the Compounds, except for those
disclosed to AZ as part of the formal due diligence process between Rigel and
AZ prior to the Execution Date.

 

(e)           Enforceability. To the best of Rigel’s knowledge the
Rigel Patents are valid and enforceable without any claims, challenges,
oppositions, interference or other proceedings pending or threatened and Rigel
has filed and prosecuted patent applications within such Rigel Patents in good
faith and complied with all duties of disclosure with respect thereto.

 

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

 

45

 

(f)            Patent Fees. All necessary and material application,
registration maintenance and renewal fees in respect of the Rigel Patents in
existence as of the Effective Date have been paid.

 

(g)           Notice of Infringement or
Misappropriation.  Neither Rigel or its Affiliates has received
any  written notice from any Third Party
asserting or alleging that the Exploitation of the Compound prior to the
Effective Date infringed or misappropriated the intellectual property rights of
such Third Party and to the best of Rigel’s knowledge, no such notice is
pending or threatened.

 

(h)           Non-infringement of Third Party
Rights.  To the best of Rigel’s knowledge, the making,
using and selling of the R788 Product as it exists as of the Effective Date, in
the manner as conducted by Rigel as of the Effective Date, does not infringe
any patents or published patent applications owned or controlled by a Third
Party.

 

(i)            Non-infringement [ * ]. To the best of Rigel’s knowledge, in
engaging [ * ] of [ * ] as a consultant, there has not been any breach of the [
* ], rules, statutes or regulations.

 

(j)            Assignments. 
Rigel has obtained from all individuals who participated in any respect
in the invention or authorship of any Rigel Technology effective assignments of
all ownership rights of such individuals in such Rigel Technology, either
pursuant to written agreement or by operation of law.

 

(k)           No Proceedings.  
There are no pending, and to the best of Rigel’s knowledge no
threatened, actions, suits or proceedings against Rigel involving the Rigel
Technology or the Compound.

 

10.3        Representations and Warranties by
Rigel relating to the Pfizer Agreement.  Rigel hereby represents and warrants to AZ as of the
Effective Date as follows:

 

(a)           The execution of this Agreement and the grant of the licenses
hereunder by Rigel to AZ does not conflict with any provision of the Pfizer
Agreement.

 

(b)           Pfizer does not have any rights to the Compounds,
either in the Field or the Excluded Indications.

 

(c)           Since
its execution on January 18, 2005 the Pfizer Agreement has not been
amended, restated, terminated, in whole or in part, or otherwise modified.

 

10.4        Covenants.  Rigel covenants and agrees that:

 

(a)           it will not grant any interest in the Rigel Technology
in a manner that would materially adversely affect AZ’s right to develop and/or
commercialize Products hereunder;

 

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

 

46

 

(b)           it will not assign its right, title or interest in or
to any Rigel Patent to any Third Party in a manner that would materially
adversely affect AZ’s right to develop and/or Commercialize Products hereunder,
other than in connection with an assignment of this Agreement pursuant to Section 15.5.

 

(c)           it will not amend, restate, terminate, in whole or in
part, or otherwise modify the Pfizer Agreement in each case in any manner that
would adversely affect any rights that have been licensed by Rigel to AZ under
this Agreement.

 

(d)           it will promptly notify AZ of any Serious Adverse
Events which it becomes aware of relating to the Compounds after the Execution
Date.

 

10.5        Disclaimer.  Each Party understands that the Compound(s) and
Product(s) are the subject of ongoing clinical research and development
and that the other Party cannot assure the safety or usefulness of the Compound(s) or
Product(s).  In addition, Rigel makes no
warranties except as set forth in this Article 10 concerning the Rigel
Technology and AZ makes no warranties except as set forth in this Article 10
concerning the AZ Technology.

 

10.6        No Other Representations or Warranties.  EXCEPT
AS EXPRESSLY STATED IN SECTION 7.6(a) AND THIS ARTICLE 10, NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY
RIGHTS, IS MADE OR GIVEN BY OR ON BEHALF OF A PARTY.  EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT,
ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE,
ARE HEREBY EXPRESSLY EXCLUDED.

 

ARTICLE 11

 

INDEMNIFICATION

 

11.1        Indemnification by Rigel.  Rigel shall defend, indemnify, and hold AZ, its
Affiliates, and their respective officers, directors, employees, and agents
(the “AZ Indemnitees”) harmless
from and against any and all damages or other amounts payable to a Third Party
claimant, as well as any reasonable attorneys’ fees and costs of litigation
incurred by such AZ Indemnitees (collectively, “AZ
Damages”),
all to the extent resulting from claims, suits, proceedings or causes of action
brought by such Third Party (“AZ  Claims”)
against such AZ Indemnitee based on or alleging: (a) a breach of any of
Rigel’s representations, warranties, and obligations under the Agreement; or (b) the
willful misconduct or negligent acts of Rigel, its Affiliates, or the officers,
directors, employees, or agents of Rigel or its Affiliates.  The foregoing indemnity obligation shall not
apply to the extent that such AZ Claim is based on or alleges:  (i) a breach of any of AZ’s
representations, warranties, and obligations under the Agreement; or (ii) the
willful misconduct or negligent acts of AZ or its Affiliates, or the officers,
directors, employees, or agents of AZ or its Affiliates.

 

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

 

47

 

11.2        Indemnification by AZ.  AZ shall defend, indemnify, and hold Rigel, its
Affiliates, and their respective officers, directors, employees, and agents
(the “Rigel Indemnitees”) harmless
from and against any and all damages or other amounts payable to a Third Party
claimant, as well as any reasonable attorneys’ fees and costs of litigation
incurred by such Rigel Indemnitees (collectively, “Rigel
Damages”),
all to the extent resulting from claims, suits, proceedings or causes of action
brought by such Third Party (“Rigel  Claims”)
against such Rigel Indemnitee based on or alleging:  (a) the development, manufacture,
storage, handling, use, promotion, sale, offer for sale, and importation of the
Product by AZ or its Affiliates, Sublicensees, or Distributors in the
Territory; (b) a breach of any of AZ’s representations, warranties, and
obligations under the Agreement; or (c) the willful misconduct or
negligent acts of AZ or its Affiliates, or the officers, directors, employees,
or agents of AZ or its Affiliates.  The
foregoing indemnity obligation shall not apply to the extent that any Rigel
Claim is based on or alleges:  (i) a
breach of any of Rigel’s representations, warranties, and obligations under the
Agreement; or (ii) the willful misconduct or negligent acts of Rigel, its
Affiliates, or the officers, directors, employees, or agents of Rigel or its
Affiliates.

 

11.3        Indemnification Procedures.  The Party claiming indemnity under this Article 11
(the “Indemnified Party”) shall
give written notice to the Party from whom indemnity is being sought (the “Indemnifying Party”) promptly after
learning of the claim, suit, proceeding or cause of action for which indemnity
is being sought (“Claim”).  The Indemnified Party shall provide the
Indemnifying Party with reasonable assistance, at the Indemnifying Party’s
expense, in connection with the defense of the Claim for which indemnity is
being sought.  The Indemnified Party may
participate in and monitor such defense with counsel of its own choosing at its
sole expense; provided, however, the Indemnifying Party shall have the right to
assume and conduct the defense of the Claim with counsel of its choice.  The Indemnifying Party shall not settle any
Claim without the prior written consent of the Indemnified Party, not to be
unreasonably withheld, unless the settlement involves only the payment of
money.  So long as the Indemnifying Party
is actively defending the Claim in good faith, the Indemnified Party shall not
settle any such Claim without the prior written consent of the Indemnifying
Party.  If the Indemnifying Party does
not assume and conduct the defense of the Claim as provided above, (a) the
Indemnified Party may defend against, and consent to the entry of any judgment
or enter into any settlement with respect to the Claim in any manner the Indemnified
Party may deem reasonably appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, the Indemnifying Party in connection
therewith), and (b) the Indemnifying Party will remain responsible to
indemnify the Indemnified Party as provided in this Article 11.

 

11.4        Limitation of Liability.  NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE
LIABLE IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE FOR
ANY SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR FOR LOSS OF PROFITS SUFFERED
BY THE OTHER PARTY, EXCEPT TO THE EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE
PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES
INDEMNIFICATION UNDER THIS ARTICLE 11, PROVIDED, HOWEVER,
THAT EACH PARTY SHALL HAVE THE RIGHT TO SEEK CONSEQUENTIAL DAMAGES FROM THE
OTHER PARTY FOR

 

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

 

48

 

SUCH OTHER PARTY’S BREACH
OF ITS OBLIGATIONS UNDER SECTION 7.6 OR ARTICLE 12.

 

11.5        Insurance. 
Each Party shall procure and maintain insurance, including product
liability insurance, adequate to cover its obligations hereunder and which are
consistent with normal business practices of prudent companies similarly
situated at all times during which any Product is being clinically tested in
human subjects or commercially distributed or sold.  It is understood that such insurance shall
not be construed to create a limit of either Party’s liability with respect to
its indemnification obligations under this Article 11.  Each Party shall provide the other with
written evidence of such insurance upon request.  Each Party shall provide the other with
written notice at least [ * ] ([ * ]) days prior to the cancellation,
non-renewal or material change in such insurance or self-insurance which
materially adversely affects the rights of the other Party hereunder.

 

ARTICLE 12

 

CONFIDENTIALITY

 

12.1        Confidentiality.  Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the Parties, each Party agrees
that, for the Term and for [ * ] ([ * ]) years thereafter, it shall keep
confidential and shall not publish or otherwise disclose and shall not use for
any purpose other than as provided for in this Agreement any Confidential
Information furnished to it by the other Party pursuant to this Agreement
except for that portion of such information or materials that the receiving
Party can demonstrate by competent written proof:

 

(a)           was already known to the receiving Party or its
Affiliate, other than under an obligation of confidentiality, at the time of
disclosure by the other Party;

 

(b)           was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the receiving Party;

 

(c)           became generally available to the public or otherwise
part of the public domain after its disclosure and other than through any act
or omission of the receiving Party in breach of this Agreement;

 

(d)           is subsequently disclosed to the receiving Party or
its Affiliate by a Third Party without obligations of confidentiality with
respect thereto; or

 

(e)           is subsequently independently discovered or developed
by the receiving Party or its Affiliate without the aid, application, or use of
Confidential Information.

 

12.2        Authorized Disclosure.  Each Party may disclose Confidential Information
belonging to the other Party to the extent such disclosure is reasonably
necessary in the following situations:

 

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

 

49

 

(a)           filing or prosecuting Rigel Patents, Joint Patents or
AZ Patents;

 

(b)           submitting regulatory filings and other filings with
Governmental Authorities (including Regulatory Authorities), including filings
with the SEC or the FDA, with respect to a Product;

 

(c)           prosecuting or defending litigation relating to the
subject matter of this Agreement;

 

(d)           complying with Applicable Laws, including regulations
promulgated by securities exchanges, provided that the Party seeking to make
such disclosure shall, to the extent practicable, give reasonable advance
notice to the other Party of such disclosure and use reasonable efforts to
secure confidential treatment of such information; and

 

(e)           disclosure to its Affiliates, employees, agents, and
independent contractors, and any sublicensees only on a need-to-know basis and
solely as necessary in connection with the exercise of its rights or the
performance of its obligations under this Agreement, provided that each person
or entity receiving such Confidential Information must be bound by similar
obligations of confidentiality and non-use at least as equivalent in scope as
those set forth in this Article 12 prior to any such disclosure, provided
that such confidentiality and non-use obligations may be subject to a shorter
duration of no less than [ * ] ([ * ]) years.

 

12.3        Publicity; Terms of Agreement.

 

(a)           The Parties agree that the terms of this Agreement are
the Confidential Information of both Parties, subject to the authorized
disclosure provisions set forth in Section 12.2 and this Section 12.3.  The Parties have agreed to make a joint
public announcement of the execution of this Agreement substantially in the
form of the press release attached as Exhibit G
on or after the Execution Date.  In
addition, following the initial press release announcing the execution of this
Agreement, either Party shall be free to disclose, without the other Party’s
consent, the existence of this Agreement, the identity of the other Party and
those terms of this Agreement which have already been publicly disclosed in
accordance with this Section 12.3.

 

(b)           Either Party may disclose the financial terms and
certain material obligations of this Agreement, provided such disclosure is in
the form attached at Exhibit J (but not provide any additional terms or
financial information relating to this Agreement) to any bona fide potential or
actual investor investment banker, acquirer, merger partner, or other potential
or actual financial partner; provided that in connection with such disclosure,
each person or entity receiving such Confidential Information is at the time of
such disclosure bound by a confidentiality agreement at least as stringent in
scope as the provisions of this Article 12.   Rigel may disclose other terms and
conditions of this Agreement that are not included in Exhibit J under this
Section 12.3(b) with AZ’s prior written consent, which consent may
not be unreasonably withheld or delayed.

 

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

 

50

 

(c)           After release of such press release, if either Party
desires to make a public announcement concerning the material terms of, or
material events occurring under, this Agreement, such Party shall give
reasonable prior advance notice of the proposed text of such announcement to
the other Party for its prior review and approval (except as otherwise provided
herein), such approval not to be unreasonably withheld.  A Party commenting on such a proposed press
release shall provide its comments, if any, within [ * ] ([ * ]) Business Days
after receiving the press release for review (or, if any Applicable Law request
an earlier release of such press release, a shorter period to allow the Party
seeking to issue such press release to comply with such Applicable Law).  Where required by Applicable Laws or by the rules or
regulations of the applicable securities exchange upon which Rigel may be
listed, Rigel shall have the right to make a press release announcing the
achievement of each milestone under this Agreement as it is achieved, and the
achievements of Marketing Approvals as they occur, subject to, in addition to
the review procedure set forth in the preceding sentence, approval from AZ on
the language of such press release, such approval not to be unreasonably
withheld or delayed.  In relation to AZ’s
review of such an announcement, AZ may make specific, reasonable comments on
such proposed press release within the prescribed time for commentary, but
shall not withhold its consent to disclosure of the information that the
relevant milestone has been achieved and triggered a payment hereunder. For the
avoidance of doubt, except as expressly provided in this Agreement, including
under Exhibit J, Rigel acknowledges and agrees that AZ may withhold its
consent with respect to disclosure of specific [ * ], [ * ] or other [ * ]
under this Agreement. Subject to the foregoing and sub-section (d) below,
Rigel may not disclose any specific [ * ], [ * ] or other [ * ] under this
Agreement without AZ’s prior written consent. The Parties also recognize that
Rigel has an interest in keeping the financial markets informed of the progress
of its various partnered drug development programs, and agree that Rigel may
disclose the events identified on Exhibit H
to this Agreement as they occur, regardless of whether such events are
technically material events, but only pursuant to the press releases developed
and approved in accordance with this Section 12.3 and subject further to
prior approval from AZ on the language of such press release, such approval not
to be unreasonably withheld or delayed.

 

(d)           The Parties acknowledge that Rigel may be obligated to
file a copy of this Agreement with the SEC. 
Rigel shall be entitled to make such a required filing, provided that it
requests confidential treatment of at least the commercial terms and sensitive
technical terms hereof to the extent such confidential treatment is reasonably
available to Rigel.  In the event of any
such filing, Rigel will provide AZ with a copy of the Agreement marked to show
provisions for which Rigel intends to seek confidential treatment and shall
reasonably consider and incorporate AZ’s comments thereon to the extent
consistent with the legal requirements governing redaction of information from
material agreements that must be publicly filed.  Rigel shall also be entitled to make public
disclosures of the terms of this Agreement and developments related to this
Agreement as required by Applicable Laws or as instructed by the SEC or other
government agencies.  Rigel shall give AZ
prior written notice, to the extent practicable, of any such public disclosure
that contains information not previously released and shall discuss with AZ the
reason for such disclosure and shall in good faith take into account any AZ
comments in relation to such disclosure.

 

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

 

51

 

12.4        Publications. 
Rigel shall not publicly present or publish results of studies carried
out under this Agreement (each such presentation or publication a “Publication”) without the prior written consent of AZ. AZ
may freely present or publish the result of studies carried out under this
Agreement provided that AZ shall not have the right to publish or present Rigel’s
Confidential Information without Rigel’s prior written consent, and Rigel shall
not have the right to publish or present AZ’s Confidential Information without
AZ’s prior written consent.  The Parties
further acknowledge that Rigel has made significant contributions to the
discovery of Compound as of the Execution Date and the Parties agree that any
public disclosure made after the Execution Date regarding the Compound and/or
Product(s) shall give appropriate recognition to the Rigel scientists who
are responsible for the discovery of such Compound and/or Product(s).  Notwithstanding the foregoing, AZ
acknowledges that Rigel may have contractual obligations existing as of the
Execution Date to allow for the presentation or publication of the results of
clinical trials of the Products completed prior to the Execution Date, and AZ
agrees that Rigel shall not be prohibited to fulfill such contractual
obligations by reason of this Section 12.4, provided that, for any such
presentation or publication that is to be submitted after the Effective Date,
Rigel shall provide such presentations and publications to AZ at least [ * ] ([
* ]) days prior to the intended disclosure date for AZ’s comments and review
and shall in good faith communicate such comments from AZ to the Person(s) seeking
such presentations and/or publications and request that such Person(s) reasonably
consider in good faith all such comments from AZ and further use Diligent
Efforts to incorporate such AZ comments.

 

ARTICLE 13

 

TERM AND TERMINATION

 

13.1        Term.  This Agreement
shall become effective on the Effective Date and, unless earlier terminated
pursuant to this Article 13, shall remain in effect until the cessation of
all commercial sales of the Products in the Territory (the “Term”).

 

13.2        Termination by Either Party for Breach.  Rigel shall have the right to terminate this
Agreement upon written notice to AZ if AZ, after receiving written notice from
Rigel identifying a material breach by AZ of its obligations under this
Agreement, fails to cure such material breach within sixty (60) days from the
date of such notice AZ shall have the right to terminate this Agreement upon
written notice to Rigel if Rigel, after receiving written notice from AZ
identifying a material breach by Rigel of its obligations under this Agreement,
fails to cure such material breach within sixty (60) days from the date of such
notice.

 

13.3        Termination following Insolvency
Event.  Either Party may terminate this Agreement without
notice if an Insolvency Event occurs in relation to the other Party.  In any event when a Party first becomes aware
of the likely occurrence of any Insolvency Event in regard to that Party, it shall
promptly so notify the other Party in sufficient time to give the other Party
sufficient notice to protect its interests under this Agreement.

 

13.4        Termination for Patent Challenge.  Rigel may terminate this Agreement in its entirety if
AZ or its Affiliates or Sublicensees, directly or indirectly, individually or
in association

 

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

 

52

 

with any other person or
entity, challenge the validity, enforceability or scope of any Rigel Patent
anywhere in the Territory.

 

13.5        Termination for Change of Control. Notwithstanding AZ’s right to terminate
certain provisions of this Agreement following any Change of Control of Rigel,
AZ may terminate this Agreement in its entirety upon thirty (30)-days written
notice in the event of any Change of Control of Rigel.

 

13.6        Termination without Cause.  AZ may terminate this Agreement without cause at any
time after the Effective Date in its entirety at any time on one hundred eighty
(180) days prior written notice, provided that, in the event a human clinical
trial is ongoing for a Product comprising a Rigel Compound hereunder at the
time AZ provides Rigel such notice of termination, then, at Rigel’s request, AZ
shall be required to orderly transfer the responsibility of such trial to
Rigel, at AZ’s expense, and AZ shall continue to bear all costs and expenses
incurred by both Parties in connection with the conduct of and the transfer of
responsibilities for such trial within such one hundred eighty (180)-day
period.

 

13.7        Effect of Termination of the Agreement
by AZ without Cause and by Rigel.  Upon termination of this Agreement for
any reason other than by AZ under Section 13.2, the following shall apply
(in addition to any other rights and obligations under Section 13.11 or
otherwise under this Agreement with respect to such termination):

 

(a)           Licenses. 
The licenses granted in Article 7 shall terminate.  Notwithstanding the foregoing, AZ hereby
grants to Rigel, effective only upon such termination, an exclusive, worldwide,
fully-paid, perpetual, irrevocable, royalty-free license, with the right to
grant multiple tiers of sublicenses, under the AZ Technology to the extent that
such AZ Technology covers or is incorporated into the Rigel Compound or
corresponding Products that are being Exploited in the Territory as of the effective
date of termination, solely to Exploit such Product(s) in the Field in the
Territory. For the avoidance of doubt, [ * ].

 

(b)           Regulatory Materials; Marks. 
To the extent permitted by Applicable Laws, AZ shall transfer and assign
to Rigel all Regulatory Materials and Marketing Approvals for any Product(s) comprising
the Rigel Compound(s) in the Territory that are Controlled by AZ or its
Affiliates or Sublicensees.

 

(c)           Transition Assistance.  AZ shall, at no
cost to Rigel, transfer or transition to Rigel all AZ Know-How to the extent
that such AZ Know-How covers or is incorporated into Rigel Compounds or
corresponding Products that are being Exploited in the Territory as of the
effective date of termination. In addition AZ shall use Diligent Efforts to assign
to Rigel any agreements with Third Parties performing development or
commercialization related activities for AZ under this Agreement relating to
the Rigel Compound or corresponding Products. If any such contract between AZ
and a Third Party is not assignable to Rigel or if AZ manufactures the Product
itself (and thus there is no contract to assign), then AZ shall use Diligent
Efforts to reasonably cooperate with Rigel to arrange to continue to obtain
such license and/or supply from such entity, and AZ shall supply such bulk
Rigel Compound or corresponding finished Product,

 

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

 

53

 

as applicable, to Rigel,
at a transfer price equal to AZ’s fully burdened cost of goods, for a
reasonable period not to exceed six (6) months following the effective
date of termination.

 

(d)           Remaining Inventories.  The Parties
shall discuss reasonably and in good faith and agree on a transfer of inventory
of Product comprising the Rigel Compound(s) from AZ at a price equal to AZ’s
[ * ] for such inventory.  Rigel shall
notify AZ within [ * ] ([ * ]) days after the date of termination whether Rigel
elects to exercise such right.

 

13.8        Effect of Termination of the Agreement
by AZ for Cause.  Upon termination of this Agreement by AZ
under Section 13.2, the following shall apply (in addition to any other
rights and obligations under Section 13.11 or otherwise under this
Agreement with respect to such termination):

 

(a)           Any licenses granted by AZ to Rigel will terminate and
revert to AZ;

 

(b)           The license granted by Rigel to AZ under the Rigel
Technology will continue as an exclusive, transferable, perpetual and
irrevocable license, in consideration of which AZ will pay Rigel all payments
due under Article 8 that would otherwise have been payable under the terms
of this Agreement, provided that AZ’s milestone payment and royalty payment
obligations as set forth in Article 8 after termination of this Agreement
shall be [ * ].

 

(c)           Each Party shall continue to have its rights with
respect to Rigel Patents and Joint Patents as specified in Article 9;

 

(d)           Except as set forth in this Section 13.8 and in Section 13.11,
the rights and obligations of the Parties hereunder shall terminate as of the
date of such termination.

 

13.9        Other Remedies. 
Termination or expiration of this Agreement for any reason shall not
release either Party from any liability or obligation that already has accrued
prior to such expiration or termination, nor affect the survival of any
provision hereof to the extent it is expressly stated to survive such
termination.  Termination or expiration
of this Agreement for any reason shall not constitute a waiver or release of,
or otherwise be deemed to prejudice or adversely affect, any rights, remedies
or claims, whether for damages or otherwise, that a Party may have hereunder or
that may arise out of or in connection with such termination or
expiration.  To the extent AZ asserts
money damages arising from a breach of this Agreement by Rigel, the value [ * ]
of future payments pursuant to Section 13.8(b) shall be [ * ] such
money damages.

 

13.10      Rights in Bankruptcy.  All rights and licenses granted under or pursuant to
this Agreement by Rigel and AZ are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the US Bankruptcy Code, licenses of
right to “intellectual property” as defined under Section 101 of the US
Bankruptcy Code.  The Parties agree that
AZ, as licensee of certain rights under this Agreement, shall retain and may
fully exercise all of its rights and elections under the US Bankruptcy
Code.  The Parties further agree that, in
the event of the commencement of a bankruptcy proceeding by or against Rigel
under the US Bankruptcy Code, AZ shall be entitled to a complete duplicate of
(or complete access to, as appropriate) any intellectual property

 

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

 

54

 

licensed to AZ and all
embodiments of such intellectual property, which, if not already in AZ’s
possession, shall be promptly delivered to AZ (a) upon any such
commencement of a bankruptcy proceeding upon AZ’s written request therefor,
unless Rigel elects to continue to perform all of its obligations under this
Agreement or (b) if not delivered under clause (a), following the
rejection of this Agreement by Rigel upon written request therefor by AZ.

 

13.11      Survival. 
The
following provisions shall survive any expiration or termination of this
Agreement for the period of time specified: Sections [ * ] and [ * ] (in each
case for the period of time [ * ] obligations under Article [ * ] survives
such expiration or termination), [ * ] and [ * ] and Articles [ * ] and [ * ]
(other than Section [ * ]).

 

ARTICLE 14

 

DISPUTE RESOLUTION

 

14.1        Disputes.  The Parties recognize that disputes as to certain
matters may from time to time arise during the Term which relate to either
Party’s rights and/or obligations hereunder. 
It is the objective of the Parties to establish procedures to facilitate
the resolution of disputes arising under this Agreement in an expedient manner
by mutual cooperation and without resort to litigation.  In the event of any disputes, controversies
or differences which may arise between the Parties, out of or in relation to or
in connection with this Agreement, including any alleged failure to perform, or
breach of this Agreement, or any issue relating to the interpretation or
application of this Agreement, then upon the request of either Party, the
Parties agree to meet and discuss in good faith a possible resolution thereof,
which good faith efforts shall include at least one in-person meeting between
senior officers of each Party.  If the
matter is not resolved within [ * ] ([ * ]) days following the request for
discussions, either Party may then invoke the provisions of Section 14.2.
For the avoidance of doubt, the Parties acknowledge and agree that certain
matters may be determined by [ * ] under Section 2.2(e) via the JSC [
* ].

 

14.2        Arbitration. 
If the senior executive officers designated by the Parties are not able
to resolve such dispute referred to them under Section 14.1 within such [
* ] ([ * ]) day period, such dispute shall be resolved through binding
arbitration, which arbitration may be initiated by either Party at any time
after the conclusion of such period, on the following basis:

 

(a)           The place of arbitration shall
be [ * ].

 

(b)           The arbitration
shall be made in accordance with the current Commercial Arbitration Rules of
the International Center for Dispute Resolution of the American Arbitration
Association, before a single arbitrator, who shall be neutral and independent
of both Parties and each of their Affiliates.

 

(c)           Each Party shall
have a right to take [ * ] ([ * ]) depositions of no more than [ * ] ([ * ])
hours each.  Each Party reserves the
right to seek additional depositions from the arbitrator.

 

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

 

55

 

(d)           Judgment upon the award
rendered by such arbitrator shall be binding on the Parties and may be entered
by any court or forum having jurisdiction.

 

(e)           Either Party may apply to the
arbitrators for interim injunctive relief until the arbitration award is
rendered or the controversy is otherwise resolved.  Further, either Party also may, without
waiving any remedy under this Agreement, seek from any court having
jurisdiction any injunctive or provisional relief necessary to protect the
rights or property of such Party pending the arbitration award.

 

(f)            The arbitrators shall have no
authority to award punitive, consequential, special or any other type of
damages not measured by a Party’s compensatory damages.

 

(g)           Each Party shall bear its own
costs and expenses and attorneys’ fees and an equal share of the arbitrators’
and any administrative fees of arbitration.

 

(h)           Except to the extent necessary
to confirm an award or as may be required by law, neither Party nor any
arbitrator may disclose the existence, content, or results of an arbitration
without the prior written consent of both Parties.

 

(i)            In no event shall an
arbitration be initiated after the date when commencement of a legal or
equitable proceeding based on the dispute, controversy or claim would be barred
by the applicable statute of limitations.

 

14.3        Injunctive
Relief.  Nothing herein may prevent
either Party from seeking a preliminary injunction or temporary restraint order
in order to prevent any irreparable harm from occurring, including preventing Confidential Information from being
disclosed without appropriate authorization under this Agreement.

 

14.4        Governing Law. 
Resolution of all disputes arising out of or related to this Agreement
or the validity, construction, interpretation, enforcement, breach,
performance, application or termination of this Agreement and any remedies
relating thereto, shall be governed by and construed under the substantive laws
of the State of [ * ], excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of this
Agreement to the substantive law of another jurisdiction.

 

14.5        Costs.  Each Party
shall bear its own legal fees.  The
arbitrator shall assess his or her costs, fees and expenses against the Party
losing the arbitration unless he or she believes that neither Party is the
clear loser, in which case the arbitrator shall divide his or her fees, costs
and expenses according to his or her sole discretion.

 

14.6        Confidentiality. 
The arbitration proceeding shall be confidential and the arbitrator
shall issue appropriate protective orders to safeguard each Party’s
Confidential Information.  Except as
required by law, no Party shall make (or instruct the arbitrator to make) any
public announcement with respect to the proceedings or decision of the
arbitrator without prior written consent of the other Party.  The existence of any dispute submitted to
arbitration,

 

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

 

56

 

and the award, shall be
kept in confidence by the Parties and the arbitrator, except as required in
connection with the enforcement of such award or as otherwise required by
applicable law.

 

14.7        Survivability. 
Any duty to arbitrate under this Agreement shall remain in effect and be
enforceable after termination of this Agreement for any reason.

 

14.8        Jurisdiction. 
For the purposes of this Article 14, the Parties acknowledge their
diversity (AZ having its principal places of business in Sweden and Rigel
having its principal place of business in California) and agree to accept the
exclusive jurisdiction of the Courts in the State of [ * ] for the purposes of
enforcing or appealing any awards entered pursuant to this Article 14 and
for enforcing the agreements reflected in this Article 14 and agree not to
commence any action, suit or proceeding related thereto except in such courts.

 

14.9        Patent and Trademark Disputes. 
Any dispute, controversy or claim relating to the scope, validity,
enforceability or infringement of any Rigel Patents covering the manufacture,
use, importation, offer for sale or sale of the Products shall be submitted to
a court of competent jurisdiction in the country in which such patent or
trademark rights were granted or arose.

 

ARTICLE 15

 

MISCELLANEOUS

 

15.1        Entire Agreement; Amendment. 
This Agreement, including the Exhibits hereto, sets forth the complete,
final and exclusive agreement and all the covenants, promises, agreements,
warranties, representations, conditions and understandings between the Parties
hereto with respect to the subject matter hereof and supersedes, as of the
Effective Date, all prior agreements and understandings between the Parties
with respect to the subject matter hereof, including the Existing
Confidentiality Agreement, provided, however,
that the Common Interest and Joint Purpose Agreement by and between the Parties
effective [ * ], shall remain in full force and effect.  The foregoing shall not be interpreted as a
waiver of any remedies available to either Party as a result of any breach,
prior to the Effective Date, by the other Party of its obligations pursuant the
Existing Confidentiality Agreement. 
There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the Parties other than as are set forth herein and therein.  No subsequent alteration, amendment, change
or addition to this Agreement shall be binding upon the Parties unless reduced
to writing and signed by an authorized officer of each Party.

 

15.2        Force Majeure.  Both Parties shall be excused from the performance of
their obligations under this Agreement to the extent that such performance is
prevented by force majeure and the nonperforming Party promptly provides notice
of the prevention to the other Party. 
Such excuse shall be continued so long as the condition constituting
force majeure continues and the nonperforming Party takes reasonable efforts to
remove the condition.  For purposes of
this Agreement, force majeure shall mean conditions beyond the control of the
Parties, including an act of God, war, civil commotion, terrorist act, labor
strike or lock-out, epidemic, destruction of production facilities or materials
by fire, earthquake, storm or like

 

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

 

57

 

catastrophe, Notwithstanding
the foregoing, a Party shall not be excused from making payments owed hereunder
because of a force majeure affecting such Party.  In the event a Party is subject to an event
of force majeure which substantially
interferes with the performance of its obligations hereunder and which extends
for a period of 180 consecutive days or more, the other Party may elect to
terminate this Agreement upon notice to the Party affected by such event.  Any such termination shall be treated as a
termination pursuant to Section 13.2 with respect to the consequences of
termination set forth in this Agreement. 
Notwithstanding the foregoing, a Party shall not be excused from making
payments owed hereunder because of a force majeure affecting such Party.  In the event of a force
majeure that prevents a Party from performing its obligations for
more than thirty (30) days, the other Party shall be entitled to perform the
obligations affected by such inability to perform if it is practically able to
do so on a commercially reasonable basis and the costs of such performance
shall be allocated between the Parties as if such performance had been
accomplished under the Agreement by the Party affected by the event of force majeure as originally contemplated.

 

15.3        Notices. 
Any notice
required or permitted to be given under this Agreement shall be in writing,
shall specifically refer to this Agreement, and shall be addressed to the
appropriate Party at the address specified below or such other address as may
be specified by such Party in writing in accordance with this Section 15.3,
and shall be deemed to have been given for all purposes (a) when received,
if hand-delivered or sent by a reputable overnight delivery service, or (b) five
(5) Business Days after mailing, if mailed by first class certified or
registered mail, postage prepaid, return receipt requested.

 

	
  If to Rigel:

  	
  Rigel
  Pharmaceuticals, Inc.

  
	
   

  	
  1180 Veterans Boulevard

  
	
   

  	
  South San Francisco, CA
  94080

  
	
   

  	
  Attention: Chief Executive
  Officer

  
	
   

  	
   

  
	
  With a copy to:

  	
  Cooley Godward Kronish LLP

  
	
   

  	
  Five Palo Alto Square

  
	
   

  	
  3000 El Camino Real

  
	
   

  	
  Palo Alto, CA 94306

  
	
   

  	
  Attention:
  Robert L. Jones, Esq.

  
	
   

  	
   

  
	
  If to AZ:

  	
  AstraZeneca AB

  
	
   

  	
  S-151 85 Södertälje

  
	
   

  	
  Sweden

  
	
   

  	
  Attn: Anders Burén, Assistant General Counsel

  
	
   

  	
   

  
	
  With a copy to:

  	
  AstraZeneca UK Limited Alderley House

  
	
   

  	
  Alderley Park

  
	
   

  	
  Macclesfield

  
	
   

  	
  Cheshire SK10 4TF

  
	
   

  	
  Attn: Liam McIlveen, Deputy General Counsel AstraZeneca

  

 

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

 

58

 

15.4        No Strict Construction;
Headings.  This Agreement has been prepared jointly
and shall not be strictly construed against either Party.  Ambiguities, if any, in this Agreement shall
not be construed against any Party, irrespective of which Party may be deemed
to have authored the ambiguous provision. 
The headings of each Article and Section in this Agreement
have been inserted for convenience of reference only and are not intended to
limit or expand on the meaning of the language contained in the particular Article or
Section.

 

15.5        Assignment. 
Except as expressly permitted under this Agreement, neither Party may
assign or transfer this Agreement or any rights or obligations hereunder
without the prior written consent of the other, except that a Party may make
such an assignment without the other Party’s consent to Affiliates or to a
successor to substantially all of the business of such Party, whether in a
merger, sale of stock, sale of assets or other transaction.  Any permitted successor or assignee of rights
and/or obligations hereunder shall, in a writing to the other Party, expressly
assume performance of such rights and/or obligations (and in any event, any
Party assigning this Agreement to an Affiliate shall remain bound by the terms
and conditions hereof).  Any assignment
or attempted assignment by either Party in violation of the terms of this Section 15.5
shall be null, void and of no legal effect.

 

15.6        Performance by Affiliates. 
Each Party may discharge any obligations and exercise any right
hereunder through any of its Affiliates. 
Each Party shall cause its Affiliates to comply with the provisions of
this Agreement in connection with such performance and shall remain primarily
responsible for the performance of its Affiliates.  Any breach by a Party’s Affiliate of any of
such Party’s obligations under this Agreement shall be deemed a breach by such
Party, and the other Party may proceed directly against such Party without any
obligation to first proceed against such Party’s Affiliate.

 

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

 

15.8        Compliance with Applicable Law. 
Each Party shall comply with all Applicable Laws in the course of
performing its obligations or exercising its rights pursuant to this Agreement.

 

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

 

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

 

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

 

59

 

15.11      Independent Contractors.  Each Party shall act solely as an independent
contractor, and nothing in this Agreement shall be construed to give either
Party the power or authority to act for, bind, or commit the other Party in any
way.  Nothing herein shall be construed
to create the relationship of partners, principal and agent, or joint-venture
partners between the Parties.

 

15.12      Counterparts.  This Agreement may be executed in one (1) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

15.13      Standstill.

 

(a)           Commencing
with [ * ] (the “[ * ] Date”) and expiring [ * ]
([ * ]) months following the [ * ] Date (such [ * ] period, the “Standstill Period”), neither AZ nor any of its Affiliates,
without the prior consent of Rigel or except as provided for in this Agreement
or in any agreement referred to herein, or in any agreement executed after the
date hereof by Rigel with AZ or any of its Affiliates, will:

 

(i)            make, effect, initiate, cause or participate in (i) any
[ * ] of Rigel or any [ * ] other Affiliate of Rigel (each, a “Rigel Entity”) such that [ * ], AZ and its Affiliates then [
* ] of such Rigel Entity, (ii) any [ * ] any Rigel Entity, (iii) any
[ * ] a Rigel Entity, or [ * ] a Rigel Entity, or (iv) any “[ * ]” of “[ *
]” (as those terms are used in the [ * ]) or consents with respect to [ * ] of
a Rigel Entity;

 

(ii)           [ * ] with respect to [ * ] of a Rigel Entity;

 

(iii)         [ * ], to seek to [ * ] of a Rigel Entity;

 

(iv)          take any action that might require a Rigel Entity to
make a public announcement regarding any of the types of matters set forth in
clause “(i)” of this Section 15.13(a);

 

(v)            agree or offer to take, or encourage or propose
(publicly or otherwise) the taking of, any action referred to in clause “(i)”, “(ii)”,
“(iii)” or “(iv)” of this Section 15.13(a);

 

(vi)          assist, induce or encourage any other person or entity
to take any action of the type referred to in clause “(i)”, “(ii)”, “(iii)”, “(iv)”
or “(v)” of this Section 15.13(a); or

 

(vii)         enter into any discussions, negotiations, arrangement
or agreement with any other person or entity relating to any of the foregoing.

 

AZ shall promptly inform Rigel when the [ * ] Date has
occurred.  The expiration of the
Standstill Period will not terminate or otherwise affect any of the other
provisions of this Agreement.

 

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

 

60

 

(b)           Notwithstanding the foregoing provisions, AZ or its
Affiliates will not be subject to any of the restrictions set forth in this Section 15.13
with respect to a Rigel Entity if either: (i) such Rigel Entity publicly
announces its intention to [ * ] (as defined below); (ii) such Rigel
Entity shall have entered into an agreement [ * ];   (iii) the board of directors of such
Rigel Entity shall have [ * ] or (iv) if a Third Party [ * ].  “[ * ]” means (A) any direct or indirect
[ * ] of the applicable Rigel Entity at [ * ] of or [ * ] in such Rigel Entity
by any person [ * ]; (B) any [ * ] that [ * ] would result in any person [
* ] of such Rigel Entity; or (C) any [ * ] involving such Rigel Entity [ *
] of such Rigel Entity.

 

(c)           Notwithstanding the foregoing, the Parties agree that
AZ or its Affiliates shall not be prohibited from (i) [ * ] of any Rigel
Entity; or (ii) proposing other [ * ] to Rigel.

 

15.14      HSR Filings. Promptly following the Execution Date,
each Party shall make the filings required under the HSR Act in connection with
this Agreement, and shall promptly reply to any related requests for
information received from the United States Federal Trade Commission (“FTC”) or the Antitrust Division of the United States
Department of Justice (“DoJ”). The
Parties shall consult with one another and shall otherwise cooperate and act in
good faith in connection with such filings and communications. Each Party shall
be responsible for its own filings costs (including legal costs) associated
with any such filings.

 

{Signature Page to Follow}

 

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

 

61

 

IN
WITNESS WHEREOF, the Parties have executed this Agreement in
duplicate originals by their duly authorized officers as of the Execution Date.

 

	
  RIGEL PHARMACEUTICALS,
  INC.

  	
   

  	
  ASTRAZENECA AB (publ)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ James M. Gower

  	
   

  	
  By:

  	
  /s/ Göran Lerenius

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  James M. Gower

  	
   

  	
  Name:

  	
  Göran Lerenius

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  CEO

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

 

Signature Page to
License and Collaboration Agreement

 

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

 

 

EXHIBIT A

 

[ * ]

 

[ * ]

 

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

 

 

EXHIBIT B

 

COMPOUND ASSAY CRITERIA

 

1)
The compound inhibits syk kinase in the [ * ] assay at [ * ]*,

 

and either 2a or
2b

 

2a)
The compound inhibits syk kinase in [ * ] assay at [ * ]*

 

or

 

2b)
The compound inhibits syk kinase in [ * ] assay [ * ] at [ * ]*

 

Where
the assays give results for [ * ] that are comparable** to the [ * ] results as
described in the publication*.

 

And
wherein the compound is [ * ]

 

*
Assays as described in [ * ].

 

**comparable
defined as [ * ].

 

[ * ]

 

Sequence
of SYK spleen tyrosine kinase

 

mRNA: [ * ]

Protein: [ * ]

LocusID: [ * ]

 

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

 

 

EXHIBIT C

 

RIGEL
PATENTS AS OF THE EFFECTIVE DATE

 

	
  RIGEL

  MATTER

  	
   

  	
  STATUS

  	
   

  	
  CNTRY

  	
   

  	
  SERIAL #

  	
   

  	
  PUB.

  NO.

  	
   

  	
  FILING

  DATE

  	
   

  	
  PATENT

  	
   

  
	
  P.0177.01

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0177.02

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0177.03

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0177.01

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  [ * ].

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  P.0177.09

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0177.09

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  P.0226.01

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0226.01

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0193.02

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0193.02

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  P.0218.01

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0218.01

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0219.02

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0219.02

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0084.04

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0084.05

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0084.05

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  P.0084.11

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0084.13

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0084.13.WO

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  P.0084.14

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0084.22

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0084.23

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0084.42

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0084.47

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  

 

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

 

 

	
  RIGEL

  MATTER

  	
   

  	
  STATUS

  	
   

  	
  CNTRY

  	
   

  	
  SERIAL #

  	
   

  	
  PUB.

  NO.

  	
   

  	
  FILING

  DATE

  	
   

  	
  PATENT

  	
   

  
	
  P.0144.01

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0144.04

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0144.07

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0144.01

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  P.0145.02

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0145.03

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0145.04

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0145.05

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0145.02

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  P.0242.01

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0253.00

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  P.0267.00

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  

 

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

 

 

EXHIBIT D

 

TRANSITION
PLAN

 

[ * ]

 

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

 

 

EXHIBIT E

 

INITIAL DEVELOPMENT PLAN

 

The Major Three RA Trials referenced herein are: 

 

1)    [ * ]

 

2)   [ * ]

 

3)   [ * ]

 

Development Strategy

 

The intended development strategy is to achieve a [ * ] submission in [
* ], excluding [ * ] and, for the avoidance of doubt, [ * ]. This strategy is
aimed at meeting [ * ] requirements for filings in Rheumatoid Arthritis
indications & targeting positioning as a treatment for patients who
are [ * ].

 

The development programme is based on:

 

1.    
A package of studies that [ * ] in the [ * ]
document.

 

a.     A study in [ * ].

b.     A study in [ * ].

c.     A study in [ * ].

d.     [ * ] Study (including [ * ] from [ * ])

 

2.     [ * ] studies including

 

a.     [ * ] Study(s)

b.     [ * ] study [ * ] to secure approval in the [ * ] ([ * ]) ([ * ] and [ * ])

c.     A [ * ] study

d.     A [ * ] study with [ * ] for [ * ]. 
([ * ] from [ * ] to [ * ]

 

The target NDA/MAA submission in US/EU is [ * ] 2013.

 

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

 

 

[ * ]

 

Major Study Outlines

The attached outlines
show in more detail the design ([ * ]) of the Major Three RA Trials that are
indicated above.

 

Study 1

 

[ * ]

 

Study 2

 

[ * ]

 

Study 3

 

[ * ]

 

([ * ])

 

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

 

 

EXHIBIT F

 

R788 INVENTORY

 

Inventory of R788 Drug Substance

 

	
  Lot

  	
   

  	
  Quantity as of [ * ]

  	
   

  
	
  LTRGGA1005

  	
   

  	
  [ * ] kg

  	
   

  
	
  LTRGGA2004

  	
   

  	
  [ * ] kg

  	
   

  
	
  LTRGGA2005

  	
   

  	
  [ * ] kg

  	
   

  
	
  LTRGGA3001

  	
   

  	
  [ * ] kg

  	
   

  
	
  LTRGGA3002

  	
   

  	
  [ * ] kg

  	
   

  
	
  LTRGGA3003

  	
   

  	
  [ * ] kg

  	
   

  

 

Inventory of R788 Tablets

 

	
  Lot

  	
   

  	
  No of Bottles as of [ * ]

  	
   

  
	
  C9I2281, [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  C9I2282, [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  C9I2283/4, [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  FZW, [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  FZV, [ * ]

  	
   

  	
  [ * ]

  	
   

  

 

Inventory of R788 starting materials

 

	
  Material

  	
   

  	
  Quantity as of [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  [ * ] kg

  	
   

  
	
  [ * ]

  	
   

  	
  [ * ] kg

  	
   

  
	
  [ * ]*

  	
   

  	
  [ * ] kg

  	
   

  
	
  [ * ]

  	
   

  	
  [ * ] kg

  	
   

  

 

*
The Parties agree that the [ * ] is being used in the production of approx. [ *
]kg of R788 at [ * ]

 

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

 

 

EXHIBIT G

 

JOINT PRESS RELEASE

 

	
  

  	
  

  

 

ASTRAZENECA AND RIGEL PHARMACEUTICALS SIGN WORLDWIDE LICENSE
AGREEMENT FOR LATE-STAGE DEVELOPMENT PRODUCT—FOSTAMATINIB DISODIUM (R788)—FOR
THE TREATMENT OF RHEUMATOID ARTHRITIS (RA)

 

For immediate release: 16 February 2010

 

AstraZeneca
and Rigel Pharmaceuticals (Nasdaq: RIGL) today announced an exclusive  worldwide
license agreement for the global development and commercialization of
fostamatinib  disodium (R788), Rigel’s late-stage investigational product for
rheumatoid arthritis (RA) and  additional indications. Fostamatinib
disodium, which has completed a comprehensive phase 2  program,
is the furthest developed oral Spleen Tyrosine Kinase (Syk) inhibitor being
evaluated  for RA. Inhibiting Syk is thought to block the intracellular signaling
of various immune cells
implicated in the destruction of bone and
cartilage which is characteristic of RA.

 

RA
is a systemic autoimmune inflammatory disease, which causes damage to the
joints and other  organs, affecting approximately 1 in 100 people. It is a major cause of
disability and it is also  associated with reduced life expectancy,
especially if not adequately treated. Despite current  treatment
options, many patients still experience pain, worsening of joint destruction
and  disability, so new treatment options are needed. The RA market was
estimated to be  approximately $13bn globally in 2009, having grown from $1.3bn in 1998.

 

Once
the agreement is effective, AstraZeneca will make an upfront payment to Rigel
of $100  million with up to an additional $345 million payable if specified
development, regulatory and  first commercial sale milestones are achieved.
Rigel will also be eligible to receive up to an  additional $800
million of specified sales related milestone payments if the product achieves  considerable
levels of commercial success, as well as significant stepped double-digit
royalties

 

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

 

 

on
net sales worldwide. AstraZeneca is responsible for all development, regulatory
filings,  manufacturing and global commercialization activities in all licensed
indications under the
contract. Effectiveness of the agreement is
contingent on expiration or termination of the waiting  period
under the Hart-Scott-Rodino Antitrust Improvements Act.

 

AstraZeneca
will design a global phase 3 program, anticipated to begin in the second half
of 2010,  with the goal of filing new drug applications with the US Food and Drug
Administration (FDA)  and the European Medicines Agency (EMEA) in 2013. Fostamatinib disodium
is being developed  as a next generation oral RA therapy in adults who have failed to
respond adequately to a
traditional disease modifying anti-rheumatic
drug (DMARD), such as methotrexate, where a  TNF biologic
add-on treatment would currently be considered. Under the terms of the  agreement,
AstraZeneca will also receive exclusive rights to Rigel’s portfolio of oral Syk  inhibitors,
as well as for additional indications for fostamatinib disodium beyond RA.

 

Anders
Ekblom, Executive Vice President of Development, of AstraZeneca said:  “There
is a very real and pressing unmet medical need in the area of rheumatoid
arthritis. Given  the debilitating effect this disease can have on patients, AstraZeneca
looks forward to working
together with Rigel to continue development
of this innovative investigational compound.  Collaborations
such as this one, which further strengthen our late-stage pipeline, demonstrate
the  key role externalization continues to play in AstraZeneca’s strategy.”

 

James
M. Gower, chairman and chief executive officer of Rigel Pharmaceuticals, Inc.
said:  “This collaboration fulfills our expectations in two key ways. First,
AstraZeneca has made an
expansive commitment to develop fostamatinib
disodium for the treatment of RA, which means  that the work we
have begun for patients with this disease will be completed with a
substantially  larger clinical program. Second, Rigel will receive royalties on
potential future sales,
appropriate to its investment in the
development of R788.”

 

- ENDS —

 

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

 

 

NOTES TO EDITORS:

 

About Fostamatinib disodium

Fostamatinib
disodium, which has completed a comprehensive phase 2 program is at the most  advanced
stage of development of the oral Spleen Tyrosine Kinase (Syk) inhibitors being  evaluated
for an RA indication. Inhibiting Syk is thought to block the intracellular
signaling of  various immune cells implicated in the destruction of bone and
cartilage, which is characteristic  of RA. Inhibition
of Syk signaling is therefore a very attractive research approach to RA  treatment.

 

About Fostamatinib disodium Phase 2 data

Three
Phase 2 trials have been completed. TASKi1 and TASKi2 studied patients with an  incomplete
response to methotrexate. TASKi3 studied patients who had failed treatment with  biologic
therapies.

 

TASKi2
was a multi-center, randomized, double-blind, placebo-controlled Phase 2b trial
of 457  RA patients in the target population of those with inadequate response
to methotrexate.  Treatment with stable doses of methotrexate in combination with
fostamatinib disodium 100 mg  twice daily, 150 mg once daily, or placebo
were evaluated at six months. At six months, 100 mg  twice daily
fostamatinib disodium therapy (a dose planned to be taken forward in Phase 3)  yielded
responder rates of 66% versus 35% of the placebo group for the primary end
point of  ACR 20 improvement. ACR 50 response was achieved by 43% versus 19%: ACR
70 responder  rates were observed in 28% versus 10%. All achieved p values of <0.001.
DAS28 remission was  achieved in 31% versus 7% (p<0.01).

 

This
replicates the signal seen in the original smaller TASKi1 study in a similar
population  (n=189) where 100 mg of fostamatinib disodium twice daily yielded
responses of 65% versus
38% of the placebo group for ACR20. ACR 50
response was achieved by 49% vs 19% and  ACR70 was achieved
by 33% vs 4%. DAS28 remission was achieved in 26% vs 8%. All of  these
endpoints achieved p values of p < 0.05 or better. In both studies clinical
effect was seen as  early as 1 week.

 

TASKi3
was a smaller study which included 219 patients who had failed biologic  therapies.
Although there was some evidence of efficacy on the MRI imaging, and on some  other
parameters, the study did not meet its primary endpoint.

 

These
data indicate further studies of fostamatinib disodium are warranted in RA.

 

Combining
all three trials, the most common side effects have been GI disturbances such
as  diarrhea, elevated blood pressure, transient and mild neutropenia,
increased transaminases and a  slight increase in infections, although not
serious or opportunistic infections.

 

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

 

 

About Rigel Pharmaceuticals—(www.rigel.com)

Rigel
is a clinical-stage drug development company that discovers and develops novel,
small  molecule drugs for the treatment of inflammatory/autoimmune diseases and
metabolic diseases.  Rigel’s pioneering research focuses on intracellular signaling pathways
and related targets that
are critical to disease mechanisms. Rigel’s
productivity has resulted in strategic collaborations  with
large pharmaceutical partners to develop and market our product candidates.
Rigel has  product development programs in inflammatory/autoimmune diseases such as
rheumatoid  arthritis, thrombocytopenia and asthma, as well as in cancer.

 

About AstraZeneca

AstraZeneca
is a global, innovation-driven biopharmaceutical business with a primary focus
on  the discovery, development and commercialization of prescription
medicines. As a leader in  gastrointestinal, cardiovascular,
neuroscience, respiratory and inflammation, oncology and  infectious
disease medicines, AstraZeneca generated global revenues of US $32.8 billion in  2009.
For more information please visit: www.astrazeneca.com

 

Rigel Forward-Looking Statements

This
press release contains “forward-looking” statements, including, without
limitation, statements  related to the anticipated
effectiveness of the agreement described in this press release and Rigel’s  receipt
of an upfront cash payment from AstraZeneca, Rigel’s potential receipt of
development,  regulatory and sales milestones and royalties on net sales worldwide,
the potential market for and  commercial potential of
R788 and plans to pursue further clinical development of R788, including the  timing
thereof. Any statements contained in this press release that are not statements
of historical fact
may be deemed to be forward-looking statements. Words
such as “estimate,” “anticipate” and similar  expressions are intended
to identify these forward-looking statements. These forward-looking statements  are based
upon Rigel’s current expectations and involve risks and uncertainties. There
are a number of  important factors that could cause Rigel’s results to differ materially
from those indicated by these  forward-looking
statements, including, without limitation, risks associated with entering into
a corporate  partnership agreement and reliance on a corporate partner, including
risks that if conflicts arise between  us and our corporate
partners, the other party may act in its self-interest and not in the interest
of our  stockholders and if any of our corporate partners were to breach or
terminate its agreement with us or  otherwise fail to conduct
the partnership activities successfully and in a timely manner, the clinical  development
or commercialization of the affected product candidates or research programs
could be  delayed or terminated, as well as other risks associated with the
timing and success of clinical trials and  the commercialization of
product candidates, potential problems that may arise in the clinical testing
and  approval process, market competition and other risks detailed from time
to time in Rigel’s SEC reports,  including its Quarterly
Report on Form 10-Q for the quarter ended September 30, 2009. Rigel
does not  undertake any obligation to update forward-looking statements and
expressly disclaims any obligation or  undertaking to release
publicly any updates or revisions to any forward-looking statements contained  herein.

 

# # #

 

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

 

 

RIGEL
CONTACTS :

 

Contact:
Raul Rodriguez

Phone:
650.624.1302

Email:
rrodriguez@rigel.com

 

Media
Contact: Susan C. Rogers, Alchemy Consulting, Inc.

Phone:
650.430.3777

Email:
susan@alchemyemail.com

 

ASTRAZENECA
CONTACTS :

 

	
  Media Enquiries:

  	
   

  	
   

  
	
  Neil
  McCrae

  	
  +44
  207 304 5045 (24 hours)

  
	
  Chris
  Sampson

  	
  +44
  207 304 5130 (24 hours)

  
	
  Sarah
  Lindgreen

  	
  +44
  207 304 5033 (24 hours)

  
	
  Abigail
  Baron

  	
  +44
  207 304 5034 (24 hours)

  
	
   

  	
   

  	
   

  
	
  Investor Enquiries UK:

  	
   

  
	
  Jonathan
  Hunt

  	
  +44
  207 304 5087

  	
  mob:
  +44 7775 704032

  
	
  Karl
  Hard

  	
  +44
  207 304 5322

  	
  mob:
  +44 7789 654364

  
	
  Clive
  Morris

  	
  +44
  207 304 5084

  	
  mob:
  +44 7710 031012

  
	
   

  	
   

  	
   

  
	
  Investor Enquiries US:

  	
   

  
	
  Ed
  Seage

  	
  +1
  302 886 4065

  	
  mob:
  +1 302 373 1361

  
	
  Jorgen
  Winroth

  	
  +1
  212 579 0506

  	
  mob:
  +1 917 612 4043

  
				

 

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

 

 

EXHIBIT H

 

SPECIFIED EVENTS

 

[
* ]

 

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

 

 

EXHIBIT I

 

ON-GOING
CLINICAL TRIALS

 

	
  Study
  Number

  	
   

  	
  Study Title

  	
   

  
	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  [ * ]

  	
   

  

 

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

 

 

EXHIBIT J

 

SUMMARY
OF FINANCIAL TERMS PERMITTED FOR

 DISCLOSURE UNDER CONFIDENTIALITY AGREEMENT

PURSUANT
TO SECTION 12.3.

 

Financial:

·                  Upfront Payment: $100M

·                  R788 Milestones: [ * ] for [ * ] and [ *
].

·                  R788 [ * ] Milestone Payments

·                  [ * ] Milestone: [ * ]

·                  [ * ] Milestones: [ * ]

·                  [ * ] Milestones: [ * ]

·                  R788 Sales Related Payments based on
stepped sales threshold achievement: Maximum of $800M, should Net Sales achieve
$[ * ] in a Calendar Year. R788 Royalties: in the range of [ * ]% - [ * ]%.

·                  Multi-Product Deal: payments on R788 and
follow-on oral syk inhibitors.

 

Scope of License:

·       Exclusive
license to AstraZeneca in the Territory and Field to develop and commercialize
R788 and oral syk inhibitors.

·       Field:
[ * ] indications [ * ] excluding [ * ].

·       Territory:
Worldwide

 

Obligations:

 

·                  AZ to assume all responsibility for
further development and commercialization after effective date.

·                  AZ to work with Rigel exclusively on oral
syk inhibition in RA for a defined time period.

·                  Rigel to maintain responsibility for open
Label Extension study for [ * ]

 

833659 v3/HN

 

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934, as amended.Exhibit 10.1

 

February
24, 2010

 

Clayton,
Dubilier & Rice LLC

375
Park Avenue

18th
Floor

New
York, New York 10152

Attn.:   Kevin J. Conway

 

Dear
Mr. Conway:

 

This
letter memorializes the agreement between Clayton, Dubilier & Rice, LLC (“CD&R”)
and Sally Beauty Holdings, Inc. (“SBH”) with respect to the provision of
services by CD&R to the SBH Board of Directors (the “Board”).

 

Professional
employees of CD&R serve as, and may in the future serve as, members of the
Board (each a “CD&R Designee” and, collectively, the “CD&R Designees”).

 

As
compensation for the services of the CD&R Designees (the “Services”),
CD&R shall receive thirty-seven thousand five hundred dollars ($37,500) per
calendar quarter, paid quarterly in advance, for each CD&R Designee serving
as a member of the Board.  In
consideration of this Services payment, CD&R on behalf of the current and
future CD&R Designees, irrevocably waives and disclaims any right to the
payment of other compensation of any kind for serving as a member of the Board
(and any of its committees), including but expressly not limited to the receipt
of retainers, meeting fees and equity-based compensation.

 

In
addition, beginning January 26, 2010, CD&R Designees shall receive
reimbursement for travel and other out-of-pocket expenses in the same manner
and to the same extent as other members of the Board under the then-applicable
independent director compensation policy, except that to the extent that the
Chairman of the Board remains a CD&R Designee, such Chairman (or any other
CD&R Designee) will be entitled to up to one hundred fifty thousand dollars
($150,000) per calendar year as reimbursement for actual private air travel
expenses in lieu of any reimbursement based on the cost of commercial air
travel.

 

This
agreement has been approved by a majority of the members of the Board who are
not employees of CD&R or SBH (the “Disinterested Directors”).

 

Payments
under this letter agreement shall continue until the first of (i) the tenth
anniversary of November 16, 2006, or (ii) such a time as there are no longer
CD&R Designees.

 

1

 

The
parties acknowledge and agree that CD&R shall perform the Services as an
independent contractor, retaining control over and responsibility for its own
operations and personnel and those of its affiliates.

 

In
the course of CD&R’s providing Services, SBH may disclose and deliver to
CD&R certain information.  All such
information furnished directly or indirectly by SBH, whether oral or written,
and regardless of the manner in which it is furnished, together with any notes,
reports, summaries, analyses, compilations, studies, interpretations, memoranda
or other material (in any format, including, without limitation, electronic)
prepared by CD&R that contain, are derived from, refer to, rely upon or
use, in whole or in part, any information so furnished to CD&R pursuant
hereto is referred to in this letter agreement as “Proprietary Information”.  Proprietary Information does not include,
however, information that CD&R demonstrates (i) is or becomes generally
available to the public other than as a result of a disclosure directly or
indirectly by CD&R in breach of the terms of this letter agreement, (ii) was
available to CD&R on a nonconfidential basis prior to its disclosure by
SBH, (iii) becomes available to CD&R on a nonconfidential basis from a
person or entity other than SBH which CD&R has no reason to believe is
bound by a confidentiality agreement with SBH or is otherwise under an
obligation to SBH not to transmit the information to CD&R, or (iv) is
independently developed by CD&R without derivation from, reference to or
reliance upon, or using in any manner the Proprietary Information.

 

Subject
to the immediately preceding paragraph, unless otherwise agreed to in writing
by SBH and except as required by applicable law, regulation, stock exchange
rule, or by legal process, CD&R agrees (i) to keep all Proprietary
Information confidential and not to disclose or reveal any Proprietary
Information to any other person or entity, and (ii) not to use Proprietary
Information for any purpose other than in connection with providing Services.

 

This
letter agreement (i) contains the complete and entire understanding and
agreement between CD&R and SBH with respect to the subject matter hereof,
and (ii) supersedes all prior and contemporaneous understandings, conditions
and agreements, whether written or oral, express or implied, in respect of the
subject matter hereof.  SBH acknowledges
and agrees that CD&R makes no representations or warranties in connection
with this letter agreement or its provision of the Services.  This letter agreement may not be amended,
restated, supplemented or otherwise modified, and no provision of this letter
agreement may be waived, other than in a writing duly executed by the parties
hereto and approved by a majority of the Disinterested Directors.  This letter agreement and any dispute or
controversy arising hereunder shall be governed by the laws of the state of
Delaware to the same extent as agreements entered into and fully performed in
the state of Delaware.  The parties agree
that the courts serving Wilmington, Delaware shall be the sole and exclusive
forum for any lawsuit arising out of this letter agreement and any dispute or
controversy arising hereunder, and the parties expressly waive and disclaim any
right to bring a lawsuit or other adversarial proceeding in any other court or
forum.

 

Please
acknowledge your agreement with the terms of this letter agreement by signing
where shown below, returning an original copy to me.

 

2

 

	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
  /s/
  Gary Winterhalter

  	
   

  
	
   

  	
   

  
	
  Gary
  Winterhalter

  	
   

  
	
  President
  and Chief Executive Officer

  	
   

  
	
  Sally
  Beauty Holdings, Inc.

  	
   

  

 

Acknowledged
and agreed:

 

	
  /s/
  Kevin J. Conway

  	
   

  	
  4/21/10

  
	
  Kevin
  J. Conway

  	
   

  	
  Date

  
	
  Vice
  President, Secretary, and Assistant Treasurer

  	
   

  	
   

  
	
  Clayton,
  Dubilier & Rice, LLC

  	
   

  	
   

  

 

3

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