Document:

Form of Stock Option Agreement

 EXHIBIT 4.2 
  
 CIRRUS LOGIC, INC. 2002 STOCK OPTION PLAN 
 STOCK OPTION AWARD AGREEMENT 
  
 1.  Grant of Option.    Cirrus Logic, Inc., a Delaware corporation (the “Company”), hereby grants to the Grantee (the
“Grantee”) named in the Notice of Stock Option Award (the “Notice”), a non-qualified stock option (the “Option”) to purchase the Total Number of Shares of Common Stock subject to the Option (the “Shares”) set
forth in the Notice, at the Exercise Price per Share set forth in the Notice (the “Exercise Price”) subject to the terms and provisions of the Notice, this Stock Option Award Agreement (the “Option Agreement”) and the
Company’s 2002 Stock Option Plan, as amended from time to time (the “Plan”), which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this
Option Agreement. 
  
 2.  Exercise of Option. 
  

(a)  Right to Exercise.    The Option shall be exercisable during its term in accordance with the Vesting Schedule
set out in the Notice and with the applicable provisions of the Plan and this Option Agreement. During any authorized leave of absence, the continued vesting of the Option shall be determined in accordance with the Company’s leave of absence
policy as may be amended from time to time. The Option shall be subject to the provisions of Sections 11 and 12 of the Plan relating to the exercisability or termination of the Option in the event of certain transactions. The Grantee shall be
subject to reasonable limitations on the number of requested exercises during any monthly or weekly period as determined by the Administrator. In no event shall the Company issue fractional Shares. 
  
 (b)  Method of Exercise.    This Option is exercisable by delivery of an exercise
notice, in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such
other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be completed by the Optionee and delivered to E*Trade as the Company’s Plan Administrator. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by E*Trade on behalf of the Company of such fully executed Exercise Notice accompanied by
such aggregate Exercise Price. 
  
 No Shares shall be issued pursuant to the exercise of this Option unless such
issuance and exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such Exercised Shares.

  
 (c)  Taxes.    No Shares will be delivered to the Grantee or
other person pursuant to the exercise of the Option until the Grantee or other person has made arrangements acceptable to the Administrator for the satisfaction of applicable income tax, employment tax, 

 
 1 

 and social security tax withholding obligations. Upon exercise of the Option, the Company or the Grantee’s employer may offset or withhold
(from any amount owed by the Company or the Grantee’s employer to the Grantee) or collect from the Grantee or other person an amount sufficient to satisfy such tax obligations and/or the employer’s withholding obligations. 

 
 3.  Method of Payment.    Payment of the Exercise Price shall be by any of the following,
or a combination thereof, at the election of the Grantee; provided, however, that such exercise method does not then violate any Applicable Law: 
  
 (a)  cash; 
  
 (b)  check;

  
 (c)  consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan; or 
  
 (d)  surrender of Shares
(including withholding of Shares otherwise deliverable upon exercise of the Option) which have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Shares as to which the Option is being exercised (but only to
the extent that such exercise of the Option would not result in an accounting compensation charge with respect to the Shares used to pay the exercise price). 
  
 4.  Restrictions on Exercise.    The Option may not be exercised if the issuance of the Shares subject to the Option upon such exercise would constitute a violation
of any Applicable Laws. 
  
 5.  Termination or Change of Continuous
Service.    In the event the Grantee’s Continuous Service terminates, the Grantee may, to the extent otherwise so entitled at the date of such termination (the “Termination Date”), exercise the Option during
the ninety (90)-day period that begins on the day following the Termination Date. In no event shall the Option be exercised later than the Expiration Date set forth in the Notice. In the event of the Grantee’s change in status from Employee or
Consultant to any other status of Employee or Consultant, the Option shall remain in effect and, except to the extent otherwise determined by the Administrator, continue to vest. Except as provided in Sections 6 and 7 below, to the extent that the
Grantee is not entitled to exercise the Option on the Termination Date, or if the Grantee does not exercise the Option within the 90 days following termination, the Option shall terminate. 
  
 6.  Disability of Grantee.    In the event the Grantee’s Continuous Service terminates as a result of his or her Disability, the
Grantee may, but only within twelve (12) months from the Termination Date (and in no event later than the Expiration Date), exercise the Option to the extent he or she was otherwise entitled to exercise it on the Termination Date. To the extent that
the Grantee is not entitled to exercise the Option on the Termination Date, or if the Grantee does not exercise the Option to the extent so entitled within the time specified herein, the Option shall terminate. 

 
 2 

  
 7.  Death of Grantee.    In the event of the
termination of the Grantee’s Continuous Service as a result of his or her death, the Grantee’s estate, or a person who acquired the right to exercise the Option by bequest or inheritance, may exercise the Option, but only to the extent the
Grantee could exercise the Option at the date of termination, within twelve (12) months from the date of death (but in no event later than the Expiration Date). To the extent that the Grantee is not entitled to exercise the Option on the date of
death, or if the Option is not exercised to the extent so entitled within the time specified herein, the Option shall terminate. 
  
 8.  Non-Transferability of Option.    An Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than as set forth in this Section 8. The Option
may be transferred to any person by will and by the laws of descent and distribution. In addition, the Option also may be transferred during the lifetime of the Grantee pursuant to a domestic relations order to members of the Grantee’s
Immediate Family to the extent and in the manner determined by the Administrator. The terms of the Option shall be binding upon the executors, administrators, heirs, successors and transferees of the Grantee. 
  
 9.  Term of Option.    The Option may be exercised no later than the Expiration Date set forth in the
Notice or such earlier date as otherwise provided herein. 
  
 10.  Tax
Consequences.    Set forth below is a brief summary as of the date of this Option Agreement of some of the federal tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. 
  
 (a)  Exercise of Options.    On exercise of an Option, the Grantee will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If the Grantee is an Employee or a former Employee, the Company will be required to
withhold from the Grantee’s compensation or collect from the Grantee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise
and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. 
  
 (b)  Disposition of Shares.    If Shares acquired as a result of an Option exercise are held for more than one year, any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes. 
  
 11.  Entire Agreement: Governing
Law.    The Notice, the Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the
Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the Grantee. Nothing in the Notice, the Plan and this Option
Agreement (except as expressly provided 

 
 3 

 therein) is intended to confer any rights or remedies on any persons other than the parties. The Notice, the Plan and this Option Agreement are
to be construed in accordance with and governed by the internal laws of the State of Texas without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of
Texas to the rights and duties of the parties. Should any provision of the Notice, the Plan or this Option Agreement be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by
law and the other provisions shall nevertheless remain effective and shall remain enforceable. 
  
 12.  Headings.    The captions used in the Notice and this Option Agreement are inserted for convenience and shall not be deemed a part of the Option for construction or interpretation.

  
 13.  Dispute Resolution    The provisions of this Section 13 shall be the
exclusive means of resolving disputes arising out of or relating to the Notice, the Plan and this Option Agreement. The Company, the Grantee, and the Grantee’s assignees pursuant to Sections 7 and 8 (the “parties”) shall attempt in
good faith to resolve any disputes arising out of or relating to the Notice, the Plan and this Option Agreement by negotiation between individuals who have authority to settle the controversy. Negotiations shall be commenced by either party by
notice of a written statement of the party’s position and the name and title of the individual who will represent the party. Within thirty (30) days of the written notification, the parties shall meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to resolve the dispute. 
  
 Any controversy, dispute or
claim that has not been settled by negotiation within thirty (30) days of the written notification as set forth above shall be finally settled by arbitration under the Commercial Arbitration Rules of the American Arbitration Association
(“AAA”) by three arbitrators. In such event, the claimant will deliver a written notice to the respondent(s) and the AAA initiating arbitration and naming an arbitrator. Within twenty (20) days after receipt of such arbitration notice, the
respondent(s) shall name an arbitrator. Within twenty (20) days from the naming of the two arbitrators, the two arbitrators shall name a third arbitrator. If there are multiple claimants and/or multiple respondents, all claimants and/or all
respondents shall attempt to agree upon naming their respective arbitrator. If the claimants or respondents, as the case may be, fail to name their respective arbitrator, or if the two arbitrators fail to name a third arbitrator, or if within twenty
(20) days after any arbitrator shall resign or otherwise cease to serve as such a replacement arbitrator is not named by the party that originally named such arbitrator, such arbitrator as to which agreement cannot be reached or as to which a timely
appointment is not made shall be named by the AAA. The place of arbitration shall be Austin, Texas. The award of the arbitrators may be entered in any court of competent jurisdiction. The costs of the arbitration shall be shared by the disputing
parties equally. Notwithstanding anything to the contrary herein, the arbitrators shall not award nor shall the Company have any liability for any consequential, punitive, special, incidental, indirect or similar damages. 
  
 14.  Notices.    Any notice required or permitted hereunder shall be given in writing and shall be
deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail (if the parties are within the United States) or upon deposit for delivery by 

 
 4 

 an internationally recognized express mail courier service (for international delivery of notice), with postage and fees prepaid, addressed to
the other party at its address as such party may designate in writing from time to time to the other party. 
  
 By
your signature below, you agree that this Option is granted under and governed by the terms and conditions of the Plan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option Agreement and fully understands all provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to the Plan and Option Agreement. Optionee further agrees to notify the Company upon any change in the residence address indicated below. 
  
 
	 
	 OPTIONEE:
  
 
	 
	 

	 Signature
 
	 
	 

	 Printed Name
 
	 
	 

	 Date
 

 

 
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 [E*TRADE FINANCIAL BUSINESS SOLUTIONS GROUP LOGO] 
  
 EXHIBIT A 
  
 EXERCISE INSTRUCTIONS

  
 Who should I call if I have a question about my option or want to sell my shares? 
  
 Contact E*TRADE OptionsLink at: 
  
  
 
	 www.optionslink.com
 
	 Or
 	    	  	  
	 Within U.S.:
 	    	 (800
 	 ) 838-0908
 
	 Outside U.S.:
 	    	 (650
 	 ) 599-0125
 
	 Canada:
 	    	 (888
 	 ) 283-7787
 

 
  
  
 How do I exercise my stock option?

  
 Same Day Sale (Selling Your Shares the Same Day You Exercise Them—A Cashless Exercise):

  
 1.  Complete the OptionsLink activation process as described in the OptionsLink
Welcome Email/Letter. You must activate your account prior to placing a trade. 
  
 2.  Log
in to the OptionsLink at web site www.optionslink.com or through the Interactive Voice Response (IVR) System at either of the telephone numbers listed above to verify the number of shares available for exercise and to place your order. 

 
 3.  After your sale takes place, OptionsLink will process your transaction and have the shares
directed to your account for settlement. 
  
 4.  OptionsLink will release the proceeds from
the sale, minus the cost of your exercise, any applicable taxes and commissions to you 3 business days after the transaction. 
  
 5.  A “Confirmation of Exercise” will be mailed to your home address when your transaction is completed. Please retain this statement for income tax purposes. 

 
 6 

 How do I exercise my stock option? (continued) 
  
 Exercise and Hold (Purchase and hold your shares—a Cash Exercise): 
  
 6.  Complete the OptionsLink activation process as described in the OptionsLink Participant Kit. Complete the OptionsLink activation process as described in the OptionsLink Welcome
Email/Letter. You must activate your account prior to placing a trade. 
  
 7.  You must
fund your account before you can place a Cash Exercise. 
  
 8.  Log in to OptionsLink at
web site www.optionslink.com or through the Interactive Voice Response (IVR) System at either of the telephone numbers listed above to verify the number of shares available for exercise and to place your order. 
  
 9.  After your transaction takes place, OptionsLink will process your transaction and have the shares directed
to your account for settlement. 
  
 10.  A “Confirmation of Exercise” will be
mailed to your home address when your transaction is completed. Please retain this statement for income tax purposes. 
  

 
 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.
                                                                   EXHIBIT 10.36
                             PRODUCT DEVELOPMENT AND
                           COMMERCIALIZATION AGREEMENT
                                     BETWEEN

                         SMITHKLINE BEECHAM CORPORATION
                        DOING BUSINESS AS GLAXOSMITHKLINE
                                       AND
                                 EXELIXIS, INC.
                                   DATED AS OF
                                OCTOBER 28, 2002

<PAGE>
<TABLE>
<CAPTION>

ARTICLE 1   DEFINITIONS                                                          2
<C>        <S>                                                                <C>
      1.2  "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . .     2
      1.3  "Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . .     2
      1.4  "Alliance Managers" . . . . . . . . . . . . . . . . . . . . . . .     2
      1.6  "Artemis" . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2
      1.7  "Artemis Agreement" . . . . . . . . . . . . . . . . . . . . . . .     2
      1.8  "Artemis Intellectual Property" . . . . . . . . . . . . . . . . .     2
      1.9  "Back-up Compound". . . . . . . . . . . . . . . . . . . . . . . .     2
     1.10  "Bankruptcy Code" . . . . . . . . . . . . . . . . . . . . . . . .     2
     1.12  "Biotherapeutic Product". . . . . . . . . . . . . . . . . . . . .     3
     1.13  "Biotherapeutic Target" . . . . . . . . . . . . . . . . . . . . .     3
     1.14  "Breaching Party" . . . . . . . . . . . . . . . . . . . . . . . .     3
     1.15  "Calendar Quarter". . . . . . . . . . . . . . . . . . . . . . . .     3
     1.16  "cGMP". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3
     1.17  "Change of Control" . . . . . . . . . . . . . . . . . . . . . . .     3
     1.20  "Collaboration Committee" . . . . . . . . . . . . . . . . . . . .     3
     1.21  "Collaboration Compound". . . . . . . . . . . . . . . . . . . . .     3
     1.22  "Collaboration Targets" . . . . . . . . . . . . . . . . . . . . .     3
     1.23  "Collaboration Technology". . . . . . . . . . . . . . . . . . . .     4
     1.24  "Combination Product" . . . . . . . . . . . . . . . . . . . . . .     4
     1.25  "Commercialization Liaison" . . . . . . . . . . . . . . . . . . .     4
     1.26  "Commercialization Program" . . . . . . . . . . . . . . . . . . .     4
     1.27  "Commercialization Term". . . . . . . . . . . . . . . . . . . . .     4
     1.28  "Competitive Infringement". . . . . . . . . . . . . . . . . . . .     4
     1.29  "Competitive Product" . . . . . . . . . . . . . . . . . . . . . .     4
     1.31  "Compound Patents". . . . . . . . . . . . . . . . . . . . . . . .     4
     1.32  "Confidential Information". . . . . . . . . . . . . . . . . . . .     4
     1.33  "Contract Year" . . . . . . . . . . . . . . . . . . . . . . . . .     4
     1.34  "Control," "Controls," "Controlled" or "Controlling". . . . . . .     4
     1.35  "Co-promote" or "Co-promotion". . . . . . . . . . . . . . . . . .     5
     1.36  "Co-promotion Right". . . . . . . . . . . . . . . . . . . . . . .     5
     1.37  "Cost of Goods Sold". . . . . . . . . . . . . . . . . . . . . . .     5
     1.39  "Developability Criteria" . . . . . . . . . . . . . . . . . . . .     5
     1.40  "Development Candidate" . . . . . . . . . . . . . . . . . . . . .     5
     1.41  "Development Candidate Liaison" . . . . . . . . . . . . . . . . .     5
     1.42  "Development Candidate Plan". . . . . . . . . . . . . . . . . . .     5
     1.43  "Development Compound". . . . . . . . . . . . . . . . . . . . . .     5
     1.44  "Development Election". . . . . . . . . . . . . . . . . . . . . .     5
     1.45  "Development Information" . . . . . . . . . . . . . . . . . . . .     5
     1.46  "Development Operating Plan" or "DOP" . . . . . . . . . . . . . .     5
     1.47  "Development Program" . . . . . . . . . . . . . . . . . . . . . .     5
     1.48  "Development Term". . . . . . . . . . . . . . . . . . . . . . . .     6
     1.49  "Disclosing Party". . . . . . . . . . . . . . . . . . . . . . . .     6
     1.50  "Drafting Party". . . . . . . . . . . . . . . . . . . . . . . . .     6
     1.51  "Effective Date". . . . . . . . . . . . . . . . . . . . . . . . .     6
     1.52  "EMEA". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     6
     1.53  "Employee Agreements" . . . . . . . . . . . . . . . . . . . . . .     6
     1.54  "Encumbered Compound" . . . . . . . . . . . . . . . . . . . . . .     6
     1.55  "Encumbered Target" . . . . . . . . . . . . . . . . . . . . . . .     6
     1.56  "Excluded Targets". . . . . . . . . . . . . . . . . . . . . . . .     6
     1.57  "Executive Officers". . . . . . . . . . . . . . . . . . . . . . .     6
     1.58  "EXEL". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     6
     1.59  "EXEL Biotherapeutic Product" . . . . . . . . . . . . . . . . . .     6
     1.61  "EXEL Know-How" . . . . . . . . . . . . . . . . . . . . . . . . .     6
     1.62  "EXEL Patents". . . . . . . . . . . . . . . . . . . . . . . . . .     7
     1.63  "EXEL Product". . . . . . . . . . . . . . . . . . . . . . . . . .     7
     1.64  "EXEL Technology" . . . . . . . . . . . . . . . . . . . . . . . .     7
     1.65  "Existing Biotherapeutic Target". . . . . . . . . . . . . . . . .     7
     1.66  "Existing Compound" . . . . . . . . . . . . . . . . . . . . . . .     7
     1.67  "Existing Targets". . . . . . . . . . . . . . . . . . . . . . . .     7
     1.68  "Existing Third Party Collaboration". . . . . . . . . . . . . . .     7
     1.69  "Expanded Program Option" . . . . . . . . . . . . . . . . . . . .     7
     1.70  "Extension Period". . . . . . . . . . . . . . . . . . . . . . . .     7
     1.71  "FDA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7
     1.72  "Field. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7
     1.73  "First Commercial Sale" . . . . . . . . . . . . . . . . . . . . .     8
     1.74  "First Option Period" . . . . . . . . . . . . . . . . . . . . . .     8
     1.75  "Follow-up Compound". . . . . . . . . . . . . . . . . . . . . . .     8
     1.76  "Future Third Party Collaboration". . . . . . . . . . . . . . . .     8
     1.77  "Gross Margin". . . . . . . . . . . . . . . . . . . . . . . . . .     8
     1.78  "GSK" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     8
     1.80  "GSK Know-How". . . . . . . . . . . . . . . . . . . . . . . . . .     8
     1.82  "GSK Patents" . . . . . . . . . . . . . . . . . . . . . . . . . .     9
     1.84  "GSK Technology". . . . . . . . . . . . . . . . . . . . . . . . .     9
     1.87  "Included Compound" . . . . . . . . . . . . . . . . . . . . . . .     9
     1.88  "IND" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     9
     1.89   "Indemnitee" . . . . . . . . . . . . . . . . . . . . . . . . . .     9
     1.90  "Information" . . . . . . . . . . . . . . . . . . . . . . . . . .     9
     1.91  "Invention" . . . . . . . . . . . . . . . . . . . . . . . . . . .    10
     1.92  "Loan Agreement". . . . . . . . . . . . . . . . . . . . . . . . .    10
     1.93  "Licensed Product(s)" . . . . . . . . . . . . . . . . . . . . . .    10
     1.94  "Licensed Product Diligence Plan" . . . . . . . . . . . . . . . .    10
     1.95  "Limited Program Option". . . . . . . . . . . . . . . . . . . . .    10
     1.96  "Losses". . . . . . . . . . . . . . . . . . . . . . . . . . . . .    10
     1.97  "Major Country" . . . . . . . . . . . . . . . . . . . . . . . . .    10
     1.99  "Marketing Approval". . . . . . . . . . . . . . . . . . . . . . .    10
    1.100  "Marketing Approval Application" or "MAA" . . . . . . . . . . . .    10
    1.102  "Net Sales" . . . . . . . . . . . . . . . . . . . . . . . . . . .    11
    1.103  "Non-breaching Party" . . . . . . . . . . . . . . . . . . . . . .    12
    1.104  "Non-Selected Target" . . . . . . . . . . . . . . . . . . . . . .    12
    1.105  "North America" . . . . . . . . . . . . . . . . . . . . . . . . .    12
    1.106  "Oncology Collaborator" . . . . . . . . . . . . . . . . . . . . .    12
    1.108  "Other Field" . . . . . . . . . . . . . . . . . . . . . . . . . .    12
    1.109  "Party" or "Parties". . . . . . . . . . . . . . . . . . . . . . .    12
    1.110  "Patent". . . . . . . . . . . . . . . . . . . . . . . . . . . . .    12
    1.111  "Patent Costs". . . . . . . . . . . . . . . . . . . . . . . . . .    12
    1.112  "Patent Subcommittee" . . . . . . . . . . . . . . . . . . . . . .    12
    1.113  "Payee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    12
    1.114  "Payor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    12
    1.115  "Person". . . . . . . . . . . . . . . . . . . . . . . . . . . . .    12
    1.116  "Pipeline Option Period". . . . . . . . . . . . . . . . . . . . .    12
    1.117  "Pivotal Registration Study". . . . . . . . . . . . . . . . . . .    12
    1.118  "Product" . . . . . . . . . . . . . . . . . . . . . . . . . . . .    12
    1.119  "Product Acceptance Milestone". . . . . . . . . . . . . . . . . .    13
    1.120  "Product Report". . . . . . . . . . . . . . . . . . . . . . . . .    13
    1.121  "Proposed Biotherapeutic Target". . . . . . . . . . . . . . . . .    13
    1.122  "Proof of Concept Trial" or "PoC Trial" . . . . . . . . . . . . .    13
    1.123  "Prosecuting Party" . . . . . . . . . . . . . . . . . . . . . . .    13
    1.124  "Prosecution and Maintenance" or "Prosecute and Maintain" . . . .    13
    1.125  "Receiving Party" . . . . . . . . . . . . . . . . . . . . . . . .    13
    1.126  "Refused Candidate" . . . . . . . . . . . . . . . . . . . . . . .    13
    1.127  "Regulatory Authority" or "Regulatory Authorities". . . . . . . .    13
    1.128  "Report Date" . . . . . . . . . . . . . . . . . . . . . . . . . .    13
    1.129  "Research and Development Payments" . . . . . . . . . . . . . . .    13
    1.130  "Returned Licensed Product" . . . . . . . . . . . . . . . . . . .    13
    1.131  "Review Subcommittee" . . . . . . . . . . . . . . . . . . . . . .    13
    1.133  "Second Option Period". . . . . . . . . . . . . . . . . . . . . .    14
    1.134  "Stock Purchase Agreement". . . . . . . . . . . . . . . . . . . .    14
    1.135  "Subcommittee". . . . . . . . . . . . . . . . . . . . . . . . . .    14
    1.136  "Subject Transaction" . . . . . . . . . . . . . . . . . . . . . .    14
    1.137  "Sublicensee" . . . . . . . . . . . . . . . . . . . . . . . . . .    14
    1.138  "Subsequent Product Report" . . . . . . . . . . . . . . . . . . .    14
    1.139  "Subsequently Affiliated Company" . . . . . . . . . . . . . . . .    14
    1.140  "Successful PoC Completion" . . . . . . . . . . . . . . . . . . .    14
    1.141  "Target Product Profile". . . . . . . . . . . . . . . . . . . . .    14
    1.142  "Term". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    14
    1.143  "Territory" . . . . . . . . . . . . . . . . . . . . . . . . . . .    14
    1.144  "Third Party" . . . . . . . . . . . . . . . . . . . . . . . . . .    14
    1.145  "United States" or "U.S." . . . . . . . . . . . . . . . . . . . .    14
    1.146  "Written Disclosure". . . . . . . . . . . . . . . . . . . . . . .    14
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 2  OVERSIGHT OF THE COLLABORATION                                       15
<C>        <S>                                                                <C>
      2.1  In General. . . . . . . . . . . . . . . . . . . . . . . . . . . .    15
      2.2  The Collaboration Committee . . . . . . . . . . . . . . . . . . .    15
      2.3  Alliance Managers . . . . . . . . . . . . . . . . . . . . . . . .    18
      2.4  Liaisons. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    18
      2.5  Biotherapeutic Targets. . . . . . . . . . . . . . . . . . . . . .    18
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 3  DEVELOPMENT PROGRAM                                                   19
<C>        <S>                                                                 <C>
      3.1  Commencement; Term . . . . . . . . . . . . . . . . . . . . . . . .    19
      3.2  Objectives; Diligence. . . . . . . . . . . . . . . . . . . . . . .    20
      3.3  Development Operating Plan; Development Candidate Plan(s). . . . .    24
      3.4  Development Candidate Liaison. . . . . . . . . . . . . . . . . . .    27
      3.5  Program Option Election. . . . . . . . . . . . . . . . . . . . . .    27
      3.6  Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . .    29
      3.7  Exchange of Information. . . . . . . . . . . . . . . . . . . . . .    30
      3.8  Development Program Funding. . . . . . . . . . . . . . . . . . . .    30
      3.9  Future Acquired Technology . . . . . . . . . . . . . . . . . . . .    32
     3.10  GSK Technology . . . . . . . . . . . . . . . . . . . . . . . . . .    32
     3.11  Subcontracting . . . . . . . . . . . . . . . . . . . . . . . . . .    32
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 4  GKS'S ELECTION RIGHTS                                                33
<C>        <S>                                                                <C>
      4.1  Development Election. . . . . . . . . . . . . . . . . . . . . . .    33
      4.2  Product Report. . . . . . . . . . . . . . . . . . . . . . . . . .    33
      4.3  Development Election Options. . . . . . . . . . . . . . . . . . .    33
      4.4  The Discussion Opportunity. . . . . . . . . . . . . . . . . . . .    35
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 5  GRANT OF RIGHTS; COMMERCIALIZATION                                   36
<C>        <S>                                                                <C>
      5.1  License Grants. . . . . . . . . . . . . . . . . . . . . . . . . .    36
      5.2  Technology Transfer . . . . . . . . . . . . . . . . . . . . . . .    37
      5.3  Commercialization Program . . . . . . . . . . . . . . . . . . . .    38
      5.4  Competitive Products. . . . . . . . . . . . . . . . . . . . . . .    40
      5.5  Returned Licensed Products. . . . . . . . . . . . . . . . . . . .    41
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 6  MILESTONES AND ROYALTIES; PAYMENTS                                   42
<C>        <S>                                                                <C>
      6.1  Upfront Payment to EXEL . . . . . . . . . . . . . . . . . . . . .    42
      6.2  Milestones Payments to EXEL . . . . . . . . . . . . . . . . . . .    42
      6.3  Royalty Payments to EXEL. . . . . . . . . . . . . . . . . . . . .    45
      6.4  Royalty Payments to GSK . . . . . . . . . . . . . . . . . . . . .    48
      6.5  Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    50
      6.6  Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    50
      6.7  Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    51
      6.8  Credit against Payments for Third Party License . . . . . . . . .    51
      6.9  Compulsory Licenses . . . . . . . . . . . . . . . . . . . . . . .    52
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 7  EXCLUSIVITY                                                          52
<C>        <S>                                                                <C>
      7.1  EXEL Prohibited Activities. . . . . . . . . . . . . . . . . . . .    52
      7.2  EXEL Permitted Activities . . . . . . . . . . . . . . . . . . . .    52
      7.3  GSK Activities. . . . . . . . . . . . . . . . . . . . . . . . . .    53
      7.4  Existing Third Party Collaborations . . . . . . . . . . . . . . .    53
      7.5  Excluded Compounds. . . . . . . . . . . . . . . . . . . . . . . .    54
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 8  OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS                 54
<C>        <S>                                                                <C>
      8.1  Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . .    54
      8.2  Patent Costs. . . . . . . . . . . . . . . . . . . . . . . . . . .    56
      8.3  Enforcement Rights. . . . . . . . . . . . . . . . . . . . . . . .    57
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 9  CONFIDENTIALITY                                                      58
<C>        <S>                                                                <C>
      9.1  Confidentiality; Exceptions . . . . . . . . . . . . . . . . . . .    58
      9.2  Authorized Disclosure . . . . . . . . . . . . . . . . . . . . . .    59
      9.3  Additional Confidentiality Requirements . . . . . . . . . . . . .    59
      9.4  Termination of Prior Agreement. . . . . . . . . . . . . . . . . .    60
      9.5  Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    60
      9.6  Publications. . . . . . . . . . . . . . . . . . . . . . . . . . .    60
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 10  REPRESENTATIONS; WARRANTIES AND COVENANTS                            60
<C>         <S>                                                                <C>
      10.1  Representations and Warranties of Both Parties. . . . . . . . . .    60
      10.2  Representations and Warranties of EXEL. . . . . . . . . . . . . .    61
      10.3  Covenants of EXEL . . . . . . . . . . . . . . . . . . . . . . . .    63
      10.4  Representation and Warranty of GSK. . . . . . . . . . . . . . . .    64
      10.5  Covenants of GSK. . . . . . . . . . . . . . . . . . . . . . . . .    64
      10.6  Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . . . .    64
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 11  INDEMNIFICATION; INSURANCE                                           64
<C>         <S>                                                                <C>
      11.1  Indemnification by GSK. . . . . . . . . . . . . . . . . . . . . .    64
      11.2  Indemnification by EXEL . . . . . . . . . . . . . . . . . . . . .    65
      11.3  Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . .    65
      11.4  Complete Indemnification. . . . . . . . . . . . . . . . . . . . .    65
      11.5  Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . .    65
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 12  TERM AND TERMINATION                                                 66
<C>         <S>                                                                <C>
      12.1  Term; Expiration. . . . . . . . . . . . . . . . . . . . . . . . .    66
      12.2  Termination for Cause; Other Breaches . . . . . . . . . . . . . .    66
      12.3  GSK Unilateral Termination Rights . . . . . . . . . . . . . . . .    67
      12.4  Termination for Insolvency. . . . . . . . . . . . . . . . . . . .    67
      12.5  Effect of Termination upon Certain Payment Terms. . . . . . . . .    67
      12.6  Effect of Termination . . . . . . . . . . . . . . . . . . . . . .    68
</TABLE>

<TABLE>
<CAPTION>

ARTICLE 14  MISCELLANEOUS                                                        79
<C>         <S>                                                                <C>
      14.1  Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . .    79
      14.2  Dispute Resolution. . . . . . . . . . . . . . . . . . . . . . . .    80
      14.3  Governing Law; Jurisdiction . . . . . . . . . . . . . . . . . . .    80
      14.5  Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . .    80
      14.7  Performance Warranty. . . . . . . . . . . . . . . . . . . . . . .    81
      14.8  Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . .    81
      14.9  Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    81
     14.10  Export Clause . . . . . . . . . . . . . . . . . . . . . . . . . .    82
     14.11  Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    83
     14.12  Severability. . . . . . . . . . . . . . . . . . . . . . . . . . .    83
     14.13  Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . .    83
     14.14  Independent Contractors . . . . . . . . . . . . . . . . . . . . .    83
     14.15  Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    83
     14.16  Use of Name . . . . . . . . . . . . . . . . . . . . . . . . . . .    83
     14.17  Books and Records . . . . . . . . . . . . . . . . . . . . . . . .    83
     14.18  Further Actions . . . . . . . . . . . . . . . . . . . . . . . . .    83
     14.19  Parties in Interest . . . . . . . . . . . . . . . . . . . . . . .    83
     14.20  Construction of Agreement . . . . . . . . . . . . . . . . . . . .    83
     14.21  Supremacy . . . . . . . . . . . . . . . . . . . . . . . . . . . .    84
     14.22  Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . .    84
</TABLE>

<TABLE>
<CAPTION>

                                  LIST OF SCHEDULES

<S>                                        <C>

               Schedule 1.62 . . . . . . . . . . . . . .  EXEL Patents

               Schedule 1.65 . . . . . . . . . . . . . .  Existing Biotherapeutic Targets

               Schedule 1.66 . . . . . . . . . . . . . .  Existing Compounds

               Schedule 1.67 . . . . . . . . . . . . . .  Existing Targets

               Schedule 1.68 . . . . . . . . . . . . . .  Existing Third Party Collaborations

               Schedule 3.2.3(f) . . . . . . . . . . . .  Minimum Information Requirements for EXEL's Periodic Reports

               Schedule 4.2. . . . . . . . . . . . . . .  Criteria to Be Included in Product Reports

               Schedule 5.1.1. . . . . . . . . . . . . .  Sample GSK Internal Development Activities

               Schedule 6.3.4. . . . . . . . . . . . . .  Examples of Application of Milestone and Royalty Payments

</TABLE>

[  *  ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT  TO  RULE  24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>

                             PRODUCT DEVELOPMENT AND
                           COMMERCIALIZATION AGREEMENT

THIS  PRODUCT DEVELOPMENT AND COMMERCIALIZATION AGREEMENT is made as of the 28th
day  of  October,  2002  (the "EFFECTIVE DATE") by and between Exelixis, Inc., a
Delaware  corporation  ("EXEL"),  and  SmithKline  Beecham  Corporation,  a
Pennsylvania  corporation,  doing  business as GlaxoSmithKline ("GSK"). EXEL and
GSK are each referred to herein by name or as a "PARTY" or, collectively, as the
"PARTIES."
                                    RECITALS

     A.  EXEL  has  developed  certain  capabilities  for  the  discovery  and
development  of  pharmaceutical  products for the treatment of human diseases or
conditions.

     B.  GSK  possesses  pharmaceutical research, development, manufacturing and
commercialization  expertise.

     C.  GSK  desires to engage in a collaborative effort with EXEL, pursuant to
which  GSK  shall  partially  fund the research costs incurred by EXEL, and EXEL
shall  engage  in  a  research  and  development program to discover and develop
compounds  with  demonstrated  efficacy in humans (i.e., completion of Phase IIa
clinical  trials)  that  will  be  offered  by  EXEL  to  GSK.

     D.  At  the  end of Contract Year Two (as defined below) GSK shall have the
ability to select, in its sole discretion, either the Limited Program Option (as
defined  below)  or  the  Expanded  Program  Option  (as  defined  below).

     E. From the compounds offered by EXEL hereunder, GSK may accept for further
development  and  commercialization,  for  any and all uses in the Territory (as
defined  below),  [  * ] compounds in the event GSK [ * ], or [ * ] compounds in
the  event  GSK  [  *  ],  all  on  the  terms  and conditions set forth herein.

     F.  Upon  acceptance of such compounds by GSK, EXEL shall grant to GSK, and
GSK  shall obtain, an exclusive license in the Territory under this Agreement to
make,  have made, use, sell, offer for sale and import certain Licensed Products
(as  defined  below)  throughout  the  Territory on the terms and conditions set
forth  herein.

     G.  The  Parties  acknowledge  that  any  rights  GSK  acquires  under this
Agreement,  as  defined  below, will be held by GSK in accordance with GSK's and
its  group's  inter-company  agreements,  as  in  effect  from  time  to  time.

     H. Contemporaneously with the execution of this Agreement, the Parties have
executed: (i) a Stock Purchase and Stock Issuance Agreement (the "STOCK PURCHASE
AGREEMENT")  under  which  (A)  GSK shall purchase common stock of EXEL; and (B)
EXEL  shall  have the option to sell to GSK additional shares of common stock of
EXEL  at  a  certain  specified  point  in  time;  and  (ii) a Loan and Security
Agreement  (the  "LOAN  AGREEMENT")  under which GSK shall make available a loan
against  which  EXEL  may  draw  down  advances  during the Development Term (as
defined  below)  of  up  to  an  aggregate  maximum total of Eighty-Five Million
Dollars  ($85,000,000)  in  the event GSK [ * ] or [ * ] in the event GSK [ * ].

     Now,  therefore,  in  consideration  of  the  premises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency  of  which  are  hereby  acknowledged,  the  Parties hereto agree as
follows:

                                    ARTICLE 1

                                   DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth
in  this  Article  1  unless  context  dictates  otherwise:

     1.1     "ACTIVITY  THRESHOLD"  shall  mean[  *  ].

     1.2  "AFFILIATE"  shall mean any Person, whether de jure or de facto, which
directly  or  indirectly  through  one  (1)  or more intermediaries controls, is
controlled  by,  or  is under common control with, a Party to this Agreement.  A
Person  shall  be deemed to "control" another Person if it (i) owns, directly or
indirectly,  beneficially  or  legally,  at  least  fifty  percent  (50%) of the
outstanding  voting securities or capital stock (or such lesser percentage which
is  the maximum allowed to be owned by a Person in a particular jurisdiction) of
such  other  Person,  or has other comparable ownership interest with respect to
any  Person other than a corporation; or (ii) has the power, whether pursuant to
contract,  ownership  of  securities  or otherwise, to direct the management and
policies  of  the  Person.

     1.3  "AGREEMENT"  shall mean this Product Development and Commercialization
Agreement together with the recitals and all exhibits, schedules and attachments
hereto.

     1.4  "ALLIANCE  MANAGERS"  shall  have the meaning assigned to such term in
Section  2.3.

     1.5  "ANNUAL  RESEARCH  AND  DEVELOPMENT  PAYMENTS"  shall have the meaning
assigned  to  such  term  in  Section  3.8.1.

     1.6  "ARTEMIS"  shall  have  the  meaning  assigned to such term in Section
8.1.1(a).

     1.7  "ARTEMIS  AGREEMENT"  shall  that  certain Asset Purchase and Transfer
Agreement  between  Artemis  Pharmaceuticals  GmbH and Exelixis Deutschland GmbH
dated  as  of  December  18,  2001.

     1.8 "ARTEMIS INTELLECTUAL PROPERTY" shall have the meaning assigned to such
term  in  Section  10.2.15.

     1.9  "BACK-UP  COMPOUND"  shall  mean  [  *  ].

     1.10  "BANKRUPTCY  CODE"  shall  have  the meaning assigned to such term in
Section  12.4.2.

     1.11  "BIOTECHNOLOGY  COMPANY" shall have the meaning assigned to such term
in  Section  13.2.2.

     1.12  "BIOTHERAPEUTIC  PRODUCT"  shall  mean  [  *  ].

     1.13  "BIOTHERAPEUTIC  TARGET"  shall  mean  [  *  ].

     1.14  "BREACHING  PARTY"  shall  have  the meaning assigned to such term in
Section  12.2.1.

     1.15 "CALENDAR QUARTER" shall mean a period of three (3) consecutive months
ending  at  midnight, Eastern Time on the last day of March, June, September, or
December,  respectively.

     1.16  "CGMP"  shall mean current Good Manufacturing Practices as defined in
Parts 210 and 211 of Title 21 of the U.S. Code of Federal Regulations, as may be
amended  from  time  to  time,  or  any  successor  thereto.

     1.17  "CHANGE  OF  CONTROL"  shall  mean  a  transaction  in  which  [ * ].

     1.18  "CHANGE  OF CONTROL COMPOUND" shall have the meaning assigned to such
term  in  Section  13.1.2(f)(i).

     1.19  "CHANGE  OF CONTROL LICENSED PRODUCT" shall have the meaning assigned
to  such  term  in  Section  13.1.2(f)(i).

     1.20 "COLLABORATION COMMITTEE" shall have the meaning assigned to such term
in  Section  2.2.

     1.21  "COLLABORATION  COMPOUND"  shall  mean  [  *  ].

     1.22  "COLLABORATION  TARGETS"  shall  mean  [  *  ].

     1.23  "COLLABORATION  TECHNOLOGY"  shall  mean  [  *  ].

     1.24  "COMBINATION  PRODUCT"  shall  mean  a  product that is a preparation
incorporating  two  (2)  or  more  therapeutically  active  ingredients  [  * ].
Notwithstanding  the  foregoing,  ingredients  or  components  other than active
ingredients, including without limitation drug delivery vehicles, adjuvants, and
excipients,  shall not be deemed to be "therapeutically active ingredients," and
their  presence shall not be deemed to create a Combination Product for purposes
of  this  Section  1.24.

     1.25  "COMMERCIALIZATION  LIAISON"  shall have the meaning assigned to such
term  in  Section  5.3.4(a).

     1.26  "COMMERCIALIZATION  PROGRAM"  shall have the meaning assigned to such
term  in  Section  5.3.1.

     1.27  "COMMERCIALIZATION TERM" shall have the meaning assigned to such term
in  Section  5.3.1.

     1.28  "COMPETITIVE  INFRINGEMENT"  shall  have the meaning assigned to such
term  in  Section  8.3.2.

     1.29  "COMPETITIVE PRODUCT" shall have the meaning assigned to such term in
Section  5.4.1.

     1.30  "COMPOUND INVENTIONS" shall have the meaning assigned to such term in
Section  8.1.1(b).

     1.31 "COMPOUND PATENTS" shall have meaning assigned to such term in Section
8.1.1(b)(i).

     1.32  "CONFIDENTIAL  INFORMATION"  shall  have the meaning assigned to such
term  in  Section  9.1.

     1.33  "CONTRACT  YEAR" shall mean a year of 365 days (or 366 days in a leap
year)  beginning on the Effective Date and ending one (1) year thereafter and so
on  year-by-year  during the Term. "CONTRACT YEAR ONE" shall mean the first such
year;  "CONTRACT  YEAR  TWO"  shall  mean  the  second  such  year,  and  so on,
year-by-year.

     1.34  "CONTROL,"  "CONTROLS,"  "CONTROLLED"  OR  "CONTROLLING"  shall  mean
possession  by  the  granting  Party  of  the  ability  to grant the licenses or
sublicenses to the other Party, as provided in this Agreement, without violating
the  terms  of  any agreement or other arrangement with any Third Party. A Party
shall  be  deemed  to  Control  Collaboration  Technology  to  the extent of its
individual  or  joint  interest  therein,  as  applicable.  Notwithstanding  the
foregoing, for purposes of Sections 6.4.1(a), 6.4.2(c), and 6.4.3, Control shall
mean  possession  of  the  ability  to  grant  licenses  or  sublicenses without
violating  the terms of any agreement or other arrangement with any Third Party.

     1.35  "CO-PROMOTE"  OR  "CO-PROMOTION" shall mean, with respect to EXEL, to
engage  in  the  promotional  activities  that  may  be  agreed  upon as further
described  in  Section  5.3.4(c).

     1.36  "CO-PROMOTION  RIGHT" shall have the meaning assigned to such term in
Section  5.3.4(c).

     1.37  "COST OF GOODS SOLD" shall mean all reasonable costs allocable to the
Licensed  Product  calculated  by  using  GSK's  standard accounting procedures,
consistently applied. [*]

     1.38 "DATA PACKAGE" shall have the meaning assigned to such term in Section
3.5.1.

     1.39  "DEVELOPABILITY  CRITERIA"  shall  mean  [  *  ].

     1.40  "DEVELOPMENT  CANDIDATE"  shall  mean  [  *  ].

     1.41  "DEVELOPMENT  CANDIDATE  LIAISON"  shall have the meaning assigned to
such  term  in  Section  3.4.

     1.42  "DEVELOPMENT  CANDIDATE PLAN" shall have the meaning assigned to such
term  in  Section  3.3.2(a).

     1.43  "DEVELOPMENT  COMPOUND"  shall  mean  [  *  ].

     1.44 "DEVELOPMENT ELECTION" shall have the meaning assigned to such term in
Section  4.1.

     1.45 "DEVELOPMENT INFORMATION" shall have the meaning assigned to such term
in  Section  4.3.2(b)(ii).

     1.46  "DEVELOPMENT OPERATING PLAN" OR "DOP" shall have the meaning assigned
to  such  term  in  Section  3.3.1.

     1.47  "DEVELOPMENT PROGRAM" shall mean the program, to be conducted by EXEL
during  the  Development  Term and the Extension Period, if any, as set forth in
Article  3,  of  Identification  and  validation  of  Collaboration Targets, and
research,  discovery,  characterization,  optimization, pre-clinical development
and early-stage clinical development of Development Compounds through completion
of  Proof  of  Concept  Trials.

     1.48  "DEVELOPMENT  TERM"  shall  have the meaning assigned to such term in
Section  3.1.1.

     1.49  "DISCLOSING  PARTY"  shall  have the meaning assigned to such term in
Section  9.1.

     1.50  "DRAFTING  PARTY"  shall  have  the  meaning assigned to such term in
Section  2.2.3(a).

     1.51  "EFFECTIVE  DATE" shall have the meaning assigned to such term in the
Preamble.

     1.52  "EMEA"  shall  mean  the European Medicines Evaluation Agency and any
successor  entity  thereto.

     1.53  "EMPLOYEE AGREEMENTS" shall have the meaning assigned to such term in
Section  10.2.15.

     1.54  "ENCUMBERED COMPOUND" shall have the meaning assigned to such term in
Section  7.4.3.

     1.55  "ENCUMBERED  TARGET"  shall have the meaning assigned to such term in
Section  7.4.3.

     1.56  "EXCLUDED  TARGETS"  shall  mean  [  *  ].

     1.57  "EXECUTIVE  OFFICERS" shall have the meaning assigned to such term in
Section  2.2.4.

     1.58  "EXEL"  shall have the meaning assigned to such term in the Preamble.

     1.59  "EXEL BIOTHERAPEUTIC PRODUCT" shall have the meaning assigned to such
term  in  Section  6.4.3.

     1.60  "EXEL  ENTITIES"  shall  mean,  as  of  the  Effective Date, [*]

     1.61 "EXEL KNOW-HOW" shall mean: (i) all Information that EXEL discloses to
GSK  under  this  Agreement  or has disclosed under the Non-Disclosure Agreement
executed  by  EXEL  and GSK dated [ * ]; (ii) all Information that is within the
Control  of  the  EXEL  Entities,  on the Effective Date or during the Term; and
(iii)  all non-patentable Inventions Controlled by the EXEL Entities, during the
Term,  in  each  of clauses (i), (ii) and (iii) that are necessary or useful for
GSK:  [  *  ]  for  the  further  development  of  Licensed  Products;  [  *  ].
Notwithstanding  anything  herein  to  the  contrary,  EXEL  Know-How  excludes
Information  contained  in  any  published  EXEL  Patents.

     1.62  "EXEL  PATENTS" shall mean all Patents in the Territory Controlled by
the  EXEL  Entities, as of the Effective Date as set forth on Schedule 1.62, and
any  other Patent Controlled by the EXEL Entities during the Term that claims or
covers:  [ * ]. EXEL shall update GSK regarding any EXEL Patents: (A) during [ *
]  on an annual basis commencing on the first day of [ * ]; and (B) upon request
by  GSK  after [ * ] with respect to EXEL Patents to which GSK retains a license
hereunder.

     1.63 "EXEL PRODUCT" shall have the meaning assigned to such term in Section
6.4.1.

     1.64 "EXEL TECHNOLOGY" shall mean EXEL Patents and EXEL Know-How, including
without  limitation any Collaboration Technology owned by EXEL either jointly or
solely.

     1.65  "EXISTING  BIOTHERAPEUTIC  TARGET"  shall  mean  [  *  ].

     1.66  "EXISTING  COMPOUND"  shall  mean  [  *  ].

     1.67  "EXISTING  TARGETS"  shall  mean  [  *  ].

     1.68  "EXISTING  THIRD  PARTY  COLLABORATION"  shall  mean  any  of  those
collaboration agreements between EXEL and a Third Party listed on Schedule 1.68.

     1.69 "EXPANDED PROGRAM OPTION" shall have the meaning assigned to such term
in  Section  3.5.1(b).

     1.70  "EXTENSION  PERIOD"  shall  have the meaning assigned to such term in
Section  3.1.2(b).

     1.71  "FDA"  shall  mean  the  U.S.  Food  and Drug Administration, and any
successor  entity  thereto.

     1.72  "FIELD"  shall  mean  the  areas  of  vascular biology-based disease,
oncology  and  inflammatory  disease,  subject  to  the  rights of certain Third
Parties  pursuant  to  the  Existing  Third  Party  Collaborations.  [  *  ].

     1.73  "FIRST COMMERCIAL SALE" shall mean, with respect to each Product, the
first  sale  for  which  payment has been received for use or consumption by the
general  public  of  such  Product  in  any  country  in the Territory after all
required  Marketing  Approvals  have  been  granted,  or  such sale is otherwise
permitted,  by  the Regulatory Authority in such country, excluding registration
samples,  compassionate  use  sales  and  the  like.

     1.74  "FIRST OPTION PERIOD" shall have the meaning assigned to such term in
Section  4.3.1(a).

     1.75  "FOLLOW-UP  COMPOUND"  shall  mean  [  *  ].

     1.76  "FUTURE  THIRD  PARTY  COLLABORATION" shall mean an agreement between
EXEL  and  a  Third  Party  after  the  Effective  Date.

     1.77  "GROSS  MARGIN"  shall mean, with respect to a Licensed Product,[*].

     1.78  "GSK"  shall  have the meaning assigned to such term in the Preamble.

     1.79 "GSK COMPOUND INVENTIONS" shall have the meaning assigned to such term
in  Section  8.1.1(b).

     1.80 "GSK KNOW-HOW" shall mean: (i) Information which GSK discloses to EXEL
under  this  Agreement  or  has  disclosed  under  the  Non-Disclosure Agreement
executed  by  EXEL  and GSK dated [ * ]; (ii) all Information that is within the
Control  of  GSK or its Affiliates on the Effective Date or during the Term; and
(iii)  all  non-patentable Inventions Controlled by GSK or its Affiliates during
the  Term, if any; in each of clauses (i), (ii) and (iii), that are necessary or
useful  for  EXEL:  [  * ]. Notwithstanding anything herein to the contrary, GSK
Know-How  excludes  Information  contained  in  any  published  GSK  Patents.

     1.81 "GSK LICENSED PRODUCT" shall have the meaning assigned to such term in
Section  12.6.3(b).

     1.82  "GSK  PATENTS"  shall mean all Patents in the Territory Controlled by
GSK  or its Affiliates as of the Effective Date, and any other Patent Controlled
by  GSK  during  the  Term,  necessary  or  useful  for  EXEL:  [  *  ].

     1.83  "GSK  SCREENED-COMPOUND" shall have the meaning assigned to such term
in  Section  12.6.3(b).

     1.84  "GSK  TECHNOLOGY"  shall  mean  any  GSK  Patents  and  GSK Know-How,
including  without  limitation  any Collaboration Technology owned by GSK either
jointly  or  solely.

     1.85  "HSR  ACT"  shall  have  the meaning assigned to such term in Section
14.6.1.

     1.86 "IDENTIFY," "IDENTIFIED," "IDENTIFYING" OR "IDENTIFICATION" shall mean
[  *  ].

     1.87  "INCLUDED  COMPOUND"  shall  mean  [  *  ].

     1.88  "IND"  shall mean any investigational new drug application filed with
the  FDA  pursuant  to  Part  312  of  Title  21  of  the  U.S.  Code of Federal
Regulations,  including  any  amendments thereto. References herein to IND shall
include,  to  the  extent  applicable, any comparable filing(s) outside the U.S.
(such  as  a  CTA  in  the  European  Union).

     1.89  "INDEMNITEE"  shall have the meaning assigned to such term in Section
11.3.

     1.90  "INFORMATION" shall mean information and materials within the Control
of (i) with respect to GSK, GSK or its Affiliates; or (ii) with respect to EXEL,
the EXEL Entities, in either case that is necessary or useful for the conduct of
the  Development  Program or the Commercialization Program and that exists as of
the  Effective Date or is discovered, developed or acquired during the Term, and
including,  without  limitation:  (A)  techniques  and  data, including, but not
limited  to,  screens, models, inventions, methods, test data including, but not
limited  to,  pharmacological,  toxicological and clinical test data, analytical
and  quality  control  data,  marketing, pricing, distribution, costs, and sales
data,  manufacturing  information  (including  any  relevant  Third  Party
manufacturing information to the extent Controlled by, and in the possession of,
GSK  or  its  Affiliates,  or  the  EXEL Entities), and patent and legal data or
descriptions  (to the extent that disclosure thereof would not result in loss or
waiver  of  privilege  or  similar  protection); and (B) compositions of matter,
including  but  not  limited  to  compounds,  biological  materials, vectors and
assays.  As  used  herein,  "CLINICAL  TEST DATA" shall be deemed to include all
information  related  to  the  clinical  or preclinical testing of a Development
Compound,  or  Licensed  Product,  including  without limitation, patient report
forms,  investigators'  reports,  biostatistical,  pharmaco-economic  and  other
related  analyses,  regulatory  filings  and  communications,  and  the  like.

     1.91  "INVENTION"  shall  mean  any  new  or  useful  process,  machine,
manufacture,  or  composition of matter relating to or comprising [ * ], whether
patentable or unpatentable, or any improvement thereof, that is conceived during
the  Term  in  connection  with  the  Parties'  activities under this Agreement.

     1.92  "LOAN  AGREEMENT" shall have the meaning assigned to such term in the
Recitals.

     1.93  "LICENSED  PRODUCT(S)"  shall  mean  [  *  ].

     1.94  "LICENSED  PRODUCT DILIGENCE PLAN" shall have the meaning assigned to
such  term  in  Section  5.4.1.

     1.95  "LIMITED PROGRAM OPTION" shall have the meaning assigned to such term
in  Section  3.5.1(a).

     1.96 "LOSSES" shall have the meaning assigned to such term in Section 11.1.

     1.97  "MAJOR  COUNTRY"  shall  mean  [  *  ].

     1.98 "MAJOR PHARMACEUTICAL COMPANY" shall have the meaning assigned to such
term  in  Section  13.1.4.

     1.99 "MARKETING APPROVAL" shall mean all approvals, licenses, registrations
or  authorizations of any federal, state or local regulatory agency, department,
bureau  or  other  governmental  entity,  necessary  for the manufacturing, use,
storage,  import,  transport and sale of a Product in a regulatory jurisdiction.
"Marketing  Approval" shall be deemed to occur upon first receipt of notice from
a Regulatory Authority that a Product has been approved for commercial sale. For
countries where governmental approval is required for pricing or for the Product
to  be  reimbursed  by  national  health  insurance (i.e., other than the United
States), "Marketing Approval" shall not be deemed to occur until such pricing or
reimbursement  approval  is obtained. Marketing Approval shall be deemed to have
occurred  in  such country where government approval of pricing or reimbursement
has  not  been obtained if, at any time, the Party begins the commercial sale of
such Product in the country without obtaining pricing approval or reimbursement,
with  the  date  of such Marketing Approval to be deemed to occur on the date of
the  First  Commercial  Sale  of  the  Product  in the country.

     1.100  "MARKETING  APPROVAL  APPLICATION"  OR  "MAA"  shall mean a New Drug
Application  (as  defined  in  Title 21 of the U.S. Code of Federal Regulations,
Section  314.50,  et.  seq.), or a comparable filing for Marketing Approval (not
including  pricing  or  reimbursement  approval) in a country, in each case with
respect  to  a  Product  in  the  Territory.

     1.101  "MATERIAL  BREACH"  shall  have the meaning assigned to such term in
Section  12.2.1.

     1.102  "NET  SALES"  shall  mean  [  *  ].

     In the event a Product is sold which is a Combination Product, for purposes
of  determining  payments due hereunder, Net Sales of Combination Products shall
be  calculated  by  multiplying  the Net Sales of the Combination Product by the
fraction  A  over A+B, in which A is the Gross Selling Price of the Product when
such Product is sold in substantial quantities comprising a Development Compound
as  the  sole therapeutically active ingredient during the applicable accounting
period  in  which  the  sales  of the Product were made, and B is the sum of the
Gross Selling Price of the other therapeutically active ingredients contained in
the  Combination  Product  sold  separately in substantial quantities during the
accounting  period  in question. All Gross Selling Prices of the therapeutically
active  ingredients  of the Product and Combination Products shall be calculated
as  the average Gross Selling Price of the therapeutically active ingredients in
such  Products  and Combination Products during the applicable accounting period
for which the Net Sales are being calculated. In the event that no separate sale
of  either  the  Product  comprising  a  single Development Compound as the sole
therapeutically  active  ingredient  or  the  other  therapeutically  active
ingredients  of the Combination Product are made during the accounting period in
which  the  sale  was  made  or  if  the  Gross  Selling  Price for a particular
therapeutically  active  ingredient  included in a Combination Product cannot be
determined  for  an  accounting  period,  Net  Sales  allocable  to  each of the
therapeutically  active  ingredients  in  the  Combination  Product  shall  be
determined by mutual agreement reached in good faith by the Parties prior to the
end  of  the  accounting  period  in  question  based  on an equitable method of
determining  same  that  takes  into  account,  in  the Territory, variations in
potency,  the relative contribution of each therapeutically active ingredient in
the  Combination  Product,  and  relative  value  to  the  end-user  of  each
therapeutically  active  ingredient.  For purposes of this Section 1.102, "GROSS
SELLING  PRICE"  shall  mean  [  *  ].

     1.103 "NON-BREACHING PARTY" shall have the meaning assigned to such term in
Section  12.2.1.

     1.104 "NON-SELECTED TARGET" shall have the meaning assigned to such term in
Section  7.4.2.

     1.105  "NORTH  AMERICA"  shall  mean  [  *  ].

     1.106  "ONCOLOGY COLLABORATOR" shall have the meaning assigned to such term
in  Section  7.4.1.

     1.107  "OTHER  BREACH"  shall  have  the  meaning  assigned to such term in
Section  12.2.2.

     1.108 "OTHER FIELD" shall have the meaning assigned to such term in Section
7.2.1.

     1.109  "PARTY" OR "PARTIES" shall have the meaning assigned to such term in
the  Preamble,  or  where the context requires, shall mean GSK or its Affiliates
and/or  the  EXEL  Entities.

     1.110  "PATENT"  shall  mean:  (i)  issued  and  unexpired  letters patent,
including  any  extension,  registration,  confirmation,  reissue, continuation,
supplementary  protection  certificate,  divisional,  continuation-in-part,
re-examination  or  renewal  thereof,  (ii)  pending  applications  for  letters
patents, and (iii) foreign counterparts of any of the foregoing; in each case to
the  extent  the  same  has  not been held, by a court or governmental agency of
competent  jurisdiction, to be invalid or unenforceable in a decision from which
no  appeal  can  be  taken.

     1.111  "PATENT  COSTS"  shall mean the reasonable fees and expenses paid to
outside  legal counsel, and filing, maintenance and other out-of-pocket expenses
paid  to  Third  Parties,  incurred  in  connection  with  the  Prosecution  and
Maintenance  of  Patents.

     1.112 "PATENT SUBCOMMITTEE" shall have the meaning assigned to such term in
Section  8.1.5(a).

     1.113  "PAYEE"  shall  have  the  meaning  assigned to such term in Section
6.5.1.

     1.114  "PAYOR"  shall  have  the  meaning  assigned to such term in Section
6.5.1.

     1.115  "PERSON"  shall  mean  any  corporation,  firm, partnership or other
entity.

     1.116 "PIPELINE OPTION PERIOD" shall have the meaning assigned to such term
in  Section  4.3.2(b)(ii).

     1.117  "PIVOTAL  REGISTRATION  STUDY"  shall  mean  a  human clinical trial
conducted  to  demonstrate  evidence  of  the  efficacy and safety of a drug for
inclusion  in  the  MAA  to  support Marketing Approval as more fully defined in
Section  312.21(c)  of  Title  21  of  the  U.S.  Code  of  Federal Regulations.

     1.118  "PRODUCT"  shall  mean  [  *  ].

     1.119  "PRODUCT  ACCEPTANCE  MILESTONE"  shall have the meaning assigned to
such  term  in  Section  6.2.1(a).

     1.120  "PRODUCT  REPORT"  shall  have  the meaning assigned to such term in
Section  4.2.

     1.121  "PROPOSED  BIOTHERAPEUTIC TARGET" shall have the meaning assigned to
such  term  in  Section  2.5.2.

     1.122  "PROOF  OF CONCEPT TRIAL" or "POC TRIAL" shall mean an initial phase
II  clinical  trial  of  a  Development  Candidate  [  *  ].

     1.123  "PROSECUTING  PARTY" shall have the meaning assigned to such term in
Section  8.1.5(b).

     1.124 "PROSECUTION AND MAINTENANCE" OR "PROSECUTE AND MAINTAIN" shall mean,
with  regard  to a Patent, the preparing, filing, prosecuting and maintenance of
such  Patent,  as well as the conduct of re-examinations, reissues, and requests
for  patent  term  extensions  with  respect  to  such Patent, together with the
conduct  of  interferences,  the  defense  of  oppositions  and  other  similar
proceedings  with  respect  to  the  particular  Patent.  For  clarification,
"Prosecution  and Maintenance" or "Prosecute and Maintain" shall not include any
other  enforcement  actions  taken  with  respect  to  a  Patent.

     1.125  "RECEIVING  PARTY"  shall  have the meaning assigned to such term in
Section  9.1.

     1.126  "REFUSED  CANDIDATE" shall have the meaning assigned to such term in
Section  4.3.1(b).

     1.127 "REGULATORY AUTHORITY" OR "REGULATORY AUTHORITIES" shall mean the FDA
in  the  U.S.,  and  any  health regulatory authority(ies) in any country in the
Territory that is a counterpart to the FDA and holds responsibility for granting
regulatory  marketing  approval  for  a  Product  in  such  country,  and  any
successor(s)  thereto.

     1.128 "REPORT DATE" shall have the meaning assigned to such term in Section
4.3.1(a).

     1.129  "RESEARCH  AND DEVELOPMENT PAYMENTS" shall have the meaning assigned
to  such  term  in  Section  3.8.

     1.130  "RETURNED  LICENSED PRODUCT" shall have the meaning assigned to such
term  in  Section  5.5.1.

     1.131 "REVIEW SUBCOMMITTEE" shall have the meaning assigned to such term in
Section  2.2.6(b).

     1.132  "SAC  SEC  FILING"  shall  have the meaning assigned to such term in
Section  13.1.2(d)(i).

     1.133  "SECOND  OPTION PERIOD" shall have the meaning assigned to such term
in  Section  4.3.1(c)(ii).

     1.134  "STOCK  PURCHASE  AGREEMENT" shall have the meaning assigned to such
term  in  the  Recitals.

     1.135  "SUBCOMMITTEE"  shall  have  the  meaning  assigned  to such term in
Section  2.2.6.

     1.136 "SUBJECT TRANSACTION" shall have the meaning assigned to such term in
Section  13.1.

     1.137  "SUBLICENSEE"  shall  mean, with respect to a particular Development
Compound  or  Product,  a  Third  Party  to whom GSK or EXEL, as applicable, has
granted  a  sublicense  under  any  Collaboration  Technology, technology and/or
intellectual  property  licensed  to  such  Party  pursuant  to  this Agreement.

     1.138  "SUBSEQUENT  PRODUCT REPORT" shall have the meaning assigned to such
term  in  Section  4.3.1(c)(ii).

     1.139  "SUBSEQUENTLY AFFILIATED COMPANY" shall have the meaning assigned to
such  term  in  Section  13.1.

     1.140  "SUCCESSFUL  POC  COMPLETION"  shall  mean  [  *  ].

     1.141  "TARGET  PRODUCT  PROFILE"  shall  mean  [  *  ].

     1.142  "TERM"  shall  have  the  meaning  assigned  to such term in Section
12.1.2.

     1.143  "TERRITORY" shall mean anywhere [  *  ].

     1.144  "THIRD  PARTY"  shall  mean  any entity other than EXEL or GSK or an
Affiliate  of  EXEL  or  GSK.

     1.145  "UNITED  STATES"  OR "U.S." shall mean the United States of America.

     1.146  "WRITTEN DISCLOSURE" shall have the meaning assigned to such term in
Section  14.1.

                                    ARTICLE 2

                         OVERSIGHT OF THE COLLABORATION

     2.1  IN  GENERAL.  Except  as  set  forth  herein  (including  without
limitation  as  set  forth  in  Section  5.5),  EXEL  shall  have  principal
responsibility  for  all  research,  discovery  and  development activities with
respect  to  Development  Compounds  prior to exercise by GSK of its Development
Election  with  respect  to  such  Development  Compounds,  and  GSK  shall have
principal  responsibility  for  all  research, development and commercialization
activities  with  respect  to  such  Development  Compounds selected as Licensed
Products  by  GSK  thereafter.

     2.2  THE  COLLABORATION  COMMITTEE.  Promptly  after  the  Effective  Date,
the  Parties  shall  establish  a  collaboration  committee  (the "COLLABORATION
COMMITTEE")  as  more  fully  described  in this Section 2.2.  The Collaboration
Committee  shall  have  review  and oversight responsibilities for all research,
development  and  commercialization  activities  performed  hereunder, including
oversight  of both the Development Program and the Commercialization Program, in
each  case  as  more  specifically  provided herein; provided, however, that the
Collaboration  Committee  shall have no authority to amend this Agreement.  Each
Party  agrees  to  keep  the  Collaboration Committee reasonably informed of its
progress and activities within the Development Program and the Commercialization
Program.

          2.2.1 Membership. The Collaboration Committee shall be comprised of an
equal  number of representatives from each of GSK and EXEL.  The exact number of
such  representatives  shall  be  [  * ] for each of GSK and EXEL, or such other
number  as the Parties may agree. Each Party shall provide the other with a list
of  its  initial  members  of the Collaboration Committee [ * ].  Each Party may
replace  any or all of its representatives on the Collaboration Committee at any
time  upon  written notice to the other Party in accordance with Section 14.9 of
this  Agreement.  Such  representatives  shall  include  individuals  within the
senior  management of each Party, and those representatives of each Party shall,
individually  or  collectively,  have expertise in business, pharmaceutical drug
discovery,  development  and commercialization.  Any member of the Collaboration
Committee may designate a substitute to attend and perform the functions of that
member  at  any  meeting of the Collaboration Committee.  Each Party may, in its
reasonable discretion, invite non-member representatives of such Party to attend
meetings of the Collaboration Committee.  If the Collaboration Committee chooses
to  designate  a  chairperson, such chairperson shall be appointed for a one (1)
year  term  and  the  right  to name the chairperson shall alternate between the
Parties.

          2.2.2  Meetings.  [ * ], the Collaboration Committee shall meet [ * ],
and  more frequently as the Parties deem appropriate, on such dates, and at such
places  and times, as provided herein or as the Parties shall agree. Thereafter,
the  Collaboration  Committee shall meet, in person or otherwise, at least [ * ]
to  provide  EXEL  an update regarding GSK's efforts under the Commercialization
Program  and otherwise to perform the responsibilities assigned to it under this
Agreement;  provided,  however,  that  [  * ], the Parties agree to periodically
discuss  in  good  faith  the  appropriate  frequency  of such ongoing meetings.
Meetings  of the Collaboration Committee that are held in person shall alternate
between  the  offices  of  the  Parties,  or such other place as the Parties may
agree.  The members of the Collaboration Committee also may convene or be polled
or  consulted  from  time  to  time  by  means  of  telecommunications,  video
conferences,  electronic  mail  or  correspondence,  as  deemed  necessary  or
appropriate.

          2.2.3  Minutes.  [  *  ],  EXEL shall be responsible for preparing and
circulating minutes of such meeting setting forth, inter alia, a description, in
reasonable  detail, of the discussions at the meeting and a list of any actions,
decisions  or  determinations approved by the Collaboration Committee and a list
of  any  issues  to  be  resolved  by the Executive Officers pursuant to Section
2.2.4.  Thereafter GSK shall be responsible for such minutes. Such minutes shall
be  effective  only  after  approved by both Parties. With the sole exception of
specific  items  of  the  meeting  minutes to which the members cannot agree and
which  are  escalated  to the Executive Officers as provided in Section 2.2.3(d)
below,  definitive  minutes  of  all  Collaboration  Committee meetings shall be
finalized  no later than thirty (30) days after the meeting to which the minutes
pertain,  as  follows:

               (a)  Within [ * ] after each Collaboration Committee meeting, the
Party responsible for preparing the minutes (the "DRAFTING PARTY") shall prepare
and  distribute  to  all members of the Collaboration Committee draft minutes of
the  meeting.

               (b)  The non-Drafting Party shall then have [ * ] after receiving
such  draft  minutes  to  collect  comments  thereon  from  its  members  of the
Collaboration  Committee  and  provide  them  to  the  Drafting  Party.

               (c)  Upon  the expiration of such [ * ] period, the Parties shall
have  [  * ] to discuss each other's comments and finalize the minutes. A member
of  the  Collaboration  Committee  from each Party shall sign and date the final
minutes.  The  signature of each Party's Collaboration Committee member upon the
final  minutes  shall  indicate  such  Party's  assent  to  the  minutes.

               (d) If at any time during the preparation and finalization of the
Collaboration  Committee  minutes,  the  Parties  do not agree on any issue with
respect  to  the minutes, such issue shall be resolved by the escalation process
as  provided  in  Section  2.2.4.  The  decision  resulting  from the escalation
process  shall  be  promptly recorded by the Drafting Party in amended finalized
minutes  for  said  meeting.

          2.2.4  Decision Making. Except as otherwise provided herein, decisions
of  the  Collaboration  Committee  [  *  ].  In the event that the Collaboration
Committee  is unable to reach [ * ] after it has met and attempted to reach such
decision, then either Party may, by written notice to the other, have such issue
referred  to the Chief Executive Officer of EXEL, or such other person holding a
similar  position  designated  by  EXEL  from  time  to  time, and the Chairman,
Research and Development, Pharmaceuticals of GSK, or such other person holding a
similar  position  designated  by  GSK  from  time  to  time  (collectively, the
"EXECUTIVE  OFFICERS"),  for  resolution.  The  Executive  Officers  shall  meet
promptly  to discuss the matter submitted and to determine a resolution.  If the
Executive  Officers  are  unable  to  determine a resolution in a timely manner,
which shall in no case be [ * ] after the matter was referred to them, the issue
shall  be  resolved  as  follows:

               (a)  Except  as  set  forth in Section 3.3.4 and as otherwise set
forth  in  this  Agreement,  [  *  ];  and

               (b)  [  *  ].

          2.2.5  Responsibilities.  The  Collaboration  Committee  shall  be
responsible  for  overseeing the entire collaboration between GSK and EXEL under
this Agreement, including both the Development Program and the Commercialization
Program.  Without  limiting  the  foregoing,  the  Collaboration Committee shall
perform  the following functions, some or all of which may be addressed directly
at  any  given  meeting  of  the  Collaboration  Committee:

               (a)  [  *  ];

               (b)  [  *  ];

               (c)  [  *  ];

               (d)  [  *  ];

               (e)  [  *  ];

               (f)  [  *  ];

               (g)  [  *  ];

               (h)  review  and  coordinate all of the Parties' activities under
this  Agreement;

               (i)  [  *  ];

               (j)  [  *  ];  and

               (k)  such  other  responsibilities  as  may  be  assigned  to the
Collaboration  Committee pursuant to this Agreement or as may be mutually agreed
upon  by  the  Parties  in  writing  from  time  to  time.

          2.2.6  Subcommittee(s). From time to time, the Collaboration Committee
may  establish subcommittees to oversee particular projects or activities, as it
deems  necessary or advisable (each, a "SUBCOMMITTEE").  Each Subcommittee shall
consist  of  such number of members of each Party as the Collaboration Committee
determines  is appropriate from time to time.  Such members shall be individuals
with  expertise  and  responsibilities  in the areas of preclinical development,
clinical  development,  intellectual  property, process sciences, manufacturing,
regulatory  affairs,  product  development  and/or product commercialization, as
applicable  to  the  stage  of  development  of  the  project or activity.  Each
Subcommittee shall meet with such frequency as the Collaboration Committee shall
determine.

               (a)  Each  Subcommittee  shall operate by [ * ] in all decisions.
If, with respect to a matter that is subject to a Subcommittee's decision-making
authority,  the Subcommittee cannot reach [ * ], the matter shall be referred to
the  Collaboration Committee, which shall resolve such matter in accordance with
Section  2.2.4.

               (b)  The  Parties acknowledge and agree that at the first meeting
of  the Collaboration Committee a temporary subcommittee shall be established to
continue  the initial review of all Existing Targets and Existing Compounds (the
"REVIEW  SUBCOMMITTEE").  The  Review  Subcommittee  shall  be  responsible  for
reviewing  proposals  from  the respective Parties regarding [ * ]. In addition,
the  Review  Subcommittee  shall  be  responsible  for  recommending the initial
prioritization  of  EXEL's  activities  with  respect  to  [  *  ].

          2.2.7  Expenses. Each Party shall bear its own travel related expenses
and  other  costs  with  respect to its activities relating to membership on the
Collaboration  Committee  or  any  Subcommittee.

     2.3  ALLIANCE  MANAGERS.  Promptly  after  the  Effective  Date, each Party
shall  appoint  an  individual(s)  (other  than  an  existing  member  of  the
Collaboration  Committee)  to act as the alliance manager(s) for such Party (the
"ALLIANCE  MANAGERS").  Each  Alliance  Manager shall thereafter be permitted to
attend  meetings  of  the  Collaboration  Committee  and  any  Subcommittee as a
nonvoting observer.  The Alliance Managers shall be the primary point of contact
for  the  Parties  regarding  the  collaboration activities contemplated by this
Agreement  and shall facilitate all such activities hereunder including, but not
limited  to, the exchange of Information described in Section 3.7.  The Alliance
Managers  shall also be responsible for assisting the Collaboration Committee in
performing  its  oversight responsibilities by: (i) maintaining a current roster
of: (A) Collaboration Committee members; and (B) Subcommittees and each of their
respective  members;  and  (ii)  ensuring the prompt appointment and maintaining
current  contact  information for each of the Development Candidate Liaisons and
Commercialization  Liaisons,  as and when applicable.  In addition, the Alliance
Managers  shall  be  responsible for coordinating with the Development Candidate
Liaison  all enabling activities to provide for a smooth transition in the event
GSK  exercises  its  Development  Election  with  respect  to  such  Development
Candidate  for  advancement  to become a Licensed Product, coordinating with the
Commercialization Liaison all communications between the Parties with respect to
the  further development and commercialization of the Licensed Products, as well
as  any  other  duties  as may be assigned to the Alliance Managers from time to
time  by  the  Collaboration Committee or EXEL and GSK, as the case may be.  The
name  and  contact  information  for  such  Alliance  Managers,  as  well as any
replacement(s)  chosen  by  EXEL  or GSK, in their sole discretion, from time to
time,  shall  be promptly provided to the other Party in accordance with Section
14.9  of  this  Agreement.

     2.4  LIAISONS.  GSK  shall appoint a Development Candidate Liaison for each
Development  Candidate  selected  by  EXEL in accordance with Section 3.3.2, who
shall be responsible for, and shall undertake, those activities as set forth in,
and pursuant to, Section 3.4; and EXEL shall appoint a Commercialization Liaison
for  each  Licensed  Product for which GSK has exercised a Development Election,
who shall be responsible for, and shall undertake, those activities as set forth
in,  and  pursuant  to,  Section  5.3.4(a).

     2.5  BIOTHERAPEUTIC  TARGETS.

          2.5.1  Existing  Biotherapeutic  Targets.  GSK agrees and acknowledges
that  EXEL has identified and/or conducted research with respect to the Existing
Biotherapeutic  Targets prior to the Effective Date.  It is expressly understood
that  Existing  Biotherapeutic  Targets  shall  be excluded from the Development
Program  [  *  ].

          2.5.2  Ongoing  Identification.  The  Parties  agree  that it is their
intention  that  targets  identified by EXEL during the Development Program that
are  only  amenable  to  the  development  of  Biotherapeutic  Products shall be
excluded  from  the Development Program to the extent necessary to allow EXEL to
develop  Biotherapeutic  Products  [  *  ].

          2.5.3  Criteria.  In  general,  a Biotherapeutic Target or an Existing
Biotherapeutic  Target  shall  be  [  *  ].

                                    ARTICLE 3

                               DEVELOPMENT PROGRAM

     3.1  COMMENCEMENT;  TERM.  The  Development  Program  shall commence [ * ].
EXEL  shall  have  principal  responsibility  for the conduct of the Development
Program,  including  all  scientific,  clinical, legal and regulatory activities
consistent  with  the Development Operating Plan described in Section 3.3.1 and,
where  applicable,  the  Development  Candidate  Plans.  GSK  shall  provide
consultation  and  advice  with  respect  to  such  activities,  which  shall be
considered  in  good  faith  by  EXEL.

          3.1.1  Term.  The Development Program will terminate upon the first to
occur  of:  (A)  [  *  ];  or  (B)  the end of Contract Year Six, unless earlier
terminated  in  accordance  with the provisions hereof (the "DEVELOPMENT TERM").

          3.1.2  Extension  Option. [ * ] GSK shall have the right and option to
elect  to extend the Development Program for a period not to exceed the first to
occur  of:
               (a)  [  *  ];  or

               (b)  [  *  ]  in  either  case,  (the  "EXTENSION  PERIOD").

To  exercise  such  option, GSK shall so notify EXEL, in writing, at least [ * ]
prior  to the end of    [ * ] or, in the event GSK has exercised its Development
Election  [ * ] after such exercise, and make the applicable annual payments set
forth  in  Section  3.8.3.

     3.2  OBJECTIVES;  DILIGENCE.

          3.2.1  Objectives.  The  common  objectives  of  the  Parties  are:

               (a)  in  the  event  GSK  [  *  ];

               (b)  in  the  event  GSK  [  *  ];

               (c)  for  EXEL  to  [  *  ].

          3.2.2  Diligence.  The Parties acknowledge and agree that, in order to
achieve  these  objectives,  EXEL  will  [  *  ]

          3.2.3  EXEL's Responsibilities. In order to achieve the objectives set
forth  in  Section  3.2.1,  [  *  ]  EXEL  shall:

               (a)  have  the  right  and responsibility to manufacture, or have
manufactured,  the  Development  Compounds  prior  to  GSK's  exercise  of  its
Development  Election  with  respect  thereto,  including all required bulk drug
substance  and  clinical  materials     [  *  ]

               (b) conduct all research and development activities it reasonably
determines  are  required  to further utilize [ * ]; provided however, that EXEL
shall have no obligation to GSK to conduct research with respect to any Excluded
Target  or,  subject  to Section 2.5.2, any Biotherapeutic Target as part of the
Development  Program  [  *  ];

               (c)  conduct all pre-clinical activities and clinical trials [*];

               (d)  conduct  formulation  development  [  *  ];

               (e)  develop  pharmacogenomic, biomarker or similar assays [ * ];

               (f)  keep GSK informed, through [ * ] written reports [ * ]; such
reports  shall  contain,  at  a  minimum,  the information set forth in Schedule
3.2.3(f);

               (g)  [  *  ];

               (h)  be  responsible  for  preparing  and  filing  all regulatory
filings  [  *  ];

               (i)  [  *  ];  and

               (j)  perform  such  other  obligations  with  respect  to  [  * ]
consistent  with  the  Development  Operating  Plan.

          3.2.4  [  *  ]

               (a)  [  *  ]  EXEL  shall:

               (b)  [  *  ]  use  commercially reasonable efforts to perform the
continuing  research  activities  to  be  conducted  by  EXEL  pursuant  to  the
Development  Program  [  *  ]

               (c)  [  *  ].

     3.3  DEVELOPMENT  OPERATING  PLAN;  DEVELOPMENT  CANDIDATE  PLAN(S).

          3.3.1  Development  Operating  Plan.  The  Development Program will be
carried  out  by  EXEL  pursuant to an annual overall development operating plan
(the  "DEVELOPMENT  OPERATING  PLAN" or "DOP") [ * ].  The DOP for Contract Year
One,  dated  as  of October 28, 2002, shall be [ * ].  The Development Operating
Plan  shall  be  updated  by  EXEL  [ * ].  As provided in Section 3.2.3(f), the
reports  being  provided  by  EXEL  under  such Section shall provide updates of
EXEL's  progress  under  the  Development  Operating  Plan  [  *  ].

          3.3.2  Development  Candidate  Plan(s).

               (a)  At  the  first  meeting  of the Collaboration Committee, the
Collaboration  Committee  shall  [  *  ]  Based  on these discussions, EXEL will
prepare  [  *  ]  a  development  plan  for  each Development Candidate [ * ] (a
"DEVELOPMENT  CANDIDATE  PLAN") for review by the Collaboration Committee at its
next  regularly  scheduled  meeting.  [  *  ]

          3.3.3  Ongoing  Review.  The  Development  Operating  Plan  and  each
Development Candidate Plan with respect to a Development Candidate [ * ] will be
reviewed  as  necessary  at  each  meeting of the Collaboration Committee [ * ].

          3.3.4  [  *  ]

     3.4  DEVELOPMENT  CANDIDATE  LIAISON.  [  * ] GSK shall appoint an internal
contact  to  act as a liaison between EXEL and GSK regarding further development
of  each  such Development Candidate (the "DEVELOPMENT CANDIDATE LIAISON").  The
Development  Candidate  Liaison  shall  be  responsible for [ * ].  The name and
contact  information for each such Development Candidate Liaison, as well as any
replacement(s)  chosen  by GSK, in its sole discretion, from time to time, shall
be  promptly provided to EXEL in accordance with Section 14.9 of this Agreement.
EXEL shall [ * ].  During [ * ], the Development Candidate Liaison shall provide
to EXEL regular, periodic written reports, at least [ * ] and not later than [ *
]  in  advance  of  each Collaboration Committee meeting [ * ].  The Development
Candidate  Liaison  position  for  each  Development  Candidate  shall  [  *  ].

     3.5  PROGRAM  OPTION  ELECTION.

          3.5.1  Election Period. Commencing as of the [ * ] in which to provide
to GSK [ * ], along with a data package containing, to the extent then available
and with respect to [ * ] (the "DATA PACKAGE").  GSK shall [ * ] from receipt of
the  Data  Package  to  choose  either  to:

               (a)  [  * ] for further development under the Development Program
(the  "LIMITED  PROGRAM  OPTION");  or

               (b)  have  EXEL  [  *  ]  as part of the Development Program (the
"EXPANDED  PROGRAM  OPTION").

In  the  event  that  GSK  [  *  ]  GSK  shall  [  *  ].

          3.5.2 Selection of the Limited Program Option. In the event GSK [ * ].

     3.6  REGULATORY  MATTERS.

          3.6.1  Compliance.  EXEL shall conduct all pre-clinical activities and
clinical  trials  in  good  scientific  manner  and  in  compliance  with  all
requirements of applicable laws, rules and regulations, and all other applicable
requirements  of  cGMP,  good  laboratory  practice  and  current  good clinical
practice.

          3.6.2  Ownership.  EXEL  shall own and maintain all regulatory filings
for  Development  Compounds  developed pursuant to this Agreement, including all
INDs.  Upon  exercise  by  GSK  of  its  Development  Election with respect to a
Development  Candidate, EXEL shall transfer ownership of such regulatory filings
for such Development Candidate [ * ], including all relevant INDs for any of the
foregoing  to GSK, and provide GSK with copies of such INDs and other regulatory
filings,  and  all  pre-clinical  and  clinical  data  and  results  (including
pharmacology,  toxicology,  formulation,  and  stability  studies).  GSK  or its
designee  shall  own  all Marketing Approval Applications for Licensed Products.

          3.6.3  Adverse  Event  Reporting.  Beginning on the Effective Date and
continuing  until such time, if any, that GSK exercises its Development Election
with  respect to a Development Candidate to be a Licensed Product, EXEL shall be
responsible  for  reporting all adverse drug reaction experiences related to the
activities  of  EXEL  under  this  Agreement  to  the  appropriate  Regulatory
Authorities in the countries in the Territory in which the Development Candidate
is  being  developed, in accordance with the appropriate laws and regulations of
the relevant countries and Regulatory Authorities.  EXEL shall provide copies of
all  such reports to GSK within [ * ] of any filing with a Regulatory Authority.

     3.7  EXCHANGE  OF  INFORMATION.  In  addition  to  the  [ * ] reports to be
provided  under  Section 3.2.3(f), and subject in all cases to the provisions of
Article  9,  [  *  ]  EXEL shall [ * ]. Any significant new Information shall be
communicated  [  * ].  All such exchanges of Information shall be coordinated by
the  Alliance  Managers.

     3.8  DEVELOPMENT  PROGRAM  FUNDING.  As consideration for, and to partially
fund  the  costs  to  be  incurred  by  EXEL  for, the research activities to be
conducted  by  EXEL  for the intended benefit of GSK pursuant to the Development
Program,  GSK  shall  pay  the  following  research  and  development  payments
(collectively,  the  "RESEARCH  AND  DEVELOPMENT  PAYMENTS"):

          3.8.1  Annual  Payments.  GSK  shall  pay  the  following  annual
non-refundable  and  non-creditable payments (collectively, the "ANNUAL RESEARCH
AND  DEVELOPMENT  PAYMENTS")  to  EXEL  on  or  before  the  date  set  forth:

               (a)  regardless  of  GSK's  selection  pursuant  to  Section 3.5:

[  *  ]

;  and  either

               (b)  under  the  Expanded  Program  Option:

[  *  ]

or

               (c)  under  the  Limited  Program  Option:

[  *  ]

          3.8.2  Incentive  Payments.

               (a)  [  *  ],  GSK  shall  make  a  one  (1)-time  non-refundable
non-creditable  payment  to EXEL, within [ * ] of GSK's Development Election for
the  [  *  ]  Licensed  Product,  equal  to  the amount of any remaining, unpaid
Research  and  Development  Payments  set  forth in Section 3.8.1(a) and (b); or

               (b)  If  GSK  [ * ], GSK shall make a one (1)-time non-refundable
non-creditable  payment  to EXEL, within [ * ] of GSK's Development Election for
the  [  *  ]  Licensed  Product,  equal  to  the amount of any remaining, unpaid
Research  and  Development  Payments  set  forth  in  Section  3.8.1(a) and (c).

          3.8.3  Extension  Period  Option  Payments.

               (a)  In  the event GSK [ * ], GSK shall pay to EXEL the following
non-refundable, non-creditable payments to EXEL [ * ]: (1) [ * ] upon [ * ]; and
(2)  [  *  ];  or

               (b)  In  the event GSK [ * ], GSK shall pay to EXEL the following
non-refundable, non-creditable payments to EXEL [ * ]: (1) [ * ]; and (2) [ * ].

               (c)  [  *  ].

     3.9  FUTURE  ACQUIRED  TECHNOLOGY.  [  *  ].

     3.10  GSK  TECHNOLOGY.  [  *  ].

     3.11  SUBCONTRACTING. Each Party shall have the right to engage Third Party
subcontractors  to  perform  certain  of its obligations under this Agreement in
accordance  with the terms of Section 5.1.1.  In the event that any Affiliate of
EXEL  other  than  an  EXEL Entity performs any of EXEL's obligations under this
Agreement,  such  Affiliate  shall  be  deemed to be a subcontractor of EXEL for
purposes  of  this  Section 3.11.  Any subcontractor to be engaged by a Party to
perform  a  Party's  obligations  set  forth  in  the  Agreement  shall meet the
qualifications  typically  required  by  such  Party for the performance of work
similar  in  scope  and  complexity  to  the  subcontracted  activity.  [  *  ]

                                    ARTICLE 4

                              GSK'S ELECTION RIGHTS

     4.1 DEVELOPMENT ELECTION. During [ * ], GSK shall have the exclusive right,
in  its  sole discretion, to elect to develop and commercialize each Development
Compound  proposed  to  it  by EXEL as set forth below in Section 4.3, under the
terms  and  conditions set forth in this Agreement (the "DEVELOPMENT ELECTION").
Subject  to  Section  5.5,  any  such  Development  Election  by  GSK  shall  be
irrevocable.

     4.2  PRODUCT REPORT. Once a Development Candidate [ * ], EXEL shall, within
[  *  ], provide a data package to GSK containing information addressing all the
criteria for such Development Candidate as agreed upon by the Parties and listed
in  Schedule  4.2, [ * ]. The Collaboration Committee shall meet and review such
Product  Report  within  [  *  ]  of  its  receipt  by  GSK.

     4.3  DEVELOPMENT  ELECTION  OPTIONS.

          4.3.1 Exercise During Development Term or Extension Period. During the
Development  Term  or  the  Extension  Period,  if  any:

               (a)  First Option. GSK may exercise its Development Election with
respect  to  a Development Candidate [ * ] for further development as a Licensed
Product  by delivery to EXEL of written notice of exercise, not later than [ * ]
after  receipt  of the Product Report from EXEL with respect to that Development
Candidate  (such date of receipt, the "REPORT DATE"), specifying the Development
Candidate  as  to  which  the Development Election is being exercised. The [ * ]
period  during  which  the  Development Election must be exercised, as set forth
herein,  shall  be  referred  to in this Agreement as the "FIRST OPTION PERIOD."

               (b)  Refused  Candidate. If GSK does not exercise its Development
Election  with  respect  to  a  particular  Development  Candidate  (a  "REFUSED
CANDIDATE")  within the First Option Period, then the Development Election shall
expire  with  respect  to that Refused Candidate [ * ]. Upon the expiration of a
Development  Election with respect to a Refused Candidate (subject to the rights
of  GSK  set  forth  in  Section  4.3.1(c)  and  Section  4.4), GSK shall [ * ].

               (c)  Second  Option.  Following  expiration  of GSK's Development
Election  with  respect  to  a particular Development Candidate within the First
Option  Period  and  until  [  *  ]:

                    (i)  EXEL  shall  not  [  *  ];  and

                    (ii) [ * ] EXEL shall: (A) promptly notify GSK of [ * ] with
respect  to such Refused Candidate (the "SUBSEQUENT PRODUCT REPORT"). During the
[  *  ]  period  immediately following delivery to GSK of the Subsequent Product
Report  (the  "SECOND  OPTION  PERIOD"),  GSK  shall have the exclusive right to
exercise  a  second  Development Election with respect to such Refused Candidate
and  accept  such Refused Candidate as a Licensed Product by delivery to EXEL of
written  notice  of  exercise.

                    (iii) Notwithstanding the foregoing, upon [ * ], GSK shall [
*  ].  It  is  further understood that in the event GSK elects not to exercise a
Development  Election  during  the  Second  Option  Period  with  respect  to  a
particular  Refused Candidate, its rights with respect to such Refused Candidate
under  Section  4.3.1(c)(ii)  shall  be exhausted, and GSK shall have only those
rights  as  may  arise  pursuant  to  Section  4.3.2(b)  or  4.4.

          4.3.2  Exercise  upon  Expiration of the Development Term or Extension
     Period.

               (a)  Effect  on  First  and  Second  Option  Periods. If upon the
expiration  of  the  Development  Term,  or  the  Extension  Period,  if  any, a
Development Candidate or Refused Candidate has been proposed to GSK either under
a  First  Option Period or a Second Option Period, as the case may be, GSK shall
have [ * ] to exercise its Development Election with respect to such Development
Candidate  or  Refused Candidate under such First Option Period or Second Option
Period,  as  the  case  may  be,  [  *  ].

               (b)  Pipeline  Option.  [  *  ].

     4.4  THE  DISCUSSION  OPPORTUNITY.  [  *  ].

                              ARTICLE  5

                    GRANT  OF  RIGHTS;  COMMERCIALIZATION

     5.1  LICENSE  GRANTS.

          5.1.1  Development.

               (a)  EXEL  hereby  grants  to  GSK,  subject  to  the  terms  and
conditions  of  this Agreement, a non-exclusive, non-royalty bearing, license in
the  Territory  to  use subject matter within the EXEL Technology solely for the
purpose of performing internal development activities [ * ]. The license granted
under  this  Section  5.1.1(a) shall not include the right to grant or authorize
sublicenses;  provided, however, that the engagement by GSK of subcontractors to
conduct  activities  under  this Agreement shall not be construed as having been
granted  a  sublicense.

               (b)  [  *  ]

          5.1.2  Commercialization.  Upon  GSK's  exercise  of  its  Development
Election and acceptance of each Licensed Product, EXEL shall be hereby deemed to
have  granted,  and hereby grants to GSK, subject to the terms and conditions of
this  Agreement,  during  the  Term,  the exclusive (even as to EXEL), right and
license  in  the  Territory, with the right to grant sublicenses, under the EXEL
Technology,  to  make,  have  made,  use,  sell,  offer for sale and import such
Licensed  Products  for  any  and  all  purposes.

          5.1.3  License  to  Co-promote.  In  the  event  the  Parties  [  * ]:

               (a) GSK shall grant to EXEL [*]; and

               (b)  The  licenses  granted  to  GSK under Section 5.1.2 shall be
deemed  to  be  modified  to  the  extent  necessary  in  order to allow EXEL to
undertake  its  Co-promotion  activities  thereunder.

               (c)  For  each  Co-promotion  license granted to EXEL pursuant to
Section  5.1.3(a)  with  respect to a particular Licensed Product, GSK covenants
that  [  *  ]

     5.2  TECHNOLOGY  TRANSFER.

          5.2.1  Initial  Transfer.  After  GSK  exercises  its  Development
Election  for  a  Development  Candidate  pursuant  to  Section 4.3, EXEL shall:

               (a)  promptly  deliver  to  GSK  [  *  ]  all EXEL Technology and
other  Information  Controlled  by  the  EXEL  Entities  relating  to [ * ]; and

               (b)  transfer  to  GSK,  or  its  designee  [  *  ];  and

               (c)  without  limiting  the  foregoing,  EXEL  shall  [  *  ].

          5.2.2  [  *  ].

          5.2.3  [  *  ].

     5.3  COMMERCIALIZATION  PROGRAM.

          5.3.1  Commencement;  Term.  GSK  shall  promptly  commence and pursue
a program of ongoing development and commercialization for the Licensed Products
[  *  ]  (the "COMMERCIALIZATION PROGRAM"). Subject to the provisions of Article
12,  the  Commercialization  Program  shall  terminate,  on  a  Licensed
Product-by-Licensed  Product  basis,  and  a  country-by-country basis, upon the
expiration  of  this  Agreement  with  respect  to such Licensed Product in such
country  pursuant  to  Section  12.1.1  (the  "COMMERCIALIZATION  TERM").

          5.3.2  GSK  Responsibilities;  Rights.  Except  as  set  forth  in
Section  5.3.4(c),  GSK,  either  itself  and/or  by and through its Affiliates,
Sublicensees  or  contractors,  shall  be  responsible  for,  and shall have the
exclusive  right  to  engage  in,  all  development,  manufacturing,  marketing,
advertising,  promotional,  launch  and  sales activities in connection with the
marketing  of  the  Licensed Products. As part of the Commercialization Program,
during  the  Commercialization  Term,  GSK  shall:

               (a)  have  the  exclusive  right  and  responsibility  for
manufacturing  all  bulk drug substance or drug product material with respect to
Licensed  Products  for  ongoing  development  and  commercial  requirements,
consistent  with GSK's reasonable internal practices, industry standards and all
applicable  laws  and  regulations;

               (b)  own  all  MAAs,  Marketing  Approvals  and  other regulatory
filings  and  approvals  for  the  Licensed  Product(s)  in  the  Territory;

               (c)  prepare  overview  marketing  plans  for  each  of  the
Licensed  Products  in  the  Territory;

               (d)  conduct,  or  cause  to  be  conducted,  manage  and oversee
all  analysis  and  other  support  necessary  with  respect to the manufacture,
marketing  and  sale  of  all  Licensed  Products  in  the  Territory;

               (e)  [  *  ];

               (f)  [  *  ];  and

               (g)  maintain  records,  in  sufficient  detail,  which  shall be
complete  and  accurate  and  shall fully and properly reflect all work done and
results  achieved  in  connection with the Commercialization Program in the form
required  under  all  applicable  laws  and  regulations.

          5.3.3  GSK  Diligence.  During  the  Commercialization Term, GSK shall
[  *].

          5.3.4  EXEL  Responsibilities;  Rights.  As  part  of  the
Commercialization  Program,  EXEL  shall:

               (a)  appoint  an  internal  contact  to  act as a project liaison
between  EXEL  and GSK for the further development and commercialization of such
Licensed  Product  (the  "COMMERCIALIZATION  LIAISON").  The  Commercialization
Liaison  shall  be  responsible  for [ * ]. The name and contact information for
such Commercialization Liaison, as well as any replacement(s) chosen by EXEL, in
its  sole  discretion,  from  time to time, shall be promptly provided to GSK in
accordance  with  Section  14.9 of this Agreement. The Commercialization Liaison
position  for  each  Licensed  Product  shall  [  *  ];

               (b)  transfer  ownership  of  all  regulatory  filings  for
Licensed  Products,  including  all  INDs to GSK, and provide GSK with copies of
such  INDs  and other regulatory filings, all pre-clinical and clinical data and
results  for  Licensed  Products  as  set  forth  in Sections 3.6.2 and 5.2; and

               (c)  have  the  right  to  Co-promote  each  Licensed  Product
throughout  North  America  (the  "CO-PROMOTION  RIGHT")  only  pursuant  to the
following  conditions:

                    (i)  GSK  shall  promptly  notify  EXEL of the filing by GSK
of  the  first  MAA  for  Marketing  Approval for each Licensed Product in North
America,  and EXEL shall have [ * ] from the date of receipt of such notice from
GSK  to  exercise  the  Co-promotion  Right;

                    (ii)  if  EXEL  so  exercises  the  Co-promotion  Right, the
Parties  shall,  within  [  *  ] from such exercise, meet to commence good faith
negotiations  to  determine  [  * ]. Such discussions will include [ * ]. If the
Parties  agree  [  *  ].

     5.4  COMPETITIVE  PRODUCTS.

          5.4.1  After  GSK's  Development  Election.  In the event that, at any
time  after  GSK  exercises  its  Development  Election and accepts a particular
Licensed  Product  for  further  development  and  commercialization, GSK [ * ].

          5.4.2  [  *  ].

     5.5  RETURNED  LICENSED  PRODUCTS.

          5.5.1  Termination  of  Development  by  GSK.  In  the  event that GSK
exercises  its  Development  Election  and accepts a particular Licensed Product
into  the Commercialization Program and thereafter [ * ], GSK shall be deemed to
have  terminated its rights to such Licensed Product in such country(ies) or the
Territory, as the case may be (except for GSK's right to receive royalties under
Section 6.4.2), and thereafter such Licensed Product shall be deemed a "RETURNED
LICENSED  PRODUCT"  in  such  country(ies)  or  the  Territory,  as  applicable.

          5.5.2  Effect  of  Termination.  Upon  any  such  termination  [  * ].

          5.5.3  EXEL's  Right  to  Commercialize.  Thereafter,  EXEL  shall  be
free  to  develop  and  commercialize  the  Returned  Licensed  Product  in such
country(ies) or the Territory, as applicable, either alone, through an Affiliate
or  with any Third Party, subject to the payments set forth in Section 6.4.2. In
the  event  EXEL  decides  to further develop and/or commercialize such Returned
Licensed  Product  in  such country(ies) or the Territory, as applicable, either
alone,  through  an Affiliate or with any Third Party, EXEL shall be responsible
for any and all obligations of EXEL or GSK to Third Parties with respect to such
Returned Licensed Product including, but not limited to, any ongoing obligations
of  GSK  under  Third  Party  manufacturing  or  licensing  agreements.

          5.5.4  Unauthorized  Sales.  In  the  event  that  EXEL  acquires  the
rights  with  respect  to  a  Returned  Licensed  Product  in some, but not all,
countries  in  the  Territory,  each  Party  shall  use  commercially reasonable
efforts,  consistent  with  applicable  laws,  to  assist  the  other  Party  in
maintaining  such  other  Party's exclusive rights with respect to such Licensed
Product  or  Returned Licensed Product, as the case may be, within the countries
in  its respective territory. Each Party shall also take all reasonable actions,
and  shall  use  all  commercially reasonable efforts to require its Affiliates,
Sublicensees  and distributors to take all reasonable actions, not to solicit or
facilitate  sales  of such Licensed Product or Returned Licensed Product, as the
case may be, outside the countries in its respective territory, unless permitted
in  writing  by  the other Party. In addition, each Party shall notify the other
Party  immediately  if  it  becomes  aware  of  any  such  sales.

                                    ARTICLE 6

                       MILESTONES AND ROYALTIES; PAYMENTS

     6.1  UPFRONT  PAYMENT  TO  EXEL.  As  consideration  for,  and to partially
fund  the  costs  to  be  incurred  by  EXEL  for, the research activities to be
conducted  by  EXEL  for the intended benefit of GSK pursuant to the Development
Program, GSK shall pay to EXEL a non-refundable, non-creditable up-front payment
of:

               (a)  Thirty  Million  Dollars  ($30,000,000)  [  *  ];  and

               (b)  [  *  ]  payable  [  *  ].

     6.2  MILESTONES  PAYMENTS  TO  EXEL.  As  partial consideration to EXEL for
the  license  and other rights granted to GSK under Article 5 of this Agreement,
GSK  shall  pay to EXEL the following non-refundable milestone payments upon the
occurrence  of  each  event  set  forth  below:

          6.2.1  Product  Acceptance  Milestones.

               (a)  Subject  to  Section  6.2.1(b),  GSK  shall  pay to EXEL the
following milestone payments upon GSK's exercise of its Development Election for
a  particular  Development  Candidate  to  become  a  Licensed  Product (each, a
"PRODUCT  ACCEPTANCE  MILESTONE"):

                    (i)  First Option. If GSK exercises its Development Election
for  a Development Candidate during the First Option Period for such Development
Candidate  pursuant to Section 4.3.1(a) or 4.3.2(a) [ * ], then GSK shall pay to
EXEL  within  [  *  ]  of the delivery of notice to EXEL regarding such exercise
(subject  to  Section  14.6)  the  following  amount  [ * ]

                    (ii)  Second  Option.  If  GSK's  Development  Election  is
exercised  for  a  Refused  Candidate  during  the Second Option Period for such
Refused  Candidate  pursuant  to  Sections  4.3.1(c)  or  4.3.2(a),  the Product
Acceptance  Milestone(s)  to  be  paid  to  EXEL shall be [ * ] , which shall be
determined  [  *  ]  and shall be paid within [ * ] of the delivery of notice to
EXEL  regarding  such  exercise  (subject  to  Section  14.6).

                    (iii)  Pipeline  Option.  If  GSK's  Development Election is
exercised  for a Development Compound during the Pipeline Option Period pursuant
to Section 4.3.2(b) [ * ], then GSK shall pay to EXEL the following amount [ * ]
All payments under this Section 6.2.1(a)(iii) shall be made within [ * ] after [
*  ]  with  respect  to  any  such  Development  Compound  [ * ].

               (b)  Any  such  Product  Acceptance  Milestone(s) [ * ].

          6.2.2  Commercialization  Milestones.

               (a)  Subject  to Section 6.2.2(b), GSK shall, within [ * ] of the
first  occurrence  of  each  event set forth below with respect to each Licensed
Product,  pay  to  EXEL  the  following  non-refundable  milestone  payments:

                    (i)  First  Option.  If  GSK's  Development  Election  was
exercised  for  a  Development Candidate to become a Licensed Product during the
First Option Period for such Development Candidate pursuant to Sections 4.3.1(a)
or  4.3.2(a)  [  *  ]:

         MILESTONE EVENT                           MILESTONE PAYMENT
         ------------------------------------------------------------------
         1. - [ * ] . . . . . . . . . . . . . .            [ * ]
         ------------------------------------------------------------------
         2. - [ * ] . . . . . . . . . . . . . .            [ * ]
         ------------------------------------------------------------------
         3. - [ * ] . . . . . . . . . . . . . .            [ * ]
         ------------------------------------------------------------------

                    (ii)  Second  Option.  If  GSK's  Development Election for a
Refused  Candidate  to become a Licensed Product was exercised during the Second
Option  Period  for  such  Refused  Candidate  pursuant  to Sections 4.3.1(c) or
4.3.2(a), the milestone payment to EXEL for such Licensed Product shall be [ * ]
;  and

                    (iii)  Pipeline  Option. If GSK's Development Election for a
Development  Compound  to  become  a  Licensed  Product was exercised during the
Pipeline  Option  Period  for  such  Development  Compound  pursuant to Sections
4.3.2(b)  (which is not otherwise deemed to have been exercised during the First
Option  Period  pursuant  to  Section  6.2.1(a)(iii)):

         MILESTONE EVENT                           MILESTONE PAYMENT
         ------------------------------------------------------------------
         1. - [ * ] . . . . . . . . . . . . . .            [ * ]
         ------------------------------------------------------------------
         2. - [ * ] . . . . . . . . . . . . . .            [ * ]
         ------------------------------------------------------------------
         3. - [ * ] . . . . . . . . . . . . . .            [ * ]
         ------------------------------------------------------------------

               (b)  GSK  shall be responsible for promptly informing EXEL when a
milestone  has  been  achieved.  Any  milestone  payments  made pursuant to this
Section  6.2.2 [  *  ].

               (c) Notwithstanding anything contained herein to the contrary, in
the  event  that a particular Licensed Product: (1) has not achieved one or more
of  the milestone events set forth in Section 6.2.2(a); and (2) total cumulative
Net Sales for [ * ] for such Licensed Product exceed [ * ] in the Territory, GSK
shall  pay to EXEL (subject to Section 6.2.2(b)) all milestone payments for such
Licensed  Product  as  if  all  milestone  events had occurred and such Licensed
Product  shall have been deemed to have achieved such milestone event(s) for all
purposes  hereunder.

          6.2.3  [  *  ].

          6.2.4  Payments  Only  Once.  For  purposes  of  clarification,  it is
understood  and  agreed that: (A) with respect to the milestone events set forth
in  Sections  6.1.1  and  6.1.2,  a  milestone payment shall be made by GSK with
respect  to  each  Licensed  Product based on whether GSK's Development Election
with respect to the Development Candidate as such Licensed Product was exercised
during  the First Option Period, the Second Option Period or the Pipeline Option
Period; and (B) with respect to all milestone payments set forth in this Section
6.2,  a  particular milestone payment will be made with respect to each Licensed
Product  only  one  (1)  time  [  *  ].

     6.3  ROYALTY  PAYMENTS  TO  EXEL.  As further consideration to EXEL for the
license  and  other rights granted to GSK under Article 5 of this Agreement, GSK
shall  pay  to  EXEL  royalties  as  follows:

          6.3.1  Licensed  Product  Royalty  Payments.

               (a)  Subject  to  Section  6.3.3, GSK shall pay EXEL a royalty on
annual  Net Sales of Licensed Products by GSK, its Affiliates or Sublicensees in
the  Territory.  Such royalty shall be determined by: [ * ], in each case as set
forth  in  the  following  tables:

                    (i)  First  Option Period. If GSK's Development Election for
the applicable Licensed Product was made during the First Option Period pursuant
to  Sections  4.3.1(a) or 4.3.2(a) (or GSK is deemed to have done so pursuant to
Section 6.2.1(a)(iii)): (A) the royalty rate for all Licensed Products shall [ *
];  and  (B)  the  royalty  rate for the individual Licensed Product so accepted
during  the  First  Option  Period  shall  be  as  follows:

[  *  ]

                    (ii) Second Option Period. If GSK's Development Election for
a  particular Licensed Product was made during the Second Option Period pursuant
to Sections 4.3.1(c) or 4.3.2(a): (A) the royalty rate for all Licensed Products
shall  [  *  ] ; and (B) the royalty rate for the individual Licensed Product so
accepted  during  the  Second  Option  Period  shall  be  as  follows:

[  *  ]

                    (iii)  Pipeline Option Period. If GSK's Development Election
for  a  particular  Licensed  Product  is made during the Pipeline Option Period
pursuant  to  Section  4.3.2(b)  [  *  ]:  (A) the royalty rate for all Licensed
Products  [ * ]; and (B) the royalty rate for the individual Licensed Product so
accepted  during  the  Pipeline  Option  Period  shall  be  [  *  ], as follows:

[  *  ]

               (b)  For  purposes  of  determining  the royalty rates applicable
under  Section  6.3.1,  it  is understood that "total annual Net Sales" shall be
determined  [  *  ].  Further, it is understood that the royalty rates set forth
herein  shall  be  [  *  ].

               (c)  In  the event the Gross Margin for a Licensed Product [ * ]

          6.3.2  [  *  ].

          6.3.3  Termination  of  Royalty Obligation. For each Licensed Product,
the  obligation  to  pay  royalties  under  Section  6.3.1 shall terminate, on a
country-by-country  basis,  upon  the expiration of the later of: (A) [ * ] ; or
(B)  [ * ] of such Licensed Product in such country; provided, however, that the
royalty  rate  set  forth  in  the  respective tables in this Article 6 shall be
applicable  for  [ * ] claiming or covering the manufacture, use of sale of such
Licensed  Product,  and  thereafter  the  royalty  rate  shall be [ * ] for such
Licensed  Product  for  the  remainder,  if  any,  of  the royalty term for such
Licensed  Product  set  forth  in  this  Section  6.3.3.

          6.3.4  Schedule  of  Examples.  To  further clarify the application of
Sections  6.1  and  6.2,  Schedule  6.3.4  sets  forth examples of the milestone
payments  and  royalty  rates  that  will  apply  in  different  scenarios.

     6.4  ROYALTY  PAYMENTS  TO  GSK.  As  further  consideration to GSK for its
support of, and activities under, the Development Program, EXEL shall pay to GSK
royalties  as  follows:

          6.4.1  EXEL  Product  Royalties. With respect to any Refused Candidate
that  EXEL is free to develop and commercialize as provided in Section 4.3.1(b),
which  Refused  Candidate  is  subsequently  commercialized  by  EXEL,  or  its
Affiliates  or  Sublicensees,  EXEL shall pay to GSK a royalty of [ * ] of total
Net  Sales  in  the  Territory  of  all  products  incorporating  [  * ], and/or
formulations,  mixtures  or  compositions incorporating any of the foregoing (an
"EXEL  PRODUCT")  by  EXEL,  its  Affiliates  or  Sublicensees.

               (a)  The obligation to pay royalties under Section 6.4.1 for each
EXEL  Product  so commercialized shall terminate, on a country-by-country basis,
upon  the  expiration  of  the later of: (1) the expiration of [ * ] claiming or
covering  the  manufacture, use or sale of such EXEL Product in such country; or
(2)  [  * ] of such EXEL Product in such country; provided, however, the royalty
rate  set forth herein shall be applicable for [ * ] described above claiming or
covering  the  manufacture, use or sale of such EXEL Product, and thereafter the
royalty  rate shall be [ * ] for such EXEL Product for the remainder, if any, of
the  royalty  term  for  such  EXEL  Product set forth in this Section 6.4.1(a).

          6.4.2  Returned  Licensed  Product  Royalties.  With  respect  to  any
Returned  Licensed Product under Section 5.5 that is subsequently commercialized
by  EXEL,  either  alone or with a Third Party (including any Sublicensee), EXEL
shall  pay to GSK a royalty on total Net Sales of such Returned Licensed Product
by  EXEL,  its  Affiliates  or  Sublicensees  as  follows:

               (a)  an  amount equal to [ * ] of the aggregate Net Sales of such
Returned  Licensed  Product  if  GSK  terminated  its  commercialization of such
Returned  Licensed  Product  [  *  ];  or

               (b)  an  amount equal to [ * ] of the aggregate Net Sales of such
Returned  Licensed  Product  if  GSK  terminated  its  commercialization of such
Returned  Licensed  Product  [  *  ].

               (c)  The obligation to pay royalties under Section 6.4.2 for each
Returned  Licensed  Product  so  commercialized  shall  terminate  on  a
country-by-country basis upon the expiration of the later of: (1) the expiration
of  [  *  ]  claiming  or covering the manufacture, use or sale of such Returned
Licensed Product in such country; or (2) [ * ] of such Returned Licensed Product
in such country; provided, however, that the royalty rate set forth herein shall
be  applicable  for  [ * ] described above claiming or covering the manufacture,
use  or  sale of such Returned Licensed Product, and thereafter the royalty rate
shall  be [ * ] for such Returned Licensed Product for the remainder, if any, of
the  royalty  term  for such Returned Licensed Product set forth in this Section
6.4.2(c).

          6.4.3 Royalties on EXEL Biotherapeutic Products. EXEL shall pay to GSK
a  royalty  of  [  *  ]  of  total  Net Sales, reduced by royalties due to Third
Parties, as described in Section 6.4.4, by EXEL, its Affiliates or Sublicensees,
on a country-by-country basis, of all Biotherapeutic Products which EXEL, either
alone  or through an Affiliate or Third Party, develops and commercializes for [
*  ]  (each,  an "EXEL BIOTHERAPEUTIC PRODUCT"). The obligation to pay royalties
under  this Section 6.4.3 for each EXEL Biotherapeutic Product so commercialized
shall terminate, on a country-by-country basis, upon the expiration of the later
of:  (A)  the  expiration  of [ * ] claiming or covering the manufacture, use or
sale  of such EXEL Biotherapeutic Product is directed; or (B) [ * ] of such EXEL
Biotherapeutic  Product;  provided,  however,  the  royalty rate set forth above
shall  be  applicable  for  [  *  ]  described  above  claiming  or covering the
manufacture, use or sale of such EXEL Biotherapeutic Product, and thereafter the
royalty  rate  shall  be  [  *  ]  for  such EXEL Biotherapeutic Product for the
remainder,  if any, of the royalty term for such EXEL Biotherapeutic Product set
forth  in  this  Section  6.4.3.

          6.4.4  EXEL  Royalties  Offsets.  If,  during  the Term, EXEL deems it
necessary  to  seek or obtain a license from any Third Party in order to develop
and  commercialize  any  EXEL  Product,  Returned  Licensed  Product  or  EXEL
Biotherapeutic  Product  under  this Agreement, EXEL shall be entitled to offset
against  royalties otherwise due GSK under Section 6.4 [ * ] of any royalties or
other  fees  paid  by  EXEL  to  such  Third Party under such license; provided,
however, in no event shall such deduction reduce the royalties otherwise payable
to  GSK  during any calendar year by more than [ * ]; further provided, however,
that  any  deductible amounts not applied in a particular calendar year shall be
carried  over  and applied in subsequent calendar years until the full deduction
has  been  taken.

     6.5  PAYMENTS.

          6.5.1  Commencement.  Beginning with the Calendar Quarter in which the
First  Commercial  Sale  for an applicable Product is made and for each Calendar
Quarter  thereafter,  royalty  payments shall be made to either EXEL pursuant to
Sections  6.3,  or  GSK  pursuant  to  Section  6.4  (the  "PAYEE") within [ * ]
following  the  end of each such Calendar Quarter. Each royalty payment shall be
accompanied  by  a  report,  summarizing  the total Net Sales for the applicable
Product  during  the relevant Calendar Quarter and the calculation of royalties,
if  any, due thereon. In the event that no royalties are payable in respect of a
given Calendar Quarter, the Party making the payments (the "PAYOR") shall submit
a  royalty  report  so  indicating.

          6.5.2  Mode of Payment. All payments due under this Agreement shall be
payable, in full, in U.S. dollars, regardless of the country(ies) in which sales
are  made or in which payments are originated. For the purposes of computing Net
Sales  of  Products  sold  in  a currency other than U.S. dollars, such currency
shall  be  converted into U.S. dollars as calculated at the actual average rates
of  exchange  for  the pertinent quarter or year to date, as the case may be, as
used  by  the Payor in producing its quarterly and annual accounts, as confirmed
by  the  Payor's  auditors.  Subject  to Sections 6.4.4, Section 6.7 and Section
6.8.2, such payments shall be without deduction of exchange, collection or other
charges.

          6.5.3  Records Retention. Commencing with the First Commercial Sale of
a  Product, the Payor shall keep complete and accurate records pertaining to the
sale  of such Products, for a period of [ * ] after the year in which such sales
occurred,  and  in sufficient detail to permit the Payee to confirm the accuracy
of  the  royalties  paid  by  the  Payor  hereunder.

          6.5.4 Expatriated Payments. If by law, regulation, or fiscal policy of
a particular country, conversion into United States dollars or transfer of funds
of  a  convertible currency to the United States is restricted or forbidden, the
Payor  shall  give  the  Payee  prompt written notice of such restriction, which
notice  shall  satisfy  the payment deadlines in this Agreement. The Payor shall
pay  any  amounts  due  to  the Payee through whatever lawful method it chooses,
including  without limitation making such payments in the local currency of such
country,  provided such choice is consistent with seeking to make the payment in
the  most  expeditious  manner  possible.

     6.6  AUDITS.  During  the  term  of  this Agreement and for a period of [ *
] thereafter, at the request and expense of the Payee, the Payor shall permit an
independent,  certified  public  accountant  of  nationally  recognized standing
appointed  by  the  Payee, and reasonably acceptable to the Payor, at reasonable
times  and upon reasonable notice, but in no case no more than once per calendar
year  thereafter,  to  examine  such  records  as  may be necessary for the sole
purpose  of  verifying  the  calculation  and  reporting  of  Net  Sales and the
correctness  of  any  royalty  payment  made under this Agreement for any period
within  the  preceding  [  *  ].  Results  of any such examination shall be made
available  to both Payor and Payee. The independent, certified public accountant
shall  disclose  to  the  Payee  only  the royalty amounts which the independent
auditor believes to be due and payable hereunder to the Payee and shall disclose
no  other  information  revealed  in such audit. Any and all records examined by
such independent accountant shall be deemed the Payor's Confidential Information
which  may  not be disclosed by said independent, certified public accountant to
any  Third  Party. If, as a result of any inspection of the books and records of
the  Payor,  it  is shown that a Payee's payments under this Agreement were less
than  the  amount  which  should  have  been paid, then the Payor shall make all
payments  required  to  be  made  to  eliminate any discrepancy revealed by said
inspection within [ * ]. The Payee shall pay for such audits, except that in the
event  that  the  royalty payments made by the Payor were less than [ * ] of the
undisputed amounts that should have been paid during the period in question, the
Payor  shall  pay  the  reasonable  costs  of  the  audit.

     6.7  TAXES.

          6.7.1  Sales  or  Other Transfers. The recipient of any transfer under
this  Agreement  of  EXEL  Technology,  GSK Technology, Information, Development
Compounds,  Licensed Products or Returned Licensed Products, as the case may be,
shall  be  solely  responsible  for any sales, use, value added, excise or other
non-income  taxes  applicable  to  such  transfer.

          6.7.2  Withholding.  In  the  event  that  the  Payor,  or  any of its
Affiliates or Sublicensees is required to withhold any tax to the tax or revenue
authorities in any country regarding any payment to the Payee due to the laws of
such  country:  (A)  such  amount  shall  be  promptly  paid by the Payor or its
Affiliate  or  Sublicensee  for  and  on  behalf of the Payee to the appropriate
governmental authority; (B) such amount shall be deducted from the payment to be
made  by  the  Payor;  and (C) the Payor shall promptly notify the Payee of such
withholding and, within a reasonable amount of time after making such deduction,
furnish  the Payee with proof of payment of such tax together with copies of any
tax certificate or other documentation evidencing such withholding sufficient to
enable  the  Payee  to support a claim, if permissible, for income tax credit in
respect  of  any amount so withheld. Each of Payor and Payee agrees to cooperate
with the other in claiming exemptions from such deductions or withholdings under
any agreement or treaty from time to time in effect. However, any such deduction
or  withholding  shall  be  an  expense  of  and  borne  solely  by  the  Payee.

     6.8  CREDIT  AGAINST  PAYMENTS  FOR  THIRD  PARTY  LICENSE.

          6.8.1 Payments under Third Party Agreements Entered into by EXEL. EXEL
shall  have  sole  financial  responsibility  for all royalty and other payments
required  to  be  paid to any Third Party as a result of, or relating to, EXEL's
activities  under  this Agreement including, without limitation, payments due on
sales  of Licensed Products. Such payments shall be made by EXEL directly to the
relevant  Third  Party in accordance with the provisions of the applicable Third
Party  license  agreement.

          6.8.2  Right  of  Offset.  GSK  shall be entitled to an offset against
royalties  as  follows:

               (a) if, during the Term, GSK, [ * ] deems it necessary to seek or
obtain  a  license  from any Third Party in order to develop and commercialize a
Licensed Product pursuant to the rights and licenses granted hereunder, [ * ] of
any royalties or other fees paid to such Third Party under such license shall be
deducted  from  royalties  otherwise  due  EXEL  under this Agreement; provided,
however, in no event shall such deduction reduce the royalties otherwise payable
to  EXEL during any calendar year by more than [ * ]; further provided, however,
that  any  deductible amounts not applied in a particular calendar year shall be
carried  over  and applied in subsequent calendar years until the full deduction
has  been  taken;  and

               (b)  [  *  ]

          6.8.3 Consultation. GSK shall [ * ] for which GSK would seek to deduct
royalties  under  Section  6.8.2,  and shall [ * ] with respect to such proposed
license  agreement.

     6.9  COMPULSORY  LICENSES.  In  the  event  that  a  governmental agency in
any  country in the Territory grants, or compels EXEL to grant, a license to any
Third Party for a Licensed Product, other than to an Affiliate or Sublicensee of
GSK, GSK shall [ * ]. For the avoidance of doubt, any sales of Licensed Products
by  a  licensee pursuant to a compulsory license shall in no case be included in
the Net Sales calculation or be the basis of any milestone payment(s) under this
Agreement.

                                    ARTICLE 7

                                   EXCLUSIVITY

     7.1  EXEL  PROHIBITED  ACTIVITIES.

          7.1.1  Regarding Targets and Compounds. Except as necessary to perform
its  obligations  under this Agreement, EXEL shall not, either alone, through an
Affiliate  or  with  any  Third  Party:

               (a)  during  [  *  ];

               (b)  during  [  *  ];  or

               (c)  during  [  *  ].

          7.1.2 Regarding EXEL Technology. With respect to any given Development
Compound,  from  [  *  ]  EXEL  shall  [  *  ].

     7.2  EXEL  PERMITTED  ACTIVITIES.  Subject  to  Section  7.1,  but
notwithstanding  anything  else  in  this  Agreement  to  the  contrary:

          7.2.1  Outside  the  Field.  GSK  acknowledges and agrees that EXEL is
engaged  generally  in  the elucidation of biological pathways in model systems,
that  biological  systems  are  by  their nature redundant, and that, therefore,
different pathways may contain the same human molecular target. For example, and
without  limitation, EXEL has been, and may be in the future, engaged by a Third
Party  to  identify  targets  in a research field or disease area other than the
Field  (an  "OTHER  FIELD").  Such  research may result in the identification of
human  molecular  targets that are the same as Existing Targets or Collaboration
Targets,  and  in the case where such identification arises under a Future Third
Party  Collaboration  during  [  *  ],  EXEL  shall  [  *  ].

          7.2.2  Regarding  EXEL  Biotherapeutic  Products.  EXEL  will  not  be
restricted  from  conducting  any  activities related to researching, developing
and/or commercializing any EXEL Biotherapeutic Products, provided, however, that
EXEL  shall  [  *  ].

          7.2.3  Regarding  Targets. EXEL will not be restricted from conducting
any  activities:  (A)  related  to  any Excluded Targets, or (B) with respect to
targets  outside  the  Field.

          7.2.4  Regarding  Development  Compounds. EXEL shall at all times have
the  right  to  use  any  Development  Compound  [  *  ].

     7.3  GSK  ACTIVITIES.  GSK  will  not  be  restricted  from  conducting any
activities,  including, without limitation, activities in the Field outside this
Agreement;  provided  that  the foregoing shall not be construed to grant to GSK
any  license  under  the  EXEL  Technology  except as expressly provided in this
Agreement.  GSK  covenants  [  *  ].

     7.4  EXISTING  THIRD  PARTY  COLLABORATIONS.

          7.4.1  Oncology  Collaborations.  GSK  acknowledges  [  *  ] (each, an
"ONCOLOGY  COLLABORATOR"),  and  [  *  ].

          7.4.2 Non-Selected Targets. Notwithstanding the foregoing, pursuant to
an  Existing  Third  Party  Collaboration  with  an  Oncology Collaborator, with
respect  to  [  *  ]  (each, a "NON-SELECTED TARGET"), EXEL hereby agrees [ * ].

          7.4.3  Encumbered Targets and Compounds. Pursuant to an Existing Third
Party Collaboration with an Oncology Collaborator, EXEL retains the right to [ *
] (each, an "ENCUMBERED TARGET"). However, GSK understands and acknowledges that
such  Existing Third Party Collaboration [ * ] (each, an "ENCUMBERED COMPOUND"),
including  without  limitation,  [  *  ].  At  any  time  [  *  ].

     7.5  EXCLUDED  COMPOUNDS.  The  Parties  expressly  acknowledge  and  agree
that  GSK  shall  have  no  rights  under  this Agreement with respect to [ * ].

                                    ARTICLE 8

     OWNERSHIP  OF  INTELLECTUAL  PROPERTY  AND  PATENT  RIGHTS

     8.1  OWNERSHIP.

          8.1.1  Generally.

               (a) GSK and its Affiliates shall retain all of their right, title
and interest in and to the GSK Technology existing as of the Effective Date, and
the  EXEL  Entities  (subject  to  completion  by  Artemis  Pharmaceuticals GmbH
("ARTEMIS") of its asset transfer obligations under the Artemis Agreement) shall
retain  all  of  their  right,  title and interest in and to the EXEL Technology
existing  as  of  the  Effective Date; including without limitation the right to
transfer or license such intellectual property to Third Parties for any purpose,
subject only to each Party's obligations under this Agreement, including but not
limited  to  the  obligations set forth in Article 7 and the licenses granted in
Article  5.  Following  the Effective Date, subject to Section 8.1.1(b), GSK and
its Affiliates shall retain all of their right, title and interest in and to the
GSK  Technology,  and the EXEL Entities (subject to completion by Artemis of its
asset  transfer  obligations  under  the  Artemis Agreement) shall retain all of
their  right,  title  and  interest  in and to the EXEL Technology, in each case
developed  during  the  Term,  subject to the rights granted to each Party under
this  Agreement.

               (b)  Notwithstanding  Section  8.1.1(a),  all  right,  title  and
interest  in  and  to  all [ * ], shall be owned by [ * ], except that any [ * ]
("GSK COMPOUND INVENTIONS") shall be solely owned by [ * ]. GSK shall [ * ]. For
purposes  of  this  Agreement,  "COMPOUND  INVENTIONS"  shall mean [ * ] that is
discovered,  conceived  or  created  solely  or  jointly by employees, agents or
consultants  of  [  *  ] in the course of performing their respective activities
under  the  Development  Program.

                    (i)  For  the  avoidance  of doubt, Patents [ * ] ("COMPOUND
PATENTS"),  if  any,  shall  be  [  *  ].

                    (ii)  To  the extent that any such Compound Patent [ * ] GSK
shall  [  *  ].

               (c)  All  right, title and interest in and to all [ * ], shall be
owned  by GSK or its Affiliates. All right, title and interest in and to all [ *
], shall be jointly owned by GSK or the relevant Affiliate and the EXEL Entities
in  equal  and undivided shares. Except as expressly provided in this Agreement,
neither  Party shall have any obligation to account to the other for profits, or
to  obtain  any  consent  of  the  other  Party  to  license or exploit patented
jointly-owned  subject  matter,  by  reason of joint ownership thereof, and each
Party  hereby waives any right it may have under the laws of any jurisdiction to
require  any  such  consent  or  accounting.

          8.1.2  Patent  Filings.  The  Party  responsible  for  Prosecution and
Maintenance  of  Patents  claiming  any Collaboration Technology as set forth in
Sections  8.1.3  and  8.1.4  shall  use reasonable diligent efforts (which shall
include,  without  limitation,  ensuring  that,  in  the  case  of  EXEL,  EXEL
Deutschland  GmbH,  and  in  the  case  of  GSK, its Affiliates, comply with all
reasonable  requests relating to such Prosecution and Maintenance of Patents) to
obtain  a  reasonable scope of protection for Development Compounds and Licensed
Products,  as  applicable,  and  will consider in good faith reasonable comments
provided  by  the  other  Party.

          8.1.3  Compound  Patents  and  Joint  Patents.  The responsibility and
strategy  for  Prosecution  and  Maintenance  of  Compound  Patents  and Patents
claiming  any jointly owned Collaboration Technology shall be [ * ]. The Parties
shall  cooperate  to  prepare  and  prosecute  patent  applications for Compound
Patents  and Patents claiming any such Collaboration Technology in a manner that
ensures  a  reasonable  scope  of  protection  for  the relevant subject matter.

          8.1.4  Solely  Owned  Patents.  GSK or EXEL, as the case may be, shall
control  the  Prosecution  and Maintenance of Patents claiming any Collaboration
Technology  owned  solely by GSK or its Affiliates, or the EXEL Entities, as the
case  may  be,  and as set forth in Section 8.1.1, in each case [ * ]; provided,
however, that the control of the Prosecution and Maintenance of Compound Patents
shall  be subject to 8.1.3 and the Patent Costs related thereto shall be subject
to  Section  8.2.1.

          8.1.5  Other  Matters  Pertaining  to  Prosecution  of  Patents.

               (a)  The  Collaboration  Committee shall establish a subcommittee
(the  "PATENT  SUBCOMMITTEE")  to  coordinate Prosecution and Maintenance of the
Compound  Patents  and  patents  claiming  any  jointly  owned  Collaboration
Technology. The Patent Subcommittee shall report to the Collaboration Committee.
Each  Party shall submit to the Patent Subcommittee copies of all correspondence
with  patent  authorities  covering such Collaboration Technology for which such
Party  has responsibility for Prosecution and Maintenance. Each Party shall keep
the Patent Subcommittee informed as to material developments with respect to the
Prosecution  and  Maintenance of Patents claiming such Collaboration Technology,
including  without  limitation,  by  providing  upon  request  copies  of  any
substantive  documents  that  such Party or its relevant Affiliate receives from
any  patent  office,  including  notice  of  all  interferences,  reissues,
re-examinations,  oppositions  or  requests  for  patent term extensions, and by
providing  the  other  Party  the  opportunity to have reasonable input into the
strategic  aspects  of  such  Prosecution  and Maintenance. Without limiting the
foregoing,  neither  Party  shall  [  *  ].

               (b)  If, during the Term, the Party responsible for prosecuting a
Patent  claiming  jointly  owned Collaboration Technology or any Compound Patent
(the  "PROSECUTING  PARTY"),  intends  to  allow  such Patent to lapse or become
abandoned  without having first filed a substitute, the Prosecuting Party shall,
whenever  practicable,  notify  the other Party of such intention at least [ * ]
prior  to  the  date upon which such Patent shall lapse or become abandoned, and
such  other  Party  shall  thereupon  have the right, but not the obligation, to
assume  responsibility  for  the  Prosecution  and  Maintenance  thereof  [ * ].

     8.2  PATENT  COSTS.

          8.2.1  Collaboration  Technology and Compound Patents. As set forth in
Section  8.1.4,  [  *  ]  shall  be  responsible  for  [ * ] associated with the
Prosecution  and  Maintenance  of Patents claiming any [ * ]; provided, however,
that  EXEL  and  GSK  shall  [ * ]. EXEL and GSK shall [ * ], unless the Parties
otherwise  agree.

          8.2.2  Existing  EXEL  Technology  and  GSK  Technology. EXEL shall be
responsible  for  [  *  ]  with  respect  to  EXEL Technology existing as of the
Effective  Date.  GSK  shall  be  responsible  for  [  *  ]  with respect to GSK
Technology  existing  as  of  the  Effective  Date.  If  a  Party chooses not to
Prosecute  and Maintain a [ * ], then to the extent such Party owns such Patent,
it  shall  use  good  faith  efforts  to  promptly notify the other Party of its
decision.  Thereafter,  if  such  Patent  [  *  ],  the other Party shall [ * ].

     8.3  ENFORCEMENT  RIGHTS.

          8.3.1  Defense  and  Settlement  of  Third  Party  Claims.

               (a) Development Compounds. If a Third Party asserts that a Patent
or  other  right  owned  by  it  is  infringed  by the manufacture, use, sale or
importation  of  [  *  ], the Party first having knowledge of such a claim shall
promptly  provide  the other Party notice of such claim and the related facts in
reasonable  detail. In such event, [ * ] shall determine best how to control the
defense of any such claim; provided, however, that if such claim also covers [ *
]  then  [ * ] shall control. In the event [ * ] on the strategy for the defense
of any such claim, such defense shall be controlled by [ * ]; provided, that [ *
]  shall  have  the  right  [  *  ]  to  participate  in  such defense and to be
represented  by  counsel of its choice. The Party that controls the defense of a
given  claim  with  respect  to  [  *  ],  shall  also have the right to control
settlement  of  such  claim.

               (b)  Licensed Products. If a Third Party asserts that a Patent or
other  right  owned  by  it  is  infringed  by  the  manufacture,  use,  sale or
importation  of [ * ], [ * ] shall have the primary right but not the obligation
to  control  the defense of any such assertions [ * ]. In the event [ * ] elects
to  control  the  defense  of  any such Third Party claims, [ * ] shall have the
right  to  control  the  settlement  of  such claims; provided, however, that no
settlement  shall be entered into [ * ]. Any Third Party royalties that arise in
connection  with the settlement of a Third Party claim of infringement against a
Licensed  Product  shall  be  subject  to [ * ]. In any event, the Parties shall
reasonably  assist  one  another  and  cooperate  in  any such litigation at the
other's  request  without  expense to the requesting Party. Each Party may [ * ]
join  any  defense  brought  by  the  other  Party.

          8.3.2  Infringement  by  Third  Parties.  If  any  Party  learns of an
infringement,  unauthorized  use,  misappropriation  or  ownership  claim  or
threatened  infringement or other such activity by a Third Party with respect to
[  *  ] ("COMPETITIVE INFRINGEMENT"), such Party shall promptly notify the other
Party  and  shall  provide  such  other  Party  with  available evidence of such
Competitive  Infringement.

               (a)  [  * ] shall have the primary right, but not the obligation,
to  institute,  prosecute,  and control any action or proceeding with respect to
Competitive  Infringement  of  a  Patent  claiming  [ * ], by counsel of its own
choice,  and [ * ] shall have the right, [ * ], to be represented in that action
by  counsel  of  its own choice. If [ * ] fails to bring an action or proceeding
within  a period of [ * ] after a request by [ * ] to do so, then, to the extent
that  such Competitive Infringement relates to [ * ], [ * ] shall have the right
to  bring  and  control  any such action by counsel of its own choice, and [ * ]
shall  have the right to be represented in any such action by counsel of its own
choice  [  *  ].  Notwithstanding the foregoing, in the event that a Competitive
Infringement  implicates  a  Patent  that  covers  [  *  ].

               (b)  [  * ] shall have the primary right, but not the obligation,
to  institute,  prosecute,  and control any action or proceeding with respect to
Competitive  Infringement  of  a  Patent  claiming  [ * ], by counsel of its own
choice, and [ * ] shall have the right, at its own expense, to be represented in
that  action  by counsel of its own choice. If [ * ] fails to bring an action or
proceeding  within  a  period  of [ * ] after a request by [ * ] to do so, [ * ]
shall  have the right to bring and control any such action by counsel of its own
choice,  and  [ * ] shall have the right to be represented in any such action by
counsel  of  its  own  choice  [  *  ].

               (c)  If  one  Party  brings  any  such  action  or  proceeding in
accordance  with  this  Section 8.3.2, the second Party agrees to be joined as a
party  plaintiff and to give the first Party reasonable assistance and authority
to  file  and  prosecute  the suit. The costs and expenses of the Party bringing
suit  under this Section 8.3.2 shall be borne by [ * ], and any damages or other
monetary  awards  recovered  shall  be  shared  [  *  ]. A settlement or consent
judgment or other voluntary final disposition of a suit under this Section 8.3.2
may  be  entered  into  without  the consent of the Party not bringing the suit;
provided  that  [  *  ].

               (d)  Subject  to  Sections 8.3.2(a), (b) and (c), with respect to
Patents claiming [ * ], [ * ] may proceed in such manner as the law permits. [ *
]  shall bear [ * ], and the amount of recovery actually received by [ * ] shall
first  be  applied  to reimburse [ * ]; and then any remaining proceeds shall be
allocated  [  *  ].

                                   ARTICLE  9

                              CONFIDENTIALITY

     9.1  CONFIDENTIALITY;  EXCEPTIONS.  Except  to  the  extent  expressly
authorized  by  this Agreement or otherwise agreed in writing, the Parties agree
that  the  receiving  Party  (the "RECEIVING PARTY") shall keep confidential and
shall  not  publish  or  otherwise disclose or use for any purpose other than as
provided  for  in  this  Agreement  any  Information  or  other confidential and
proprietary  information  and  materials  patentable  or  otherwise, in any form
(written,  oral,  photographic,  electronic,  magnetic,  or  otherwise) which is
disclosed  to  it  by  the  other  Party  (the  "DISCLOSING PARTY") or otherwise
received  or  accessed  by  a  Receiving  Party  in the course of performing its
obligations  under  this  Agreement including, but not limited to trade secrets,
know-how,  proprietary  information,  formulae,  processes,  techniques  and
information relating to a Party's past, present and future marketing, financial,
and  research  and development activities of any product of the Disclosing Party
and  the  pricing  thereof (collectively, "CONFIDENTIAL INFORMATION"), except to
the  extent  that  it  can  be  established  by  the  Receiving  Party that such
Confidential  Information:

          9.1.1  was  in  the  lawful  knowledge and possession of the Receiving
Party prior to the time it was disclosed to, or learned by, the Receiving Party,
or was otherwise developed independently by the Receiving Party, as evidenced by
written  records  kept  in the ordinary course of business, or other documentary
proof  of  actual  use  by  the  Receiving  Party;

          9.1.2  was  generally available to the public or otherwise part of the
public  domain  at  the  time  of  its  disclosure  to  the  Receiving  Party;

          9.1.3  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;  or

          9.1.4  was  disclosed  to  the  Receiving  Party,  other than under an
obligation  of  confidentiality,  by  a Third Party who had no obligation to the
Disclosing Party not to disclose such information to others. Notwithstanding any
disclosure  of Confidential Information of the Disclosing Party to the Receiving
Party,  no  ownership of such Confidential Information shall be transferred as a
result  of  such  disclosure.

     9.2  AUTHORIZED  DISCLOSURE.  Except  as  expressly  provided  otherwise in
this  Agreement, a Receiving Party may use and disclose Confidential Information
of  the  Disclosing  Party  as  follows:  (i)  under appropriate confidentiality
provisions  substantially  equivalent  to those in this Agreement, in connection
with  the  performance  of  its  obligations  or  exercise  of rights granted or
reserved  in  this  Agreement through an Affiliate or any Third Party (including
the  rights  to  commercialize  Licensed  Products  and  to  grant  licenses and
sublicenses  hereunder);  or  (ii)  to  the extent such disclosure is reasonably
necessary in filing or prosecuting patent, copyright and trademark applications,
prosecuting  or  defending  litigation,  complying  with applicable governmental
regulations, obtaining regulatory approval, conducting preclinical activities or
clinical  trials,  marketing  Licensed  Products,  or otherwise required by law;
provided, however, that if a Receiving Party is required by law or regulation to
make  any  such  disclosure  of a Disclosing Party's Confidential Information it
will,  except  where impracticable for necessary disclosures, for example in the
event  of  medical  emergency,  give reasonable advance notice to the Disclosing
Party  of such disclosure requirement and, except to the extent inappropriate in
the  case  of  patent  applications,  will  use its reasonable efforts to secure
confidential  treatment  of  such  Confidential  Information  required  to  be
disclosed;  or  (iii)  in communication with investors, consultants, advisors or
others  on  a need to know basis, in each case under appropriate confidentiality
provisions  substantially  equivalent to those of this Agreement; or (iv) to the
extent  mutually  agreed  to  in  writing  by  the  Parties.

     9.3  ADDITIONAL CONFIDENTIALITY REQUIREMENTS. In addition to the foregoing,
any  Information  or  other  Collaboration  Technology developed pursuant to the
Development Program that solely relates to Development Compounds (for so long as
GSK's  ability  to exercise a Development Election with respect to same have not
expired) or Licensed Products that is necessary or useful for GSK to continue to
develop  such  Development Compounds or Licensed Products, shall be deemed to be
the  Confidential Information of each Party as a Disclosing Party and each Party
shall  have  the  obligations  of  a Receiving Party pursuant to this Article 9,
except for disclosures to permitted Sublicensees as set forth in this Agreement,
and  except  to  any  Third  Party  in connection with EXEL's rights pursuant to
Section  4.4,  without the prior written consent of both Parties This obligation
shall  not  apply  to any Information or other Collaboration Technology that has
general  utility  as  it  relates  to  any  use  or  application other than such
Development  Compounds  or  Licensed  Products.

     9.4  TERMINATION  OF  PRIOR  AGREEMENT.  This  Agreement  supersedes  the
Non-Disclosure Agreement executed by EXEL and GSK dated [ * ] (including any and
all  amendments  thereto).  All  information exchanged between the Parties under
that  Agreement  shall be deemed Confidential Information hereunder and shall be
subject  to  the  terms  of  this  Article  9.

     9.5  REMEDIES. Each Party shall be entitled, in addition to any other right
or  remedy  it  may  have,  at  law  or in equity, to an injunction, without the
posting  of any bond or other security, enjoining or restraining the other Party
from  any  violation  or  threatened  violation  of  this  Article  9.

     9.6  PUBLICATIONS.  Each  Party  shall  submit  any  proposed  publication
containing  Confidential  Information  of  the other Party to the other Party at
least  [  *  ]  in  advance  to  allow  that Party to review such planned public
disclosure.  The  reviewing Party will promptly review such proposed publication
and  respond  in any event within [ * ] and make any objections that it may have
to  the publication of Confidential Information of the reviewing Party contained
therein.  Should the reviewing Party make an objection to the publication of any
such Confidential Information, then the Parties shall discuss the advantages and
disadvantages  of  publishing  such Confidential Information. If the Parties are
unable  to  agree on whether to publish the same, subject to Section 14.1, [ * ]
shall  attempt  to  resolve  the matter but if it is unable to do so such matter
shall  be  resolved  in  accordance  with  the  dispute resolution provisions of
Section 14.2. Notwithstanding the foregoing, upon the reviewing Party's request,
the  other Party shall not submit any such publication until the reviewing Party
is  given  a  reasonable  period  of  time  to  secure patent protection for any
material  in  such  publication  that  it  believes  to  be  patentable.

                                   ARTICLE  10

                    REPRESENTATIONS;  WARRANTIES  AND  COVENANTS

     10.1  REPRESENTATIONS  AND  WARRANTIES  OF  BOTH  PARTIES.  Each  Party
represents  and  warrants  to  the  other Party, as of the Effective Date, that:

          10.1.1  such  Party  is  duly  organized, validly existing and in good
standing  under  the  laws of the jurisdiction of its incorporation and has full
corporate  power and authority to enter into this Agreement and to carry out the
provisions  hereof;

          10.1.2  such  Party  has  taken  all  necessary  action on its part to
authorize  the  execution  and delivery of this Agreement and the performance of
its  obligations  hereunder;

          10.1.3  this  Agreement  has  been  duly  executed  and  delivered
on  behalf  of  such  Party, and constitutes a legal, valid, binding obligation,
enforceable  against  it  in  accordance  with  the  terms  hereof;

          10.1.4  the  execution,  delivery and performance of this Agreement by
such  Party, including without limitation the grant of rights to the other Party
pursuant  to  this  Agreement,  does  not:  (A) conflict with, nor result in any
violation  of or default under, any agreement, instrument or understanding, oral
or  written,  to  which  it  or  any  Affiliate is a party or by which it or any
Affiliate  is  bound;  (B) conflict with any rights granted by such Party to any
Third Party or breach any obligation that such Party has to any Third Party; nor
(C)  violate  any  law  or  regulation  of  any  court,  governmental  body  or
administrative  or  other  agency  having  jurisdiction  over  such  Party;

          10.1.5  no  government  authorization,  consent,  approval,  license,
exemption  of  or  filing  or  registration  with  any  court  or  governmental
department,  commission,  board,  bureau, agency or instrumentality, domestic or
foreign,  under any applicable laws, rules or regulations currently in effect is
necessary  for,  or  in  connection  with,  the transaction contemplated by this
Agreement  or any other agreement or instrument executed in connection herewith,
or  for  the  performance by it of its obligations under this Agreement and such
other  agreements  except as may be required under the Stock Purchase Agreement;
and

          10.1.6  it has not employed (and, to the best of its knowledge without
further  duty  of  inquiry,  has  not  used  a contractor or consultant that has
employed)  any individual or entity debarred by the FDA (or subject to a similar
sanction  of  EMEA),  or,  to  the best of its knowledge without further duty of
inquiry,  any  individual who or entity which is the subject of an FDA debarment
investigation  or  proceeding (or similar proceeding of EMEA), in the conduct of
the  preclinical or clinical studies of Development Compounds and its activities
under  the  Development  Program.

     10.2  REPRESENTATIONS  AND  WARRANTIES  OF  EXEL.  EXEL  represents  and
warrants  to  GSK,  as  of  the  Effective  Date,  that:

          10.2.1  to  the  best  of  its knowledge and belief, EXEL Controls all
rights  it  purports to grant to GSK to the EXEL Know-How and EXEL Patents under
this  Agreement;

          10.2.2  to  the  best of its knowledge and belief: (A) the issued EXEL
Patents, if any, listed as Schedule 1.62 are valid and in full force and effect;
(B)  the  EXEL  Patents  are  not  the subject of any interference or opposition
proceedings; and (C) EXEL is not aware of any pending or threatened action, suit
proceeding  or  claim  by  a  Third  Party  challenging the ownership rights in,
validity  or  scope  of  such  EXEL  Patents;

          10.2.3  to the best of its knowledge and belief: (A) EXEL is not aware
of  any notice from any Third Party asserting any ownership rights to any of the
EXEL  Know-How;  and  (B) EXEL is not aware of any pending or threatened action,
suit,  proceeding or claim by a Third Party asserting that EXEL is infringing or
otherwise  is  violating any patents, trade secret or other proprietary right of
any  Third Party as would reasonably be expected to result in a material adverse
effect  upon  the  ability  of EXEL to fulfill any of its obligations under this
Agreement;

          10.2.4  to  the best of its knowledge and belief, EXEL has not granted
any  right  to  any  Third Party relating to the EXEL Technology which conflicts
with  the  rights  granted  to  GSK  hereunder;

          10.2.5  No  [  *  ]  Controls  any  [  *  ]  that  are  [  *  ];

          10.2.6 EXEL has all [ * ] to conduct the activities to be conducted by
EXEL  under  this Agreement and to fulfill its obligations under this Agreement;

          10.2.7  the agreements identified on Schedule 1.68 comprise a complete
and accurate list of all collaboration agreements between EXEL and a Third Party
in  existence  on  the  Effective  Date  that  [ * ] pursuant to this Agreement;

          10.2.8 (A) the Existing Third Party Collaborations [ * ]; (B) EXEL has
[  * ];

          10.2.9  EXEL  is not a party to any arrangement or agreement that EXEL
reasonably  believes  [  *  ];

          10.2.10  the compounds identified on Schedule 1.66 comprise a complete
and accurate list of all compounds identified as [ * ] as of the Effective Date;

          10.2.11  the  human  molecular  targets  identified  on  Schedule 1.67
comprise a complete and accurate list of all human molecular targets [ * ] as of
the  Effective  Date  and  do not include any Excluded Targets or Biotherapeutic
Targets;

          10.2.12  to  the  best  of  its  knowledge  and  belief,  the  targets
identified on Schedule 1.65 meet all of the criteria set forth in Section 2.5.3;

          10.2.13  other  than  as  described  in the SEC Filings (as defined in
Section  4.5.1 of the Stock Purchase Agreement, there are no claims, actions, or
proceedings  pending  or,  to  EXEL's  knowledge,  threatened;  nor,  except  as
disclosed  on Schedule 4.6 of the Stock Purchase Agreement, are there any formal
inquiries  or  notices  which  may  lead  to  the  institution  of  such  legal
proceedings,  against  EXEL  or  its  properties,  assets  or business, which if
adversely  decided,  would,  individually  or  in the aggregate, have a material
adverse  effect  or prevent EXEL's ability to conduct the Development Program or
to  grant  the  licenses  to  be  granted  to  GSK  upon  the  exercise of GSK's
Development  Election;

          10.2.14 EXEL has not [ * ] which EXEL reasonably believes would [ * ];
and

          10.2.15  to  the  best  of  EXEL's  knowledge  and belief the Employee
Agreements and the Artemis Intellectual Property constitute substantially all of
the  intellectual property rights and other enabling rights [ * ] (as defined in
the  Artemis Agreement). For purposes of this Section 10.2.15: (A) the "EMPLOYEE
AGREEMENTS"  means  the employee agreements, between Artemis Pharmaceutical GmbH
and  its  employees  that were transferred to Exelixis Deutschland GmbH; and (B)
the  "ARTEMIS  INTELLECTUAL  PROPERTY" means the Assets, Know-how, Contracts and
Joint  Contracts  (as  the  same  are defined under Artemis Agreement) that were
transferred,  to be transferred, or to be managed under the Artemis Agreement in
accordance  with  the  provisions  thereof.

     10.3  COVENANTS  OF  EXEL.  EXEL  covenants  and agrees, from and after the
Effective  Date  and  during  the  Term,  that:

          10.3.1  EXEL  shall  provide access to Confidential Information of GSK
only  to  EXEL's employees, consultants and independent contractors who, in each
case,  need  such access (including without limitation access to GSK Know-How on
any  database that is owned or controlled by EXEL or its Affiliates which access
shall  in  all cases be password-protected or otherwise similarly restricted) to
perform  services  or activities under the Development Program and who, prior to
such  access, have executed appropriate confidentiality and invention assignment
agreements  to  protect  the  Confidential  Information  of GSK and to retain or
obtain  ownership  of  all  EXEL  Technology;

          10.3.2 EXEL shall not amend the terms of any [ * ] in such a manner as
would  have  a  material adverse effect on EXEL's performance of its obligations
under  this Agreement, in whole or in part, without the prior written consent of
GSK;

          10.3.3  EXEL  shall  not enter into any agreement with any Third Party
that  EXEL  reasonably believes would materially adversely affect EXEL's ability
to  successfully  conduct  the  Development  Program;

          10.3.4  all  Collaboration Technology that is discovered, conceived or
created  solely  or  jointly  by  the  employees,  agents,  consultants  or
subcontractors (with respect to subcontractors, subject to Section 3.11) of EXEL
or  its  Affiliates  shall  be  Controlled by the EXEL Entities during the Term;

          10.3.5 subject to Section 7.1.1, during the Term, EXEL shall not grant
any  right  to  any  Third Party relating to the EXEL Technology which conflicts
with  the  rights  granted to GSK hereunder. Except as may be provided under the
Loan  Agreement,  during  the Term EXEL shall not encumber the EXEL Patents with
liens, mortgages, security interests or another similar interest that would give
the  holder  the right to convert the interest into patent ownership, unless the
encumbrance  is  expressly  subject  to  the  licenses  herein;

          10.3.6  it  shall not employ (or, to the best of its knowledge without
further  duty  of  inquiry,  shall  not  use  any  contractor or consultant that
employs)  any  individual or entity debarred by the FDA (or subject to a similar
sanction  of  EMEA),  or,  to  the best of its knowledge without further duty of
inquiry,  any  individual who or entity which is the subject of an FDA debarment
investigation  or  proceeding (or similar proceeding of EMEA), in the conduct of
the  preclinical or clinical studies of Development Compounds and its activities
under  the  Development  Program;

          10.3.7 EXEL shall perform its activities under the Development Program
in compliance with good laboratory and clinical practices and cGMP, in each case
as  applicable  under  the  laws  and  regulations  of  the  country  where such
activities  are  conducted;

          10.3.8  none  of  the  EXEL  Entities  will  initiate any legal suits,
claims, actions, proceedings or demands under any EXEL Technology based upon GSK
using  any  Existing  Targets  or  Collaboration  Targets solely for the further
development  of  Licensed  Products;  and

          10.3.9  EXEL  shall  use  all reasonable efforts to ensure that [ * ].

     10.4  REPRESENTATION  AND  WARRANTY  OF  GSK.  GSK  represents and warrants
to  EXEL,  as  of  the  Effective  Date,  that  GSK  [  *  ].

     10.5  COVENANTS  OF  GSK.  GSK  covenants  and  agrees,  from and after the
Effective  Date  and  during  the  Term,  that:

          10.5.1  GSK  shall  provide access to Confidential Information of EXEL
only  to  GSK's  employees, consultants and independent contractors who, in each
case,  need such access (including without limitation access to EXEL Know-How on
any  database  that is owned or controlled by GSK or its Affiliates which access
shall  in  all cases be password-protected or otherwise similarly restricted) to
perform  services or development activities under this Agreement, and who, prior
to  such  access,  have  executed  appropriate  confidentiality  and  invention
assignment  agreements  to  protect  the Confidential Information of EXEL and to
retain  or  obtain  ownership  of  all  GSK  Technology;

          10.5.2  it  shall not employ (or, to the best of its knowledge without
further  duty  of  inquiry,  shall  not  use  any  contractor or consultant that
employs)  any  individual or entity debarred by the FDA (or subject to a similar
sanction  of  EMEA),  or,  to  the best of its knowledge without further duty of
inquiry,  any  individual who or entity which is the subject of an FDA debarment
investigation  or  proceeding (or similar proceeding of EMEA), in the conduct of
the preclinical or clinical studies of Development Compounds and its development
activities;  and

          10.5.3 GSK shall perform its development activities in compliance with
good  laboratory  and  clinical  practices  and cGMP, in each case as applicable
under  the  laws  and  regulations  of  the  country  where  such activities are
conducted.

     10.6 DISCLAIMER. Except as otherwise expressly set forth in this Agreement,
neither  Party  makes  any  representation  or  extends any warranty of any kind
either  express or implied, including, but not limited to, any warranty that any
Patents  are  valid  or enforceable or that their exercise does not infringe any
patent  rights  of Third Parties. A holding of invalidity or unenforceability of
any  Patent,  from  which no further appeal is or can be taken, shall not affect
any  obligation  already  accrued  hereunder, but shall only eliminate royalties
otherwise  due  under  such  Patent  from the date such holding becomes final in
accordance  with  this  Agreement.

                                   ARTICLE  11

                         INDEMNIFICATION;  INSURANCE

     11.1  INDEMNIFICATION  BY  GSK.  GSK  shall  indemnify,  defend  and  hold
harmless  EXEL,  and  its  Affiliates, and their respective directors, officers,
employees and agents, from and against any and all liabilities, damages, losses,
costs  and  expenses  including,  but  not  limited  to,  the reasonable fees of
attorneys  and  other  professionals  (collectively "LOSSES"), arising out of or
resulting  from  any  and  all Third Party suits, claims actions, proceedings or
demands  based  upon:

          11.1.1  negligence,  recklessness  or  wrongful  intentional  acts  or
omissions  of  GSK  or  its Affiliates and their respective directors, officers,
employees  and  agents,  in connection with GSK's performance of its obligations
under this Agreement; except, in each case, to the comparative extent such claim
arose  out  of  or  resulted  from  the  negligence,  recklessness  or  wrongful
intentional  acts  or  omissions of EXEL or its Affiliates, and their respective
directors,  officers,  employees  and  agents  (including their Sublicensees and
subcontractors);

          11.1.2  any breach of any representation or warranty made by GSK under
Article  10;  or

          11.1.3 the research, development, manufacture, use, handling, storage,
sale  or  other  disposition of chemical agents or Licensed Products by GSK, its
Affiliates,  agents  or  Sublicensees.

     11.2  INDEMNIFICATION  BY  EXEL.  EXEL  shall  indemnify,  defend  and hold
harmless  GSK  and  its  Affiliates,  and  their respective directors, officers,
employees  and  agents,  from  and against any and all Losses, arising out of or
resulting  from  any  and all Third Party suits, claims, actions, proceedings or
demands  based  upon:

          11.2.1  negligence,  recklessness  or  wrongful  intentional  acts  or
omissions  of  EXEL  or its Affiliates and their respective directors, officers,
employees  and  agents, in connection with EXEL's performance of its obligations
under this Agreement; except, in each case, to the comparative extent such claim
arose  out  of  or  resulted  from  the  negligence,  recklessness  or  wrongful
intentional  acts  or  omissions  of GSK or its Affiliates, and their respective
directors,  officers,  employees  and  agents  (including their Sublicensees and
subcontractors);

          11.2.2  any breach of any representation, warranty or covenant made by
EXEL  under  Article  10;  or

          11.2.3  the  development, manufacture, use, handling, storage, sale or
other  disposition  of  chemical  agents  or  Development  Compounds (including,
without  limitation, all Development Candidates, Refused Candidates and Returned
Licensed  Products)  by  EXEL,  its  Affiliates,  agents  or  Sublicensees.

     11.3  PROCEDURE.  In  the  event  that  any  person  (an  "INDEMNITEE")
entitled  to  indemnification under Section 11.1 or Section 11.2 is seeking such
indemnification, such Indemnitee shall: (i) inform, in writing, the indemnifying
Party  of  the  claim  as  soon  as reasonably practicable after such Indemnitee
receives  notice  of  such  claim;  (ii) permit the indemnifying Party to assume
direction  and  control of the defense of the claim (including the sole right to
settle  it  at the sole discretion of the indemnifying Party; provided that such
settlement does not impose any obligation on, or otherwise adversely affect, the
Indemnitee  or other Party); (iii) cooperate as requested (at the expense of the
indemnifying  Party)  in  the  defense  of  the  claim;  and  (iv) undertake all
reasonable  steps  to  mitigate  any loss, damage or expense with respect to the
claim(s).

     11.4  COMPLETE  INDEMNIFICATION.  All  costs  and  expenses  incurred by an
Indemnitee  in  connection with enforcement of Sections 11.1 and 11.2 shall also
be  reimbursed  by  the  indemnifying  Party.

     11.5  INSURANCE.

          11.5.1 EXEL's Insurance Obligations. EXEL shall maintain, at its cost,
adequate  insurance  against  liability  and  other  risks  associated  with its
activities  contemplated  by  this  Agreement,  including but not limited to its
clinical  trials and its indemnification obligations herein, in such amounts and
on  such terms as are customary in the biotechnology industry for the activities
to  be  conducted by it under this Agreement and shall name GSK as an additional
insured  as  its  interest  may appear in such insurance policies. At a minimum,
EXEL shall maintain, at its cost, a general liability insurance policy providing
coverage  of  at  least  [  *  ].  EXEL  shall  furnish  to GSK evidence of such
insurance,  upon  request

          11.5.2  GSK's  Insurance Obligations. GSK shall maintain, at its cost,
adequate  insurance  against  liability  and  other  risks  associated  with its
activities  and  obligations  under  this  Agreement in such amounts and on such
terms  as  are customary in the pharmaceutical industry for the activities to be
conducted by it under this Agreement. Alternatively, GSK shall have the right to
satisfy  its  obligations  under  this  Section  11.5.2  through  a  program  of
self-insurance.  GSK  shall  furnish  to  EXEL  evidence of such insurance, upon
request.

                                   ARTICLE  12

                              TERM  AND  TERMINATION

     12.1  TERM;  EXPIRATION.  This  Agreement  shall become effective as of the
Effective  Date  and, unless earlier terminated pursuant to the other provisions
of  this  Article  12,  shall  expire  as  follows:

          12.1.1  on  a  Product-by-Product, and country-by-country, basis until
the  expiration  of all payment obligations under this Agreement with respect to
such  Product  in  such  country;  and

          12.1.2  in its entirety upon the expiration of all payment obligations
under  this  Agreement  with respect to the last Product in all countries in the
Territory  pursuant to Section 12.1.1. The period from the Effective Date to the
expiration  of the entire Agreement pursuant to this Section 12.1.2 shall be the
"TERM."

     12.2  TERMINATION  FOR  CAUSE;  OTHER  BREACHES.

          12.2.1  Material Breach. Either Party (the "NON-BREACHING PARTY") may,
without  prejudice  to  any  other remedies available to it at law or in equity,
terminate  this  Agreement  in  its  entirety  in the event the other Party (the
"BREACHING  PARTY")  shall  have  committed  a Material Breach and such Material
Breach  shall  have  continued  and/or  remained uncured for [ * ] after written
notice  thereof  was provided to the Breaching Party by the Non-breaching Party.
Any  such  termination  shall  become effective at the end of such [ * ] period,
unless  the  Breaching  Party  has  cured  any such Material Breach prior to the
expiration  of such [ * ]. The right of either Party to terminate this Agreement
as  provided  in  this  Section  12.2.1 shall not be affected in any way by such
Party's waiver or failure to take action with respect to any previous default. A
"MATERIAL  BREACH"  shall mean: (A) with respect to GSK, that [ * ]; or (B) with
respect  to  EXEL,  that  [  *  ].

     12.2.2 Other Breach. For any breach other than a Material Breach (an "OTHER
BREACH"),  the  Non-breaching Party shall have all rights and remedies available
to it at law or in equity, as may be appropriate and, in accordance with Section
14.2,  to  protect  the interest of the Non-breaching Party with respect to such
Other Breach, provided that the right of the Non-breaching Party to proceed with
its rights and remedies hereunder shall: (A) if such Other Breach relates to any
matter other than non-payment of any amounts due hereunder, not be effective for
[  *  ]  after written notice thereof was provided to the Breaching Party by the
Non-breaching  Party;  or  (B)  if such Other Breach resulted from the Breaching
Party's  failure  to  pay  any amounts due hereunder, not be effective for [ * ]
after  written  notice  thereof  was  provided  to  the  Breaching  Party by the
Non-breaching Party. Upon the Breaching Party's receipt of such notice and until
the earlier of the Breaching Party's cure of such Other Breach or the resolution
of  such  Other  Breach  pursuant  to  Section  14.2,  [  *  ].

     12.3  GSK  UNILATERAL  TERMINATION  RIGHTS.

          12.3.1  For  Failure  of  Performance Requirements. GSK shall have the
right,  for  a  period of [ * ] commencing [ * ], to terminate this Agreement in
its  entirety  upon  written notice to EXEL in the event EXEL has failed to meet
its  minimum  performance  requirement  set forth in [ * ]. In such event, GSK's
obligation  to  make  the Research and Development Payment [ * ] shall be tolled
until  [  *  ]. For the avoidance of doubt, any decision by GSK not to terminate
this  Agreement  pursuant  to  this  Section  12.3.1,  shall not be deemed to be
acceptance  of  any  Development  Compound  as  a  Development  Candidate.

          12.3.2  Discretionary.  GSK  shall  have  the  right to terminate this
Agreement  in  its  entirety  for  any  reason  or no reason at all, at its sole
discretion,  upon  [ * ] prior written notice to EXEL; provided that such notice
may  not  be  given  until  [  *  ].

          12.3.3  Licensed  Product  by Licensed Product. GSK may terminate, for
any reason or no reason at all, in its sole discretion, this Agreement as to any
particular  Licensed  Product,  on  a country-by-country basis, upon [ * ] prior
written  notice  to  EXEL.

     12.4  TERMINATION  FOR  INSOLVENCY.

          12.4.1  Insolvency.  Either Party may terminate this Agreement, if, at
any  time,  the  other  Party  shall file in any court or agency pursuant to any
statute  or  regulation  of  any  state  or country, a petition in bankruptcy or
insolvency or for reorganization or for an arrangement or for the appointment of
a  receiver or trustee of the Party or of substantially all of its assets, or if
the  other  Party  proposes  a  written agreement of composition or extension of
substantially  all  of  its debts, or if the other Party shall be served with an
involuntary  petition  against  it, filed in any insolvency proceeding, and such
petition shall not be dismissed within [ * ] after the filing thereof, or if the
other Party shall propose or be a party to any dissolution or liquidation, or if
the  other Party shall make an assignment of substantially all of its assets for
the  benefit  of  creditors.

          12.4.2 Bankruptcy Code Section 365(n). All rights and licenses granted
under  or  pursuant  to any section of this Agreement are and shall otherwise be
deemed to be for purposes of Section 365(n) of Title 11, United States Code (the
"BANKRUPTCY  CODE")  licenses of rights to "intellectual property" as defined in
Section  101(56)  of the Bankruptcy Code. The Parties shall retain and may fully
exercise all of their respective rights and elections under the Bankruptcy Code.
Upon  the  bankruptcy  of  any  Party,  the  non-bankrupt Party shall further be
entitled  to  a  complete  duplicate  of,  or  complete  access  to,  any  such
intellectual  property,  and  such,  if  not already in its possession, shall be
promptly  delivered  to the non-bankrupt Party, unless the bankrupt Party elects
to  continue,  and  continues,  to  perform  all  of  its obligations under this
Agreement.

     12.5  EFFECT  OF  TERMINATION  UPON  CERTAIN PAYMENT TERMS. Notwithstanding
anything  herein  to the contrary, GSK shall not be obligated to pay any payment
otherwise  payable  under  Section  6.2.2  as  a  result  of the occurrence of a
milestone  event  if  the milestone occurs after the last day of the cure period
described in Section 12.2.1 for the breach event which remained uncured and gave
rise  to a right of termination by GSK pursuant to Section 12.2.1. Similarly, in
the  event  that  GSK  terminates  this  Agreement  with respect to a particular
Licensed  Product  in  a  particular  country  or  countries in the Territory in
accordance  with Section 12.3.3, GSK shall not be obligated to pay any milestone
payment under Section 6.2.2 as the result of the occurrence of a milestone event
with  respect  to such terminated Licensed Product if the milestone event occurs
in  any  terminated  country more than [ * ] after notice of such termination is
properly  given  by  GSK  pursuant  to  Section  12.3.3.

     12.6  EFFECT  OF  TERMINATION.

          12.6.1  Upon  Expiration  of  the  Term.

               (a)  Following  the  expiration  of  the  Term  with respect to a
Licensed  Product  in a country pursuant to Section 12.1.1, subject to the terms
and  conditions  of  this Agreement, GSK shall have a non-exclusive, fully-paid,
right  and  license,  with  the  right  to  grant  sublicenses,  under  the EXEL
Technology  licensed hereunder solely to continue to make, have made, use, sell,
offer  for  sale and import the Licensed Product in such country, for so long as
it  continues to do so. Following the expiration of the Term with respect to any
Returned  Licensed  Product  or  EXEL  Product  in a country pursuant to Section
12.1.1, subject to the terms and conditions of this Agreement, EXEL shall have a
non-exclusive,  fully-paid,  right  and  license,  with  the  right  to  grant
sublicenses,  under  the GSK Technology licensed hereunder solely to continue to
make,  have  made,  use, sell, offer for sale and import the applicable Returned
Licensed  Product  or  EXEL Product, as the case may be, in such country, for so
long  as  it  continues  to  do  so.

               (b)  Following expiration of the Term in its entirety pursuant to
Section 12.1.2, subject to the terms and conditions of this Agreement, GSK shall
have  a  non-exclusive,  fully-paid,  right and license, with the right to grant
sublicenses,  under the EXEL Technology licensed hereunder solely to continue to
make,  have  made, use, sell, offer for sale and import all Licensed Products in
the Territory, for so long as it continues to do so. Following the expiration of
the  Term  in  its entirety pursuant to Section 12.1.2, subject to the terms and
conditions of this Agreement, EXEL shall have a non-exclusive, fully-paid, right
and  license, with the right to grant sublicenses, under GSK Technology licensed
hereunder  solely  to continue to make, have made, use, sell, offer for sale and
import  the  applicable  Returned Licensed Product, or EXEL Product, as the case
may  be,  for  so  long  as  it  continues  to  do  so.

          12.6.2  Upon  Unilateral  Termination  by  GSK.

               (a)  For  Failure  of  Performance  Requirements.  [  *  ]

               (b)  Discretionary.  [  *  ]

               (c)  Licensed  Product  by  Licensed  Product.  In the event of a
termination  of this Agreement by GSK pursuant to Section 12.3.3 with respect to
a  given  Licensed Product in a given country(ies): (1) such Licensed Product in
such  country(ies)  shall  be  deemed  to  be  a Returned Licensed Product under
Section  5.5;  and  (2)  thereafter,  the terms and conditions of this Agreement
shall apply with respect to such Returned Licensed Product in such country(ies).

          12.6.3  Upon  Termination  by  GSK  for  Cause.  In  the  event  of  a
termination  of  this  Agreement in its entirety by GSK: (A) pursuant to Section
12.2.1  upon  Material  Breach by EXEL; or (B) pursuant to Section 12.4 upon the
insolvency  of  EXEL:

                    [  *  ]

          12.6.4  Upon  Termination  by  EXEL  for  Cause.  In  the  event  of a
termination  of  this Agreement in its entirety: (A) by EXEL pursuant to Section
12.2.1  upon  Material  Breach  by GSK; or (B) pursuant to Section 12.4 upon the
insolvency  of  GSK:

                    [  *  ]

          12.6.5  Accrued  Rights;  Surviving  Obligations.

               (a)  Termination,  relinquishment or expiration of this Agreement
for  any reason shall be without prejudice to any rights that shall have accrued
to  the  benefit  of  any  Party  prior  to  such termination, relinquishment or
expiration  including, without limitation, the payment obligations under Article
6  hereof  and  any  and  all  damages  arising  from any breach hereunder. Such
termination,  relinquishment  or  expiration  shall  not  relieve any Party from
obligations  which  are  expressly  indicated  to  survive  termination  of this
Agreement.

               (b)  In  addition  to  the  provisions  of  this  Agreement which
expressly  survive  as  set  forth  in  this  Article  12  or  elsewhere in this
Agreement,  all  of  the  Parties'  rights  and  obligations  under,  and/or the
provisions  contained  in,  Sections  6.5,  6.6,  6.7,  12.5,  12.6, 13.1.2, and
Articles  1, 8 (except for Sections 8.1.2 and 8.1.5), 9, 11 and 14 shall survive
the  expiration,  termination  or  relinquishment  of  this  Agreement.

                                   ARTICLE  13

                              CHANGE  OF  CONTROL

     13.1  MAJOR  PHARMACEUTICAL COMPANY. In the event of a Change of Control of
EXEL (each such event, a "SUBJECT TRANSACTION"), and the surviving Person (each,
a  "SUBSEQUENTLY  AFFILIATED  COMPANY")  is  a  Major  Pharmaceutical  Company:

          13.1.1 Automatic Effect. In all cases hereunder, regardless of whether
GSK  elects to terminate this Agreement or not, in accordance with Section [ * ]
13.1.2,  effective  [  *  ]  the  consummation  of  such  Subject  Transaction:

                         [  *  ]

          13.1.2  GSK  Right  to  Terminate.  In  the  event  that  such Subject
Transaction  occurs  prior  to  the  expiration  of the Development Term, or the
Extension  Period, if any, then GSK shall have the right, upon written notice to
EXEL  within  [  * ] of the consummation of such Change of Control, to terminate
this  Agreement.  In  the  event  GSK  so  elects  to  terminate this Agreement:

                         [  *  ]

          13.1.3  Effect  of  No  Termination.  In  the  event GSK elects not to
terminate  this  Agreement  as  set  forth  in  Section  13.1.2,  then:

                         [  *  ]

          13.1.4  Major  Pharmaceutical Company Defined. As used in Section 13.1
and  13.2, a "MAJOR PHARMACEUTICAL COMPANY" shall mean any Person that, together
with  its  Affiliates,  has  [  *  ].

     13.2  BIOTECHNOLOGY  COMPANY.  If  the Subsequently Affiliated Company is a
Biotechnology  Company:

          13.2.1  Automatic  Effect.  Effective  [  * ] the consummation of such
Subject  Transaction:

          13.2.2 Biotechnology Company Defined. As used herein, a "BIOTECHNOLOGY
COMPANY"  shall  mean  any  Person  other  than  a Major Pharmaceutical Company.

                                   ARTICLE 14

                                  MISCELLANEOUS

     14.1  PUBLICITY.  Neither Party shall originate any written publicity, news
release or other announcement or statement relating to the announcement or terms
of  this  Agreement  (collectively,  a "WRITTEN DISCLOSURE"), without the prompt
prior  review  and written approval of the other Party, which approval shall not
be unreasonably withheld or delayed. Notwithstanding the foregoing, either Party
may  make any public Written Disclosure it believes in good faith based upon the
advice  of  counsel  is  required  by  applicable law, rule or regulation or any
listing  or  trading agreement concerning its or its Affiliates' publicly traded
securities;  provided,  however,  that such Written Disclosure shall minimize to
the  extent  possible  the  financial  information  disclosed, and that prior to
making  such Written Disclosure, the disclosing Party shall provide to the other
Party a copy of the materials proposed to be disclosed and provide the receiving
Party  with an opportunity to promptly review the Written Disclosure and provide
comments  within  [  *  ]  of  the  proposed  drafts  of the Written Disclosure.
Notwithstanding  the  foregoing, the Parties shall agree upon a press release to
announce the execution of this Agreement, together with a corresponding question
&  answer  outline  for  use  in  responding  to  inquiries about the Agreement;
thereafter,  GSK  and  EXEL  may  each disclose to Third Parties the information
contained  in  such press release and question & answer outline without the need
for  further  approval  by  the  other.

     14.2  DISPUTE RESOLUTION. Prior to the commencement of any litigation under
this  Agreement,  the Executive Officer of the Party considering commencement of
such  litigation shall notify the Executive Officer of the other Party that such
litigation  is  being contemplated. For at least [ * ] following the delivery of
such  notice,  the  Parties'  Executive Officers shall use good faith efforts to
make  themselves  available  to  discuss  the dispute and attempt to resolve the
matter.  If  the dispute is not resolved within such [ * ], the Parties agree to
submit  the  dispute  for non-binding mediation (with the understanding that the
role of the mediator shall not be to render a decision but to assist the Parties
in reaching a mutually acceptable resolution), which shall occur within a period
of not more than [ * ]. If the dispute is not resolved within such [ * ], either
Party  may commence litigation with respect to the subject matter of the dispute
and  with  respect  to any other claims it may have and thereafter neither Party
hereto  shall  have  any  further  obligation  under  this  Section  14.2.

     14.3  GOVERNING  LAW;  JURISDICTION. This Agreement and any dispute arising
from  the  performance  or  breach hereof shall be governed by and construed and
enforced  in  accordance with the laws of the State of New York, U.S.A., without
reference  to  conflicts  of  laws  principles.

     14.4  WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT  PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT  TO  ANY  LITIGATION  DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION  WITH  THIS  AGREEMENT.  EACH  PARTY  HERETO  (i)  CERTIFIES  THAT NO
REPRESENTATIVE,  AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR  OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO  ENFORCE  THAT  FOREGOING WAIVER, AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES  HERETO  HAVE  BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND ANY RELATED
INSTRUMENTS,  AS  APPLICABLE,  BY,  AMONG  OTHER  THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS  IN  THIS  SECTION  14.4.

     14.5  ASSIGNMENT. This Agreement shall not be assignable by either Party to
any  Third  Party  hereto without the written consent of the other Party hereto.
Notwithstanding  the  foregoing, either Party may assign this Agreement, without
the  written  consent  of  the other Party, to an Affiliate or to an entity that
acquires  all  or  substantially  all of the business or assets of such Party to
which  this  Agreement pertains (whether by merger, reorganization, acquisition,
sale  or  otherwise),  and  agrees  in  writing  to  be  bound  by the terms and
conditions  of  this  Agreement.  No  assignment and transfer shall be valid and
effective  unless and until the assignee/transferee shall agree in writing to be
bound  by  the  provisions  of  this Agreement. The terms and conditions of this
Agreement  shall  be  binding  on  and  inure  to  the  benefit of the permitted
successors  and  assigns  of  the  Parties.

     14.6  REGULATORY  REVIEW.

          14.6.1  Tolling  of Payment Obligations. If the exercise by GSK of any
Development  Election under Section 4.3 requires the making of filings under the
Hart-Scott-Rodino  Antitrust  Improvements  Act  (the  "HSR  ACT"), or under any
similar  premerger  notification  provision  in  the European Union or any other
jurisdiction,  then  all  rights and obligations related to the exercise of such
Development  Election  shall  be  tolled until the applicable waiting period has
expired  or  been  terminated  or until approval or clearance from the reviewing
authority  has  been received, and each Party agrees to diligently make any such
filings  and  respond  to any request for information to expedite review of such
transaction.

          14.6.2 Resolution of Regulatory Authority Opposition. If the antitrust
enforcement  authorities in the U.S. make a second request under the HSR Act, or
any  antitrust  enforcement  authority  in  another  jurisdiction  commences  an
investigation  into  the  exercise  by  GSK  of a Development Election, then the
Parties  shall,  in  good  faith,  cooperate with each other and take reasonable
actions  to  attempt  to:  (A) resolve all enforcement agency concerns about the
transaction  under  investigation;  and  (B)  diligently  oppose any enforcement
agency opposition to such transaction. In the event the enforcement agency files
a  formal  action  to  oppose  the transaction, the Parties shall confer in good
faith to determine the appropriate strategy for resolving the enforcement agency
opposition,  including  without  limitation,  and  where  appropriate,  the
renegotiation  of  their  obligations  under this Agreement with respect to that
Development  Election,  with the objective of placing each Party, to the maximum
extent  possible,  in  the  same  economic  position  that each Party would have
occupied  if  GSK  had  been  permitted  to  exercise such Development Election.
Notwithstanding the foregoing, nothing in this Section 14.6 shall require either
party  to  divest  any  assets.

     14.7  PERFORMANCE  WARRANTY. Each Party hereby acknowledges and agrees that
it  shall  be  responsible  for, and irrevocably, absolutely and unconditionally
guarantees,  the  full  and  timely  performance  as  and  when  due  under, and
observance  of  all the covenants, terms, conditions and agreements set forth in
this  Agreement  by  its  Affiliate(s)  and  Sublicensees.

     14.8  FORCE  MAJEURE.  No  Party shall be held liable or responsible to the
other  Party nor be deemed to be in default under, or in breach of any provision
of,  this  Agreement  for  failure  or  delay  in  fulfilling  or performing any
obligation of this Agreement when such failure or delay is due to force majeure,
and  without  the  fault  or negligence of the Party so failing or delaying. For
purposes  of  this  Agreement,  force  majeure  is  defined as causes beyond the
control  of  the  Party,  including,  without  limitation,  acts  of  God; acts,
regulations,  or  laws  of  any government; war; civil commotion; destruction of
production  facilities  or  materials  by  fire, flood, earthquake, explosion or
storm;  labor  disturbances; epidemic; and failure of public utilities or common
carriers.  In  the event of force majeure EXEL or GSK, as the case may be, shall
immediately  notify  the  other  Parties of such inability and of the period for
which such inability is expected to continue. The Party giving such notice shall
thereupon  be excused from such of its obligations under this Agreement as it is
thereby disabled from performing for so long as such Party is so disabled, up to
a  maximum  of  ninety (90) days, after which time the Party not affected by the
force  majeure, may terminate this Agreement. To the extent possible, each Party
shall  use  reasonable  efforts  to  minimize the duration of any force majeure.

     14.9 NOTICES. Any notice or request required or permitted to be given under
or  in  connection with this Agreement shall be deemed to have been sufficiently
given  if  in writing and personally delivered or sent by certified mail (return
receipt  requested),  facsimile  transmission  (receipt  verified), or overnight
express  courier  service  (signature required), prepaid, to the Party for which
such  notice  is  intended,  at  the  address  set  forth  for such Party below:

     If  to  EXEL,

                    addressed  to:      Exelixis,  Inc.
                                        170  Harbor  Way
                                        PO  Box  511
                                        South  San  Francisco,  CA  94083
                                        Attention:  Chief  Executive  Officer
                                        Telephone: [  *  ]
                                        Telecopy:  [  *  ]

                    with  a  copy  to:  Cooley  Godward  llp
                                        Five  Palo  Alto  Square
                                        3000  El  Camino  Real
                                        Palo  Alto,  CA  94306
                                        Attention:  Barbara  Kosacz,  Esq.
                                        Telephone: [  *  ]
                                        Telecopy:  [  *  ]
     If  to  GSK,
                    addressed  to:      SmithKline  Beecham  Corporation,
                                        doing  business  as  GlaxoSmithKline
                                        2301  Renaissance  Blvd.  (Bldg.  #510)
                                        King  of  Prussia,  PA  19406
                                        Attention:  Vice President, Alliance and
                                        Joint  Venture  Management
                                        Telephone: [  *  ]
                                        Telecopy:  [  *  ]

                    with  a  copy  to:  GlaxoSmithKline
                                        Corporate  Legal  Department
                                        One  Franklin  Plaza
                                        200  N.  16th  Street  /  FP  2360
                                        Philadelphia,  PA  19103
                                        Attention:  Senior  Vice  President  and
                                        Associate
                                        General  Counsel-R&D  Legal  Operations
                                        Telephone: [  *  ]
                                        Telecopy:  [  *  ]

or  to  such  other  address  for  such Party as it shall have specified by like
notice  to the other Parties, provided that notices of a change of address shall
be  effective only upon receipt thereof. If delivered personally or by facsimile
transmission,  the date of delivery shall be deemed to be the date on which such
notice  or  request was given. If sent by overnight express courier service, the
date  of  delivery shall be deemed to be the next business day after such notice
or  request was deposited with such service. If sent by certified mail, the date
of  delivery  shall  be deemed to be the third business day after such notice or
request  was  deposited  with  the  U.S.  Postal  Service.

     14.10  EXPORT CLAUSE. Each Party acknowledges that the laws and regulations
of  the  United  States restrict the export and re-export of certain commodities
and  technical  data of United States origin. Each Party agrees that it will not
export  or re-export any restricted commodities or any restricted technical data
of  the  other Party in any form without any necessary United States and foreign
government  licenses.

     14.11  WAIVER.  Neither  Party  may  waive  or release any of its rights or
interests  in  this  Agreement except in writing. The failure of either Party to
assert a right hereunder or to insist upon compliance with any term or condition
of  this  Agreement  shall  not  constitute  a  waiver of that right or excuse a
similar  subsequent  failure to perform any such term or condition. No waiver by
either  Party  of  any  condition  or term in any one or more instances shall be
construed  as  a  continuing  waiver  of  such  condition  or term or of another
condition  or  term.

     14.12 SEVERABILITY. If any provision hereof should be held invalid, illegal
or  unenforceable in any jurisdiction, the Parties shall negotiate in good faith
a  valid,  legal  and enforceable substitute provision that most nearly reflects
the  original intent of the Parties and all other provisions hereof shall remain
in  full  force and effect in such jurisdiction and shall be liberally construed
in  order  to carry out the intentions of the Parties hereto as nearly as may be
possible.  Such  invalidity, illegality or unenforceability shall not affect the
validity,  legality  or  enforceability  of  such  provision  in  any  other
jurisdiction.

     14.13  ENTIRE  AGREEMENT.  This  Agreement,  including  the  schedules  and
exhibits  hereto,  together  with  the  Stock  Purchase  Agreement  and the Loan
Agreement,  set  forth  all  the  covenants,  promises,  agreements, warranties,
representations,  conditions  and  understandings between the Parties hereto and
supersede  and  terminate  all  prior  agreements  and understanding between the
Parties.  There  are  no  covenants,  promises,  agreements,  warranties,
representations,  conditions  or understandings, either oral or written, between
the  Parties  other  than  as  set  forth  herein  and  therein.  No  subsequent
alteration,  amendment,  change  or  addition to this Agreement shall be binding
upon  the  Parties hereto unless reduced to writing and signed by the respective
authorized  officers  of  the  Parties.

     14.14  INDEPENDENT CONTRACTORS. Nothing herein shall be construed to create
any  relationship  of employer and employee, agent and principal, partnership or
joint  venture  between  the  Parties.  Each Party is an independent contractor.
Neither  Party  shall assume, either directly or indirectly, any liability of or
for  the other Party. Neither Party shall have the authority to bind or obligate
the  other  Party  and neither Party shall represent that it has such authority.

     14.15 HEADINGS. Headings used herein are for convenience only and shall not
in  any  way  affect  the  construction  of  or  be  taken into consideration in
interpreting  this  Agreement.

     14.16 USE OF NAME. Except as otherwise provided herein, no Party shall have
any  right,  express  or  implied,  to  use  in  any  manner  the  name or other
designation  of the other Parties or any other trade name, trademark or logos of
the  other  Parties  for  any purpose in connection with the performance of this
Agreement.

     14.17  BOOKS AND RECORDS. Any books and records to be maintained under this
Agreement  by  a  Party or its Affiliates or Sublicensees shall be maintained in
accordance  with  U.S.  generally  accepted  accounting principles, consistently
applied,  except  that  the  same  need  not  be  audited.

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

     14.19  PARTIES  IN  INTEREST.  All  of  the  terms  and  provisions of this
Agreement  shall  be binding upon, inure to the benefit of and be enforceable by
the  Parties  hereto  and  their  respective  permitted  successors and assigns.

     14.20 CONSTRUCTION OF AGREEMENT. The terms and provisions of this Agreement
represent  the  results  of  negotiations  between  the  Parties  and  their
representatives,  each  of  which  has  been  represented  by counsel of its own
choosing,  and  neither  of  which has acted under duress or compulsion, whether
legal,  economic  or  otherwise.  Accordingly,  the terms and provisions of this
Agreement  shall be interpreted and construed in accordance with their usual and
customary meanings, and each of the Parties hereto hereby waives the application
in  connection with the interpretation and construction of this Agreement of any
rule  of  law  to  the  effect that ambiguous or conflicting terms or provisions
contained  in this Agreement shall be interpreted or construed against the Party
whose  attorney  prepared  the  executed  draft  or  any  earlier  draft of this
Agreement.

     14.21  SUPREMACY.  In  the  event  of any express conflict or inconsistency
between  this Agreement and the DOP or any Development Candidate Plan, the terms
of  this  Agreement  shall  control.

     14.22  COUNTERPARTS. This Agreement may be signed in counterparts, each and
every  one  of  which shall be deemed an original, notwithstanding variations in
format  or  file  designation which may result from the electronic transmission,
storage  and  printing  of  copies  of this Agreement from separate computers or
printers.  Facsimile  signatures  shall  be  treated  as  original  signatures.

                              *  -  *  -  *  -  *

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

EXELIXIS,  INC.                          SMITHKLINE  BEECHAM  CORPORATION

By: /s/  George  Scangos                 By: /s/  T.  Yamada
    --------------------                     ----------------
Name: George  Scangos                    Name: Tachi  Yamada
      ------------------                       --------------
Title: President  &  CEO                 Title: Director
       -----------------                        --------
Date: 10/28/2002                         Date: 10/28/2002
      ----------                               ----------

[  *  ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT  TO  RULE  24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>
------

                                  SCHEDULE 1.62
                                  EXEL PATENTS

                                      [ * ]

[  *  ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT  TO  RULE  24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>
                                  SCHEUDLE 1.65
                         EXISTING BIOTHERAPEUTIC TARGET
                                      [ * ]

[  *  ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT  TO  RULE  24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>
                                  SCHEDULE 1.66
                               EXISTING COMPOUNDS
                                      [ * ]

[  *  ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT  TO  RULE  24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>
                                  SCHEDULE 1.67
                                EXISTING TARGETS
#     TARGET

 [  *  ]

[  *  ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT  TO  RULE  24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>
                                  SCHEDULE 1.68

                       EXISTING THIRD PARTY COLLABORATIONS

                                      [ * ]

  [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
   COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
                                    AMENDED.
<PAGE>
                                SCHEDULE 3.2.3(f)

                        MINIMUM INFORMATION REQUIREMENTS
                           FOR EXEL'S PERIODIC REPORTS

                                      [ * ]

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
  COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
                                    AMENDED.
<PAGE>
                                  SCHEDULE 4.2

                                 CRITERIA TO BE
                           INCLUDED IN PRODUCT REPORTS

                                      [ * ]

[  *  ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT  TO  RULE  24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>
                                 SCHEDULE 5.1.1

                               SAMPLE GSK INTERNAL
                             DEVELOPMENT ACTIVITIES

                                      [ * ]

[  *  ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT  TO  RULE  24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>
                                 SCHEDULE 6.3.4

                           EXAMPLES OF APPLICATION OF
                         MILESTONE AND ROYALTY PAYMENTS

                                      [ * ]

[  *  ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT  TO  RULE  24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>

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