Document:

10Q Q3 2006 EXHIBIT 10.64

 

Exhibit 10.64 

ASSIGNMENT AGREEMENT

BY AND BETWEEN

PHARMACYCLICS, INC.

AND

APPLERA CORPORATION

April 7, 2006

 

ARTICLE 1 DEFINITIONS*

1.1"Active
Component"*

1.3"Assigned
Product"*

1.4"[ *** ]"*

1.5"[ *** ]"*

1.6"[ *** ]"*

1.7"Bulk Form"*

1.8"Celera Intellectual
Property"*

1.9"Celera
Material"*

1.10"Celera
Patent"*

1.11"Celera
Program"*

1.12"Celera
Technology"*

1.13"Clinical
Trial"*

1.14"Combination
Product"*

1.15"Commercialize" or
"Commercialization"*

1.16"Commercially Reasonable
Efforts"*

1.17"Confidential
Information"*

1.18"Control"*

1.19"Default"*

1.20"DOJ"*

1.21"Dollar"*

1.22"Dosage Form"*

1.23"Drug Approval
Application"*

1.24"Effective
Date"*

1.25"EMEA"*

1.26"EU"*

1.27"Factor VIIa
Compound"*

1.28"Factor VIIa
Product"*

1.29"Factor VIIa
Program"*

1.30"FDA"*

1.31"Force
Majeure"*

1.32"FTC"*

1.33"GAAP"*

1.34"HDAC
Compound"*

1.35"HDAC Product"*

1.36"HDAC Program"*

1.37"IND"*

1.38"Licensee"*

1.39"Losses"*

1.40"Major Market
Country"*

1.41"Net Sales"*

1.42"New Drug
Application" or "NDA"*

1.43"Patent"*

1.44"Phase 3 Clinical
Trial"*

1.45"Regulatory
Approval"*

1.46"Regulatory
Authority"*

1.47"Royalty" or
Royalties"*

1.48"Technology"*

1.49"Term"*

1.50"Third Party"*
ARTICLE 2 ASSIGNMENT AND DELIVERY*

2.1Assignment*

2.2Delivery*

2.3License*
ARTICLE 3 DEVELOPMENT*

3.1Material Agreements*

3.2Development Efforts*

3.3Celera Assistance and
Cooperation*

3.4Development Summaries*
ARTICLE 4 REGULATORY*

4.1General*

4.2Regulatory Reports and Additional
Regulatory Filings*

4.3Applications for Regulatory
Exclusivity*
ARTICLE 5 COMMERCIALIZATION*

5.1Pricing*

5.2Diligence*

5.3Reports*
ARTICLE 6 CONSIDERATION*

6.1Fee*

6.2Stock*

6.3Product Milestones*

6.4Royalties*

6.5Term of Royalties
Payments*

6.6Royalty Payments and
Reports*

6.7Records; Royalty Audit*

6.8Taxes*

6.9Blocked Currency*

6.10Foreign Exchange*

6.11Late Payments*
ARTICLE 7 INTELLECTUAL PROPERTY*

7.1Prosecution of Patents*

7.2Infringement of Patents by Third
Parties*

7.3Infringement of Third Party
Rights*
ARTICLE 8 REPRESENTATONS AND
WARRANTIES*

8.1Mutual Representations and
Warranties*

8.2Mutual Covenants*

8.3Representations and Warranties of
Celera*

8.4Representations, Warranties and
Covenants of Pharmacyclics*

8.5Disclaimer*

8.6Limitation*
ARTICLE 9 INDEMNIFICATION*

9.1Indemnification by Celera*

9.2Indemnification by
Pharmacyclics*

9.3Insurance*

9.4Limitation of Liability*
ARTICLE 10 CONFIDENTIALITY*

10.1Treatment of Confidential
Information*

10.2Authorized Disclosure*

10.3Publicity; Terms of
Agreement*
ARTICLE 11 TERM AND TERMINATION*

11.1Term*

11.2Termination for Default*

11.3Reversion*

11.4Survival*
ARTICLE 12 DISPUTE RESOLUTION*

12.1Disputes*

12.2Governing Law; Judicial
Resolution*

12.3Patent Dispute
Resolution*
ARTICLE 13 MISCELLANEOUS*

13.1Entire Agreement;
Amendment*

13.2Force Majeure*

13.3Notices*

13.4Maintenance of Records*

13.5No Strict Construction*

13.6Counterparts*

13.7Severability*

13.8Headings*

13.9Further Actions*

13.10Independent Contractors*

13.11Use of Name*

13.12No Waiver*

ASSIGNMENT AGREEMENT

This Assignment Agreement (the
"Agreement"), effective as of April 7, 2006 ("Effective
Date"), is by and between Pharmacyclics, Inc., a Delaware
corporation having its principal place of business at 995 East Arques Avenue,
Sunnyvale, California 94085 ("Pharmacyclics") and Applera
Corporation, a Delaware corporation, by and through the Celera Genomics Group having its
principal place of business at 45 West Gude Drive, Rockville, Maryland 20850
("Celera").  Celera and Pharmacyclics are sometimes referred to herein
individually as a "Party" and collectively as the "Parties"
and references to "Pharmacyclics" and "Celera" will include
their respective Affiliates.

RECITALS

Whereas, Celera has been conducting research
directed to the discovery and development of therapeutic products and methods
based on (i) HDAC inhibitor compounds, including intravenous and oral
formulations of a clinical lead compound having the corporate identification
[ *** ], a backup compound having the corporate identification [ ***
] and other compounds identified as selective HDAC-8 inhibitor compounds;
(ii) Factor VIIa inhibitor compounds, including a preclinical lead compound
having the corporate identification [ *** ] and a backup compound having
the corporate identification [ *** ] and other compounds identified in
its program on Factor VIIa inhibitor compounds; and (iii) [ *** ]
(collectively "Celera Programs"); and

Whereas, Pharmacyclics desires to acquire, and Celera
wishes to sell to Pharmacyclics, all proprietary technology and know-how that
relate to the Celera Programs, including but not limited to, (i) the small
molecule HDAC inhibitor compound [ *** ] and all clinical trial data and
results related thereto, (ii) the multiple small molecule backup compounds in
various stages of preclinical development, including [ *** ] and [ ***
], (iii) certain compounds and related information associated with Celera
Programs, and (iv) related intellectual property and know-how, on the terms and
conditions set forth herein.

Now Therefore, based on the foregoing premises and the
mutual covenants and obligations set forth below, the Parties agree as
follows:

	   ARTICLE 1 

DEFINITIONS

The following terms have the following meanings as used
in this Agreement:

	"Active Component"  means any
product other than an Assigned Product which performs an identifiable
therapeutic or prophylactic function when combined with an Assigned
Product.

	"Affiliate"  means a Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with Celera or Pharmacyclics.  For
purposes of this definition, "control" means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
a Person, whether through ownership of fifty percent (50%) or more of the voting
securities of such Person, by contract or otherwise.

	"Assigned Product"  means [ ***
], Factor VIIa Product or HDAC Product, and "Assigned
Products" means all of the foregoing.

	"[ *** ]"  means [ ***
].

	"[ *** ]"  means any
product

[ *** ].

 

 

 

 

 

	"[ *** ]"  means [ ***
].

 

	"Bulk Form"  means (a) bulk active
pharmaceutical ingredient, (b) with respect to biologics, bulk drug substance
(whether formulated or not) of the applicable product, or (c) any pharmaceutical
ingredient that as sold cannot be used or distributed without further
processing, combination with other Active Components or inactive components or
packaging into Dosage Form.

	"Celera Intellectual Property"
means Celera Material, Celera Patents and Celera Technology.

	"Celera Material"  means any and
all small molecules synthesized by Celera or under the direction and control of
Celera pursuant to the Celera Programs, clinical formulations thereof, and
backup compounds, that are in the possession of Celera, or a Celera contractor
and accessible to Celera, and retrievable upon exercise by Celera of reasonable
efforts.

	"Celera Patent"  means any and all
Patents that claim Celera Technology, including without limitation, the Patents
listed in Exhibit 1.10.

	"Celera Program"  means the HDAC
Program, Factor VIIa Program or [ *** ].

	"Celera Technology"  means any and
all Technology owned or Controlled by Celera as of the Effective Date that arose
from or is directed solely to a Celera Program, including without limitation,
all data and results obtained by Celera during the Clinical Trial.

	"Clinical Trial"  means the
clinical trial listed in Exhibit 1.13 hereto, which was directed to
compound [ *** ], that Celera conducted prior to the Effective Date.
Celera represents that the Clinical Trial listed in Exhibit 1.13 is the
only clinical trial of compound        [ *** ] conducted by or on behalf
of Celera as of the Effective Date.

	
"Combination Product"  means a product that contains an
Assigned Product and one or more other Active Components.

	"Commercialize" or
"Commercialization"  means those activities relating to
the promotion, marketing and sale of Assigned Products and will include without
limitation, Phase 4 clinical trials or equivalent clinical trials conducted
following Regulatory Approval to market a pharmaceutical product. 

	"Commercially Reasonable Efforts"
means the level of efforts and resources required to Commercialize an
Assigned Product in a sustained manner consistent with the efforts a similarly
situated biopharmaceutical company would typically devote to a product of
similar market potential, profit potential or strategic value resulting from its
own research efforts, based on conditions then prevailing.  Commercially
Reasonable Efforts will be determined on a country-by-country (each country
including its territories) basis for a particular Assigned Product, and it is
anticipated that the level of effort will change over time reflecting changes in
the status of the Assigned Product and the country (including its territories)
involved. Commercially Reasonable Efforts may be different for each Assigned
Product.

	"Confidential Information"  means
all information received by either Party ("Receiving Party")
from the other Party ("Disclosing Party") pursuant to this
Agreement, other than that portion of such information or materials which the
Receiving Party can establish by direct evidence:

	is publicly disclosed by the Disclosing Party, either
before or after it becomes known to the Receiving Party;

	was known to the Receiving Party, without obligation to
keep it confidential, prior to when it was received from the Disclosing
Party;

	is subsequently disclosed to the Receiving Party by a
Third Party lawfully in possession thereof without obligation to keep it
confidential;

	has been publicly disclosed other than by the Disclosing
Party and without breach of an obligation of confidentiality with respect
thereto; or

	has been independently developed by the Receiving Party
without the aid, application or use of Confidential Information, as demonstrated
by competent written proof.

Specific aspects or details of Confidential Information will
not be deemed to be within the public knowledge or in the prior possession of
the Receiving Party merely because the aspects or details of the Confidential
Information are embraced by general disclosures in the public domain.  In
addition, any combination of Confidential Information will not be considered in
the public knowledge or in the prior possession of the Receiving Party merely
because individual elements thereof are in the public domain or in the prior
possession of the Receiving Party unless the combination and its principles are
in the public knowledge or in the prior possession of the Receiving Party.
Confidential Information will include information received in confidence by the
Disclosing Party from a Third Party. Prior to disclosure of such Third Party
Confidential Information to the Receiving Party the Disclosing Party will
determine that it has the right to make such disclosure, advise the Receiving
Party that the disclosure includes Third Party Confidential Information and
provide the Receiving Party with the terms and conditions of any agreement
between the Third Party and the Disclosing Party respecting such Third Party
Confidential Information.  For purposes of this Agreement, all Confidential
Information relating solely to Celera Program and Celera Intellectual Property,
except for information that is publicly available as of the Effective Date,
shall be deemed to be Confidential Information of Pharmacyclics.  The Parties
acknowledge and agree that certain information will apply to, and be proprietary
and confidential information of, both Celera Program and Celera Intellectual
Property and, in addition, other programs of Celera that are not subject to the
terms of this Agreement, and that, for purposes of this Agreement, such
information shall be deemed to be Confidential Information both of Celera and of
Pharmacyclics. 

	"Control"  means, with respect to
Patents, Technology and other tangible and intangible property, possession of
the ability to disclose, to license or to assign as provided for in this
Agreement without violating the terms of any written agreement or other written
arrangement with any Third Party.

	"Default"  means with respect to
either Party (a) that any representation of such Party set forth herein was
untrue in any material respect when made, (b) that any warranty of such Party
becomes untrue in any material respect, or (c) such Party, such Party's
Affiliate or such Party's licensee fails to materially perform any material
obligation set forth in this Agreement.

	"DOJ"  means the United States
Department of Justice.

	"Dollar"  means a United States
dollar, and "$" will be interpreted accordingly.

	"Dosage Form"  means a
pharmaceutical product that as sold is in individual dosage amounts and in the
form approved for sale to end users.

	"Drug Approval Application"  means
an application for Regulatory Approval required before clinical trials or
commercial sale or use of an Assigned Product as a drug or to treat a particular
indication in a regulatory jurisdiction, including without limitation
applications to expand the label of an approved drug.

	"Effective Date"  means the date
set forth above in the first paragraph of this Agreement.

	"EMEA"  means the European
Medicines Evaluation Agency or any successor agency thereof.

	"EU"  means the European Union as
constituted on the Effective Date.

	"Factor VIIa Compound"  means [
*** ], [ *** ], any other Factor VIIa inhibitor compounds identified
by Celera during its Factor VIIa Program and any other small molecule that acts
as a Factor VIIa inhibitor. 

	"Factor VIIa Product"  means any
product

	that comprises 

[ *** ],

 

 

and

	that 

[ *** ].

 

	"Factor VIIa Program"  means the
research activities conducted by Celera prior to the Effective Date directed to
the discovery and development of small molecule Factor VIIa inhibitors as
therapeutic agents, including without limitation, compounds [ *** ] and
[ *** ].

	"FDA"  means the United States
Food and Drug Administration, or any successor thereto.

	"Force Majeure"  means any
occurrence beyond the reasonable control of a Party that prevents or
substantially interferes with the performance by the Party of any of its
obligations hereunder, if such occurs by reason of any act of God, flood, fire,
explosion, breakdown of plant, earthquake, strike, lockout, labor dispute,
casualty or accident, or war, revolution, civil commotion, acts of public
enemies, blockage or embargo, or any injunction, law, order, proclamation,
regulation, ordinance, demand or requirement of any government or of any
subdivision, authority or representative or any such government, inability to
procure or use materials, labor, equipment, transportation, or energy sufficient
to meet manufacturing needs without the necessity of allocation, or any other
cause whatsoever, whether similar or dissimilar to those above enumerated,
beyond the reasonable control of such Party, if and only if the Party affected
used reasonable efforts to avoid such occurrence and to remedy it promptly if it
occurred.  

	"FTC"  means the United States
Federal Trade Commission.

	"GAAP"  means United States generally
accepted accounting principles.

	"HDAC Compound"  means [ ***
], [ *** ], any other HDAC inhibitor compounds identified by Celera
during its HDAC Program and any other small molecule that acts as an HDAC
inhibitor.  

	"HDAC Product"  means any
product

	that comprises 

	[ *** ], or 

	[ *** ], 

and

	that 

	[ *** ], or 

	[ *** ], or

	[ *** ].

 

	"HDAC Program"  means the research
activities conducted by Celera prior to the Effective Date directed to the
discovery and development of small molecule HDAC inhibitors as therapeutic
agents, including without limitation, compounds [ *** ] and [ ***
], HDAC-8 inhibitors and the Clinical Trial.  

	"IND"  means a "Notice of
Claimed Investigational Exemption for a New Drug" filed with the FDA, as
defined in 21 C.F.R. Part 312, or an equivalent application filed with a
Regulatory Authority outside of the United States.

	"Licensee"  means any Third Party
to whom Pharmacyclics grants a license under rights conveyed to Pharmacyclics
pursuant to this Agreement.

	"Losses"  means suits, claims,
actions, demands, liabilities, expenses and/or losses, including without
limitation reasonable legal expenses and attorneys' fees.

	"Major Market Country"  means (a)
the United States, (b) any of United Kingdom, France, Germany, Spain or Italy,
(c) Japan, or (d) Canada.

	"Net Sales"  means

	all revenues recognized in accordance with GAAP from the
arms-length sale or other disposition of Assigned Products by Pharmacyclics, its
Affiliates or Licensees to a Third Party ("Revenues"), less the
following items:

	[ *** ];

	[ *** ];

	[ *** ];

 

	[ *** ]; and 

	[ *** ].  

The deductions set forth in clauses (i) through (v) above
will be determined in accordance with GAAP, as consistently applied by
Pharmacyclics across all of its products.

	A "sale" will include the transfer or other
disposition of an Assigned Product for consideration other than cash, in which
case such consideration will be valued at the fair market value thereof.  In the
event that an Assigned Product is sold either for consideration other than cash
or as part of a bundled product, the Net Sales of such Assigned Product will be
the greater of (i) the recognized amount attributable to the Assigned Product,
or (ii) the average unit price of such Assigned Product in Dosage Form when sold
(other than as part of a bundle) in cash transactions in such country.  If
Pharmacyclics, its Affiliates or Licensees do not separately sell such Assigned
Product in such country, the Net Sales for such Assigned Product will be
calculated based on the average unit price of such Assigned Product when sold
(other than as part of a bundle) in cash transactions in Major Market Countries
collectively.

	Amounts received by Pharmacyclics, its Affiliates or
Licensees for the sale of Assigned Products among Pharmacyclics, its Affiliates
and Licensees for resale will not be included in the computation of Net Sales
hereunder. Distributors of Pharmacyclics selling Assigned Products will not be
deemed to be Licensees of Pharmacyclics.

	If Pharmacyclics, its Affiliates or Licensees sell an
Assigned Product in Bulk Form to a Third Party for resale, then the amount to be
included in the calculation of Net Sales arising from such sale will be the
amount that would have been recognized if such Assigned Product had been sold in
Dosage Form, to be determined using the average units of Assigned Product in
Dosage Form expected from the quantity of subject product in Bulk Form sold and
the average amount recognized by Pharmacyclics, its Affiliates or Licensees for
the same Assigned Product in Dosage Form sold in the same country during the
preceding three calendar months.  If there have been no sales of the same
Assigned Product during the preceding three calendar months, the Parties will
agree upon an amount for such Bulk Form sale which will not be less than a good
faith determination of the amount invoiced by the Third Party upon resale of
Assigned Product in Dosage Form obtained from the quantity of Assigned Products
purchased in Bulk Form.

	In the event that, on a country-
by-country basis, an Assigned Product is sold in the form of a Combination
Product, the Net Sales for such Combination Product will be calculated as
follows:

	If Pharmacyclics, its Affiliates or Licensees separately
sells, in such country, (x) Assigned Products as contained in such Combination
Product and (y) other products containing as their sole active ingredient(s) the
other Active Components in such Combination Product, the Net Sales attributable
to such Combination Product will be calculated by multiplying actual Net Sales
of the Combination Product (calculated in accordance with Section 1.41(a)-(d))
by the fraction A/(A+B) where: A is Pharmacyclics' (or its Affiliates or
Licensees, as applicable) average wholesale price during the period to which the
Net Sales calculation applies to its three (3) largest distributors of the
Assigned Product in such country, and B is Pharmacyclics' (or its Affiliate's or
Licensee's, as applicable) average wholesale price during the period to which
the Net Sales calculation applies to its three (3) largest distributors in such
country of products which contain as their sole active ingredient(s) the other
Active Components in the Combination Product.

	If Pharmacyclics, its Affiliates or Licensees separately
sell, in such country, Assigned Products as contained in such Combination
Product but do not separately sell, in such country, other products containing
as their sole active ingredient(s) the other Active Components in such
Combination Product, the Net Sales attributable to such Combination Product will
be calculated by multiplying the Net Sales of such Combination Product
(calculated in accordance with Section 1.41(a)-(d)) by the fraction A/C where: A
is Pharmacyclics' (or its Affiliate's or Licensee's, as applicable) average
wholesale price for the Assigned Product(s) as contained in such Combination
Product during the period to which the Net Sales calculation applies to its
three (3) largest distributors of a Assigned Product in such country, and C is
Pharmacyclics' (or its Affiliate's or Licensee's, as applicable) average
wholesale price for the Combination Product during the period to which the Net
Sales calculation applies to its three (3) largest distributors of the
Combination Product in such country.

	If Pharmacyclics, its Affiliates or Licensees do not
separately sell, in such country, Assigned Products, the Net Sales attributable
to such Combination Product will be calculated by multiplying the Net Sales of
such Combination Product (calculated in accordance with Section 1.41(a)-(d)) by
the fraction D/(D+E) where D is the actual total cost of the Assigned Product(s)
at the point of formulation into the Combination Product and E is the actual
total cost of the other Active Component(s) in the Combination Product.

	"New Drug Application" or
"NDA"  means (a) a FDA new drug application, biologics
license application or its equivalent in the United States, or (b) any
corresponding application to a Regulatory Authority in a Major Market
Country.

	 "Patent"  means (a) an issued,
unexpired patent (with the term "patent" being deemed to encompass, without
limitation, an inventor's certificate) in any country which has not been held
invalid or unenforceable by a court of competent jurisdiction from which no
appeal can be taken or has been taken within the required time period, including
without limitation any substitution, extension, registration, confirmation,
reissue, re-examination, renewal or any like filing thereof or (b) an
application for a patent pending in any country, including without limitation
any provisional, converted provisional, continued prosecution application,
continuation, divisional or continuation-in-part thereof; any patents issuing
therefrom; and any substitution, extension, registration, confirmation, reissue,
reexamination, renewal or like filing thereof, provided that if such an
application for a patent has not issued as an issued patent within [ ***
] years after the filing date from which such application takes priority,
such application for a patent shall not be a Patent for purposes of this
Agreement unless such application for a patent later issues as an issued patent
at which time such application for a patent shall be reinstated as a Patent
hereunder.  

	"Phase 3 Clinical Trial"  means a
pivotal human clinical trial in any Major Market Country the results of which
could be used to establish safety and efficacy of an Assigned Product as a basis
for a regulatory filing or that would otherwise satisfy requirements of 21
C.F.R.  312.21(c), or its foreign equivalent.

	"Regulatory Approval"  means, with
respect to a national, supra-national, regional, state or local regulatory
agency, department, bureau, commission, council or other governmental entity,
(a) any approvals, licenses, registrations or authorizations necessary for the
manufacture (where relevant), marketing and commercial sale of Assigned Product
in such nation or within jurisdiction of such authority, and (b) where relevant,
pricing approvals necessary to obtain reimbursement from a governmental
authority. 

	"Regulatory Authority"  means any
national (e.g., the FDA), supra-national (e.g., the EMEA) or other regulatory
agency or governmental entity involved in the granting of Regulatory Approval
for, or in the regulation of human clinical studies of, an Assigned
Product.

	"Royalty" or Royalties"
means those amounts payable as royalties by Pharmacyclics to Celera pursuant to
Section 6.4 of this Agreement.

	"Technology"  means any technical,
scientific and business information, including all biological, chemical,
pharmacological, toxicological, clinical, and assay information, data, analyses,
discoveries, inventions, methods, techniques, improvements, concepts, designs,
processes, formulae (including, for example, names for compounds or products
whether proposed or planned to be proposed as an United States Adopted Name
(USAN)), specifications and trade secrets, whether or not patentable, including
documents (which include paper, notebooks, books, files, ledgers, records,
tapes, discs, diskettes, CD-ROM and any other media on which the foregoing
information can be stored) containing any of the foregoing information.

	"Term"  means the term of this
Agreement as provided in Section 11.1.

	"Third Party"  means any entity
other than Celera or Pharmacyclics or an Affiliate of either of them.

	   ARTICLE 2

ASSIGNMENT AND
DELIVERY

	Assignment.  Subject to the terms and
conditions of this Agreement, Celera hereby irrevocably sells, assigns,
delivers, conveys, transfers and sets over to Pharmacyclics, its successors and
assigns, the entire right, title and interest in and to the Celera Technology
and the entire right, title and interest in, to and under the Celera Patents.

	Delivery.  

	Promptly after the Effective Date, and thereafter as
reasonably required upon reasonable notice, except as otherwise set forth in
Section 3.1 with respect to clinical trial contracts covering the Clinical
Trial, Celera shall deliver to Pharmacyclics the Celera Material and all data,
documentation, and other physical embodiments of the Celera Technology together
with all cooperation, assistance and access to data reasonably requested by
Pharmacyclics to effect transfer of the Celera Technology, including without
limitation all notebooks and related materials, invention disclosures, patent
applications and other documents that would be necessary or useful in
prosecuting, maintaining and enforcing the Celera
Patents.  

	In particular, but without limiting the scope of Celera's
obligations under Section 2.2(a), within five (5) days after the Effective Date,
Celera shall execute, as owner of the patents and patent applications within the
Celera Patents, an assignment with respect to each patent and patent application
within the Celera Patents as reasonably necessary and required by Pharmacyclics
for submission to the United States Patent and Trademark Office in a form
substantially as set forth on Exhibit 2.2(b).  

	In addition, Celera shall provide to Pharmacyclics:

	the information set forth on Exhibit 2.2(c)(i)
relating to the [ *** ];

	the information set forth on Exhibit 2.2(c)(ii)
relating to the Factor VIIa Program; and

	the information set forth on Exhibit 2.2(c)(iii)
relating to the HDAC Program.

	License.  Subject to the terms and
conditions of this Agreement, Celera hereby grants to Pharmacyclics a non-
exclusive, royalty-free right and license under any and all (a) Patents owned or
Controlled by Celera to the extent that without such right and license
Pharmacyclics cannot otherwise make, use, sell, offer for sale or import an
Assigned Product without infringing a claim of such Patents, and (b) Technology,
other than Celera Technology, owned or Controlled by Celera that would be
necessary in the making, using, selling, offering for sale or importing of an
Assigned Product.  Such right and license shall include a right to grant
sublicense rights but only to the extent that, in addition to the grant of a
sublicense under such Patents owned or Controlled by Celera and such Technology
owned or Controlled by Celera, Pharmacyclics grants a license under the Celera
Intellectual Property for the purpose of exercising Celera Intellectual Property
to develop, make, use, sell, offer for sale, import and export any or all
Assigned Products.  

	   ARTICLE 3

DEVELOPMENT

	Material
Agreements.  Within ten (10) days after the Effective Date, Celera and
Pharmacyclics will determine which agreements, and other contracts, of Celera
are material to the development of Assigned Products.  Thereafter, Celera will
assign and transfer, and Pharmacyclics will assume, all material agreements, and
other material contracts, of Celera relating to the development of Assigned
Products deemed by Pharmacyclics, in Pharmacyclics' discretion, as necessary or
useful for continuing development activities, including for example,
manufacturing agreements, contract research service agreements, and clinical
trial agreements such as the clinical trial contracts covering the Clinical
Trial.  Celera will use commercially reasonable efforts to complete the
assignment and transfer of all such material agreements and such material
contracts within twenty-five (25) days after the Effective Date, but in no event
shall such assignment and transfer be completed later than forty-five (45) days
after the Effective Date.  

	Development Efforts.  Beginning promptly after
the Effective Date, Pharmacyclics will use Commercially Reasonable Efforts to
develop and seek Regulatory Approval for Assigned Products in the Major Market
Countries.  Pharmacyclics will use Commercially Reasonable Efforts to hire key
Celera employees associated with Celera Programs, provided, however, that
the failure to hire any such employees will not relieve Pharmacyclics from its
obligations under this Agreement to use Commercially Reasonable Efforts to
develop and seek Regulatory Approval for Assigned Products in the Major Market
Countries. 

	Celera
Assistance and Cooperation.  At Pharmacyclics' request, Celera will
provide reasonable assistance in understanding and assimilating the Celera
Technology and Celera Material, such assistance to be provided without cost to
Pharmacyclics for a period of up to thirty (30) days after the Effective Date,
but in any event not beyond May 30, 2006.  After such period, Celera will have
no obligation to provide Pharmacyclics with assistance, but will use reasonable
efforts to locate personnel who may be able to provide further assistance in
understanding and assimilating the Celera Technology and Celera Material.

	Development Summaries.  Each year on the
anniversary of the Effective Date, Pharmacyclics will provide a written summary
to Celera outlining Pharmacyclics' efforts in connection with development,
clinical and regulatory activities relating to Assigned Products ("Development
Summaries").  Such Development Summaries are intended only to demonstrate
Pharmacyclics' continued interest in the development and commercialization of
Assigned Products, and will not provide detailed information regarding
Pharmacyclics' activities.  All such Development Summaries will be Confidential
Information of Pharmacyclics. 

	   ARTICLE 4

REGULATORY

	General.  Subject to the terms and
conditions of this Agreement, Celera hereby irrevocably sells, assigns,
delivers, conveys, transfers and sets over to Pharmacyclics the entire right,
title and interest in and to any and all Regulatory Approvals and Drug Approval
Applications for compound [ *** ] and any and all Assigned Products.  No
later than ten (10) days after the Effective Date, Celera will notify Regulatory
Authorities of, and as soon as is reasonably practicable thereafter take all
actions necessary to effect or evidence, the transfer of any and all such
Regulatory Approvals to Pharmacyclics.  

	Regulatory Reports and Additional Regulatory
Filings.  No later than ten (10) days after the Effective Date,
Celera will deliver to Pharmacyclics any and all files, reports and other
similar documents and information concerning communications with any Regulatory
Authority relating to Assigned Products.  As of the Effective Date,
Pharmacyclics will have the exclusive right to file, in its own name, and will
own any and all Drug Approval Applications for Assigned Products.  

	Applications for Regulatory Exclusivity.
The Parties recognize that exclusivity rights granted or provided for under
regulatory laws of any country may be commercially significant to Assigned
Products.  To the extent permitted by law, as between the Parties, Pharmacyclics
has the exclusive right to file for, request and maintain any regulatory
exclusivity rights for any and all Assigned Products, including without
limitation, regulatory exclusivity rights based upon an orphan drug designation
of an Assigned Product, and to conduct and prosecute any proceedings or actions
to enforce such regulatory exclusivity rights.

	   ARTICLE 5

COMMERCIALIZATION

	Pricing.  Pharmacyclics may determine in its
sole discretion the pricing, discounting policy and other commercial terms
relating to Assigned Products.  

	Diligence.  

	Pharmacyclics will use Commercially Reasonable Efforts to
Commercialize Assigned Products during the Term.  

	Beginning promptly after the receipt of Regulatory
Approval for a first Assigned Product in each country of the world,
Pharmacyclics will use Commercially Reasonable Efforts to Commercialize such
Assigned Product in such country.

	Reports.  Each year on the anniversary of
the Effective Date, after Pharmacyclics or a Licensee of Pharmacyclics has
received Regulatory Approval for distribution, use or sale of an Assigned
Product, Pharmacyclics will provide a written summary to Celera outlining
Pharmacyclics' efforts in connection with Commercialization activities relating
to such Assigned Product ("Commercialization Summaries").  Such
Commercialization Summaries are intended only to demonstrate Pharmacyclics'
continued interest in the Commercialization of such Assigned Product, and will
not provide detailed information regarding Pharmacyclics' activities.  All such
Commercialization Summaries will be Confidential Information of Pharmacyclics.

	   ARTICLE
6

CONSIDERATION

	Fee.  Within thirty (30) days after the
Effective Date, Pharmacyclics will pay Celera a fee of two million Dollars
($2,000,000) by wire transfer of immediately available funds into an account
designated by Celera.  The fees paid pursuant to this Section 6.1 will be
nonrefundable and non-creditable against Royalties due Celera pursuant to this
Agreement or against any other fees, milestone payments or other payments due
Celera under this Agreement.  

	Stock.  As additional consideration, on the
Effective Date, Pharmacyclics and Celera will execute the Stock Purchase
Agreement substantially in the form attached as Exhibit 6.2 hereto,
pursuant to which Pharmacyclics shall issue to Celera between five hundred
thousand (500,000) and one million (1,000,000) shares of Pharmacyclics common
stock.

	Product Milestones.  Pharmacyclics will pay to
Celera milestone payments as set forth in this Section 6.3 within thirty
(30) days after the first achievement of the corresponding milestone for an
Assigned Product which is an [ *** ] or which is a [ *** ].  Such
payments shall be made in Dollars by wire transfer of immediately available
funds into an account designated by Celera.  No milestone payment will be
payable more than once, no matter how many times achieved by a single Assigned
Product or by multiple Assigned Products in each of such two product categories.
Such milestone payments will be nonrefundable and non-creditable against
Royalties payable pursuant to Sections 6.4, and any other fees, milestone
payments or other payments due Celera under this Agreement.

	
Milestone Event
	
Milestone Payment Amount (Dollars)

	 	
[ *** ]
	
[ *** ]

	1.[ *** ] 

	
$[ *** ] 
	
$[ *** ] 

	 	 	 
	2.[ *** ]

	
$[ *** ] 
	
$[ *** ]

	 	 	 
	3.[ *** ]

	
$[ *** ] 
	
$[ *** ] 

	 	 	 
	4.[ *** ]

	
$[ *** ]
	
$[ *** ]

	 	 	 
	5.[ *** ]

	
$[ *** ]
	
$[ *** ]

	 	 	 
	6.[ *** ]

	
$[ *** ]
	
$[ *** ]

	 	 	 
	7.[ *** ]

	
$[ *** ]
	
$[ *** ]

	 	 	 
	8.[ *** ]

	
$[ *** ]
	 
	 	 	 
	9.[ *** ]

	
$[ *** ]
	 
	 	 	 
	 	 
	
Total
	
$[ *** ]
	
$[ *** ]

	Royalties.

	Subject to the terms and conditions of this
Agreement, Pharmacyclics will pay Celera a tiered Royalty in accordance with the
following table on worldwide Net Sales:

	
Total Net Sales of an Assigned Product in a Calendar
Year
	
Percent of Net Sales 

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

	
[ *** ]to $ [ *** ]
	
[ *** ]%
	
[ *** ]%
	
[ *** ]%

	 	 	 	 
	
$ [ *** ] to $ [ *** ]
	
[ *** ]%
	
[ *** ]%
	
[ *** ]%

	 	 	 	 
	
Above $ [ *** ]
	
[ *** ]%
	
[ *** ]%
	
[ *** ]%

	Pharmacyclics may deduct from
Royalties payable to Celera pursuant to Section 6.4(a) up to [ *** ]
percent ([ *** ]%) of any amounts paid to Third Parties to obtain
licenses or other rights under any Patents to the extent that, without such
licenses or rights, Pharmacyclics cannot otherwise make, use, sell, offer for
sale, or import an Assigned Product without infringing a claim of such Patent,
provided that, after such deduction, the amount paid to Celera is not less than
[ *** ] percent          ([ *** ]%) of the amount that would
otherwise have been paid to Celera pursuant to Section 6.4(a).  As a condition
to benefiting from this Section 6.4(b), Pharmacyclics must deliver to Celera a
true copy of each agreement with a Third Party that Pharmacyclics contends is
subject to this Section 6.4(b).  Each such agreement shall be treated by Celera
as Pharmacyclics' Confidential Information

	Term of Royalties Payments.  Pharmacyclics'
obligation to pay Royalties under Section 6.4 will continue, on an Assigned
Product-by-Assigned Product basis, in each country of the world:

	In the case of any Assigned Product described in Section
1.5, Section 1.28 (except in the case of Assigned Products described in Section
0) and Section 1.35 (except in the case of Assigned Products described in
Section 1.35(b)(iii)), for as long as the manufacture, use, sale, offer
for sale or import of such Assigned Product is covered by a Celera Patent.

	In the case of any Assigned Product described in Section
0 or Section 1.35(b)(iii), for a period of [ *** ] years beginning on the
date of first commercial sale of such Assigned Product.  

	Royalty Payments and Reports.  All Royalties
payable to Celera under this Agreement will be paid in Dollars by wire transfer
of immediately available funds into an account designated by Celera within sixty
(60) days after the end of each calendar quarter, except as otherwise
specifically provided herein.  Each payment of Royalties owing to Celera will be
accompanied by a statement, certified by an executive officer of Pharmacyclics
as accurate to the best of its ability consistent with Pharmacyclics' standard
practices in performing such computations and in accordance with GAAP, on a
country-by-country basis, setting forth (a) the amount of gross sales of
Assigned Products and, if applicable, Combination Products in such quarter, (b)
any deductions from such amount of gross sales as permitted pursuant to
Section 1.41(a), (c) a calculation of Net Sales of each Assigned Product
and, if applicable, Combination Product for such quarter, (d) the amount of
aggregate worldwide Net Sales of each Assigned Product and, if applicable,
Combination Product on a cumulative per year basis for the current year, and (e)
the amount of Royalty due on Net Sales during such quarter.  

	Records; Royalty Audit.  

	Pharmacyclics shall keep, and will use commercially
reasonable efforts to cause its Licensees to keep, such records as necessary to
determine, in a manner consistent with GAAP, the accuracy of calculations of all
amounts due to Celera under this Agreement.  Such records will be retained for
no less than three (3) years following the year in which a payment was made
hereunder.  Once per calendar year, Celera may engage, at its own expense, an
independent certified public accountant appointed by Celera and reasonably
acceptable to Pharmacyclics, to examine, in confidence, the records of
Pharmacyclics as may be necessary to determine, with respect to any calendar
year for which Pharmacyclics retains records in accordance with the previous
sentence, the correctness of any payment required to be made under this
Agreement.  The report of such accountant will be limited to a certificate
verifying the correctness or incorrectness of any payment made by Pharmacyclics.
All information contained in any such certificate will be Confidential
Information of Pharmacyclics hereunder.  

	If such examination results in a determination that any
payment actually paid has been overstated or understated, any amount overstated
or understated, as the case may be, shall be refunded or paid promptly to the
appropriate Party, as applicable.  

	If any audit performed under this Section 6.7
discloses an underpayment or an overpayment, any amount underpaid or overpaid,
as the case may be, shall be paid or refunded promptly remit to the appropriate
Party, as applicable, plus interest as provided in Section 6.11.  If any
underpayment is more than [ *** ] percent ([ *** ]%) from the
amount of the original payment calculation, Pharmacyclics shall reimburse Celera
for the reasonable cost of the performance of the audit. 

	Taxes. Celera will be responsible for any
and all taxes levied on account of amounts it receives under this Agreement.  If
Pharmacyclics is required by law, rule or regulation to withhold taxes from such
types of payments due Celera hereunder, Pharmacyclics will (a) deduct those
taxes from the remittable amount, (b) pay the taxes to the proper taxing
authority, and (c) send original copies of all official receipts evidencing
such tax obligation, together with written evidence of payment, to Celera within
fifteen (15) business days following such payment.  In the event of any such
withholding, the Parties agree to confer regarding other reasonable, lawful
measures to minimize such withholding. 

	Blocked Currency.  In any country where
conversion of the local currency is blocked and such currency cannot be removed
from the country, Pharmacyclics shall make payments of any Royalties due
hereunder in respect of Net Sales in such country in local currency by
depositing such amount to an interest-bearing account in the name of Celera, in
a bank within such country designated by Celera.

	Foreign Exchange.  For the purpose of
computing the Net Sales for sale or other distribution of Assigned Products and,
if applicable, Combination Products in a currency other than Dollars, such
currency will be converted into Dollars at the average rate of exchange for
buying Dollars as available from the on-line edition of the Wall Street Journal
(at
http://www.interactive.wsj.com) for
the calendar quarter in which such sales or other distributions were made.

	Late Payments.  Any amounts not paid by
Pharmacyclics when due under this Agreement will be subject to interest from and
including the date payment is due through and including the date upon which
Pharmacyclics has made payment at a rate equal to the then-current prime rate of
interest quoted in the Money Rates section of the on-line edition of the Wall
Street Journal (at http://www.interactive.wsj.com) plus two percent
(2%).

	   ARTICLE 7

INTELLECTUAL
PROPERTY

	Prosecution of Patents.  After the Effective
Date, Pharmacyclics will bear the sole responsibility and costs for prosecuting
and maintaining all Celera Patents, using patent counsel of Pharmacyclics'
choice.  Celera, upon request, will provide reasonable assistance to
Pharmacyclics in the prosecution and maintenance of any Celera Patents.  In the
event that Pharmacyclics elects not to continue to prosecute or maintain any
patent application or patent within the Celera Patents, Pharmacyclics will give
timely notice to Celera and Celera, at its sole discretion and expense, may
elect to continue the prosecution and maintenance of such patent application or
patent and, in such an event, Pharmacyclics will assign
to Celera all right, title and interest in and to such patent application or
patent, as applicable (hereinafter a "Reverted Patent").  Celera will
not enforce any Reverted Patent against Pharmacyclics as long as Celera is
receiving a royalty payment under Section 6.4 of this Agreement with respect to
any Assigned Product within the scope of such Reverted Patent.

	Infringement of Patents by Third
Parties.  

	Pharmacyclics has the sole right
to enforce the Celera Patents against Third Parties and to defend the Celera
Patents against any challenge.  Celera will reasonably assist and cooperate in
any such enforcement or defense of a challenge.  Pharmacyclics will bear all
costs and expenses (including attorneys' fees) incurred by either Party after
the Effective Date to carry out the activities described in this Section 7.2.
Recoveries in any actions under this Section 7.2(a) will first be used to
reimburse Pharmacyclics' for any and all costs and expenses (including
attorneys' fees) incurred in connection with enforcement of the Celera Patents
or defense of the Celera Patents against challenge.  After reimbursement of
costs and expenses as provided in the previous sentence, [ *** ].

	Pharmacyclics agrees to use commercially reasonable
efforts in enforcing Celera Patents; provided that, in the event that
Pharmacyclics and Celera disagree, the Parties each acknowledge and agree that
Pharmacyclics shall have the right to make the final decision with respect to
any aspect of enforcement or defense of the Celera Patents. 

	Infringement of Third Party Rights.

	Defense.  Pharmacyclics will defend any action
which names Pharmacyclics and/or Celera and which claims the infringement, after
the Effective Date, of any Third Party Patent through the making, using,
selling, offer for sale or importing an Assigned Product.  If necessary and at
Pharmacyclics' expense, Celera will assist and cooperate with Pharmacyclics in
any such defense.  Pharmacyclics will bear all costs and expenses (including
attorneys' fees) and pay all damages and settlement amounts arising out of or in
connection with any such action. 

	Notice.  Each Party will promptly notify the other
upon becoming aware of any Third Party claim or action against Pharmacyclics
and/or Celera for infringement of any Third Party Patent based on Assigned
Products. 

	Settlement.  Neither Party may enter into any
settlement that affects the other Party's rights or interests without such other
Party's written consent, which consent will not be unreasonably withheld or
delayed.

	   ARTICLE 8

REPRESENTATIONS AND WARRANTIES

	Mutual Representations and Warranties.  Each
Party hereby represents and warrants to the other Party as follows:

	Corporate Existence and Power.  As of the
Effective Date, it is a corporation duly organized, validly existing and in good
standing under the laws of the state of Delaware, 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, without limitation, the right to make the assignments
hereunder.  

	Authority and Binding Agreement.  As of the
Effective Date, (a) it has the corporate power and authority and the legal right
to enter into this Agreement and perform its obligations hereunder; (b) it has
taken all necessary corporate action on its part required to authorize the
execution and delivery of the Agreement and the performance of its obligations
hereunder; and (c) the 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. 

	No Conflict. As of the Effective Date, the
execution, delivery and performance of this Agreement by such Party does not
conflict with, and would not result in a breach of any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, nor violate any material law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it.

	Validity.  As of the Effective Date, it is aware
of no action, suit, inquiry or investigation instituted by any Third Party which
questions or threatens the validity of this Agreement.

	Mutual
Covenants

.  Each Party hereby covenants to the other Party as
follows:

	No Misappropriation.  It will not knowingly
misappropriate the trade secret of a Third Party in its activities to develop or
Commercialize Assigned Products.

	No Debarment.  In the course of the development
and manufacture of Assigned Products and during the Term, such Party will not
knowingly use and will not have knowingly used any employee or consultant who is
or has been debarred by the FDA or Regulatory Authorities, or, to the best of
such Party's knowledge, is or has been the subject of debarment proceedings by
the FDA or Regulatory Authorities.

	No Conflict.  It will not enter into any agreement
with any Third Party that is in conflict with this Agreement, and will not take
any action that would in any way prevent it from assuming its obligations or
granting the rights granted to the other Party under this Agreement, or that
would otherwise materially conflict with or adversely affect its obligations or
assuming the rights granted to the other Party under this
Agreement.

	Representations and Warranties of Celera.

	Celera Intellectual Property.  With respect to the
Celera Intellectual Property, Celera represents and warrants that:

	Celera owns all right, title and interest in and to all
of the Celera Intellectual Property; 

	the execution of this Agreement, including applicable
assignments attached as exhibits hereto, is sufficient to transfer all right,
title and interest in and to the Celera Intellectual Property to Pharmacyclics;

	the Celera Intellectual Property is free and clear of all
liens, encumbrances, pledges, security interests, licenses, charges of any
nature and restrictions on transfer; 

	no person has any license to, rights to, or proprietary
interest in or with respect to the Celera Intellectual Property; 

	as of the Effective Date, Pharmacyclics shall succeed to
all of Celera's right, title and standing to (i) receive all rights and benefits
pertaining to the Celera Intellectual Property, (ii) institute and prosecute all
suits and proceedings, (iii) take all actions that Pharmacyclics, in its sole
discretion, may deem necessary or proper to collect, assert, or enforce any
claim, right or title of any kind under any and all of the Celera Intellectual
Property, whether arising before or after the Effective Date, (iv) defend and
compromise any and all such actions, suits, or proceedings relating to such
transferred and assigned rights, title, interest, and benefits, and (v) do all
such acts and things in relation thereto as Pharmacyclics, in its sole
discretion, deems advisable;

	no consents of any other parties are required under any
agreements concerning any of the Celera Intellectual Property in order for the
transfer and assignment of any of the Celera Intellectual Property under this
Agreement to be legally effective;

	to the best of Celera's knowledge, use of the Celera
Intellectual Property does not infringe any existing United States of America or
foreign patent, trademark, trade secret, copyright or other intellectual
property right of any third party, rights or other intellectual property rights
of any third party, and the manufacture, use or sale of compositions of matter
and use of methods disclosed in or covered by the Celera Intellectual Property
will not cause or result in any such infringement; 

	to the best of Celera's knowledge after diligent inquiry,
the manufacture, use, sale, offer for sale or import of [ *** ], the
clinical lead compound in the HDAC Program, and [ *** ], the preclinical
lead compound in the Factor VIIa Program, does not infringe any existing United
States of America or foreign patent, trademark, trade secret, copyright or other
intellectual property right of any third party, rights or other intellectual
property rights of any third party, and the manufacture, use, sale, offer for
sale or import of such compounds and use of methods disclosed in or covered by
the Celera Intellectual Property will not cause or result in any such
infringement; and 

	to the best of Celera's knowledge after diligent inquiry,
there are no actions, suits, investigations, claims or proceedings, or threats
thereof, pending or threatened against Celera in any way relating to the Celera
Program or the Celera Intellectual Property.  

	Celera Programs.  Celera represents and warrants
that:

	as of the Effective Date, all research and development
activity at Celera and all Affiliates of Celera with respect to Celera Programs
has terminated;

	all Celera Material and all data, documentation and other
physical embodiments of the Celera Technology have been delivered to
Pharmacyclics in accordance with Section 2.2; and 

	neither Celera nor any Affiliate of Celera has any
intention to initiate any research or development activity with respect to small
molecules directed toward treatment of human disease by means of [ *** ],
Factor VIIa inhibition or HDAC inhibition.  

	Representations, Warranties and Covenants of
Pharmacyclics.  

	Expertise.  In entering into this Agreement,
Pharmacyclics has relied solely on its scientific and commercial experience and
its analysis and evaluation of both the scientific and commercial value of the
Assigned Products.  

	Diligence.  Pharmacyclics covenants to use
Commercially Reasonable Efforts to develop, obtain Regulatory Approval,
Commercialize and promote the Assigned Products. 

	Compliance by Pharmacyclics.  Pharmacyclics
covenants to comply with all applicable laws, statutes, regulations and guidance
of Regulatory Authorities relating to the development, manufacture and
Commercialization of the Assigned Products in each country.

	Disclaimer.  Except as otherwise set forth
in this Article 8, nothing in this Agreement will be construed as:

	a warranty or representation by Celera as to the
validity, enforceability or scope of any Celera Patent; or

	a warranty or representation that anything made, used,
sold, or otherwise disposed of pursuant to this Agreement is or will be free
from infringement of Patents or other intangible rights of Third Parties;
or

	a requirement that Celera or Pharmacyclics must file any
patent application, secure any Patent, or maintain any Patent in force;
or

	an obligation on Celera or Pharmacyclics to bring or
prosecute actions or suits against Third Parties for infringement of the Celera
Patents; or

	an obligation to furnish any manufacturing or technical
information; or

	granting by implication, estoppel, or otherwise, any
license or rights under patents, trade secrets, know-how, copyrights, or other
intangible rights of Celera other than the Celera Intellectual
Property.

	Limitation.  

	Celera makes no representations, extends no warranties of
any kind, either express or implied, and assumes no responsibilities whatever
with respect to manufacture, use, sale or other disposition by Pharmacyclics,
its Affiliates, its Licensees, or their customers or transferees, of products
incorporating or made by use of inventions assigned under this
Agreement.

	Each Party and its Affiliates hereby waive, release, and
renounce any and all warranties, guarantees, obligations, liabilities, rights
and remedies, express or implied, arising by law or otherwise, with respect to
the usefulness or freedom from defects of the Assigned Products, including, but
not limited to, (a) any implied warranty of merchantability or fitness, (b) any
implied warranty arising from course of performance, course of dealing or usage
in the trade, and (c) any obligation, right, liability, claim or remedy for (i)
loss of use, revenue or profit, or any other damages, (ii) infringement of third
party intangible property rights, or (iii) incidental or consequential damages.

	   ARTICLE 9

INDEMNIFICATION

	Indemnification by Celera.  Celera hereby
agrees to defend, hold harmless and indemnify (collectively
"Indemnify") Pharmacyclics and its Affiliates, agents, directors,
officers  and employees (the "Pharmacyclics Indemnitees") from and
against any and all Losses arising out of (a) any making, having made, using,
selling, having sold, offering for sale, or import and/or otherwise distributing
Assigned Products by, on behalf of, or under the authority of Celera, its
Affiliates or any Third Party prior to the Effective Date, (b) any exploitation
of the Celera Intellectual Property by or under the authority of Celera prior to
the Effective Date, and (c) any Third Party claim resulting directly or
indirectly out of any of Celera's representations and warranties set forth in
this Agreement being untrue in any material respect when made or any material
breach or material default by Celera of its material covenants and material
obligations under this Agreement.  To be eligible to be so Indemnified, the
Pharmacyclics Indemnitees will provide Celera with prompt notice of any claim
giving rise to the indemnification obligation pursuant to this Section 9.1
and the exclusive ability to defend (with the reasonable cooperation of
Pharmacyclics Indemnitees) and subject to Pharmacyclics' right to participate in
and have counsel selected by it participate, at Pharmacyclics' expense, in any
action for which Pharmacyclics seeks to be Indemnified by Celera).
Pharmacyclics may not settle any claim for the Loss associated with which any
Pharmacyclics Indemnitee seeks to be Indemnified by Celera, without Celera's
prior written consent, provided that Celera will be relieved of its
obligations only if the failure by the Pharmacyclics Indemnitee to deliver
prompt notice is prejudicial to its ability to defend such action.  Celera's
obligation to Indemnify the Pharmacyclics Indemnitees pursuant to this
Section 9.1 will not apply to the extent of any Losses (i) that arise
from the negligence or intentional misconduct of any Pharmacyclics Indemnitee;
(ii) that arise from Pharmacyclics' material breach of this Agreement; or
(iii) for which Pharmacyclics is obligated to Indemnify the Celera
Indemnitees pursuant to Section 9.2 of this Agreement.

	Indemnification by Pharmacyclics.
Pharmacyclics hereby agrees to Indemnify Celera and its Affiliates, agents,
directors, officers  and employees (the "Celera Indemnitees") from and
against any and all Losses arising from Third Party claims resulting directly or
indirectly from (a) any of Pharmacyclics' representations and warranties
set forth in this Agreement being untrue in any material respect when made or
any material breach or material default by Pharmacyclics of its material
covenants or material obligations under this Agreement; or (b) the making,
having made, using, selling, having sold, offering for sale, or import and/or
otherwise distributing of Assigned Products by, on behalf of, or under the
authority of Pharmacyclics, its Affiliates or any of its Licensees after the
Effective Date.  Without limiting the foregoing, Pharmacyclics agrees to
Indemnify the Celera Indemnitees from any Losses arising from, relating to, or
based upon any claim by a Third Party after the Effective Date that an Assigned
Product made, used, sold or distributed by, on behalf of, or under the authority
of Pharmacyclics, its Affiliates or any of its Licensees after the Effective
Date was or is unsafe, unfit or otherwise deficient in quality or condition,
or an Assigned Product made, used, sold or distributed by, on behalf of, or
under the authority of Pharmacyclics, its Affiliates or any of its Licensees
after the Effective Date caused any death or personal injury of any kind,
including but not limited to any death or personal injury occurring during the
conduct of any clinical trial by, on behalf of, or under the authority of
Pharmacyclics, its Affiliates or any of its Licensees.  To be eligible to be
Indemnified as described above in this Section 9.2, the Celera Indemnitees will
provide Pharmacyclics with prompt notice of any claim giving rise to the
indemnification obligation pursuant to this Section 9.2 and the exclusive
ability to defend (with the reasonable cooperation of Celera Indemnitees and
subject to Celera's right to participate in and have counsel selected by it
participate, at Celera's expense, in any action for which Celera seeks to be
Indemnified by Pharmacyclics).  Celera will not settle any claim for the Loss
associated with which any Celera Indemnitee seeks to be Indemnified by
Pharmacyclics, without Pharmacyclics' prior written consent, provided that
Pharmacyclics will be relieved of its obligations only if the failure by the
Celera Indemnitee to deliver prompt notice is prejudicial to its ability to
defend such action.  Pharmacyclics' obligation to Indemnify the Celera
Indemnitees pursuant to this Section 9.2 will not apply to the extent of
any Losses (i) that arise from the negligence or intentional misconduct of
any Celera Indemnitee, (ii) for which Celera is obligated to Indemnify the
Pharmacyclics Indemnitees pursuant to Section 9.1 of this Agreement, or
(iii) that arise from any material breach by Celera of this Agreement.

	Insurance.  Within thirty (30) days
after the Effective Date, each Party, at its own expense, will procure and
maintain during the Term, insurance policy or policies, including in the case of
Pharmacyclics product liability insurance, adequate to cover its obligations
hereunder and which are consistent with normal business practices of prudent
companies similarly situated.  As of the Effective Date, Pharmacyclics will
carry comprehensive general liability, property damage, and product liability
insurance with an insurance limit of $10,000,000 and, thereafter, will maintain
coverage that is reasonable and customary for a similarly situated
biopharmaceutical company.  Celera may self-insure all or part of any such
obligation consistent with pharmaceutical industry practices.   Each insurance
policy required by, and procured under, this Section 9.3 by a Party will
name the other Party as an additional insured.  The existence of such insurance
will not limit the insuring Party's liability with respect to its
indemnification obligations under this Article 9.  Each Party will provide the
other Party with written evidence of such insurance upon request, and will
provide the other Party with written notice at least thirty (30) days prior to
the cancellation, non-renewal or material change in such insurance or self-
insurance which materially adversely affects the rights of such other Party
hereunder.  

	Limitation of Liability.  Neither Party nor
its respective Affiliates and licensees will be liable for special, exemplary,
consequential or punitive damages, whether in contract, warranty, tort, strict
liability or otherwise incurred by the other party in connection with this
Agreement, including but not limited to damages measuring lost profits or
business opportunities.  Notwithstanding the foregoing, amounts paid by a Party
to a Third Party as special, exemplary, consequential or punitive damages,
whether in contract, warranty, tort, strict liability or otherwise will be
reimbursed by the other Party to the extent such other Party is required to
Indemnify such first Party pursuant to the Indemnifications of Section 9.1 or of
Section 9.2.

	   ARTICLE 10

CONFIDENTIALITY

	Treatment of Confidential Information.  The
Parties agree that during the Term, and for a period of [ *** ] years
after this Agreement expires or terminates, a Receiving Party must (a) maintain
in confidence the Disclosing Party's Confidential Information to the same extent
the Receiving Party maintains its own proprietary information of similar kind
and value (but at a minimum each Party will use commercially reasonable efforts
to maintain Confidential Information in confidence); (b) not disclose such
Confidential Information to any Third Party without prior written consent of the
Disclosing Party, except for disclosures to its licensees and commercial
partners for Assigned Products who agree to be bound by obligations of non-
disclosure and non-use at least as stringent as those contained in this Article
10; and (c) not use such Confidential Information for any purpose except
those purposes permitted by this Agreement.  

	Authorized Disclosure.  Notwithstanding any
other provision of this Agreement, each Party may disclose Confidential
Information of the other Party:

	to the extent and to the persons
and entities as required by an applicable law, rule, regulation, legal process,
court order or the rules of the National Association of Securities Dealers or of
a Regulatory Authority; or 

	as necessary to file or prosecute
those patent applications for which either Party has the right to assume
prosecution or maintenance, pursuant to Section 7.1 of this Agreement (in
the case of Celera's Confidential Information), prosecute or defend litigation
or otherwise establish rights or enforce obligations under this Agreement, but
only to the extent that any such disclosure is necessary;

provided, however, that the Receiving Party required
or intending to disclose the Disclosing Party's Confidential Information under
Section 10.2(a) or Section 10.2(b) will first give prompt notice to the
Disclosing Party to enable it to seek any available exemptions from or
limitations on such disclosure requirement and will reasonably cooperate in such
efforts by the Disclosing Party.

	Publicity; Terms of Agreement.  The Parties
agree that the existence of and the material terms of this Agreement are
Confidential Information of both Parties, subject to the special authorized
disclosure provisions set forth below in this Section 10.3 (in lieu of the
authorized disclosure provisions set forth in Section 10.2, to the extent of any
conflict) and without limiting the generality of the definition of Confidential
Information set forth in Section 1.17.  The Parties will mutually agree the
text of a press release announcing the execution of this Agreement.  Thereafter,
if either Party desires to make a public announcement concerning this Agreement
or the terms hereof, such Party will give reasonable prior advance notice of the
proposed text of such announcement to the other Party for its prior review and
approval, such approval not to be unreasonably withheld. A Party will not be
required to seek the permission of the other Party to repeat any information as
to the terms of this Agreement that have already been publicly disclosed by such
Party in accordance with the foregoing or by the other Party.  Either Party may
disclose the terms of this Agreement to potential investors who agree to be
bound by obligations of non-disclosure and non-use at least as stringent as
those contained in this Article 10.  The Parties acknowledge that Celera and/or
Pharmacyclics may be obligated to file a copy of this Agreement with the U.S.
Securities and Exchange Commission with its next quarterly report on Form 10-Q,
annual report on Form 10-K or current report on Form 8-K or with any
registration statement filed with the U.S. Securities and Exchange Commission
(the "SEC") pursuant to the Securities Act of 1933, as amended and
each such Party will be entitled to make such filing, provided that it
requests confidential treatment of the more sensitive terms hereof to the extent
such confidential treatment reasonably available to the filing Party under the
circumstances then prevailing.  In the event of any such filing, the filing
Party will provide the non-filing Party with an advance copy of the Agreement
marked to show provisions for which the filing Party intends to seek
confidential treatment and will reasonably consider the non-filing Party's
timely comments thereon.  

	   ARTICLE 11

TERM AND
TERMINATION

	Term.  This Agreement will become
effective on the Effective Date and will remain in effect, unless earlier
terminated pursuant to this Article 11, until expiration of Pharmacyclics'
obligation to pay Royalties pursuant to Section 6.5.

	Termination for Default. This Agreement
may be terminated effective immediately by written notice by either Party at any
time during the Term for Default by the other Party, which Default remains
uncured for [ *** ] days, measured from the date written notice of such
Default is given to the Defaulting Party, provided, however, that if such
Default is not susceptible of cure within the stated period and the Defaulting
Party uses diligent good faith efforts to cure such Default, the stated period
will be extended by an additional [ *** ] days.

	Reversion.  In the event of termination of
this Agreement before expiration of the Term, Pharmacyclics will assign to
Celera all right, title and interest in and to all Celera Intellectual
Property.

	Survival.  The following provisions will
survive any expiration or termination of this Agreement for the period of time
specified: Articles 9, 10, 12 and 13, and Sections 8.6 and 11.4.
Termination of this Agreement will not relieve the Parties of any liability
which accrued hereunder prior to the effective date of such termination nor
preclude either Party from pursuing all rights and remedies it may have
hereunder or at law or in equity with respect to any breach of this Agreement
nor prejudice either Party's right to obtain performance of any obligation.  The
remedies provided in this Article 11 are not exclusive of any other
remedies a Party may have in law or equity.

	   ARTICLE 12

DISPUTE
RESOLUTION

	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 or obligations hereunder.  It is the objective
of the Parties to establish procedures to facilitate the resolution of disputes
arising from, concerning or in any way relating to this Agreement in an
expedient manner by mutual cooperation and without resort to litigation.  To
accomplish this objective, the Parties agree to follow the procedures set forth
in this Section 12.1 if and when a dispute arises under this Agreement.
The Parties will undertake good faith efforts to resolve any such dispute in
good faith.  In the event the Parties are unable to resolve such dispute, either
Party may, by written notice to the other Party, have any dispute between the
Parties remaining unresolved after [ *** ] days referred to their
respective executive officers designated below or their designees or successors
for attempted resolution by good faith negotiations within [ *** ] days
after such notice is received.  Such designated officers are as
follows:

For Pharmacyclics: Richard A. Miller, M.D.,
President and Chief Executive Officer 

For Celera:President, the Celera Genomics
Group of Applera Corporation

If the designated officers are not able to resolve such
dispute within such [ *** ] day period, either Party may at any time
thereafter pursue any legal or equitable remedy available to it.
Notwithstanding the above, either Party will be entitled at all times and
without delay to seek equitable relief.  The Parties agree that all discussions
and negotiations conducted pursuant to this Section 12.1, and any documents
exchanged during any such discussions or negotiations, will be treated as if
subject to Rule 408, Federal Rules of Evidence.

	Governing Law; Judicial Resolution.
Resolution of all disputes arising out of or related to this Agreement or the
performance, enforcement, breach or termination of this Agreement and any
remedies relating thereto, will be governed by and construed under the
substantive laws of the State of California, as applied to agreements executed
and performed entirely in the State of California by residents of the State of
California, without regard to conflicts of law rules.   The exclusive
jurisdiction for any dispute arising under this Agreement will be a state or
federal court of competent jurisdiction in California.   

	Patent
Dispute Resolution.  Any dispute, controversy or claim relating to
the scope, validity, enforceability or infringement of any patent rights
claiming the use or sale of any Assigned Product will be submitted to a court of
competent jurisdiction in which such patent rights were granted or arose.
Notwithstanding the foregoing, any dispute, controversy or claim relating to the
scope, validity, enforceability or infringement of any United States patent
rights covering the use or sale of any Assigned Product will be submitted to a
court of competent jurisdiction in the State of California.  

	   ARTICLE 13

MISCELLANEOUS

	Entire Agreement; Amendment.  This Agreement
(including all exhibits) and the Confidential Disclosure Agreement dated
February 3, 2006 and the Confidential Disclosure Agreement dated March 9, 2006,
set forth the complete, final and exclusive agreement and all the covenants,
promises, agreements, warranties, representations, conditions and understandings
between the Parties hereto and supersedes and terminates all prior and
contemporaneous agreements and understandings between the Parties.  There are no
covenants, promises, agreements, warranties, representations, conditions or
understandings, either oral or written, between the Parties other than as are
set forth herein and therein.  No subsequent alteration, amendment, change or
addition to this Agreement will be binding upon the Parties unless reduced to
writing and signed by an authorized officer of each Party.

	Force
Majeure.  Both Parties will 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 will be continued so long as
the condition constituting Force Majeure continues and the nonperforming Party
uses reasonable efforts to remove the condition.  Incidents of Force Majeure
will not excuse the mere payment of money.  If Pharmacyclics is excused from
performance under this Agreement by Force Majeure for a continuous period of six
(6) months or more, Celera may terminate this Agreement by thirty (30) days
advance written notice.

	Notices.  Any notice required or permitted
to be given under this Agreement must be in writing, must specifically refer to
this Agreement and will be deemed to have been sufficiently given for all
purposes if mailed by first class certified or registered mail, postage prepaid,
express delivery service or personally delivered, or if sent by facsimile,
electronic transmission confirmed.  Unless otherwise specified in writing, the
mailing addresses of the Parties are as described below.

For Celera:Celera Genomics

45 West Gude Drive 

Rockville, Maryland 20850

Fax: 240-453-3781  

Attn:  Legal Department

With a Copy to:Applera Corporation

301 Merritt 7

Norwalk, Connecticut 06851

Attn:  General Counsel 

Fax: 203-840-2902

For Pharmacyclics:Pharmacyclics, Inc.

995 E. Arques Avenue

Sunnyvale, California 94085-4521

Fax:  408-774-4594 

Attention:  Vice President, Business Development 

With a Copy to:  Chief Financial Officer 

	Maintenance of Records.  Each Party will
keep and maintain all records required by law or regulation with respect to
Assigned Products and will make copies of such records available to the other
Party upon request.

	No
Strict Construction.  This Agreement has been prepared jointly and
will not be strictly construed against either Party.

	Counterparts.  This Agreement may be
executed in two (2) or more counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.

	Severability.  If any one or more of the
provisions of this Agreement is held to be invalid or unenforceable by any court
of competent jurisdiction from which no appeal can be or is taken, the provision
will be considered severed from this Agreement and will not serve to invalidate
any remaining provisions hereof.  The Parties must 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.  

	Headings.  The headings for each article and
section in this Agreement have been inserted for convenience of reference only
and are not intended to limit or expand on the meaning of the language contained
in the particular article or section.

	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 the Agreement.

	Independent Contractors.  The relationship
between Pharmacyclics and Celera created by this Agreement is one of independent
contractors and neither Party will have the power or authority to bind or
obligate the other except as expressly set forth in this Agreement.

	Use of
Name.  No right, express or implied, is granted to either Party by
this Agreement to use in any manner any trademark, trade name or logo of the
other Party, including the names "Celera" and
"Pharmacyclics", without the prior written consent of the owning
Party.

	No
Waiver.  Any delay in enforcing a Party's rights under this
Agreement or any waiver as to a particular default or other matter will 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.

[ *** ] Indicates that material has been omitted and confidential treatment
has been requested therefor. 
 All such omitted material has been filed
separately with the Commission pursuant to Rule 24b-2. 

In Witness Whereof, the Parties have executed this Agreement in duplicate
originals by their duly authorized representatives.

	
APPLERA CORPORATION

THROUGH THE CELERA GENOMICS GROUP
	
 
	
PHARMACYCLICS, INC.

	
By:  /s/ KATHY P. ORDOÑEZ
	
 
	
By:  /s/ RICHARD A. MILLER, M.D.

	
Print Name: Kathy P. Ordoñez
	
 
	
Print Name: Richard A. Miller, M.D.

	
Senior Vice President and President, 

Title:  Celera Genomics Group 
	
 
	
Title: President and Chief Executive
Officer

 

Exhibit 1.10

Celera
Patents

	
TTC's Ref. No.
	
Celera's Ref. No
	
Country
	
Serial No.
	
File Date

[ *** ]

 

 

Exhibit 1.13

Clinical
Trial

CLINICAL STUDY PROTOCOL
#[ *** ]

 

Study Entitled:

[ *** ]

 

 

PRINCIPAL
INVESTIGATOR:[ *** ] 

STUDY LOCATION:[ *** ]

 

 

ORIGINAL PROTOCOL:[ *** ]

AMENDMENT NUMBER:[ *** ]

AMENDMENT DATE:[ *** ]

 

 

 

PROTOCOL
SUMMARY

	
TITLE:
	
[ *** ]

 

 

	
PRINCIPAL INVESTIGATOR:
	
[ *** ]

	
STUDY CENTER:
	
[ *** ]

 

 

 

	
CLINICAL PHASE:
	
[ *** ]

	
OBJECTIVE:
	
[ *** ]

 

 

 

	
METHODOLOGY:
	
[ *** ]

	
NUMBER OF TREATED 

PATIENTS PLANNED:
	
[ *** ]

	
DIAGNOSIS AND CRITERIA FOR INCLUSION:
	
[ *** ]

 

 

	
 

TEST PRODUCT:
	
[ *** ]

	
DOSE(S):
	
[ *** ]

 

 

 

 

 

 

	
ROUTE OF ADMINISTRATION:
	
[ *** ]

	
MAXIMUM DURATION OF     TREATMENT:
	
[ *** ]

	
REFERENCE THERAPY:
	
[ *** ]

	
CRITERIA FOR EVALUATION:
	
[ *** ]

 

Exhibit 2.2(b)

Form of
Assignment

ASSIGNMENT

 

WHEREAS, APPLERA CORPORATION[, by and through the
CELERA GENOMICS GROUP], ASSIGNOR, a corporation organized and existing under the
laws of the State of Delaware, United States of America, and having a place of
business at 45 West Gude Drive, Rockville, Maryland 20850, is the owner of the
entire right, title and interest in, and to the United States Letters Patent No.
__________, which issued from United States Letters Patent Application Serial
No. __________ entitled "________________________________________," and of the invention
therein described; and

WHEREAS, PHARMACYCLICS, INC., ASSIGNEE, a corporation
organized and existing under the laws of the State of Delaware, United States of
America, and having a place of business at 995 East Arques Avenue, Sunnyvale,
California 94085, is desirous of obtaining the entire right, title and interest
in, to and under such patent and such invention.

NOW, THEREFORE, in consideration of the sum of One Dollar
($1.00) to ASSIGNOR in hand paid, and other good and valuable consideration, the
receipt of which is hereby acknowledged, ASSIGNOR has sold, assigned,
transferred and set over, and by these presents does hereby sell, assign,
transfer and set over, unto ASSIGNEE, its successors, legal representatives and
assigns, the entire right, title and interest in, to and under the invention,
including the right to sue for past infringement, and the patent and all
divisions, renewals and continuations thereof, and all patents of the United
States which may be granted thereon and all reissues and extensions thereof; and
all applications for industrial property protection, including, without
limitation, all applications for patents, utility models, and designs which may
hereafter be filed for the invention in any country or countries foreign to the
United States, together with the right to file such applications and the right
to claim for the same the priority rights derived from the patent under the
patent laws of the United States, the International Convention for the
Protection of Industrial Property, or any other international agreement or the
domestic laws of the country in which any such application is filed, as may be
applicable; and all forms of industrial property protection, including, without
limitation, patents, utility models, inventors' certificates and designs which
may be granted for said invention in any country or countries foreign to the
United States and all extensions, renewals and reissues thereof; and

ASSIGNOR HEREBY authorizes and requests the Commissioner of
Patents and Trademarks of the United States, and any official of any country or
countries foreign to the United States, whose duty it is to issue patents or
other evidence or forms of industrial property protection on applications as
aforesaid, to issue the same to ASSIGNEE, its successors, legal representatives
and assigns, in accordance with the terms of this instrument; and

ASSIGNOR HEREBY covenants and agrees that it has the full
right to convey the entire interest herein assigned, and that ASSIGNOR has not
executed, and will not execute, any agreement in conflict herewith; and

ASSIGNOR HEREBY further covenants and agrees that ASSIGNOR
will communicate to ASSIGNEE, its successors, legal representatives and assigns,
any material facts known to ASSIGNOR respecting the invention, and testify in
any legal proceeding, sign all lawful papers, execute all divisional,
continuing, reissue and foreign applications, make all rightful oaths, and
generally do everything possible to aid ASSIGNEE, its successors, legal
representatives and assigns, to obtain and enforce proper protection for the
invention in all countries.

IN WITNESS AND IN TESTIMONY WHEREOF, I, as a duly
authorized representative of ASSIGNOR, hereunto set my hand and seal this ______
day of April 1999.

By:

 

 

State of )

)   SS.:

County of )

On this ______ day of ____________, before me, a Notary
Public in and for the State and County aforesaid, personally appeared
_________________, to me known and known to me to be the person of that name,
who signed and sealed the foregoing instrument, and he acknowledged the same to
be his free act and deed.

 
_______________________________,

Notary Public.

 

Exhibit 2.2(c)(i)

[ *** ]

 

[ *** ]

Exhibit 2.2(c)(ii)

Factor VIIa
Program Information

 

[ *** ]

Exhibit 2.2(c)(iii)

HDAC
Program Information

[ *** ]

 

Exhibit 6.2

Stock
PURCHASE Agreement

 

 

See
Attached<PAGE>

                                                                    Exhibit 10.1

                          DESCRIPTION OF DIRECTORS AND
                      NAMED EXECUTIVE OFFICERS COMPENSATION

NON-EMPLOYEE DIRECTORS COMPENSATION

The compensation payable to all of the Company's non-employee directors is as
follows:

         o    An annual cash retainer of $30,000;

         o    An additional annual cash retainer of $15,000 for the chair of the
              Audit Committee and $5,000 for each other member of the Audit
              Committee;

         o    An additional annual cash retainer of $5,000 for the chair of the
              Compensation Committee and $2,500 for each other member of the
              Compensation Committee; and

         o    An additional annual cash retainer of $3,500 for the chair of the
              Nominating and Corporate Governance Committee and $2,500 for each
              other member of the Nominating and Corporate Governance Committee.

Michael J. Joyce will also receive a $25,000 fee in 2006 for his services as
chair of the board committee conducting a search for the new Chief Executive
Officer of the Company. In addition, non-employee directors will each receive an
annual stock option grant pursuant to the Company's 2002 Stock Option Plan. The
amount of shares subject to the option grant and the exercise price are expected
to be determined by the Company's Board of Directors in August 2006.

NAMED EXECUTIVE OFFICER COMPENSATION

          The following discussion relates to the Company's Chief Executive
Officer and each of the executive officers who were named in the Summary
Compensation Table in the Company's 10-K/A filed on April 26, 2006 (the "Named
Executive Officers").

         On February 20, 2006, the Board of Directors of the Company reaffirmed
the current annual salaries of each of the following executive officers in the
respective following amounts:

         Name                                               Salary
         ----                                               ------
         John E. (Jack) Parker                              $450,000
         Lawrence H. Fine                                   $350,000
         Leslie H. Gordon                                   $244,625
         Patricia A. Parker                                 $215,000
         Jeffrey C. Gerstel                                 $215,000

         Bonus compensation is paid annually to the Named Executive Officers and
is dependent upon A.C. Moore achieving certain financial goals as approved by
the Company's Compensation Committee at the beginning of the year. On February
20, 2006, the Compensation Committee approved the 2006 Bonus Plan, which is not
set forth in a written agreement, for certain management-level employees,
including the Named Executive Officers. Under the 2006 Bonus Plan, if the
Company achieves certain pre-tax profit targets approved by the Compensation
Committee, the Company will pay bonuses to eligible participants at
pre-determined amounts which increase as the Company's pre-tax profit increases.
The amounts paid to eligible participants vary based upon that participant's job
responsibility. The pre-tax profit targets approved by the Compensation
Committee are based on the Company's net income. In addition, the Compensation
Committee may also approve discretionary bonuses to each Named Executive Officer
based upon his or her level of responsibility, contribution to the Company's
performance and individual performance during the year.

<PAGE>

         The Named Executive Officers are also eligible to participate in the
Company's 2002 Stock Option Plan and its 1997 Employee, Director and Consultant
Stock Option Plan; and to participate in the Company's broad-based benefit
programs generally available to its salaried employees, including health and
life insurance programs, and qualified 401(k) plan.

         In addition, certain of the Named Executive Officers receive automobile
allowances and other personal benefits. The aggregate amount of such personal
benefits received by each Named Executive Officer is less than $25,000 or 10% of
the total annual salary and bonus compensation received by each respective Named
Executive Officer.

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